So, we’ve a new movie, an Inconvenient Truth about inequality it is said, coming out. In which we are told:
Half of the US’s total assets are now owned by just 400 people – 400! – and, Reich contests that this is not just a threat to the economy, but also to democracy.
This is entire bollocks.
As shown in Table 2, the top 1%
of households accounted for a little more than one-third of total net worth in 2010.
The top 400 people are a very much smaller group than the top 1% (in the US, the top 1% is some 3 million people or perhaps 1 million or so households). In fact, the top 400 people is, to an acceptable level of accuracy, 0.01% of the country. UPDATE! Hah, yes, as in the comments, the top 400 are 0.01% of the top 1%, not of the population. So, 0.0001%.
Agreed, leftist mathematics can be a little odd but in the maths they teach us in this universe the top 0.0001% cannot have more of the total wealth than the entire top 1%, including that 0.0001%, has. Well, not unless many of the top 1% have negative wealth that is, which isn’t something that anyone at all is asserting.
So, it’s bollocks.
What would be interesting is to find a script of this movie, “Inequality For All” and plough through it for similar nonsenses.
There’s other great stuff in it too:
There’s Erika and Robert Vaclav, for example, who pay $400 a week to keep their daughter in after-school care so that Erika can work on the checkout at Costco. “And I’m trying to work out if I should get her a phone so that she can walk home from school alone, and I know she’s OK, or if I should continue paying the money.” They lost their house when Robert was made redundant from his job as a manager at the now defunct electrical retailer Circuit City. And, it gradually transpires, that he’s a student in Reich’s wealth and poverty class at Berkeley.
“How much money do you have in your checking account?” Kornbluth asks Erika from off camera as she drives her daughter to school. “$25,” she says and her voice starts to crack and waver.
Fancy that eh? Family of mature student don’t have lots of money. I’m shocked I tell you, shocked.
One of the key pieces of research that Reich cites is a study of tax data by Emmanuel Saez and Thomas Piketty which shows that the years of peak income inequality in America were in 1928 and 2007. Right before both crashes. “The parallels are striking,” he says.
What’s actually striking is the incredible difference between the two sets of inequality. In 1928 it was largely income from capital which led to it. In 2007 it was largely income from labour which did. It’s actually entirely different in fact.