[ARCHIVED THREAD] - HOLY CLASS WARFARE, Wall Street Journal: How The Rich Are Winning

Posted: 7/20/2010 9:55:35 AM EDT

http://finance.yahoo.com/family-home/article/110113/how-the-rich-are-winning?mod=family-love_money&sec=topStories&pos=4&asset=&ccode=

How The Rich Are Winning

by Brett Arends

Tuesday, July 20, 2010

You may have been hearing a lot of doom and gloom about
the economy recently.

OK, so the news on jobs, real estate and
retail sales has been dismal. Yes, maybe it's true the middle class is
broke, in debt, under water, out of work and in despair.

But
look on the bright side. One group of people is doing just fine. The
rich.

The New York Times this weekend tried to find signs they
were easing up –– maybe somebody put their new Ferrari on hold because
of the Greek crisis. But any such suggestion should be viewed in
context.

Tiffany & Co. (NYSE: TIF - News) says sales at its
flagship New York store jumped 26% in the first quarter. International
luxury goods giant Louis Vuitton Moet Hennessy –– whose brands range
from Fendi to Givenchy to Moet & Chandon Champagne, plus, of course,
those cliched Vuitton bags –– says U.S. sales boomed 20% in the first
quarter, including a remarkable 58% boost for sales of jewelry and
expensive watches like Tag Heuer.

Indeed
the Swiss watch federation says exports of luxury watches (those $2,000
"timepieces") to the U.S. rose 12% in May and are now ahead 9% for the
year. Nordstrom Inc. (NYSE: JWN
- News) says
same-store sales zoomed ahead 14% in June. They're up 11% year to date.
Super-luxury goods purveyor Richemont –– which owns
such brands as Cartier, Dunhill, and Van Cleef & Arpels –– says U.S.
sales are up.

The Sunseeker Club in New York, America's biggest
dealership in the multi-million dollar British luxury power boats, tells
me business is strong again. Those who have the money to spend, they
say, are spending it.

At times like these, cash buyers are king.

These
are not isolated incidents. According to consultants Cap Gemini, the
wealthy saw their net worth bounce back sharply last year. And while
those with $1 million or more did pretty well, the real story was the
boom among the ultra rich: Those with more than $30 million to invest.
"Ultra-HNWIs (High Net Worth Individuals) increased their wealth by a
striking 21.5% in 2009, far more than the average in the HNWI segment as
a whole," Cap Gemini reported, adding: "A disproportionate amount of
wealth remained concentrated in the hands of Ultra-HNWIs."

There
are fewer than 100,000 ultras around the world. A third of those are
here in the U.S. Ultras make up 1% of the high net worth, according to
Cap Gemini, but held 36% of the high net worth's wealth.

Talk to
any rich person, and they won't tell you they're doing well. They're
more likely to complain. After all, taxes are going up. And there's that
Black Panther communist in the White House spending us to rack and ruin
on all this socialism.

Are they right?

The rich are always
complaining. Back in Edwardian England the aristocrats moaned about the
servants.

Sure, the top rates of tax expected to go up at the end
of this year, when the Bush tax cuts are due to expire (the debate about
the new tax regime rages on). But that will only take rates up a bit ––
to the levels seen in the late 1990s. You remember how tough things
were for the elite back then.

And who pays the top rate anyway?

Right
now it only kicks in on each dollar of ordinary income over $374,000 a
year. A recent study by the Congressional Budget Office found that the
top 1% of Americans paid an average federal income tax rate of just 19%
in 2007, the last year when data were available. The top 5% of earners
paid an average rate of less than 18%. There are ways and means to
minimize tax –– like calling your income "capital gains." That's what
private equity honchos do, where possible. In many cases, it means
people making tens of millions a year are paying lower tax rates than
their chauffeurs and receptionists. (There are proposals to change that,
with predictable screaming).

As for socialism: The Federal
Reserve reports that the private sector is doing so badly that corporate
profits just, um, rocketed to a new record high. The after-tax profits
of corporate America rocketed 43% in the first quarter.

And let's
not overlook, too, this year's gigantic one-off tax cut for the very
wealthiest: The one-year abolition of the federal estate tax. When it
comes to inheritance, we are, at least for a year, back in the age of
President Taft. That, for example, saved George Steinbrenner's richly
deserving heirs hundreds of millions in taxes. For years we've heard the
wealthy rage against the estate tax and express their fervent wish they
could avoid it. This year they have their chance.

The truth is,
this is a great time and place in which to be rich. The average Fortune
500 chief executive pocketed $10.5 million in 2008, the last year for
which data are yet available. That's more than 300 times the average
worker's pay. Back in the Dark Ages –– the 1940s through 1980 –– the
ratio was typically about 40 times. From 1979 through 2007, says the
CBO, the top 1% saw their average household income skyrocket from
$346,000 to $1.3 million in constant, 2007 dollars. That's after taxes.
Meanwhile the average middle-class family saw their income rise from
$44,000 to $55,000.

And according to an analysis by the Central
Intelligence Agency, the U.S. has one of the most unequal income
distributions in the world. In this field, most of the developed world
is pretty much in line –– Japan, Italy, Australia, Canada, Norway, Great
Britain. Some are more unequal than others, but all are comparable. In
each case, of course, the rich make more than the middle class,
sometimes a lot more. But they generally occupy the same economy.

The
U.S.? Our income distribution is more in line with Zimbabwe, Argentina,
and El Salvador. We think of Russia as the land of oligarchs, but
America's inequality is actually slightly greater than Russia's.

Maybe
we should all be investing in luxury goods companies, and launching
overpriced "designer" labels targeted at oligarchs with more money than
sense. As for all those millions out of work: Maybe they can get jobs as
servants.

Class warfare much? Maybe this author should give up all his worldly possessions to rectify the situation he bemoans.

Posted: 7/20/2010 10:50:56 AM EDT

[#1]

Fair Tax FTW.

Posted: 7/20/2010 10:52:32 AM EDT

[#2]

Shit, Ive heard a radio ad a few times now talking about how no matter the economy, the rich get richer.

Then they sell you their services telling you why you shouldnt diversify your portfolio, dont buy gold, buy bonds instead, etc...

The idiocy makes my blood boil.

Posted: 7/20/2010 10:54:45 AM EDT

[#3]

Quoted:

Shit, Ive heard a radio ad a few times now talking about how no matter the economy, the rich get richer.

Then they sell you their services telling you why you shouldnt diversify your portfolio, dont buy gold, buy bonds instead, etc...

The idiocy makes my blood boil.

because the left's view of the rich is that they are all somehow born into wealth like a prince and none of the wealth ever involved hard work and struggle.

Posted: 7/20/2010 10:55:13 AM EDT

[#4]

The rich always do well, no matter what the economy is. FACT OF LIFE, get over it Brett

Posted: 7/20/2010 10:57:45 AM EDT

[#5]

where is the WSJ source?

eta: disregard, I forgot Market Watch is the WSJ

Posted: 7/20/2010 11:03:05 AM EDT

[#6]

Quoted:

Quoted:
Shit, Ive heard a radio ad a few times now talking about how no matter the economy, the rich get richer.

Then they sell you their services telling you why you shouldnt diversify your portfolio, dont buy gold, buy bonds instead, etc...

The idiocy makes my blood boil.

because the left's view of the rich is that they are all somehow born into wealth like a prince and none of the wealth ever involved hard work and struggle.

And that is why the rich complain about new taxes or new regulations. It is because all these new rules make it harder to keep doing what your doing and make money! It means they (whoever the rules affect) have to figure out how to make money a different way.

The rich are rich because they have figured out how to make money, not because they stole it from anybody.

Posted: 7/20/2010 11:05:48 AM EDT

[#7]

Talk to any rich person, and they won't tell you they're doing well. They're more likely to complain. After all, taxes are going up. And there's that Black Panther communist in the White House spending us to rack and ruin on all this socialism.

Are they right?

Yes

Posted: 7/20/2010 11:06:40 AM EDT

[#8]

And let's not overlook, too, this year's gigantic one-off tax cut for the very wealthiest: The one-year abolition of the federal estate tax. When it comes to inheritance, we are, at least for a year, back in the age of President Taft. That, for example, saved George Steinbrenner's richly deserving heirs hundreds of millions in taxes. For years we've heard the wealthy rage against the estate tax and express their fervent wish they could avoid it. This year they have their chance.

It sure was mighty kind of Mr. S to hurry up and slip this mortal coil just in time to save his heirs some bank.

Posted: 7/20/2010 11:10:21 AM EDT

[#9]

I would be spending money too before the VAT increases the price of everything too much.

Posted: 7/20/2010 11:13:34 AM EDT

[#10]

Quoted:

Fair Tax FTW.

agreed

Posted: 7/20/2010 11:18:00 AM EDT

[#11]

The truly rich people don't depend on work for their income. It is based on investments, and with the stock market recovery those investments have gained back much of what they lost in the initial drop. Long term, of course, they will sink unless the economy truly recovers, but for now they are doing fine.

Posted: 7/20/2010 11:28:39 AM EDT

[#12]

Not exactly a revelation. Recall discussing it many times in various mathematics classes. Frankly, I don't buy the "you get what you pay for" argument WRT execs any more. I'm not seeing the so-called super-star quarterback performance analogy holding when it really should. Seems like they can't balance a spreadsheet, & whenever it hits the fan, they all become clueless & didn't know what was going on, come running to gov't with palms out for a too-big-to-fail bailout. Times like these are when top-tier quality should be asserting itself, but I'm not seeing it. There are some exceptions, but only. Ford CEO (Jacques Nasser?) refused to take a paycheck when it all went sour a couple yrs back. Ford also refused to take "bail-out" cash that the others did (another example if why I think a some execs are "capitalists" in name only). And the big banks? Please. No doubt, "small" bank execs are livid.

Sometimes, I think some at that level exist as figureheads, pressing the flesh is the order of the day more than actually running things. The "golden parachute" phenomenon kind of spells out where the priorities run. There's probably a lot of greed & out-of-touch-ness going on at the executive level than most would care to admit, for fear of being called a "communist".

Speaking of which, flame suit on...

Posted: 7/20/2010 11:32:28 AM EDT

[#13]

Quoted:

And let's not overlook, too, this year's gigantic one-off tax cut for the very wealthiest: The one-year abolition of the federal estate tax. When it comes to inheritance, we are, at least for a year, back in the age of President Taft. That, for example, saved George Steinbrenner's richly deserving heirs hundreds of millions in taxes. For years we've heard the wealthy rage against the estate tax and express their fervent wish they could avoid it. This year they have their chance.

It sure was mighty kind of Mr. S to hurry up and slip this mortal coil just in time to save his heirs some bank.

No sh*t... I'm sure Steinbrenner's heirs were really whooping it up.

Author of that piece is a crass moron.

Posted: 7/20/2010 11:36:31 AM EDT

[#14]

Brett Arends is a fucking tool.

Posted: 7/20/2010 11:45:40 AM EDT

[#15]

Quoted:
The rich always do well, no matter what the economy is. FACT OF LIFE, get over it Brett

Wait until the foreigner in chief gets all this wealth re-distrubuted. Then things will be peachy-keen.
I think that I will go boat shopping.

Posted: 7/20/2010 11:47:47 AM EDT

[#16]

Socialist class envy and hogwash.

Most of the 'rich' were poor at one time, like when they graduated from school or started their business.
Most of the 'poor' won't be in the lowest income group as they develop experience and marketable skills.

And here's a surprise, any tax cut will benefit the top 50% of earners, because the bottom half pay only 5% of the taxes.
The bottom 50% also pervert the republic by voting for scumbag politicians who give away taxpayers money and want even more
money from those who contribute.

The economy isn't a zero sum game. Who cares if there is a bigger income disparity than some other country when the important
fast is that people here live better than almost every country and the only limit on opportunity is the limit people put on themselves?

Damn the socialists and liberals for peaching their hopeless views of America and dispairaging the blessings of capitalism and liberty.

And while I'm on a roll: FBHO

Posted: 7/20/2010 11:54:02 AM EDT

[#17]

If my marginal federal income tax rate were about to jump to 39.6% I'd be bitching too.

Posted: 7/20/2010 11:56:38 AM EDT

[#18]

I'd rather have a discussion of how the rich got rich.

e.g., loans, debt, stocks, etc. The bank executive got paid because the bank made a lot of money. The bank made a lot of money because hordes of average people were using them to place bets and take out loans. "I bet my house will have a big return." "I need $30,000 for a new car, which I will pay back with interest."

The rich didn't print their money. It didn't fall out of the sky. They didn't steal it from us. We gave it to them willingly and many of us benefited (or thought we would) in the process. Oh sure, we see the banks handing out paychecks and we think, "Hey! That's MY MONEY." But we were willing enough to sign on the dotted line when we wanted that loan, saying we'd pay all that money in interest. It was agreed.

Trying to take the money back is basically reneging on a debt.

Sure, some of the rich probably got some of their money from fraud, waste or abuse. But most of the money got generated legitimately by way of us handing it to them. We wanted that credit card debt. We wanted that home mortgage. We were buying stocks while they were selling.

"Class warfare" never seems to delve into how the rich got rich. The rich mostly got rich by giving us the loans we asked for.

Posted: 7/20/2010 11:59:31 AM EDT

[#19]

Quoted:
The rich always do well, no matter what the economy is. FACT OF LIFE, get over it Brett

Them figuring out how to do well no matter the economy might have something to do with why they're rich.

Posted: 7/20/2010 12:00:21 PM EDT

[#20]

I hate the rich.

I'm foing to get a job from someone in the middle class.

Posted: 7/20/2010 12:02:24 PM EDT

[#21]

The rich make money no matter the market. My advice is to make friends with them, and have them as a mentor.

Posted: 7/20/2010 12:44:01 PM EDT

[#22]

I just can't get over the hypocrisy of this douchebag. It's not like he turned down the payment for writing that column, I bet...

Posted: 7/20/2010 12:56:12 PM EDT

[#23]

damn you ammoman.... DAMN YOU!!!!!!!

Posted: 7/20/2010 3:17:16 PM EDT

[#24]

Quoted:
I just can't get over the hypocrisy of this douchebag. It's not like he turned down the payment for writing that column, I bet...

Writing off the essential observation as classist is easy, but misses the point. Wealth & politics don't go hand-in-hand by accident. Laws are written specifically to benefit contributors; we're not getting what we pay for WRT "equal representation under the law". It's a contemporary myth. Too much special interest. Bailing out the banks & the auto companies that couldn't/wouldn't/didn't manage themselves was proof-positive of how twisted it is. Taxpayers shouldn't have been forced to bail out the private sector, period. The sooner those ill-managed orgs died, the sooner & more effective any recovery (would have been). The unions aren't the only groups feeding at the trough anymore. Tax reform? Not happening. Special interest set-asides written into law is the order of the day. I chuckle at the notion of this country calling itself a 'capitalist' economy. A truly capitalist economy nation doesn't force its constituency to bail out private business (at the point of a gun).

Edited to remove unintentional double-negative.

Posted: 7/20/2010 4:17:03 PM EDT

[#25]

Quoted:
I'd rather have a discussion of how the rich got rich.

e.g., loans, debt, stocks, etc. The bank executive got paid because the bank made a lot of money. The bank made a lot of money because hordes of average people were using them to place bets and take out loans. "I bet my house will have a big return." "I need $30,000 for a new car, which I will pay back with interest."

The rich didn't print their money. It didn't fall out of the sky. They didn't steal it from us. We gave it to them willingly and many of us benefited (or thought we would) in the process. Oh sure, we see the banks handing out paychecks and we think, "Hey! That's MY MONEY." But we were willing enough to sign on the dotted line when we wanted that loan, saying we'd pay all that money in interest. It was agreed.

Trying to take the money back is basically reneging on a debt.

Sure, some of the rich probably got some of their money from fraud, waste or abuse. But most of the money got generated legitimately by way of us handing it to them. We wanted that credit card debt. We wanted that home mortgage. We were buying stocks while they were selling.

"Class warfare" never seems to delve into how the rich got rich. The rich mostly got rich by giving us the loans we asked for.

They knew what they where doing, The large financial institutions/Bankers got rich granting high risk loans w/ insufficient collateral, gambling that they could resell their defaults for inflated prices. They(with govt. help) built the bubble that sunk them. Then they got the govt. to go further in debt so they wouldn't fail. On top of all that, the responsible lending institutions, that should have had access to emergency funds to jump start the economy, are now faced w/ additional regulations and costs(onerous in the case of smaller institutions) and at a competative disadvantage to the institutions that screwed the American people over in the fist place.

Posted: 7/20/2010 4:21:57 PM EDT

[#26]

This editorial is so full of factual inaccuracies and liberal propaganda I don't even know where to begin.

Posted: 7/20/2010 4:22:12 PM EDT

[#27]

Karl Marx approves of that article.

Commies everywhere man. Did the Soviet Union invade and I missed it?

Posted: 7/20/2010 4:45:27 PM EDT

[#28]

http://finance.yahoo.com/family-home/article/110113/how-the-rich-are-winning?mod=family-love_money&sec=topStories&pos=4&asset=&ccode=

How The Rich Are Winning

by Brett Arends

Tuesday, July 20, 2010

The U.S.? Our income distribution is more in line with Zimbabwe, Argentina, and El Salvador. We think of Russia as the land of oligarchs, but America's inequality is actually slightly greater than Russia's.

Income distribution > Richest 20% (most recent) by country:

(Argentina Data Not Available)

(source)

#20 Zimbabwe: 55.7%

#18 El Salvador: 56.4%

#24 Russia: 53.7%

#54 United States: 46.4%

#71 United Kingdom: 43.2%
Income distribution > Richest 10% (most recent) by country:

(Argentina Data Not Available)

(source)

#19 Zimbabwe: 40.4%

#21 El Salvador: 39.5%

#22 Russia: 38.7%

#54 United States: 30.5%

#73 United Kingdom: 27.7%

Don't ever let FACTS get in the way of a good lie.

Posted: 7/20/2010 4:48:29 PM EDT

[#29]

Quoted:

I just can't get over the hypocrisy of this douchebag. It's not like he turned down the payment for writing that column, I bet...

Hypocrisy is right. This POS must not have a single mirror in his home.

http://brettarends2.blogspot.com/

Posted: 7/20/2010 4:48:45 PM EDT

[#30]

With all the bailouts, the CEOs and high officials of Goldman Sachs should be doing well.

Posted: 7/20/2010 4:52:13 PM EDT

[#31]

Quoted:

Karl Marx approves of that article.

Commies everywhere man. Did the Soviet Union invade and I missed it?

No - they did it all out in the open, starting in the early '20s and culminating with an unabashed Marxist being elected to the Presidency in 2008.

Posted: 7/20/2010 5:10:12 PM EDT

[#32]

I don't disapprove of the wealthy, but when you live an ostentatious lifestyle while others are hurting you're a big, bright, easy target for populist propaganda. Unless you're a movie star or a professional athlete, then it's fine.

Posted: 7/20/2010 5:12:55 PM EDT

[#33]

Quoted:

Karl Marx approves of that article.

Commies everywhere man. Did the Soviet Union invade and I missed it?

No - they did it all out in the open, starting in the early '20s and culminating with an unabashed Marxist being elected to the Presidency in 2008.

Exactly. Zero isn't in the poor house.

Posted: 7/20/2010 5:13:11 PM EDT

[#34]

Quoted:
Fair Tax FTW.

first post, LOOSE

FLAT TAX is the win, fair tax can be manipulated over time, just like the current one.

Posted: 7/20/2010 5:17:43 PM EDT

[#35]

Quoted:

Quoted:

I just can't get over the hypocrisy of this douchebag. It's not like he turned down the payment for writing that column, I bet...

Writing off the essential observation as classist is easy, but misses the point. Wealth & politics don't go hand-in-hand by accident. Laws are written specifically to benefit contributors; we're not getting what we pay for WRT "equal representation under the law". It's a contemporary myth. Too much special interest. Bailing out the banks & the auto companies that couldn't/wouldn't/didn't manage themselves was proof-positive of how twisted it is. Taxpayers shouldn't have been forced to bail out the private sector, period. The sooner those ill-managed orgs died, the sooner & more effective any recovery (would have been). The unions aren't not the only groups feeding at the trough anymore. Tax reform? Not happening. Special interest set-asides written into law is the order of the day. I chuckle at the notion of this country calling itself a 'capitalist' economy. A truly capitalist economy nation doesn't force its constituency to bail out private business (at the point of a gun).

This.

Posted: 7/20/2010 5:40:44 PM EDT

[#36]

This douchebag only talks about the top tax rate increasing, which is a stab at Bush. The left has derided Bush's "tax cuts for the wealthiest", but he conveniently forgets to tell you that when the Bush Tax Cuts expire, the bottom rate will go up too. Someone correct me if I am wrong, but I think they are going from 10% to 15%. So much for Bush only looking out for the wealthy.

Damn communist scum.

Posted: 7/20/2010 5:49:03 PM EDT

[#37]

Quoted:
This douchebag only talks about the top tax rate increasing, which is a stab at Bush. The left has derided Bush's "tax cuts for the wealthiest", but he conveniently forgets to tell you that when the Bush Tax Cuts expire, the bottom rate will go up too. Someone correct me if I am wrong, but I think they are going from 10% to 15%. So much for Bush only looking out for the wealthy.

Damn communist scum.

You're correct. Everyone in the 10% bracket gets bumped up to the 15% bracket. Also, a lot of tax credits disappear.

Posted: 7/20/2010 6:00:41 PM EDT

[#38]

Quoted:

Quoted:

Fair Tax FTW.

agreed

A flat tax is better.

Posted: 7/20/2010 6:02:11 PM EDT

[#39]

Fair Tax wouldn't be fair. All the rich will have their shit imported straight to them and not pay a dime. The rest will be schleps with their prebate bullshit.

Posted: 7/20/2010 6:20:11 PM EDT

[#40]

People fail to see that its all a game to the rich.

Rich invest in stockmarket? oh please. Stockmarket is for the middle class. Only time rich uses it is to play the game and make more money.

They make sure their wealth is passed on. they put their wealth into a complex trail of paperwork so no one will know how much wealth they have.

They don't invest their money with risk. They know how to use the system to make more money.

Make a bank. Bank can loan 1 dollar 9 times. they charge 5% interest on good home loans. they make 45% interest.

They will invest in the middleclass because we make money for them. Its all a game.

We might end up like mexico, if we don't let the rich play their games.

Tax them? No way to tax them. They will just leave the country.

Now the people with multi millions are not really rich.. You can tax them, sure. Rich will always be rich, even if the economy goes down, they will have the gold to be rich again in the new market.

Posted: 7/20/2010 7:11:13 PM EDT

[#41]

Quoted:

They don't invest their money with risk. They know how to use the system to make more money.

Do tell...

[ARCHIVED THREAD] - HOLY CLASS WARFARE, Wall Street Journal: How The Rich Are Winning

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