Caption: This man has moved from the ranks of the wealthy to those of the very wealthy.
While El Cabrero has been busy ranting about the growing gap between the wealthy and everyone else, another gap in income and wealth has emerged.
According to yesterday's New York Times, the new gap is the one between the wealthy and the very wealthy.
One out of every 825 households "earned" at least $2 million last year, double the proportion in 1989 when adjusted for inflation. In terms of wealth, one in 325 households had a net worth of $10 million or more in 2004, which is more than four times the rate in 1989.
Some of the very wealthy have turned to philanthropy, the best known examples being Bill Gates and Warren Buffett. This is commendable, although it's no substitute for economic justice.
Mark M. Zandi, founder of Economy.com, whose net worth is in the eight figures (presumably without decimal points) agrees:
"Our tax policies should be redesigned through the prism that wealth is being increasingly skewed," Mr. Zandi said, arguing that higher taxes on the rich could help restore a sense of fairness to the system and blunt a backlash from a middle class that feels increasingly squeezed by the costs of health care, higher education, and a secure retirement.
Speaking of the squeeze, an article today shows some interesting trends over time.
Over all, average incomes rose 27 percent in real terms over the quarter-century from 1979 through 2004. But the gains were narrowly concentrated at the top and offset by losses for the bottom 60 percent of Americans, those making less than $38,761 in 2004.
The bottom 60 percent of Americans, on average, made less than 95 cents in 2004 for each dollar they reported in 1979, analysis of the I.R.S. data shows.
The next best-off group, the fifth of Americans on the 60th to 80th rungs of the income ladder, averaged 2 cents more income in 2004 for each dollar they earned in 1979.
One third of the whole increase went to the top one percent and more than half of that went to the top tenth of a percent. Adjusted for inflation, that group had $3.48 in 2004 for every dollar they had in 1979.
When you add in the effects of the tax cuts for the wealthy, that jumps to $3.94 in 2004 for each 1979 dollar.
A nice gig if you can get it.
BONUS FEATURE: MIXED METAPHORS. This has nothing to do with anything, but El Cabrero has been reading about and thinking about metaphors lately, especially mixed ones. A while back, I heard a friend unintentionally come up with the best one I've ever heard:
Let's not pull the trigger until the cake is baked.
Do you have any idea what I would have given to come up with something like that on purpose? I guess the shoe is on the other artichoke now...
GOAT ROPE ADVISORY LEVEL: YAWNING