Mike Kueber's Blog

October 14, 2014

Distribution of wealth in America

Filed under: Economics,Facebook,Politics — Mike Kueber @ 10:04 pm

The Walton family is being excoriated by socialist Senator Bernie Sanders in a popular Facebook poster because the Walton family apparently has more wealth (about $140 billion) than the bottom 40% of Americans combined. My initial reaction to this charge is there are “lies, damn lies, and statistics” (i.e., a phrase describing the persuasive power of numbers, particularly the use of statistics to bolster weak arguments). After all, most political/economist types know that they individually probably have more wealth than the bottom 20% of Americans combined because those “no-accounts” don’t “have a pot to piss in.”

It was not easy to confirm my suspicion because most studies on the distribution of wealth focus on the top 10%. For example, according to the Credit Suisse Global Wealth Databook (2013), the top 10% of Americans have more of our nation’s wealth (75%) than any of the other 19 leading developed nations, with the others ranging from 44.9% in Finland to 72.2 in Denmark.

After a lengthy search, however, I found a chart on Wikipedia that shows the bottom 25% of American families have a negative net worth of about $2,000.

The conservative in me thinks that, instead of looking enviously at the wealth of the top 10%, America should be thinking about how to inculcate personal responsibility in the bottom 25% who save nothing despite living in our land of plenty. But the me who have been reading Piketty’s book on Capital thinks that these matters are interrelated. So I had the following exchange with my friend who posted the Bernie Sanders poster:

  • Friend – You are under the misunderstanding that these people, the bottom 20%, have some disposable income other than debts. These are people that live below the poverty line. Forty-five million Americans live below the poverty line which is a disgrace for the richest country in the world. And of course we also have the largest income inequality in the world, thanks to companies like Wal-Mart and fast food restaurants including social programs as part of their costs mitigation strategy.
  • Me – And the bottom 25% of American families have a negative net worth. I agree that something has to be done to keep all wealth from going to the top 10% (an annual wealth tax to supplement or replace the estate tax), but the bottom 25% need to be more personally responsible.

I will blog in a few days about the epiphany that Thomas Piketty’s Capital is triggering in me.


Leave a Comment »

No comments yet.

RSS feed for comments on this post. TrackBack URI

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: