In the last two decades, wealth held by billionaires has quintupled. While inflation explains some of the increase, this has also been a period of very low inflation (54% in 20 years or less than 4%/year). One measure is to consider yourself; has your wealth quintupled since 1996? For some it has, but for many this has also been a period of low wage growth and the loss of wealth during the Great Recession (the Second Great Depression). Billionaires also lost wealth, but as a group, their wealth has more than doubled since the bottom. Collectively, they hold almost $5 trillion in wealth. The recent financial turmoil has seen their wealth decrease slightly, the first time that’s happened since the Great Recession, which was the first time that happened since the Internet Bubble. The pattern of boom and bust is not a guarantee of economic instability, but increases in inequality can lead to systemic retractions as we’ve witnessed about once per decade. The Great Recession (the Second Great Depression)? That was just about a decade ago. Past performance is no guarantee of future performance – but it is worth considering.
(Click on the graph for the link.)