March 25, 2013
If It Quacks Like an Oligarch…

From Naked Capitalism:

Now Johnson carefully laid the bread crumbs, but so as not to violate the rules of power player discourse, pointedly switched from the banana republic term “oligarch” to the more genteel and encompassing label “elites” when talking about the US (“elites” goes beyond the controlling interests themselves to include their operatives as well as any independent opinion influencers). Yet despite his depiction of extensive parallels between the role played by oligarchs in emerging economies and the overwhelming influence of the financial elite in the US, there’s been a peculiar sanctimonious reluctance to apply the word oligarch to the members of America’s ruling class…

But the fact that some people have advantages and are able to make the most of them, isn’t the reason to pin the “o” word on America’s top wealthy. It’s that, like Simon’s prototypical emerging market magnates, they increasingly dominate our society and are running it strictly for own self interest and devil take the rest of us. And the results on important metrics are worse than in Russia. The Gini coefficient is a widely-used measure of income inequality. The Gini coefficient is worse (higher) for the US than for Russia. Even though its rich have gotten richer and have pulled away from their lessers, the rest of the population has also done better:

In dollar terms, Russia’s GDP increased 7.5-fold over the last decade from around $200bn to $1.5 trillion; at the same time, nominal average wages increased 14-fold over the same period from $50 to around $700 a month.
And the latest statistics on the Gini coefficients (at least readily findable on the Web) are a few years stale. As we’ve written, the income gains in the US from 2009 to 2011 went entirely to the top 1%, which saw a 121% increase; the rest of the population suffered a small decline. That would increase the US Gini coefficient even further.

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Posted by Jerome Doolittle at March 25, 2013 12:33 PM
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