By Dave Johnson, blog.ourfuture.org

Many people don’t understand our country’s problem of concentration of income and wealth because they don’t see it. People just don’t understand how much wealth there is at the top now. The wealth at the top is so extreme that it is beyond most people’s ability to comprehend.

If people understood just how concentrated wealth has become in our country and the effect is has on our politics, our democracy and our people, they would demand our politicians do something about it.

How Much Is A Billion?

Some Wall Street types (and others) make over a billion dollars a year – each year. How much is a billion dollars? How can you visualize an amount of money so high? Here is one way to think about it: The median income in the US is around $29,000, meaning half of us make less and half make more. If you make $29,000 a year, and don’t spend a single penny of it, it will take you 34,482 years to save a billion dollars. . . . (Please come back and read the rest of this after you have recovered.)

What Do People Do With SO Much?

What do people do with all that money? Good question. After you own a stable of politicians who will cut your taxes, there are still a few more things you can buy. Let’s see what $1 billion will buy.

Cars

This is a Maybach. Most people don’t even know there is something called a Maybach. The one in the picture, the Landaulet model, costs $1 million. (Rush Limbaugh, who has 5 homes in Palm Beach, drives a cheaper Maybach 57 S — but makes up for it by owning 6 of them.)

Your $1 billion will only buy you a thousand Maybach Landaulets.

Here are pics of just some of Ralph Lauren’s collection of cars. This is not a museum, this is one person’s private collection. You don’t get to go look at them.

Luxury Hotels

This is the Mardan Palace Hotel in Turkey, Burj Al Arab in Dubai.

Here is a photo gallery of some other expensive hotels, where people pay $20-30,000 per night. Yes, there are people who pay that much. Remember to send me a postcard!

A billion dollars will buy you a $20,000 room every night for 137 years.

Yachts

Le Grand Bleu – $90 million.

Some people spend as much as $200 million or more on yachts.

You can buy ten $100 million yachts with a billion dollars.

Private Jets

Of course, there are private jets. There are approx. 15,000 private jets registered in the US according to NBAA. (Note: See the IPS High-Flyers study.)

This is a Gulfstream G550. You can pick one up for around $40 million, depending. Maybe $60 million top-of-the-line.

Your billion will buy you 25 of these.

Private Islands

If the rabble are getting you down you can always escape to a private island.

This one is going for only $24.5 million – castle included. You can only buy 40 of these with your billion.

Mansions

This modest home (it actually is, for the neighborhood it is in) is offered right now at only about $8 million. I ride my bike past it on my regular exercise route, while I think about how the top tax rate used to be high enough to have good courts, schools & roads and counter the Soviet Union and we didn’t even have deficits.

I ride there but that neighborhood is not like my neighborhood at all. While there is one family in that house, I live closer to the nearby soup kitchen that serves hundreds of families. One family in a huge estate and hundreds at a soup kitchen roughly matches the ratio of wealth concentration described below.

Here are a few nearby homes up for sale.

You can buy 125 houses like this one with your billion.

Luxury Items

Here is an article about ten watches that are more expensive than a Ferrari.

The one in this picture costs more than $5 million. You can buy 200 of these with your billion.

Medieval Castles

Just for fun, this is Derneburg Castle. Do you remember the big oil-price runup a few years ago that sent the price of a gallon at the pump up towards $5? One speculator who helped make that happen got a huge bonus paid with government bailout money. He owns this castle. He has filled it with rare art. You can’t go in and see any of the rare art.

Click here to see the layout in an aerial view. That’s as close as you’re going to get, peasant.

Let’s Go Shopping

So you say to yourself, “I want me some of that. I’d like to place the following order, please.”

One Maybach Landaulet for $1 million to drive around in. (Actually to be driven around in.)
One $100 million yacht for when I want to get seasick.
One Gulfstream G550 private jet for $40 million.
One private island for $24.5 million (castle included) for when I want to escape the masses.
One $8 million estate for when I have to go ashore and mingle with the masses (but not too close.)
One $5 million watch so I can have one.
Total: $178.5 million.

My change after paying with a billion-dollar bill is a meager $821.5 million left over. I might be hard up for cash after my spending spree, but I can still stay in a $20,000 room every night for 112 and 1/2 years.

So, as you see, $1 billion is more than enough to really live it up. People today are amassing multiples of billions, paying very little in taxes and using it in ways that harm the rest of us.

How Extreme Is The Concentration?

Now you have a way to visualize just how much money is concentrated at the very top. And the concentration is increasing. The top 1% took in 23.5% of all of the country’s income in 2007. In 1979 they only took in 8.9%.

It is concentrating at the expense of the rest of us. Between 1979 and 2008, the top 5% of American families saw their real incomes increase 73%, according to Census data. Over the same period, the lowest-income fifth (20% of us) saw a decrease in real income of 4.1%. The rest were just stagnant or saw very little increase. This is why people are borrowing more and more, falling further and further behind. (From the Working Group on Extreme Inequality)

Income VS Wealth

There are a few people who make hundreds of millions of income in a single year. Some people make more than $1 billion in a year.  But that is in a single year. If you make vast sums every year, after a while it starts to add up. (And then there is the story of inherited wealth, passed down and growing for generation after generation…)

Top 1% owns more than 90% of us combined. “In 2007, the latest year for which figures are available from the Federal Reserve Board, the richest 1% of U.S. households owned 33.8% of the nation’s private wealth. That’s more than the combined wealth of the bottom 90 percent.” (Also from the Working Group on Extreme Inequality)

400 people have as much wealth as half of our population. The combined net worth of the Forbes 400 wealthiest Americans in 2007: $1.5 trillion. The combined net worth of the poorest 50% of American households: $1.6 trillion.

Corporate wealth is also personal wealth. When you hear about corporations doing well, think about this chart:

The top 1% also own 50.9% of all stocks, bonds, and mutual fund assets. The top 10% own 90.3%.

Worse Than Egypt

In fact our country’s concentration of wealth is worse than Egypt. Richard Eskow writes,

Imagine: A government run by and for the rich and powerful. Leaders who lecture others about “sacrifice” and deficits while cutting taxes for corporations and the wealthy. A system so corrupt that rich executives can break the law without fear of being punished. Increasing poverty and hardship even as the stock market rises. And now, a nation caught between a broken political system and a populist movement that could be hijacked by religious extremists at any moment. Here’s the reality: Income inequality is actually greater in the United States than it is in Egypt. Politicians here have close financial ties to big corporations, both personally and through their campaigns. Corporate lawbreakers often do go unpunished. Poverty and unemployment statistics for US minorities are surprisingly similar to Egypt’s.

The Harmful Effect on The Rest Of Us

This concentration is having a harmful effect on the rest of us, and even on the wealthy. When income becomes so concentrated people who would otherwise think they are well off look up the ladder, see vastly more wealth accumulating, and think they are not doing all that well after all. This leads to dissatisfaction and risk-taking, in an effort to get even more. And this risk-taking is what leads to financial collapse.

Aside from the resultant risk of financial collapse, the effect of so much in the hands of so few is also bad psychologically. People need to feel they earned that they have earned what they have, and develop theories about why they have so much when others do not. Bizzare and cruel explanations like Ayn Rand’s psychopathic theories about “producers” and “parasites” take hold. Regular people become little more than commodities, blamed for their misery (“personal responsibility”) as they become ever poorer.

Teddy Roosevelt, speaking to the educators about “False Standards Resulting From Swollen Fortunes,” warned that while teachers believe their ideals to be worth sacrifice and so do non-renumerative work for the good of others, seeing great wealth makes people think that obtaining wealth is itself a lofty ideal,

The chief harm done by men of swollen fortune to the community is not the harm that the demagogue is apt to depict as springing from their actions, but the effect that their success sets up a false standard, and serves as a bad example to the rest of us. If we do not ourselves attach an exaggerated importance to the rich man who is distinguished only by his riches, this rich man would have a most insignificant influence over us.

Societies that are more equal do better. In the book The Spirit Level: Why More Equal Societies Almost Always Do Better, Richard G. Wilkinson and Kate Pickett make the case that great inequality harms us physically as well as spiritually, and the these harmful effects show up across society. The book examines social relations, mental health, drug use, physical health, life expectancy, violence, social mobility and other effects and show how inequality worsens each.

Influence Buying

There is a problem of the effect on our democracy from the influence that extreme, concentrated wealth buys. In the book Winner-Take-All Politics: How Washington Made the Rich Richer–and Turned Its Back on the Middle Class, Jacob Hacker and Paul Pierson make the case that the anti-democracy changes we have seen in America since the late 1970s that led to intense concentration of wealth and income are the intentional result of an organized campaign by the wealthy and businesses to use their wealth to, well, buy even more wealth.

The secretive Koch Brothers are said to have a net worth of $21.5 billion each and are particularly influential. They financed the Tea Party movement and along with big corporations and other billionaires they financed the massive assault of TV ads in the midterm elections that helped change the makeup of the Congress. And now Congress is paying them back,

Nine of the 12 new Republicans on the panel signed a pledge distributed by a Koch-founded advocacy group — Americans for Prosperity — to oppose the Obama administration’s proposal to regulate greenhouse gases. Of the six GOP freshman lawmakers on the panel, five benefited from the group’s separate advertising and grassroots activity during the 2010 campaign. … Republicans on the committee have launched an agenda of the sort long backed by the Koch brothers. A top early goal: restricting the reach of the Environmental Protection Agency, which oversees the Kochs’ core energy businesses.
We Must Address This

We owe it to ourselves to come to grips with this problem. We owe it to democracy to begin taxing high incomes and inheritance again. We owe it to future generations to use a temporary wealth tax to pay off the debt.

Resources

The Working Group on Extreme Inequality explains why inequality matters in many more ways, and is well worth clicking through to study. They also have a page of resources for study with links to other organizations. Also, spend some time at Too Much, A commentary on excess and inequality because it is “Dedicated to the notion that our world would be considerably more caring, prosperous, and democratic if we narrowed the vast gap that divides our wealthy from everyone else.” The Center on Budget and Policy Priorities has a Poverty and Income area of research with good resources. The Center for Economic and Policy Research has a research section on Inequality and Poverty.

About Dave Johnson

Dave has more than 20 years of technology industry experience including positions as CEO and VP of marketing. His earlier career included technical positions, including video game design at Atari and Imagic. And he was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.

SOURCE: http://blog.ourfuture.org/20120322/Nine_Pictures_Of_The_Extreme_IncomeWealth_Gap

The American dream, the myth that never was, is alive and well. But only as propaganda entertainment, in the Style magazine of the New York Times and in the glossy Hearst publications but above all on television programs like The Real Housewives.

The idea of an American Dream was to advance the notion that anyone at all could reach the lofty wealth of robber barons like Rockefeller and Frick, that all of us are like runners in a race for riches and that we are all blessed with equal opportunities to a life of leisure and happiness if only we work individually very hard for it.

This deliberate but attractive fiction originated in the frontier spirit where every man and every woman could reach for the stars so-to-say as long as they competed incessantly for the prize, a carrot-and-stick psychology that had and still has Americans working extra hard at an ephemeral materialistic success.

Those who did not succeed were considered to be failures in the economic struggle for survival of the fittest and meanest. It makes for a hollow existence where everything in life is subsumed under a money making philosophy.

To strengthen the fiction that being rich is making you noble and good is undertaken by the PBS programs like Upstairs / Downstairs where the slaves gleefully humiliate themselves to serve their masters or betters as the case may be. Downton Abbey, a caricature of all of the worst British upper class foibles and their misdeeds vis-à-vis their inferiors, i.e. their servants is lauded as an entertaining television series and touted as a fine representation of civilized behavior.

The Housewives on the Bravo channel, a reality television program which never becomes real but is staged and scripted with allowances for personal but also controlled outbursts is an American fiction drama. It displays the most immature behavior while the over-costumed and overly made-up protagonists indulge in personal attacks and petty differences of opinion. all larded in thick egocentrism.

I prefer the Italian Housewives from New Jersey, they are as common as dirt but nevertheless very passionate and dramatic, an Italian opera buffa with all the folderol of clothes and make-up. Teresa and her brother the former stripper Joe Gorga are truly the pieces de resistance. They scream and cry and do not even pretend to be high-class like the awful low-brow cafe society ones in New York City.

und wenn dan der Kopffälltsage ich: Hoppla ! (and when their heads roll, I say: Oops…).

It is cleverly designed so that we may imagine ourselves equally indulging in our worst excesses and moods while lounging in elaborate Byzantine surroundings with surgically enhanced bodies, being hung with extraordinary baubles, clad in tight or flowing couture outfits and high platform shoes. These shows deliberately promote the fiction that rich is wonderful and richer is better and that one’s own dignity as a human being is entirely immaterial.

The fascination that rot and decadence has over us is a sign of the times when empire is fading and the old shibboleths have lost their power. The fictional American Dream has become the American Self Hypnosis. True isolation and emptiness of spirit is being sold to us like a panacea for curing our insecurities and need for substance. It is the worst of times and it percolates into everything from sham presidential debates to the doctored news.

Television shows like the Housewives are fully intended to make us forget that we live in a capitalist totalitarian universe by advancing the idea of individual choice, of which there is none. They are the Janus face of the gloom and doom industry of contemporary Hollywood mega-movies. In the last it is the single hero (and now women are leashed into battle gear as well) destined to overcome by himself and herself all alien opponents and terrorist predators, trying to convince us that we should do battle for survival without any communal solidarity.

We are being reduced here to lonely and passive observers, like laboratory animals who are strapped into machines, sadly reacting to what is being done to them and who are not even recognized as oppressed casual victims. Those are the tactics of the holders of our attention that make us easily controllable and that is the bondage of the slave mentality that modern day capitalism demands.

The Real Housewives shows us our serfdom and serves as a warning about the easy slide into complacency because it glorifies a dire rentier attitude that fully takes its status for granted. Its quite cleverly hidden repulsiveness like that of the deathly predator movies demonstrates how far we have entered a path of no return within the present destructive system. It reinforces and justifies the obnoxious ads that seduce us into an artificial and dis-enhanced lifestyle in thrall to a destructive materialism. Morris Berman wrote about the disenchanted world (“Coming to our senses”, Shuster 1989) and there is no better illustration for it than these television series.

GUI ROCHAT  (Guillaume Frédéric Rochat) is an international private art dealer and consultant, dealing primarily in seventeenth and eighteenth century French paintings and drawings, working from New York as ‘Gui Rochat Old Masters’. His long experience with four art auction houses, Sotheby’s, Phillips Son & Neale, Butterfields (now Bonhams) and DoyleNewYork has given him the background for rescuing a number of Old Master paintings from oblivion.

With every good wish,

—(Dr.) Steve Jonas 

STEVEN JONAS MD, MPH

“Washington Doesn’t Work,” or “Washington Just Doesn’t Work,” or “Washington: the Gridlock has to be Broken,” or some such. One hears it on the media all the time, both reactionary and liberal: Fox”News”Channel, Joe Scarborough, Ed Schultz, and certainly on CNN. “We’ve got to fix ‘Washington.’ ” But is it really true that “Washington doesn’t work” and that it “Has to be fixed?” Well, it all depends. It all depends who you are and what your interests are. There surely is gridlock in the Congress and between the Congress and the President, most of the time, as demonstrated by what will have happened, or not happened, by the time this column, written at around 6:00PM EST on Jan. 1 makes its way onto the internet. But that doesn’t mean “it doesn’t work.” It works just fine for a variety of interested parties, taken here in no particular order. (And the so-called cliff-hanger sure did for the most part benefit the GOP and the wealthy, see, for example, the footnotes, below, from The Huffington Post and the Citizens for Tax Justice.)

For example, Washington works just fine for the gun industry, that is the gun and ammunition manufacturers and the gun dealers. Nothing that can get in the way of their continued sales of weapons and ammunition, the main interest of the NRA’s major funders, those very industries, gets through Congress. And the same Congress makes sure that the Executive Branch can do nothing on its own about the gun problem, even if it wanted to. A majority of the Congress is owned by that dreadful alliance and no meaningful legislation will ever get through it as long as that state of affairs is maintained, no matter how many Newtowns there might be.

Just consider how clever the NRA is, converting the debate in the aftermath of Newtown from one over some minimal approaches to gun control to one over whether there should be armed guards in every school (like there was at Columbine) and whether teachers should be armed (think “Gunfight at the OK teachers’ lounge). As for the Executive Branch, they have left the position of Director of the Bureau of Alcohol, Tobacco and Firearms unfilled for six years. That gap not only affects the gunners but also affects the two even larger killers of US citizens, the tobacco and alcohol industries, (440,000 and 65,000-100,000 deaths per year, depending upon how one counts).

Washington works just fine if you are a major smoke polluter. Very early in his first term, Obama dropped any pretence of going after cap-and-trade legislation and it works just fine if the last thing you want is any set of meaningful measures to deal with global warming and climate change.

Washington works just fine if you are a wealthy person, a la Mitt Romney, who has stashed a good deal of wealth overseas, beyond the reach of the IRS. For all the talk of “tax reform” and “fixing the tax code” that comes out of both parties, if such initiatives were ever to get down to the nitty-gritty in the House and Senate committees concerned with such matters you could bet your bottom dollar that the lobbyists would tie those committees in knots and any meaningful reform would become a dead letter.

Washington works just fine if you are Grover Norquist and your real aim is not “no new taxes” but “shrinking the size of the Federal government to the size of a bathtub and then drowning it in the bathtub” (1). Of course by that phrase Grover means those sections of the Federal government he doesn’t like: the non-military/non-prison operational arms, the paid-for benefits programs, and virtually any form of regulation. His game was in fact given away when the final form of the “pulling-back-from-the-fiscal-cliff” “compromise” was being negotiated. Grover said that an agreement that included certain tax increases on the very wealthy was OK with him (2). Why? Because he was fairly salivating over the unspecified spending cuts that would be part of any deal, spending cuts to that tiny proportion of the Federal government beyond the paid-for benefits programs, that provide real services (like say air traffic control, infrastructure construction, and the National Weather Service) to real people, that would be fully controlled by his beloved GOP-front Tea party in the House.

Washington works just fine if you are one of the various beneficiaries of the so-called “War on Drugs:” the prison industrial complex; the drug cartels (whose business and enormous profits would go to zero were the “war” to be ended); the tobacco and alcohol industries (which might see attention turned to the real killer substances, the drug and drug carriers that they produce and sell); the pharmaceutical industry (that might be called to account for the epidemic of pain-killer addiction that has gained such a prominent place in the real drug-use problem); the gun industry (which benefits from the selling of illegal guns both here and abroad); and so on and so forth. Even with marijuana legalization starting to take hold, there are few politicians ready to risk it all for an all-out assault on this “war” that originated as a complement to Nixon’s racist “Southern Strategy.”

Washington works just fine if you are the oil or factory farm industries, with their huge subsidies that aren’t going to end anytime soon.

And of course Washington works just fine if you are part of the military/industrial complex. You may see a real drop in money spent, as part of the resolution of the “fiscal cliff” crisis, but a) in percentage terms it isn’t so great, and b) apparently a significant chunk of the savings will be coming out of the hides, literally, of service members and civilian employees, in one way or another.

And so on and so forth. The primary point here is that the State, that is the legislative, executive and judicial branches (see Citizens United) of government works in the interest not of the “We the People of the United States” which supposedly are the underpinning of the Constitution (see that least-read part of it, the Preamble), but in the interests of the economic ruling class of the United States.

As that great socialist (sic) Teddy Roosevelt said in an August, 1912, speech when he was running for President under the banner of the Bull Moose Party (3): “Behind the ostensible government sits enthroned an invisible government owing no allegiance and acknowledging no responsibility to the people. To destroy this invisible government, to befoul the unholy alliance between corrupt business and corrupt politics is the first task of the statesmanship of the day.” In this, the great TR was actually several years ahead of a now obscure Russian political scientist named V.I. Ulyanov who in 1917 published a whole book on the subject, entitled The State and Revolution.

When the political commentators cited at the beginning of this column talk about “Washington not working” they are referring to either some abstract concept of “working” or to legislation, judicial decisions, and regulatory policies that would actually benefit the majority of “We the People of the United States.” But as long as the ruling class, and you know who they are, remains in control of the state, that ain’t going to happen.

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1. Jonas, S., “Grover Norquist’s Wet Dream,” http://blog.buzzflash.com/node/12601. April 20, 2011.

2. “Norquist Throws His Support Behind Biden-McConnell Plan,” Newsmax, http://www.newsmax.com/Headline/Norquist-Biden-McConnell-support/2012/12/31/id/469608?s=al&promo_code=11598-1.

3. Nader, R., “Compare the 1912 Elections with the 2012 Elections,” http://www.informationclearinghouse.info/article33492.htm
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Steven Jonas, MD, MPH is a Professor of Preventive Medicine at Stony Brook University (NY) and author/co-author/editor/co-editor of over 30 books. In addition to being a columnist for BuzzFlash@Truthout he is the Managing Editor of and a Contributing Author to The Political Junkies for Progressive Democracy.

Footnotes:

Fiscal Cliff Deal Sneaks In Wall Street Gifts, NASCAR Perk
Posted: 01/02/2013 8:38 pm EST | Updated: 01/03/2013 10:17 am EST (Huff Post)

The 11th-hour deal to avert the so-called fiscal cliff preserved billions of dollars in corporate tax giveaways even as it slashed take-home pay for millions of American workers.

The deal was less kind to the middle class. Congress permitted a cut in the payroll tax to expire, meaning that the tax burden for the average worker will increase about $1,000 in 2013.