Wages Are Falling. Wealth Is Surging. No Wonder Americans Are Unhappy.
Inequality is hardly a new feature in America. But the explosion of wealth at the very top is without precedent in U.S. history. At the height of the Gilded Age at the end of the 19th century, the richest handful of Americans had a net worth equivalent to about 3 percent of the country’s annual economic output, according to data compiled by the French economists Gabriel Zucman and Emmanuel Saez. Today, the fortunes of the same 0.00001 percent — about 20 individuals — make up roughly four times as large a share, equivalent to 12 percent of annual output.
Other economists, using different methodologies, come up with somewhat different numbers. But hardly anyone disputes the basic fact that the wealthiest few have made extraordinary gains in recent years.
....the share of national income going to workers has been trending down for decades. It hit a record low in the first quarter of the year, according to data from the Commerce Department.....In addition to making Mr. Musk a trillionaire, the SpaceX I.P.O. alone was expected to mint thousands of new millionaires and several billionaires.
“Many of the tech moguls who are the current superrich have not helped themselves in the conversation by saying, ‘My innovation is going to obliterate your life,’” said Glenn Hubbard, an economist at Columbia Business School who served as a top adviser to President George W. Bush. “It’s not too crazy to imagine a backlash.”....
Mr. Hubbard said he did not necessarily see a problem with the existence of billionaires or even trillionaires, as long as people were getting rich through entrepreneurship and innovation rather than through corruption or cronyism. But he said policymakers should take the public attitudes seriously. Congress should consider ways to tax billionaires more effectively, he said, and to ensure that the wealthy don’t exert undue influence on the political system.
Many progressive economists, however, argue that enormous fortunes like Mr. Musk’s inherently distort both the economic and the political systems, giving the superrich too many ways to avoid regulation, taxation and oversight.
“It’s the power to influence markets, it’s the power to buy competitors, it’s the power to influence policymaking,” said Mr. Zucman, one of the French scholars of wealth inequality. “If you want a well-functioning market economy, it’s not good to have too much concentrated power with extreme wealth at the very top. It distorts markets. It distorts democracy.”....
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