The typical affluent family in America now has nearly seven times the wealth of a middle-income family, the biggest wealth gap in three decades, according to a new analysis by Pew Research Center. Last year, the median wealth of upper-income families in the U.S. ($639,400) was 6.6 times bigger than that of middle-income families ($96,500), up from 6.2 times in 2010.
Upper-income families now have a median wealth level that is nearly 70 times that of lower-income families.
In a totally unrelated development, the nations richest zip-codes and counties are clustered around Washington, D.C.
The discussion over economic inequality in the United States seems to have captured the public imagination, at least on the political left. President Obama has called it “the defining challenge of our time,” and Secretary Clinton has deemed it “a cancer.” Given the shorthand manner in which politicians sometimes refer to policy matters it is not always clear if Obama and Clinton are referring specifically to inequality, the ratio or distribution of wealth in society, or to raw poverty—the fact that millions of Americans live in impoverished circumstances. There is a keen difference in which of these two approaches one takes to the challenge of alleviating misery. Here, I’ve devised a simple test to understand the issue:
Former President Bill Clinton insists he and his wife, Hillary Clinton, are not out of touch. The examples he cites? They talk to people at their "local grocery store on the weekend" and, he adds, they "talk to people in [their] town."
Hillary Clinton will be getting $225,000 to speak at a university fundraiser later this year. Students at the same school, the University of Nevada, Las Vegas, have recently been outraged that the institution is raising tuition by a staggering 17 percent.
At a Beverly Hills estate last night, President Obama heard a complaint from a major donor: There's no valet parking at the White House. The complaint was made by Haim Saban, who hosted a fundraiser with the president last night.
It is no secret that Washington generally prospers even as the rest of the country struggles. In a rough fashion, prosperity in the capital and economic hardship in the rest of the country are inversely related. An economic crisis means lots of new government pump priming--remember the stimulus?--which means new departments and programs in Washington. More opportunities for the tribe of lawyers and lobbyists.
The Wall Street Journal editors are unhappy about the present correlation of political forces. Who isn't? They're also, I gather, unhappy about "Beltway sages" who, facing the fact that the Bush tax cuts expire at the end of this year, have suggested Republicans accept a modest increase in tax rates for the wealthy while leading the charge to keep taxes from rising for 98 percent of the American people.
Warren Buffett is by now no stranger to the national debate over federal tax policy. In 2009, he penned a New York Timesop-ed calling for "truly major changes in both taxes and outlays." Two years later, he returned to the Times with a widely publicized call for large tax increases on the "super-rich," noting that his own effective federal tax rate (17 percent) was far less than his employees' rates (ranging from 33 to 41 percent). President Obama liked the idea so much, he called for Congress to pass "the Buffett Rule" in his 2012 state of the union address.