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Ear to the Ground

How the Rich Benefited From the Recovery (While Most of Us Got Nothing)

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Posted on May 5, 2013
Image via Shutterstock

The richest Americans made trillions during the so-called economic recovery from 2009 to 2011, while most everyone else’s net worth dropped, according to a recent Pew Research Social & Demographic Trends analysis of newly released Census Bureau data.

According to the study, the net worth of the nation’s wealthiest 7 percent rose 28 percent during that time period. In contrast, the net worth of the rest of Americans dropped 4 percent. The 8 million families at the top saw their aggregate wealth rise $5.6 trillion (an increase of roughly $700,000 per family), while the 111 million families that comprise the remaining 93 percent saw their total wealth decline more than $600 billion (a decrease of roughly $6,000 per family).

“It’s as if the entire economic recovery is going into the pockets of the rich,” Les Leopold writes at AlterNet. “And that’s no accident.”

Leopold goes on to cite nine reasons why the wealthy benefited from the so-called recovery while the rest of us didn’t. Among his explanations, Wall Street—not Main Street—got bailed out, big banks got even bigger, Washington didn’t do enough to spur job creation and Occupy Wall Street was silenced.

Les Leopold via AlterNet:

1. The bailouts went to Wall Street, not to Main Street.

The federal government and Federal Reserve poured trillions of dollars into Wall Street through a wide variety of financial maneuvers, many of which were hidden from view until recently. When we add it all up, it’s clear that most of the money floated right into Wall Street. (Fannie and Freddie were private institutions that also considered themselves part of the Wall Street elite.)

...4. Washington fails to create enough jobs.

Wall Street’s gambling spree tore a gaping hole to our economy. In a matter of months more than 8 million workers lost their jobs due to no fault of their own. What these elite financiers did to us is unconscionable, and they haven’t had to pay a dime for the damage they caused. Although the stimulus programs prevented the slide from deepening, it was far too small to put America back to work. So now we’re facing the highest levels of sustained unemployment since the Great Depression. The biggest victims of Wall Street greed are the long-term unemployed.

...6. The big banks have become even bigger criminal conspiracies.

Not only did we bail out too-big-to fail banks with public money and get nothing back in return, but Washington allowed them to grow even bigger. The biggest banks now have oligopoly power to rig prices. They also can illegally collude in order to siphon off more wealth from the rest of us. (For some juicy details, see Matt Taibbi’s “Everything is Rigged: The Biggest Price-Fixing Scandal Ever.” ) The corruption and cheating are reaching epic proportions as they gamble with insured deposit money, partner with loan sharks, money launder for drug cartels, and foreclose on homeowners who are up-to-date on their payments. All of that dirty money goes to the rich.

...9. The silencing of Occupy Wall Street.

For a few short months, the hundreds of Occupy Wall Street encampments dramatically shifted the national debate. Wall Street was in the crosshairs and “We are the 99 percent” spread into our consciousness. It’s still there, but Occupy Wall Street isn’t…at least not in the potent form that shook the rich and powerful. We don’t have time here to discuss whether it was silenced by repressive authorities, or if it primarily caved in due to internal weaknesses in strategy and tactics. But this much is certain: a mass movement to take on Wall Street makes a difference.

Read more

—Posted by Tracy Bloom.

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