“The Millionaire’s Club Expands”: The Wealthiest 10 Percent Of Americans Own 75 Percent Of The Personal Wealth
The millionaire’s club isn’t what it used to be.
Time was that “being a millionaire” was a mark of unimaginable success. You’d joined the financial elite. People didn’t much discuss whether you arrived by wealth or income, because it didn’t matter much. The millionaire’s club was so small that the path to membership wasn’t worth discussing.
Millionaires aren’t as common as water, but there are plenty of them. A new study puts the worldwide total at 35 million in 2014, with about 40 percent (14 million) of them American. That’s about 5 percent of the U.S. adult population (241 million in 2014), or one in 20. Rarefied, yes; exclusive, no. After the United States, Japan has the largest concentration of millionaires with 8 percent of the world total, followed by France (7 percent), Germany (6 percent) and the United Kingdom (6 percent). At 3 percent, China ranks eighth.
The figures come from a study by Credit Suisse Research, which has been estimating worldwide personal wealth since 2010. The numbers reflect net worth, not annual income. The wealth totals add the value of people’s homes, businesses and financial assets (stocks, bonds) and subtract their loans. Doubtlessly, the number of millionaires would be much smaller if the calculations were based on income. In the study, an American with a $300,000 mortgage-free home and $700,000 in retirement accounts and financial investments qualifies as a millionaire.
On this basis, the study put global personal wealth in mid-2014 at $263 trillion, up from $117 trillion in 2000. Wealth in the United States reached $84 trillion, almost a third of the total. All of Europe, with a larger population, was virtually the same. Median wealth in the United States — meaning half of Americans were above the cutoff and half below — was $53,000, dominated by homes for many middle-class families. Japan’s total wealth was $23 trillion, but with a more equal distribution and a smaller population, its median was more than twice the American at $113,000. China’s wealth was $21 trillion and its median $7,000.
Credit Suisse did a special analysis of wealth inequality and, not surprisingly, found plenty of it. For starters, the analysis reminded readers that wealth inequality (basically, the ownership of stocks and bonds) is typically much greater than income inequality (basically, wages, salaries, dividends and interest).
In the United States, the wealthiest 10 percent of Americans own about 75 percent of the personal wealth, a share that’s unchanged since 2000; the income share of the top 10 percent is slightly less than 50 percent. But the study also found that wealth inequality is high in virtually all societies. Although the United States is at the upper end of the range, the low end is still stratospheric.
In 2014, the wealthiest 10 percent owned 62 percent of the personal wealth in Germany; 69 percent in Sweden; 49 percent in Japan; 64 percent in China; 51 percent in Australia; 54 percent in the United Kingdom; 53 percent in France; 72 percent in Switzerland; and 68 percent in Denmark. These steep levels, the report noted, defied large cross-country differences in tax and inheritance policies.
There is, however, one country where wealth inequality is “so far above the others that it deserves to be placed in a separate category.” This is Russia. In 2014, the wealthiest 10 percent owned 85 percent of personal wealth. They aren’t oligarchs for nothing.
By: Robert Samuelson, The Washington Post, October 22, 2014
“The New Politics Of Foreign Policy”: Steadier, More Sober, More Realistic—The Balance We Have Been Seeking
Over the last decade, Americans’ views on foreign policy have swung sharply from support for intervention to a profound mistrust of any military engagement overseas. Over the same period, political debates on foreign affairs have been bitter and polarized, defined by the question of whether the invasion of Iraq was a proper use of the nation’s power or a catastrophic mistake.
This contest for public opinion has taken place in the shadow of the attacks of Sept. 11, 2001. For understandable reasons, the United States was thrown off balance by the horrific events of 13 years ago, and we have never fully recovered.
The emergence of the Islamic State and its barbaric beheadings of James Foley and Steven Sotloff have shaken public opinion again. It is, of course, possible that the public’s guardedly increased hawkishness is another short-term reaction to an enraging news event. But there is a strong case that, after all the gyrations in policy and popular attitudes, we are on the verge of a new politics of foreign policy based on a steadier, more sober and more realistic view of our country’s role in the world and of what it takes to keep the nation safe.
And it fell to President Obama on Wednesday night to take the first steps toward building a durable consensus that can outlast his presidency. The paradox is that, while polls show Americans more critical than ever of the president’s handling of foreign affairs, the strategy he outlined toward the Islamic State has the potential of forging a unity of purpose across a wide swath of American opinion. In many ways, it is an approach that goes back to the pre-9/11 presidencies of George H.W. Bush and Bill Clinton.
Two things are clear about where the public stands now: It is more ready to use U.S. power than it was even a few months ago. But it remains deeply wary of again committing U.S. combat troops to the Middle East. Thus the wide popularity of using air attacks to push back the Islamic State.
Obama’s strategy seeks to thread this needle. As the president explained Wednesday night, the bombing campaign the United States has undertaken is aimed at supporting those — including the Iraqi army, the Kurdish pesh merga and, perhaps eventually, Syrian opposition forces — who are bearing the burden of the fighting. Although the circumstances are quite different, Obama’s reliance on air power is reminiscent of Clinton’s actions in Bosnia and Kosovo. Obama said he was sending an additional 475 U.S. troops to Iraq “to support Iraqi and Kurdish forces with training, intelligence and equipment.” But he was again at pains to insist that they would “not get dragged into another ground war in Iraq.”
More generally, Obama is pushing a tough-minded multilateralism. His stress on building “a broad coalition of partners” and the administration’s aggressive courting of allies in both the Middle East and Europe recalls the intense rounds of diplomacy that former secretary of state James A. Baker III led on behalf of the first President Bush before the successful war to drive Saddam Hussein’s army from Kuwait in 1991.
Obama’s diplomatic exertions have extended to pressuring Shiite politicians in Iraq to create what he called “an inclusive government” that Sunni Muslims could regard as their own. It was the creation of such a government, he said Wednesday, that now made the rest of his strategy possible. Above all, Obama went out of his way to describe his new effort as a “counterterrorism strategy,” tying it back to the cause that large majorities of Americans embraced after the 9/11 attacks and have never stopped supporting. His new effort, he insisted, “will be different from the wars in Iraq and Afghanistan.”
Some who championed the Iraq war will, no doubt, object to this implicit criticism of a venture they still defend. Others will point to the risks of relying on Iraqis and others to take the lead on the battlefield. In the meantime, anti-interventionists — who still loom large in the president’s party and in Republican libertarian quarters — will continue to be wary of any re-escalation of U.S. military engagement. And a bitter election season is hardly an ideal moment for building bipartisanship.
Nonetheless, circumstances have presented Obama with both an opportunity and an obligation to steer U.S. policy toward a middle course that acknowledges a need for American leadership and the careful use of American power while avoiding commitments that are beyond the country’s capacity to sustain. It is the balance we have been seeking since an awful day in September shook us to our core.
By: E. J. Dionne, Jr., Opinion Writer, The Washington Post, September 10, 2014
It’s hard to believe, but almost six years have passed since the fall of Lehman Brothers ushered in the worst economic crisis since the 1930s. Many people, myself included, would like to move on to other subjects. But we can’t, because the crisis is by no means over. Recovery is far from complete, and the wrong policies could still turn economic weakness into a more or less permanent depression.
In fact, that’s what seems to be happening in Europe as we speak. And the rest of us should learn from Europe’s experience.
Before I get to the latest bad news, let’s talk about the great policy argument that has raged for more than five years. It’s easy to get bogged down in the details, but basically it has been a debate between the too-muchers and the not-enoughers.
The too-muchers have warned incessantly that the things governments and central banks are doing to limit the depth of the slump are setting the stage for something even worse. Deficit spending, they suggested, could provoke a Greek-style crisis any day now — within two years, declared Alan Simpson and Erskine Bowles some three and a half years ago. Asset purchases by the Federal Reserve would “risk currency debasement and inflation,” declared a who’s who of Republican economists, investors, and pundits in a 2010 open letter to Ben Bernanke.
The not-enoughers — a group that includes yours truly — have argued all along that the clear and present danger is Japanification rather than Hellenization. That is, they have warned that inadequate fiscal stimulus and a premature turn to austerity could lead to a lost decade or more of economic depression, that the Fed should be doing even more to boost the economy, that deflation, not inflation, was the great risk facing the Western world.
To say the obvious, none of the predictions and warnings of the too-muchers have come to pass. America never experienced a Greek-type crisis of soaring borrowing costs. In fact, even within Europe the debt crisis largely faded away once the European Central Bank began doing its job as lender of last resort. Meanwhile, inflation has stayed low.
However, while the not-enoughers were right to dismiss warnings about interest rates and inflation, our concerns about actual deflation haven’t yet come to pass. This has provoked a fair bit of rethinking about the inflation process (if there has been any rethinking on the other side of this argument, I haven’t seen it), but not-enoughers continue to worry about the risks of a Japan-type quasi-permanent slump.
Which brings me to Europe’s woes.
On the whole, the too-muchers have had much more influence in Europe than in the United States, while the not-enoughers have had no influence at all. European officials eagerly embraced now-discredited doctrines that allegedly justified fiscal austerity even in depressed economies (although America has de facto done a lot of austerity, too, thanks to the sequester and cuts at the state and local level). And the European Central Bank, or E.C.B., not only failed to match the Fed’s asset purchases, it actually raised interest rates back in 2011 to head off the imaginary risk of inflation.
The E.C.B. reversed course when Europe slid back into recession, and, as I’ve already mentioned, under Mario Draghi’s leadership, it did a lot to alleviate the European debt crisis. But this wasn’t enough. The European economy did start growing again last year, but not enough to make more than a small dent in the unemployment rate.
And now growth has stalled, while inflation has fallen far below the E.C.B.’s target of 2 percent, and prices are actually falling in debtor nations. It’s really a dismal picture. Mr. Draghi & Co. need to do whatever they can to try to turn things around, but given the political and institutional constraints they face, Europe will arguably be lucky if all it experiences is one lost decade.
The good news is that things don’t look that dire in America, where job creation seems finally to have picked up and the threat of deflation has receded, at least for now. But all it would take is a few bad shocks and/or policy missteps to send us down the same path.
The good news is that Janet Yellen, the Fed chairwoman, understands the danger; she has made it clear that she would rather take the chance of a temporary rise in the inflation rate than risk hitting the brakes too soon, the way the E.C.B. did in 2011. The bad news is that she and her colleagues are under a lot of pressure to do the wrong thing from the too-muchers, who seem to have learned nothing from being wrong year after year, and are still agitating for higher rates.
There’s an old joke about the man who decides to cheer up, because things could be worse — and sure enough, things get worse. That’s more or less what happened to Europe, and we shouldn’t let it happen here.
By: Paul Krugman, Op-Ed Columnist, The New York Times, August 14, 2014
“Meanwhile, Back In The Oval Office”: Why It’s So Idiotic To Complain When The President Takes A Vacation
There are a lot of stupid ways people attack presidents from the other party, but there can’t be that many as stupid as the complaint that he takes too many vacations. Since Obama is now on Martha’s Vineyard, despite the fact that there are things going on in the world, the volume of these complaints has grown, like the inevitable rise of the tide. Conservatives are in full on mockery mode (did you know he plays golf!!!), and the press is getting into the act as well. For instance, the Washington Post‘s Dana Milbank took on the vacation issue in a piece colorfully titled “Obama Vacations As the World Burns,” explaining that “Even presidents need down time, and Obama can handle his commander-in-chief duties wherever he is. But his decision to proceed with his getaway just 36 hours after announcing the military action in Iraq risks fueling the impression that he is detached as the world burns.” That pretty much sums up the problem with how the press discusses this issue. There’s no substantive reason why it’s a problem, it just “risks fueling the impression” that there’s a problem. But nobody’s holding a gun to any reporter’s head demanding that they write not about substance but about which impressions are being fueled. And what really fuels that impression? Why, articles like that one.
As everybody acknowledges, when the president goes on vacation, it’s not like he’s out of touch. He travels with a significant staff, is in communication with the White House constantly, and of course has close access to the nuclear “football,” should it become necessary to end all life on planet earth at a moment’s notice. And when it comes to giving himself vacations, Obama has been rather parsimonious. George W. Bush is the recent record-holder, and it’s not even close. He spent 879 days away from the White House during his eight years in office, including 16 full months at his “ranch” in Crawford, Texas.
At this point we should acknowledge that liberals used to talk plenty about Bush’s vacations when he was president. And it was ridiculous then too, not because we don’t want the president to be devoted to the job, but because of who was making the complaint. None of the things liberals didn’t like about Bush would have been improved had he spent more time toiling away in the White House. Nor would conservatives be happier with the policy choices Barack Obama makes today if he stayed away from Martha’s Vineyard or didn’t play golf as often.
And that’s the real reason the vacation complaint is so absurd. No one—not the opposition party, and not reporters—actually believes that the quality of a presidency has anything to do with how many hours the president logs in the Oval Office. Yes, it now seems weird that with the most important job in the world, Ronald Reagan worked basically 9 to 5 and didn’t come in on weekends. But was the sheer quantity of hours he worked the cause of his disconnection from the details of governing? No, it was just his style. There has never been a president about whom you can honestly say, “If he had pulled a couple of all-nighters, everything would have been different.”
The problem, I think, is that on some level Americans have a presumption that vacation is basically sinful, that the moment you leave work you’re indulging your selfishness and shirking your responsibilities. This assumption can be found throughout American society, but it’s particularly acute in Washington, where people believe that that the amount you accomplish is directly correlated with how late you stay at the office. I’ve encountered this in any number of workplaces, and I’m sure you have too. But there’s almost no reason to think it’s true.
As you may know, Americans take fewer vacation days than anyone else in the developed world, both as a matter of practice and as a matter of law. In pretty much every other advanced country, employers are required to give paid vacation and holidays, in quantities that ensure that their employees have the time to recharge, relax, and have a life. Here’s a graph from the Center for Economic Policy and Research comparing mandated paid vacation and holidays in OECD countries:
That’s us over on the right, at zero. If you lived in Germany, for instance, a country with a high standard of living and extremely productive workers, you’d have 20 days of paid vacation and 10 paid holidays mandated by law. That’s 6 weeks off per year. Paid.
Of course, most Americans get some paid vacation and paid holidays. But it’s entirely up to the generosity of your boss. Incredibly, many workers don’t use the vacation days they have — as much as half of Americans’ vacation time goes unused. And the people who could use it the most—lower-wage, hourly workers—usually get little or no paid vacation or holidays at all. And most workers who do take vacation end up working while they’re vacating, like the president does.
So the next time you see someone criticize the president for taking a vacation — whether it’s a conservative criticizing this president, or a liberal criticizing the next Republican one — the question you have to ask is, “Do you think that if he were back in the Oval Office he’d be making the right decisions, but because he’s away from Washington he’s making the wrong decisions?” When the answer is no, as it inevitably will be, the logical response is: So what the hell are you complaining about?
By: Paul Waldman, Contributing Editor, The American Prospect, August 13, 2014
When I was young, a mantra among progressives was that America had to stop operating as global policeman. Vietnam was the signal episode of arrogant and ultimately self-defeating American overreach. But there were plenty of other cases of the U.S. government doing the bidding of oil companies and banana barons, and blithely overthrowing left-democratic governments as well as outright communists (or driving nationalist reformers into the arms of communists.)
As the late Phil Ochs tauntingly sang, “We’re the cops of the world.” Or as Randy Newman mordantly put it, “Let’s drop the big one and see what happens.“
At the same time, I viewed myself as sensible left. I was the guy at the Moratorium demonstrations of the late 1960s and early 1970s (actually covering them for Pacifica) hoping to make prudent withdrawal from Vietnam a majority cause, not the guy chanting “Ho, Ho, Ho Chi Minh.”) I liked Norman Thomas’s line: Don’t burn the flag, wash it.
Overthrowing elected leaders like Chile’s Allende, staging coups against Mossadegh in Iran and Arbenz in Guatemala, blocking the elected presidency of Juan Bosch in the Dominican Republic—those were outrages. Yet the basic containment of Soviet expansionism seemed necessary and smart policy to me.
As a lapsed political scientist, I agreed with the received wisdom that global anarchy and American isolationism led to 20th century war and chaos. I thought people who preached world government were naïve. I was, if you will, on the left wing of the realist camp. Yes to benign use of American power, no to marginal Cold War adventures and corporate-led foreign policy. Pick your battles and don’t assume unlimited power; give colonies their liberty but with very limited forays into “nation building.”
I understood that much of the pent-up rage in the global South was a delayed reaction to earlier Western imperialism, both political and economic. But I did not romanticize every Third World uprising.
Later, I thought Bill Clinton got it about right with his intervention in the former Yugoslavia, warm embrace of Mandela, diplomacy in Northern Ireland, realistic anti-terrorism policies, and relative restraint generally. I applauded Clinton’s Mid-East peace efforts, but thought both parties were far too indulgent of Israeli settlement-building on the West Bank.
Today, the legacy of the Cheney-Bush regime has underscored the folly of overreach. Every place where America intervened under the Cheney doctrine, we’ve left a worse mess than the one we attempted to fix.
In a sense, the Left has gotten its wish. Events have made crystal clear that America can’t intervene everywhere. It’s not even apparent that we can constructively intervene anywhere.
Challenges to global peace and stability are hydra-headed and localized, not the work of a central conspiracy. Not even Henry Kissinger could cut a deal with non-state militias, and there’s not much to negotiate with the ISIS caliphate.
Despite the partial culpability of Western excesses during the last century, it’s hard to argue that Jihadists are therefore the good guys and Yankee imperialists the bad guys. On the contrary, radical Islam is at war against the Enlightenment, not to mention the rights of religious others, women, and basic political democracy. (So, for that matter, are ultra-orthodox Zionism and ultra-fundamentalist Christianity.)
Despite its omissions, limitations, and the central role of dead white Europeans, I’m rather fond of the Enlightenment. Its basic ideals are worth defending.
Many Jihadists would surely use nuclear weapons if they could get them, making the events of 9/11 look like a mere prologue, and requiring U.S. global vigilance.
So, Left friends, be careful what you wish for. America’s power today is humbled—and the world is more of a cauldron than ever. Even for lefties inclined to “blame America first,” as the Right likes to put it, U.S. intervention is often a lesser evil.
So if you were Czar, as the old saying went, exactly what foreign policy would you venture?
Given the limited options, is Obama getting it mostly right? Or is he pursuing the correct policies but somehow projecting weakness (as he surely does with Republicans at home)?
Where does it make sense to exit the game, even if the vacuum is filled by true crazies and sectarian wars, as in Afghanistan and Iraq?
Where must we conclude that we have little constructive role to play despite humanitarian outrages, because of limited resources and leverage, as in Syria?
Where are truly vital interests at stake (Ukraine, and China?) and what’s the possible policy? Where is robust diplomacy a substitute for brute force?
How do we deal with the true menace of nuclear proliferation, when it’s no longer feasible to police the world?
I’m a big fan of Elizabeth Warren. I hope she runs for president. However, several progressive Democrats, not unreasonably, have lately said to me: But she has no foreign policy experience. Do we have any idea of her views, or whom she’d appoint? With the world in crisis, would people vote for someone like Warren solely on pocketbook issues?
Well, Cheney and Rumsfeld had plenty of foreign policy experience, and look what it got us. Obama had none whatever, but Kerry and Biden seem to be doing about as well as anyone could, given the terrible hand that history has dealt them. Clinton, if memory serves, had been governor of Arkansas, a state without a foreign policy.
Here is one more story from my youth. At my Oberlin graduation, in 1965, the Commencement speaker was Martin Luther King, Jr. The College trustees, perhaps to balance Dr. King, were also giving an honorary degree to Secretary of State Dean Rusk, architect of the Vietnam escalation.
One faction of students wanted to boycott or picket Commencement, but that would have insulted Dr. King. Moderate lefties like me proposed a compromise. If Rusk would meet with us and listen to our proposal, we would not stage a demonstration. The meeting was duly brokered. The few far lefties groused that the student leaders had sold them out.
At the meeting, we pitched the following proposition. Ho Chi Minh was first and foremost a nationalist. His real enemy was China. South Vietnam was corrupt, non-democratic, and in any case not viable as a state. Why not allow Ho’s National Liberation Front to take power, as America should have done when Ho won his anti-colonial war with France in 1954, and guarantee Vietnam’s neutrality in exchange for Vietnam’s non-intervention elsewhere?
Rusk smiled indulgently. What did we know? We were a bunch of kids.
As events turned out, we were better realists than Rusk. Today, half a century later, the communist government in Hanoi prizes trade deals with America, practices semi-capitalism, does not threaten its neighbors, and relies on the U.S. as a counterweight to China. We might have had roughly the same outcome in 1965, with 50,000 fewer American combat deaths.
But I digress. Here are two concluding thoughts.
First, despite far-left fantasies, American can’t simply exit the world stage. There are too many menaces that require our constructive engagement. But America’s room to operate is very limited.
Secondly, better to have a thoughtful and well-read progressive leader with limited foreign policy experience than an experienced right-wing zealot like Cheney, or even a misguided experienced moderate like Rusk.
By: Robert Kuttner, Co-Founder and Co-Editor, The American Prospect; The Huffington Post Blog, July 27, 2014