Possibly last posting about the World Household Wealth Distirbution study.
First off I’m bemused by two articles in the New York Times. One about giant purses:
“…clients old and new staggering under the weight of huge purses and griping about neck pain. “It’s an epidemic,” Ms. Ehrlich said. “We’re busier than ever before right now and big bags are the reason.”
A common side effect is that one shoulder becomes slightly higher than the other, she said. “A lot of women talk on their cellphones while they’re carrying these bags, which only intensifies the problem, because in addition to balancing too much weight on one side, they’re lifting the shoulder at the same time.”
Ms. Ehrlich recommends weekly massages for the pain. Gentle stretching and warm baths with Epsom salts can help bag abusers, too, she said. But she would never tell a client to ditch her Mulberry Elgin tote.
“It’s like telling a woman, ‘You cannot wear Manolo Blahniks,’ ” she said. “It’s just not realistic.”…”
One about giant planes.
“… private jet much like Air Force One, which is a 747. Each plane carries a list price of about $275 million. Boeing will not identify the customers, … personal use.”
Finally there is a note in the report that points out that zero is, of course, not the bottom of the household wealth distribution. Debt allows household’s wealth to be negative. Because most of the worlds poor are “unbanked” you need to go into the developed world to find the absolutely poorest households. How’s that for a triggering a worry-some eye brow raising moment? Since, the currently popular fad in this problem space is micro-finance.
“Debt allows householdâ€™s wealth to be negative.”
Debt against what? The developed world is full of rich person’s debt. Mortgages, secured against property. And at the top end of a pyramid scheme, junk bonds, leveraged takeovers, etc.
Some basic principles: If you own land, you’re rich. If it includes a house and it’s in the developed world, you’re *very* rich. If you don’t, you’re not: though you may be OK if you’re in a society where land is not owned. Finally, if you’re in a landowning society but own nothing, you’re poor.
Against what is a good question. If your debt is secured then your total wealth is still positive. What some modern economies enable is for households to secure their debt against nothing more than the borrower’s “good name”, i.e. his future earnings. If you willing to treat that security as fundamentally different than the security of property that can be liquidated then that’s what I mean when I say that the wealth societies enable some of the poorest people.