All men and women are not created equal. Some are lucky enough to be born very, very wealthy. And they just get wealthier with the passage of time.
Last month, economist Paul Krugman spoke with Bill Moyers about the US’s growing inherited wealth problem in the United States while discussing Thomas Piketty’s bestselling book, Capital in the Twenty-First Century. “[R]ight now, what we’re really talking about is Gordon Gekko’s son or daughter. We’re talking about inherited wealth playing an ever-growing role,” he said.
In this clip, Vox’s Ezra Klein lays out why wealth inequality is a more dangerous cousin of income inequality. Close to 40 percent of America’s national wealth rests in the hands of the top one percent of US households. What that means is that the top one percent in the country holds more accumulated wealth than the bottom 90 percent.
And all that wealth gets passed on to their children, with whom it just continues to grow. As Piketty revealed, the rate of the return on capital — on wealth — is greater than the growth of the economy as a whole. So the wealthy and their offspring continue to get fatter wallets unless something disruptive like a war — or high taxes on those at the top — get in the way.
“Take the heirs of Sam Walton, the founder of Wal-Mart. None of them have founded Wal-Mart,” says Klein. “None of them were created equal either. The six of them have more than $140 billion of wealth. That makes those six people wealthier than the bottom 40 percent of Americans combined.”
Income inequality, Klein says, actually comes with an upside, as talent or risk or hard work can pay off with higher wages. Wealth inequality, on the other hand, often comes from just being born with a silver spoon in your mouth.
Read the post on Vox to learn more about wealth inequality.