Extreme Wealth Is Bad for Everyone—Especially the Wealthy

Michael Lewis in The New Republic:

The grotesque inequality between the haves and the have-nots is seldom framed as a problem that the haves might privately help to resolve. Instead, it is a problem the have-nots must persuade their elected officials to do something about, presumably against the wishes of the haves. The latest contribution to the discussion comes from Darrell West, a scholar at the Brookings Institution. “Wealth—its uses and abuses—is a subject that has intrigued me since my youth in the rural Midwest,” West writes in the introduction to his study of billionaires. From his seat in Washington, D.C., he has grown concerned about the effects on democracy of a handful of citizens controlling more and more wealth.

Drawing on the work of Thomas Piketty and Emmanuel Saez, West notes that the concentration of wealth in the top 1 percent of American citizens has returned to levels not seen in a century. One percent of the population controls a third of its wealth, and the problem is only getting worse: from 1979 to 2009 after-tax income for the top 1 percent rose by 155 percent while not changing all that much for everyone else. By another measure of inequality, which compares the income controlled by the top 10 percent with that of the bottom 40 percent, the United States is judged to come forty-fourth out of the eighty-six nations in the race, and last among developed nations.

More here.