The Yacht Recovery
Capitalist economies are cyclical in nature. Over the last sixty years, the US has experienced ten recessions, each followed by a renewal of economic growth. Although each of these recessions brought substantial losses to both rich and poor, the way the expanding post-recession pie has been divvied up has become increasingly skewed. In the earliest of these recoveries (1949 to 1953), those in the top 1% of the income distribution received only a proportionate share of the gain in income. However, as a recent report
notes, since 1954, and particularly since 1980, the share of new income claimed in each expansion by the top 1% has grown dramatically. It reached 76% during the 2001 to 2007 recovery and is on track to hit 95% during the current expansion. The relevance of the mainstream adage that a rising economic tide lifts all boats is sinking fast. In the US, as many drown, only the largest yachts rise.