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Making It Real That We Live in the
"Second Gilded Age"…
J. Bradford DeLong
Economics and Blum Center, UC Berkeley; WCEG; and NBER
http://bradford-delong.com
| @delong |
delong@econ.berkeley.edu
June 26, 2019
I am hearing from a number of people that
columns like this one and its ilk by Paul
Krugman and our other compadres are
bloodless, and ineffective. They do not
convey any sense of what is happening.
So let me make it more concrete:
The top 0.01
%
of American workers—
now some 15000—this year have
incomes, including capital gains, of about
500 times the average. Typical incomes in
America today, including capital gains and
benefi ts, are perhaps 300 a working day.
The gulf between them and average
income is large: average income is about
800. Thus 15000 workers in the top 0.01
%
of income this year receive an average of
400,000 dollars a day.
How could one go about spending that?
Suppose you decided this morning that
you wanted to rent the 2000 square-foot
Ritz-Carlton suite at the Ritz-Carlton San
Francisco hotel for the week of next
Memorial Day, and did so. That would set
you back 6000 for seven nights. You
would still have to spend 394,000 more
today to avoid getting richer: to avoid
getting richer you would have to spend
16,667 an hour, awake and asleep, day in
and day out.
One way to think about the spending of
these 15000 superrich is that they are,
collectively, through their spending
employing 7,500,000 who are dedicated to
making them happier and advancing their
purposes, whatever they may be. And a
J. Bradford DeLong
Second Gilded Age
large proportion of them are bosses,
partially constrained by their obligation to
advance the purposes of the organizations
they work for, but free to shape and
interpret those purposes as they wish.
Guess average is effectively the
unconstrained boss of only 3 more: that
makes
3
0,000,000 of us who are paid to
directly and indirectly and who are thus
are focused on advancing the top 0.01
%
's
particular and idiosyncratic purposes.
And then there are the rest of the top 0.1
%
—not 15,000 but 135,000 each on average
one-ninth as well-off—who must spend
and reinvest not 400,000 but 45,000 a day,
but who are collectively of the same
economic weight as the top 0.01
%
, and
thus have another
3
0,000,000 of us
working for them: paid to
do so
directly
and indirectly
,
and thus focused on
advancing the top 0.1
%
's particular and
idiosyncratic purposes as well
.
Is that likely to be a healthy society?
Paul Krugman
:
Notes on Excessive
Wealth Disorder
<
https://
www.nytimes.com/2019/06/22/opinion/
notes-on-excessive-wealth-disorder.html
>
:
“
How not to repeat the mistakes of
2011.... What’s really at issue here is the
role of the 0.1 percent, or maybe the 0.01
percent—the truly wealthy, not the
‘
400,000 a year working Wall Street stiff'
memorably ridiculed in the movie Wall
Street.
“
This is a really tiny group of people, but
one that exerts huge influence over
policy.... Raw corruption.... Soft
corruption.... Campaign contributions....
“
Defi ning the agenda... [which] I want to
focus on... a particular example that for
me and others was a kind of radicalizing
moment, a demonstration that extreme
wealth really has degraded the ability of
our political system to deal with real
problems... the extraordinary shift in
conventional wisdom and policy priorities
that took place in 2010-2011, away from
placing priority on reducing the huge
suffering still taking place in the aftermath
of the 2008 fi nancial crisis, and toward
action to avert the supposed risk of a debt
crisis...
”
<
https://www.icloud.com/pages/
0JTXNu9m4uN3UFgerxwb9vU_A
>
<
https://www.bradford-delong.com/2019/06/eg-opinion-
notes-on-excessive-wealth-disorder-the-new-york-
times.html
>
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