Every once in a while a book, movie or piece of theater captures the Zeitgeist so completely that its popularity soars. Thomas Piketty's new book Capital in the Twenty-First Century is the latest example, and an unlikely one, as it is a 700-page economics book.
Published just weeks ago in the U.S., the book is now the Number 1 bestseller on Amazon.com. (Its author is a professor of the Paris School of Economics and it was first published in France.)
The primary theme of "Capital" is that income inequality is growing and will continue to grow due to the structure of capitalism in the 21st century.
James Pethokoukis, the money and politics columnist-blogger at the conservative-leaning American Enterprise Institute, tells The Daily Ticker that Piketty's book is "the right book at the right time," because it focuses on an issue that concerns many Americans.
Consider these statistics:
- The income of the top 1% of earners in the U.S. grew 31.4% between 2009 and 2012 -- the first three years AFTER the Great Recession -- while the incomes of the bottom 99% grew just 0.4%.
- Median per capita income in the U.S. in 2010 of $18,700 (equivalent to $75,000 for a family of four) was virtually unchanged since 2000 after adjusting for inflation.
- The average compensation of the CEOs of the 350 largest U.S.-based companies in 2012 was 273 times the average pay of the average worker. (It was 14 times in 1965.)
"The concern is if you have one small slice of the population grabbing all the gains and stagnation for everybody else," says Pethokoukis in the video above. "We've seen some stagnation recently. It doesn't mean we're going to have it in the future, but I think it's something we're going to have to pay attention to."
He says even if you don't agree with Piketty there are still policies that should be adopted to make sure the French economist's bearish scenario doesn't play out, and which could also benefit the economy.
Those policies, says Pethokoukis, should focus on increasing innovation, boosting employment and expanding the workforce, and enhancing education and job training skills.
Tell us what you think would help reduce inequality in America. And don't forget to follow The Daily Ticker on Facebook or Twitter @dailyticker.
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