The New York Times printed an op-ed today by a “longtime Wall Street executive” drawning on work by French economists Thomas Piketty and Emmanuel Saez analyzing U.S. tax returns:
NEW statistics show an ever-more-startling divergence between the fortunes of the wealthy and everybody else — and the desperate need to address this wrenching problem. Even in a country that sometimes seems inured to income inequality, these takeaways are truly stunning.
In 2010, as the nation continued to recover from the recession, a dizzying 93 percent of the additional income created in the country that year, compared to 2009 — $288 billion — went to the top 1 percent of taxpayers, those with at least $352,000 in income. That delivered an average single-year pay increase of 11.6 percent to each of these households.
Still more astonishing was the extent to which the super rich got rich faster than the merely rich. In 2010, 37 percent of these additional earnings went to just the top 0.01 percent, a teaspoon-size collection of about 15,000 households with average incomes of $23.8 million. These fortunate few saw their incomes rise by 21.5 percent.
The bottom 99 percent received a microscopic $80 increase in pay per person in 2010, after adjusting for inflation. The top 1 percent, whose average income is $1,019,089, had an 11.6 percent increase in income.
Steven Rattner, Op-Ed, The Rich Get Even Richer, N.Y. Times, Mar. 26, 2012, at A27.
And the Business section reported a few days earlier that, although “Americans have never been too worried about the income gap,” now “tolerance for a widening income gap may be ebbing.” Eduardo Porter, Inequality Undermines Democracy, N.Y. Times, Mar. 21, 2012, at B1. The article also notes that when “inequality becomes very acute, it breeds resentment and political instability, eroding the legitimacy of democratic institutions.” Indeed, as Gar Alperovitz has pointed out
repeated studies have shown the majority of Americans know full well that something challenging and fundamental is going on with “democracy”: Four out of five in a recent assessment judged that “[g]overnment leaders say and do anything to get elected, then do whatever they want.” Another study found that seven out of ten felt that “people like me have almost no say in the political system.”
Gar Alpervitz, American Beyond Capitalism 1 (2005) (arguing for democratization of the economic system through varying forms of ownership such as co-ops, worker-owned businesses, community land trusts, and other social enterprises).