The economy isn't getting better for most Americans. But there is a fix
US economic data leaves us in the dark. If we dont change the way we measure such progress, were unlikely to have much of it
Read our entire Broken capitalism series
The economy is getting bigger, but not better. Not for most Americans, anyway. In the United States, additional income from productivity and growth has been going mostly to those at the top of the income and wealth ladder. Between 1979 and 2016, the US national income grew by nearly 60%, but after accounting for taxes and transfers, the bottom half of the income distribution experienced incomes rising by 22%, while those in the top 10% had income gains that were almost five times as much 100%.
As income inequality widens, its calcified into some at the top accumulating larger and larger stocks of assets money, but also property, stocks, bonds and other kinds of capital. In the United States, the distribution of wealth is even more severely unequal than income. Since 1979, wealth gains at the top have grown even faster than income; those in the top 1% now control about 40% of all wealth in the US economy, and the top 0.1% control more than 20% three times as much as the late 1970s.
To put this into raw numbers, there are 160,000 families in the United States who hold more than $20m in 2012, the most recent year for which data is available, and their average wealth was $72m. This groups share of wealth was almost equal to that of the bottom 90% of Americans.
And as such money should be treated like a resource and regulated so it maintains its life fulfilling its purpose, to facilitate the exchange of goods and services. A system that lets money be removed from the economy is no different than a football game where the Victors take possession of and remove the footballs from the game. Eventually GAME OVER. Allowing money to be hoarded is the death of an economy. An economy by definition is the trading of goods and services. The trading of goods and services is facilitated by money. Hoarding of money besides killing an economy will also eventually kill a society. The rule for money should be use it or lose it. Acknowledgement of the skills required to amass large fortunes should be in the form of possessions so that work will continue. Rewards for excellence in amassing fortunes can be in the form of reduced personal property taxes. Maybe some other form that helps make painless the contribution to create parks and businesses and healthy workers and living wages, in a word prosperity. Hoarding money is a choice by the wealthy to impose poverty on the less fortunate.
The recent worst evil of all, Commodities Futures Modernization Act, should be immediately repealed. The CFMA simply makes the accumulation of wealth without providing a service. For the Conservatives, you can still keep some forms of insurance. The traditional forms of commodities that require a stabilized market in spite of natural phenomena will still be protected by futures trading. Like the damming up of a river at the head of a valley so are the monmies that are used to secure unintersted positions in trading, derivative securitising. Bust open that dam and release a flood of prosperity..