Hand it to the rich — no, wait, they already took it. Anyway, they get the job done. From my latest Read 2 roundup, a connection of pieces on wealth paints a dismal picture. (Unless you’re one of those 80).
First, from Michael M. Phillips at The Wall Street Journal:
In 2010, it would have taken the combined riches of the 388 top billionaires to equal the combined assets of the bottom 50% of the planet. But the billionaires’ assets have appreciated so quickly since then, and the total value of the poor’s resources has dropped so precipitously, that last year it took just the top 80 billionaires to equal the wealth of the bottom 3.5 billion people on the planet, Oxfam said.
The wealthiest 80 people have a combined net worth of $1.9 trillion, up from $1.3 trillion in 2010, with the bulk of their fortunes coming from the financial, pharmaceutical and health care industries. More than a billion people live on less than $1.25 a day, Oxfam said.
That’s a 50% increase, in just 5 years, in the wealth of the wealthiest 80 people. (And yours?) Conceivably that has something to do with what Ta-Nahesi Coates, in an essay from last fall, calls segregation as a system of plunder. In this superb round-up, Coates, having summarized a report showing how housing policies established in the early 20th-century systematically pushed poor blacks into specific underserved neighborhoods, describes how
Once the big game has been fenced off, then comes the hunt:
According to a study by the St. Louis nonprofit Better Together, Ferguson receives nearly one-quarter of its revenue from court fees; for some surrounding towns it approaches 50 percent. Municipal reliance on revenue generated from traffic stops adds pressure to make more of them. One town, Sycamore Hills, has stationed a radar-gun-wielding police officer on its 250-foot northbound stretch of Interstate.
With primarily white police forces that rely disproportionately on traffic citation revenue, blacks are pulled over, cited and arrested in numbers far exceeding their population share, according to a recent report from Missouri’s attorney general. In Ferguson last year, 86 percent of stops, 92 percent of searches and 93 percent of arrests were of black people—despite the fact that police officers were far less likely to find contraband on black drivers (22 percent versus 34 percent of whites).
It gets worse. In an essay Coates links to, John Light at Moyers & Company, drawing from a fine story by Matthew Goldstein at the Times, shows how this profiteering continues, with a boost from the still-lingering 2008 economic bust, in the very housing economy that the original segregation created:
Nationally, 17 percent of homeowners are underwater — they owe more on their mortgages than their homes are actually worth. In Ferguson, that figure sits at 50 percent. Because so many homeowners are struggling, the town is ripe for institutional investors — often hedge funds or private equity groups on the coasts, thousands of miles away — to buy up homes, then rent them to low-income tenants. And that’s what has happened. Investment firms are responsible for roughly a quarter of all recent housing purchases in the town.
As Goldstein notes, tenant advocates say the problem comes when investors try to turn too quick a profit on their investment — or fail to turn a profit at all. In New York City, for example, private equity firms have invested in neighborhoods — often low-income communities that investors were unfamiliar with — where the economics of their investment didn’t work out and tenants suffered. In some cases, residents watched their buildings fall into disrepair as their new Wall Street landlords sought to wring maximum profit. In others, tenants faced intense pressure to leave their homes as new landlords tried to gentrify neighborhoods and raise rents. Tenants’ rights groups have dubbed this style of landlordship “predatory equity.”
These practices have spread far beyond urban neighborhoods to the suburbs, where an abundance of cheap homes are teetering on the brink of foreclosure. In the wake of the housing crisis, Bloomberg reported, Blackstone Group raised $20 billion to purchase “as many as 200,000 homes.” As of 2013, the fund was renting residences in 14 cities. Ferguson was “largely avoided” by Blackstone, Goldstein writes, but other investment groups filled the gap.
From my semi-daily and sometimes very occasional newsletter, Read 2: Sneaky cops, sneakier capitalists, healthier minds, and parachuting beavers.