The gap between rich and poor in America is getting wider. At a time when US unemployment is stuck at 9.2 per cent and when the number of food-stamp recipients has soared to 44 million from 26 million in 2007, the rich have been getting richer. The perverse part of the story is that while the rest of the US struggles, the number of millionaires there is climbing.
A CapGemini report found that the number of millionaires in Houston has gone up 9.6 per cent. It's risen 8.8 per cent in Los Angeles and 7.8 per cent in New York. Indeed, New York's millionaire population increased by 52,800 last year to 720,000, which means that one in 25 New Yorkers is a millionaire. That must be news to the rest of America.
What's creating this gap? David Moss, a professor of economics at Harvard Business School, researched bank failures and income inequality going right back to the 1920s and found that the two are connected. When bank failures go up, so does income inequality.
He is at a loss to explain the connection. But it would be clear that financial crises will hit certain groups harder. They will take longer to recover, which pretty sums up the state of America now.
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