The 16,000 Dow: Recovery or Transfer of Wealth from the Majority of the Population to the Super-Rich?

Side by side with the sweeping growth in social misery and destitution has been the vast expansion in wealth of the super-rich. The world’s billionaires have had their combined net worth double since 2009, according to a report published earlier this month by UBS and Wealth-X. Even though the United States has only 4.4 percent of the world’s population, it has a third of the world’s billionaires, according to Forbes.

By Andre Damon

Global Research, November 25, 2013

The Dow Jones Industrial Average closed above 16,000 for the first time ever Thursday, in the seventh consecutive week of gains. This feat was immediately followed by another milestone: the S&P 500 index closed at 1,804, the first time the index has closed above 1,800 in history.

The Dow is up by 24 percent over the past year, having doubled since 2009. The S&P 500 is likewise up by 28 percent.

Far from expressing a genuine and healthy economic recovery, however, the rise in the stock market has paralleled a vast expansion of social misery and an unprecedented expansion of social inequality.

Occupy Wall Street: Wall St under "Lockdown" - Near Zuccotti Park,
Oct 2011. (Photo: Ronald Jackson)

The number of people receiving assistance under the Supplemental Nutrition Assistance Program (SNAP) has climbed from 28.2 million in 2008 to 47.7 million in April 2013, an increase of seventy percent. Far from decreasing, this number continues to swell, with over 1 million new food stamp recipients added between 2012 and 2013.

The reason for this vast increase in destitution is not hard to find: between 2007 and 2012, the median household income in the United States had plummeted by 8.3 percent. The precipitous fall was due to a combination of a sharp fall in the percentage of the population that is employed, and a fall in wages. The percentage of the US working-age population that has a job has fallen by 4.6 percent since 2008, while manufacturing wages have fallen three percent since May 2009.

A report in October by the National Center for Homeless Education, based on figures provided by the US Department of Education, found that over 1.1 million children enrolled in public schools were homeless at some point in 2011-2012, 72 percent higher than before the onset of the economic crisis.

Side by side with the sweeping growth in social misery and destitution has been the vast expansion in wealth of the super-rich. The world’s billionaires have had their combined net worth double since 2009, according to a report published earlier this month by UBS and Wealth-X. Even though the United States has only 4.4 percent of the world’s population, it has a third of the world’s billionaires, according to Forbes.

Occupy Wall Street: Zuccotti Park, Oct 2011.
(Photo: Ronald Jackson)

Since 2009, the richest one percent has captured a staggering 95 percent of all income gains, while the bottom 95 percent have seen their incomes stagnate, According to a report issued by University of California Berkeley Professor Emmanuel Saez earlier this year.

US income inequality grew four times faster in the first three years of the Obama administration than under Bush, according to figures published Saturday in the New York Times. As the newspaper reports, “From 2001 through 2008, during the George W. Bush administration,” the ratio of mean (average) to median income “grew at 0.28 percentage points per year. From 2009 through 2011, the latest year for which the data is available, the ratio increased 1.14 percentage points annually, or roughly four times faster.”