Most of Us Will Not Have a Better Life Unless We Turn the Tables on the Super Rich

By Chuck Collins

October 4, 2012  |  The following is an excerpt from 99 to 1: How Wealth Inequality Is Wrecking the World and What We Can Do About It [3], by Chuck Collins (Berrett-Koehler, 2012).

An economy so dependent on the spending of a few is also prone to great booms and busts. The rich splurge and speculate when their savings are doing well. But when the values of their assets tumble, they pull back. That can lead to wild gyrations. Sound familiar? It’s no mere coincidence that over the last century the top earners’ share of the nation’s total income peaked in 1928 and 2007—the two years just preceding the biggest downturns. —Robert Reich (b. 1946)

There are many theories about what triggered the 2008 economic meltdown. These explanations focus on bad actors such as the large banks and financial firms, the unregulated “shadow” financial sector, and unethical subprime mortgage pushers.

But there is a missing lens to the story, one that shows how the economic meltdown was caused by excessive income and wealth inequality. The two triggers were consumption by the 99 percent based on borrowing rather than real wage growth, and reckless financial speculation by the 1 percent.