Thursday Morning Links

This and that for your Thursday reading.

- David Macdonald comments on Statistics Canada's latest wealth survey, with particular emphasis on the continued gap between a privileged few and the vast majority of Canadians:

(T)he top 20% of families have twice as much wealth as the bottom 80% of families combined. Even if the bottom 80% of families doubled their net worth tomorrow, they still wouldn’t have as much as the top 20% presently do.

Inequality is not only about the wealthy, it’s also about the middle class. Looking at the middle 20% of families, while they represent 20% of the population, they only receive 15% of all income. However, the middle 20% of families only have 8% of all net wealth and this has remained fairly constant since 1999.

All the above examines the share of net worth, not its dollar value change over time. In fact, net wealth has increased for all quintiles since 1999.  For instance, middle class net wealth has increased by almost 80% since 1999 in inflation-adjusted terms. The upper class has increased their net worth by a little over 80% since 1999. That seems fairly equal until you realize that the wealth they were starting from in 1999 was already incredibly unequal: 80% of $760,000 is a lot more than 80% of $137,000 (the 1999 median wealth values for the upper and middle classes, respectively).

In fact, of every new dollar of Canadian wealth created since 1999, $0.66 went to the richest, $0.23 went to the upper middle class and the bottom 60% fought it out for the remaining dime.

The reasons why wealth increased for the middle class in contrast to the rich are also quite different. If we look at the distribution of debt instead of net wealth, we find that the middle class actually holds the most debt of any quintile, certainly more than the poor, but interestingly also more than the rich.  The middle class has managed to increase their net wealth in large part due to increased leveraging, not asset price appreciation. The richest families have less debt and substantially more assets. Their increased wealth is largely due to asset accumulation, not leveraging.

- Meanwhile, Phillip Inman reports on a new IMF study which shows that redistribution of wealth correlates to slightly more economic development - meaning that policies aimed at giveaways to the wealthy in the name of growth tend to fail even on their own terms (while succeeding only at exacerbating inequality).

- Ian Welsh explains how our political and financial systems are set up to funnel free money to the banking sector - while pointing out the inevitable result that an already-coddled industry is accumulating ever more wealth and power.

- Karl Nerenberg offers seven suggestions to make the Cons' elections legislation less damaging. But it's particularly worth noting that exactly one point on the list reflects a change from the status quo - meaning that the main effects of the Fair Elections Act are to make matters worse than they'd be if nothing were to be passed at all.

- And Rick Mercer rants about the Cons' plans to change Canada's electoral rules solely for their own benefit:


- Finally, David Climenhaga looks at the dwindling membership of the Canadian Taxpayers Federation - showing that even astroturf has an expiry date.