Wednesday, October 24, 2007

The obscenely wealthy and all the rest of us

Class is rarely mentioned in America today. We talk about sports, presidential elections and the past few days, forest fires. This isn’t to say that for people living in Southern California, experiencing the horrors of fire and devastation, there’s anything else they can focus on. Furthermore, death and natural disasters will always “lead,” when it comes to today’s news programming.

Despite ubiquitous news coverage, the scope of what gets reported seems to narrow over time. When Paris Hilton had her little run-in with the law, that’s all we seemed to have beamed into our homes. It’s probably not accidental, as corporations profit from the increasingly ignorant American population.

One of the things obvious to me in our very own state, is the growing chasm between those with real wealth and the rest of us. By using the term “us,” I’m lumping myself in with the diminished middle class (propped up by credit cards and other “smoke and mirrors” means of capital acquisition and attainment), watching whatever advantages that were carved and acquired during an aberrant period of post-WWII democratization and sharing of the wealth. Included in the “us” are those classified as lower income, some barely at a subsistence level and others living hand-to-mouth. For many of us on the bottom strata of the middle class, its not hard to imagine how easy it would be to descend to the bottom rungs of the socio-economic ladder. Social Darwinism, or the “survival of the fittest (or maybe, richest)” seems to be back in vogue in our fine nation.

I know it’s World Series night and all eyes will be focused on our national version of “bread and circuses,” but seeing this article by Holly Sklar and also, regularly rubbing elbows with people struggling to stay afloat, made it impossible for me to avoid injecting a dose of reality into today’s post.

One of the things that was apparent to me last Friday, when I was at the GrowSmart Summit, was that the crowd was not representative of most of Maine, at least the rural parts of Maine where average incomes are much lower than some of the more privileged parts of the state. Maybe that’s why panelists like David Flanagan, who keeps popping up on panels everywhere, are able to talk about cutting the state budget by $800 million and do so with a straight face, without batting an eye.

Here is a blog post linking to another article on the good fortunes of the richest Americans.

I give you Sklar’s article, which I read in Dissident Voice, in its entirety; consider this while you watch millionaires cavort and frolic about.

Billionaires Up, America Down
by, Holly Sklar

When it comes to producing billionaires, America is doing great.

Until 2005, multimillionaires could still make the Forbes list of the 400 richest Americans. In 2006, the Forbes 400 went billionaires only.

This year, you’d need a Forbes 482 to fit all the billionaires.

A billion dollars is a lot of dough. Queen Elizabeth II, British monarch for five decades, would have to add $400 million to her $600 million fortune to reach $1 billion. And she’d need another $300 million to reach the Forbes 400 minimum of $1.3 billion. The average Forbes 400 member has $3.8 billion.

When the Forbes 400 began in 1982, it was dominated by oil and manufacturing fortunes. Today, says Forbes, “Wall Street is king.”

Nearly half the 45 new members, says Forbes, “made their fortunes in hedge funds and private equity. Money manager John Paulson joins the list after pocketing more than $1 billion short-selling subprime credit this summer.”

The 25th anniversary of the Forbes 400 isn’t party time for America.

We have a record 482 billionaires — and record foreclosures.

We have a record 482 billionaires — and a record 47 million people without any health insurance.

Since 2000, we have added 184 billionaires — and 5 million more people living below the poverty line.

The official poverty threshold for one person was a ridiculously low $10,294 in 2006. That won’t get you two pounds of caviar ($9,800) and 25 cigars ($730) on the Forbes Cost of Living Extremely Well Index. The $20,614 family-of-four poverty threshold is lower than the cost of three months of home flower arrangements ($24,525).

Wealth is being redistributed from poorer to richer.

Between 1983 and 2004, the average wealth of the top 1 percent of households grew by 78 percent, reports Edward Wolff, professor of economics at New York University. The bottom 40 percent lost 59 percent.

In 2004, one out of six households had zero or negative net worth. Nearly one out of three households had less than $10,000 in net worth, including home equity. That’s before the mortgage crisis hit.

In 1982, when the Forbes 400 had just 13 billionaires, the highest paid CEO made $108 million and the average full-time worker made $34,199, adjusted for inflation in $2006. Last year, the highest paid hedge fund manager hauled in $1.7 billion, the highest paid CEO made $647 million, and the average worker made $34,861, with vanishing health and pension coverage.

The Forbes 400 is even more of a rich men’s club than when it began. The number of women has dropped from 75 in 1982 to 39 today.

The 400 richest Americans have a conservatively estimated $1.54 trillion in combined wealth. That amount is more than 11 percent of our $13.8 trillion Gross Domestic Product (GDP) — the total annual value of goods and services produced by our nation of 303 million people. In 1982, Forbes 400 wealth measured less than 3 percent of U.S. GDP.

And the rich, notes Fortune magazine, “give away a smaller share of their income than the rest of us.”

Thanks to mega-tax cuts, the rich can afford more mega-yachts, accessorized with helicopters and mini-submarines. Meanwhile, the infrastructure of bridges, levees, mass transit, parks and other public assets inherited from earlier generations of taxpayers crumbles from neglect, and the holes in the safety net are growing.

The top 1 percent of households — average income $1.5 million — will save a collective $79.5 billion on their 2008 taxes, reports Citizens for Tax Justice. That’s more than the combined budgets of the Transportation Department, Small Business Administration, Environmental Protection Agency and Consumer Product Safety Commission.

Tax cuts will save the top 1 percent a projected $715 billion between 2001 and 2010. And cost us $715 billion in mounting national debt plus interest.

The children and grandchildren of today’s underpaid workers will pay for the partying of today’s plutocrats and their retinue of lobbyists.

It’s time for Congress to roll back tax cuts for the wealthy and close the loophole letting billionaire hedge fund speculators pay taxes at a lower rate than their secretaries.

Inequality has roared back to 1920s levels. It was bad for our nation then. It’s bad for our nation now.

Distributed by McClatchy-Tribune News Service

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