Wealth Inequality. Somehow Trump is to blame. Somehow, his new tax plan is to blame. And somehow, it is forgotten that during Obama’s tenure, wealth inequality continued it’s brisk rise. He continued the chart unabated. But it is hardly a nuance of the last decade, or even two, the upswing actually began in 1978 during the Carter administration and continued through every single administration for the next 40 years – Democrats and Republicans
During the Obama administration, food stamp payouts doubled. But wealth distribution continued its unabated rise. Obviously, welfare Socialism did not solve the wealth distribution issue. So what will?
The UK is labeled a Socialist Capital economy whereby high taxes are imposed to fund extensive welfare costs. But the skew of wealth distribution in the UK actually models that of the US. So obviously, Socialism is not the answer to the dreaded wealth inequality. What is?
It is said that if you are born into wealth, there you stay, and conversely if you are born into poverty – there you stay. So, which countries have the least income/wealth inequality?
The number One is Slovenia. So should everyone move to Slovenia? Most people probably don’t even know where it is or what it is. Slovenia was part of the Roman Empire and then it became part of Serbia, then it was annexed by Germany, Italy and Hungary, before becoming part of Yugoslavia, before becoming – Slovenia.
Slovenia has a population just over 2 million, a nominal GDP per capita of just over $23,000 and the lowest ‘gini score’ in the world. The gini score is what is used to rate a countries wealth distribution. So Slovenia is the place to be! Or not.
The birth rate is a negative, the population is aging, immigration isn’t enough to boost the economy, you could fit seven to ten Slovenia’s into the state of Kansas, and like other secular countries, their future is tenuous. But most importantly, when assigning a gini score to a country it is important to understand the skews upon which the score is ranked. In Slovenia, the top “100” wealthy have a combined wealth of roughly Euro 2.9 billion.
By contrast, the US which has a much higher gini score, also has the most wealth – the top “5” wealthiest individuals combined amount to over $400 billion. The US share of world wealth is 25.4%. The country coming in second is Japan at 9.86%. Both have high gini scores – because that’s where the wealth is concentrated!
Barbados has a wealth per adult capita of over $144,000 and a gini of .7, the “wealth” is a concentration of ex-patriot and offshore accounts. It is meaningless.
Ireland also has a very high ‘gini score’. Ireland too has very few formidable wealthy citizens. The wealthiest to date is a transplant from India whose net worth is estimated to be roughly $10 billion. The third richest man in Ireland is an American who renounced citizenship and was heir to the Campbell Soup company. And the combined net worth of the top five wealthiest living in Ireland amounts to about $22 billion, 95% less than the top tier in the US.
So when we create comparisons in the media using ‘gini scores’ in displaying the skew of US wealth distribution, the story is not exactly wholly relevant and the picture portrayed becomes rather nonsensical. What it does is give fat to the media when it is only worthy of gristle.
And when we see that this ‘distribution’ has been on a steady rise for 40 years, despite all the Presidents and all the President’s men, it bears consideration that welfare and socialism are hardly the answer because in fact welfare and socialism in the US have followed the exact same skew. Imagine that…
Our prison population follows the same skew. Food Stamps, Housing, Healthcare, all follow the same skew as wealth distribution. Does that mean they are contributors to wealth inequality? Most graphs tell a very limited picture. Wealth inequality does exist, and probably always will – even in a purely Communist regime where the government holds the only wealth. It certainly isn’t fun when you are on the bottom of the spectrum, but it’s not fun when your health insurance represents a third of your income either.
None of this denies the fact that in the US CEO’s pay themselves exorbitant salaries and benefit packages that skew the curve. But griping isn’t the solution, nor is stacking on more and more welfare, the only solution would be to introduce more competition wherein the cost of a comparable unit is so much lower, the profit margins have to be renegotiated, and the CEO compensation package becomes the prime target. Without competition, the capital structure becomes Socialist and as the US becomes more and more Socialist, the skew deepens.
And that graph is telling.