How the Rich Stole Our Money--And Made Us Think They were Doing Us a Favor

[madokie]

Pushing people toward stocks, real estate and credit cards have all come at a cost -- and with one goal in mind.

If you’ve paid attention to the economy over the last few years, you’ve doubtless seen the charts and figures showing the decline of the American middle class in concert with the explosion of wealth for the super-rich. Wages have stagnated over the last 40 years even as productivity has increased, which is another way of saying that Americans are working harder but getting paid less. Unemployment remains stubbornly high even though corporate profits and the stock market are at or near record highs. Passive assets in the form of stocks and real estate, in other words, are doing very well. Wages for working people are not. Unfortunately for the middle class, however, the top 1 percent of incomes own almost 50 percent of asset wealth, and the top 10 percent own over 85 percent of it. When assets do well but wages don’t, the middle class suffers.

This ominous trend is particularly prominent in the United States. That shouldn’t surprise us: study after study shows that American policymakers operate almost purely on behalf of wealthy interests. Recent polling also proves that the American rich want policies that encourage the growth of asset values while lowering their own tax rates, and are especially keen on outcomes that favor themselves at the expense of the poor and middle class.

So why isn’t the 99 percent in open revolt? The answer lies in part because the top 1 percent have done an excellent job disguising the upward transfer of wealth by making the rest of us feel better off than we actually are while enriching themselves in the process.

To understand how they accomplished this, we have to realize that the peculiarities of American politics and culture do not tell the whole story. The trend toward greater hoarding of wealth by economic elites and shrinking middle-class incomes is not limited to the United States. It is present to one degree or another throughout the industrialized world. The self-interested preferences and self-serving ideology of the super-rich surely have influence, of course, but it also seems clear that a broader range of factors and economic policy decisions come into play. And indeed they do. The current inequality crisis has its roots in a series of decisions made in response to the inflation shocks of the 1970s and to the growing threat of globalization and workforce mechanization.

http://www.alternet.org/economy/how-rich-stole-our-money-and-made-us-think-they-were-doing-us-favor