Posts Tagged ‘inequality’

I was honored once again to be invited to offer the “communi8ty update” at Southern New Hampshire Outreach for Black Unity’s Martin Luther King, Jr. Day Breakfast.  Here’s what I said on January 19 at the Alpine Grove in Hollis:

Honor and pleasure to be invited back. Thanks to Irving, Linda, Ray, and Governor Hassan. And congratulations to OBU for the 31st annual breakfast.

I want to begin by saying a few words about inequality, and I’ve learned that a trick to effective public speaking is to tell people stuff that they already know.

We know that for most families, most workers, most ordinary people, take home pay has been stagnant since the 1970s, two generations.

At the same time we know that the rich are getting richer.

The ultra rich are getting ultra richer.

The mega rich are getting mega richer.

And the giga rich are getting giga richer.

This has caused economic inequality to rise to record levels.

And we know that when race is added to the equation the situation is even more unequal. Net worth of white families is five times that of black families.

I think we know what Dr. King would say about that. He would say,

“The misuse of capitalism can lead to tragic exploitation.”

We know what Martin Luther King would do because we know what he did. We know what he was doing at the time he was killed. He was supporting working people in a strike for dignity in the workplace and calling on the federal government to take sides with the locked out, the cast out and the left out.

What else do we know?

We know that fifty years ago at this time Dr. King and the Southern Christian Leadership Conference were engaged in a dramatic campaign in Selma Alabama to win the right to vote for Black people who had been denied their rights.

We know that after marches, arrests, beatings, and several murders of voting rights activists that the Congress approved the Voting Rights Act. At last it became possible for African Americans to use the ballot to elect people who would respond to their interests.

What’s the state of voting rights now? It’s not good.

We know that in state after state – including New Hampshire – legislatures have adopted laws like photo ID requirements and other restrictions that make it harder for people to vote when we ought to be making it easier.

We know that the US Supreme Court struck down an essential element of the Voting Rights Act.

And we know that five years ago this Wednesday, the Supreme Court declared that since corporations are people (really) and money is speech (yup), that restricting the ability of corporations to invest their money in the electoral system violates the first amendment protection of free speech. This widened the gates for floods of corporate cash into our electoral system. Instead of one person one vote we are getting a one dollar one vote democracy.

We know what Dr. King would say, something like, “Oh America, how often have you taken necessities from the masses to give luxuries to the classes. If you are going to be a truly great nation you must solve this problem.”

I want to suggest a couple ways we can help solve this problem.

First, at the State House this year there will be a mighty fight over the state budget. The question our lawmakers will face is whether they will protect the interests of the well off or take the side of the locked out, the left out, the least of these. They will also consider a range of bills dealing with voting rights, some to make it harder to vote, some to make it easier, and some to reduce the influence of money in our elections.

You may have heard about a group in North Carolina, headed by Rev. Dr. Barber of the North Carolina NAACP, that brings a prayerful presence into their state capitol every week. They call it “Moral Mondays.

We’ve got a group like that here. We call ourselves “New Hampshire Voices of Faith.” Mondays are pretty quiet up in Concord, so we’re more likely to show up for “Witnessing Wednesdays,” bringing a multi-faith, prayerful presence for justice into the State House. We’ll be calling on our lawmakers to let justice roll down like waters and righteousness like a mighty stream.

Look for us on Facebook at NH Voices of Faith. And if you are not receiving my weekly “State House Watch” newsletter by email, let me know and I’ll add you to our mailing list.

But we’ve got another big opportunity, one that comes around every four years.

New Hampshire has the eyes of the world on us because of the first-in-the-nation presidential primary. The candidates are already among us. You might need to set some extra tables for next year’s breakfast. That means we’ve got the opportunity – and with that the responsibility – to let them know what’s on our minds. As Governor Hassan said, “democracy is not an every other year sport.”

At the American Friends Service Committee, we’ve got a new project we call “Governing Under the Influence.” It’s about the excessive power in the hands of big corporations – corporations that profit from violence, corporations that profit from prisons, corporations that profit from war. It’s about demanding that the democracy believe in is rooted in the one person, one vote principle, not in rule by those with the most money. We’ll be keeping track of the candidates’ whereabouts. Get in touch if you want to get involved.

But by all means use every opportunity to tell the presidential wannabes what is on your mind.

We who lift up the example of Martin Luther King, Jr. know that the struggle can be hard. We know the struggle can be long, but that ultimately we have faith that the power of the people can be stronger than the power of money, that justice can prevail over injustice, that love can prevail over hate.

Will we let anybody turn us around?

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Most of the discussion I’ve seen of wealth and income inequality has focused on trends in the USA.  Now comes the annual report from Credit Suisse, one of the world’s largest financial institutions, on wealth and inequality worldwide.  The picture looks familiar:  a small number of individuals control most of the globe’s wealth. 

Among their findings released October 14:

  • The number of millionaires worldwide is likely to increase from 35 million to 53 million in the next five years;
  • The USA is “the undisputed leader in terms of aggregate wealth;”
  • The USA, Switzerland, and Hong Kong are the most unequal “developed countries;”
  • Countries labeled as “emerging markets,” especially China, can be expected to grow their shares of global wealth in the next five years.  But there, too, inequality is rising.

Credit Suisse, which no doubt wants to handle those millionaires’ accounts, also finds that the USA leads the world with 14.2 million millionaires, 41% of the members of the worldwide millionaire club.  Credit Suisse  refers to them as ‘high net worth” or “HNW” individuals.


Above the HNWs on the ladder are the UHNWs, the “ultra high net worth individuals,” those with with more than $50 million in net assets. The Global Wealth Report says this group has 128,200 members, 49% of whom live in the USA.  


“The number of HNW and UHNW individuals has grown rapidly in recent years, reinforcing the perception that the very wealthy have benefitted most in the favorable economic climate,” the report says.  Indeed.

“HNW and UHNW individuals are heavily concentrated in particular regions and countries, and tend to share more similar lifestyles, participating in the same global markets for luxury goods, even when they reside in different continents,” the authors observed.

Here’s more numbers:

  • The poorest 50% of the global population owns less than 1% of the world’s wealth.
  • The wealthiest 10% (those with more than $77,000 of net worth) owns 87% of the world’s wealth. 
  • The top 1% (more than $798,000 of wealth) owns 48.2% of the world’s wealth.
  • The world now has 35 million millionaires, less than 1% of the population.  Together they own 44% of the wealth.

Figures such as these demonstrate that the world’s wealth is in the hands of a very small group of individuals. The figures don’t, by themselves, tell us anything about trends in wealth distribution.  But this topic has finally gotten the attention of policy makers and bankers, even those whose clientele is ultra-rich.

“The changing distribution of wealth is now one of the most widely discussed and controversial of topics, not least owing to Thomas Piketty’s recent account of long-term trends around inequality. We are confident that the depth of our data will make a valuable contribution to the inequality debate,”  the report’s introduction says.  

Credit-Suisse also says, “During much of the last century, wealth differences contracted in high income countries, but this trend may have gone into reverse.” 

It may be significant that the Global Wealth researchers find that while the top 10% has seen its share of the global pie rise from 67% in 1989 to 72% in 2007 and topped 75% in 2013, the share in the pockets of the top 1% has “shown little upward movement for the past two decades.” 

For the USA, however, they find that shares held by the top 10% and the top 1% have held steady, at about 75% and 38% respectively.  This finding contrasts with that of Emmanuel Saez and Gabriel Zucman, who recently wrote

“Wealth inequality [in the USA] has considerably increased at the top over the last three decades.  By our estimates almost all of the increase is due to the rise of the share of wealth owned by the 0.1% richest families, from 7% in 1978 to 22% in 2012.

The conflict may result from differences in methodology or from Saez and Zucman’s attention to the top 0.1%, a smaller sliver than Credit Suisse studied. Nevertheless, both reports add to a body of evidence that the economy is doing just fine for a tiny class of people while just about everyone else is getting left behind. 

It wasn’t long ago that economists generally avoided discussion of the distribution of wealth.  Even if they now differ on some fine points, it probably represents progress when economists working for an institution like Credit Suisse are adding their weight to a call for a change of direction.

“In mature economies,” they conclude, “policies to address wealth inequality are receiving increased attention and can hopefully be designed to avoid unwanted effects on growth or economic security. Among emerging markets, policy makers would be advised to study countries, such as Singapore, which have tried to ensure that wealth gains are broadly shared, and which have succeeded in keeping wealth inequality in check.”

[Note: There’s a link to the Global Wealth Report pn the Credit Suisse publications page, but the link did not work for me.  Instead, I contacted the bank’s New York press office, where I found someone to send me a copy.]

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Janet Yellin is not the only one with a new analysis of the growing chasm between the ultra-rich and everyone else  If you can handle some dense economics (or like me willing to skip past the fancy equations), take a look at a new paper by Emmanuel Saez and Gabriel Zucman on “Wealth Inequality in the United States since 1913.”

It seems that reliable data on wealth is not easy to come by.  So Saez and Zucman had to do some fancy calculation to figure out who owns how much and how the proportions have changed over time.   They find

wealth inequality has considerably increased at the top over the last three decades.  By our estimates almost all of the increase is due to the rise of the share of wealth owned by the 0.1% richest families, from 7% in 1978 to 22% in 2012.

That’s a level of inequality comparable to the early 1900s, before the Progressive Era.

Occupy movement, if you’re still out there, take notice. 

“Wealth concentration has followed a U-shaped evolution over the last 100 years,” they write  “It was high in the beginning of the twentieth century, fell from 1929 to 1978, and has continuously increased since then.”

(You can see the U-shaped curve and other charts at:  http://gabriel-zucman.eu/files/SaezZucman2014Slides.pdf.)

The top 0.1% is just 160,000 families whose wealth rose at 5.3% per year from 1986 to 2012. In the same period the bottom 90% saw its wealth stagnate. 

The key factors driving the wealth gap, Saez and Zucman conclude, is a surge in labor income among those at the tippy top and a decline in savings for those in the middle class.  That leads the authors to a set of recommendations.

First and perhaps most obvious, they recommend progressive income taxes and estate taxes.  

“Yet tax policy is not the only channel,” they say.

Other policies can directly support middle class incomes—such as access to quality and affordable education, health benefits, cost controls, minimum wage policies, or more generally policies shifting bargaining power away from shareholders and management toward workers.  [emphasis added]

It’s good to see a solution that deals with the cause of the problem.  Janet Yellin take notice.


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Fed Head Takes on Inequality

Diagnosis unmatched by prescription

Janet Yellin, who chairs the Board of Governors of the Federal Reserve System, delivered an unusual and important speech two days ago about the growing gap between the richest Americans and everyone else.   

Speaking at a conference at the Federal Reserve Bank of Boston, Yellin  offered “Perspectives on Inequality and Opportunity from the Survey of Consumer Finances.”  She said,

It is no secret that the past few decades of widening inequality can be summed up as significant income and wealth gains for those at the very top and stagnant living standards for the majority. I think it is appropriate to ask whether this trend is compatible with values rooted in our nation’s history, among them the high value Americans have traditionally placed on equality of opportunity.

It’s fair to assume that was a rhetorical question and the answer is, no, the widening gap between the ultra-rich and the rest of the population is a threat to democracy and the economic futures of most people.

While the trend of wage stagnation for working Americans goes back to the 1970s, Yellin focused on the most recent period of economic history, 1989 to 2013.  This is useful because it includes the recent economic meltdown as well as the so-called “recovery.”  

Yellin illustrated her talk with an obligatory set of graphs (she’s an economist after all), including this one depicting changes in net worth (i.e. wealth) for the wealthiest 5% of Americans, the next 45%, and the bottom half of the population.   

As the chart makes obvious, the wealthiest 5% of Americans saw their share of the nation’s wealth climb from about 55% to about 65%, while the next 45% saw its share go from from 45% to 35% and the share held by bottom 50% approaching zero percent.   

It’s good to know the nation’s top economist is alarmed. 

The second half of Yellin’s speech concerned what she called “four building blocks of opportunity,” access to early education, access to higher education, ownership of private businesses, and inheritance.  The first three could be useful ways for individuals and families to do better in a time of widening inequality, but do not affect tax policy, deindustrialization, political and business attacks on organized labor, and the growth of the finance sector’s share of the economy, i.e. the factors driving the equality gap to historic highs. 

For a more incisive analysis of what went wrong, I recommend the latest issue of Dollars and Sense, especially an article by Gerald Friedman on “What Happened to Wages?”  He writes,

From the dawn of American industrialization in the 19th century until the 1970s, wages rose with labor productivity, allowing working people to share in the gains produced by capitalist society.  Since then, the United States has entered a new era, in which stagnant wages have allowed capitalists to capture a growing share of the fruits of rising productivity.

I recommend examining Friedman’s charts alongside Yellin’s.  And try to follow Yellin’s fourth piece of advice:  inherit a fortune.  

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Writing in the New York Times, Thomas Edsall assembles an impressive array of facts that illuminate the realities of wealth inequality in America.  

Citing Federal Reserve figures, Edsall reports that household net worth, corporate profits, and the value of real estate have been going up at an impressive pace.  If you think that sounds like evidence of recovery you’d be mistaken, at least if you equate “recovery” with economic conditions that are improving for most workers.   

“The September Federal Reserve Bulletin graphically demonstrates how wealth gains since 1989 have gone to the top 3 percent of the income distribution,” he writes.  “The next 7 percent has stayed even, while the bottom 90 percent has experienced a steady decline in its share.”

It’s not just wealthy individuals getting wealthier; it’s also the corporations they own and run.    Citing statistics from Goldman Sachs, Edsall says corporate profits rose five times faster than wages last year.  And he quotes an article from Business Insider that stated,

“America’s companies and company owners — the small group of Americans who own and control America’s corporations — are hogging a record percentage of the country’s wealth for themselves.”

Edsall asks, “Why don’t we have redistributive mechanisms in place to deploy the trillions of dollars in new wealth our economy has created to shore up the standard of living of low- and moderate-income workers, to restore financial stability to Medicare and Social Security, to improve educational resources and to institute broader and more reliable forms of social insurance?”

It’s the right question. 

For answers he turns to a bunch of economists, who provide data about tax rates, labor force participation, the declining growth of well-paying jobs, globalization, and the reduction of labor’s share of profit relative to capital in a time of rising productivity.  

My answer is a bit more straightforward:  America’s companies and company owners — the small group of Americans who own and control America’s corporations — are hogging the political system.  This is nothing new, but in the legal environment created by recent Supreme Court decisions (Citizens United and McCutcheon in particular) it is becoming easier for corporate interests to wage class war and win.  Simply put, the people who make the laws and set the policies have their receptors tuned to the frequency where the corporations are broadcasting. 

Edsall notes survey data that reveal corporations are not so popular in the USA and other so-called “advanced countries.”   He asks if the legitimacy of free market capitalism in America is facing fundamental challenges.

My gut response is to say “I hope so.”  But the dynamics described by all those economists are not the workings of “the invisible hand.”  The market is operating under a set of rules established by those who already have more than their fair share of power, wealth, and privilege.  The legitimacy of our corporate-directed political system must be challenged as well.


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A quiet country road from Dublin to Hancock, New Hampshire was the site of the New Hampshire Rebellion’s latest “Granny D Walk” to end the influence of money in American politics.P8230046 (2)

Granny D was the public moniker for Doris Haddock, a long-time Dublin resident who set out from California a few days short of her 89th birthday to walk across the USA and publicize the need for campaign finance reform.  She had just turned 90 when she reached the nation’s capital on February 29, 2000. 

The path of today’s walk was one she used to train for her historic pilgrimage, which ended at the US Capitol on February 29, 2000, a month after she turned 90.

Few people reflect the strength of conviction demonstrated by Granny D, observed Larry Lessig, the writer and Harvard Law School professor who launched the Rebellion last year.  The group conducted a winter march from Dixville Notch to Nashua in P8230054

January and another along the New Hampshire seacoast in July. 

Today forty people, aiming to make breaking the money-politics link a central issue of the 2016 presidential nominating contest, continued Granny D’s quest.  Walking through a wooded area with no pedestrians and barely any cars, there weren’t many people to educate and convince.  But perhaps that wasn’t the point.  P8230045

There’s a long history of walks, marches, and pilgrimages intended to bolster movements for social change.  Gandhi’s march to the sea, the 1965 march from Selma to Montgomery, the United Farm Workers Union’s 300-mile march from Delano to Sacramento, and the regular peace walks led by the Nipponzan Myohoji monks come to mind as examples.  Yes, they are expressions of political views, but they also embody spiritual power. 

When we sing “we won’t let nobody turn us around,” we aim to capture that same spirit.  When musicians Leslie Vogel and Fred Simmons treated us to “Just a P8230063 Walk with Granny D” before the march, I felt the spirit in motion. 

Part of the point was also to get to know new people, Dan Weeks said at the walk’s outset.  Dan, who was recently appointed as Executive Director for the NH Coalition for Open Democracy (NH COD), says his own activist inclinations began when Granny D visited his high school.  At that time the impressionable 15-year old learned from his elderly neighbor that companies which profited from selling tobacco had a heavy hand in writing the nation’s laws through their political involvement.  Children were dying because of the nation’s twisted approach to campaign finance, Granny D explained.  Dan was hooked, not on cigarettes, but on money & politics activism.  “The systemP8230109 excludes so many of our people,” he says. 

To put it another way, if money is speech, then those with the most money get the most speech.  And as the distribution of wealth becomes increasingly skewed, inequality of speech becomes a profound political problem for a country where government of the people, by the people, and for the people is supposed to be imperishable.

From Dan’s perspective, a walk in the steps of Granny D is a statement that we have not given up hope.

Two hours after setting out, clusters of walkers arrived in the center of Hancock, a town with a population of fewer than 2000 people.  There we were greeted by volunteers and treated to ice cream donated by Ben & Jerry’s.  The crowd had grown to about P8230117 60 people, now including Jim Rubens, a Republican candidate for the US Senate who has made campaign finance reform a plank in his platform (and who says he’s the only Republican in the race who is speaking out against the third Iraq war).  

When the ice cream had been eaten, Dan Weeks introduced Professor Lessig for a short speech by the gazebo on the Hancock Common.  Lessig apparently didn’t feel a need to educate the assembled dozens about the corruption caused by the billions of dollars in the political system, nor did he choose to restate the strategy of the NH Rebellion.  He chose instead to exhort the small crowd about the importance of action, something he says our country has become unaccustomed to taking. 

“We’ve just gotten through a century of very passive politics, where we were told to shut up and listen to the commercials and just show up to vote,” Lessig said.

“That’s the only thing we were to do. We weren’t to organize or to get people out in P8230104

the streets.  We weren’t about ordinary citizens trying to lead.  We weren’t practiced in that kind of politics.”

“But that’s the kind of politics this will take,” he continued.  “Neither the Republican nor the Democratic Party leadership like this issue.  Neither of them are going to make this transition happen on their own.  It will only happen if we force them.”

Plans are already being hatched for another walk next January, timed to coincide not only with Granny D’s birthday but also with the fifth anniversary of the Citizens United court decision. 



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henniker 11-3-13 007crop 

Chuck Collins, whose latest book is 99 to 1: How Wealth Inequality is Wrecking the World and What We Can Do About it, spoke to the Henniker Peace Community yesterday. 

Chuck Collins didn’t come to Henniker to “foment antagonism or class warfare,” he said, but instead to encourage people to do some “simple math.”  It’s pretty much the same thing.

The richest 44 households in the USA hold more wealth than the poorest 95%, for example.  The wealthiest 1 percent controls 36 percent of US wealth and more than 42 percent of all financial assets. 

It hasn’t always been that bad.  According to Collins, there’s been a “dramatic upward redistribution of wealth” in the past three decades.  That was no accident, but followed policy changes in which the rules of the economy were “rigged” to benefit asset owners over wage earners.  “These are the folks we need to defend ourselves against,” he told an audience of more than fifty people at the Henniker Congregational Church.

Historically, Collins said Americans have been comfortable with wealth and income inequality as long as they thought the rules were fair.  But that has shifted since the 2008 Wall Street meltdown.  Now, 70 percent of Americans believe extreme henniker 11-3-13 005 inequality is a problem.

It’s a problem that can be addressed with three types of policy changes:

1) “Raise the floor,” through a higher minimum wage and a stronger safety net;

2) “Level the playing field,” through reforms of the political process, such as overturning the Supreme Court’s “Citizens United” decision; and

3) “Break up concentrations of wealth and power.” 

It’s that third point that would meet the most resistance from the natural persons, organizations, and corporations where power and wealth are unfairly concentrated.  But there are specific steps to advocate, such as restoring the progressivity of US income taxes, raising the estate tax, closing loopholes that enable corporations to evade taxes by assigning profits to overseas subsidiaries, breaking up the megabanks, and imposing a tax on financial transactions.    Some of the One Percenters even agree.

One place we can take this message is into the presidential campaign, now warming up in both major parties.  New Hampshire and Iowa may soon be awash in candidates.  Let’s tell them what we think.

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