The lion’s share of the income of the top 1 percent is concentrated in the top 0.1 percent and 0.01 percent. The average income of the top 1 percent in 2013, according to data provided by Emmanuel Saez, a Berkeley economist, was $1.2 million, for the top 0.1 percent, $5.3 million, and for the top 0.01 percent, $24.9 million.
Summers is correct about many things: TARP and fed policy being effective, the begrudged necessity of bailing out LTCM, his controversial comments about women in science, and the push for deregulation – but he is wrong to be concerned about wealth inequality.
The solution, if one exists, is the come to terms with the fact that entitlement spending is a contributing factor. Mike Rowe says that industrial companies cannot fill jobs because no one wants them. Another possibility is to make welfare contingent on mandatory birth control, along with drug testing. This would help break the genetic cycle of poverty, of the poor begetting more poor.
Second, we also need to come to terms with the fact that in a Meritocracy, such as America, not everyone will be smart or ‘good enough’ to reap the fruits of the post-2008 economic recovery and wealth creation boom. As part of Social Darwinism 2.0, many people are biologically preordained to a subsistence lifestyle, and there’s scantly anyone can or should do about it. There will always be have’s and have-nots; makers and takers. Tyler Cowen’s approach – abundant entertainment and cheap food – is intriguing. But if we must provide services for these people, the use of tax payer dollars should be minimal as necessary. However, given the astronomical inflation-adjusted rise in the price of internet and cable access, cheap entertainment seems like wishful thinking. One idea is to let private companies sponsor these services to avoid the tax payer fronting the bill. Maybe we’ll become a bifurcated nation: a productive half and a second half that lives in makeshift trailers and camps, using cheap wifi provided by Google and Facebook in exchange for viewing ads.