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The Hidden Wealth of the Richest 1% Excerpted from the electronic book:
Feudalism ... Alias American Capitalism
Hidden Permanent Prosperity For The Rich
If you were unaware of the severity of wealth distribution inequities,
then you are probably
in for an even bigger surprise to learn
that the rate, at which the economic elite are getting richer,
is simply astounding.
Statistics published in Forbes magazine's annual survey of
America's billionaires expose this little known but shocking reality.
In 1982 there were 13 billionaires; in 1983....15; in 1984....12; in 1985....13; in 1986....26; in 1987....49.
Note carefully that prior to 1986 the number of American billionaires
had averaged around 13.
Then the Reagan administration drastically
altered the wealth distribution patterns by introducing
new
tax legislation favoring the top 1%.
In 1986 the number of billionaires DOUBLED, and by 1987
the number
of billionaires had virtually QUADRUPLED to 49!!
By 1988, there were 68 individuals or
families that each had
net wealth in excess of $1,000,000,000. By 1989, the number had
risen
precipitously to 82. And by 1990, the Forbes survey reported
the staggering total of 99!!
With
favorable tax laws in place, the super rich can enjoy bonanza
years even during recessions!!
The tax laws that allowed this
to happen are still in place, and will remain in place till
enough
people get sufficiently concerned to insist that they be
changed.
(A book excerpt)
Including or excluding the so called "couch potatoes",
Americans take in more
information than they ever have. Newscasters
such as Ted Koppel, Dan Rather,
Tom Brokaw, Robert McNeil, and
Jim Lehrer are as well known to this generation
as Walter Cronkite
was to previous generations. Not only do people watch their
favorite
newscasters regularly, they read mountains of newspapers and magazines
as well.
Because the American media claims to be the freest in the world,
few have reason
to suspect that their mass media information is
being very carefully controlled and colored.
The shocking truth
is that the American public is being purposely kept in the dark
about many vital realities.
For example are you aware that:
THE RICHEST 1 (ONE) PERCENT OF AMERICANS possess more wealth than
THE COMBINED WEALTH OF THE BOTTOM 90 (NINETY) PERCENT.
Despite how incorrect that statistic may first appear, there is
definitely no error
or misprint involved. Not only that, the full
significance of the above statement
is rather difficult to instantly
appreciate, so we'll take a moment more to consider its implications.
Because the richest 1% prefer to associate almost exclusively
with members of
their own social and economic standing, few members
of the bottom 90% of
Americans have ever even met a millionaire
let alone a billionaire.
Consequently if you belong to the bottom 90%,
you can think of
the wealth of the richest 1% as :
more wealth than the combined assets of every American you have
ever met,
plus all the assets of every American you would be likely
to meet on a trip
that took you through every single city and
town in the nation!!
If you haven't been thinking of the rich and their wealth in quite
that light,
I suggest you begin to, because that information is
only the tip of the iceberg of
information being actively suppressed
by the so-called freest media on the planet.
Many references will
be made throughout the book to the bottom 90%,
so it is appropriate
that we try to define the group a little more precisely.
Since the average person in the West considers himself or herself
a member of the
middle class, logic as well as popular opinion
would suggest that half or more of the
population fits into it.
Initially then, let's arbitrarily consider that American society
is
comprised of 60% middle class, 20% lower class, and 20% upper
class. Because the
combined middle and lower economic classes
only account for 80% of the population,
the bottom 90% of society
must also include half of the so-called upper class as well!
This means that the bottom 90% is comprised of:
1) Every member of the middle class
2) Every member of the lower class
3) Half the members of the wealthy upper class
So now our original statistics can be interpreted to mean that:
THE RICHEST 1 (ONE) PERCENT of Americans own more wealth than:
1) ALL of the wealth of ALL of the MIDDLE class
COMBINED WITH
2) ALL of the wealth of ALL of the LOWER class
AND ADDED TO
3) ALL of the wealth of the bottom HALF of the UPPER class
If you are surprised or shocked, don't feel bad. The elite have
gone out of their way
to ensure that you didn't know it. Nevertheless,
my initial choice of (20%, 60%, and 20%)
to represent the upper,
middle, and lower class population percentages was arbitrary,
so if you think the arbitrary percentage breakdown of society
was at fault, I welcome
you to run your own idea of the class
percentages through the preceding model. No
matter what figures
you choose, the bottom 90% of society would still have to include
ALL of the lower class, plus ALL of the so called middle class,
plus a portion of the upper class.
The staggering significance
of the wealth of the richest 1% will not alter. Go ahead and try
it.
The Hidden Wealth of the Next Richest 9%
Up to this point, we have referred only to the richest 1% and
the bottom 90%. However,
sandwiched in between those two groups
is another wealthy minority, the next richest 9% .
Let's
now find out how that group fares economically. You may be stunned
to learn that:
THE NEXT RICHEST 9 (NINE) PERCENT also possess more wealth
than
THE COMBINED WEALTH OF THE BOTTOM 90 (NINETY) PERCENT
As unbelievable as it sounds, there are two minority groups, not
just one, that own
more assets than the bottom 90%. These two
statistics alone should leave little doubt
that the bulk of the
wealth in America is owned by a very small minority of super rich
individuals. This reality contrasts so drastically with the "equal
opportunity", "equal prosperity"
concepts fed to
the bottom 90% and the world at large, that statistics such as
these have
had to be suppressed. Again, there is no misprint.
The only deceit involved is that the
bottom 90% have been purposely
kept in the dark about wealth distribution realities.
Hidden Permanent Prosperity For The Rich
If you were unaware of the severity of wealth distribution inequities,
then you are probably in
for an even bigger surprise to learn
that the rate, at which the economic elite are getting richer,
is simply astounding.
Statistics published in Forbes magazine's annual survey of
America's billionaires expose this little
known but shocking reality.
In 1982 there were 13 billionaires; in 1983....15; in 1984....12; in 1985....13;
in 1986....26; in 1987....49. Note carefully that prior to 1986 the number of
American billionaires
had averaged around 13. Then the Reagan administration
drastically
altered the wealth distribution patterns by introducing new
tax legislation favoring the top 1%.
In 1986 the number of billionaires DOUBLED, and by 1987 the number
of
billionaires had virtually QUADRUPLED to 49!!
By 1988, there were 68 individuals or
families that each had
net wealth in excess of $1,000,000,000. By 1989, the number
had
risen precipitously to 82. And by 1990, the Forbes survey reported
the staggering
total of 99!!
With favorable tax laws in place, the super rich can enjoy bonanza
years even
during recessions!! The tax laws that allowed this
to happen are still in place, and will
remain in place till
enough people get sufficiently concerned to insist that they be
changed.
Go to: Forbes: CEO Pay Jumped 24 Percent Last Year
If prostitution is the oldest profession, gambling is certainly
one of the runners-up.
The practice of increasing one's wealth
without having to expend one's energy, or be
productive in any
way, has attracted followers from the dawn of time. In the West,
individuals who do so as a career, have percolated to the top
of the economic and social
ladders because their predecessors
have successfully lobbied for the legislation that makes it all
possible.
Regrettably, the message being broadcast by the yuppies and the
super rich is that
putting in an honest day's work for an honest
day's pay is reserved for suckers and those
afraid to take risks.
Accordingly, the fever to get rich quick, without really working,
is causing
countless lower class entrepreneurs to choose drug
trafficking as an elevator to their
financial success, just as
stock market and real estate speculation is chosen by the upper
class entrepreneurs. To put it mildly, Wall Street scandals are
becoming commonplace, and
stock markets seem more and more to
be the playing field for inside traders and stock price
manipulators.
Legitimate balance sheet acrobatics makes it increasingly unwise
for all but
seasoned market professionals to invest in America's
potential. The article on page 46 in the
Jan 9 1989 issue of Forbes,
entitled "Never, but never, give a sucker an even break",
exposes just how easily the unwary can be parted from their money.
Although the stock market has always had a casino-like atmosphere
attached to it, the
contagious "get rich quick" fever,
now seems to have pervaded virtually every aspect of
legitimate
business. Corporations are spending more time and effort on making
profits
through balance sheet maneuvers than through anything
even remotely related to efficiency or productivity.
The investment departments of corporations have usually preferred
to gamble on the
stock market, and banks on real estate. But in
reality they each gamble in both speculation
games simultaneously,
converting assets back and forth from real estate to stocks whenever
they think one or the other of the speculation games is ready
to crumble.
The October 1987 stock market crash was to the stock market speculation
game, the equivalent
of a national run on the banks in the real
estate market speculation game. Stocks across the
board had been
traded back and forth until they were hopelessly overvalued, at
which time the
gamblers who did not get out in time, took their
losses, and passed them on to their customers
in the guise of
price inflation. Of course there were the usual bailouts,
but
some of the brokerage houses still went bankrupt.
The key, to understanding why the public at large should be concerned
about market and
bank failures, centers around the fact that speculators
rarely gamble with their own money.
They normally borrow the money
from someone else. To appreciate the magnitude of this problem,
let's examine why so many banks and savings and loan thrift institutions
have gone bankrupt.
THIS SOUNDS JUST LIKE THE 2008 WALL STREET BAIL OUT
http://users.uniserve.com/~synergy/pg1-45.htm#s3s7
The banking world, which has up to now enjoyed a reputation as
a trustworthy,
stable cornerstone of society, no longer merits
either the respect or the trust which
most citizens, in ignorance,
continue to ascribe to it. One of the oldest jokes in the
banking
industry wryly acknowledges that "The easiest way to rob
a bank, is to own one."
And in a nutshell, this is precisely why hundreds of banks and
S&L thrift institutions have recently declared bankruptcy.
A knowledge of the root causes of S&L failures is so fundamental
to an overall appreciation
of society today, that a synoptic description
of the scam behind the failures will now be outlined.
Most important is the fact that banks and S&Ls were, and still
are today, vehicles for acquiring
money to gamble with. Most depositors
who deposit their money in a savings account, or on
fixed term
deposit, tend to think of banks as giant vaults in which their
money can safely reside
free from the ravages of fire, theft,
and accidental loss. Even the massive amounts of money that
flow
into banks from pension funds are put on deposit basically for
safekeeping. Decades ago,
when interest rates, and property values
were relatively stable and comparatively fixed, the
image of banks
as vaults was not that far off the mark. Most institutions made
their money
from the spread in interest rates between what they
paid to their depositors, and what they
received from those who
borrowed from the bank. Times have changed.
With speculation profits as the lure,
S&L thrift owners
have been using depositors' money as their
personal gambling stakes
to engage in real estate speculation.
They bought up plenty
of actual properties, and also issued mortgages on others.
Some
of these mortgages were assigned, at preferred interest rates,
to friends, relatives,
and business partners, etc. In this way,
a network of chosen insiders could also
use depositors' money
to engage in real estate speculation!!
As prices continued to rise, the speculators were free to sell
their properties
for profits. The mortgages could be paid out
or passed on to the new real estate buyers,
in which case, new
properties could be purchased and new mortgages taken out.
The
profits for many were enormous. Prior to the real estate slump,
prices had skyrocketed.
Although much of the speculation involved
commercial real estate, the price of residential
real estate was
also inflated in the process. Meanwhile, the innocent bank depositors
were
still only being paid their measly fixed low interest. The
profit difference, which for some has
been instant millions or
hundreds of millions, was pure profit involving absolutely no
productivity whatsoever, and for that matter, little or no risk
either. Why little or no risk?
Well, when the real estate market inevitably collapsed, the banking
and corporate gamblers
start dumping their real estate holdings
on the declining market. Almost instantly, there were
no buyers
in sight. The gambling bankers were left with overvalued properties,
and overvalued
mortgages whose holders predictably chose to default
on. Hundreds of bank and thrift owners
knew the party was over,
and that they were on the road to bankruptcy.
Were the speculators now going to lose all the profits they had
made on the way up?
Not a chance.
They were all capable of walking
away from their institutions relatively unscathed, and here's
how.
Between the time the gamblers know they have lost, and before
a bank or thrift actually declares bankruptcy,
the insiders purposely
maintain appearances and keep the institution afloat as long as
possible
to buy time to carry out some or all of the following
remaining steps of this much used scenario.
- 1) Maintain the institution's cash flow, often by offering higher
interest rates than its
competitors to attract "brand new"
depositors. These new depositors are in effect
unsuspecting victims
right from the start!! This tactic allows time for the insiders
to
withdraw as much of their own capital as possible, and leave
the new unsuspecting
depositors as victims to absorb the losses,
and/or have their money tied up
during the bankruptcy or bailout
delays.
- 2) Pay themselves out as many dividends, bonuses, private country
club
membership dues, etc. as is possible.
- 3) Transfer the bulk of their entire personal wealth into their
wives or children's names,
(if they hadn't already done so), and
stash away some extra cash in foreign banks,
in case they later
get sued.
- 4) Issue low interest or interest free loans to their family businesses,
friends' corporations,
and even their own healthy subsidiary businesses,
etc. Needless to say, when the bank goes
into bankruptcy, these
loans will start defaulting too, and will probably eventually
be
written off as bad debts by the liquidator or receiver.
- 5) Operate the last few months strictly on credit, running up
the tab to the hilt.
- 6) Apply for a government bailout. Even if a bailout is denied,
individual investors
may be repaid through deposit insurance plans.
Here again, it is not the gamblers
who end up covering any of
their losses. Either directly or indirectly, it is the taxpayer
who pays for the gambler's winnings and losses.
- 7) Failing a successful bailout bid, they declare bankruptcy,
and walk away from the carcass leaving countless
"depositors"
(victims) innocently holding the bag.
The present and future taxpayers, whose standard of living
will be reduced in the process
of paying back the two to three
hundred billion dollars in S&L bailout money, are simply paying
for all the profits taken out by the speculators who now pose
as the nation's most
successful entrepreneurs, and respected community
leaders!!