The 1 Percent Are Killing America’s Middle Class

We've long heard that a thriving middle class is essential for economic growth and financial prosperity.  Yet today, the 1% and GOP policies are destroying the middle class as we see wealth disparities not seen since the so-called Gilded Age of the robber barons or outside of former banana republics.  But seemingly this economic peril to America means nothing to the Republican Party or the ever more greedy 1%.  A column in Salon looks at this phenomenon and the danger it poses for the country.  Here are excerpts:

The richest Americans hold more of the nation’s wealth than they have in almost a century. What do they spend it on? As you might expect, personal jets, giant yachts, works of art, and luxury penthouses.

And also on politics. In fact, their political spending has been growing faster than their spending on anything else. It’s been growing even faster than their wealth.

According to new research by Emmanuel Saez of the University of California at Berkeley and Gabriel Zucman of the London School of Economics, the richest one-hundredth of one percent of Americans now hold over 11 percent of the nation’s total wealth. That’s a higher share than the top .01 percent held in 1929, before the Great Crash.

We’re talking about 16,000 people, each worth at least $110 million.

One way to get your mind around this is to compare their wealth to that of the average family. In 1978, the typical wealth holder in the top .01 percent was 220 times richer than the average American. By 2012, he or she was 1,120 times richer.

Why should we care?

Because this explosion of wealth at the top has been accompanied by an erosion of the wealth of the middle class and the poor. In the mid-1980s, the bottom 90 percent of Americans together held 36 percent of the nation’s wealth. Now, they hold less than 23 percent.

[T]he top .01 percent have also been investing their money in politics. And these investments have been changing the game.  In the 2012 election cycle (the last for which we have good data) donations from the top .01 accounted for over 40 percent of all campaign contributions . . . .

Despite larger pensions and homes, the debts of the bottom 90 percent – mortgage, consumer credit, and student loan – have grown even faster.

The richest .01 percent haven’t been donating out of the goodness of their hearts. They’ve donated out of goodness to their wallets.  Their political investments have paid off in the form of lower taxes on themselves and their businesses, subsidies for their corporations, government bailouts, federal prosecutions that end in settlements where companies don’t affirm or deny the facts and where executives don’t go to jail, watered-down regulations, and non-enforcement of antitrust laws.

Since the top .01 began investing big time in politics, corporate profits and the stock market have risen to record levels. That’s enlarged the wealth of the richest .01 percent by an average of 7.8 percent a year since the mid-1980s.

But the bottom 90 percent don’t own many shares of stock. They rely on wages, which have been trending downward. And for some reason, politicians don’t seem particularly intent on reversing this trend.

[I]f you want to know what’s happened to our democracy, follow the richest .01 percent. They’ll lead you to the politicians who have been selling our democracy.