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Wealth catapulted up

Summary:
From Blair Fix and current issue of RWER Speaking of competition and losers, Ronald Reagan set the tone of the neoliberal era when, in 1981, he fired 11,000 striking air-traffic controllers (Houlihan, 2021). The message? Workers were losers who would be subjected to the discipline of competition. Reagan called it ‘morning in America’. But really, it was ‘morning for American big business’. Today, we are well into the next-day’s hangover, and we know how the party played out. For workers, it was a disaster. But for the rich, it was an incredible boon. Wealth didn’t trickle down so much as it got catapulted up. The result, as Figure 1A shows, was a relentless rise in the concentration of American wealth. Figure 1: A neoliberal experiment — rising wealth concentration among Americans,

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from Blair Fix and current issue of RWER

Speaking of competition and losers, Ronald Reagan set the tone of the neoliberal era when, in 1981, he fired 11,000 striking air-traffic controllers (Houlihan, 2021). The message? Workers were losers who would be subjected to the discipline of competition. Reagan called it ‘morning in America’. But really, it was ‘morning for American big business’.

Today, we are well into the next-day’s hangover, and we know how the party played out. For workers, it was a disaster. But for the rich, it was an incredible boon. Wealth didn’t trickle down so much as it got catapulted up. The result, as Figure 1A shows, was a relentless rise in the concentration of American wealth.

Wealth catapulted up

Figure 1: A neoliberal experiment — rising wealth concentration among Americans, and American elites.

The top panel shows the Gini index of wealth concentration among all Americans. The bottom panel shows the concentration of wealth among the 400 richest Americans. (For more details, see the Appendix.)

Interestingly, as wealth got catapulted from the poor to the rich, it also got transported from the mega rich to the supremely rich. This is the story told by Figure 1B. Here, I’ve focused on the richest Americans — the folks who grace the Forbes 400 list. Even here, among the upper crust of elites, wealth has grown more concentrated. Why?

As you’ll see, the culprit seems to be the stock market. But before we interrogate our suspect, let’s have a quick look at the brethren of the American rich — the globetrotting, jet-fuel belching species otherwise known as Earth’s billionaires.   read more

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