Wealth inequality in America

April 24, 2013

The following short video recently went viral and received more than 5.5 million views on YouTube. Using accurate and easy to comprehend graphs, it showcases the full scope of U.S. income inequality.

The video is mostly based on a paper written and published by Michael I. Norton and Dan Ariely, titled “Building a Better America—One Wealth Quintile at a Time.” It also references other data provided by a number of mainstream and progressive websites such as CNN, Motherjones and ThinkProgress.

The video is receiving interesting responses from conservative and neo-liberals, who either challenge the accuracy of the video or attempt to defend the reality it portrays. Mark J. Perry for example bemoans that the study does not include wealth mobility, i.e. data on people moving up or down on the wealth scale, repeating the American Ilusion that “everyone can make it”. And Tim Worstall from Forbes Magazine writes the following:

What is desperately underappreciated is that the country already does a large amount of wealth reallocation. So much so that the figures being used in the video are hopelessly wrong out in the real world. The method we use for that reallocation is government. Or we could call it the welfare state if you like. I agree that the US welfare state isn’t all that generous. You need to have a large number of fake IDs to become that mythical welfare queen with her Cadillac for example. But the welfare state does indeed exist in America and it does redistributes wealth.

And goes on to present public schooling as an example of how — in the real world — wealth is already being redistributed through these services because, you know, free education is really just paid for by the rich.

It is truly astonishing how someone could possibly deny that there is something fundamentally wrong with the situation as presented in this video or even attempt to defend it. Sure one can question why the term “poverty line,” which measures income is used in a graph that plots overall wealth, but that minor detail does not change the undeniable fact that 1% of Americans possesses a staggering 40% of  the entire wealth while the bottom 80% only possess 7%. No amount of neo-liberal propaganda and nitpicking can argue this away–and the majority of U.S. citizens appear to agree.

And on the clever arguments about mobility, trickle down economics, and “public” schooling, have a look at the articles linked to below as related posts.


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