There are some serious structural problems with our economy that need to be addressed. The ever increasing concentration of wealth is dangerous economically and politically. Millionaires make a comeback Although hit hard during the Great Recession, the wealthy rebounded in 2009, data show. By Nathaniel Popper, Los Angeles Times June 11, 2010 Unemployment remains at near-record levels, and most Americans are struggling to rebuild their battered finances. But the country's wealthy are once again doing just fine, thank you. No group was immune to the downturn. In 2008, as the financial crisis raged, the stock market hit bottom and the Great Recession ate into the economy, the number of millionaires in the United States plunged. But last year the number of millionaires bounced up sharply, new data show. And after that decline and rebound, the millionaire class held a larger percentage of the country's wealth than it did in 2007. "It's been a recession where everyone took a hit — with the bottom taking a bigger hit," said Timothy Smeeding, a University of Wisconsin professor who studies economic inequality. But "the wealthy alone have bounced back." The return of the millionaires last year was not limited to the United States. China saw the swiftest growth in millionaires, and now has the third-most of any country, trailing the U.S. and Japan, according to the data released Thursday by Boston Consulting Group. The consulting firm's latest report on wealth, one of the first broad depictions of how wealth shifted in 2009, indicates that the number of U.S. households with at least $1 million in "bankable" assets climbed 15% last year to 4.7 million after tumbling 21% in 2008. "Assets have recovered much faster than we expected, to be candid," said Monish Kumar, a managing director at Boston Consulting Group. The rebound largely reflects the stock market's powerful surge from 12-year lows reached in March 2008. Even though the long bear market that began in late 2007 continued into early last year, the Dow Jones industrials gained 19% over the course of 2009. As a result, the expansion of the portfolios of the rich resembled the quick recovery of the profits of Wall Street investment banks and the bonuses of their executives, both of which depend on the health of the stock market. The boom didn't reach all parts of the population. For the middle class, home values account for a larger slice of a family's wealth than they do for the rich. And unlike stocks, home values remain at or near the lows they reached after a painful crash. In fact, real estate and other hard assets, such as $200,000 cars, aren't reflected in Boston Consulting Group's report. Had they been, the financial condition of ordinary Americans would have appeared even worse. The Federal Reserve reported Thursday that the net value of real estate owned by U.S. households fell again in the first three months of this year after sinking a total of $7.7 trillion in 2007-09. Moreover, among the less than rich, unemployment emerged as a powerful force depleting assets. The jobless rate rose to 10% at the end of 2009 after starting the year at 7.7%. Still, thanks to the stock market, Americans' collective net worth, including home equity, managed to grow 4.3% last year and 2% in the first quarter of 2010, the Fed reported. But the consulting firm's report showed an increase in the concentration of wealth in the last two years. In the U.S., the number of millionaires in 2009 remained 10% lower than in 2007, but the percentage of Americans' total wealth held by those households was slightly higher, at 55%, according to the consulting firm. "The recession is going to end up accentuating the inequalities of income and wealth we've seen for 30 years," said Larry Mishel, president of the Economic Policy Institute in Washington. "This requires attention if we're going to see robust wealth growth going forward." In many other countries, the wealth held by millionaires has already returned to levels reached before the crisis. That's because rich Americans before the bear market had more of their money invested in stocks than did the wealthy in other countries. Even though the wealthy have bounced back, many have still not regained their trust in the financial system and remain wary of the stock market, said Bruce Holley, a consultant in Boston Consulting's New York office. "It doesn't feel to them like they are fully back in business," Holley said. http://www.latimes.com/business/la-fi-millionaires-20100611,0,3466702,print.story
while I agree that income distribution is a problem, this is probably the biggest reason for this particular issue. the stock market has come back, giving people who already had wealth a sharp boost. while the job market hasn't
It's the American way at least since old smiley Ronnie Reagan and many young healthy folk were fooled into calling themselves "libertarians". That is conservatives who like sex, drugs and rock and roll or at least don't care if others do. Every day on this bbs and in society we see folks who are just apopleptic about the injustice of the "death tax" or the estate tax that only kicks in at $7 million. Libertarian style they call taxes "theft" and whatever. We see it from toothless Tea Party types. Can someon explain to me how many young folks and even some older folks who make say $20 to 60 k per year get so upset at this. Many even have gone to college and certainly should have some idea of what their chances are of them actually having an estate of $7 million in today's money.
Everyone makes money in the market all the time. You can't argue with the cold hard calcualtions. If you just put in 10% of your check and it compounds at the historical average you then become a multi-millionaire automatically. Anyone who doesn't do this deserves to be poor in their old age and none of that sissy theft stuff like having social security. No siree. Nut up and quit complaining or you will wind up being a loser like your parents and the rest of the moochers who don't have millions.
Problem is the po folk saw their 401k balances falling like a rock and moved to cash and of course have stayed their through one of the biggest jumps ever Dow 6,500-10,000. I know several people who did this at work and I just shake my head. You can't time the market and you're not retiring tomorrow so just say to yourself I am dollar cost averaging at lower and lower prices which is a good thing. Can't begin to say how thankful I am SS is not privatized. Just what we need all of our seniors mistiming the market, sitting in money market funds that broke the buck, chasing yield in Lehman and Bear Stearns debt, buying GM stock because they always drove Chevy's etc.
I think MArx was right, that capitalism would lead to two seperate classes(one poor and one rich) and then a revolution. It happened in Cuba and Latin Americva, don't see why it can't happen here.
Because Marx did not live under the era of big media/ biz school style economics and other propaganda that has so effectively brained washed much of the working class into idenitfying with the wealthy. He did forsee religion as the opiate of the masses. IIRC in attributing that quote to him.
Most millionaires in the early 90's and in the early 2000's were all FIRST GENERATION wealthy...meaning that they came from poor or middle class homes. I believe the statistics were 88%.
sorry, its a book..not a website. It was a New York Times Bestseller. "The Millionaire Next Door: The surprising Secrets of America's Wealthy" Thomas J Stanley, Ph.D. William D. Danko, Ph.D Pocket Books Publishing 1997 (updated early 2000's for accuracy, can't find the exact year) It was a very lengthy study of Millionaires, their habits, and their lifestyles. The results surprised many..some examples. Most millionaires: worked an avg of 60hrs a week read 3 non-fiction books a month bought 2yr old cars instead of new cars never made more than 175K in one year did make between 50K-150K salary didn't buy status items like luxury cars or expensive clothes its really an interesting read
