The Top 1% Saw Their Incomes Rise 8 Times,1979-2007

You are hereby instructed to read John Cassidy�s powerful New Yorker piece , Inequality 101, which in his pithy way gives you the facts and the charts that back them that define the nation�s most serious domestic problem.

The growth in the real after-tax income of the top 1% was 278% in the nearly 3 decades from 1979 through 2007, i.e.� before the great meltdown.  Yes, I said 278%. That�s almost 300% for just 1% of the nation� roughly 3 million people, or less in households. The rest of us just plain fell so far behind according to the CBO figures Cassidy presents. The earners in the  next highest group� from 81st to 99th� gained just 65% in 28 years or just over 2% unadjusted for inflation. Everyone else got somewhere between 18% more and 43% more. You can do the division.

This is the despairing downward mobility of the multitude that followed the so-called Golden Era of 1947-1973 when, as Cassidy underscores �the inflation-adjusted incomes of the rich, the poor, and the middle class grew in a pretty similar manner.�

What�s to be done about this predicament?   On this score I recommend you google, then print out, and absorb   PIMCO executive Mohamed El_Erian�s April talk,  �Evolution, Impact and Limitations of Unusual Central Bank Policy.�

Because this sounds forbidding I advise you to concentrate on the notion of central bank limitations in our �unusually uncertain� economic environment.� El-Erian is not sanguine about  what policies can put us �on a path of sustained growth and ample job creation.� There could still be �a global recession, forced de-leveraging and disorderly debt deflation.� Even the 1% could lose some of their gains they�ve made back in t he stock market�s recovery since March, 2009.

In other words, don�t count on central banks to make incomes right for the other 99%. This is one of the dreadful ramifications of what we have just been through.  A stagnant economy can even  flatten out the combined wages, salaries, bonuses dividends, and stock market gains of the fortunate 1%. One of Cassidy�s charts shows the share of total U.S. income earned by the top 1% to have been largely going nowhere between 1953 and 1984.