Racial Wealth Gap

Wealth Gap Series

The Ever-Growing Gap: Failing to Address the Status Quo Will Drive the Racial Wealth Divide for Centuries to Come

http://www.ips-dc.org/report-ever-growing-gap/

08 Aug 2016

In the last decade, we have seen the catastrophic economic impact of the Great Recession and an ensuing recovery that has bypassed millions of Americans, especially households of color. This period of economic turmoil has been punctuated by civil unrest throughout the country in the wake of a series of high-profile African-American deaths at the hands of police. These senseless and violent events have not only given rise to the Black Lives Matter movement, they have also sharpened the nation’s focus on the inequities and structural barriers facing households of color.

America’s Financial Divide: The Racial Breakdown of U.S. Wealth in Black and White

http://www.huffingtonpost.com/antonio-moore/americas-financial-divide_b_7013330.html

28 Jan 2016

The major sources of wealth for most of the super rich are inheritances and in life transfers. The big reason is racial differences in access to resources to transfer to the next generation. The practices of enslavement, violence, Jim Crow, discrimination and dispossession of property have kept generations of African Americans from accruing the type of wealth that whites in the top 1 percent have today.

Most famous of all New-Deal images is “After the Louisville Flood,” by photographer Margaret Bourke-White, which features black flood victims in line at a relief agency being virtually run down by the looming white family of the “American Way” billboard beside them

Billboard Series

Inherited Wealth

Wealth Gap Series

Capital in the Twenty-First Century by Thomas Piketty, 2014, Excerpts

Inherited wealth is a long term process. The advantage of owning things is that one can continue to consume and accumulate without having to work. It is not an insignificant thing when one country works for another and pays out a substantial share of its output as dividends and rent to foreigners over a long period of time.

When the rate of return on capital significantly exceeds the growth rate of the economy, then inherited wealth grows faster than output and income. It is inevitable that inherited wealth will dominate wealth amassed from a lifetime’s labor by a wide margin, and the concentration of wealth will attain extremely high levels – levels incompatible with the meritocratic values and principles of social justice fundamental to modern democratic societies.

Wealthy people are constantly coming up with new and ever more sophisticated legal structures to house their fortunes. Trust funds, foundations, and the like often serve to avoid taxes, but they also constrain the freedom of future generations to do as they please with the associated assets.

Accumulated Old Wealth

Wealth Gap Series

Capital in the Twenty-First Century by Thomas Piketty, 2014, Excerpts

Foreign possessions became important in the period 1750-1800. It was the nineteenth century that British subjects began to acquire considerable assets in the rest of the world, in amounts previously unknown and never surpassed to this day. By the eve of WWI, Britain had assembled the world’s preeminent colonial empire and owned foreign assets. France was the second most important colonial power.

By the turn of the twentieth century, capital invested abroad was yielding around 5 percent a year in dividends, interest, and rent. A fairly significant social group was able to live off this boon. The rest of world worked to increase consumption by the colonial powers and at the same time became more and more indebted to those same powers.

France and Britain have always been countries based on private property; private wealth has always dominated public wealth. Private wealth in 2010 accounts for virtually all of national wealth in both countries: more than 99 percent in Britain and roughly 95 percent in France. 

Capital vs Income

Wealth Gap Series

Capital in the Twenty-First Century by Thomas Piketty, 2014, Excerpts

Capital

“Capital” and ‘Wealth” are used interchangeably. Capital is defined as the sum total of nonhuman assets that can be owned and exchanged on some market. The total wealth owned at a given time. “National capital”, or “national wealth”, is the total market value of everything owned by the residents and governments of a given country. National wealth = private wealth + public wealth

Income

Income is a flow. The quantity of goods produced and distributed in a given time period, assume annual. Wages and output.

Capital/Income Ratio

B Ratio = Capital/Income

The principal destabilizing force is when the rate of return on capital, r, is significantly higher for long periods of time than the rate of growth of income, g. The inequality r>g implies that accumulated wealth grows more rapidly than income, capital reproduces itself faster than income increases. The conditions are ideal for an “inheritance society” characterized by both a very high concentration of wealth and a significant persistence of large fortunes from generation to generation.

The rate of return on capital – generally 4-5 percent – has throughout history always been distinctly greater than the income growth rate and is a powerful force for an unequal distribution of wealth.

In the developed countries today, the capital/income ratio varies between 5 and 6.

 

Pope Francis Series – Fatwa on Money

I wasn’t ever expecting to put together a Pope Series; however, Pope Francis keeps commenting on monetary and economic issues, and what he is saying is creating quite a stir. He is just short of pontificating on the evils of debt, interest and usury, which have always been honorable mentions in the Old and New Testaments and the Koran, common ground issues for these cousin religions – Religion and Usury. If the Catholic flock ever takes to heart his economic exhortations, it would be a global economic game changer. Amen.

Pope Francis Apostolic Exhortation - 2013 Nov

Pope Francis Encyclica Laudato – 2015 Jun
Pope Francis United States Tour – 2015 Sep

Pope Francis Says Ills of Global Economy, Not Islam, Inspire Terrorism

Excerpt of Pope Francis' in-flight presser from Poland

http://www.wsj.com/articles/pope-francis-urges-poles-to-embrace-migrants-on-final-day-of-visit-1469963264

01 Aug 2016

“Terrorism grows when there are no other options, and when the center of the global economy is the god of money and not the person -- men and women -- this is already the first terrorism! You have cast out the wonder of creation -- man and woman -- and you have put money in its place. This is a basic terrorism against all of humanity! Think about it!”