u/Humble-Tangelo7598

Gini is a measurement of economic equality something that was improving in this country until the late 1970s where it stalled and reversed beginning a four decade period where equality decreased by 20%, a move that shows a statistically strong correlation with the accumulation of wealth in the form of savings (which makes sense as savings are extra money not needed to live).

Inflation has grown those savings from $348B in 1975 preceding peak equality by three years to $10.6T when the series collection was halted in 2020.

Absolute cause and effect is impossible to determine, but it's pretty clear that a small group of people has accumulated more wealth at a much faster pace then the rest of the people.

Assets are the means of productions to paraphrase Zack de la Rocha of Rage Against the Machine. These charts show the increase in the value of assets in relation to the value they produce, aka GDP.

This is a holistic way to look at the value of labor versus assets as GDP naturally grows over time as a function of inflation and input costs and these factors are closely correlated with the cost of labor via wages. In a balanced system the ratio of asset values to production would be stable as the value of the asset is a function of the value of it's output. Productivity gains when shared with labor would keep the ratio stable as that would increase input costs thus balancing the ratio.

But... what we actually see is a massive increase in the value of assets in relation to the value of the output they produce, this is indicative of owners extracting more of the economic gains for themselves and reducing labors share of those same gains.

For thirty years between 1950 and 1980, we maintained a ratio ranging between $4 and $5 of assets for every dollar of American GDP, then everything changed. The gap between total assets and assets net of debt has increased by over 200% since the 1960's and it now takes 250% as many assets to generate a dollar of GDP just since the 1980s.

Starting in 1978 we began a massive decades long de-regulatory frenzy removing regulatory controls on every industry to create free markets for their goods and services while abstaining from regulating new industries that emerged with the invention of digital circuits, computers, networks and the web.

This regulatory purge began making assets more valuable as ownership of them was conferred with more control allowing owners to leverage them to extract more economic gains from their output, including the eventual sale and shipment of them overseas.

Furthermore, this de-regulatory binge was coupled with a monetary policy that transferred large volumes of capital from individual tax payers into the hands of a select few in the financial sector via double digit interest rates charged on the federal debt issued during the beginning of Volker's term.

As monetary policy and federal regulatory policy transitioned into a laissez-faire activity the only regulatory control exercised was to support the value of assets via various bailout schemes starting with Chrysler and continuing with airlines, banks, real estate etc.

Fiscal policy followed suit, prioritizing tax cuts for asset owners over tax cuts for labor and on the odd occasion when labor was rewarded with a tax cut the majority of benefits flowed to the highest income brackets containing the owners of the assets used to produce our collective GDP.

Asset prices continue to increase while GDP faces even greater headwinds today then it has at any time in the last forty years, this is without question a large asset bubble, of ALL assets.

Sources:

GDP: https://fred.stlouisfed.org/series/GDP

Assets: https://fred.stlouisfed.org/series/BOGZ1FL894090005Q

Debt: https://fred.stlouisfed.org/series/TCMDO

Tools: PyCharm, and Python code partially generated by Junie Jetbrains AI assistant.