Corporate executives have more money than you-much more

The Washington Post reported on a headline based upon the Gini index, which gathers data and reports on income inequality, and the 4 1 1 is bad news for us all. To simplify things an index of zero would indicate that everyone for the most part has a piece of the pie, and 1 would be a world where a few people lived like kings while the world around them fought for food. Our score is almost a .5 which is 25% worse than any other country in the world.

The Gini index would nearly certainly trace the origin of this movement of wealth from many to few, which I call “Croupier Economics,” to 1913 when the Federal Reserve bank was founded. The US borrows money which is an unseen drag on the quality and standard of living of every citizen. The government borrowing today is mostly distributed to the defense and medical industries along with medicare and interest which are not a direct benefit to an average citizen.

Why does this matter? Thomas Friedman wrote “The World is Flat” which offers purist economist insight into the natural trendlines across the world to fluctuate towards an equilibrium. Products want the cheapest labor, compliance and other unit economics, and although consumers have some say in defining the “line in the sand” of sacrifices they won’t make for lower prices, Adam Smith’s “invisible hand” can be relied upon to reduce income in the United States and increase it elsewhere until some equilibrium is found.

There are some elements where this purism is not what should be aspired to, particularly in the United States where all the long term assets citizens believe are safe; social security funds, annuity funds, pension funds, savings and investments are risk managed by experts, regulations and policies. If people were told to get college educations, paid 1,100% more than their parents to do that and took massive loans the salaries should reflect that promise.

I have blogged about the five hundred or so million Michael Eisner made running the Disney corporation back when this Gini disparity and the gap between workers and bosses began to expand massively. CEOs earn a thousand times worker pay and honestly although I have met some extraordinary people, I have yet to meet the person who was a thousand times better than another person.

Our borrowing is so ridiculous few reports ever toss out the aggregate, except a few citizen groups like “truthinaccounting” who place the current number at $120 trillion dollars. I cannot stress enough that people borrowing for furniture, vacations or food is completely insane, but probably not as insane as taking trust money for medicare and social security obligations and just signing IOUs to future generations to meet the shortfalls.

At the end of this rainbow ultimately is a devalued currency and a standard of living that is sub poverty for a generation in the future. Capitalism only works when there is some integrity to it and where every level participates in bounty so the exchange and barter, currency or otherwise circulates every day. There are some billionaires who feel safe behind the gates with one percent of the folks holding 51% of all that is. If we don’t change these trends, people will one day revolt against it or die trying. In the meantime it’s time to do something about it.

Be mindful, be watchful and good luck!

Leave a Reply

Your email address will not be published. Required fields are marked *