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Thursday, July 13th, 2017

The huge gap between America’s rich and superrich exposes a fundamental misunderstanding about inequality

Author:     Pedro Nicolaci da Costa
Source:     Business Insider
Publication Date:     Jul. 7, 2017, 11:44 PM
 Link: The huge gap between America’s rich and superrich exposes a fundamental misunderstanding about inequality
Stephan:   Part of the problem people have in understanding the reality of wealth inequity is that most middle class people tend to think of the rich as the wealthy people with whom they have contact, medical specialists, lawyers and the like. But those people are really only upper middle class. There is a huge divide between the upper middle class and the uber-rich, most of whom unlike Bill and Melinda Gates are completely and deliberately anonymous to all but their peers. Here is some insight on this difference.

Destabilizing levels of income inequality, once a problem reserved for developing nations, is now a defining social and political issue in the United States.

Donald Trump seized on the issue during the presidential campaign, vowing to become a voice for forgotten Americans left behind by decades of widening wealth disparities.

While America’s enormous gap between rich and poor and the sorry state of its middle class are well-documented, a less prominent trend tells an equally important story about the American economy: the divide between the well-off and the stratospherically rich.

This particular pattern is especially important since some economists and conservative commentators have tried to blame inequality on educational levels, arguing that those with college degrees have fared well in the so-called knowledge economy while those with a high school diploma or less lack the skills to do the jobs available.

Others, however, point to runaway salaries for top executives in industries like energy and finance as the key underlying drivers of inflation, which has been characterized by huge gains at the very top of the income distribution. Executive compensation is driven in large part by corporate boards that have cozy relationships with firms’ CEOs, rather than market forces.

From Aspen, Colorado, the New York Times columnist David Brooks […]

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