2011 October 30 Sunday
Occupy Wall Street And Global Top 1%
A great article in the Motley Fool: Lots of Occupy Wall Street protestors who feel poor are in the global top 1% of income. Do you make at least $34k per year? If so, you are in the global top 1%. Never knew you were that elite did you?
The recent Occupy Wall Street protests have aimed their message at the income disparity between the 1% richest Americans and the rest of the country. But what happens when you expand that and look at the 1% richest of the entire world? Some really interesting numbers emerge. If there were a global Occupy Wall Street protest, people as well off as Linda Frakes might actually be the target.
In America, the top 1% earn more than $380,000 per year. We are, however, among the richest nations on Earth. How much do you need to earn to be among the top 1% of the world?
If you are making at least a few dollars a day you are making more than over half the world's population. Keep that in mind when a Prius driver claims he's being more ecologically and economically responsible to the world by driving a Prius. Then ask him how he's spending the money he's saving on gasoline. Perhaps spending it on airplane trips? Or home remodeling?
Any reader not in the global top 10%? I want to know how much you have to make to be in the global top 0.01%. Maybe that's a goal within reach.
That was the finding World Bank economist Branko Milanovic presented in his 2010 book The Haves and the Have-Nots. Going down the distribution ladder may be just as surprising. To be in the top half of the globe, you need to earn just $1,225 a year. For the top 20%, it's $5,000 per year. Enter the top 10% with $12,000 a year. To be included in the top 0.1% requires an annual income of $70,000.
OWS is about declining living standards within America. They would not be pleased to know that part of the reason American living standards are declining is that living standards in Asia are rising. But our natural resources demand now competes with rising Asian demand and we've got to get less as they get more. Plus, rising world population (including rising US population driven mainly by immigration) increases the number of people competing for those natural resources. Imagine all 7 billion (and growing) people of this planet made as much money per year as the average OWS protestor. There aren't enough resources on the planet to support such a lifestyle globally. This will become more apparent as oil production hits limits and starts declining.
"Imagine all 7 billion (and growing) people of this planet made as much money per year as the average OWS protestor. There aren't enough resources on the planet to support such a lifestyle globally. This will become more apparent as oil production hits limits and starts declining."
Such scenario would never happen. Simply most societies in the world are unable to attain that level of modernity and structure to reach that level of common living standard for their peoples.
Actually most of the OWS people are aware of that and many aren't even in that global 1%. More than half (i.e most) US citizens for example make under the amount you mentioned.
Also for someone supporting capitalism isn't this globalist approach to fairness kind of Marxist? After all the idea is to compare oneself to members of ones own capitalist or market society, not some faceless global mass or non developed nations . And while yes certainly poor Americans are better off than poor people in say Nigeria, thats not a relevant criteria anyway. Unless of course your goal is a poorer America.
I support OWS but I too have a quible with the way it frames the issue in terms of the 99%.
My quibble is this: it isnít the top 1% who are so different than you and me. Itís the top .01% or, roughly speaking, the 10,000 wealthiest families in America (together with their counterparts overseas). These are the families that NYT financial reporter David Cay Johston labels ďthe donor classĒ because they bankroll both political parties and thereby control the political agenda, on issues of trade, immigration, and tax policy particularly.
Why is this distinction important? Well, mainly because you donít want to multiply your opponents unnecessarily. Thereís quite a difference between families with a net worth around $5 million and those whose net worths are $50 million and up.
In the first place the first group generally pays its taxes. The second group does does not. According to Johnson as of 1996 they escaped paying roughly $300 billion annually which they legally owe. (Itís no doubt a good deal more than that now ó enough, in fact, to close the annual budget deficit of our federal government in ordinary years.)
How do they do it? Principally by concealing most of their incomes in in a nest of shell corporations and overseas tax havens, using a small army of lawyers and tax accountants to bring it all off. Plus of course by buying off both political parties, thereby making sure our elected officials donít even think about sicking the IRS on them in any serious or systematic way. That NYT reporter spells it all out.
Those million families worth $5 million on the other hand are, thanks to inflation, todayís haute bourgeoisie. They are your typical Main Street business people, local merchants, small factory owners, the decayed descendants of former wealth.
Now the fact is these Main Street millionaires donít wield near the influence on our political process as the super-rich do. Which leads to the question: How can we identify members of that more exclusive elite?
Well, there are only about 200 of them per state on the average. It is not a big group, and if youíve lived very long in any typical metropolitan area in America you can probably name half of them just by reading the local society pages. They ďareĒ local society for all intents and purposes. You can even find out where they live if you just ask around (hint, hint).
But if instead of targeting this upper-upper crust you target the million or so families who compose the haute beorgeosie, then you are asking for a lot of unnecessary trouble. Particularly if your idea is to make them ďpayĒ for the sins of their betters.
These people will fight you with every fiber of their being and, based on historical experience, will probably prevail. For which reason their betters will be more than happy to encourage you in your misguidedness, the bigger guys hiding behind the littler ones as they always have.
Bottom line: Know your enemy. Thatís the first rule of war, including class war. And that, dear readers, is the sum and substance of my quibble. Change those signs to 99.99%!
"top 10% with $12,000 a year."
Figures like this mean nothing. No one can live well in NY on 12k a year.
The economy has been lousy for most Americans for the last decade. The political class mostly ignores the plight of average Americans. They care more about millionaires having to pay estate taxes or whether homosexuals can marry. I don't agree with everything about OWW but I am glad they came up with the 99% slogan. It puts the plight of average Americans into political discussion and on the radar of politicians.
The Occupy Wall Street protesters' slogan refers to the top 1%, but overall they're hoping to achieve all standard liberal policies.
If they simply wanted greater Wall Street regulations that would be achievable, but in practice, most people in the top 33% of earners (anybody who's semi-competent and isn't fresh out of college) would probably experience reduced outcomes under the raft of liberal policies being advocated.
OWS is focusing too much on issues like "greed" which is sadly making the whole thing into a standard leftist freak show. The reality is that Wall Street is incredibly corrupt and broken. The protestors' real focus should be on how the financial community flaunts rules and social norms to the detriment of everyone. Bring back Glass-Steagall.
The problem isn't just that the 1% of the U.S. has an unreasonably large share of the wealth in this country - the problem is that they use their influence to avoid playing by normal capitalistic rules/laws in America, and to fix the game in other countries by force.
That's crap, that's corruption, and ultimately that is unsustainable.
I guarantee most OWS protestors would have no problem lowering their standard of living if opportunities were more equitable here and abroad for the average world citizen.
While life may not be "fair" understand that an armed and informed citizenry can be a great equalizer.
Most complaints about economic inequality ultimately refer to the 80 million permanently poor non-Asians we imported since 1970.
That's the same reason California, once one of best places in the world, is now the dumbest state in the country, despite some of the highest taxes and entitlement spending in the country.