Real wages for the average worker in US declined
In the last three decades real wages for the average worker declined in the last three decades. We were too enthralled by our orgy of fantasy finance. So much money gushed to the top of the income ladder that the wealthy literally ran out of real world investments. Deregulated Wall Street “financial engineers” solved this problem by creating new derivative financial products for people to invest in. Bubbles inflated everywhere. Tangible assets didn’t matter anymore, since it turned out we could make money from money, indefinitely and without any serious real world constraints. (Forgive me again for leading you to The Looting of America, which recounts this whole outrageous story.)
Not only did our free-market fetish destabilize the economy, but it saddled us with an aristocracy of wealth and waste that now blocks us from solving our problems. The wealthy are determined to hold onto their fictional profit-making activities and astronomical salaries — even if it means forcing the rest of us to bail them out again with trillions of dollars in subsidies and toxic asset guarantees. With wealth they can buy the political process. But they also can shape our minds. They want us to believe that they are the natural rulers of our universe and that we are powerless to change it.
Our free-market love-affair also broke the bonds that connected the top and the bottom of our society. The wealthy have no clue what it’s like to live like most Americans do each day. A few statistics tell it all:
• In 1970 the ratio of compensation between the top 100 CEOs and the average worker was 45 to 1. By 2006 it was a whopping 1,723 to one.
• By 2007 there were about 400,000 tax payers with adjustable gross incomes over $1 million. They had about as much income as the bottom 67 million tax returns! That’s the worst distribution of wealth since 1928 – no coincidence there.
• Today the top 400 billionaires have enough wealth (more than $1.56 trillion combined) to endow all of our public colleges and universities so that tuition would be free… forever.
