The neo-Gilded Age: 62 richest people in the world have the same wealth as half the world. An economy for the 1 per cent.

The Gilded Age was a period in American history where the few had so much while the majority toiled away in pauper like conditions.  One of the reasons often cited for the Great Depression was massive wealth inequality.  Well today wealth inequality is at levels that rival the pre-Depression era.  And for those of you that watched The Big Short, you now realize that Hollywood is even understanding that a large part of the financial sector is designed to fleece the working public.  So it is no surprise that wealth inequality continues to grow.  A recent report highlights that the 62 richest people in the world have the same wealth as the bottom half of humanity.  In other words 62 people have the same wealth as 3.6 billion people living on this planet.  Part of the current system is designed to accelerate this wealth inequality.  In fact, in the United States the middle class is now a full fledged minority.  Welcome to the neo-Gilded Age.

Neo-gilded Age

It is worth noting how all of this wealth inequality is harming the middle class.  Take real estate for example.  Since the Great Recession hit a large portion of real estate buying has gone to investors.  For example, Wall Street was buying up properties to turn into rentals.  Yet new home building was not occurring.  So this drove up the prices of homes and rents for middle class Americans while incomes were stagnant.  End result is more funding goes to Wall Street and keep in mind banks leveraged bailout systems in place to accomplish this.  This wasn’t some “free market” savvy play – this was cronyism at its finest.

So with that said, take a look at how this inequality is playing out:

And this makes sense since this happened under the watch of the big bull run in stocks from 2009 to today.  The wealthy hold a large portion of assets in stocks, bonds, and businesses.  Most working people don’t even have one stock or bond to their name.  In the United States, housing is by far the largest line item on the net worth balance sheet for Americans.  Yet the homeownership rate has been crushed thanks to bailouts, banking policy, and investors crowding regular buyers out:

And this is a major reason why Americans are going to get a lot poorer in 2016.  Going back to the massive wealth inequality, you can actually visualize this better by the looking at this:

Pretty soon you will be able to use a small school bus of people and those people will have more wealth than half of the people on our planet.  You need robust consumers across the world to actually buy products.  We are seeing this issue in the United States.  While most American families are cash strapped, you have big investors chasing real world assets in art, cars, and even real estate just to satisfy their hunger for higher yields.  And for regular workers all you have is a savings account at a bank that gives you close to zero percent in interest.

This neo-Gilded Age is designed to support the politically connected.  Wall Street and D.C. basically operate for one another.  The majority in Congress are millionaires:

“(NPR) For the first time in history, more than half the members of Congress are millionaires, according to a new analysis of financial disclosure reports conducted by the non-partisan Center for Responsive Politics.

Of the 534 current members of the House and Senate, 268 had an average net worth of $1 million or more in 2012 – up from 257 members in 2011. The median net worth for members of the House and Senate was $1,008,767.”

And you expect these people to look out for you?  Or think of some in the banking industry making billions of dollars on bets that Americans will fail (i.e., on subprime loans, etc) and how they profit off of this misfortune.  Remember too big to fail?  Those banks are even bigger today and wealth inequality is even more pronounced than before the Great Recession hit.  This is why the political climate is so intense this year and people just have no trust in the status quo.  Status quo candidates simply look like operatives for the neo-Gilded Age operators.

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