Sunday, January 5, 2014

Inequality and debt (1): Winterspeak and the 1%


Lots of activity lately on the topic of income inequality, as I noted the other day. But do you really suppose we could have such inequality without all the debt?

I don't.


Winterspeak:

Who is the 1%?

Glad to see the Economist focus on the actual makeup of the 1% in America by wealth and income and find that it's the financial sector. While CEOs are often targetted in the press, the game has moved on:

Steve Kaplan of the University of Chicago thinks finance explains much of the rise in inequality...
In 2009 the richest 25 hedge-fund investors earned more than $25 billion, roughly six times as much as all the chief executives of companies in the S&P 500 stock index combined.
Within the 1% then are three groups -- well paid professionals (doctors, lawyers), business people, and finance folks (including a subset of Wall Street oriented lawyers). The top end of the 1% is very skewed towards finance.


"The top end of the 1% is very skewed towards finance."


2 comments:

Jazzbumpa said...

But do you really suppose we could have such inequality without all the debt?

I would say this is exactly backwards.

Cheers!
JzB

Greg said...

This makes me think of this post I read a few days ago

http://neweconomicperspectives.org/2013/12/essays-monetary-theory-policy-nature-money-2.html

Id be interested in your thoughts on this paper.

One thing I take away from this paper is that monetary economies must have inequality to function.
Someoenes money must be better than others in order of people to work harder for it and produce.
A hierarchy is essential