A staggering piece of information:

Researchers have found two peak years when the richest 1% (in America) earned nearly a quarter of the nation’s total income; 1928 and 2007.

And we all know what happened to the global economy in the years following on from these points in time. Disaster!

I garnered the facts from a review of a new film “Inequality For All“, which is fascinating, if not bizarre. How can a 90 minute documentary on income inequality become a commercial hit? And it intends to do just that by launching as its star a 66 year old diminutive ex-politician, Robert Reich, who was Bill Clinton’s Secretary of Labour.

The figures that Reich supplies are simply gobsmacking. In 1978, the typical male US worker was making $48,000 a year (adjusted for inflation). Meanwhile the average person in the top 1% was making $390, 000. By 2010, the median wage had plummeted to $33,000, but at the top it had nearly trebled, to $1,100,000…….Reich’s thesis is that since the 1970s a combination of anti-union legislation and deregulation of the markets contrived to create a situation in which the economy boomed but less of the wealth trickled down.

Reich has strong words of warning for policy makers in America, in the UK and elsewhere. As somebody living in Israel, his words have special meaning. This is the country where many analysts argue that the significant change in the recent general election was that the middle classes refused to ‘buy the arguments’ of the outgoing government. People swopped parties. Jerusalem will have a new coalition, where at least initially economic issues will count for more.

So what social miracle happened in the Holy Land?

It is easy to dwell on the social protests of two summers ago. The 25-40 year old bracket took to the streets, moaning that the cost of raising a young family in Israel is prohibitive. For decades, many parents have run away from the work market as child care has remained exorbitant. And the list of complaints is long.

Back in December 2011, the OECD summed up the position very clearly.  “….the gap between the average income of the richest 10% of earners in Israel and the United States was 14 times that of the bottom decile, compared to 10 times in Britain and six times in Germany and Denmark.”

Barely four months later, the Bank of Israel confirmed the problem. “Income inequality grew faster in Israel than in other developed countries………. adding that over the last 20 years, the salary gaps between educated and uneducated workers grew while salary gaps between men and women narrowed.”

Since 2002, Israel has seen average annual economic growth of 3-5% almose every year. Tel Aviv is full of tall buildings. Despite warnings of a bubble and despite a global dowturn, the price of new housing continues to rise. The stats for internal tourism remain firm. Money is available,………. but for whom?

There is a growing impression in Israel that just as “the Bush crowd” blossomed just before the 2008 credit crisis, Bibi Netanyahu’s friends are in a similar position today. In parallel, there is no shortage of charities in Israel that collect means and money for the less well-off. This misfit is a red warning sign in any society, and that is an inconvenient truth that needs to be addressed right now.