Has America Become An Oligarchy?

[Gone baby gone]

http://www.spiegel.de/international/spiegel/0,1518,793896,00.html

I'll leave you to enjoy the article in the comfort of your favourite wing-backed leather armchair, with a glass of Hors d'âge brandy and a fine cuban cigar, but here are a few choice quotes:

Still, statistics indicate that the growing disparity is genuinely overwhelming. In fact, the 400 wealthiest Americans now own more than the "lower" 150 million Americans put together.

Nearly two-thirds of net private assets are concentrated in the hands of 5 percent of Americans. In comparison, the upper 5 percent of Germany hold less than half of net assets. In 2009 alone, at the same time as the US was being convulsed by mass layoffs, the number of millionaires in the country skyrocketed.

Indeed, if you look at the reports it compiles on every country in the world, even the CIA has concluded that wealth disparity is greater in the US than in Tunisia or Egypt.

Interesting to see this one laid bare:

The academics fear this change could have serious consequences for the country's economic future. As they see it, this extreme inequality threatens to dramatically slow growth in the world's largest economy. This is part of a development, they argue, that has been under way for years but remained largely hidden in the years of cheap credit, rising real estate prices and excessive consumption -- when it seemed everyone was on the way up. And the problems only came to light with the arrival of the financial crisis.

Fat cats, oh yeah, everything's bigger in ole US of A:

Still, that's nothing compared to the trend in executives' salaries. In 1980, American CEOs earned 42 times more than the average employee. Today, that figure has skyrocketed to more than 300 times. Last year, 25 of the country's highest-paid CEOs earned more than their companies paid in taxes.

By way of comparison, top executives at the 30 blue-chip companies making up Germany's DAX stock market index rarely earn over 100 times the salaries of their low-level employees, and that figure is often around 30 or 40 times.

I love it when a plan comes together...

Former Citigroup CEO Sanford Weill, for example, kept a framed pen in his office as a symbol of his influence. It was the pen President Bill Clinton -- at Weill's instigation -- used in 1999 to sign into law legislation repealing the provisions in the Glass-Steagall Act of 1933 that separated the transactions of investment and commercial banks.

For example, it emerged a few weeks ago that legendary investor Warren Buffett earned $63 million last year but was only required to pay 17 percent in taxes.

Hmmm.

"The major difference between this Gilded Age and the last one is the relative absence of protest," historian Gary Gerstle told the online magazine Salon in October. "In the first Gilded Age, the streets were flooded with protest movements."

[AteMoose]

17% of 63 billion is ALOT of money, the top 400 could quite easily move away from the USA and take away all that revenue. Im surprised at a tax bill of 17% of 63 billion from Warren, most people who earn more than a million a year end up leaving to live in tax havens. Why are the 400 richest still in the USA willingly paying taxes?

Edited October 30, 2011 by AteMoose

[interestrateripoff]

17% of 63 billion is ALOT of money, the top 400 could quite easily move away from the USA and take away all that revenue. Im surprised at a tax bill of 17% of 63 billion from Warren, most people who earn more than a million a year end up leaving to live in tax havens. Why are the 400 richest still in the USA willingly paying taxes?

It's 63 million not billion, this was his earnings for the year not his total wealth.

Have you considered the prospect that the USA is a tax haven if you are rich enough? Why would you move from the ultimate tax haven?

Although as has been noted many times on here those with the surpluses need to spend, that includes the rich. These 400 need to get spending and stop hoarding.

[Democorruptcy]

2009 article by a former IMF chief economist:

The Quiet Coup

The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.

http://www.theatlantic.com/magazine/archive/2009/05/the-quiet-coup/7364/

[wonderpup]

Indeed, if you look at the reports it compiles on every country in the world, even the CIA has concluded that wealth disparity is greater in the US than in Tunisia or Egypt.

Maybe they need to liberalise the labour market a bit more? Make it easier to sack people, that sort of thing?

So two decades of 'trickledown' has ended with most of the money in the hands of 400 families? That must be one of most spectacular policy failures in economic history.

[dothemaths]

17% of 63 billion is ALOT of money, the top 400 could quite easily move away from the USA and take away all that revenue. Im surprised at a tax bill of 17% of 63 billion from Warren, most people who earn more than a million a year end up leaving to live in tax havens. Why are the 400 richest still in the USA willingly paying taxes?

Hit the nail on the head. The tax base of a highly unequal society is essentially hostage to the super rich - a highly unstable situation.

This will make the rest of the population (those with a brain that is) question how much long term benefit they actually provide to the society as a whole. A broad wealth base (i.e a middle class) is by far the most stable for a wealthy society.

The people in the middle are those who value good roads, schools, health care and they must (be able to) pay for it. It is very bad news for the average man if the economy is not creating middle income jobs . Letting inequality get out of hand is a recipe for disaster.

[Live Peasant]

Why are the 400 richest still in the USA willingly paying taxes?

Taxes are in this instance a cost of sale.

[richc]

17% of 63 billion is ALOT of money, the top 400 could quite easily move away from the USA and take away all that revenue. Im surprised at a tax bill of 17% of 63 billion from Warren, most people who earn more than a million a year end up leaving to live in tax havens. Why are the 400 richest still in the USA willingly paying taxes?

Actually, you can't evade taxes in the US as easily as you can in the UK. American taxes are applied to all world-wide income of all Americans wherever they live or earn money. Billionaires would have to give up their US citizenship, and then would be allowed only limited travel time back in the country, which makes it all rather difficult to conduct business if it's based in the US.

[Nuggets Mahoney]

So two decades of 'trickledown' has ended with most of the money in the hands of 400 families? That must be one of most spectacular policy failures in economic history.

Or a spectacular success depending on your point of view

I doubt very much that, say, George Bush, Dick Cheney or Alan Greenspan get much stick in their day to day lives over how much money their policies have cost their peers

Yup, that Dubya certainly is dumber than a sack of hammers

[Jadoube]

Or a spectacular success depending on your point of view

I doubt very much that, say, George Bush, Dick Cheney or Alan Greenspan get much stick in their day to day lives over how much money their policies have cost their peers

Yup, that Dubya certainly is dumber than a sack of hammers

+1

So many potential candidates for the presidency withdraw from the primaries race quoting/ bemoaning a lack of funds. Tells you the money decides who Americans are allowed to choose between in an election.

[wonderpup]

The best part is that the americans are still buying in to the 'anyone can be rich' meme even as the door is being welded shut on the economic prison that is their future.