Inequality is bad for (almost) everyone
Yves Smith, whose Naked Capitalism blog is essential reading, is guestblogging for Glenn Greenwald this week. Her latest post sums up a lot of evidence on the adverse effects of inequality, and includes a reference to a post of mine. In summary, the huge growth of inequality in the US has harmed everyone below the 90th percentile of the income distribution in the obvious way – they get a smaller share of a cake that isn’t growing very fast, and has been shrinking since the crisis began
But even people above that level, but outside the top 1 per cent are worse off in important ways. They’ve maintained or increased their share of national income, but they aren’t rich enough to insulate themselves fully from the adverse consequences of living in a highly unequal society. Yves sums up a bunch of the evidence on thsi.
Finally, there are those in the top 1 per cent of the income distribution, now pulling in 25 per cent of all income. Members of this group can, if they choose, ignore the collapse of the society outside their gated communities, and focus on enjoying the wealth they extract from it. On recent evidence, that’s what they (or at least their political representatives) are doing, while also managing a very effective set of divide and rule tactics for the rest of the population.