Rich Dad vs. Poor Dad

The Internal Revenue Service the largest collector of personal economic data in the nation said that the gap between the richest Americans and everyone else continues to grow. A IRS report finds the wealthiest 1% of Americans made 21.2% of all income. Some of the reason for this is that loss of manufacturing jobs, declining strength of unions, little gain in minimum wage, immigration of low-skilled workers, the inability of workers to re-educate and retool for the technology sector. With the economy's rising oil prices, expanding mortgage defaults, credit crisis, the national debt, the falling value of the dollar leaves millions behind and the gap widens even more.

What causes the Income Gap?

Recent books that address aspects of the income gap are Jacob Hackers book entitled The Great Risk Shift: The Assault On American Jobs, Families, Health care and Retirement and How You Can Fight Back, he talks about extreme wealth earners and what they use the money for and how politics, psychology and economic theory play a part in the great divide.

Robert Franks discusses in Richistan: A Journey Through The American Wealth Boom And The Lives Of The New Rich that the super wealthy have created their own country. The number of millionaires in the U.S. has tripled between 1995 and 2004. Those worth over 25 million has doubled. Forbes Magazine records a list of 400 Billionaires. Robert Franks turns his attention on the Upper Richistan those worth over 100 million and the exclusive billionaireville which number over 1,000.

An Economist at Cornell University talks about how wealth is created in his book Falling Behind: How Rising Inequality Hurts the Middle Class, he states that the concentration of wealth at the top makes life more expensive for those in the middle. A behavioral phenomena called expenditure cascades has us competing to buy better houses in better neighborhoods, better equipped cars and even bigger barbecue grills. This places economics in a psychological context, exploring happiness and envy as well as the role of real-situation context in our drive to consume.

What is causing the middle class to disappear?

What is causing the middle class to disappear sociologists Katherine Newman and Victor Tan Chen discuss this in the book The Missing Class: Portraits of the Near Poor In America. There are 57 million in the missing class who are making 20,000 to 40,000 a year and bearly able to afford health insurance.

Economist Paul Krugman writes a book called The Conscience of a Libral. Krugman sees us entering a new gilded age and going against the accepted thinking, due to the rise of movement conservatives. He suggests raising funds in order to supply the working class with education, healthcare and public sector jobs that improve infrastructure.

So if you have always wanted to know why the rich are getting richer and the rest of us are falling behind? Well read the books noted and maybe you will have a clearer understanding of at least what factors are involved.

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