Jake's View | A tale of three US Fed misfits and the growing wealth gap

The three richest people in the US – Bill Gates, Jeff Bezos and Warren Buffett own as much wealth as the bottom half of the US population, or 160 million people.

Guardian, SCMP, November 10

This is not a statistic on which the United States has reason to pride itself but, in my view, it is often a misunderstood one. We actually have two different gaps here. The wealth gap measures the total value, mostly at current market prices, of what any person owns and the income gap measures the amount that any person earns from his work or his investments over a given period.

The two are quite different. Jeff Bezos of Amazon.com, for instance, may be one of the world’s wealthiest people by the market value of the Amazon shares he owns but he is far down the rankings on income. Amazon pays no dividends. He gets only his Amazon salary, if he takes one.

In general the wealthy are concerned mostly with their wealth while the poor are almost exclusively focused on their income. They need every cent of it to put food on the table and clothes on their backs. Anything saved is insurance against almost certain later shortages. They don’t think of it as wealth.

But if we are to do any moral colouring here then surely it is the income gap, or even the spending gap, which truly matters. We do not castigate wealthy individuals who spend little of their wealth and live frugally. If anything we admire them for self-denial.