World currencies

The USA has many billionaires, but its people are poor compared to other developed countries.

America is the richest nation on earth, e.g., we have the most billionaires. But, when it comes to per-adult median wealth, we rank #27:

Country Median Wealth per Adult

1. Australia $193,653
2. Luxembourg $153,967
3. Japan $141,410
4. Italy $123,710
5. Belgium $119,937
6. United Kingdom $115,245
7. Iceland $ 95,685
8. Singapore $ 95,542 (non-OECD)
9. Switzerland $ 87,137
10. Denmark $ 87,121
11. Austria $ 81,649
12. Canada $ 81,610
13. France $ 81,274
14. Norway $ 79,376
15. Finland $ 73,487
16. New Zealand $ 63,000
17. Netherlands $ 61,880
18. Ireland $ 60,953
19. Qatar $ 57,027 (non-OECD)
20. Spain $ 53,292
21. United Arab Emir. $ 47,998 (non-OECD)
22. Taiwan $ 45,451 (non-OECD)
23. Germany $ 42,222
24. Sweden $ 41,367
25. Cyprus $ 40,535 (non-OECD)
26. Kuwait $ 40,346 (non-OECD)
27. United States $ 38,786

Here is an explanation:

Guess which [factor] had the biggest impact on the growing split between the 1 percent and the 99 percent?

Financialization!

What is that? Economist Gerald Epstein offers us a working definition:

“Financialization means the increasing role of financial motives, financial markets, financial actors and financial institutions in the operation of the domestic and international economies.”

This includes such trends as:

* The corporate change during the 1980s to make shareholder value the ultimate goal.

* The deregulation of Wall Street that allowed for the creation of a vast array of new financial instruments for gambling.

* Allowing private equity firm to buy companies, load them up with debt, extract enormous returns, and then kiss them goodbye.

* The growth of hedge funds that suck productive wealth out of the economy.

* The myriad of barely regulated world financial markets that finance the globalization of production, combined with so-called “free trade” agreements.

* The increased share of all corporate profits that go to the financial sector.

* The ever increasing size of too-big-to-fail banks.

* The fact that many of our best students rush to Wall Street instead of careers in science, medicine or education.

In short, financialization is when making money from money becomes more important that providing real goods and services. Here’s a chart that says it all. Once we unleashed Wall Street, their salaries shot up, while everyone else’s stood still.

And now for the good news.

We have watch a leftward shift in the opinions of the electorate on civil liberties (race, homosexuality, abortion, marijuana, etc.) also on matters of social welfare (social security, healthcare, and gun control). Also, on foreign policy (Iraq, Afghanistan, and even the Israel/Palestine conflict). But, thus far, I have thought that the electorate were still in the death grip of neoliberalism and “the unseen hand” as preached by Ronald Reagan (deregulation, privatization, stipends and tax cuts for the wealthy, a.k.a., “job creators,” and austerity for the less fortunate, e.g., cuts to food stamps and unemployment benefits).

But it appears that Reagan’s spell has been broken. Per the Wall Street journal:

Who are people turning to nowadays for business advice?

Celebrity economists.

Big-name experts on the economy like Paul Krugman, Joseph Stiglitz, Michael Porter, Robert Reich and Muhammad Yunus feature prominently in a new ranking of influential business thinkers compiled for The Wall Street Journal.

The findings – based on Google hits, media mentions and academic citations – show just how much the business-guru landscape has changed since 2008, when a previous ranking was conducted using similar methodology. Author and consultant Gary Hamel ranked No. 1 at the time, a spot now occupied by Krugman.

[...]

Here are the top results from 2013 …:

1. Paul Krugman
2. Joseph Stiglitz
3. Bill Gates
4. Michael Porter
5. Thomas Friedman
6. Eric Schmidt
7. Richard Branson
8. Malcolm Gladwell
9. Robert Reich
10. Jack Welch
11. Muhammad Yunus
12. Niall Ferguson
13. Michael Dell
14. Howard Gardner
15. Jimmy Wales

The article shows that this is a major leftward shift in the business-conscious public over the past five years.

Like it or not, in 1980 there was a class war and only the wealthy showed up. And, they’ve been trickling down on us ever since. We’ve are winning some battles (legalization of marijuana and gay marriage). But, the major fronts are voting rights and money, which has too much influence and needs to be redistributed. That’s what the war is about. To win on those fronts, we need to keep heightening the awareness of the electorate. And, it reassuring to see this progress.

Have a happy Independence Day.

UPDATE: Per the CIA, the U.S. has an average per-capita GDP of $49,800, while Australia’s is only $42,400. Yet, their median wealth is five times ours. That’s what trickle-down economics has cost us.

Photo by epsos.de released under a Creative Commons license.