As the FT notes this morning, Deutsche Bank have put out a big, long, 80-page note on “US Income and Wealth Inequality”. The FT borrows some of the charts. So do I.
Thirty per cent of US families have no non-home wealth:
Whilst the young are getting poorer:
And the rich are getting richer:
All of which is aided and abetted by tax cuts:
If anyone can find the Deutsche document (I could not, in haste) I'd be interested to see it.
The tale is not a pretty one.
But what will Deutsche do about it?
Answers on the back of ten dollar bills to suitable charities please.....
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Despite 40 years of evidence, the IMF and these banks point these things out as if they are observers from another planet and are not implicated in the proceedings themselves! The observer clearly has no connection with the observed. How to appear ‘objective’ whilst maintaining the same vested interests.
This report on Barron’s ( I assume about the same report) is indicative of the stance that it’s all about how investors ‘play it.’-
‘What’s missing in this report is a narrative that digs behinds the numbers to tell investors how inequality to (sic!) play out for various sectors of the market. Hopefully, that will be coming from Wall Street firms and the financial press in the months and years ahead.
The report does briefly point that certain trends in technology and finance are contributing to income inequality by creating a separate class of highly-skilled workers who can demand bigger salaries.
Automation, no doubt, would also weaken the economic prospects of those without skills.
Until now, income inequality has been viewed mostly as sociological and political story. But it clearly has great implications for investors.’
‘Some implications’…..
Automation will also weaken the prospects of those with skills
http://www.economist.com/blogs/babbage/2011/11/artificial-intelligence
It will
Watch out accountants
Once again, more justification for saying that North American style capitalism just no longer works.
Better late than never. Maybe by now you’ve found the DB doc. If not – maybe this is helpful, although I don’t think it’s the original report – http://www.euro-properties.com/wp-content/uploads/2017/08/US_Inequality_25Aug17.pdf
I am only just on my way home from working
Have not had time to look
Full 56 page report is here
http://www.euro-properties.com/wp-content/uploads/2017/08/US_Inequality_25Aug17.pdf
I’d be interested on how it sat on my shelf for 4 months before gaining wider circulation from the financial press.
Also interesting is page 3 where there is an illustration that the most equal of the developed societies do not have highly progressive tax regimes. They do have high consumption taxes and high levels of transfers.
The chart ignores the fact that pre-tax income range is lower in those states so less progressive tax is acceptable
I’d be interested to see your source for that statement.
Look at the Gini pre tax
The wealth advisors are on hand to explain this inequality of wealth holding.
It really is very simple they tell us. In order to accumulate wealth one simply has to spend less than one earns and save the surplus. Compound interest on the savings will do the rest over one’s lifetime. What could be easier?
I am reminded of the poster outside the evangelical church which proclaimed “Jesus Saves”. To which some wag had appended “Not on my wages he doesn’t”
Inequality might be justified in a meritocracy but in Britain, & in the USA, we don’t have anything approaching that.
Winston Churchill was not only our war leader against the horrors of Nazism, he was also a prize-winning historian & an exceptional stylist in the English language, spoken or written. He was, justifiably, lauded for his many books.
He was also someone who failed most of his exams because he could not comprehend Maths at all.
Churchill was lucky enough to come from an enormously wealthy family.
Had Winston come from a working class family presumably they would’ve noted his persistent inability to pass Maths common entrance & said “throw this one away”. We throw away a lot of ability every year. I don’t know how to deal with this.I definitely don’t agree with Richard re comprehensives but I must be honest that grammar schools don’t really bring out the best in every child either . Any ideas?
Flexibility within a comprehensive system
And recognition that the able are not necessarily all rounders
In fact, they are often not good all rounders. The mean is not always best