Big Lie: America Doesn't Have #1 Richest Middle-Class in the World... We're Ranked 27th!

http://www.huffingtonpost.com/les-leopold/big-lie-america-doesnt-ha_b_3516185.html

by Les Leopold, huffingtonpost.com
July 1st 2013

America is the richest country on Earth. We have the most millionaires, the most billionaires and our wealthiest citizens have garnered more of the planet's riches than any other group in the world. We even have hedge fund managers who make in one hour as much as the average family makes in 21 years!

This opulence is supposed to trickle down to the rest of us, improving the lives of everyday Americans. At least that's what free-market cheerleaders repeatedly promise us.

Unfortunately, it's a lie, one of the biggest ever perpetrated on the American people.

Our middle class is falling further and further behind in comparison to the rest of the world. We keep hearing that America is number one. Well, when it comes to middle-class wealth, we're number 27.

The most telling comparative measurement is median wealth (per adult). It describes the amount of wealth accumulated by the person precisely in the middle of the wealth distribution -- fifty percent of the adult population has more wealth, while fifty percent has less. You can't get more middle than that.

Wealth is measured by the total sum of all our assets (homes, bank accounts, stocks, bonds etc) minus our liabilities (outstanding loans and other debts). It the best indicator we have for individual and family prosperity. While the never-ending accumulation of wealth may be wrecking the planet, wealth also provides basic security, especially in a country like ours with such skimpy social programs. Wealth allows us to survive periods of economic turmoil. Wealth allows our children to go to college without incurring crippling debts, or to get help for the down-payment on their first homes. As Bill Holiday sings, "God bless the child that's got his own."

Well, it's a sad song. As the chart below shows, there are 26 other countries with a median wealth higher than ours, (and the relative reduction of U.S. median wealth has done nothing to make our economy more sustainable.)

Why?

Here's a starter list:

We don't have real universal health care. -----

Weak labor laws undermine unions and give large corporations more power to keep wages and benefits down. -----

Our minimum wage is pathetic, especially in comparison to other developed nations. (We're # 13). -----

Wall Street is out of control. -----

Higher education puts our kids into debt. In most other countries higher education is practically tuition free. -----

It's hard to improve your station in life if you're in prison, often due to drug-related charges that don't even exist in other developed nations. In fact, we have the largest prison population in the entire world, and we have the highest percentage of minorities imprisoned. -----
[And once you've served your sentence, it's hard to get a job.]

Our tax structures favor the rich and their corporations -----

The wealthy dominate politics. -----

Big Money dominates the media. -----

America encourages globalization of production so that workers here are in constant competition with the lower wage workers all over the world as well as with highly automated technologies.

Is there one cause of the middle-class collapse that rises above all others?

Yes. The International Labor organization produced a remarkable study, (Global Wage Report 2012-13) that sorts out the causes of why wages have remained stagnant while elite incomes have soared. The report compares key causal explanations like declining bargaining power of unions, porous social safety nets, globalization, new technologies and financialization.

Guess which one had the biggest impact on the growing split between the one percent and the 99 percent?

Financialization!

What is that? Economist Gerald Epstein offers us a working definition:

"Financialization means the increasing role of financial motives, financial markets, financial actors and financial institutions in the operation of the domestic and international economies."

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