Looks good on the surface, i.e. good enough for re-election!
From the failure to do simple math department (which also brought us Obamacare):
How income inequality can hurt the economy
Given that the adjectives most used in describing the economy's recovery from the great recession include "sluggish" and "disappointing" it may come as a surprise to some that average household income in the U.S. is higher, in nominal terms, than it was in 2008.
Not only that, it passed the 2008 average as long ago as 2012. So, if income has recovered, the stock market is at record highs, and corporate earnings are way up, how come it doesn't feel like there's been much of a recovery?
An analysis released last week by the Bureau of Labor Statistics provides a useful illustration of at least one thing that is unquestionably holding our economy back: income inequality. But maybe not for the reason most people think.
The key here, though, is to remember that the study measured "average" household income when it found a return to pre-recession levels. The headline number on the day the story was released was that 82 percent of the income gains went to the top 20 percent of households measured by income. That top quintile saw its nominal income increase on average by $8,358 per year, while the bottom quintile saw income decline by $275 in the same time period.
So literally, the rich get richer and the poor get poorer. Welcome to Fantasy Island! This is on top of news that only high end apartments are being built now for the most part. (They are zooming up all over Dallas. I keep asking myself, "Who are all these fuckers with 2K a month to blow on rent??") Thus, the middle class in many cities can no longer afford to pay rent as the renter class grows but affordable housing remains stagnant. Feeling the squeeze yet?
Left or right, the overriding belief - enforced with merciless zeal -
is that the banks and corporations must be served first for us to survive.
By this time, though, the fact that income gains are concentrated in the top of the distribution should surprise nobody. The really telling part of Corbet's study is what he found when he looked at the change in spending across households in different quintiles.
...What many people don't grasp is that when high income households see their income increase, they generally don't spend it. Cobet found that the top quintile increased spending by only $2,365 per year, meaning they spent about 29 percent of the extra income they received.
The next quintile down, which saw an annual increase in income of $1,862, spent an extra $1,348, or about 72 percent of the additional income.
Households in the middle quintile earned only $69 more per year, but spent an additional $345, meaning that they increased their spending by 500 percent of their income gain. The next lowest quintile saw income increase by $143, but increased spending by $881—616 percent of their income gain.
Well, that sounds sustainable. What we have created is a giant vacuum at the top sucking up all the money leaving those at the bottom to use up all their resources - and then some. Logically speaking, we'll have a huge swelling in the homeless population because having a job won't be enough to keep you housed! I realize most people have no self-esteem but just to roll and over and die accepting a fate like that certainly indicates just how corrupt of a society we've become.
Cobet, the study's author and a senior economist at BLS said that there is no way of explaining the spending patterns except to assume that families "are using either savings and some version of credit card and other debt."
For the first quintile, for whom income fell by $275, spending actually decreased. But the decrease— $150—was not enough to offset the decline in income, meaning that they, too spent savings or borrowed.
What this means is that in total, household income in 2012 was, on average, $10,157 higher than in 2008. But average spending only increased by $4,789—and even getting spending to that level required households in the bottom three quintiles to go into debt.
To economists, this shows the damage that income inequality can do to the economy as a whole. If the three lowest quartiles in income distribution had shared more equally in the increase in average income, they most certainly would have spent most or all of that increase. But as it is, $5,993 of the average increase of $10,157—more than half—went into the savings of the highest quartile instead of being used for the purchase of goods and services, which boosts economic growth.
So, yes, we know this is poison to our society, but like the good little kool-aid drinkers we are, we stuff it down our throats anyway. Greed certainly plays a part in this but the majority of the 99% are just as greedy as the 1%. The main thing is that we live a state of hopelessness. We hear practical solutions proposed every day on how to eliminate income equality but since we've given greed the final say on what we do, those are just whispers in the wind, never to be heard.
If we truly believed we have a sustainable way of life we'd have hope and enact the already known solutions to our problems. But without that belief there is no hope, which permeates an every-man-for-himself mentality. A pig farmer was asked about his blatant destruction of the environment his farm was causing. He said he didn't care because he wouldn't be around to live with it. (Ah, if only he knew the truth!)
So take all you can, tomorrow is screwed anyway! As I've said before (to much derision), there are no economic problems, only moral solutions.