| Number 138 | December 28, 2001 |
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This Week:
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Greetings, With impeccable timing, I am welcoming quite a number of new readers just as I am in the middle of "reruns." Regular readers know that I needed to take a couple of weeks off in order to catch up on things on the business end of Nygaard Notes, so I am offering reprints this week of a couple of essays I put out in March of the year 2000. For some reason they were controversial at the time, judging by the mail I received. Perhaps they still are. See what you think. I am not really catching up on much of anything, since I decided to spend a chunk of the past two weeks being ill. I'll get caught up some day. In any case, WELCOME to the new readers. My usual caveat is to read the Notes for a few weeks before casting judgement. It's different every week, y'know. OK, on with the old news. Until next year! Nygaard |
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Here is the lead paragraph from an article entitled "Grounded by an Income Gap," from the New York Times ("All the News That's Fit to Print") of December 15th, 2001.
Millions of us can "figure out" what to do, of course, but apparently we are "no one" in the eyes of the Times. |
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(Reprinted from Nygaard Notes #61, March 3, 2000.) "In a rare show of bipartisanship," the front pages said this week, the U.S. House of Representatives unanimously passed a law enabling American seniors to earn "as much money as they want" without losing federal retirement benefits. Under current law, people aged 65 to 69 lose $1 of their Social Security benefits for every $3 they earn above $17,000 a year. That limit is set to go up to $30,000 shortly. If you read the papers you wouldn't know that this new law affects only 3% of retirees. Or that anyone who was making $30,000 per year at retirement is also already receiving about $12,000 each year in Social Security benefits, for a total income of about $42,000. The median income in the United States is about $19,000 (one-half of the population makes more than this, one-half makes less). The Congress is thus addressing with this law the needs of a pretty-comfortable minority of older Americans, despite the claim of "moderate" Republican House Speaker Dennis Hastert that the passage of this legislation is "a time of salvation for our seniors." Could this fact help to explain the "rare" display of bipartisanship? I think it could. There are a lot of things that can be better understood if you have a basic understanding of who earns what and who owns what. That's why I talk so much about money and wealth in Nygaard Notes. As I point out elsewhere in this issue, we live in a "spectacularly unequal society." I hesitate to throw numbers at people, since the eyes quickly begin to glaze over. But just a few numbers can go a long way toward understanding the world we live in and your and my place in that world. So allow me to talk a little bit about... Income I just filed my taxes (early!) and found out in the process that my adjusted gross income (Line 33 on form 1040) was $8,633 last year. Does that seem low? Let me tell you what "low" is: One quarter of the human population of the earth lives on less than one dollar per day, which is about four percent of what I made last year. Fully one-half of everyone in the world makes less than $1,000 per year. It's not like I'm some kind of aberration. One out of eight Americans earned less than $10,000 last year, with the average in that group being $6,600. Ponder for a moment the fact that I have less income than 90% of all Americans, and also make more money than two-thirds of the people on the planet. This is just a fact. Perhaps some readers would like to know where they stand in terms of income. Here's a handy list: If you make:
Want to place yourself in the greater world? If you make $25,000 a year, you make more than 98% of the world's population. Those of you who minimize the suffering that lies behind these numbers have probably not been out of the United States very much. When you look at the numbers on wealth in the United States and the world (that is, what people own, as opposed to what their income is) the inequities are even more mind-boggling. I'll look at that next week. ******** Long-time readers are well aware that when I say "next week," it could mean anytime in the coming 3 months. In this case, I actually did get around to the promised follow-up article in just two weeks, and the next article is from Nygaard Notes #63, of March 24, 2000: |
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Most people know how much they earn each year, since they have to pay income taxes. Many people do not know their net worth, however. Maybe this is because we have no wealth taxes in this country (property taxes being the exception). So, Nygaard Notes readers, get out your calculators and get ready to figure out how wealthy you are. What is “Wealth?” What you take home in pay (or interest, or dividends, or whatever) is called “income.” What you already have at home - that is, what you own - is called your “wealth.” There are essentially four types of wealth you can have:
Add up all of those things and see what number you get. This number is your “total assets.” Now, subtract what you owe to other people - your “liabilities.” The result is what is called your “net worth.” Are you surprised at how little it is? Now that you have a number to attach to your personal net worth, how about some numbers to put that number in perspective? (Some of the following information may be hard to believe, so I will include many of my sources.) Who Owns America? For purposes of this discussion, “rich” means those who own more than 90% of the population; in other words, the top 10%. When I say “super rich,” I mean the top one percent. Unless you are rich, you probably don’t own much of anything, except maybe the house you live in. That’s because the rich own 62% of everything in the United States, including 85% of all the stocks, 90% of all the bonds, 87% of all the trusts, 92% of all the businesses, 80% of all the non-residential real estate, 45% of all the life insurance, and so on. That doesn’t leave much for you and me. Although the rich own 62% of everything, they only have 29% of the debts in the country. So if we look at net worth - wealth minus debt - the share of the national wealth owned by the rich goes up to 68%. Since two-thirds of the “wealth” owned by the bottom 90% of us is tied up in our homes - which are assets that we can’t really convert to cash very easily - some economists factor this out to come up with what is called “financial wealth.” Since financial wealth roughly indicates how much money you could come up with and still have a place to live, that’s the indicator I usually talk about. Using this indicator, then, the rich own fully 77.5% of the country. I told you this might be unbelievable. [Figures courtesy of Doug Henwood, based on figures from the Federal Reserve and the IRS. Find more details at http://www.panix.com/~dhenwood/LBO_home.html] Two weeks ago I presented a handy-dandy little chart to help you see where you stand in terms of your income. This week I’ve prepared the wealth, or “net worth,” version. Bear in mind that these are figures for “household” net worth, not individual. That’s because these figures come from the Census Bureau (www.census.gov/hhes/www/wealth/wlth93t4.html) and that’s the way they do things. The groups are organized according to monthly income.
These are 1993 figures; wealth is even more concentrated now, with the top one-half of one percent of the population owning almost as much as the bottom 90% combined (28% to 32%). As mind-boggling as these numbers are, it’s even worse when you break things down by race. The net worth of white families, not all that high to begin with, is still 8 times that of African-Americans and 12 times that of “Hispanics” (Census Bureau terminology) . The median financial wealth of African-Americans (meaning that half have more and half have less) is $200. This is one percent of the $18,000 median financial wealth of whites. The median financial wealth of “Hispanics” is zero. These stats are from Jeff Gates at the Global Policy Forum, http://www.globalpolicy.org/socecon/inequal/gates99.htm Are your eyes glazed over yet? Needless to say, there are a lot more numbers where these came from, but mercy compels me to stop here for this week. Now you have enough information to realize that you are not rich. (Surprise!) Next week I’ll conclude with a few more numbers (sorry) about the larger world, and a comment on the meaning of wealth. And, as usual, I’ll suggest a few ideas about what we might want to do about this inequality stuff. Stay tuned. |
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(The following is actually only an excerpt from an article entitled "Wealth, and How To Share It," from Nygaard Notes #64, March 31, 2000.) Here are a few basic facts about the distribution of wealth on the global level:
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