3 ways the super-rich suck wealth from the rest of us

The financial industry has, in effect, created a whole new share of global wealth

Topics: AlterNet, Inequality, U.S. Economy, Wealth, Poverty, ,

3 ways the super-rich suck wealth from the rest of us (Credit: AP/Diane Bondareff)
This article originally appeared on AlterNet.

AlterNet The facts are indisputable, the conclusion painful. The wealthiest people in the U.S. and around the world have used the stock market and the deregulated  financial system to lay claim to the resources that should belong to all of us.

This is not a matter of productive people benefiting from their contributions to society. This is a relatively small number of people extracting massive amounts of money through the financial system for accomplishing almost nothing.

1. They’ve Taken $1.6 Million Per Family in New Wealth Since the Recession

The richest 5% of American families each gained at least that much in five years, mostly from the stock market. Using data from  Credit Suisse, the Economic Policy InstitutePew Research, and the  Census Bureau and two separate analyses (shown here and here), this extraordinary wealth grab can be calculated.

To briefly summarize, the richest 5% (six million households) own about two-thirds of the wealth, or about $10 trillion of the $15 trillion in financial wealth gained since the recession. That’s $1,667,000 per household. Calculations based on alternate sources resulted in a gain of over $2 million per household.

It is noteworthy that most of their windfall came from  stock market gains rather than from job-creating business ventures. The stock market has, once again, been forming an overblown bubble of wealth that does not reflect the relative degrees of productivity of workers around America. The market has more than doubled in value since the recession, and the richest 5% own about  80% of all non-pension stocks.



2. They Create Imaginary Money That Turns Real

The world’s wealth has  doubled in a little over ten years. The financial industry has, in effect, created a whole new share of global wealth and redistributed much of it to itself.

In the U.S., financial sector profits as a percentage of corporate profits have been  rising steadily over the past 30 years. The speculative, non-productive, and fee-generating  derivatives market has increased to an unfathomable level of over  $1 quadrillion – a thousand trillion dollars, twenty times more than the world economy.

With the U.S. driving the expansion of this great bubble of wealth, our nation has become the fifth-most  wealth-unequalcountry in the world, while global inequality ( between rather than  within countries) has become even worse than for any one country. Just  250 individuals have more money than the total annual living expenses of  almost half the world - three billion people.

3. They’ve Stopped Payment on Productive Americans

Reputable sources agree that the working class has not been properly compensated for its  productivity, and that the  “rent-seeking” behavior of the financial industry, rather than changes in technology, is extracting wealth from society.

As a result, our median inflation-adjusted household  wealth has  dropped from $73,000 to $57,000 in a little over 25 years. We’ve lost another  five percent of our wealth since the recession.

Shockingly, only one out of four Americans, according to a survey by Bankrate.com, “have six months’ worth of expenses for use in emergency, the minimum recommended by many financial planning experts.”

The End Result? That suction-like sound is the financial industry soaking up our country’s wealth.

More Related Stories

Featured Slide Shows

  • Share on Twitter
  • Share on Facebook
  • 1 of 13
  • Close
  • Fullscreen
  • Thumbnails
    Clare Barboza/Bloomsbury

    Uncommon Apples

    Api Étoile

    Like little stars.

    Clare Barboza/Bloomsbury

    Uncommon Apples

    Calville Blanc

    World's best pie apple. Essential for Tarte Tatin. Has five prominent ribs.

    Clare Barboza/Bloomsbury

    Uncommon Apples

    Chenango Strawberry

    So pretty. So early. So ephemeral. Tastes like strawberry candy (slightly).

    Clare Barboza/Bloomsbury

    Uncommon Apples

    Chestnut Crab

    My personal fave. Ultra-crisp. Graham cracker flavor. Should be famous. Isn't.

    Clare Barboza/Bloomsbury

    Uncommon Apples

    D'Arcy Spice

    High flavored with notes of blood orange and allspice. Very rare.

    Clare Barboza/Bloomsbury

    Uncommon Apples

    Esopus Spitzenberg

    Jefferson's favorite. The best all-purpose American apple.

    Clare Barboza/Bloomsbury

    Uncommon Apples

    Granite Beauty

    New Hampshire's native son has a grizzled appearance and a strangely addictive curry flavor. Very, very rare.

    Clare Barboza/Bloomsbury

    Uncommon Apples

    Hewes Crab

    Makes the best hard cider in America. Soon to be famous.

    Clare Barboza/Bloomsbury

    Uncommon Apples

    Hidden Rose

    Freak seedling found in an Oregon field in the '60s has pink flesh and a fragrant strawberry snap. Makes a killer rose cider.

    Clare Barboza/Bloomsbury

    Uncommon Apples

    Knobbed Russet

    Freak city.

    Clare Barboza/Bloomsbury

    Uncommon Apples

    Newtown Pippin

    Ben Franklin's favorite. Queen Victoria's favorite. Only apple native to NYC.

    Clare Barboza/Bloomsbury

    Uncommon Apples

    Pitmaston Pineapple

    Really does taste like pineapple.

  • Recent Slide Shows

Comments

Loading Comments...