In spite of nearly destroying our economy, costing millions their jobs and homes, and making us the first generation not to leave our kids a better standard of living than we had, America’s super rich are still fat and sassy.
Times are tough for workers in the U.S. where a recession has a stranglehold on much of the economy, but life is perfectly rosy for those at the top.
The riches of the wealthiest North Americans grew by double digits in 2009, primarily from interest their money earned when it was invested in the stock market and elsewhere, according to a report by the Boston Consulting Group.
Millionaires in the U.S. and Canada saw their wealth increase 15 percent in 2009, to a total of 4.6 trillion dollars, the report found.
Worldwide, 11 million – or less than 1 percent of all households – were millionaires in 2009. They owned about 38 percent of the world’s wealth or 111 trillion dollars, up from about 36 percent in 2008, according to Boston Consulting Group.
About 4.7 million millionaires live in the U.S., four percent of the population and more than anywhere else in the world. Japan, China, Britain and Germany followed the U.S. in the number of millionaires.
Their fortune is a stark contrast to the lives of more than 15 million people in the U.S. who are unemployed and searching for work, and the eight million more who are just getting by with a part-time job, according to the U.S. Bureau of Labor Statistics. More than two million more people were working prior to the recession but have now dropped out of the labour force.
Apart from the newly unemployed, about 39 million people in the U.S. are chronically poor and do not have enough food to eat, according to the U.S. Census and U.S. Department of Agriculture.
“The nation’s jobs crisis is so catastrophic that, unless Congress acts on the scale of the New Deal, millions of Americans will experience extremely long periods of unemployment for many years ahead,” Lawrence Mishel, president of the Economic Policy Institute, told a panel of the Committee on Ways and Means recently.
Not so for millionaires and the uber-rich.
The uber-rich, those with more than 30 million dollars, are on the rebound. They spent more money in 2009 on fancy cars, yachts and jets compared to 2008, according to a study by Merrill Lynch-Capgemini. They bought fine art, expensive jewelry, gems and antiques, items that are likely to increase in value over time, so they can sell them later and make more money.
The recession isn’t hitting those at the top as it has workers. In fact, many wealthy people benefited from the stock market’s ups and downs, said Mike Lapham, director of the Responsible Wealth Project at United for a Fair Economy, an NGO in Boston… [emphasis added]
Inserted from <Alternet>
Since the Reagan Revolution, supply side economics have been our economic paradigm, coming to fruition in the failed Presidency of GW “Potomac Pinocchio” Bush. The damage from decades of malfeasance cannot be undone with simple fixes. The system is too broken to be fine tuned. To recover this economy we will need public works on a scale not seen since FDR. To protect it we need the kind of financial reform we will not get as long as Geithner, Bernanke and Summers are in the driver’s seat, including a return to Glass-Steagall and the breakup of the TBTF Banksters. To fund it, we need to remember that during the 1950s, a time when our economy was most prosperous, the top tax bracket was 92%, and even then, the rich did not want for luxury. To ensure the survival of the American way of life we must do whatever it takes to ensure that Bush will have been the last Republican President in US history.
Every Republican in office is one Republican too many!
13 Responses to “There’s No Recession for the Rich”
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Nothing like being kicked when your down is there…
Amen to that, Tim.
Ask my readers. I have been saying that for a long time. We have no right to ruin the American economy for decades.
we should tax ourselves high enough (rich get taxed more) to pay off our 13 trillion dollar debt before we die off. One generation does so much damage and yet we think we have been living the American dream. Selfish.
Tom, Americans are taxed comparably to workers in other first world companies. At 62, I won’t live long enough to pay it off. The reason Europeans enjoy a standard of living so much better than ours is the manner in which those tax dollars art spent. They pay taxes to benefit their society as a whole. We pay them to provide corporate welfare.
Someone should look into the effects of a recession on the rich over the century. I am sure that it will be found that all recessions typically hit the rich disproportionately compared to the poor. While in this case has most likely hit the rich less so than in the past, I would not be surprised to see that it isn’t so much more than in the past.
In this country, it takes money to make money. If you already have money, you are much more insulated from sudden jolts than if you don’t. Furthermore, once the jolt has passed, you are in a much stronger position to take advantage of opportunities that arise from the sudden change in the situations.
Not all of these people made their money by jilting widows and orphans. Some of the banks did, but there are many investment funds that never had anything doing with the mortgage mess. They wisely put money in places for their clients and maximized opportunities for them.
We should not be targeting the rich. We should be targeting criminals. Being rich is not a crime. Getting rich can be, sometimes. These are the things that we should be focusing on.
I seriously doubt that any one of us here, if we could somehow have verified, that the Market was going to rise more than 40% between March of 09 and June of 10 would have taken on whatever we could, bought the most leveraged item that existed, made a killing, and retired in style. There were plenty of stocks that could have been ‘conscience free’ stocks that went up 100s of percent in that time we could have purchased. We didn’t. We did not have the disposable income to do so. Much of the rich, or near-rich, did, and they took advantage. I don’t fault those that have worked for their money, or even inherited it and have been responsible with it.
I don’t want a populist attitude to develop. The Tea Baggers are wrong, but being disdainful of those with honest, legitimate opportunities is prejudice, pure and simple. Charities are not making as much as they did in ’07, but they have not been wiped out yet. People are still donating. So, it is not all bad. Some for tax reasons, but some give far more than their taxes allow.
Finally, I believe that amount of CRIMINALS in the upper class is not so disproportionate as to those in the lower class. Some of the rich may do things we don’t agree with, but I think it is because some are ignorant snobs, not criminals. Just as some of the actions of the lower class are disagreeable because they are ignorant slobs. This has more to do with situation and perspective than law. While we in the middle and lower classes look down on the rich, remember that the proof we lack perspective of their situations is that over 80% of lottery winner end up declaring bankruptcy within 5 years of winning. Not all of those that won were ignorant wretches. However, they were all in completely over their head and lacked perspective that comes with either A) earning money or B) raised to respect money in a way that we, living pay check to pay check, are ignorant of almost completely.
That’s quite a mélange of opinions, and it would be foolhardy to attempt to address each one (some of which are so convoluted it’s impossible to decipher exactly what your point is, like your final paragraph in which you compare criminality between upper and lower classes).
Dealing with the impact of the recession on the wealthy over time mentioned in your first paragraph, given the CBO’s lag in crunching data there is as yet no clear delineation of the last/current recession impact on the rich. However, it seems likely it will be similar to the 2001 recession when the dot-com bubble burst and reduced after-tax incomes by 30 percent among the top 1 percent of households between 2000 and 2002.
But not all recessions impacted the wealthy more than those of us in lower quintiles. CBO data documents the rich got even richer throughout the back-to-back recessions of the early 1980s. So I doubt you’ll gain much sympathy that the wealthy are really going through tough times in this recession.
Source:
http://www.cbpp.org/cms/?fa=view&id=3220
Our country, as with all other developed countries, has always held that a progressive tax is the only fair way to address that thorny issue – it’s something even most conservatives agree with. And one need look no further than the Bible for an endorsement of that approach:
“For unto whomsoever much is given, of him shall be much required.” (Luke 12:48)
So I wholeheartedly disagree with your view that it’s ill-advised to “target the rich.”
But sadly, in reality even targeting the rich does not occur when you crunch the numbers. There are endless studies to document, given the ever-widening gap between the über-rich and the rest of us, that the wealthy in fact do NOT bear an inordinate share of the tax burden:
“Income taxes do tilt upward. But they’re the progressive bit of the federal tax wedge. Other federal taxes, like the payroll tax and the excise tax, are not progressive. (And we’re not even going to get into state income, which are frequently regressive) That’s why CBO calculates something called the “effective federal tax rate.” The EFTR is simply a households’ federal tax liability divided by its income. The four taxes that are included in the measure are the income, payroll, excise, and corporate taxes. And they give us a pretty good idea of whether the rich really are overpaying.
“When you look at percentage of total tax liabilities, the rich do in fact bear a heavier burden. But it’s because they have so much more money. They are not bearing a heavier burden as a percentage of their incomes. They’re bearing it in relation to everyone else’s incomes. Indeed, it’s only because the sheer levels of income inequality in this country are frankly unintuitive that [one can claim the rich bear a disproportionate tax burden]. People hear that the top 20 percent pay almost 70 percent of the country’s income taxes and nod their head. That’s unfair! But it only seems unfair because people don’t know the top 20 percent accounts for almost 60 percent of the national income.
[Emphasis NOT added]”
Source:
http://www.prospect.org/csnc/blogs/ezraklein_archive?month=04&year=2009&base_name=the_tyranny_of_the_income_tax
“For unto whomsoever much is given, of him shall be much required.” (Luke 12:48)
This hits the issue right on the head. We can not blame all of our ills on a person JUST because they are rich. It is how they use their money that matters. There are people out there that start businesses which help grow the economy. Owning a business is a lot of work especially in the beginning when you may not have a lot of money. It’s long hours and you can miss out on a lot of family time. The business can also fail which means bankruptcy and financial hardship. Not everyone is Donald Trump. If someone grows a business, provides good jobs for people, and after a decade or so has earned a good living, I have no fault with them. THEY took the risk, they worked hard and they deserve what they get. As for taxes, they need to pay their fair share….not 90% of what they make.
There are also rich people who help make a difference in this world. Oprah is a prime example. People talk about how she is a billionaire. Fewer people talk about how much she has helped out the less fortunate. The last I checked, she has given away over $300 million to others. She gave $10 million to the victims of Hurricane Katrina. She also started Oprah’s Angel Network which has given away something like 50 million. Does this make her almost criminal? No.
The problem that we should be addressing here is greed. I disagree with Gordon Gekko in the movie Wall Street when he said that “greed is good, greed works.” Greed has led the CEO’s in this country to offshore jobs or downsize their workforce to get bigger bonuses. THESE are the people we need to be talking about.
The bailouts were another joke. We spent taxpayer dollars to help bail out businesses that mismanaged their money, took unacceptable risks, or did not eliminate waste. Some of these CEO’s even got bonuses after they received government money! Yes, some had to give back the money, but it was not before a huge public outcry. But it is the whole “entitled” attitude that we need to change.
I think the biblical passage above is how we should look at this situation. It is not the democrats/republicans….rich/poor….black/white….hollywood/midwest….religious/government…etc that got us into this mess. It was our attitude of entitlement and greed. If everyone started pulling their weight and we all stop asking for handouts, our country has a chance.
To be clearer – while my last two paragraphs are indeed sourced (something I believe only buttresses an opinion), those words are from none other than Ezra Klein.
Otis, I never intended to say that all rich people are evil criminals, but I disagree with your belief that the rich are harder hit by the recession that the rest of us. The share of our national wealth owned by the top decile had increased unabated for the last 30 years. The inability of lottery winners to manage wealth has no bearing on my argument that supply side economics has trashed our economy.
Nameless, I agree and thanks for digging the numbers out.
Dan, I agree in part. I blame Republicans, because Republicans represent and protect the criminally greedy far more than even the DINOs. I do not blame people for being rich. Some rich manipulate the system to their advantage, knowing that their manipulation is destroying other’s lives, but not all. Others are the unwitting beneficiaries of supply side economics. If is a legitimate function of government to provide for the general well being, according to our Constitution. But government has failed through policies that have massively shifted our nations wealth from the lower and middle classes to the rich. I am not suggesting that the rich be punished for their affluence. Instead, I am suggestion that government must recapture a portion of that shifted wealth and employ it for the benefit of all Americans.
Ok, let’s talk about the rich being hit “disproportionately.” If a man (or woman) with $10,000,000 invested in the stock market loses half of that money, they still have $5,000,000 left to play with.
When a family of 4 making a total, before taxes/etc. $40,000 lose half their wealth (to job loss, not the stock market – families making 5 digits don’t play the stock market roulette wheel), they are in severe poverty level.
That’s the difference between when the rich lose half of that they have compared to when the poor lose half of what they have.
i.e., the rich are still rich, the poor are just that much poorer.
Yes, that is true. However, the rich are not to blame, necessarily.
Blame the Fed for pushing too much money into the system? Yes. Blame the banks for trying to put that money to work (Which IS one of their key roles in the economy, I might add) in ‘creative’ ways? Yes. Blame unscrupulous mortgage companies for writing unscrupulous mortgages? Yes. Blame the ratings agencies for saying it was all AAA? Yes. Blame the millions of people that bought houses, SUVs, 4,000 inch plasmas, swimming pools, stocks, bonds, etc. that they simply could not afford if they looked at their finances logically for more than 1 second? Yes. The rich for surviving? Um… No. Any more than I blame an ugly hyena for eating a beautiful gazelle.
There were many rich people involved in what happened, but once again to say that ‘The Rich’ should be punished or made to pay SO much more is prejudice. You are faulting the rich for being rich.
Yes, it is disproportionate. So is their lifestyle. So is are the decisions that they have to deal with sometimes daily. So are their bills. So are the problems they face raising children when they have money.
Here is something I would like to point out, if you won the lottery almost all of your middle class problems would go away because most of them are probably associated with money, or lack thereof. The rich have problems, but what are they? When we say something like ‘picking out the champagne for brunch’, we are applying our middle class mentality to an upper class situation. The truth is: We don’t know for sure. Where is the pressure coming from? Peers, government, socialists? Some want money, some want ALL of your money, some want other things. Like what, what ‘other things’? I don’t know. Do you? Are their problems less or more important than yours and does having money to deal with the problems of the middle class free them to tackle the other problems?
Let me put this another way, here in the US, there are people without food or home. I agree that is a shame, but that is also another discussion. The lower class sometimes decides whether to eat or pay rent. It is an awful decision, but there are many that have adapted to that way of life. We, in the middle class, have to decide whether we want chicken or beef tonight. We are free to tackle other issues, like the quality of education in public schools. We have the option available to us, in the middle class, to make higher level decisions than whether or not to eat. Now, MOST in the middle class choose NOT to be more active. Before we go running around talking about how the rich need to do more, why don’t we talk about, oh, I don’t know, 80% of the freaking country!!!
Also, is it fair that I still have a job, but my neighbor doesn’t because my company didn’t over-extend its self? Should my company be paying something to my neighbor’s company because my neighbor’s company had to lay off people? I mean, after all, my company is obviously better off than my neighbor’s company, right? This recession was disproportionate by industry, apparently, as well. I guess that means we should have a rotating tax on the best performing industry, right? And that tax should be used to support industries and companies, whether those companies deserve it or not. That way people can keep jobs that shouldn’t exist, live in the houses they couldn’t afford, and filled with things that they shouldn’t have.
This is what is called class warfare. We just don’t care about surrounding circumstances, just that someone is not effected as much, or the same way, that we are. Are there totally useless people out there that will do things that fly in the face of decency, respect, and common sense? Of course there are. They exist at all levels. Should I think that all of the lower class are just grubbing when because when I was a cab driver I took people that took their income tax refund (and certainly tax credit) and spend a few hundred dollars at Wal-Mart on DVD players, TVs, and other electronic gadgets back to their project housing? This is something an indifferent Republican would say about the lower class. So because some douche goes out and buys a yacht, we should assume that being rich makes you a douche?
Does this mean we need to litigate a ‘moral responsibility’? If you open that door, be prepared to have some of the things that you do litigated as well. And because there would have to be a line drawn in stone, it may hurt me more than you. I won’t be happy.
Otis, it was class warfare when Republicans instituted policies that transferred wealth from the poor and middle class to the rich. Some rich are to blame. Others are not. The fact remains that the policies of the last thirty years have skewed wealth and income in this country to record levels. The fact also remains that unless a nation offers some prosperity to most citizens, markets stagnate. Our economic pyramid cannot survive as long as the capstone is so heavy that it crushes the base. Taxing the rich is not a punitive measure or an act of class warfare. It is a corrective measure to return our economy to a more equitable state and bring the class warfare of the last thirty years to an end.
Bee, I fully agree.