Summary: Reading Time: 3 minutesAt the beginning of this series I asked the question, “Why is inequality bad for the economy?” Beginning in the late 1990s and up to the 2008 meltdown we began to see the answer to this question. We began to see the effects of wealth and income inequality economics as the American economy bounded from one extreme to another. (Note the bullet points of income inequality facts at the bottom of this post.)<br> <br> The tech boom, and tech bubble, of the late 1990s fed into different crises of the early 2000s. First there was 9/11 and then there was Enron and the corruption scandals. Each of these crises along with the busting of the tech bubble bursting should have led to a correction in the markets. The excess of the 1980s and 90s should have been resolved here. They were not. Instead the government kept interest rates artificially low fueling greater and greater levels of market speculation and investment. We also saw a surge in the finance sector as it became one of the leading sectors of the American economy.<br> <br> Why and how did this all happen? It happened because the elite and powerful who were amassing more and more wealth through the markets had their hands on the levers of power in the markets and the governments. This was not calculated or conspiratorial. There was no cabal unfolding in America. It was basic human nature and self interests at work throughout the American economic system. Why is inequality bad for the economy? Because income inequality economics and wealth inequality economics, when allowed to go unrestrained, breed greater and greater levels of corruption.<br> When left unchecked and unaccountable individual self interests will fight for individual survival and strengths even if the rest of the ship goes down. That was what was taking shape in the American economy.<br> Debt was growing. Interest rates were holding low. Corruption was increasing. The gap between those at the top of the economic spectrum and those at the bottom was growing wider and wider by the month.<br> <br> * US public debt in 2001 was $144.5 billion, in 2008 $962 billion<br> * The poverty rate grew from 11.5% in 2000 to 13.2% in 2008 (US Census Bureau, 2010).<br> <br> The Look of Income Inequality Economics<br> Check out these income inequality facts.<br> <br> * From 2000-2005, only 4% of workers, typically highly-educated professionals, had real income increases.<br> * According to economists Emmanuel Saez and Thomas Piketty, who reviewed income tax returns for all income groups since 1917, found that in 2005, the top 1% received its largest share of gross income since 1928.<br> * The top one percent of households received 21.8 percent of all pre-tax income in 2005, more than double what that figure was in the 1970s.<br> * This is the greatest concentration of income since 1928, when 23.9 percent of all income went to the richest one percent.<br> * All of the income gains in 2005 went to the top 10 percent of households, while the bottom 90 percent of households saw income declines.<br> * While the middle class stagnated, the super rich, the top 0.1% jumped from an annual average income of $4million in 1979 to $24.3 million in 1976 –A 600% gain per family. This was more than 2 ½ times their share in 1979.<br> * The super rich, the top 1%, gained so much that they captured 23.4% of the national economic pie in 2007.<br> * The typical college graduate today makes only about a $1000 more than in 1980, adjusted for inflation.<br> * In the past decade entry level college salaries actually went backward. Their annual pay in 2010 was about $2,000 below their pay in 2000.<br> <br> These are only the tip of the iceberg for income inequality facts. Learn more about the state of income inequality economics that occurred after the turn of the century in this podcast episode.<br> <br> <a href="http://feeds.feedburner."></a>
