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International Monetary Fund managing director Christine Lagarde opined earlier this month that the “staggering rise in inequality” over recent decades may well “haunt us” deep into the 21st century. We agree. And we suspect that the ghost of Sam Walton will figure somewhere in the haunting.

Sam Walton founded Walmart back in the 1960s and went on to leave billions to his heirs. Those heirs have spent the last 20 years growing their inheritances. Four of them now rank among the ten richest people in the world. They control, journalist David Cay Johnston noted last week, about half of Walmart’s shares.

Sam’s heirs don’t just hold these shares. They squeeze out of them every possible penny. An apt stat that lays bare that squeezing: Dividends to Walmart shareholders have over the last decade soared 60 percent faster than Walmart’s earnings. Meanwhile, for those without stock, Walmart has cuts. The retailer has just announced plans to ax health insurance coverage for some 30,000 workers.

Still more takes on our hauntingly unequal times, inside this week’s Too Much.


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The private bankers who handle financial planning for wealthy households like to speak in terms of “asset classes.” Bonds rate as an asset class. So does fine art. And now, say the experts, so do luxury handbags. A Hermes blue crocodile-skin Birkin bag that sells new for $64,000, they posit, amounts to an investment. Like any other asset, the bag may appreciate. And now, says the London-based Borro financial services firm, you can actually monetize your bag while you wait for that appreciation. Borro began lending against luxury bags last December. One fashionista, says Borro’s Paul Aitken, used a vintage Chanel bag to underwrite a new online business. Borro execs do urge handbag investors to be cautious. Beware, they advise, the “myriad fakes and replicas flooding the market.”

Ken DeLeonServicing America’s rich can be intensely lucrative. Just ask Ken DeLeon, the Silicon Valley lawyer-turned-realtor. In 2012, the Wall Street Journal named DeLeon the nation’s top realtor. In 2013, his DeLeon Realty sold over $330 million in property, and this year’s sales will likely top that record. To what does DeLeon owe his good fortune? He happens to service the five-mile-square California suburb of Atherton, America’s most expensive zip code. A bedroom community 45 minutes south of San Francisco, Atherton holds only 2,500 homes. The cheapest among them — a two-bedroom bungalow — now lists for $1.5 million. In 2014’s first quarter alone, seven Atherton homes sold for over $10 million. About 80 percent of his clients, DeLeon notes, pay all cash . . .

If you like what you see at the Paris Auto Show, you have to move fast. At this year’s show, earlier this month, Rolls-Royce debuted a $570,000 model with built-in dining tables. Also included: “imaginary city skylines” as decor options, each finished in 500 individual wood veneer pieces. Rolls is only making 20 of these skylined motor cars. They’ve already sold out. Rolls customers, observes company chief Torsten Mueller-Oetvoes, typically have at least 12 cars. They have garages, he told reporters in Paris, “like you and me would have wardrobes.” Adds Stefan Bratzel of Germany’s Center of Automotive Management: “The gap is widening between the super rich and the rest.”


Quote of the Week

“It is no secret that the past few decades of widening inequality can be summed up as significant income and wealth gains for those at the very top and stagnant living standards for the majority. I think it is appropriate to ask whether this trend is compatible with values rooted in our nation's history, among them the high value Americans have traditionally placed on equality of opportunity.”
Federal Reserve chair Janet Yellen, conference remarks, October 17, 2014




Donald TrumpBack in August billionaire Donald Trump urged U.S. officials not to allow two Americans suffering from Ebola into the United States for treatment. The pair, said Trump, should “have to suffer the consequences.” Trump felt quite a bit differently about consequences last year when New York Attorney General Eric Schneiderman filed a $40-million fraud suit against him for operating an unlicensed “investment school” that ripped off over 5,000 students. Trump blasted the AG as a “publicity-mad” pol desperate to change his image. Last week a New York judge confirmed that “Trump University” had operated without a license and cleared the decks for a trial on fraud charges. Students at Trump U paid up to $35,000 each for The Donald’s investing wisdom.




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Luxury chair

Designer Tapio Anttila has just bestowed upon the world an “incomparable sunbathing experience.” His new Remmus lounger “tracks the sun, turning to keep you in its rays at all times.” And if those rays beat down on you too hard, your lounger “will spritz you with cooling water sprays.” The Remmus company suggests the chair for “yachts, villas, and high-class holiday resorts,” places where you can put to use the chair’s ultimate wow: a “built-in service button designed to call a waiter over to refresh your cocktail.” The chair price: $45,000.


Web Gem

New Economy Week/ Actions and events last week brought to life the vision of a society both equitable and sustainable. Learn more.


antidotes to inequity

PodemosThe Occupy Wall Street movement hasn’t left behind any lasting political structure in America. But the Spanish indignados movement that helped inspire Occupy just may. This past January saw the birth of Podemos, a new political party that’s already polling over 20 percent. Podemos is calling for  “a fair distribution of wealth” and an end to “the impunity and corruption that have turned the European dream of liberty, equality, and fraternity into the nightmare of an unjust, cynical, and oligarchic society.” This past weekend a Podemos general assembly in Madrid drew over 130,000 online and in-person participants. 


Take Action
on Inequality

Join with Americans for Financial Reform and urge federal regulators to write tough regulations that stop Wall Street banks from rewarding their decision-makers for reckless bets.


inequality by the numbers

French and U.S. wealth






Stat of the Week

The world now hosts 128,200 “ultra high net worth individuals,” deep pockets whose personal wealth tops $50 million, the Credit Suisse Research Institute reported last week. Last year’s ultra wealthy total: just 98,700. About half the world’s ultras, 62,800, live in the United States.



On a Top-Heavy Planet, a Nordic Puzzler

Income gaps and wealth concentration go hand in hand, new global stats make clear. With one exception.

The latest annual Global Wealth Report from the Credit Suisse Research Institute has everything you would expect from a report on global wealth. And one thing you wouldn’t: a mystery.

The media coverage of the new Credit Suisse report hasn’t focused much at all on that mystery. Reporters have zeroed in instead on the report’s host of startling stats on global wealth distribution.

Global Wealth ReportThe top attention-grabbing stat in the new Credit Suisse study? The richest 1 percent of the world’s adults now hold nearly half the world’s wealth, 48.2 percent to be exact.

Entering this global top 1 percent takes a personal net worth of at least $798,000. A net worth of anything over $77,000, adds the fifth annual Credit Suisse Global Wealth Report, suffices for entry into the world’s top 10 percent.

Adults in this richest 10 percent hold an amazing 87 percent of the wealth in the world. The bottom half of the world’s people hold less than 1 percent.

The authors of this new Credit Suisse study — a group that includes the respected wealth researchers Anthony Shorrocks and Jim Davies — don’t limit their stats to global breakdowns. They also explore and contrast distributions of wealth by nation. And that’s where the mystery begins.

Credit Suisse’s investigators start their nation-by-nation analysis with the United States, the most unequal of the world’s major developed powers.

In the United States, they calculate, the richest 10 percent of adults hold 74.6 percent of national wealth, a share well above the 48.5 percent of national wealth the richest 10 percent of adults holds in Japan. Credit Suisse places the top 1 percent’s wealth share in the United States at 38.4 percent, over double the 17.9 percent wealth share for Japan’s top 1 percent.

These contrasts in wealth concentration shouldn’t surprise anyone. The United States, after all, has a much more unequal distribution of income than Japan. American top 1 percenters take in 22.5 percent of U.S. income. The comparable top 1 percent income share in Japan: only 10.4 percent.

In other words, America’s top 1 percent is annually adding to its net worth a much higher share of national income than Japan’s top 1 percent. Given this dynamic, how could a great deal more wealth not sit in the pockets of America’s 1 percent? Nations with narrower income divides, common sense tells us, are always going to have narrower wealth divides.

Or will they? Consider Sweden.

This Nordic nation today sports an income distribution even more equal than Japan’s. At last count, says the World Top Incomes Database, Sweden’s top 1 percenters were pulling in only 8.7 percent of their nation’s income.

Yet the new Credit Suisse Global Wealth Report calculates that Sweden’s 1 percenters hold 30.8 percent of their nation’s wealth, a figure closer to the 38.4 percent share for the U.S. top 1 percent than the 17.9 percent top 1 percent share in Japan.

And Sweden’s most affluent 10 percent hold a hefty 68.6 percent share of their nation’s personal net worth, a figure much closer to the 74.6 percent of national wealth that the top 10 percent hold in the United States than the 48.5 percent share of national wealth the top 10 percent hold in Japan.

Even more puzzling: Sweden doesn’t stand alone by these yardsticks. Norway and Denmark show much the same pattern. These two Nordic nations also have income distributions as or more equal than Japan. But the most affluent 10 percents of Norway and Denmark hold a share of national wealth much more in the neighborhood of the United States than Japan.

In Norway, Credit Suisse reports, the top decile of adults hold 65.8 percent of national personal wealth. In Denmark, 67.5 percent.

Most developed nations, to be sure, do follow the Japanese pattern. More equal distributions of income do go hand in hand, almost all across the world, with more equal distributions of wealth.

France, for instance, has a more equal distribution of income than the United States and, the new Credit Suisse figures make plain, a more equal distribution of wealth. In France, the top 10 percent hold just 53.1 percent of national wealth, a share significantly below the 74.6 percent U.S. figure.

So why don’t the Nordic nations follow this pattern? Why doesn’t their wealth inequality profile more closely track their income inequality profile? How can the Nordic nations have such egalitarian distributions of income side by side with much more top-heavy distributions of personal wealth?

The authors of the new Credit Suisse Global Wealth Report both acknowledge this mystery and suggest a solution for it. A higher wealth concentration, they note, can sometimes result from “benign” egalitarian public policies.

Strong social safety nets, the new Credit Suisse Global Wealth Report goes on to explain, “can greatly reduce the need for personal financial assets.”

What does that mean? If you live in a society that provides everyone with everything from inexpensive — or free — higher education and health care to decent unemployment benefits to robust systems of public housing and pensions, you don’t need to sock away money for a rainy day fund. You can live decently in the present — and still enjoy financial security for your family.

This dynamic, the Credit Suisse researchers observe, offers “one explanation for the high level of wealth inequality we identify in Denmark, Norway, and Sweden.” The “top groups” in the Nordic nations, their report notes, “accumulate for business and investment purposes, while the middle and lower classes have no pressing need for personal saving.”

Another part of the explanation: The “top groups” in the Nordic nations do not include significant concentrations of super-sized fortunes. Wealth within the Nordic wealthiest 10 percent concentrates much more at the bottom of that top 10 percent than the top, partly because tax rates on high incomes remain steeper in the Nordic nations than in the United States.

The new Credit Suisse numbers help illustrate this difference in the make-up of wealth at the Nordic and U.S. economic summits. The United States, the Credit Suisse data show, has 28 times more adults with a net worth of between $1 million and $5 million than Sweden. But the United States has 49 times more adults than Sweden with personal net worths over $10 million.

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The United States, overall, has more personal fortunes worth over $10 million than the entire rest of the world combined.

And that, in turn, leaves readers of the new Credit Suisse Global Wealth Report with an even greater mystery: Why do Americans tolerate an inequality so stark?


New Wisdom
on Wealth

Gar Alperovitz, Forging a Transformative Vision, Shelterforce, Fall 2014. In an America where 400 hold more wealth than 180 million, we need to democratize the ownership of wealth.

John Kampfner, From ancient castles to mega-yachts: what history teaches us about the super-rich, Guardian, October 14, 2014. The sheikhs, the geeks, the oligarchs, and the bankers all follow a familiar path.

Mark Ames, A Tale Of Two Silicon Valleys: Wage theft, billionaires, and the rest of us, Pando Daily, October 15, 2014. Justice in a plutocratic America.

Kathleen Geier, Nancy Folbre, Anna Clark and Susan Feiner, Should You Go to College? The Nation, October 15, 2014. In a deeply unequal America, college can be both a rational choice and an economic disaster.

Dean Baker, World's richest man tries to defend wealth inequality, Al Jazeera, October 16, 2014. What the Bill Gates critique of Thomas Piketty misses.

Nick Tabor, Breaking Up Fortunes, Jacobin, October 16, 2014. The potential power of a rejuvenated estate tax.

Matt Stoller, Why We Need to Break Up Amazon . . . And How to Do It, Medium, October 16, 2014. One plan for deconcentrating this giant retailer’s wealth and power.

Neil Irwin, What Janet Yellen Said, and Didn’t Say, About Inequality, New York Times, October 17, 2014. The Fed chief is staying away from those aspects of inequality that have a close tie-in to Fed policies.

Simone Pathe, Americans consider inequality world’s greatest danger, PBS NewsHour, October 17, 2014. So do Europeans, says new Pew research.

Anthony Orlando, Recovery of the Rich, by the Rich, for the Rich — Recession for Everyone Else, South Florida Sun-Sentinel, October 18, 2014. By every key yardstick, 90 percent of Americans have lived in recession for the past seven years.



The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class cover

Can you imagine an America where precious few Americans genuflect before the rich? That America once did exist, and Too Much editor Sam Pizzigati’s gripping saga of plutocrats past tells how that America came to be. Read the introduction.

new reads

How Did CEO Compensation Get So Crazy?

Dorff bookMichael Dorff, Indispensable and Other Myths: Why the CEO Pay Experiment Failed and How to Fix It, University of California Press, 2014. 313 pp.

Law professor Michael Dorff offers up in these fascinating pages a compelling dissection of the myths that justify sky-high corporate CEO compensation.

Indeed, no rational person who completes this ambitious new work could possibly see the conceptual rationale for contemporary CEO compensation — “pay for performance” — as anything but, as Dorff puts it, “a mirage.”

Indispensable and Other Myths ends with a plea that we “radically rethink how we restructure pay and how we encourage CEOs to lead our companies.” Unfortunately, author Dorff’s prescriptions for “fixing” CEO pay end up having little truly radical about them.

So read this book for understanding how we’ve sunk so deeply into our current swamp of corporate compensation. Just don’t expect a guide for getting out.




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Too Much, an online weekly publication of the Institute for Policy Studies | 1112 16th Street NW, Suite 600, Washington, DC 20036 | (202) 234-9382 | Editor: Sam Pizzigati. | E-mail: | Unsubscribe.

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