Note:

I read this out aloud to Jeannie last night, as I do with every post that is published, and found this chapter really didn’t flow.  I’m making the mistake of including too many words of direct quotations, many of which are not easy to follow.

So just wanted to let you know that if this strikes you the same way, you are not alone! 😉

It is, of course, just the first draft, but nonetheless …. wanted you to read this first.

oooo

Greed, inequality and poverty

Just three words: greed; inequality; poverty.

Just three words that metaphorically come to me like a closed, round, wooden lid hiding a very deep, dark well. That lifting this particular lid, the metaphorical one, exposes an almost endless drop into the vastness of where our society appears to have fallen.

That this dark well, to stay with the metaphor, is lined with example after example of greed, inequality and poverty is a given.

One might conclude that examining any of those examples is pointless, not in terms of the reality of our world, but in terms of influencing the views of a reader. If you are a reader who is uncertain about the current levels of greed, inequality and poverty then it’s unlikely that a few examples, or a few hundred examples, are going to change minds. (One might argue that you wouldn’t be reading this book in the first place!)

Thus when I was digging around, looking for insight into how and why we, as in society, are in such times, I was looking for core evidence. Very quickly, it struck me that the chapter title really should simply have been: Inequality. Because inequality, by implication, is the result of greed and results in poverty.

In November, 2014, at the time I was drafting this book, a new report was issued by the Center of Economic Policy Research (CEPR) on the latest (American) Survey of Consumer Finances. It painted a picture very familiar to many: the rich becoming richer while those with less wealth are falling further and further behind.

David Rosnick of the CEPR, and one of the report co-authors, made this important observation:

The decline in the position of typical households is even worse than the Consumer Finances survey indicates. In 1989, many workers had pensions. Far fewer do now. The value of pensions isn’t included in these surveys due to the difficulty of determining what they are worth on a current basis. But they clearly are significant assets that relatively few working age people have now.

Sharmini Peries, of The Real News Network, in an interview with David Rosnick, asked:

PERIES: David, just quickly explain to us what is the Consumer Finance Survey. I know it’s an important survey for economists, but why is it important to ordinary people? Why is it important to us?

ROSNICK: So, every three years, the Federal Reserve interviews a number of households to get an idea of what their finances are like, do they have a lot of wealth, how much are their house’s worth, how much they owe on their mortgages, how much they have in the bank account, how much stocks do wealthy people own. This gives us an idea of their situations, whether they’re going to be prepared for retirement. And we can see things like the effect of the housing and stock bubbles on people’s wealth, whether they’ve been preparing for eventual downfalls, how they’ve reacted to various economic circumstances, how they’re looking to the long term. So it’s a very useful survey in terms of finding out how households are prepared and what the distribution of wealth is like.

PERIES: So your report is an analysis of the report. And what are your key findings?

ROSNICK: So, largely over the last 24 years there’s been a considerable increase in wealth on average, but it’s been very maldistributed. Households in the bottom half of the distribution have actually seen their wealth fall, but the people at the very top have actually done very well. And so that means that a lot of people who are nearing retirement at this point in time are actually not well prepared at all for retirement and are going to be very dependent on Social Security in order to make it through their retirement years.

PERIES: So, David, address the gap. You said there’s a great gap between those that are very wealthy and those that are not. Has this gap widened over this period?

ROSNICK: It absolutely has. As, say, the top 5 percent in wealth, the average wealth for people in the top 5 percent is about 66 percent higher in 2013, the last survey that was completed, compared to 1989. By comparison, for the bottom 20 percent, their wealth has actually fallen 420 percent. They basically had very little to start with, and now they have less than little.

PERIES: So the poorer is getting poorer and the richer is getting extremely richer.

ROSNICK: Very much so.

To my way of thinking, if in the period 1989 through to 2013 “the average wealth for (American) people in the top 5 percent is about 66 percent higher” and “for the bottom 20 percent, their wealth has actually fallen 420 percent” it’s very difficult not to see the hands of greed at work and a consequential devastating increase in inequality.

In other words, the previous few paragraphs seemed to present, and present clearly, the widening gap between the ‘haves’ and the ‘have-nots’, comparatively speaking, and that it was now time for society to understand the trends, to reflect on where this is taking us, if left unchallenged, and to push back as hard as we can both politically and socially.

I wrote that shortly before another item appeared in my email ‘in-box’ in the middle of November (2014), a further report about inequality that, frankly, emotionally speaking, just smacked me in the face. It seemed a critical addition to the picture I was endeavouring to present.

Namely, on the 13th October, 2014, the US edition of The Guardian newspaper published a story entitled: US wealth inequality – top 0.1% worth as much as the bottom 90%. The sub-heading enlarged the headline: Not since the Great Depression has wealth inequality in the US been so acute, new in-depth study finds.

The study referred to was a paper released by the National Bureau of Economic Research, Cambridge, MA, based on research conducted by Emmanuel Saez and Gabriel Zucman. The paper’s bland title belied the reality of the research findings: Wealth Inequality in the United States since 1913.

As the Guardian reported:

Wealth inequality in the US is at near record levels according to a new study by academics. Over the past three decades, the share of household wealth owned by the top 0.1% has increased from 7% to 22%. For the bottom 90% of families, a combination of rising debt, the collapse of the value of their assets during the financial crisis, and stagnant real wages have led to the erosion of wealth. The share of wealth owned by the top 0.1% is almost the same as the bottom 90%.

The picture actually improved in the aftermath of the 1930s Great Depression, with wealth inequality falling through to the late 1970s. It then started to rise again, with the share of total household wealth owned by the top 0.1% rising to 22% in 2012 from 7% in the late 1970s. The top 0.1% includes 160,000 families with total net assets of more than $20m (£13m) in 2012.

In contrast, the share of total US wealth owned by the bottom 90% of families fell from a peak of 36% in the mid-1980s, to 23% in 2012 – just one percentage point above the top 0.1%.

The report was not exclusively about the USA. As the closing paragraphs in The Guardian’s article illustrated:

Among the nine G20 countries with sufficient data, the richest 1% of people (by income) have increased their income share significantly since 1980, according to Oxfam. In Australia, for example, the top 1% earned 4.8% of the country’s income in 1980. That had risen to more than 9% by 2010.

Oxfam says that in the time that Australia has held the G20 presidency (between 2013 and 2014) the total wealth in the G20 increased by $17tn but the richest 1% of people in the G20 captured $6.2tn of this wealth – 36% of the total increase.

I find it incredibly difficult to have any rational response to those figures. I am just aware that there is a flurry of mixed emotions inside me and, perhaps, that’s how I should leave it. Nonetheless, there’s one thing that I can’t keep to myself and that this isn’t the first time that such inequality has arisen, the period leading up the the Great Depression of the 1930s comes immediately to mind, and I doubt very much that it will be the last.

Unless!

Unless the growing catalogue of unsustainable aspects of this 21st century, a few of which have been the focus of this Part Three, brings about, perhaps in many different ways, a force for change that is unstoppable.

But before that is explored in Part Four, there is the one final element of the greed, inequality and poverty theme of this chapter that must be aired; the issue of poverty.

Contrary to my anticipation, the figures for poverty trends can be read in many ways and don’t give a clear-cut uniform picture. Nevertheless, it does’t take a genius to work out that the future, especially for young people, could be alarming.

Today, the poor people are the young. Today, the young are heading into a future that has many frightening aspects.

Take the present population numbers, the mind-boggling scale of the use of energy in these times, not to mention the levels of debt across so many countries (on the 14th November, 2014, the Federal Debt of the USA was about $18,006,100,032,000), possible unsustainable global climate change trends, and is it any wonder that those born in the period 1928 to 1945 (I was born in 1944), the generation that has been called the Silent Generation, must be wondering what the future holds for their children and grandchildren and what they or anyone can do today and tomorrow, to prevent these future generations sinking into oblivion.

I came across a quotation from Simon Caulkin, the award winning management writer: “It’s all the product of human conduct!”

Yes, Simon is right. Only human conduct will find that sustainable, balanced relationship with each other and, critically, with the planet upon which all our futures depend. Yet, something nags at me; a half-conscious doubt that starts with the word ‘but!’ Not that it doesn’t all come down to human conduct; not a moment’s hesitation on that one. But there’s still that half-conscious doubt. A doubt that starts to take shape on the back of that wonderful quotation from Einstein: “Insanity: doing the same thing over and over again and expecting different results.”

Then from that half-conscious place in one’s head comes another word. The word: Faith. Faith in us, as in faith in humanity. Faith that not only can we change our relationship with ourselves, with our communities and, above all, with our planet, but that we will. Faith that we, as in mankind, will embrace the many beautiful qualities of the animal that is so special to so many millions of us: our dogs. Not just embrace but pin our future on the premise that adopting the qualities of love, trust, honesty, openness and more, qualities that we see daily in our closest animal companions, is our potential salvation.

Thus comes the end of this set of depressing aspects of our 21st century. Time to move on in this story of learning from dogs and envelope ‘Of change in thoughts and deeds’; the title of the next section of this book. For we truly need a change to a better future.

1923 words Copyright © 2014 Paul Handover