Saturday, February 07, 2009
what is meant by wealth disparity
quantifying the depth of the disparity between rich and poor has largely meant citing the gini coefficient. but yves smith relates a graphic from the journal that puts a historical spin on the striking chasm that has opened up in the united states by updating the efforts of alexis de tocqueville in his 19th-century classic, 'democracy in america'.
further, notes yves:
But Blankfein was far from the best paid American. Forbes told us that the 400 highest earning taxpayers reported $105 billion in adjusted gross income. That averages $262.5 million. $262 million versus the minimum wage level of $13,100 gives a ratio of over 20,000 to one.
Now some will protest that the $105 billion probably includes one time windfalls, like the sale of major businesses. Doesn't wash. We are looking for the disparity top to bottom. I haven't seen any estimates for 2008 yet, and hedge funds had a rougher year, but the Institutional Investor ranking of top hedge fund managers for 2007 showed John Paulson at $3.7 billion, George Soros at $2.9 billion, and James Simons at $2.8 billion.
So the popular perception is right. The super wealthy today are better off than royalty of old. And it's not due to indoor plumbing, either.