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!”

Jesus Opium – Prelude to the Opium Wars

Opium Series

The Imperial Cruise by James Bradley, 2009, Excerpts

Bengal in northern India had long produced opium, for centuries used across Asia as a medicinal and social drug. England controlled a vast swath of prime opium-growing country, stretching five hundred miles across Bengal, and the British Empire invested enormous sums in state-of-the-art opium farming and productive systems. More than two thousand British opium agents oversaw the efforts of one million registered Indian opium farmers. The Bengal-to-China opium business became the world’s most valuable single commodity trade of the nineteenth century, opium accounted for 15 to 20 percent of the British Empire’s revenue. Western banks, shipping companies, and insurance companies sprouted to serve this enormously profitable trade.

Realizing the harm to their people, the Chinese government banned opium’s sale and use in China. White Christian opium smugglers could not legally sell the banned drug on Chinese soil, so they installed floating wooden warehouses in the Pearl River Delta, where they sold their booty to Chinese criminals who rowed out under the cover of darkness. It was Christians who smuggled the poisonous drug into China, so the Chinese called it “Jesus Opium”.

Between 1814 and 1850, the Jesus-opium trade sucked out 11 percent of China’s money supply. China lost more silver in thirty years than had flowed into the country in the 125 years leading up to the opium trade. As the Chinese money supply contracted, silver became unnaturally scarce, peasants had trouble paying their taxes, counterfeiting rose, waves of inflations and deflation whipsawed the economy, and unrest grew.

The Chinese government dispatched a royal representative to Canton in 1839 to stop the Foreign Devil drug trade. Buckingham Palace shook at the news. Queen Victoria was just twenty years old at this point, on the British throne less than two years, but when the Chinese threatened to cut her largest single source of income, she understood the dire financial consequences, the drug trade provided easy money, silver, that most sustained her empire. Victoria dispatched her industrialized navy to enforce Britain’s ability to push an illegal drug. What followed were the two Opium Wars – one from 1839 to 1842, the other from 1856 to 1860. What Victoria spent on these military operations against China was paltry compared to her take of profits from the illegal Jesus-opium trade.

Stereotypes

Public Opinion Series

Public Opinion by Walter Lippmann, 1921, Excerpts

In the great confusion of the outer world, we tend to pick out what our culture has already stereotyped for us by our culture. Whatever we recognize as familiar we tend to visualize with the aid of images already in our mind. We notice a trait which marks a well-known type, and fill in the rest of the picture by means of the stereotypes we carry about in our heads. Consequently the stereotype not only saves time in a busy life and is a defense of our position in society, but tends to preserve us from all the bewildering effect of trying to see the world steadily and see it whole. It is the guarantee of our self-respect; it is the projection upon the world of our own sense of our own value, our own position and our own rights.

The stereotypes are highly charged with the feelings that are attached to them. Stereotypes are loaded with preference, suffused with affection or dislike, attached to fears, lusts, strong wishes, pride, and hope. They are the fortress of our tradition, and behind its defenses we can continue to feel ourselves safe in the position we occupy. Any disturbance of the stereotypes seems like an attack upon the foundations of the universe.

What matters is the character of the stereotypes, and the gullibility with which we employ them. Uncritically held, the stereotype censors out much that needs to be taken into account. It is only when we are in the habit of recognizing our opinions as a partial experience seen through our stereotypes that we become truly tolerant of an opponent. What will become accepted as true, as realistic, as good, as evil, as desirable, is not eternally fixed.

Public Opinion Series