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Wednesday, 24 January 2018 06:39

The Rich Are Still Getting Richer: Worldwide Economic Inequality Is Accelerating

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occupyjanphotoThe 2011 Occupy movement provided hope for economic equality.          (Charlie Llewellin)

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It has only been a few short years since the heady days of the Occupy Wall Street movement, which began on September 11, 2017, in Zucotti Park, New York. The ensuing weeks created a fervor for economic justice across the United States, with encampments in many cities. In particular, the clarion call for an end to the concentration of wealth among 1% of the population became a social meme. Even the corporate mainstream media -- which only sparingly covers financial inequality issues -- reported continually on the protests, particularly the main one on Wall Street.

On November 15, 2011, New York police squashed the protest in Zucotti Park, and the shutdown of encampments around the country ensued. Although ardent concern about the increase in wealth among an extremely small percentage of the nation (and world) continues among progressives -- and in publications such as Truthout -- some recent studies have shown that the regressive trend is continuing, not abating. This reality is facilitated by public policy such as the just-enacted Republican tax restructuring, which enriches the top 1% even further while diminishing federal government support for programs that financially benefit the public at large.

A January 23 Inter Press Service (IPS) article confirms that wealth is continuing to be amassed in the hands of the few at the expense of the many:

As the 'masters of the universe' gather for their annual retreat at Davos, the World Economic Forum (WEF) has just published its Inclusive Development Index (IDI) for the second time.

After moderating from the 1920s until the 1970s, inequality has grown with a vengeance from the 1980s as neoliberal ascendance unleashing regressive reforms on various fronts....

According to the World Inequality Report 2018, the top 1% in the world had twice as much income growth as the bottom half since 1980. Meanwhile, income growth has been sluggish or even flat for those with incomes between the bottom half and the top 1%. Oxfam's new Reward Work, Not Wealth report reveals that the world's wealthiest 1% got 82% of the wealth generated in 2017, while the bottom 50% saw no increase at all!

Bloomberg reports, "The [500] richest people on earth became $1 trillion richer in 2017, more than four times last year's gain, as stock markets shrugged off economic, social and political divisions to reach record highs." As interest rates remain low, the middle class and poor are offered extremely meager interest rates on their savings. However, the wealthiest individuals have been seeing their net worth soar. The new titans of wealth include a number of billionaires who made their fortunes through technology and the internet. Bill Gates and Jeff Bezos each have a net worth of more than 90 billion dollars, for example.

One possible cause of the growing wealth imbalance relates both to austerity and privatization, as the IPS article notes:

The World Inequality Report 2018 also observed that rising income inequality has largely been driven by unequal wealth ownership. Privatization in most countries since the 1980s has resulted in negative 'public wealth' — public assets minus public debt — in rich countries, even as national wealth has grown substantially. Over recent decades, countries have become richer as governments have become poorer, constraining governments' ability to address inequality by increasing public provisioning of essential services.

An earlier IMF study also noted that the neoliberal reforms — promoting privatization, cutting government spending, and strictly limiting fiscal deficits and government debt — have also increased economic inequality.

The shift from government provision of programs to privatization thus turns funding that benefits the public at large into profits that enrich the few. Furthermore, austerity inevitably results in the cutting back of government services. These services are often then provided by companies that profit from what used to be part of the public domain. A large part of the moneyed right's animus against spending on government services derives from a rejection of the principle that shared wealth should pay for them.

The fact that the US is a wealthy nation with a strong gross domestic product does not mean that everyone benefits. A country can overall be economically strong and prosperous, but have a lopsided and inequitable distribution of wealth. That would very much describe the United States and the vision that billionaires like the Koch brothers want to maintain.

In 2017, their perspective unfortunately prevailed.