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Richest 1 percent earn biggest share since ’20s

FILE - In this 1928 file photo, Actress Joan Crawford is seen dancing the Charleston in "Our Dancing Daughters" in Hollywood, Calif. A report released, September, 10, 2013, shows that the very wealthiest Americans earned more than 19 percent of the country’s household income in 2012, their biggest share since 1928. And the top 10 percent captured a record 48.2 percent of total earnings last year.  (AP Photo/File)

FILE - In this 1928 file photo, Actress Joan Crawford is seen dancing the Charleston in "Our Dancing Daughters" in Hollywood, Calif. A report released, September, 10, 2013, shows that the very wealthiest Americans earned more than 19 percent of the country’s household income in 2012, their biggest share since 1928. And the top 10 percent captured a record 48.2 percent of total earnings last year. (AP Photo/File)

The gulf between the richest 1 percent and the rest of America is the widest it’s been since the Roaring ’20s.

The very wealthiest Americans earned more than 19 percent of the country’s household income last year – their biggest share since 1928, the year before the stock market crash. And the top 10 percent captured a record 48.2 percent of total earnings last year.

U.S. income inequality has been growing for almost three decades. And it grew again last year, according to an analysis of Internal Revenue Service figures dating to 1913 by economists at the University of California at Berkeley, the Paris School of Economics and Oxford University.

One of them, Berkeley’s Emmanuel Saez, said the incomes of the richest Americans surged last year in part because they cashed in stock holdings to avoid higher capital gains taxes in January.

In 2012, the incomes of the top 1 percent rose nearly 20 percent compared with a 1 percent increase for the remaining 99 percent.

The richest Americans were hit hard by the financial crisis. Their incomes fell more than 36 percent in the Great Recession of 2007-09 as stock prices plummeted. Incomes for the bottom 99 percent fell just 11.6 percent, according to the analysis.

But since the recession officially ended in June 2009, the top 1 percent have enjoyed the benefits of rising corporate profits and stock prices: 95 percent of the income gains reported since 2009 have gone to the top 1 percent.

The gap between rich and poor narrowed after World War II as unions negotiated better pay and benefits and as the government enacted a minimum wage and other policies to help the poor and middle class. The top 1 percent’s share of income bottomed out at 7.7 percent in 1973 and has risen steadily since the early 1980s, according to the analysis.

Legacy Comments15

It's more than coincidence that the huge disparity between the 1% and the rest of us began 3 decades ago. Fairy-tale economics from the right: supply-side/trickle-down/voodoo economics, was sold to the nation by that genial shill from G.E., Ronald Reagan, who got to play the role of his life as president for 8 years. The snake-oil remedies for a stagnant economy wrongly blamed "big government", when the real culprit was globalization. Ever since, the right's remedies have siphoned wealth to the top from everyone else, while adding little of real value--think of the real estate, dot.com, and financial services bubbles. We've had 3 decades of rule by men held in thrall to a philosophy that can barely see past the next quarter, let alone 2 decades ahead.

This piece is about how the rich have gotten richer "since 2009". Logically, though, why would the "right" as you call it, siphon money from themselves to the "rich". Bill Clinton and many Democrats, including Terry McCauliffe got very wealthy during the dot.com bubble which is when technology was spiking and the router was being developed and perfected as well as many other advances. Everyone got involved. The real estate bubble was based on supply and demand, demand was high and overall, things like the Community reinvestment act which loaned to people who could not afford the mortgages was one of the main factors in the bubble bursting. I will go along with you on the financial services bubble and we should not have bailed out banks. However, you completely ignore the fact that Obama deficits are greater per month than Bush's were for entire years. Obama has spent us into oblivion and it has all done little more than fattened government.

Yes, Bill Clinton and Terry McAuliffe have a big "D" next to their names; but if one looks more deeply into their actual policies the hidden Republican pops out. Clinton's enthusiastic support of the Gramm-Leach-Bliley Act, the one that broke down the barriers between banking and casino gambling and enabled gross financial misconduct says much about his real inclinations. The Community Reinvestment Act is a very complicated subject, but it can't be legitimately blamed for the housing bubble which was more than anything else a product of unscrupulous lenders and outright criminal marketers of their worthless paper.

In order to find out how we got here, we need to know what policies lead up to it. Often times it is something that started the ball rolling, that would be things like the community investment act. Sometimes when the govt butts in, they make it a heck of a lot easier for folks to become unscrupulous. Many of their programs attest to the fact that govt does not do a very good job when it comes to implementing their great ideas. Thus, they open the door for those programs to fail or be abused.

To Rabbit, below, forget about the Community Reinvestment Act. The dots only connect to it elliptically. Follow the straighter lines and most of all "follow the money."

Another post filled with wishful thinking and blame-shifting, but based on little factual data from the real world. There is zero support for the claim that the CRA was any kind of factor in the financial meltdown, let alone a "main factor". That claim is being made in libertarian circles again based on a 2012 paper by Agarwal and others finding that seemingly riskier loans were made by banks just prior to CRA auditing. But that paper made NO claims that the CRA contributed to the meltdown. That claim is made only by those who distort the paper's findings for political gain. The Federal Reserve found NO connection between CRA and the subprime mortgage problems. Instead, the FED found "that nearly 60 percent of higher-priced loans went to middle- or higher-income borrowers or neighborhoods, which are not the focus of CRA activity....about 20 percent of the higher-priced loans that were extended in low- or moderate-income areas, or to low- or moderate-income borrowers, were loans originated by lenders not covered by the CRA.... only six percent of all higher-priced loans were made by CRA-covered lenders to borrowers and neighborhoods targeted by the CRA." Others blame Fannie and Freddie, but their market share of loans declined from 70% to 40% between '92 and '06, suggesting they weren't one of the "main factors" either. The root cause was in the private sector: the demand for private-label, mortgage-backed securities from the investment banks and the lending institutions they owned. As for Obama "spending us into oblivion", once again it's as though Obama started in 2009 with a blank slate--or as though all conservatives developed amnesia in 2009 and forget what happened in 2008. They seem to think all that spending occurred in a vacuum, instead of in response to ( a response mandated by law to a great degree) the worst economic crisis faced by this nation since the Great Depression. Do you still pretend not to understand why the deficits occurred? And do you still not understand how devastating it would have been for our economy and for the overall health of the nation had we cut spending in 2009 instead of increasing it? Do you not understand the logic of counter-cyclical spending--policies proven to work in the real world in every economic downturn since the Great Depression? I try not to ignore the facts; instead I try to put them into their proper context. You should try it.

Obama and the democrats have been 100% in charge and the democrats trickle up theory didn't work. As democrats do, they renamed it to this new term - "growing from middle out". It is cute that democrats blame presidents not in office. Economists have called the Obama and democrats recovery the weakest in History. How is that Hopey Changey thingy working for ya now?

Actually what is cute is when a people refuse to accept factual information. A theory is just a thought that something might work, facts are when you look back and say did the theory work or did it not....... As far as that Hopey thing - my 401K is better today, my house value is higher, looking at new car, so I am feeling a lot better than lets say 2008 in the mist of the second great depression.

built on a house of cards - The biggest economic shock is to come - USA cannot flood the world with Obama Monopoly money without having to call them back in - read some articles about the money supply and get back to us

Articles about the money supply? Written by whom? The panic articles seem to come mainly from the gold-bugs who have been screaming that the sky is falling since 1933.

Why do you continue to post this counter-factual nonsense. Obama has been president since 2009 - that part is correct. Republicans have had a majority of the House since 2011, and there have always been Democrats who will vote with them (unlike the Republican party which generally votes as one). In the Senate, there was a filibuster-proof Democratic majority for only a few months, and it depended on votes by terminally ill Ted Kennedy. Oh, and let's not forget the extremely conservative majority on the Supreme Court. If that's what you consider "100% in charge" perhaps a refresher course in the meaning of percentages is in order.

Accepting that everything in the article are actual facts (history not theory) it appears Regan's (1980's) Trickle Down Economics did not work. Appears it all stayed at the top..... Then-again, maybe it did work just as planned.

you do realize that this article is about the policies under the Obama years?

I've got to agree with you again Jim, Trickle down economics has never and will never work because of the greed, in this case the 1 percenters. It's partially what's wrong with our tax structure in this state. We fund this state on the backs of the tourists and the working man as the wealthy gets yet another subsidized financial ride. No wonder we're considered one of the wealthiest states in the country.

This is a good time to repeat the (possibly apocryphal) origin story for "trickle-down" economics. In Shakespeare's day, the fashionable rakes and dandies who attended his plays stood separately and above the common groundlings. There being no bathrooms at the time, and few if any ladies present, the rakes and dandies would answer nature's call by moving to the railing to relieve themselves. There was an etiquette to this however: it was considered bad form to over-water one spot. Those dandies who did so invited the wrath of the groundlings: "We don't mind being p***** on, but could you spread it around!"

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