American Patrimony- The return of the Gilded Age [View all]

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Paul Krugman-

One problem the Piketty work I discuss in today’s column may have — at least in America — is the widespread perception, even among those who take inequality seriously, that it’s all about compensation, that wealth inequality isn’t that big an issue, and that inheritance is also not that big an issue. We think hedge fund managers, not Kochs and Waltons.

But is this perception right? A lot of it seems to be based on the Fed’s Survey of Consumer Finances — but this may have trouble tracking really huge fortunes for the same reasons standard income surveys have trouble tracking really high incomes. And the problem is especially acute because wealth distribution is even more skewed than income distribution.

So it turns out that Emmanuel Saez and Gabriel Zucman have been developing an alternative procedure for estimating top wealth shares — preliminary slides here (pdf) — and it tells a very different story from the common one. According to their estimates, the wealth share of the very wealthy is in fact all the way back to Gilded Age levels:


Meanwhile, focusing on the upper middle class, which is still fashionable among some pundits, misses the whole thing, because everyone below the 99th percentile has actually been left behind:


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http://krugman.blogs.nytimes.com/2014/03/24/american-patrimony/