by Charles Hugh Smith
Of Two Minds
Given that political power in America is a pay-to-play auction in which the highest bidder wins, how this incomprehensibly lopsided ownership of wealth plays out is an open question.
Wealth inequality easily falls into an abstraction unless we contextualize it in meaningful ways. I’ve annotated two St. Louis Federal Reserve (FRED) charts–the net worth of America’s top 1% and the net worth of America’s bottom 50% of households, roughly 66 million households–to show their net worth and their share of all household net worth, and put this in the context of inflation and GDP (gross domestic product) of the U.S. and other nations.
These charts may look complicated but the idea is actually pretty simple: I’ve noted how each group (the top 1% and the bottom 50%) did at the top and bottom of each bubble: the dot-com bubble in 2000, the stock/housing bubble that topped in 2007, and the current bubble, noting the pre-pandemic data at the end of 2019 and the most recent totals (2nd quarter 2021).