20 Nov 2015

Bernie Sanders is right: The top 0.1 percent have as much as the bottom 90 percent

Sen. Bernie Sanders defined the phrase "democratic socialist" in a speech at Georgetown University Thursday afternoon, in an effort to clarify the unusual moniker he uses to describe his worldview for confused voters.
Being a democratic socialist means believing that government must guarantee its citizens' material well being in order to truly protect their freedom, Sanders said, citing President Franklin Delano Roosevelt.
"Real freedom must include economic security. That was Roosevelt's vision 70 years ago. It is my vision today," the Democratic presidential candidate said. "People are not truly free when they are unable to feed their family. They are not truly free when their are unable to retire with dignity. They are not truly free when they are unemployed, underemployed, or when they are exhausted from working 60 or 70 years a week." 
In appealing to the principles of freedom and "economic rights," in a phrase of Roosevelt's that Sanders quoted, the senator from Vermont tried to steal the thunder from his conservative detractors. His opponents also cite personal freedom, saying Sanders's vision of socialism would leave Americans less free to pursue their economic interests without interference from government. Under his agenda, for example, private health insurers and colleges would have to compete with government-sponsored insurance and education, and the rich would have to forfeit more of their earnings in taxes.
In his speech, Sanders also cited a remarkable statistic: 0.1 percent of American families enjoy almost as much as wealth 90 percent of the rest of the country put together.
In 2014, just 160,000 families, each with a net worth in excess of $20.6 million, counted themselves among the wealthiest 0.1 percent of households. Together, they owned nearly as much as everyone from the very poor to the upper middle class combined -- 90 percent of the country, some 145 million families in total. 
Those statistics are from a recent paper by Emmanuel Saez of the University of California, Berkeley and Garbiel Zucman of the London School of Economics.
As shown in the chart above, wealth was not always so unevenly distributed in the United States, but since the middle of the Reagan administration, wealth has gradually become concentrated in the hands of a few.
Saez and Zucman write that the concentration has increased both because salaries have skyrocketed for a small group of Americans, and because that group has been able to earn more in interest and returns on their investments. The richest 0.1 percent of families today now own nearly as much as that same class did in 1929, on the eve of the Great Depression, when they controlled nearly a quarter of the nation's wealth. 
Sanders had been planning this speech on democratic socialism for weeks. "I think we have some explaining and work to do," he said last month, acknowledging the phrase can make voters "very, very nervous."

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