Breaks MY Fucking Heart: Some of the Rich Are Growing Poorer!

(Below: 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. Photo: Chris Richards for The New York Times )


I know the following tale is a bit of a harsh for your weekend-morning buzz, dashing once again your nascent hopes to be able to cheat and steal yourselves into untold MILLION$$$, but I thought you should know. It makes me very sad (/snark) to imagine all the pathologicaly pushy, arrogantly arriviste, parvenu poseurs in(e.g.) Santa Fe frantically scrambling to peddle their expensive trinkets to keep their long snoots above the rising tide of collapse. Yeah. Right!

Via Yahoo & the NYT:

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. (2007 was the best year EVAH for the wealthy. W.)

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.

Right there my little middle-class, retired, Social Security heart started to break. Oh, the shame of it! To have ridden so high, and now to be reduced to mere single-digit millions! It was just too sad. But I read on:

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. (Notice the subjunctive mood of the verb "may?" W.)

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. (What it REALLY means is that wealth is becoming even MORE concentrated, as the number of the "rich" declines, and their wealth finds fewer, newer hands. W)

Just how much poorer the rich will become remains unclear. It will be determined by, among other things, whether the stock market continues its recent rally and what new laws Congress passes in the wake of the financial crisis. At the very least, though, the rich seem unlikely to return to the trajectory they were on. (Awwww. Now I really am fucking devastated! W.)

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.

Lemme see: A 20% decline in the dividend income, for someone bringing in, say $10 million/annum (a not-imaginary number) that way -- NOT working for it-- would knock 'em down to a measly $8 MILLION? Shit, Henry, sell the baby! And before you become 'verklempt' with emotion, consider:

Since 1980, tax rates on the affluent have fallen more than rates on any other group; this year, the top marginal rate is 35 percent. President Obama has proposed raising it to 39 percent and has said he would consider a surtax on families making more than $1 million a year, which could push the top rate above 40 percent.

What any policy changes will mean for the nonwealthy remains unclear. There have certainly been periods when the rich, the middle class and the poor all have done well (like the late 1990s), as well as periods when all have done poorly (like the last year). For much of the 1950s, ’60s and ’70s, both the middle class and the wealthy received raises that outpaced inflation.

Yet there is also a reason to think that the incomes of the wealthy could potentially have a bigger impact on others than in the past: as a share of the economy, they are vastly larger than they once were.

In 2007, the top one ten-thousandth of households took home 6 percent of the nation’s income, up from 0.9 percent in 1977. It was the highest such level since at least 1913, the first year for which the I.R.S. has data.

The top 1 percent of earners took home 23.5 percent of income, up from 9 percent three decades earlier.

One positive: Perhaps we may soon actually have evidence whether "The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread. ..."