I tweeted about how much it costs to live in Manhattan and in between threats to guillotine me (someone even suggested a wood-chipper!) someone posted an interesting graph from the Fed showing wealth by percentile group.
It's pretty wild.
1/n
federalreserve.gov/releases/z1/da…
It's pretty wild.
1/n
federalreserve.gov/releases/z1/da…
1989's Top 1% Share of Wealth: 23.6%
2021: 32.3%
1989's 90-99% Percentile Share of Wealth: 37.3%
2021: 37.7%
1989's 50-90% Percentile Share of Wealth: 35.5%
2021: 27.8%
1989's 0-50% Percentile Share of Wealth: 3.7%
2021: 2.3%
2/n
2021: 32.3%
1989's 90-99% Percentile Share of Wealth: 37.3%
2021: 37.7%
1989's 50-90% Percentile Share of Wealth: 35.5%
2021: 27.8%
1989's 0-50% Percentile Share of Wealth: 3.7%
2021: 2.3%
2/n
The most commonly cited solution to this problem is to "tax the rich" but since 1989 we've done that while the wealth share got worse.
Top tax rate went from 28% to 37%.
Not an apples to apples comparison because of inflation but rates also went down for low earners.
3/n
Top tax rate went from 28% to 37%.
Not an apples to apples comparison because of inflation but rates also went down for low earners.
3/n
All this begs the question:
WTF is going on in the United States?
My first reaction was to (of course) blame the Fed but unless low earners' wealth is tied in non-appreciating assets like cash, a car, or declining cities' RE, asset price inflation doesn't explain this.
4/n
WTF is going on in the United States?
My first reaction was to (of course) blame the Fed but unless low earners' wealth is tied in non-appreciating assets like cash, a car, or declining cities' RE, asset price inflation doesn't explain this.
4/n
I feel like the best explanation is actually outsourcing and how communications technology allow few people to operate entire businesses in the USA without hiring people here.
This trend has actually ACCELERATED with work-from-home increasingly becoming work-from-overseas.
5/n
This trend has actually ACCELERATED with work-from-home increasingly becoming work-from-overseas.
5/n
And this will be a major issue for the United States going forward.
Ross Perot was right when he said this, but he was just wrong about the country.
China got into the WTO in 2002 and that was all she wrote.
6/n
Ross Perot was right when he said this, but he was just wrong about the country.
China got into the WTO in 2002 and that was all she wrote.
6/n
So that "giant sucking sound" isn't just happening with non-tariffed manufacturing jobs.
It's happening with online zoom-video enabled overseas hiring.
And it's going to further kill the demand for and harm the wages of American workers.
7/7
It's happening with online zoom-video enabled overseas hiring.
And it's going to further kill the demand for and harm the wages of American workers.
7/7
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