Reposted from Ripped off Britons
One day the icing machine crashed, due to a leak in the water pipes leading it to flood. With no icing there were no iced buns. The bankers could only get the spiced variety. Now spiced buns are better than plain buns, but less so than iced buns. Inequality was reduced! At least until the icing machine got bailed out.
The Tories are claiming that inequality has reduced since 2010. They are correct. Since the banker induced crash that started in 2007/08 the incomes of the top 20%, as shown by this graph from the ONS, fell more sharply than everyone else. As the rewards of the boom years weren’t shared with those on low income, like the icing on the buns, they didn’t see so much downside when the economic machine broke.
As a result of this the Tories can say ‘inequality’ has fallen.
The standard measure of inequality is the GINI Coefficient, which looks at income but not at wealth. So the Tories are correct: income inequality, GINI, did fall marginally in the years immediately after 2010.
On the other hand, since the banking crash and the policy of QE (Quantitive Easing) asset prices have grown strongly. The BBC provide a 1 minute explanation of what QE is.
- “pouring water into a leaking pipe in the hope that some might dribble through”
- “those who have assets [including home owners & shareholders] benefit in relation to those who don’t”
The Office for National Statistics “Total Wealth In Great Britain, 2010-2012” report shows how all wealth (Financial; Property; Physical; Pension) is distributed. You will notice that the bottom 50% have virtually no Financial Assets:
A billionaire hedge-fund manager in the USA, Stanley Druckenmiller, commented about the US policy of Quantitive Easing:
“This is the biggest redistribution of wealth from the middle class and the poor to the rich ever.”
So, in answer to the question “has inequality reduced since the Conservative-LibDem government of 2010”, the answer is: