WEALTH INEQUALITY, NOT GOOD FOR OUR NATION

Forbes magazine, (Forbes, March 2, 2015) recently gushed in its "29th Annual World Billionaires Issue" that the world has as of 2015 almost two thousand individuals who are multi-billionaires. The editors of Forbes estimate that these "magnificent two thousand" have a combined wealth of somewhat over $ 7 trillion dollars. The average world billionaire in the group this year had a net worth of about $4 billion dollars. Bill Gates, with about $80 billion, was still number one on the list, as he has been for the last sixteen years. Sagacious, curmudgeonly investor Warren Buffett with $73 billion ranked third.

The USA, center of world banking and investment, big military hardware, energy exploitation and technology has the most billionaires, 536 of them. The cumulative wealth of the 500 plus USA billionaires is estimated to be a bit over $2 trillion dollars. That amount is about 1/8 of the total U.S. 2015 GDP. It is astounding that just 500 or so individuals have skimmed off about 12.5% of all the money made or earned in our nation.

These individuals do not put much of their lucre into circulation. How could they? There are so few of them. Even if they went on a crazy spending binge the 536 American billionaires just could not realistically pump a significant amount of their accumulated wealth into the general economy. Furthermore, such activities would be the most unlikely thoughts in their minds. Their main concern, their laser like focus, is not wealth redistribution, far from it...it is further accumulation of wealth. They have more than anyone but only want more of the stuff. They care little on how their money circulates.

The "magnificent 536" have, thus, in effect, sequestered their "geld" outside of the general economy. The question of where their funds lie and how they are invested is not the focus of this essay. Sufficient to say, that the vast sums they control are mostly out of general circulation. They do not buy cars and trucks in the millions, refrigerators, clothes, shoes and all the vast array of products and services our nation provides. Hey they are only a few mostly men who you could gather in a small school auditorium. Their wealth is mostly hidden away in off shore accounts, foreign investments, exotic holdings, "priceless" artwork, vast real estate, enormous yachts, rare antiques and antiquities, etc. etc. (Some like the generous Bill Gates do make an effort at doing good deeds and he also promises to give it all away when he dies.)

The economic effect of their accumulation of excessive wealth is that their piles of currency are out of circulation, leaving all the rest of us, poor folk, workers, brick layers, plumbers, ordinary millionaires, the filthy rich, the exceedingly affluent, the simply affluent, movie moguls, Presidents, CEOs, bankers, Supreme Court judges, physicians, butchers, bakers and candlestick makers with only 9/10 of the nation's wealth to compete for. Aside from the 500, the other three-hundred plus million citizens of the USA scramble to access only 90 cents on every dollar...that makes life ten percent harder on us all. Now if only the government would tax these 500 a bit more........

So all you just filthy rich, exceedingly rich, those of you rolling in it, and the just plain wealthy folk, and others of your ilk, don't feel so smug when the conversation turns to wealth inequality. The five hundred "magnificent billionaires" have reached into your pockets too and removed ten cents on every dollar that jingle in there for their own (perhaps not so good) purposes. That is the impact of wealth inequality....that is money you too can not access.

For those of the middle class the picture is even more bleak. The topic of wealth inequality is not thought of much in this group. But it should be. Not only have the magnificent 500 picked your pockets for ten cents on every dollar, but the top 20% have picked off another 70 cents on every dollar. So that you middle class workers, bricklayers, plumbers, carpenters, truck drivers, machine operators, teachers,factory workers and others are competing for only twenty cents on every dollar. The top one fifth of the wealthy have siphoned off 80 cents on every dollar, leaving only 20 cents on each dollar for the lower 80 percent of the population to compete for. Perhaps that is why life has become so much more difficult for the American worker.

That does not seem like the American Dream, does it? Nor is it very likely...no it is unlikely, that either you in the lower 80% of wealth distribution or your children or your children's children would ever move up into the top rungs of wealth. Those places are all sewed up for the progeny of the elites. That is because wealth brings with it both priveledge, economic power, and political power. The wealthy control the politicians and the policies of this nation.

The sad fact is that the sequestering of wealth in the hands of the few is not good for our economy. Wealth inequality is a form of austerity, which limits the amount of money in the hands of the people. It is analogous to stuffing a hank of cloth into the carburetor air intake of a gasoline engine, it stalls the engine, it staunches economic growth. For that reason it is not good for our nation, and its people, rich and poor, or for a flourishing economy.