I keep having trouble getting my head around how wealth is distributed in America — or maybe just that I don’t seem to explain it well enough to other people. There’s an article, “Who Rules America: Wealth, Income, and Power“, that looks into the details. Most of the data is only up to 2007 but the suggestion is that things have gotten worse since the recession:
So far there are only tentative projections … there has been an “astounding” 36.1% drop in the wealth (marketable assets) of the median household since the peak of the housing bubble in 2007. By contrast, the wealth of the top 1% of households dropped by far less: just 11.1%. So as of April 2010, it looks like the wealth distribution is even more unequal than it was in 2007.
The following shows how wealth is distributed but it’s a little misleading if you don’t read the labels. The “pie” is all wealth but each slice represents a different percentage of households. For example, the big slice represents 1% of households (about 1.1 million) and all the other slices represent about 109 million households.
If we look at employment prior to the Great Recession compared to now there is a difference of 11.3 million jobs (from Bookings institute). Now how long is it going to take to return to that level? If you take the best job growth of the 2000’s it’ll be 157 months or 11years. That’s not until 2021!
If you take the best rate from the 1990’s it’s down to about 8 years! Here’s the chart with how many months it’ll take based on the rate with a couple note worthy rates highlighted.
Daniel Pink has some surprising results about what motivates people. Mostly, if there’s any creativity, then more money doesn’t provide more motivation — and may even unmotivate.
Doug Green has a detailed review of this book — I
saved a copy.
You can also check out an animated version of a talk by Daniel Green:
If the Greece moral hazard play winds up not working, then investors will start demanding higher interest payments from Ireland. And if they go down, you could have the equivalent of a bank runs start to endanger medium-sized countries like Spain and Italy. At that point, everyone’s screwed. So, yes, it would be crazy for Germans to let some kind of spiteful attitude toward fun-loving and overly-indebted southern Europeans allow an economic catastrophe to sweep across the continent.
So if you lost your firm billions of dollars, laid off tens of thousands and indirectly caused millions to lose their jobs and drove the unemployment rate to 10.3% well, the good news is it didn’t cost you your job! 92% of management in TARP funds recipients still have their jobs!
From A Fair Deal for Taxpayer Investments:
The executive leadership of the financial sector remain largely unchanged—92 percent of the management and directors of the top 17 recipients of TARP funds are still in office.
Fascinating article on what’s happened with the bankers bailout. One intriguing quote compares executive compensation to the average employee::
Over the last 50 years, the ratio of top pay to average pay at public companies has multiplied roughly 11 times (24:1 to 275:1). That’s more pay in one workday for the chief executive than his average employee makes in a year.
Pick your favorite, worst recession and compare with how we are doing now. There are even predictions that unemployment may reach 12%.
Unemployment is always a relative thing but this chart looks at employment as a percentage of the total work force. From Brad DeLong:
This graph has been making the rounds (I got it from Barry Ritholtz’s). It shows the percentage change in unemployment (Y-axis) and the months since the official start of the recession.
What’s particularly dramatic about this is employment continues to worsen and over a much longer period of time than past recessions. E.g. this recession is going to be deeper and longer than past ones.
What I don’t like about this chart is that it is the percentage change in a rate. For example, the unemployment in 1960 was ~6%. A 50% increase brings it up to 9%. In 2007, unemployment was 4.5%. A 100% increase brings it up to 9%, too.