September 14th, 2018
By Paul Buchheit
Guest writer for Wake Up World
While wealth continues to rush, not trickle, upwards, low-income families are going backwards as the average net worth for the poorest half of America decreased from $11,000 to $8,000 since the 2008 financial crash.
What Just Happened? $30 Trillion to the Richest White Americans Since 2008
Thirty trillion dollars. That’s nearly a third of ALL our current wealth, newly created and distributed to the richest 10%, who are mostly white millionaires. These fortunate takers profited mainly from the stock market, which has more than tripled in value since the end of 2008.
The Stunning Numbers
Wealth statistics since the recession are provided in the Credit Suisse Global Wealth Databook. A summary of relevant data can be found here.
Post-recession data shows that about $33 trillion went to the richest 10%, who are overwhelmingly millionaires (13 million millionaires, 12.6 million U.S. households!) That nearly doubled the wealth of each member of the richest 10%. Average net worth is now $14 million for each 1% household, and the greater part of a million for even the ‘poorest’ household in the top 10%.
In comparison, average net worth for the poorest half of America decreased from $11,000 to $8,000 since the recession.
A Gift to Rich White (and Asian) Households
The conclusion that $30 trillion went to white households is based on various reliable sources.
The Washington Post references Federal Reserve data that estimates combined Black/Hispanic households as about 7% of all millionaire households (about 2% of 40 million Hispanic and Black households), and thus accruing about $2.5 trillion of that total $33 trillion decade-long gain. Statista, on the other hand, estimates that Black/Hispanic households make up 15% of all millionaires, which would represent a $5 trillion gain since the recession. Asian-Americans, with just 7 million households, are millionaires at about the same rate as white Americans. By the best estimates, the ten-year gains by White/Asian households is close to $30 trillion.
Instead of Reparations, an Economic Lynching
About halfway through the post-recession decade, in 2013, the National Association of Real Estate Brokers estimated that African-Americans had lost over HALF their wealth because of the sub-prime mortgage scandal and the loss of jobs. Although a Federal Reserve survey found that Black and Hispanic households had regained up to half their losses by 2016, Pew Research concluded that the median net worth in 2016 for middle-income Blacks and Hispanics and lower-income whites was still only half as much as in 2007. Other sources make it clear that the wealth gap between whites and the two main minority groups have grown significantly since 2008.
There’s no question that Blacks and Hispanics have lost more than white families since the recession. And it’s getting worse. A shocking recent report from Prosperity Now and the Institute for Policy Studies calculates that, based on current trends, median wealth for black Americans will HIT ZERO in the next 35 years — and for Latino Americans two decades later.
A USA Today story says it best: “A century and a half of progress wiped out.”
How Did It Happen?
At least since Ronald Reagan’s presidency, the emphasis has been on individual gains, and on blaming poor people for being poor. Rich white Americans have continued to redistribute wealth to themselves through the stock market. People who relied on middle-income home ownership and savings accounts went backwards.
There is considerable evidence for the correlation between increasing wealth and decreasing empathy for less fortunate people. Privileged white Americans generally believe they deserve everything they have, because they feel they’ve worked harder than others; thus they’ve steadily lost the ability to see the great disparity in opportunity that has drained wealth from the bottom half of America.
America Has Taken Nearly 70% of the World’s Wealth Gains Since 2012
America’s super-rich are taking not only from their own nation, but also from the rest of the world. Data from the 2017 Global Wealth Databook (GWD: Table 2-4) and various war reports help to explain why we’re alienating people outside our borders.
From 2012 to 2017, global wealth increased by $37.7 trillion, and U.S. wealth increased by $26 trillion. Thus, largely because of a surging stock market, our nation took nearly 70 percent of the entire global wealth gain over the past five years. Based on their dominant share of U.S. wealth, America’s richest 10% — much less than 1% of the world’s adult population — took over half the world’s wealth gain in the past five years.
Wealth in the Volatile Middle East Has DECLINED at the Same Time
It’s not surprising that young men in the Middle East and Africa would harbor resentment against a country that takes the great majority of the wealth—especially considering that the most troubled areas of the world have collectively lost wealth between 2012 and 2017. That’s both average wealth and median wealth.
Although the GWD has limited data about individual nations in the Middle East and Africa, some is available. Median wealth has PLUMMETED in Syria and Iran and Yemen. It has gone down by almost half in all of Africa. Wealth levels are crashing in the areas of the world where we wage war.
We’re Bombing Nations That Aren’t Terrorist Threats
An explosion jolted Basim awake, and he could see the night sky through the massive hole in his bombed-out Iraqi house. “Mayada!” he screamed for his wife. No response from her, or from his daughter Tuqa… In the hospital days later, Basim lifted his phone and looked at the smiling images of a wife and daughter he would never see again. He began to sob uncontrollably.
One would think that a nation monopolizing the world’s new wealth would avoid alienating the victims of inequality. But it’s just the opposite. The U.S. dropped thousands of bombs on seven Middle Eastern and African countries in 2016. Estimates of civilian deaths by airwar monitoring groups surpass official Pentagon numbers by a wide margin.
For the desperate residents of Yemen, attacks by Saudi Arabia continue with American weapons, using American targeting data, and delivered by American jets. Power and water facilities have been destroyed. Supply lines have been cut. Hospitals have been bombed, and a cholera epidemic is raging out of control.
In Africa, the Pentagon is engaged in about 100 missions in 20 African countries. That includes Somalia, which has been the target of a wave of new U.S. bombings in 2017, even though that country is one of the Middle-Eastern states which “are not serious terrorism risks,” according to the Cato Institute. The bombing campaign in Somalia is waged with no public debate or Congressional authorization. Since 2001 the Authorization for Use of Military Force Act has been used to justify deadly attacks on any newly feared potential enemy, under the guise of taking aggressive action on any nation that might have “planned, authorized, committed, or aided the terrorist attacks” of 9/11.
Apology to the Troops
Big money interests have turned America into a financial machine, accumulating more and more tax-deferred wealth through the stock market, and using the media to frighten us with overblown terrorist threats. At the same time, Americans are brainwashed into believing that we’re forever fighting a war for freedom. But ‘freedom’ has become a distorted concept in our increasingly unequal nation. Young lives are put at risk to ensure that a few thousand American households are free to take most of the wealth.
Recommended reading by Paul Buchheit:
- Big Pharma, Big Oil and Big Banks – The Definition of Terrorism
- 5 Signs of a Dying Society
- Capitalism at Its Worst: 5 Deadly Sins of Big Pharma
- Facts That Our War-Happy Leaders Would Like to Keep Hushed Up
- How Wealth Inequality Kills
- Now Just FIVE Men Own Almost as Much Wealth as Half the World’s Population
- The Real Terrorists: The 0.01%
- Capitalism and the “Jobs for Everyone” Fallacy
- A 2% Financial Wealth Tax Could Provide a $12,000 Annual Income to Every American Household
About the author:
Paul Buchheit is a college teacher, an active member of US Uncut Chicago, founder and developer of social justice and educational websites (including youdeservefacts.org), and the editor and main author of “American Wars: Illusions and Realities” (Clarity Press). His latest book is, Disposable Americans: Extreme Capitalism and the Case for a Guaranteed Income. Paul can be reached via email here.
This work is first appeared on Common Dreams (here and here) and is licensed under a Creative Commons Attribution-Share Alike 3.0 License.