A Slew of New Studies, Highlighted By the Paradise Papers, Confirm We Are Living in a Time of Unheralded Inequality
The turn of the century, known to historians as the Gilded Age, was a period of unprecedented income inequality.
Families like the Carnegies and Rockefellers amassed tremendous fortunes while the rest of the country remained hopelessly poor. This earned them the dubious title of “robber barons”. The staggering disparity that resulted was unprecedented in our country’s short history.
We live in a time when 3 individuals, BIll Gates, Jeff Bezos, and Warren Buffet, own more wealth than half of America. And yet there is still very little publicly available data on just how far the influence of the rich and powerful extends.
2 new reports do just that, shedding a whole new light on the subject of wealth disparity in the modern era. The results are very clear. The world’s financial elites are gobbling up an unprecedented share of the pie, and they’re not leaving much for anyone else.
Is there any doubt that we are living in a new Gilded Age?
The Three Comma Club
The world’s ultra-rich are now in control of more than half of all of the world’s wealth, according to a report from banking giant Credit Suisse. Since the global financial crisis of 2008, the top 1% have experienced an impressive rebound in holdings. Their share of the the global pie has increased by 18% to just over half (50.1% of the world’s total wealth).
Meanwhile, the 3.5 billion poorest people in the world account for just 2.7 percent. This process has accelerated rapidly in the last 5 years, with earners at the very top enjoying all of the income gains. The outlook is most bleak among millennials, who despite a good faith effort to participate, find themselves falling farther behind in the marketplace.
Josef Stadler, the reports’ lead author, told the Guardian that some of his high net worth clients are concerned about that growing inequality could lead to a revolt:
The problem is the power of interest on interest – that makes big money bigger and, the question is to what extent is that sustainable and at what point will society intervene and strike back?
He goes on to add that we are “now two years into the peak of the second Gilded Age.”
Earlier this month, the International Consortium of Investigative Journalists gave us a much more concrete look at inequality, exposing trillions in unreported wealth, as well as the lengths the world’s financial elite are willing to go to avoid paying taxes.
The documents, known as the Paradise Papers, were obtained from Appleby law firm in Bermuda. They offer a glimpse into the financial lives of some of the world’s richest and most powerful people, including many with ties to the White House.
This graphic below illustrates these some of these ties in great detail. It implicates key members of the president’s staff as well as major financial backers:
The documents are a trove of information, and are the result of a nine month investigation by a global network of over 400 journalists working around the clock. Their collective efforts are one of the most expansive works of investigative journalism in history.
This expose takes the abstraction out of income inequality, and highlights the real consequences involved. Middle class taxpayers are the getting a raw deal here. They must foot the bill for infrastructure such as schools and transportation, while the richest members of society have figured out a way to skirt this responsibility.
By focusing on the massive sums of wealth stashed away by powerful individuals and corporations, the report also illustrates a level of wealth and power that is unattainable, even unimaginable to most people.
A Question of Fairness
In the day to day lives of the average citizen, it can be hard to see the real-world effects of these phenomena. They remain largely out of view.
Most people have a vague inclination that society isn’t fair, that the “game is rigged”, but many are too busy living their lives to really process what this all means.
And in most cases, the letter of the law is being followed. But what about the spirit of the law? Is it right to allow the elites of the world to hide behind their status and leave the burden of funding the country to the middle class?
These are questions we all must face as a society as we move forward into the Second Gilded Age.
ICIJ is releasing additional emails, contracts, company structures, trust declarations and more from its Paradise Papers project, a significant addition to the Offshore Leaks database and part of ICIJ’s larger goal to shed light on some of the world’s most secretive jurisdictions These documents are often referred to as unstructured, because – unlike a spreadsheet or a database – they are not easily searchable by a computer.