The New Aristocracy: the 9.9%

[Winehole23]

A Tale of Three Classes (Figure 1):
The 9.9 percent hold most of the wealth in the United States.

Saez / Zucman

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Every piece of the pie picked up by the 0.1 percent, in relative terms, had to come from the people below. But not everyone in the 99.9 percent gave up a slice. Only those in the bottom 90 percent did. At their peak, in the mid-1980s, people in this group held 35 percent of the nation’s wealth. Three decades later that had fallen 12 points—exactly as much as the wealth of the 0.1 percent rose.


In between the top 0.1 percent and the bottom 90 percent is a group that has been doing just fine. It has held on to its share of a growing pie decade after decade. And as a group, it owns substantially more wealth than do the other two combined. In the tale of three classes (see Figure 1), it is represented by the gold line floating high and steady while the other two duke it out. You’ll find the new aristocracy there. We are the 9.9 percent.

https://www.theatlantic.com/magazine...ocracy/559130/

[Winehole23]

Let’s suppose that you start off right in the middle of the American wealth distribution. How high would you have to jump to make it into the 9.9 percent? In financial terms, the measurement is easy and the trend is unmistakable. In 1963, you would have needed to multiply your wealth six times. By 2016, you would have needed to leap twice as high—increasing your wealth 12-fold—to scrape into our group. If you boldly aspired to reach the middle of our group rather than its lower edge, you’d have needed to multiply your wealth by a factor of 25. On this measure, the 2010s look much like the 1920s.

[Winehole23]

If you are starting at the median for people of color, you’ll want to practice your financial pole-vaulting. The Ins ute for Policy Studies calculated that, setting aside money invested in “durable goods” such as furniture and a family car, the median black family had net wealth of $1,700 in 2013, and the median Latino family had $2,000, compared with $116,800 for the median white family. A 2015 study in Boston found that the wealth of the median white family there was $247,500, while the wealth of the median African American family was $8. That is not a typo. That’s two grande cappuccinos. That and another 300,000 cups of coffee will get you into the 9.9 percent.

[Winehole23]

None of this matters, you will often hear, because in the United States everyone has an opportunity to make the leap: Mobility justifies inequality. As a matter of principle, this isn’t true. In the United States, it also turns out not to be true as a factual matter. Contrary to popular myth, economic mobility in the land of opportunity is not high, and it’s going down.

[Winehole23]

Economists represent this concept with a number they call “intergenerational earnings elasticity,” or IGE, which measures how much of a child’s deviation from average income can be accounted for by the parents’ income. An IGE of zero means that there’s no relationship at all between parents’ income and that of their offspring. An IGE of one says that the destiny of a child is to end up right where she came into the world.


According to Miles Corak, an economics professor at the City University of New York, half a century ago IGE in America was less than 0.3. Today, it is about 0.5. In America, the game is half over once you’ve selected your parents. IGE is now higher here than in almost every other developed economy. On this measure of economic mobility, the United States is more like Chile or Argentina than Japan or Germany.

[Winehole23]

Rising immobility and rising inequality aren’t like two pieces of driftwood that happen to have shown up on the beach at the same time, he noted. They wash up together on every shore. Across countries, the higher the inequality, the higher the IGE (see Figure 2). It’s as if human societies have a natural tendency to separate, and then, once the classes are far enough apart, to crystallize.

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The Great Gatsby Curve (Figure 2): Inequality and class immobility go together.

[Chris]

If you're born to a wealthy family you are more likely to be wealthy? WOW

Aristocracy? That's called Capitalism.

[boutons_deux]

yawn, old news for The Great Boutons, and other people who have been awake and watching.

USA was sold, bought, and delivered decades ago.

We frogs are ed and un able

Historically, when gets this bad, it's armed revolution.

And it's all going to get worse for the lower 4 quintiles, maybe lower 9 deciles.

[Winehole23]

In 1985, 54 percent of students at the 250 most selective colleges came from families in the bottom three quartiles of the income distribution. A similar review of the class of 2010 put that figure at just 33 percent. According to a 2017 study, 38 elite colleges—among them five of the Ivies—had more students from the top 1 percent than from the bottom 60 percent. In his 2014 book, Excellent Sheep, William Deresiewicz, a former English professor at Yale, summed up the situation nicely: “Our new multiracial, gender-neutral meritocracy has figured out a way to make itself hereditary.”

[Winehole23]

Measured relative to the national median salary, tuition and fees at top colleges more than tripled from 1963 to 2013.

[Winehole23]

For those who made the mistake of being born to the wrong parents, our society offers a kind of virtual education system. It has places that look like colleges—but aren’t really. It has debt—and that, unfortunately, is real. The people who enter into this class hologram do not collect a college premium; they wind up in something more like indentured servitude.

[Chris]

Speaking of spamming <_<

[Winehole23]

By now we’re thankfully done with the tech-sector fairy tales in which whip-smart cowboys innovate the heck out of a stodgy status quo. The reality is that five monster companies—you know the names—are worth about $3.5 trillion combined, and represent more than 40 percent of the market capital on the nasdaq stock exchange. Much of the rest of the technology sector consists of virtual en ies waiting patiently to feed themselves to these beasts.

[Winehole23]

If you're born to a wealthy family you are more likely to be wealthy? WOW

Aristocracy? That's called Capitalism.

he's slamming the libs, not that you would notice

[Winehole23]

Speaking of spamming <_<

by all means, find another thread if this one doesn't suit you

[Winehole23]

Hey Chris, it's called gold-plated socialism for the uber-rich.

bootstrap capitalism for the rest of us

The candy-hurling godfather of today’s meritocratic class, of course, is the financial-services industry. Americans now turn over $1 of every $12 in GDP to the financial sector; in the 1950s, the bankers were content to keep only $1 out of $40. The game is more sophisticated than a two-fisted money grab, but its essence was made obvious during the 2008 financial crisis. The public underwrites the risks; the financial gurus take a seat at the casino; and it’s heads they win, tails we lose. The financial system we now have is not a product of nature. It has been engineered, over decades, by powerful bankers, for their own benefit and for that of their posterity.

[Winehole23]

Let us count our blessings: Every year, the federal government doles out tax expenditures through deductions for retirement savings (worth $137 billion in 2013); employer-sponsored health plans ($250 billion); mortgage-interest payments ($70 billion); and, sweetest of all, income from watching the value of your home, stock portfolio, and private-equity partnerships grow ($161 billion). In total, federal tax expenditures exceeded $900 billion in 2013. That’s more than the cost of Medicare, more than the cost of Medicaid, more than the cost of all other federal safety-net programs put together. And—such is the beauty of the system—51 percent of those handouts went to the top quintile of earners, and 39 percent to the top decile.

[Winehole23]

If the secrets of a nation’s soul may be read from its tax code, then our nation must be in love with the children of rich people. The 2017 tax law raises the amount of money that married couples can pass along to their heirs tax-free from a very generous $11 million to a magnificent $22 million. Correction: It’s not merely tax-free; it’s tax-subsidized. The unrealized tax liability on the appreciation of the house you bought 40 years ago, or on the stock portfolio that has been gathering moths—all of that disappears when you pass the gains along to the kids. Those foregone taxes cost the United States Treasury $43 billion in 2013 alone—about three times the amount spent on the Children’s Health Insurance Program.

[Chris]

Hey Chris, it's called gold-plated socialism for the uber-rich.

bootstrap capitalism for the rest of us

The candy-hurling godfather of today’s meritocratic class, of course, is the financial-services industry. Americans now turn over $1 of every $12 in GDP to the financial sector; in the 1950s, the bankers were content to keep only $1 out of $40. The game is more sophisticated than a two-fisted money grab, but its essence was made obvious during the 2008 financial crisis. The public underwrites the risks; the financial gurus take a seat at the casino; and it’s heads they win, tails we lose. The financial system we now have is not a product of nature. It has been engineered, over decades, by powerful bankers, for their own benefit and for that of their posterity.

Hey I agree the Federal Banks are holding us down. Only problem is every time we have a President who wants to get rid of them, they get shot.

[Winehole23]

how many times did that happen, not including JFK?

[Chris]

Lincoln - Greenbacks

Just look up the creature from jeckyll island tbh

[Winehole23]

I've read it.

Parsimony cuts against the hypothesis that Lincoln was assassinated by international bankers, but I suppose that is at least plausible.

[sickdsm]

Born into a family where both my parents busted ass and gave up things in life in order to scrape together enough to buy some land. Fast forward to me and I'm doing the same. Any successful parent is pushing there kid to get a leg up on their peers. Valuable degree. Work hard and get good grades. Look a person in the eye, etc. Successful kids don't happen randomly. They also don't always get a hand out or inheritance from their parents. How many bottom 20% are instilling these values and traits in the next generation?

[Winehole23]

Kudos to you and your family.

Inheritance is a much better predictor of where one will end up financially in the USA than personal anecdotes and hunches about values.

[Winehole23]

Luck also figures into financial success, but I guess people like to hog all the credit for themselves.