Beruflich Dokumente
Kultur Dokumente
April 2, 2012
7
AMERICA FINANCE
with deferred compensation and fat pensions subject to few, if any, taxes. I f youre among the richest 10 per cent, a big chunk of your savings are in the stock market where youve had nice gains over the last two years. The value of financial assets held by American households increased by $1.46tn in the fourth quarter of 2011. And since 90 per cent of those financial assets are owned by the richest 10 per cent and 38 per cent by the top 1 per cent, the richest 10 per cent became $1.3tn richer and the top 1 per cent gained $554.8bn. But if youre in the bottom 90 per cent, you probably own few, if any, shares of stock. Your biggest asset is your home. And thats a big problem. Home prices are down over a third from their 2006 peak, and theyre still dropping. The median house price in February was 6.2 per cent lower than a year ago. Which means if youre in the bottom 90 per cent youre likely to be even deeper underwater owing more on your home than its worth. An estimated one in three homeowners with a mortgage are now holding their breath. This is the most lopsided recovery in US history. When the American economy began recovering from the depths of the Great Depression, the gains were widespread. From 1933 to 1934 the bottom 90 per cent gained 8.8 per cent in average income. Yet recent recoveries have become more and more lopsided. The top 1 per cent got 45 per cent of Clinton-era economic growth, and 65 per cent of the economic growth during the Bush era. So far in the Obama recovery, the top 1 per cent has pocketed 93 percent of the gains. But Washington doesnt want to talk about this lopsided recovery. The Obama administration would rather focus on the recovery without mentioning whose it is. Perhaps its because almost all Democratic and independent voters are in the bottom 90 per cent. Republicans would rather not talk about the lopsidedness of this recovery either, because theyd rather not bring up the subject of inequality to begin with. Their reverse-Robin Hood budget plans cut taxes on the rich and slash public services everyone else depends on. Fed chairman Ben Bernanke who doesnt have to face voters on election day says the US economy needs to grow faster if its to produce enough jobs to bring down unemployment. Well, yes. But he leaves out the critical point.
We cant possibly grow faster if the vast majority of Americans, who are still losing ground, dont have the money to buy more of the things American workers produce. Theres no way spending by the richest 10 per cent will be enough to get the economy out of first gear. The wr iter isthe chancellor s pr ofessor of public policy at the Univer sity of Califor nia at Ber keley, and for mer US secr etar y of labour under Pr esident Bill Clinton. He is author of After shock: The next economy and Amer icas futur e