Bernie Sanders recently took to the opinion pages of U.K. newspaper The Guardian in order to highlight “the growing gap between the very rich and everyone else” in the United States.
Here’s how the senator from Vermont started out his op-ed piece:
“The United States cannot prosper and remain a vigorous democracy when so few have so much and so many have so little. While many of my congressional colleagues choose to ignore it, the issue of income and wealth inequality is one of the great moral, economic and political crises that we face — and it must be dealt with.
The unfortunate reality is that we are moving rapidly toward an oligarchic form of society, where a handful of billionaires have enormous wealth and power while working families have been struggling in a way we have not seen since the Great Depression. This situation has been exacerbated by the pandemic.”
You may think that I — as someone who’s at least adjacent to Wall Street — disagree with America’s most left-wing senator.
But I don’t. In fact, I think his diagnosis of the problem is pretty much dead-on.
Facts are facts. Here’s how the senator lays out the current situation.
“Today, half of our people are living paycheck to paycheck, 500,000 of the very poorest among us are homeless, millions are worried about evictions, 92 million are uninsured or underinsured, and families all across the country are worried about how they are going to feed their kids…
Meanwhile, the people on top have never had it so good. The top 1% now own more wealth than the bottom 92%, and the 50 wealthiest Americans own more wealth than the bottom half of American society — 165 million people. While millions of Americans have lost their jobs and incomes during the pandemic, over the past year 650 billionaires have seen their wealth increase by $1.3 trillion.”
Indeed, the American middle class is shrinking… and not in a good way. Millions of folks are sinking below the poverty line. As this massive socioeconomic shift continues, a shrinking sliver of our population controls an ever-larger portion of our national wealth.
Consider that in 1980, the richest 1% of Americans owned about 30% of all household wealth in the country. At the same time, the bottom 90% owned about 24% of all household wealth.
But by 2012, the share of all household financial wealth owned by the top 1% had skyrocketed to more than 60%… and the share owned by the bottom 90% had plummeted below 10%. Here’s what that looks like:
So yes, here at least, Sanders and I are on the same page.
Where we differ is what we believe caused America’s wealth inequality — and the potential solutions.
So today, let’s take a closer look at the causes of the wealth gap…and what can be done to prevent regular Americans from landing on the wrong side of it.
While the senator’s prescriptions may keep you off the soup line, mine could put you on a path to growing prosperity…
How We Got Here
Not surprisingly, Sen. Sanders pins the blame for income inequality on his usual suspects: “the most powerful and well-financed entities in the country, including Wall Street, the health insurance industry, the drug companies, the fossil fuel industry, and the military-industrial complex.”
To me, though, the widening wealth chasm is the result an even greater force.
Consider that, year after year — and especially during the last pandemic year — dynamic, upstart companies topple established businesses that seem fairly sturdy and dominant in their markets.
In many cases, these dying businesses employ tens of thousands of workers. But the seeming strength of these businesses often hides their underlying weakness.
Companies that fail to adapt die a slow but certain death. Consider…
- In less than seven years, Uber Technologies Inc. (NYSE:UBER) demolished the “old” taxi industry while making its founders billionaires.
- Around 2007, Netflix Inc. (NASDAQ:NFLX) began transitioning into America’s No. 1 movie and television “streaming” service. This innovation crushed traditional brick-and-mortar rental companies like Blockbuster.
- Since early 2009, shares of Amazon.com Inc. (NASDAQ:AMZN) soared more than 5,000%. Meanwhile, dozens of old-school brick-and-mortar retailers shuffled slowly into bankruptcy.
- A study of the newspaper industry conducted by the University of North Carolina reported that 1,810 newspapers ceased publication from 2004 to 2018 thanks, in great part, due to vast amounts of cheap — or free – online content.
That destruction of much of the old-school economy wasn’t a concerted effort from Sanders’ usual suspects. It was due to the fact that technology advances so quickly that, thanks to a phenomenon known as the Law of Accelerating Returns, the rate at which these huge disruptions occur keeps speeding up.
Those disruptions will make the wealth gap grow wider every year.
Exponential progress — the kind taking place in research labs and tech businesses right now — radically accelerates the pace of change we see in the world… and radically accelerates the wealth gap.
It’s not a board room full of old men in expensive suits and military uniforms making the decisions that are changing the world.
It’s technology itself.
That’s why I call this wealth gap the “Technochasm.”
How We Can Get Out
Sen. Sanders’ solution to this problem is also predictable.
“We must raise the minimum wage from the current starvation wage of $7.25 an hour to a living wage of at least $15 an hour…
We need to make it easier, not harder, for workers to join unions…
We need to create millions of good-paying jobs rebuilding our crumbling infrastructure…’
We need to do what virtually every other major country does by guaranteeing healthcare to all people as a human right…
We need to make the wealthiest people and most profitable corporations in America start paying their fair share of taxes.”
Some of the senator’s prescriptions might be helpful, at least short term. But they would cost trillions of dollars and probably act only as Band-Aids on a gaping wound.
I wish I could tell you this situation will be resolved soon. But it won’t.
Technology is creating a wealth chasm that politicians cannot really fix.
In other words, if you want to avoid landing on the wrong side of this wealth gap, you can’t depend on Washington. You’ll have to take action yourself.
That’s why I put together this special video presentation.
In it, I show you how to take advantage of the ways in which the Law of Accelerating Returns is transforming our society… and start outlining the three key steps you can make to ensure you’re on the right side of the Technochasm.
Moreover, I highlight a select group of fast-growing tech companies with exceptional growth potential.
You can check it out here.
P.S. Hundreds of thousands of folks saw my “Technochasm” viral video from earlier this year.
Well, the whole world has changed since then… and I’m back to talk about the Technochasm, the biggest megatrend in investing, in ways I couldn’t before… and discuss opportunities for even bigger market gains… the kind to keep you from falling behind. And I’m bringing along investing legend Louis Navellier to join me on camera for the first time ever.
On the date of publication, Eric Fry did not own either directly or indirectly any positions in the securities mentioned in this article.
Eric Fry is an award-winning stock picker with numerous “10-bagger” calls —in good markets AND bad. How? By finding potent global megatrends… before they take off. In fact, Eric has recommended 41 different 1,000%+ stock market winners in his career. Plus, he beat 650 of the world’s most famous investors (including Bill Ackman and David Einhorn) in a contest. And today he’s revealing his next potential 1,000% winner for free, right here.