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Wednesday, 10 September 2014 08:28

Federal Reserve: Redistribution of Wealth in the US Is Going Upward to the Rich

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greeda(Photo: See-ming Lee)

Who knows, maybe journalists at CNNMoney are reading BuzzFlash?

On August 8, we posted a commentary, "As the Rich Get Richer, 75 Percent of the Nation Expects Stagnant or Lower Incomes." On September 8, Emily Jane Fox of CNN Money wrote, "Super rich are getting super richer." 

However, Fox did not need to read BuzzFlash to arrive at the conclusion of her article. The facts speak for themselves. As the CNNMoney article reports:

The super rich got super richer as the gap between them and the rest of Americans continued to widen over the last few years, according to a new Federal Reserve report.

In its Study of Consumer Finances, released every three years, the Fed found that the wealthiest 3% of American households controlled 54.4% of the nation's wealth in 2013, a slight increase from its last survey in 2010. It's also substantially higher from the 44.8% they held in 1989, showing how quickly the income divide has been growing over the past decade or so.

At the same time, the share of wealth held by the bottom 90% fell to 24.7% in 2013. That's compared to 33.2% in 1989.

By the metrics of the Federal Reserve, 10 percent of the US population controls 75 percent of the wealth in this country. Other analyses of the continued redistribution of wealth upward speculate that the nation's financial assets are being increasingly concentrated in the hands of a few individuals and families.

As BuzzFlash noted in its August commentary, the suppression of the bottom 90 percent's income is integrally related to the redistribution of money to the wealthiest in the nation:

Various corporate tactics to lower wages, break unions and move jobs overseas - among other strategies - have contributed to the plight of hourly and lower- and mid- level white collar workers cutting back on their expenses or incurring debt. 

In fact, one of the primary accelerating sources of income for the top 1% - especially in the financial world - is the double-digit interest rate earned on the debt of the working class in the United States. In short, keeping salaries down not only increases corporate profit, it also strengthens the bottom line of banks.

Even President Obama admitted that the recovery has overwhelmingly benefitted the super-rich. In a September 2013 article, CNNMoney reported:

President Obama has been loud and clear about his fight against income inequality, but he admitted that the rich have fared far better than the poor during his time in the White House.

In an interview that aired Sunday on ABC's "This Week with George Stephanopoulos," the show host cited a recent study from the University of California, Berkeley, that found 95% of income gains from 2009 to 2012 went to the top 1% of the earning population.

The president agreed.... 

"The folks in the middle and at the bottom haven't seen wage or income growth, not just over the last three, four years, but over the last 15 years," the president said. 

President Obama has not been "loud and clear" in actually acting to change income inequality, although at times he has used it as a topic in a speech. The lopsided redistribution of wealth and financial gains from the economic recovery, such as it has been, since 2008 have gone - even the president admits - almost entirely to the wealthiest. Little has been done by the White House to alter that trend.

It is dismaying that with midterm elections less than two months away, there is very little sustained national discussion of this economic injustice and financial systemic failure.

With more than 90 percent of the US population experiencing stagnant wages, prolonged joblessness or wage downshifting to lower-paying jobs, economic justice should be at the top of the political debate. However, that's not going to happen in a system where both national political parties benefit from campaign contributions from corporations, Wall Street and wealthy individuals.

It is also not going to happen when the ruling elite in DC - in both parties - are for the most part beneficiaries of the revolving door between government service and selling their access to the highest bidder when they leave the public payroll.

Copyright, Truthout. May not be reprinted without permission.