Who Rules America? An Investment Manager's view on the top 1%

[InRareForm]

http://sociology.ucsc.edu/whorulesamerica/power/investment_manager.html

I sit in an interesting chair in the financial services industry. Our clients largely fall into the top 1%, have a net worth of $5,000,000 or above, and if working make over $300,000 per year. My observations on the sources of their wealth and concerns come from my professional and social activities within this group.

Work by various economists and tax experts make it indisputable that the top 1% controls a widely disproportionate share of the income and wealth in the United States. When does one enter that top 1%? (I'll use "k" for 1,000 and "M" for 1,000,000 as we usually do when communicating with clients or discussing money; thousands and millions take too much time to say.) Available data isn't exact, but a family enters the top 1% or so today with somewhere around $300k to $400k in pre-tax annual income and over $1.2M in net worth. Compared to the average American family with a pre-tax income in the mid-$50k range and net worth around $120k, this probably seems like a lot of money. But, there are big differences within that top 1%, with the wealth distribution highly skewed towards the top 0.1%.

The Lower Half of the Top 1%

The 99th to 99.5th percentiles largely include physicians, attorneys, upper middle management, and small business people who have done well. Everyone's tax situation is, of course, a little different. On earned income in this group, we can figure somewhere around 25% to 30% of total pre-tax income will go to Federal, State, and Social Security taxes, leaving them with around $250k to $300k post tax. This group makes extensive use of 401-k's, SEP-IRA's, Defined Benefit Plans, and other retirement vehicles, which defer taxes until distribution during retirement. Typical would be yearly contributions in the $50k to $100k range, leaving our elite working group with yearly cash flows of $175k to $250k after taxes, or about $15k to $20k per month.

Until recently, most studies just broke out the top 1% as a group. Data on net worth distributions within the top 1% indicate that one enters the top 0.5% with about $1.8M, the top 0.25% with $3.1M, the top 0.10% with $5.5M and the top 0.01% with $24.4M. Wealth distribution is highly skewed towards the top 0.01%, increasing the overall average for this group. The net worth for those in the lower half of the top 1% is usually achieved after decades of education, hard work, saving and investing as a professional or small business person. While an after-tax income of $175k to $250k and net worth in the $1.2M to $1.8M range may seem like a lot of money to most Americans, it doesn't really buy freedom from financial worry or access to the true corridors of power and money. That doesn't become frequent until we reach the top 0.1%.

I've had many discussions in the last few years with clients with "only" $5M or under in assets, those in the 99th to 99.9th percentiles, as to whether they have enough money to retire or stay retired. That may sound strange to the 99% not in this group, but generally accepted "safe" retirement distribution rates for a 30 year period are in the 3-5% range, with 4% as the current industry standard. Assuming that the lower end of the top 1% has, say, $1.2M in investment assets, their retirement income will be about $50k per year plus maybe $30k-$40k from Social Security, so let's say $90k per year pre-tax and $75-$80k post-tax if they wish to plan for 30 years of withdrawals. For those with $1.8M in retirement assets, that rises to around $120-150k pretax per year and around $100k after tax. If someone retires with $5M today, roughly the beginning rung for entry into the top 0.1%, they can reasonably expect an income of $240k pretax and around $190k post tax, including Social Security.

While income and lifestyle are all relative, an after-tax income between $6.6k and $8.3k per month today will hardly buy the fantasy lifestyles that Americans see on TV and would consider "rich". In many areas in California or the East Coast, this positions one squarely in the hard working upper-middle class, and strict budgeting will be essential. An income of $190k post tax or $15.8k per month will certainly buy a nice lifestyle but is far from rich. And, for those folks who made enough to accumulate this much wealth during their working years, the reduction in income and lifestyle during retirement can be stressful. Plus, watching retirement accounts deplete over time isn't fun, not to mention the ever-fluctuating value of these accounts and the desire of many to leave a substantial inheritance. Our poor lower half of the top 1% lives well but has some financial worries.

Since the majority of those in this group actually earned their money from professions and smaller businesses, they generally don't participate in the benefits big money enjoys. Those in the 99th to 99.5th percentile lack access to power. For example, most physicians today are having their incomes reduced by HMO's, PPO's and cost controls from Medicare and insurance companies; the legal profession is suffering from excess capacity, declining demand and global outsourcing; successful small businesses struggle with increasing regulation and taxation. I speak daily with these relative winners in the economic hierarchy and many express frustration.

Unlike those in the lower half of the top 1%, those in the top half and, particularly, top 0.1%, can often borrow for almost nothing, keep profits and production overseas, hold personal assets in tax havens, ride out down markets and economies, and influence legislation in the U.S. They have access to the very best in accounting firms, tax and other attorneys, numerous consultants, private wealth managers, a network of other wealthy and powerful friends, lucrative business opportunities, and many other benefits. Most of those in the bottom half of the top 1% lack power and global flexibility and are essentially well-compensated workhorses for the top 0.5%, just like the bottom 99%. In my view, the American dream of striking it rich is merely a well-marketed fantasy that keeps the bottom 99.5% hoping for better and prevents social and political instability. The odds of getting into that top 0.5% are very slim and the door is kept firmly shut by those within it.

The Upper Half of the Top 1%

Membership in this elite group is likely to come from being involved in some aspect of the financial services or banking industry, real estate development involved with those industries, or government contracting. Some hard working and clever physicians and attorneys can acquire as much as $15M-$20M before retirement but they are rare. Those in the top 0.5% have incomes over $500k if working and a net worth over $1.8M if retired. The higher we go up into the top 0.5% the more likely it is that their wealth is in some way tied to the investment industry and borrowed money than from personally selling goods or services or labor as do most in the bottom 99.5%. They are much more likely to have built their net worth from stock options and capital gains in stocks and real estate and private business sales, not from income which is taxed at a much higher rate. These opportunities are largely unavailable to the bottom 99.5%.

Recently, I spoke with a younger client who retired from a major investment bank in her early thirties, net worth around $8M. We can estimate that she had to earn somewhere around twice that, or $14M-$16M, in order to keep $8M after taxes and live well along the way, an impressive accomplishment by such an early age. Since I knew she held a critical view of investment banking, I asked if her colleagues talked about or understood how much damage was created in the broader economy from their activities. Her answer was that no one talks about it in public but almost all understood and were unbelievably cynical, hoping to exit the system when they became rich enough.

Folks in the top 0.1% come from many backgrounds but it's infrequent to meet one whose wealth wasn't acquired through direct or indirect participation in the financial and banking industries. One of our clients, net worth in the $60M range, built a small company and was acquired with stock from a multi-national. Stock is often called a "paper" asset. Another client, CEO of a medium-cap tech company, retired with a net worth in the $70M range. The bulk of any CEO's wealth comes from stock, not income, and incomes are also very high. Last year, the average S&P 500 CEO made $9M in all forms of compensation. One client runs a division of a major international investment bank, net worth in the $30M range and most of the profits from his division flow directly or indirectly from the public sector, the taxpayer. Another client with a net worth in the $10M range is the ex-wife of a managing director of a major investment bank, while another was able to amass $12M after taxes by her early thirties from stock options as a high level programmer in a successful IT company. The picture is clear; entry into the top 0.5% and, particularly, the top 0.1% is usually the result of some association with the financial industry and its creations. I find it questionable as to whether the majority in this group actually adds value or simply diverts value from the US economy and business into its pockets and the pockets of the uber-wealthy who hire them. They are, of course, doing nothing illegal.

I think it's important to emphasize one of the dangers of wealth concentration: irresponsibility about the wider economic consequences of their actions by those at the top. Wall Street created the investment products that produced gross economic imbalances and the 2008 credit crisis. It wasn't the hard-working 99.5%. Average people could only destroy themselves financially, not the economic system. There's plenty of blame to go around, but the collapse was primarily due to the failure of complex mortgage derivatives, CDS credit swaps, cheap Fed money, lax regulation, compromised ratings agencies, government involvement in the mortgage market, the end of the Glass-Steagall Act in 1999, and insufficient bank capital. Only Wall Street could put the economy at risk and it had an excellent reason to do so: profit. It made huge profits in the build-up to the credit crisis and huge profits when it sold itself as "too big to fail" and received massive government and Federal Reserve bailouts. Most of the serious economic damage the U.S. is struggling with today was done by the top 0.1% and they benefited greatly from it.

Not surprisingly, Wall Street and the top of corporate America are doing extremely well as of June 2011. For example, in Q1 of 2011, America's top corporations reported 31% profit growth and a 31% reduction in taxes, the latter due to profit outsourcing to low tax rate countries. Somewhere around 40% of the profits in the S&P 500 come from overseas and stay overseas, with about half of these 500 top corporations having their headquarters in tax havens. If the corporations don't repatriate their profits, they pay no U.S. taxes. The year 2010 was a record year for compensation on Wall Street, while corporate CEO compensation rose by over 30%, most Americans struggled. In 2010 a dozen major companies, including GE, Verizon, Boeing, Wells Fargo, and Fed Ex paid US tax rates between -0.7% and -9.2%. Production, employment, profits, and taxes have all been outsourced. Major U.S. corporations are currently lobbying to have another "tax-repatriation" window like that in 2004 where they can bring back corporate profits at a 5.25% tax rate versus the usual 35% US corporate tax rate. Ordinary working citizens with the lowest incomes are taxed at 10%.

I could go on and on, but the bottom line is this: A highly complex and largely discrete set of laws and exemptions from laws has been put in place by those in the uppermost reaches of the U.S. financial system. It allows them to protect and increase their wealth and significantly affect the U.S. political and legislative processes. They have real power and real wealth. Ordinary citizens in the bottom 99.9% are largely not aware of these systems, do not understand how they work, are unlikely to participate in them, and have little likelihood of entering the top 0.5%, much less the top 0.1%. Moreover, those at the very top have no incentive whatsoever for revealing or changing the rules. I am not optimistic.

[SnakeBoy]

Sociologist pretending to be an anonymous investment manager...Nice.

[DarrinS]

Take 100% of the income from those making 10 million or more per year and you could run the govt for about 20 whole days.

[InRareForm]

Sociologist pretending to be an anonymous investment manager...Nice.

:rolleyes

I guess you missed this part:


This article was written by an investment manager who works with very wealthy clients. I knew him from decades ago, but he recently e-mailed me with some concerns he had about what was happening with the economy. What he had to say was informative enough that I asked if he might fashion what he had told me into a document for the Who Rules America Web site. He agreed to do so, but only on the condition that the document be anonymous, because he does not want to jeopardize his relationships with his clients or other investment professionals.

[Wild Cobra]

Why are people either so jealous or hateful of the rich?

[InRareForm]

Why are people either so jealous or hateful of the rich?

Loaded statement.

We love professional sports/entertainers don't we?

It's the other fuckers who are on top who don't care about anyone below them. Like the article says, they want to keep their top % to themselves and say Fuck you to the rest.

[Wild Cobra]

Loaded statement.

We love professional sports/entertainers don't we?

It's the other fuckers who are on top who don't care about anyone below them. Like the article says, they want to keep their top % to themselves and say Fuck you to the rest.
Do you know that as fact?

They made it to the top. What if they are lonely, and wished others could join them?

[TDMVPDPOY]

either stay in school and work ur ass off get a good job with ur grades and work ur ass off

have enough money, take the risks and start ur own business and work ur way up the pay scale...

the old saying goes, the poor hates the rich, the poor will do everything to drag the rich down to their level...

one thing with the rich, there is certain benefits they cant access due to their income means tested, even if they are tax in the highest income bracket...they are still well off cause of some of the benefits the rich have having access to good wealth managers and the like whether its investment, deferring taxes, or avoiding taxes...lol

ppl who take risks know the end result, either ppl look down on them if they fail, ppl are jealous if they are successful....fck haters will continue to hate no matter what

[ElNono]

Take 100% of the income from those making 10 million or more per year and you could run the govt for about 20 whole days.

I don't think anybody is advocating a 100% tax on them. Link?

[DarrinS]

Loaded statement.

We love professional sports/entertainers don't we?

It's the other fuckers who are on top who don't care about anyone below them.


Generalize much?

[DarrinS]

I don't think anybody is advocating a 100% tax on them. Link?

I'm just trying to show that soaking the super rich doesn't solve the problem. It may make some people "feel" better, but it doesn't do much to close the gap between spending and revenue.

[SnakeBoy]

:rolleyes

I guess you missed this part:


This article was written by an investment manager who works with very wealthy clients. I knew him from decades ago, but he recently e-mailed me with some concerns he had about what was happening with the economy. What he had to say was informative enough that I asked if he might fashion what he had told me into a document for the Who Rules America Web site. He agreed to do so, but only on the condition that the document be anonymous, because he does not want to jeopardize his relationships with his clients or other investment professionals.

:lol No I read that part. Ok it's written by an anonymous investment manager whose writing stlye is the same as the leftist sociologist who claims it is from an anonymous investment manager. I guess you're buying it.

[SnakeBoy]

That anonymous investment manager really went out on a limb. Rich people are rich, rich people have power, rich people want to keep getting richer. It's shocking stuff, who would've thunk it.

[ElNono]

I'm just trying to show that soaking the super rich doesn't solve the problem. It may make some people "feel" better, but it doesn't do much to close the gap between spending and revenue.

It does do some. There's rampant tax evasion in the form of loopholes going on if not by these guys income taxes alone, but on a lot of the companies these guys do run. We're talking trillions parked overseas. Not to mention the dividends tax rate they pay is amongst the lowest in the nation (compared to other income tax rates).

Is it the end-all, be-all solution? No. I don't think anybody is advocating that.
But if this is going to take some 'shared sacrifice' by everyone chipping in more money, those who have the most need to share in the pain. And unless you remove those tax loopholes and tax incentives, then they won't.

[ElNono]

That anonymous investment manager really went out on a limb. Rich people are rich, rich people have power, rich people want to keep getting richer. It's shocking stuff, who would've thunk it.

I didn't read the OP, so thanks for the cliff notes. :lol

[Winehole23]

I thought the distinction b/w the top and bottom half of the top 1% was interesting in passing.

[Wild Cobra]

I thought the distinction b/w the top and bottom half of the top 1% was interesting in passing.
I don't think very many people realize just how small the category of actual rich people is. I cringe every time someone want to tax even more from those earning six figures. Don't they pay enough in taxes already?

[Winehole23]

No.

[Winehole23]

Taxation is at multi-decade lows.

[ChuckD]

I don't think very many people realize just how small the category of actual rich people is.

Oh, I definitely do. I don't think you know that those 1% have 24% of the net worth in the USA. The standard definition of a Banana Republic, totally controlled and owned by the rich is 20%. When the wealth divide gets that great, violence ensues. It's like osmosis. It's a process that will happen whether you want it to or not. Right now, we are sitting about where Mexico was 20-25 years ago.

[Wild Cobra]

Oh, I definitely do. I don't think you know that those 1% have 24% of the net worth in the USA. The standard definition of a Banana Republic, totally controlled and owned by the rich is 20%. When the wealth divide gets that great, violence ensues. It's like osmosis. It's a process that will happen whether you want it to or not. Right now, we are sitting about where Mexico was 20-25 years ago.
My response was in the distinction made between the 99 percentile and the 99.5 percentile. They 20% you speak of, if accurate, is mostly by the 99.5 percentile, maybe the 99.9 percentile.

Besides. Who cares. Wealth is not fixed, and to think because one group has most of it, and thinking it deprives others of their share is the wrong way to think of it. When you try to take others wealth instead of creating more wealth, you are creating a problem rather than a solution.

[FuzzyLumpkins]

Take 100% of the income from those making 10 million or more per year and you could run the govt for about 20 whole days.

Nobody other than you and your RNC thinktank speak proposes $10m as the cutoff point. Thats a game called look at a graph and find the cutoff point.

[Agloco]

Why are people either so jealous or hateful of the rich?

Because to the layperson, the rich = Paris Hilton, Lindsey Lohan, et al.

There's a general perception that being or becoming rich requires luck and little else. Seeing the aforementioned riff-raff on the boob-tube every night does nothing to foster a sympathetic ear.

Really, its just hard for anyone who has to wonder week to week about how to put food on the table to listen to someone complain about higher taxes, especially when that someone has the option of never having to work another day in their life.

[vy65]

No.

That's easy for you to say.

[Wild Cobra]

Because to the layperson, the rich = Paris Hilton, Lindsey Lohan, et al.

There's a general perception that being or becoming rich requires luck and little else. Seeing the aforementioned riff-raff on the boob-tube every night does nothing to foster a sympathetic ear.

Really, its just hard for anyone who has to wonder week to week about how to put food on the table to listen to someone complain about higher taxes, especially when that someone has the option of never having to work another day in their life.
And I have a hard time listening to some of the silly rants here in these forums.

We all have things we dislike about others. I find the petty hatred of others, over coveted wealth, very distasteful. I'm perfectly happy with everyone paying the same tax rate, and the wealthy would pay more in taxes just because they earn more. I think the idea of raising the tax rate also is flat out wrong, and class warfare.

[Wild Cobra]

That's easy for you to say.
Actually, I think it was very hard for him to say so little!

[vy65]

Because to the layperson, the rich = Paris Hilton, Lindsey Lohan, et al.

There's a general perception that being or becoming rich requires luck and little else. Seeing the aforementioned riff-raff on the boob-tube every night does nothing to foster a sympathetic ear.

Really, its just hard for anyone who has to wonder week to week about how to put food on the table to listen to someone complain about higher taxes, especially when that someone has the option of never having to work another day in their life.

And there are people who come from very modest backgrounds, who work their ass off in school to get a good job, and who slave away at their work to earn their wealth. These people exemplify the values that we, as a society, laud: hard work, determination, and eventual success.

Yet once someone arrives at this point - I'm taking the 99-99.5% bracket of young professional lawyers, doctors, etc... - they immediately become demonized. I don't understand that at all.

[FuzzyLumpkins]

And there are people who come from very modest backgrounds, who work their ass off in school to get a good job, and who slave away at their work to earn their wealth. These people exemplify the values that we, as a society, laud: hard work, determination, and eventual success.

Yet once someone arrives at this point - I'm taking the 99-99.5% bracket of young professional lawyers, doctors, etc... - they immediately become demonized. I don't understand that at all.

The financial sector has been marginalizing other industries for quite some time. Scientists, engineers, lawyers, doctors etc. At the same time they accumulate the vast majority of wealth.

[Wild Cobra]

The financial sector has been marginalizing other industries for quite some time. Scientists, engineers, lawyers, doctors etc. At the same time they accumulate the vast majority of wealth.

Wealth is not that limited. Why do you think when others have more, it's a piece of your pie?

[FuzzyLumpkins]

Wealth is not that limited. Why do you think when others have more, it's a piece of your pie?

You ever worked with financiers on a design project?

[ElNono]

That's easy for you to say.

Sure it is. Class warfare goes both ways. It's only one side that has enough money to influence politics though.

[boutons_deux]

"Wealth is not that limited. Why do you think when others have more, it's a piece of your pie?"

The correlation perfect between explosion of mgmt compensation and staganation/decline of household income.

St Ronnie started it off by raising SS tax, while cutting capital gains and wealthy income tax, and firing the unionized air traffic controllers after 2 days on strike (let's bust ALL unions, bust their salaries, so mgmt and investors could pocket those salaries), signalling that the VRWC had arrived, weatlhy class' war on lower 95%, war on employees, etc.

Nearly ALL of the pie increases of these last 35 years have gone to the wealthy. No more than ever, America is brutal, predatory project of social/economic Darwinism.

[ElNono]

Yet once someone arrives at this point - I'm taking the 99-99.5% bracket of young professional lawyers, doctors, etc... - they immediately become demonized. I don't understand that at all.

I think they were talking about the top 1%. I don't think 99-99.5% of young professional lawyers, doctors, etc are at that level at all.

[ElNono]

And BTW, hedge fund managers probably make much more than any of those professionals putting in half the work. But how much they make isn't the problem (at least I have no problem with it). It's how that money is eventually leveraged to gain an political advantage for the class.

[DarrinS]

Nobody other than you and your RNC thinktank speak proposes $10m as the cutoff point. Thats a game called look at a graph and find the cutoff point.

Just talking about the corporate jet owners so frequently sited by Obama.

[DMX7]

Why are people either so jealous or hateful of the rich?

I'm not.

[Wild Cobra]

I'm not.
No, because its the others obviously being an ass.

[FuzzyLumpkins]

Just talking about the corporate jet owners so frequently sited by Obama.

And he is talking about a class within the subset he is actually talking about increasing tax levels. Its called framing and political PR machines do it and then you regurgitate it.

You have no independent political thought that I have seen.

[FuzzyLumpkins]

Why are people either so jealous or hateful of the rich?

The thing is that I know what industrial maintenance supervisors in the NW make and you do not make even a third to be included in the group discussed in the OP. You do not have a horse in that particular race yet you so incessantly regurgitate the exact rhetoric they put out. It would be funny if it was not so sad.

[InRareForm]

That anonymous investment manager really went out on a limb. Rich people are rich, rich people have power, rich people want to keep getting richer. It's shocking stuff, who would've thunk it.

You bitter old man. Take it easy :lol

I think it was more of a brief breakdown what the top 1%. That there is a big divide within that 1% as well.

[Agloco]

Why are people either so jealous or hateful of the rich?


Because to the layperson, the rich = Paris Hilton, Lindsey Lohan, et al.

There's a general perception that being or becoming rich requires luck and little else. Seeing the aforementioned riff-raff on the boob-tube every night does nothing to foster a sympathetic ear.

Really, its just hard for anyone who has to wonder week to week about how to put food on the table to listen to someone complain about higher taxes, especially when that someone has the option of never having to work another day in their life.


And I have a hard time listening to some of the silly rants here in these forums.

You asked. It is what it is.



We all have things we dislike about others. I find the petty hatred of others, over coveted wealth, very distasteful.

Sure it's distasteful. To the majority of Americans though, it represnts the difference between needing to worry abot that next mortgage payment or not. They'll gladly hate away, despite your objections.


I'm perfectly happy with everyone paying the same tax rate

Of course you are, you appear to have plenty of dispoable income and no perspective.


I think the idea of raising the tax rate also is flat out wrong, and class warfare.

Ever think of what the endgame is for the rich if they dont bear a large burden of taxation?

[boutons_deux]

WC supports destructive class warfare from the top to bottom, doesn't even think it's class warfare, but despises class warfare from the from bottom to top, that's unfair, derides any pushback at all.

"Sure there's Class Warfare, and my Class is winning" -- Warren Buffet

[vy65]

The financial sector has been marginalizing other industries for quite some time. Scientists, engineers, lawyers, doctors etc. At the same time they accumulate the vast majority of wealth.

Either you don't know what marginalizing means, or you're wrong.

[vy65]

I think they were talking about the top 1%. I don't think 99-99.5% of young professional lawyers, doctors, etc are at that level at all.

Exactly. But they get lumped into that group because of their profession. That's my point.

[boutons_deux]

Either you don't know what marginalizing means, or you're wrong.

Wall Street’s Euthanasia of Industry

What we have now instead is euthanasia of employees, euthanasia of industry and of entire economies to siphon off rent extraction, interest and financial fees to the top of the economy.

The problem is that trying to pay debts rather than writing them down to realistic ability to pay (or writing down mortgages to the market price) and increasing taxes is pushing the U.S. and foreign economies into a depression. And the worst thing is that this is viewed as a solution – supposedly making economies more “competitive” by “squeezing out the fat.” What it is doing is passing the fat to the top of the economic pyramid, like globules floating on the broth, as Werner Sombart described the rentier class a century ago.

The Obama administration raised the financial sector’s bailout to $13 trillion. This has vastly increased the government debt. And now, Mr. Obama wants to bring it back down by cutting back Social Security, Medicare, Medicaid and other social spending – to transfer wealth and income to the top of the economic pyramid

http://michael-hudson.com/2011/07/the-euthanasia-of-industry/

========

The financial sector owns and runs the country.

[ElNono]

Exactly. But they get lumped into that group because of their profession. That's my point.

I can only speak for myself. I really have no problem with professionals earning their share. I have a problem with those at the top 1% that pay off to have a bullshit tax holiday promising to invest it in jobs, then use it to pay themselves, effectively taking a juicy dump all over the rest of us.

[Sisk]

Loaded statement.

We love professional sports/entertainers don't we?

It's the other fuckers who are on top who don't care about anyone below them. Like the article says, they want to keep their top % to themselves and say Fuck you to the rest.

You think professional athletes give a fuck about people below them?

[InRareForm]

You think professional athletes give a fuck about people below them?

Some do some don't. But at least they give back entertainment to us bottom 99%

[FuzzyLumpkins]

Either you don't know what marginalizing means, or you're wrong.

Nice vague dismissal. I know exactly what it means.

[Sisk]

Some do some don't. But at least they give back entertainment to us bottom 99%

The people that make them in that 1% are the same people that you say don't give back to the bottom 99%.

[angrydude]

I agree with this article.

Banking is not like regular corporations and should not be treated as if it were Walmart.

Our modern financial system is a bloodsucking leach that enslaves everyone not in the "know". Wall Street essentially makes its money by stealing it from everyone else. Every dollar that is printed out of thin air is theft from everyone else in the world who already holds dollars.

Then the real rich call the professional class rich and the poor believe them. In reality they are just well paid wage slaves.

Until the financial industry is drastically neutered (which won't happen because they own the govt.) these problems aren't going away.

[InRareForm]

The people that make them in that 1% are the same people that you say don't give back to the bottom 99%.

I see what you did there.

[boutons_deux]

James Galbraith on How Fraud and Bad Economic Thinking Got Us in This Mess

Our resident mortgage maven Tom Adams pointed me to a speech by James Galbraith via selise at FireDogLake, which discusses, among other things, how certain key lines of thinking are effectively absent from economics, as well as a lengthy discussion of the failure to consider the role of fraud. Galbraith is not exaggerating. The landmark 1994 paper on looting, or bankruptcy for profit, by George Akerlof and Paul Romer, was completely ignored from a policy standpoint even though it explained why the US had a savings and loan crisis.

Similarly, Galbraith refers to an incident at the most recent Institute for New Economic Thinking conference, in which he stood up and said, more or less, that he couldn’t believe he has just heard a panel discussion on the financial crisis and no one mentioned fraud. The stunning part was how utterly unreceptive the panel and the audience were to his observation. You’d think he’d had the bad taste to say the host had syphilis.

I strongly urge you to read the entire piece; non-economists may want to skim the first third and focus on the crisis material and what follows. This is the key paragraph:

This is the diagnosis of an irreversible disease. The corruption and collapse of the rule of law, in the financial sphere, is basically irreparable. It’s not just that restoring trust takes a long time. It’s that under the new technological order in this field, it can not be done. The technologies are designed to sow and foster distrust and that is the consequence of using them. The recent experience proves this, it seems to me. And therefore there can be no return to the way things were before. In other words, we are at the end of the illusion of a market place in the financial sphere.

http://www.nakedcapitalism.com/2011/08/james-galbraith-on-fraud-and-how-bad-economic-thinking-got-us-in-this-mess.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capi talism%29

but y'all give your money to these criminals and expect them NOT to abuse and steal from you? to act in YOUR best interests, and not THEIRS? :lol

And y'all want to kill SS and give $Ts to Wall St? :lol

========

Note how thorgoughly Wall St, VRWC, Repugs, Fox Repug Propaganda Network, conservative stink tanks, conservative hate-media have totally steered the conversation and accountability away from Wall St and capitalists for their overwhelmingly dominant, causative role in cratering the world's economies. It's all the fault (propaganda alert!) of F&F, CRA, and stupid homeowners, as Whott, and many others argued here, and still hold that position.

and of course, as the excellent Marian Wang has documented, the executives of the most egregiously corrupt go unprosecuted, and nobody goes to jail.

Cheat Sheet on Bank Investigations and the Probes That Have Petered Out

As we and many others have noted, no top banking executives have been successfully prosecuted in connection with the financial crisis: not for making the bad loans that fed the mortgage machine, not for lying about the quality of the mortgages, and not for foreclosing improperly when homeowners struggled to make loan payments.

In 2008, the city of Cleveland sued Deutsche Bank and other financial institutions alleging that subprime mortgage lending practices had resulted in widespread foreclosures and blight. A judge dismissed the suit.

etc, etc, etc.

http://www.propublica.org/blog/item/cheat-sheet-on-bank-investigations-and-the-probes-that-have-petered-out

====

Get caught with a joint? You're arrested, fined, and your job prospects are pretty much shot due to the arrest record, esp if you're black or brown.

[Marcus Bryant]

I've never understood why Cobra Commander has such concern for the wealthy. I'm not predisposed to punitive state actions against the wealthy and those with high incomes, but frankly their wellbeing is not a major daily concern of mine.

[boutons_deux]

"Cobra Commander"

I think he's wealthy guy, one of the top 1%. At least he whines about tax and govt as much as any 1%-er. Was it CC that runs a company that is a parasite on the bloated, stinking, corrupt carcass called US FOR-PROFIT sick-care industry?

[Wild Cobra]

I've never understood why Cobra Commander has such concern for the wealthy. I'm not predisposed to punitive state actions against the wealthy and those with high incomes, but frankly their wellbeing is not a major daily concern of mine.
I simply know a two people, who through hard work, became part of that upper income crowd. They were both small business owners who employed hundreds by the time they seceded.

[boutons_deux]

'seceded."

so these two are hate-government secessionists?

[Spurminator]

I'm just trying to show that soaking the super rich doesn't solve the problem. It may make some people "feel" better, but it doesn't do much to close the gap between spending and revenue.


You must really be hearing this talking point a lot on your radio the last few weeks because you keep repeating it over and over. Like it's some big genius epiphany that renders any discussion of increased taxes moot. You realize your line of reasoning could be applied at any tax rate? 10 years from now when the highest tax rate is 10%, you could oppose an increase to 12% by saying "Hey, we'd still be in debt if we made it 100%!"

That's because it's a stupid argument for stupid people like you. You fucking sheep.

[Agloco]

Because to the layperson, the rich = Paris Hilton, Lindsey Lohan, et al.

There's a general perception that being or becoming rich requires luck and little else. Seeing the aforementioned riff-raff on the boob-tube every night does nothing to foster a sympathetic ear.

Really, its just hard for anyone who has to wonder week to week about how to put food on the table to listen to someone complain about higher taxes, especially when that someone has the option of never having to work another day in their life.


And there are people who come from very modest backgrounds, who work their ass off in school to get a good job, and who slave away at their work to earn their wealth. These people exemplify the values that we, as a society, laud: hard work, determination, and eventual success.

Yet once someone arrives at this point - I'm taking the 99-99.5% bracket of young professional lawyers, doctors, etc... - they immediately become demonized. I don't understand that at all.

:tu

As I told WC, it is what it is. The "have-nots" don't get "to that point" for various reasons. Then, human nature and an overall lack of perspective/knowledge takes over. You'll be hard pressed to find anyone who makes less than 50k who fully appreciates the work required of those who work their way up the social ladder like you illustrated (yes I generalized......).

One rotten apple spoils the bunch, and it's worm-laden cores like Lohan and Hilton that folks will remember, despite all of the hard workers out there.

[DarrinS]

You must really be hearing this talking point a lot on your radio the last few weeks because you keep repeating it over and over. Like it's some big genius epiphany that renders any discussion of increased taxes moot. You realize your line of reasoning could be applied at any tax rate? 10 years from now when the highest tax rate is 10%, you could oppose an increase to 12% by saying "Hey, we'd still be in debt if we made it 100%!"

That's because it's a stupid argument for stupid people like you. You fucking sheep.

If common sense is a stupid argument, then guilty as charged.

[DarkReign]

Never understood those who produce nothing, create nothing are the most wealthy individuals in the world.

But thats capitalism in a nutshell.

[RandomGuy]

http://sociology.ucsc.edu/whorulesamerica/power/investment_manager.html

I sit in an interesting chair in the financial services industry. Our clients largely fall into the top 1%, have a net worth of $5,000,000 or above, and if working make over $300,000 per year. My observations on the sources of their wealth and concerns come from my professional and social activities within this group.

Work by various economists and tax experts make it indisputable that the top 1% controls a widely disproportionate share of the income and wealth in the United States. When does one enter that top 1%? (I'll use "k" for 1,000 and "M" for 1,000,000 as we usually do when communicating with clients or discussing money; thousands and millions take too much time to say.) Available data isn't exact, but a family enters the top 1% or so today with somewhere around $300k to $400k in pre-tax annual income and over $1.2M in net worth. Compared to the average American family with a pre-tax income in the mid-$50k range and net worth around $120k, this probably seems like a lot of money. But, there are big differences within that top 1%, with the wealth distribution highly skewed towards the top 0.1%.

The Lower Half of the Top 1%

The 99th to 99.5th percentiles largely include physicians, attorneys, upper middle management, and small business people who have done well. Everyone's tax situation is, of course, a little different. On earned income in this group, we can figure somewhere around 25% to 30% of total pre-tax income will go to Federal, State, and Social Security taxes, leaving them with around $250k to $300k post tax. This group makes extensive use of 401-k's, SEP-IRA's, Defined Benefit Plans, and other retirement vehicles, which defer taxes until distribution during retirement. Typical would be yearly contributions in the $50k to $100k range, leaving our elite working group with yearly cash flows of $175k to $250k after taxes, or about $15k to $20k per month.

Until recently, most studies just broke out the top 1% as a group. Data on net worth distributions within the top 1% indicate that one enters the top 0.5% with about $1.8M, the top 0.25% with $3.1M, the top 0.10% with $5.5M and the top 0.01% with $24.4M. Wealth distribution is highly skewed towards the top 0.01%, increasing the overall average for this group. The net worth for those in the lower half of the top 1% is usually achieved after decades of education, hard work, saving and investing as a professional or small business person. While an after-tax income of $175k to $250k and net worth in the $1.2M to $1.8M range may seem like a lot of money to most Americans, it doesn't really buy freedom from financial worry or access to the true corridors of power and money. That doesn't become frequent until we reach the top 0.1%.

I've had many discussions in the last few years with clients with "only" $5M or under in assets, those in the 99th to 99.9th percentiles, as to whether they have enough money to retire or stay retired. That may sound strange to the 99% not in this group, but generally accepted "safe" retirement distribution rates for a 30 year period are in the 3-5% range, with 4% as the current industry standard. Assuming that the lower end of the top 1% has, say, $1.2M in investment assets, their retirement income will be about $50k per year plus maybe $30k-$40k from Social Security, so let's say $90k per year pre-tax and $75-$80k post-tax if they wish to plan for 30 years of withdrawals. For those with $1.8M in retirement assets, that rises to around $120-150k pretax per year and around $100k after tax. If someone retires with $5M today, roughly the beginning rung for entry into the top 0.1%, they can reasonably expect an income of $240k pretax and around $190k post tax, including Social Security.

While income and lifestyle are all relative, an after-tax income between $6.6k and $8.3k per month today will hardly buy the fantasy lifestyles that Americans see on TV and would consider "rich". In many areas in California or the East Coast, this positions one squarely in the hard working upper-middle class, and strict budgeting will be essential. An income of $190k post tax or $15.8k per month will certainly buy a nice lifestyle but is far from rich. And, for those folks who made enough to accumulate this much wealth during their working years, the reduction in income and lifestyle during retirement can be stressful. Plus, watching retirement accounts deplete over time isn't fun, not to mention the ever-fluctuating value of these accounts and the desire of many to leave a substantial inheritance. Our poor lower half of the top 1% lives well but has some financial worries.

Since the majority of those in this group actually earned their money from professions and smaller businesses, they generally don't participate in the benefits big money enjoys. Those in the 99th to 99.5th percentile lack access to power. For example, most physicians today are having their incomes reduced by HMO's, PPO's and cost controls from Medicare and insurance companies; the legal profession is suffering from excess capacity, declining demand and global outsourcing; successful small businesses struggle with increasing regulation and taxation. I speak daily with these relative winners in the economic hierarchy and many express frustration.

Unlike those in the lower half of the top 1%, those in the top half and, particularly, top 0.1%, can often borrow for almost nothing, keep profits and production overseas, hold personal assets in tax havens, ride out down markets and economies, and influence legislation in the U.S. They have access to the very best in accounting firms, tax and other attorneys, numerous consultants, private wealth managers, a network of other wealthy and powerful friends, lucrative business opportunities, and many other benefits. Most of those in the bottom half of the top 1% lack power and global flexibility and are essentially well-compensated workhorses for the top 0.5%, just like the bottom 99%. In my view, the American dream of striking it rich is merely a well-marketed fantasy that keeps the bottom 99.5% hoping for better and prevents social and political instability. The odds of getting into that top 0.5% are very slim and the door is kept firmly shut by those within it.

The Upper Half of the Top 1%

Membership in this elite group is likely to come from being involved in some aspect of the financial services or banking industry, real estate development involved with those industries, or government contracting. Some hard working and clever physicians and attorneys can acquire as much as $15M-$20M before retirement but they are rare. Those in the top 0.5% have incomes over $500k if working and a net worth over $1.8M if retired. The higher we go up into the top 0.5% the more likely it is that their wealth is in some way tied to the investment industry and borrowed money than from personally selling goods or services or labor as do most in the bottom 99.5%. They are much more likely to have built their net worth from stock options and capital gains in stocks and real estate and private business sales, not from income which is taxed at a much higher rate. These opportunities are largely unavailable to the bottom 99.5%.

Recently, I spoke with a younger client who retired from a major investment bank in her early thirties, net worth around $8M. We can estimate that she had to earn somewhere around twice that, or $14M-$16M, in order to keep $8M after taxes and live well along the way, an impressive accomplishment by such an early age. Since I knew she held a critical view of investment banking, I asked if her colleagues talked about or understood how much damage was created in the broader economy from their activities. Her answer was that no one talks about it in public but almost all understood and were unbelievably cynical, hoping to exit the system when they became rich enough.

Folks in the top 0.1% come from many backgrounds but it's infrequent to meet one whose wealth wasn't acquired through direct or indirect participation in the financial and banking industries. One of our clients, net worth in the $60M range, built a small company and was acquired with stock from a multi-national. Stock is often called a "paper" asset. Another client, CEO of a medium-cap tech company, retired with a net worth in the $70M range. The bulk of any CEO's wealth comes from stock, not income, and incomes are also very high. Last year, the average S&P 500 CEO made $9M in all forms of compensation. One client runs a division of a major international investment bank, net worth in the $30M range and most of the profits from his division flow directly or indirectly from the public sector, the taxpayer. Another client with a net worth in the $10M range is the ex-wife of a managing director of a major investment bank, while another was able to amass $12M after taxes by her early thirties from stock options as a high level programmer in a successful IT company. The picture is clear; entry into the top 0.5% and, particularly, the top 0.1% is usually the result of some association with the financial industry and its creations. I find it questionable as to whether the majority in this group actually adds value or simply diverts value from the US economy and business into its pockets and the pockets of the uber-wealthy who hire them. They are, of course, doing nothing illegal.

I think it's important to emphasize one of the dangers of wealth concentration: irresponsibility about the wider economic consequences of their actions by those at the top. Wall Street created the investment products that produced gross economic imbalances and the 2008 credit crisis. It wasn't the hard-working 99.5%. Average people could only destroy themselves financially, not the economic system. There's plenty of blame to go around, but the collapse was primarily due to the failure of complex mortgage derivatives, CDS credit swaps, cheap Fed money, lax regulation, compromised ratings agencies, government involvement in the mortgage market, the end of the Glass-Steagall Act in 1999, and insufficient bank capital. Only Wall Street could put the economy at risk and it had an excellent reason to do so: profit. It made huge profits in the build-up to the credit crisis and huge profits when it sold itself as "too big to fail" and received massive government and Federal Reserve bailouts. Most of the serious economic damage the U.S. is struggling with today was done by the top 0.1% and they benefited greatly from it.

Not surprisingly, Wall Street and the top of corporate America are doing extremely well as of June 2011. For example, in Q1 of 2011, America's top corporations reported 31% profit growth and a 31% reduction in taxes, the latter due to profit outsourcing to low tax rate countries. Somewhere around 40% of the profits in the S&P 500 come from overseas and stay overseas, with about half of these 500 top corporations having their headquarters in tax havens. If the corporations don't repatriate their profits, they pay no U.S. taxes. The year 2010 was a record year for compensation on Wall Street, while corporate CEO compensation rose by over 30%, most Americans struggled. In 2010 a dozen major companies, including GE, Verizon, Boeing, Wells Fargo, and Fed Ex paid US tax rates between -0.7% and -9.2%. Production, employment, profits, and taxes have all been outsourced. Major U.S. corporations are currently lobbying to have another "tax-repatriation" window like that in 2004 where they can bring back corporate profits at a 5.25% tax rate versus the usual 35% US corporate tax rate. Ordinary working citizens with the lowest incomes are taxed at 10%.

I could go on and on, but the bottom line is this: A highly complex and largely discrete set of laws and exemptions from laws has been put in place by those in the uppermost reaches of the U.S. financial system. It allows them to protect and increase their wealth and significantly affect the U.S. political and legislative processes. They have real power and real wealth. Ordinary citizens in the bottom 99.9% are largely not aware of these systems, do not understand how they work, are unlikely to participate in them, and have little likelihood of entering the top 0.5%, much less the top 0.1%. Moreover, those at the very top have no incentive whatsoever for revealing or changing the rules. I am not optimistic.

Interesting read. Pretty accurate, from what I read.

[Wild Cobra]

Never understood those who produce nothing, create nothing are the most wealthy individuals in the world.

But thats capitalism in a nutshell.
Industrialist has also become a bad word because of how some have abused the ideas.

[boutons_deux]

"Behind every great fortune is a great crime"

even behind Bill Gates' fortune

[DarkReign]

Industrialist has also become a bad word because of how some have abused the ideas.

I dont know if "industrialist" carries the same negative connotation now as maybe it did in say, 1900-1930?

[101A]

Why are people either so jealous or hateful of the rich?

Above 99%, below 99.5% and his description of that life exactly describes me. I'm the small business owner.

That said, I am VERY resentful of those in the top .1% - and their pawns in the Govt. who use the power of the Govt. to enrich themselves, and prevent anyone else form joining the party. THOSE people, through onerous regulations and taxes upon those of us ACTUALLY carrying the water, are inhibiting macro economic growth and wealth accumulation. They take ridiculous risks, get burned, and the rest of us bail them out.

They are the ultimate drain on society. They don't play by the rules - they write the rules; this is NOT capitalism - this is a rigged system.

People like you are simply useful idiots, frankly. You defend these people to your last breath, even though, as the author points out, they are not providing any useful service to our society; not creating wealth or jobs; just draining money from the rest of us. They are leaches and parasites, and have wrecked the entire planet's economy for their own benefit; and have not been held accountable for their actions. (Nor have their puppets from both sides of the aisle in Washington).

It's nearing time to break out he torches and pitchforks.

[101A]

Never understood those who produce nothing, create nothing are the most wealthy individuals in the world.

But thats capitalism in a nutshell.

No, it's not.

The proper word would be Aristocracy.

But they can't use that word; it would be too obvious what the problem is.

So they use "Capitalism" and "Democracy" and "Freedom" to keep us occupied, and not focused on the real problem.

[101A]

"Behind every great fortune is a great crime"

even behind Bill Gates' fortune

A couple off the top of my head:

He, essentially, stole DOS.

He then convinced IBM to let him develop OS2 while he ACTUALLY put resources and energy into NT.

[101A]

I simply know a two people, who through hard work, became part of that upper income crowd. They were both small business owners who employed hundreds by the time they seceded.

It does happen; but when the economy tanks because of the reckless behavior of the money changes; it makes it very difficult for those of us who are trying to do that now.

[Drachen]

Above 99%, below 99.5% and his description of that life exactly describes me. I'm the small business owner.

That said, I am VERY resentful of those in the top .1% - and their pawns in the Govt. who use the power of the Govt. to enrich themselves, and prevent anyone else form joining the party. THOSE people, through onerous regulations and taxes upon those of us ACTUALLY carrying the water, are inhibiting macro economic growth and wealth accumulation. They take ridiculous risks, get burned, and the rest of us bail them out.

They are the ultimate drain on society. They don't play by the rules - they write the rules; this is NOT capitalism - this is a rigged system.

People like you are simply useful idiots, frankly. You defend these people to your last breath, even though, as the author points out, they are not providing any useful service to our society; not creating wealth or jobs; just draining money from the rest of us. They are leaches and parasites, and have wrecked the entire planet's economy for their own benefit; and have not been held accountable for their actions. (Nor have their puppets from both sides of the aisle in Washington).

It's nearing time to break out he torches and pitchforks.

Great take 101a.

[DarkReign]

Above 99%, below 99.5% and his description of that life exactly describes me. I'm the small business owner.

That said, I am VERY resentful of those in the top .1% - and their pawns in the Govt. who use the power of the Govt. to enrich themselves, and prevent anyone else form joining the party. THOSE people, through onerous regulations and taxes upon those of us ACTUALLY carrying the water, are inhibiting macro economic growth and wealth accumulation. They take ridiculous risks, get burned, and the rest of us bail them out.

They are the ultimate drain on society. They don't play by the rules - they write the rules; this is NOT capitalism - this is a rigged system.

People like you are simply useful idiots, frankly. You defend these people to your last breath, even though, as the author points out, they are not providing any useful service to our society; not creating wealth or jobs; just draining money from the rest of us. They are leaches and parasites, and have wrecked the entire planet's economy for their own benefit; and have not been held accountable for their actions. (Nor have their puppets from both sides of the aisle in Washington).

It's nearing time to break out he torches and pitchforks.

Well fucking said. I am in the 99% as well, but I do not influence government or write the rules, as it were.

The less than 1% above me need to be killed and eaten, period. I pay my taxes, I dont have tax shelters and repatriate periods afforded me or my business to shelter money overseas (nor do I want to). And you would never hear me complain about raising my taxes, ever. I make enough money in multiple vehicles, taxing my income a little more or raising the taxes on capital gains is a miniscule increase at best. I am not a financial manager, I am not an economist, thats why I never enter into those conversations. I am a small-business owner who works extremely hard to stay where I am. My whole world is wrapped up in this business, if I fail, I lose everything. If they fail, the taxpayer (you and me) just bail them out because theyre TBTF.

These people are nothing to the working man, they provide no benefit, their employment numbers would barely register on the overall scale. Theyre vultures, producers of nothing, exchanging information and zeros.

Gordon Gecko said it best in total contrast to Wild Cobra's ethos. To paraphrase, money is a zero sum game. Because money is power and there is only so much power to go around.

Less than 1% owns ~40% of the country's wealth (and climbing), that isnt sustainable.

These people at the very tippy-top are not Americans...or Chinese...or Japanese...or Mexican...or Saudi...or anything. They exist outside national borders, no loyalty to anyone or anything except their portfolio. With decades of evidence in the form of regime changes, resource exploitation, assassinations and political corruption, they will quite literally bleed everyone of us dry with even half a chance to do so.

IMO, its not about the money, the dollars and cents. Its about their power relative to others like them. Government never even enters their train of thought until they come up with yet another rule or regulation change that benefits them in some capacity. Then it is, literally, as simple as cutting a large enough check from multiple sources in order to make their dream a reality.

A blip on the financial radar for them, a new expense that they (also because they write the laws) get to write off as an expense.

[DarkReign]

No, it's not.

The proper word would be Aristocracy.

But they can't use that word; it would be too obvious what the problem is.

So they use "Capitalism" and "Democracy" and "Freedom" to keep us occupied, and not focused on the real problem.

Fair enough, aristocracy.

[boutons_deux]

A couple off the top of my head:

He, essentially, stole DOS.

He then convinced IBM to let him develop OS2 while he ACTUALLY put resources and energy into NT.

2 strikes on ya.

Let me hit it out of the ballpark for ya:

When mfrs were already struggling to squeeze every penny out of their 100s of 1000s, millions, of PC costs, Gates put a gun in their mouths:

"pay me a (reduced price) MS-DOS/Windows license for EVERY machine you ship, or pay me a MUCH HIGHER price MS-DOS/Windows when shipped only when ordered."

aka the DOS/Win tax

Of course, the mfrs HAD to pay Gates' tax, because the rest of the herd was.

Then the "network effect" took over, and suffocated every other OS, no matter what the merits, and no matter how absolutely shitty single-tasking MS-DOS and it's graphic shell called Windows 3.0 ( :lol ).

btw, Gates' father is a lawyer. :)

[rascal]

It all doesn't matter, we all die and bring nothing in the end.

[Winehole23]

In other words, we are at the end of the illusion of a market place in the financial sphere.

While giving full credit to Obama for saving it, of course.

[SnakeBoy]

It all doesn't matter, we all die and bring nothing in the end.

http://ahealthyfit.files.wordpress.com/2010/04/debbie-downer.jpg

[SA210]

Above 99%, below 99.5% and his description of that life exactly describes me. I'm the small business owner.

That said, I am VERY resentful of those in the top .1% - and their pawns in the Govt. who use the power of the Govt. to enrich themselves, and prevent anyone else form joining the party. THOSE people, through onerous regulations and taxes upon those of us ACTUALLY carrying the water, are inhibiting macro economic growth and wealth accumulation. They take ridiculous risks, get burned, and the rest of us bail them out.

They are the ultimate drain on society. They don't play by the rules - they write the rules; this is NOT capitalism - this is a rigged system.

People like you are simply useful idiots, frankly. You defend these people to your last breath, even though, as the author points out, they are not providing any useful service to our society; not creating wealth or jobs; just draining money from the rest of us. They are leaches and parasites, and have wrecked the entire planet's economy for their own benefit; and have not been held accountable for their actions. (Nor have their puppets from both sides of the aisle in Washington).

It's nearing time to break out he torches and pitchforks.

Great post :toast


Well fucking said. I am in the 99% as well, but I do not influence government or write the rules, as it were.

The less than 1% above me need to be killed and eaten, period. I pay my taxes, I dont have tax shelters and repatriate periods afforded me or my business to shelter money overseas (nor do I want to). And you would never hear me complain about raising my taxes, ever. I make enough money in multiple vehicles, taxing my income a little more or raising the taxes on capital gains is a miniscule increase at best. I am not a financial manager, I am not an economist, thats why I never enter into those conversations. I am a small-business owner who works extremely hard to stay where I am. My whole world is wrapped up in this business, if I fail, I lose everything. If they fail, the taxpayer (you and me) just bail them out because theyre TBTF.

These people are nothing to the working man, they provide no benefit, their employment numbers would barely register on the overall scale. Theyre vultures, producers of nothing, exchanging information and zeros.

Gordon Gecko said it best in total contrast to Wild Cobra's ethos. To paraphrase, money is a zero sum game. Because money is power and there is only so much power to go around.

Less than 1% owns ~40% of the country's wealth (and climbing), that isnt sustainable.

These people at the very tippy-top are not Americans...or Chinese...or Japanese...or Mexican...or Saudi...or anything. They exist outside national borders, no loyalty to anyone or anything except their portfolio. With decades of evidence in the form of regime changes, resource exploitation, assassinations and political corruption, they will quite literally bleed everyone of us dry with even half a chance to do so.

IMO, its not about the money, the dollars and cents. Its about their power relative to others like them. Government never even enters their train of thought until they come up with yet another rule or regulation change that benefits them in some capacity. Then it is, literally, as simple as cutting a large enough check from multiple sources in order to make their dream a reality.

A blip on the financial radar for them, a new expense that they (also because they write the laws) get to write off as an expense.

:tu both of these takes. Good to hear a little truth.

[boutons_deux]

Meet the Global Financial Elites Controlling $46 Trillion In Wealth

Tax Breaks For The Rich, Budget Cuts For The Rest Of Us

To further demonstrate how the mega-wealthy have seized control of our political process, consider that the richest 400 Americans paid 30 percent of their income in taxes in 1995, but they now pay only 18 percent.

In fact, 1,470 Americans earned over $1 million in 2009 and didn’t pay any taxes.

The average tax rate for millionaires was 22.4 percent in 2009, down from 30.4 percent in 1995. The average millionaire saves $136,000 a year due to reduced tax rates.

Looking at the tax rate from a long-term perspective, the amount of money the richest people and most profitable corporations pay in taxes has fallen dramatically since 1955. Corporate tax accounted for 27.3 percent of federal revenue in 1955. In 2010, corporate tax accounted for only 8.9 percent of federal revenue. Corporate taxes accounted for 4.3 percent of overall GDP in 1955, in 2010 they accounted for only 1.3 percent.

Deliberate Systemic Attacks

The dramatic increase in economic inequality and poverty, along with the unprecedented rise in wealth within the topone-tenth of one percentof the population has not happened by mistake. It is the designed result of deliberate governmental and economic policy. It is the result of the richest people in the world, and the “too big to fail” banks, using the campaign finance and lobbying system to buy off politicians who implement policies designed to exploit 99.9 percent of the population for their financial gain. To call what is happening a “financial terrorist attack” on the United States, is not using hyperbole, it is the technical term for what is currently occurring.

http://www.alternet.org/module/printversion/151999