Skip to comments.Rise of the Super-Rich Hits a Sobering Wall
Posted on 08/21/2009 7:35:53 AM PDT by Cheap_Hessian
The rich have been getting richer for so long that the trend has come to seem almost permanent.
They began to pull away from everyone else in the 1970s. By 2006, income was more concentrated at the top than it had been since the late 1920s. The recent news about resurgent Wall Street pay has seemed to suggest that not even the Great Recession could reverse the rise in income inequality.
But economists say and data is beginning to show that a significant change may in fact be under way. The rich, as a group, are no longer getting richer. Over the last two years, they have become poorer. And many may not return to their old levels of wealth and income anytime soon.
For every investment banker whose pay has recovered to its prerecession levels, there are several who have lost their jobs as well as many wealthy investors who have lost millions. As a result, economists and other analysts say, a 30-year period in which the super-rich became both wealthier and more numerous may now be ending.
The relative struggles of the rich may elicit little sympathy from less well-off families who are dealing with the effects of the worst recession in a generation. But the change does raise several broader economic questions. Among them is whether harder times for the rich will ultimately benefit the middle class and the poor, given that the huge recent increase in top incomes coincided with slow income growth for almost every other group. In blunter terms, the question is whether the better metaphor for the economy is a rising tide that can lift all boats or a zero-sum game.
(Excerpt) Read more at nytimes.com ...
Chris Richards for The New York Times
John McAfee is auctioning off this property in New Mexico to pay bills. His worth has fallen to about $4 million from a peak of about $100 million.
McAfee, the computer anti-virus software?
I perfectly understand why his worth dropped.
Start with two people. Bob has $10. Bill has $20. A ten dollar difference. In year one, both Bob and Bill have wealth growth of ten percent.
Bob now has $11. Bill has $22. An eleven dollar difference. The rich get richer.
Sandals are for girls and arabs. Probably voted for zero. Jmo.
A typically misleading comment from a typically bigoted propaganda sheet. Income is not a zero sum game. If the rich get richer, it does NOT mean the poor get poorer. Income can grow for all, then the rich, and the poor, get richer. Or, as the case under Obamanomics, everyone is getting poorer.
The NYT: Lets smear the Evil Rich and Drive them Out of Our Nation. Then we can all be poor and enjoy Obamacare.
Thank the Lord for the Wall!
parsy, who thinks things were getting out of hand
The fact: By 2006, income was more concentrated at the top than it had been since the late 1920
Your comment: A typically misleading comment from a typically bigoted propaganda sheet
My question: How is it misleading?
parsy, who is curious how “facts” are misleading
..as well as many wealthy investors who have lost millions....
They should have invested in the Carbon Credits scheme created by a certain former VP ........
“Bob now has $11. Bill has $22. An eleven dollar difference. The rich get richer.”
That’s a fun game to play. But the reality is, executive pay, the top 10%, went up to 350 times that of the average worker in 2005. That’s up from 122 times in 1990 and 74 times in 1950.
I know the freeper line is, if that’s what they want, that’s ok, they’re running things.
Yep, and that’s one of the reasons we have a creep like Obama as President.
And it will happen again, if some level of restraint isn’t in play.
And this helps my employment prospects how??? Are these people really this stupid? How does a rich person (who chances are is also a business owner and an employer) not making as much money help me get a job? If the boss isn't making money how does the worker make money?
Bottom line I couldn't care less how much the rich make as long as the economy is good and everyone who wants a job has one.
Is there a conservative bone in your body?
Your green envy is most unattractive.
“Is there a conservative bone in your body?”
Yes. I fought bitterly agaisnt the changes in the Pledge of Allegiance sought by the GOP.
The current pldege:
I pledge allegiance to the Flag of the United States of America, and to the Republic for which it stands, one Nation under God, indivisible, with liberty and justice for all.
The proposed GOP pledge:
I pledge allegiance, to the Flag of the United States of America, and to the pursuit of the Almighty Dollar, with liberty and justice for all, subject to conditions contained in the supplement to this Pledge, which includes, but is not limited to, justice only if such justice does not include any signifigant tranfer of wealth as is determined by the Insurance compaaies and big businesses within given geographic areas (aka Tort Reform), and only if such justice provides tax breaks for capital gains and signifigant welfare incentives for large corporations.
To be honest, the proposed Pledge did not have much support in Committee.
parsy, who says the GOP needs to examine its image vis a vis the rich and moneyed interests
The good times (1940 to 1970): Low net immigration where those few who were let in had higher skills than average.
The bad times (1970 to today): High net immigration where many of those let in had much lower skills than average.
Income and wealth are different.
Rising asset prices will tend to increase wealth inequality. This does not necessarily increase well-being inequality (e.g., your house does not become bigger because the price went up).
The immigration trends listed above exacerbate the income and wealth inequalities. They lowered wages and increased returns to capital. Illegal immigration reduces wages for blue-collar workers (agriculture, building trades, services, etc.) while H1-B reduced wages for middle class workers (programmers, analysts, etc.). The lower wages and increased demand for property, infrastructure, and services help to increase the return to capital (e.g., more people = higher house prices, lower wages = more profit).
Large income and wealth gaps are not necessarily good. In fact such gaps are probably a sign of a poorly functioning (one with heavy government intervention) “capitalist” system.
Immigration is a government program. It is not something that just happens. It is not something out of “our” control.
(Actually it does seem out of “our” control (i.e., the people) but it is not out of the control of government.)
My dad always said, “It takes money to make money.”
When things get top-heavy they fall down unless they are propped up.
Just to be clear: if Bill's initial worth is exactly the same as Bob's at the start ($10 each), and Bob pays Bill $0.50 annually, over 55 years Bill's pay increases annually over Bob's from negligible to 22x.
I know the freeper line is, if thats what they want, thats ok, theyre running things.
It's basic economics. When person A pays person B even a little bit annually, and their wealth grows by the same percentage annually, B will make more than A each year - over time, a LOT more.
Economic fact: the rich get richer. Doesn't mean the poor get poorer, just that the gap grows ever wider. (Remember: today's "poor" have food, heat, AC, cable, etc; our "poverty line" is 20x the world median income.)
Probably why the Old Testament law mandates a 50-year “Year of Jubilee” where all debts are forgiven and all land returned to original owners. Things WILL get top-heavy, and WILL fall down (even propping up just delays the inevitable); if not content to let chips fall as they may, best to mandate a predictable periodic reset.
"If you have a hundred dollars and want to make two hundred, it is work
If you have ten million and want to make eleven - it is inevitable."
Letsee, what was going on then?
Well, single motherhood was getting a big boost. So the poor were getting poorer since the trend of the single-mother family was becoming permanent. At the other end of the spectrum, the wealthy male was increasingly no longer married to a stay-at-home wife but a woman with impressive earning power herself.
Who was to "blame" for these outcomes? The GOP sure didnt come up with LBJ's Great Society idiocy. And while it has gone along with a lot of feminist iniatives, I would not call it the prime mover behind them.
Of course it never occurs to the left to look in the mirror when seeking villains.
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