Capitalism: Why The Rich Are Getting Richer And The Poor Poorer?: 3 Facts...

Why The Rich Are Getting Richer And The Poor Poorer???. It sounds like a mystery to many of us why the rich are getting richer and the poor poorer. Money seems to rule the world today. Who doesn’t like money?. Sarcastically, not a day old baby will even say “No“.

Before anything else, do you think God created everyone to become rich?. Hell No!. This is the first thing you should understand. Then, you must also know this; There is no need to complain about life if you have something to eat, a place to sleep, something to wear. My dear learn how to be grateful.

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Global Economy: The coronavirus recession is over for the rich, but the working class is far from recovered - by Heather Long

U.S. stocks are hovering near a record high, a stunning comeback since March that underscores the new phase the economy has entered: The wealthy have mostly recovered. The bottom half remain far from it.

This dichotomy is evident in many facets of the economy, especially in employment. Jobs are fully back for the highest wage earners, but fewer than half the jobs lost this spring have returned for those making less than $20 an hour, according to a new labor data analysis by John Friedman, an economics professor at Brown University and co-director of Opportunity Insights.

Though recessions almost always hit lower-wage workers the hardest, the pandemic is causing especially large gaps between rich and poor, and between White and minority households. It is also widening the gap between big and small businesses. Some of the largest companies, such as Nike and Best Buy, are enjoying their highest stock prices ever while many smaller businesses fight for survival.

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The coronavirus recession is over for the rich, but the working class is far from recovered - The Washington Post

Dateline US: Economic Power for the 99% -

The American dream has been lost. A tiny parasitic upper class has managed, with the aid of a political party adept at cultural division, to suck away the benefits of a generation of economic growth from the vast majority who produced it.

The loss of economic opportunity has dealt a near-fatal blow to U.S. democracy. Popular support for democracy may not require breakneck economic growth, but it does require fairness.

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Dateline US: Economic Power for the 99% - The Globalist

Disparity between the poor and the rich: Jeff Bezos (Amazon) is richer than Hungary

eff Bezos once again breaks the ultimate prosperity record: the strong man behind Amazon is worth 171.6 billion dollars (151.5 billion euros). Not only does he remain the leader of the list of richest people in the world according to Bloomberg, he also catches up with himself after a temporary dip due to his wife's divorce last year. Bezos would now be worth more than the gross national product of Hungary or Algeria, according to The Sunday Times.

In September 2018, his fortune was valued at 167.7 billion dollars, but a few months later, he transferred about a quarter of their combined Amazon shares to his then-wife in what was to become the most expensive divorce in history. Mackenzie Bezos, who married the entrepreneur a year before he founded Amazon, thus gained 4% of the company's shares and became 38 billion dollars richer. She is now the second richest woman in the world after Françoise Bettencourt, the granddaughter of the founder of L'Oréal.

Read more at: 
Jeff Bezos (Amazon) is richer than Hungary | RetailDetail

Wealth disparity gap - Have and Have Nots : the world's wealthiest saw their fortunes increase by $2.5 billion a day in 2018

World’s wealthiest saw their fortunes increase by $2.5 billion a day in 2018 says Oxfam -

Read more at:
https://on.mktw.net/2sBQnfx

USA: Trump Administration Mulls a Unilateral Tax Cut for the Rich - by Alan Rappeport and Jim Tankersley

The Trump administration is considering bypassing Congress to grant a $100 billion tax cut mainly to the wealthy, a legally tenuous maneuver that would cut capital gains taxation and fulfill a long-held ambition of many investors and conservatives.

Steven Mnuchin, the Treasury secretary, said in an interview on the sidelines of the Group of 20 summit meeting in Argentina this month that his department was studying whether it could use its regulatory powers to allow Americans to account for inflation in determining capital gains tax liabilities. The Treasury Department could change the definition of “cost” for calculating capital gains, allowing taxpayers to adjust the initial value of an asset, such as a home or a share of stock, for inflation when it sells.

For the full report click here

The Rich and Poor Gap: Societies Are Headed Toward Revolution, Suggests Inequality Study

There’s a common thread tying together the most disruptive revolutions of human history, and it has some scientists worried about the United States. In those revolutions, conflict largely boiled down to pervasive economic inequality. On Wednesday, a study in Nature, showing how and when those first divisions between rich and poor began, suggests not only that history has always repeated itself but also that it’s bound to do so again — and perhaps sooner than we think.

In the largest study of its kind, a team of scientists from Washington State University and 13 other institutions examined the factors leading to economic inequality throughout all of human history and noticed some worrying trends. Using a well-established score of inequality called the Gini coefficient, which gives perfect, egalitarian societies a score of 0 and high-inequality societies a 1, they showed that civilization tends to move toward inequality as some people gain the means to make others relatively poor — and employ it. Coupled with what researchers already know about inequality leading to social instability, the study does not bode well for the state of the world today.

“We could be concerned in the United States, that if Ginis get too high, we could be inviting revolution, or we could be inviting state collapse. There’s only a few things that are going to decrease our Ginis dramatically,” said Tim Kohler, Ph.D., the study’s lead author and a professor of archaeology and evolutionary anthropology in a statement.

Currently, the United States Gini score is around .81, one of the highest in the world, according to the 2016 Allianz Global Wealth Report.

Kohler and his team had their work cut out for them, as studying inequality before the age of global wealth reports is not a straightforward task. It’s one thing to measure modern day economic inequality using measures of individual net worth, but those kind of metrics aren’t available for, say, hunter-gatherers chasing buffalo during the Paleolithic. To surmount this obstacle, the researchers decided to use house size as a catch-all proxy for wealth, then examined the makeup of societies from prehistoric times to modern day using data from 63 archaeological digs

Overall, they found that human societies started off fairly equal, with the hunter-gatherer societies consistently getting Gini scores around .17. The divide between rich and poor really began once humans started to domesticate plants and animals and switch to farming-based societies. Learning to till the land meant introducing the concept of land ownership, and inevitably, some people ended up as landless peasants. Furthermore, because these societies no longer lived as nomads, it became easier to accumulate wealth (like land) and pass it down from generation to generation.

The Gini scores got higher as farming societies got bigger. The small scale “horticultural” farmers had a median Gini of .27, and larger-scale “agricultural” societies moved up to .35. This pattern continued until, oddly, humans moved into the New World — the Americas. Then, over time, the researchers saw that Gini scores kept rising in Old World Eurasia but actually hit a plateau in the Americas. The researchers think this plateau happened because there were fewer draft animals, like horse and water buffalo, in the New World, making it harder for new agricultural societies to expand and cultivate more land.

Overall, the highest-ever historical Gini the researchers found was that of the ancient Old World (think Patrician Rome), which got a score of .59. While the degrees of inequality experienced by historical societies are quite high, the researchers note, they’re nowhere near as high as the Gini scores we’re seeing now.  

A global report from Credit Suisse showed that modern humans are continuing the trends set by our predecessors: Now, the report showed, half of the world’s wealth really does belong to a super-rich one percent, and the gap is only growing. Historically, Kohler says in his statement, there’s only so much inequality a society can sustain before it reaches a tipping point. Among the many known effects of inequality on a society are social unrest, a decrease in health, increased violence, and decreased solidarity. Unfortunately, Kohler points out, humans have never been especially good at decreasing inequality peacefully — historically, the only effective methods for doing so are plague, massive warfare, or revolution.

Read more: Societies Are Headed Toward Revolution, Suggests Inequality Study | Inverse

Individual Economic Success: 10 golden rules which can make you a millionaire

Thomas C. Corley of Business Insider has spent years studying the habits of wealthy people.

He completed a "Rich Habits Study" in which he interviewed 233 people each worth more than $3.2 million, 75 percent of whom were self-made millionaires.

He compiled the 10 qualities that stood out to him as most common among—and most important to—those ultra-successful individuals. Firstly, innovation, because your million-dollar idea must be just that.

It needs to have some valuable quality that sets it apart from ideas that have come before. Here's how one designer used her innovation skills to create an invention that helps fight Parkinson's.

1)  Have an Edge: It's not just your idea that needs to stand out—it's you. Whatever your strong suit is, it needs to be strong enough to help you rise above the rest of the pack.

2) Be an Expert: You need to make sure you are constantly up-to-date on everything there is to know about the field you want to succeed in.

3) Skill Set: Learning on the job is great and all, but you need to make sure you have valuable skills that you accumulate over many years.

4) Work Ethic:This one's a no-brainer. If you want to be successful, you've got to be willing to work incredibly hard and devote lots of time and energy to your goal.

5) Focus UP: Once you're set on an idea, you need to be able to focus on making it a reality. If you're working on a million-dollar project, it requires your full attention, no matter how long the project takes.

6) Connections, Connections and more connections: You can never have too many connections. Seek out the people who can help you and don't be shy.

7) Don't work alone: It'll be hard to get anywhere without people supporting you.Get people to work with you who believe in you and support your ideas and are not scared to be critical of some of your proposals.

8) Never get discouraged and give up: Persistence, of course, is extremely important. Failure happens and can only help you to start over again with new fresh ideas.

9) Have faith in your ability to succeed:  Luck is not what makes things really happen. Vision, a good plan and focused hard work is the only path  to success.

10) Blow your own horn: make sure that after you have produced your product or service, people hear about it via a variety of publicity vehicles readily available to you. 

EU-Digest

Hedge Funds: Top 10 hedge fund honchos netted $10 bn in 2015

Ten top US hedge fund honchos collectively made over $10 billion personally in 2015 after racking up huge profits in extremely volatile markets that left rivals in the red, according to a report Tuesday.

Tied for the top spot with $1.7 billion in income for just one year were Citadel's Kenneth Griffin and Renaissance Technologies' James Simons, according to the annual hedge fund "rich list" published by Alpha Magazine.

Three other hedge fund gurus also banked more than $1 billion apiece: Bridgewater Associates' Raymond Dalio and Appaloosa Management's David Tepper, each with $1.4 billion, and Millennium Management's Israel Englander, with $1.15 billion.

The article pointed out some prominent no-shows on this year's list, including John Paulson of Paulson & Co., Leon Cooperman of Omega Advisors and Daniel Loeb of Third Point. Funds of all three finished 2015 in the red, Alpha said.

Others missing from the top 10 were Nelson Peltz and Bill Ackman.

The median take for the list of top 25 hedge fund earners was $275 million, the lowest level in five years.
About half of all hedge funds lost money in 2015, Alpha said.

The S&P 500 finished 2015 with a loss, snapping a three-year winning streak.

 Read more: Flash - Top 10 hedge fund honchos netted $10 bn in 2015 - France 24

kleptocracy Rules: The Panama Papers & Capitalism -Today:Neo-liberalism’s World of Corruption

TTIP: legalizing Kleptocracy

Of course corruption has always existed in capitalism. But neoliberalism, the ‘free market’ system that started in the 1980s, promoted it on a vast scale for two reasons:

1. Neo-liberal deregulation and privatisation promoted the dominance of financial capital and the expense of industry and the state. Financialisation and low capital gains taxes have turned big companies and utilities into cash cows, virtual banks with huge wealth, looking to maximise the interest on their money and minimise their tax. Finance capital is, after all, basically about swindling. In the middle ages they called it usury.

2. The shift to the right crashed ‘socialist’ command economies and undermined nationalist governments in the third world, replacing both with corrupt and usually highly authoritarian neoliberal regimes. Getting hold of the state apparatus has become a royal road to mega-wealth for dozens of dictators and their cronies through simple theft.

The core of it is the banking system. European and American banks receive (read: launder) billions of dollars every year from international mafias, and in particular from drug dealers. Sometimes by accident some of this comes to light. In 2006 Mexican soldiers intercepted a drug shipment in Ciudad del Carmen and found a cache of documents showing the Sinaloa drugs cartel had made payments of $378 billion to the American bank Wachovia, a subsidiary of the financial giant Welles Fargo.

Roberto Saviano, the author of the best-selling Gamorrah which exposed the workings of the Neapolitan crime organisation Camorra, claims that London is the centre of money laundering for Latin American drug money. Even the British National Crime Agency says:

“We assess that hundreds of billions of US dollars of criminal money almost certainly continue to be laundered through UK banks, including their subsidiaries, each year.”

Saviano says that Mexico is the ‘heart’ of the drugs trade and London its ‘head’. Antonio Maria Costa, head of the UN Crime and Drugs Agency, says drug dealers invested $352 billion in Western banks in 2008, and this was key in keeping some major banks from collapse.

So corruption – receiving money from crime and drug cartels – is deeply ingrained in the culture of US and European banks. And this is not going to stop, given the vast profits involved.

The klepocratic state is an old story. It’s reckoned that no Mexican president leaves offices with less than $100m. Key Western allies from the 60s and 70s, like Mobutu, president of Zaire (DRC) from 1965-97 and Suharto, president of Indonesia from 1967-98, both established murderous regimes and systematically looted their respective peoples of billions of dollars.

Direct corruption by the state is one thing, influence is something else. In western democracies influence is stacked in favour of the rich and powerful. In the United States and increasingly in Britain it is professional lobbyists who fight their corner. The Atlantic magazine in the US points out:

“Corporations now spend about $2.6 billion a year on reported lobbying expenditures—more than the $2 billion we spend to fund the House ($1.18 billion) and Senate ($860 million). It’s a gap that has been widening since corporate lobbying began to regularly exceed the combined House-Senate budget in the early 2000s.

“Today, the biggest companies have upwards of 100 lobbyists representing them, allowing them to be everywhere, all the time. For every dollar spent on lobbying by labour unions and public-interest groups together, large corporations and their associations now spend $34. Of the 100 organizations that spend the most on lobbying, 95 consistently represent business.”

The above account doesn’t include the direct payments and other gifts given to members of Congress by big companies, not least the health insurance and healthcare companies who have fought so long and so successfully against a universal US healthcare system.

Britain is going in the same direction. As in the United States, business and politics are often revolving doors with former minister joining the boards of companies they dealt with when in power. Seumas Milne says:
“…lobbying doesn’t begin to cover the extent of corporate influence. More than ever the Tory party is in thrall to the City, with over half its income from bankers and hedge fund and private equity financiers. Peers who have made six-figure donations have been rewarded with government jobs.

“But the real corruption that has eaten into the heart of British public life is the tightening corporate grip on government and public institutions – not just by lobbyists, but by the politicians, civil servants, bankers and corporate advisers who increasingly swap jobs, favors and insider information, and inevitably come to see their interests as mutual and interchangeable. The doors are no longer just revolving but spinning, and the people charged with protecting the public interest are bought and sold with barely a fig leaf of regulation.”

Corruption everywhere has the effect of transferring huge amounts of wealth from the poor to the rich. If poor individuals are not directly robbed, then their economic situation, their public services, their health service, their transport, their education – all these are robbed when taxes are avoided and government revenues robbed.

You can’t analyse corruption today by looking for illegal activity alone. Many of the practices that happen in rich and poor countries are legal or in a grey area where it’s difficult to tell criminal from the lawful.

For example, property dealing in Britain is profoundly corrupt. House prices in London (and thus in the whole country indirectly) are pressured by the huge amount of hot money from corrupt Russian oligarchs and assorted gangsters of various nationalities invested in the expensive end of the market. But nothing here is illegal, as far as the house purchases in Britain are concerned. It’s just that they are bought with corrupt money and force up the living costs of millions of ordinary British people.

Look at the purchase of rare earth minerals from the Congo, essential for computers and mobile phones. Much of this mineral wealth is controlled by war lord armies, guilty of war crimes and crimes against humanity. The companies who buy the mineral products they control – the moral equivalent of blood diamonds – have no contact with them at all. Dealers act as a buffer and through their transactions – perfectly legal – wealth based on rape and murder is miraculously washed clean.

Finance capital is by definition corrupt. The investment banks typically do not disclose their fees to investors in advance (they call their charges ‘consideration’) by deduct self-decided amounts as they go along. Free charging professionals like lawyers, and in many countries doctors and dentists, make up their own huge fees. Isn’t this corrupt? But there’s nothing illegal about it.

The tax dodges by major companies like Amazon, Facebook and Starbucks, are perfectly legal. They pay all the tax they are required by law – or by agreement –in countries like Ireland and Luxemburg where they are registered. Whether these practices are illegal in the UK for example is a very grey area. But corruption it certainly is.

All these examples have the same effect: robbing the poor to further enrich the wealthy.

 Read more: CADTM - The Panama Papers & Capitalism Today: Neo-liberalism’s World of Corruption

Wealth: Richest 62 billionaires as wealthy as half the world population combined

The vast and growing gap between rich and poor has been laid bare in a new Oxfam report showing that the 62 richest billionaires own as much wealth as the poorer half of the world’s population.

Timed to coincide with this week’s gathering of many of the super-rich at the annual World Economic Forum in Davos, the report calls for urgent action to deal with a trend showing that 1% of people own more wealth than the other 99% combined.

Oxfam said that the wealth of the poorest 50% dropped by 41% between 2010 and 2015, despite an increase in the global population of 400m. In the same period, the wealth of the richest 62 people increased by $500bn to $1.76tn.

The charity said that, in 2010, the 388 richest people owned the same wealth as the poorest 50%. This dropped to 80 in 2014 before falling again in 2015.

Mark Goldring, the Oxfam GB chief executive, said: “It is simply unacceptable that the poorest half of the world population owns no more than a small group of the global super-rich – so few, you could fit them all on a single coach.

“World leaders’ concern about the escalating inequality crisis has so far not translated into concrete action to ensure that those at the bottom get their fair share of economic growth. In a world where one in nine people go to bed hungry every night, we cannot afford to carry on giving the richest an ever bigger slice of the cake.”

Note EU-Digest: Hope our politicians are reading this because they have completely failed on a local and global scale to remedy this ever increasing global problem. Finger pointing to others for this disaster is not acceptable.



Read more: Richest 62 billionaires as wealthy as half the world population combined

Disparity between Rich and Poor: World’s 400 richest get richer, adding $92bn in 2014

The 400 richest billionaires in the world added another $92 billion to their names in 2014 and now sit on assets worth $4.1 trillion, but Russia’s super-wealthy have been hit by economic problems resulting from the Ukraine crisis.

The biggest winner in 2014 was China’s Jack Ma, who co-founded the Alibaba Group Holding ltd, (BABA), China’s largest e-commerce company, Bloomberg reports.

Ma, who has a personal fortune of $28.7 billion, has added $25.1 billion to his wealth since the September initial public offering saw shares surge by 56 percent.

Other big winners in 2014 were Warren Buffett and Mark Zuckerberg. Buffet increased his net worth by $13.7 billion as dozens of businesses he had brought over the past five decades produced record profits.

Zuckerberg, who founded Facebook, the world’s largest social networking company, added $10.6 billion to his cash pile. Facebook has flourished this year as advertising increased and marketing initiatives expanded, and the 2012 acquisition of Instagram has also paid off; with the photo sharing app now worth $35 billion.

Bill Gates, the founder of Microsoft, remains the world’s richest man with an $87.6 billion personal fortune, up $9.1 billion this year.

Read more: World’s 400 richest get richer, adding $92bn in 2014 — RT Business

USA - The Wealth Gap and the Law: "How the law follows the wealth gap in modern-day America" - by Neil Macdonald

Americans all stand equal before the law, children are taught in this country, regardless of wealth or race or social status. Because this is a classless society.

Of course, children here are also told that a nocturnal fairy will exchange old teeth for cash.
The bitter truth, more obvious by the year, is that law enforcement in the U.S. is actually the enforcement of the class system itself.

If you are poor, you understand that. If you are wealthy, you probably understand it, too, but in another way altogether.

For a member of the American underclass, a minor brush with authorities can turn into the kind of Kafkaesque despair that most Americans associate with places like Egypt or Russia or Iran.

So the story of Kalief Browder, detailed earlier this month in the New Yorker — "Three years on Rikers without trial" — could only have been a shock to the readers of that magazine, who are generally members of America's elite, and therefore largely shielded from judicial abuse.

Long story short, Browder was arrested wrongly for robbery and assault. And for the sin of refusing to cop a plea he was imprisoned in New York's fearsome Riker's Island jail, mostly in solitary, for three years without trial, before prosecutors gave up and admitted they had no case.

Keeping him locked up didn't seem to bother anyone; Browder, a juvenile delinquent from the Bronx, belongs to the nuisance class, and that was enough.

Such treatment, it goes without saying, simply would not happen to a kid from the preppy confines of Sag Harbor or Montauk.

Read more: How the law follows the wealth gap in modern-day America - World - CBC News

Money Matters: he World's Richest People Are Sitting On Cash - by Mike Dolan

 Canny caution or bumbling oversight, the world's richest people have retained huge stockpiles of zero-yielding cash throughout the recent surge in financial asset prices.

Their persistence may have, counter-intuitively, prolonged the buoyancy of those very assets in the process - helping to inflate the outsize wealth of the super-rich further.

With the debate about rising inequality re-invigorated this year by French economist Thomas Piketty's best-selling book on ballooning wealth gaps, the spending and savings behavior of the so-called "plutonomists" has rarely seen more scrutiny or had more influence on the economy and markets.

Political clamor for redress through greater taxation of asset incomes, rents, gifts and inheritances may well build. But few expect much change in the rising wealth of the richest 1 percent of households or the 0.1 percent deemed 'high net-worth individuals.'

Read more: The World's Richest People Are Sitting On Cash - Business Insider

Economics: How Mainstream Economics Failed To Grasp The Importance Of Inequality - by Jon Wisman

The magnitude of exploding inequality since the mid-1970s is captured by the following: Between 1979 and 2007, inflation-adjusted income, including capital gains, increased $4.8 trillion — about $16,000 per person.

\Of this, 36 percent was captured by the richest 1 percent of income earners, representing a 232 percent increase in their per capita income. The richest 10 percent captured 64 percent, almost twice the amount collected by the 90 percent below. Between 1983 and 2007, total inflation-adjusted wealth in the U.S. increased by $27 trillion. 

 If divided equally, every man woman and child would be almost $90,000 richer. But of course it wasn’t divided equally. Almost half of the $27 trillion (49 percent) was claimed by the richest one percent — $11.7 million more for each of their households. The top 10 percent grabbed almost $29 trillion, or 106 percent, more than the total because the bottom 90 percent suffered an average decline of just over $16,000 per household as their indebtedness increased.

This soaring inequality generated three dynamics that set the conditions for a financial crisis. The first resulted from limited investment potential in the real economy due to weak consumer demand as those who consume most or all their incomes received proportionately much less. Not being capable of spending all their increased income and wealth, the elite sought profitable investments increasingly in financial markets, fueling first a stock market boom, and then after the high tech bubble burst in 2001, a real estate boom.

As financial markets were flooded with credit, the profits and size of the financial sector exploded, helping keep interest rates low and encouraging the creation of new high-risk credit instruments. This enabled more of the elite’s increased income and wealth to be recycled as loans to workers. Financial institutions were so flush with funds that they undertook ever more risky loans, the most infamous being the predatory subprime mortgages that often were racially targeted. As the elite became ever richer, those below became ever more indebted to them. When this debt burden became unsustainable, the financial system collapsed and was bailed out by taxpayers.

Economists might have stood a better chance of foreseeing the developing financial crisis had they thrown their nets far wider to catch the insights that have been harvested by a wide range of so-called heterodox economists. From the underconsumptionist tradition of Keynes, Kalecki, and Minsky they could have developed an understanding of how inequality affects aggregate demand, investment, and financial stability.

From the institutionalist tradition of Thorstein Veblen they could have learned how consumption preferences are socially formed by humans who are as concerned with social status and respectability as with material well-being. And from the Marxist tradition they could have seen how economic power translates into political power. 

Economists have failed to grasp the wisdom of one of the foremost students of crises: “the economist who resorts to only one model is stunted. Economics is a toolbox from which the economist should select the appropriate tool or model for a particular problem.”

Read more: How Mainstream Economics Failed To Grasp The Importance Of Inequality

Switzerland: Inequality may spark unrest, Davos elites worry - by David Cay Johnston

Davos Economic Forum: the have's versus the have not's

There’s trouble coming as the chasm between the richest of the rich and everyone else continues to widen. So says a report prepared by the World Economic Forum, the nonprofit foundation that hosts its annual conference of business leaders in Davos, Switzerland, popular with the world’s billionaires.

The forum’s 14th annual assessment of risks, issued just ahead of the Davos gathering, makes clear that social instability, whether measured in mere riots or in bloody revolutions, is the likely outcome of increasing inequality.

The report speaks of a lost generation of young people worldwide who are finishing school only to find a paucity of jobs, which in turn creates pressure to lower wages.

“Widening gaps between the richest and poorest citizens threaten social and political stability as well as economic development,” the report said.

Three of the report sponsors are specialists in pricing risk, the American insurance broker and risk advisory firm Marsh & McLennan and the European insurers Swiss Re and Zurich Insurance Group.

The four-day Davos conference, which begins today, will draw six dozen or so billionaires this year as well as several hundred other people rich enough to have their own jets. Davos will also draw a far larger crowd of government officials, vendors of financial services and journalists.

That those at the apex of the global economy brought forth this report should end the debate over whether inequality poses a problem, but it won’t.

To those who deny inequality is a problem, or herald inequality as an economic good, the report can be dismissed as simply the claims of an interest group. And why trust what billionaires say any more than what a minority of economists, sociologists and writers (including me) has been pointing out for two decades?

Read more: Inequality may spark unrest, Davos elites worry | Al Jazeera America

Global Economy: Paul Krugman: Greg Mankiw Forgets 'We Are A Much More Unequal Society Now'

Paul Krugman thinks Harvard economist Greg Mankiw forgot an important detail in his new paper, "Defending The One Percent": Social inequality just keeps growing.

The Nobel Prize-winning economist and New York Times columnist wrote in blog posts Saturday and Sunday that rising social inequality makes it less likely for children born into poor families to earn more money later in life. Krugman illustrates this point with a chart from Miles Corak, an economics professor at the University of Ottawa, that shows a widening gap between how much money the rich and poor spend on their children.

Earlier this month, Mankiw wrote that the top 1 percent of society is richer because they contribute more to society and in essence earn more as a result. But, as Krugman points out, the former economic adviser to President George W. Bush fails to acknowledge how much society has changed in the last 50 years and how those changes lead to differing opportunities for children, depending on the family into which they are born.

"It was a different country, one in which ordinary public high schools were often pretty good, in which good higher education was available cheaply at state universities, in which almost none of the vast apparatus of tutors and private instruction now used by the elite existed," Krugman wrote, referring to how America has changed since 1958, when Mankiw was born.

As Krugman notes, he is not the first to take aim at Mankiw's defense of the richest members of society. Dean Baker, co-director of the Center for Economic and Policy Research, points out that even if the top 1 percent deserve to earn more because of their contributions to society, policy plays a large role in deciding how much they are rewarded for those contributions.

Read more: Paul Krugman: Greg Mankiw Forgets 'We Are A Much More Unequal Society Now'