As featured on p. 218 of "Bloggers on the Bus," under the name "a MyDD blogger."

Friday, August 21, 2009

The Plaintive Wail Of The Not-Quite-As-Obscenely-Rich

There's a new sub-genre in journalism, tracking the travails and hardships of the not-quite-as-obscenely-rich. Inequality is still at its highest level since the Gilded Age, mind you, and the top 1% still rakes in 35% of all compensation, but selected still-rich individuals lost a little of their fortunes. This is the stuff of front-page news.

Last year, the number of Americans with a net worth of at least $30 million dropped 24 percent, according to CapGemini and Merrill Lynch Wealth Management. Monthly income from stock dividends, which is concentrated among the affluent, has fallen more than 20 percent since last summer, the biggest such decline since the government began keeping records in 1959.

Bill Gates, Warren E. Buffett, the heirs to the Wal-Mart Stores fortune and the founders of Google each lost billions last year, according to Forbes magazine. In one stark example, John McAfee, an entrepreneur who founded the antivirus software company that bears his name, is now worth about $4 million, from a peak of more than $100 million. Mr. McAfee will soon auction off his last big property because he needs cash to pay his bills after having been caught off guard by the simultaneous crash in real estate and stocks.

“I had no clue,” he said, “that there would be this tandem collapse.”

You really have to be kidding me with this. The stock market dropped 40%, so we're talking about paper value, not real but imagined wealth. And none of it was real anyway. That same stock market is now at a 52-week high at today's close, so the first thing to come back in this so-called recovery has been the fortunes of these same lamented rich people. The jobs for everyday Americans, not so much.

The ostensible premise of the article, that lesser yields for the rich may lead to a flattening of income distribution and maybe some relief for the middle and lower classes, is proven wrong by the middle of the article.

Few economists expect the country to return to the relatively flat income distribution of the 1950s and 1960s. Indeed, they say that inequality is likely to remain significantly greater than it was for most of the 20th century. The Obama administration has not proposed completely rewriting the rules for Wall Street or raising the top income-tax rate to anywhere near 70 percent, its level as recently as 1980. Market forces that have increased inequality, like globalization, are also not going away.

No, the real reason for this article is so super-rich people can read about other super-rich people and not feel so bad about poor people dying in the streets because of their hoarded fortunes. For example, here's Mike Bloomberg, of all people, singing a dirge for the poor little rich people.

Billionaire Mayor Michael Bloomberg defended multibillion-dollar pharmaceutical companies and their chief executives on Friday, declaring that they "don't make a lot of money" and shouldn't be scapegoats in the health care debate.

The mayor – and wealthiest person in New York City with a fortune estimated at $16.5 billion – made the comments on his radio show Friday during a discussion about health care.

"You know, last time I checked, pharmaceutical companies don't make a lot of money, their executives don't make a lot of money – not that they couldn't be better," Bloomberg said.

Pharmaceutical CEOs are known to make millions, with generous salaries, stock options and other perks.

This is a guy who bought the Mayoralty in New York for $100 million dollars over two terms, talking about people who routinely make tens of millions of dollars and hold hundreds of millions more in stock options, telling the public that the plebes shouldn't revolt because things are tough all over and those pharmaceutical CEOs are barely scraping by.

Well, tell you what then. As long as CEOs from the insurance and drug industries are basically pikers, they should have no problem adhering to Henry Waxman's request and providing readouts of their salaries and perks, so they can prove to the world once and for all that they're in this for the saving of lives and not the filthy lucre. Surely they'll agree to that.

Maybe they'll even tell the New York Times what a bad year they're having.

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