First they took from the poor, then the middle class, then the upper middle class, then …


Everyone knows the response that bank robber Willie Sutton supposedly gave when asked why he robbed banks. He is said to have replied, “Because that’s where the money is.” Sutton denied he ever said it but that story has entered the folklore.

But that saying seems relevant when we see something similar happening with the way that the oligarchy increases its share of the wealth, by going where the money is. We know that the poor have been squeezed so that the wealthy get even wealthier. But as the money left among the poor dries up. the oligarchs started squeezing the middle class. Wolf Richter says that it now appears that the oligarchs are starting to put the squeeze on the upper middle class.

He says that the Federal Reserve loves to boast that that the total wealth in the US is now a record $107 trillion. The bottom 50% has a mere 1.9% of that amount, and that is even less than it was in 1999. But what is happening to the top 50%? That of the top 1% is surging while that of the remaining 49% is declining.

In other words, this economy – and I will point my finger straight at the policies of the Federal Reserve – is set up to shift an ever-larger share of the wealth to the top 1% and away from everyone else, according to the Fed’s own data. And the Fed is bragging about it.

The top 1%’s share of household wealth over those ten years increased by 5 percentage points to 32%. The 1% now own nearly one-third of total household wealth,

But over those 10 years, the share of household wealth owned by the next 9% fell by 3 percentage points to 37%.

And the share of the 50% to 90%, the upper middle class, also fell by 3 percentage points to 29%.

It is ironic that the Fed puts out this data on a quarterly basis, as if to show off its handiwork, its success, as measured by how much of the wealth is increasingly concentrated at the 1% of households, and how every time their wealth appears threatened even a tiny little bit, the Fed comes up with new bailouts, rate cuts, and other shenanigans, such as the repo market bailout recently. This data is like a report card that the Fed issues of how successfully its policies help the 1% gain an ever-larger share of household wealth.

In his article, Richter examines the causes for this trend.

So the one-percenterrs are steadily squeezing higher and higher income and wealth brackets in order to increase their share of the wealth. The Federal Reserve is aiding in this process. And as long as the stock market keeps rising, which is the only thing these people care about since much of their wealth is tied to it, we will be told that the economy is in great shape.

Comments

  1. bmiller says

    Robert: For an example, look at the steady, ongoing impoverishment of Argentina as they flirt with bouts of Peronism. Chavismo is magical thinking as much as any American fundamentalist prosperity gospel preacher. I am much less sympathetic than our host.

  2. bmiller says

    And unlike the Koch’s (or, for that matter Mugabe), Maduro is utterly incompetent at running an economy.

  3. bmiller says

    Oops. I meant, unlike the Kochs, Maduro (and Mugabe, another example of revolutionary magical thinking that is at least based on historical injustices) are utterly incompetent at running an economy.

  4. file thirteen says

    @mnb0 #1

    But if President Maduro does exactly this and with a lot more success MS totally approves.

    I call bullshit. This post doesn’t mention anything to do with Venezuela, much less Maduro. This is the second article completely unrelated to Maduro that you’ve attempted to hijack inside of a week. Who’s paying you to do this? Inquiring minds want to know.