How Wall Street Devoured the Recovery

[hvactec]

09/20/2013 6:31 am

We are entering a disastrous new era in which all the economic gains go to the top one percent, according to data from economists Emmanuel Saez and Thomas Piketty. They report that "Top 1% incomes grew by 31.4% while bottom 99% incomes grew only by 0.4% from 2009 to 2012. Hence, the top 1% captured 95% of the income gains in the first three years of the recovery.... In sum, top 1% incomes are close to full recovery while bottom 99% incomes have hardly started to recover." (In 2012, $394,000 is the cutoff to make it into the top 1 percent.)

The odds are that we in the bottom 99 percent will never recover. That's because our nation has evolved into something entirely new: a billionaire bailout society. When I first used that phrase in 2009 at a presentation in Los Angeles I could feel the audience squirm. Surely I was exaggerating. Surely, I was just using a rhetorical flourish to stress income inequality. Surely cooler heads would prevail rather than my hot one. Oh, do I wish it were so.

But now we see in vivid detail what the new American order looks like. The top one percent live in another economic universe of high finance that sucks the wealth from the rest of us. In their world, banks (owned by and for the top 1 percent) are able to grow larger and larger so that there is no chance that they will be allowed to fail, even after these same banks took down the economy. (In 1965 they had assets equal to 17 percent percent of the U.S. economy. Today it's more than 65 percent percent.)

How Wall Street Devoured the Recovery | Les Leopold

 

[oldfart]

09/20/2013 6:31 am

We are entering a disastrous new era in which all the economic gains go to the top one percent, according to data from economists Emmanuel Saez and Thomas Piketty. They report that "Top 1% incomes grew by 31.4% while bottom 99% incomes grew only by 0.4% from 2009 to 2012. Hence, the top 1% captured 95% of the income gains in the first three years of the recovery.... In sum, top 1% incomes are close to full recovery while bottom 99% incomes have hardly started to recover." (In 2012, $394,000 is the cutoff to make it into the top 1 percent.)

The odds are that we in the bottom 99 percent will never recover. That's because our nation has evolved into something entirely new: a billionaire bailout society. When I first used that phrase in 2009 at a presentation in Los Angeles I could feel the audience squirm. Surely I was exaggerating. Surely, I was just using a rhetorical flourish to stress income inequality. Surely cooler heads would prevail rather than my hot one. Oh, do I wish it were so.

But now we see in vivid detail what the new American order looks like. The top one percent live in another economic universe of high finance that sucks the wealth from the rest of us. In their world, banks (owned by and for the top 1 percent) are able to grow larger and larger so that there is no chance that they will be allowed to fail, even after these same banks took down the economy. (In 1965 they had assets equal to 17 percent percent of the U.S. economy. Today it's more than 65 percent percent.)

I follow the Saez and Piketty papers pretty religiously, as they have gone through the protocol to gain access to raw SOI data which is the basis of their papers. Any other reputable researcher can do the same, but it takes about two years for the vetting process, so for now they have a near monopoly on the stats. They do a pretty good job, much like the Institute on Poverty at the University of Wisconsin in the 60s and 70s; ground-breaking work on numbers crunching. This is part of the story that almost no one on boards such as this gets; the raw data is available for research once the confidentiality issues and so forth are handled. These guys don't make it up out of thin air like the political pundits do.

Anyway, good job bringing good research to light. Too bad the news media doesn't realize that there is no "other side" to give equal time to on the stats.

 

[waltky]

Granny taken to sewin' old clothes to make ends meet...

Median Income of Women Dropped 4%--In First 3 Years of Recovery
April 24, 2014 -- The real median income of American women dropped a little more than four percent in the first three full years after the end of the last recession, according to data published by the Census Bureau.

The last recession began in December 2007 and ended in June 2009, according to the National Bureau of Economic Research. In 2007, according to the Census Bureau, American women 15 and older had a median income of $23,169 in constant 2012 dollars. That is the highest median income American women have ever achieved. By 2009, the year the recession ended, the median income of American women (in constant 2012 dollars) had dropped to $22,434—a decline of $735, or about 3.2 percent, from 2007.

As of 2012, the most recent year for Census Bureau income data, the median income of American women was $21,520 in constant 2012 dollars. That was down $914 dollars—or about 4.1 percent—from 2009. The median income of American women has not recovered in the current recovery. It has continued to decline from its pre-recession high.

The measure of “income,” according to the Census Bureau, does not include “noncash benefits, such as food stamps, health benefits, rent-free housing, and goods produced and consumed on the farm.” But it does include money a person takes in from such sources as unemployment compensation, Social Security payments, Supplemental Security Income, public assistance, disability benefits, and other cash payments such as rents, royalties, dividends, and interest.

Like median income, some other measures of the economic well-being of American women have also declined during the latest recovery. For example, the Census Bureau also measures “earnings,” which is the money a person gets from working. This, according to the Census Bureau, “includes wages, salary, armed forces pay, commissions, tips, piece-rate payments, and cash bonuses earned, before deductions are made for items such as taxes, bonds, pensions, and union dues.” It can also take the form of “net income” from self-employment, including on a farm.

Median Income of Women Dropped 4%--In First 3 Years of Recovery | CNS News

 

[basquebromance]

we've gotta deal with the elephant in the room which is the greed, recklessness & illegal behavior on wall street when you have 6 financial institutions in this country that issue 2/3rds of the credit cards & 1/3rd of the mortgages when 3 out of 4 of them are larger today than when we bailed them out because they are too big to fail, we've gotta re-establish glass-steagall, we have got to break the large financial institutions up. the greed of the billionaire class, the greed of wall street is destroying this economy & is destroying the lives of millions of americans, we need an economy that works for the middle class not just the greedy millionaires & billionaires!

 

[EdwardBaiamonte]

These guys don't make it up out of thin air like the political pundits do.
.

of course that's stupid and liberal!! Picketty has become a joke and buffoon.
He says there is inequality but does not:

1) count the $trillions in entitlements that we spend to lessen inequality
2) count how crippling liberal programs like family and school destruction impoverish
the lower class and thus make them inequal
3) count globalization which means our top guys now have billions of customers all over so their money comes from the world not from America. Apple does 2/3 abroad for example.
4) count land and business value which are rapidly inflated by liberal inflation but don't really equal greater wealth
5) consider that capitalism is not a zero sum gain. You cant wealthier and wealthier unless everyone can keep buying and buying from you.