In the current (May, 2011) issue of Vanity Fair magazine an article by Joseph Stiglitz a prominent economist and Nobel Prize winner, writes about “an inequality even the wealthy will come to regret.” Of the 1%, by the 1%, for the 1% explores the growing wealth gap between the superrich in America and everyone else: “It’s no use pretending that what has obviously happened has not in fact happened. The upper 1 percent of Americans are now taking in nearly a quarter of the nation’s income every year. In terms of wealth rather than income, the top 1 percent control 40 percent. … Twenty-five years ago, the corresponding figures were 12 percent and 33 percent. … While the top 1 percent have seen their incomes rise 18 percent over the past decade, those in the middle have actually seen their incomes fall.”
Stiglitz goes on to offer some of the reasons why this truly astonishing growth in the wealth gap is accelerating at an alarming pace. US tax policy is the number-one reason. The federal government has changed its legislation and regulations to allow increased “manipulation of the financial system.” The biggest and wealthiest corporations give their top executives obscene bonuses . Virtually all federal senators and many congressmen are millionaires. And so on.
The consequences are depressing. Stiglitz paints a picture of a society where the common good is increasingly ignored by those with enormous wealth and power: “The more divided a society becomes in terms of wealth, the more reluctant the wealthy become to spend money on common needs.” Values are distorted further and further. For example: “Those who have contributed great positive innovations to our society, from pioneers of genetic understanding to the pioneers of the Information Age, have received a pittance compared with those responsible for the financial innovations that brought our global economy to the brink of ruin.”
This article is worth reading in its entirety. I would have liked to know what dollar figures, in terms of net worth and/or annual incomes, Stiglitz associates with the 1 %. Unfortunately, this information is not provided.
Of particular relevance to The Inheritance Project and this blog, I also wonder how many of the 1 % club have inherited wealth. I am hoping that another article will enlighten us.
Barbara Blouin, The Inheritance Project