Is that blood boiling in the pot over there?

[voxwoman]

This article has been around for a while, but I just "found" it doing some other surfing. Even though it's 5 years old, it's still relevant and it still gets me all riled up. "The Super Rich are Out of Sight"

Two studies that do their best to muddy our understanding of wealth, conducted respectively by the Rand Corporation and the Brookings Institution and widely reported in the major media, found that individuals typically become rich not from inheritance but by maintaining their health and working hard. Most of their savings comes from their earnings and has nothing to do with inherited family wealth, the researchers would have us believe. In typical social-science fashion, they prefigured their findings by limiting the scope of their data. Both studies failed to note that achieving a high income is itself in large part due to inherited advantages. Those coming from upper-strata households have a far better opportunity to maintain their health and develop their performance, attend superior schools, and achieve the advanced professional training, contacts, and influence needed to land the higher paying positions.

More importantly, both the Rand and Brookings studies fail to include the super rich, those who sit on immense and largely inherited fortunes. Instead, the investigators concentrate on upper-middle-class professionals and managers, most of whom earn in the $100,000 to $300,000 range--which indicates that the researchers have no idea how rich the very rich really are.

When pressed on this point, they explain that there is a shortage of data on the very rich. Being such a tiny percentage, "they're an extremely difficult part of the population to survey," pleads Rand economist James P. Smith, offering the same excuse given by the Census Bureau officials. That Smith finds the super rich difficult to survey should not cause us to overlook the fact that their existence refutes his findings about self-earned wealth. He seems to admit as much when he says, "This [study] shouldn't be taken as a statement that the Rockefellers didn't give to their kids and the Kennedys didn't give to their kids." (New York Times, July 7, 1995) Indeed, most of the really big money is inherited--and by a portion of the population that is so minuscule as to be judged statistically inaccessible.

The higher one goes up the income scale, the greater the rate of capital accumulation. Economist Paul Krugman notes that not only have the top 20 percent grown more affluent compared with everyone below, the top 5 percent have grown richer compared with the next 15 percent. The top one percent have become richer compared with the next 4 percent. And the top 0.25 percent have grown richer than the next 0.75 percent. That top 0.25 owns more wealth than the other 99¾ percent combined. It has been estimated that if children's play blocks represented $1000 each, over 98 percent of us would have incomes represented by piles of blocks that went not more than a few yards off the ground, while the top one percent would stack many times higher than the Eiffel Tower.

I don't have any solutions, either. Just some anger, seething below the surface as my lunch hour draws to a close.

Comments

[thewrongcrowd.livejournal.com]

I could just maybe live with the researchers not having a clue what and who the really rich are (and the skewed results of their study). What is truly a problem is that the rich have no idea what it is to be not rich. In some ways I think China's Cultural Revolution had some good points. (A lot of bad, yes, but still.)

And what's new...

[saminz.livejournal.com]

Well, this, for example: Last weekend, my compatriots have voted in another clever tax scheme that relieves - wait for it - 5% of our top earners of paying taxes, and resulting in even more desolation on all the public service stuff we all got so used to.

Are they all brain-damaged? Well, some of course are. But I'm afraid they all aspire to be up there once, too... It's so fucking sad I've in fact stopped reading the paper since then.

[jude-36.livejournal.com]

Since I work for some upper-middle-class employers, I see this to be true. My bosses 16-year-old son has more money in his retirement account than I do.... Not to mention that a real analysis of the past few years' economic growth shows that the growth is ALL among the top-tier wage earners, while the bottom 90% are stagnant or losing ground. One example I heard is this.... lets say you have 10 guys in a bar. They all make 30k a year. So the mean wage is 30k, right? Then Bill Gates walks in. Now the mean wage is 2million, or billion, or whatever it is. But the ten guys are still only making 30k. Sure SOUNDS like a huge improvement for everyone, but when you dissect it, it's not.

[voxwoman.livejournal.com]

That would be a great joke, if it could be funny.

Bill Gates walks into a bar...

(BTW, nice to see you here!)

[jude-36.livejournal.com]

Ouch!!

Ok, they walk into a software convention....

[voxwoman.livejournal.com]

What ouch? I just couldn't think of a way to tell that to be funny...

Well, maybe this:

Bill Gates walks into a bar, and suddenly everyone in the bar is rich - the mean income increased by 4 orders of magnitude!

(was that funny? Maybe you have to hear it spoken... Feh, I can't tell a joke for anything.. I'll be over there, sulking.)

[jude-36.livejournal.com]

No, that's the joke....

a blonde walks into a bar and says, "Ouch!"

Walks into a bar. Get it?

[voxwoman.livejournal.com]

D'oh!