So one in seven Americans lives in poverty. It’s difficult to know what exactly to make of this figure, since we already knew that one in seven Americans were on food stamps, that just under one in five Americans still can’t find jobs, that wealthyish folks have barely shouldered any of the unemployment burden and that the Obama Administration appears to remain deeply committed to the unwavering conviction that the correct way of solving these problems is to bend over and allow the financial services industry to blow off a bit more steam at its expense, and the fact is that the top 1% control such a fantastically outsized portion of the GDP in this country that they really are the only people worth worrying about when you need to finangle a supposed “recovery.”
It’s also difficult to know what to make of this figure since all the newspapers are proclaiming the poverty rate to be “highest since 1994” as if we all remember all those stories about tent cities and hundred dollar houses, from 1994.* The thing is, the poor in this country have been screwed for a very long time.
What is a lot easier to gauge from the way this news item has played out is what it says about the poverty of the nation’s once-great news organizations, especially in terms of the “integrity” department, in which no outlet boasts a more stunning descent than my former employer the Wall Street Journal, which began the week with a page one story on how America had become a nation of freeloading welfare queens and previewed the Census Bureau release yesterday with a story warning readers that the poverty rate was infamously overstated — even as another story conceded that the rate would actually be significantly higher if not for a stunning spike in “multifamily” households — and accompanied the news with a companion piece on how it is “getting riskier to be rich” according to the “findings” of a Brookings Institution study whose first six pages (all I could read) set a bold new standard for intellectual dishonesty in the economics profession (a feat most economists would probably tell you was impossible) and the requisite editorial blasting Obama’s “social engineering” agenda and boasting with no supporting evidence that income inequality had been “mostly unchanged since the early 1990s.”
But the multimedia charts plotting trends in “income inequality” and other shit only liberals waste their time clicking on are where the Journal gets truly diabolical. I say this because I carry around a lot of these stats in my personal flash drive to use as pick-up lines and so I wouldn’t have actually bothered to look at the Journal’s depiction of them had some lefty guy not emailed a link to some of his lefty friends with the subject heading “One chart says it all about Republican ‘deregulation’ and ‘trickledown’ failure of philosophy — inequality since 1980.” So I looked.
The chart plots the share of U.S. GDP allegedly held by the “top 5%” and the “bottom 40%” since 1980. According to the chart, the share held by the top 5% peaked in 2001 at 22.4% and now stands at 21.7%. Weirdly, the leading scholar on this topic, the highly decorated Berkeley economist Emmanuel Saez, has spent much of his career rigorously marshaling the same data, and his latest update says that the percentage of U.S. GDP held by the top one percent stood at around 20.9% in 2008, after peaking at 23.5% in 2007, with the next top four percent comprising an added (and historically relatively steady) 15% of the GDP, meaning that the top 5% together control well over 35% of the GDP, with the top hundredth of a percent alone — that is to say, households that make more than roughly $11 million a year and possess at least $1oo million in net worth — receiving more than 14% of that, or 5% of the GDP in 2008 and more than 6% of the 2007 GDP.
So where’s the Journal getting its numbers? Who knows. The Brookings Institution economists have adopted the curious practice of excluding capital gains from their estimates, perhaps because as we all know on some visceral level, money made insider trading or statistical arbitraging or credit default swap speculating or causing rice riots in India aren’t real earnings, so why even bother taxing them, right? But when I babble about the plutocracy and oligarch misinformation conspiracies and that sort of nonsense, these are the figures I’m talking about.