The new Forbes 400: Provocative wealth amidst social misery

By Tom Eley WSWS
Dateline: 3 October 2009  [print_link]

The 400 richest Americans have so far weathered the second year of the deepest economic crisis since the Great Depression with a combined $1.27 trillion, according to Forbes magazine’s annual list.

The total net worth of the wealthiest 400 Americans actually declined by $300 billion in 2009, down from $1.57 trillion a year earlier.

This is hardly a tale of woe. The average net worth of the 400 richest Americans was $3.17 billion, and it took nearly a billion dollars, $950 million, in order to make the Forbes list.

US Census Bureau: 40 million living in poverty”)

Instead, the fall-off in the billionaires’ fortunes resulted largely from the souring and collapse of certain speculative financial ventures and the stock market.

This is what makes the fortunes of the richest Americans in 2009 so provocative—it is precisely their reckless gambling and insatiable greed that caused the economic crisis now subjecting masses in the US to a level of social misery not experienced in generations.

The obscene wealth of a tiny handful is proof of a dramatic misallocation of resources.

The combined wealth of the Forbes 400, $1.27 trillion, is greater by $483 billion than the entire “stimulus package,” the American Recovery and Reinvestment Act.

The combined fortune of the richest 400 Americans, who comprise just .00013 percent of the population, is greater by about 50 percent than the price of the health care “overhaul” promoted by the Obama administration, which, in the name of “controlling costs,” will carry out substantial cuts in Medicare, ration treatment to the sick and aged, and force families to purchase private insurance.

The personal fortunes of three men, computer magnates Bill Gates and Larry Ellison, and financier Warren Buffett, would each have been more than enough to resolve the 2009-2010 budget deficit of the nation’s most populous state, California, which has been met through deep cuts to social programs and public education, and the furloughing of state workers.

California is home to more than a fifth of the Forbes 400. Eighty-three California oligarchs have a combined net worth of about $234 billion, according to Forbes. That is a multiple of about eight times California’s two-year budget deficit.

Michigan’s ten billionaires have a combined net worth of about $20 billion, about seven times the state budget deficit of $2.8 billion. Among other savage cuts, Michigan lawmakers intend to save $350,000 by shutting down the state’s poison control call center, and about the same amount of money by scaling back a program that pays farmers to send their excess produce to food charities, helping to feed one million people.

New York’s 66 billionaires, 57 of whom reside in New York City, have a combined wealth of $216 billion, roughly 18 times the size of the Gross Domestic Product (GDP) of Afghanistan, whose population of 28 million the US military is attempting to subdue through a brutal counterinsurgency campaign.

In fact, the personal fortunes of individual Americans on the list are larger than the GDPs of a number of countries.

And the combined wealth of the Forbes 400 is larger than the GDP of India, the world’s 12th largest economy, and home to 1.2 billion people.

The fabulous wealth that the US financial and corporate elite continue to enjoy in the midst of a financial crisis of its own making is the outcome of long historical processes.

When Forbes first published its compilation of richest Americans in 1982, the wealthiest individual listed was shipping magnate Daniel Ludwig. Ludwig’s estimated fortune of $2 billion would place him far down the list today.

The list of 1982 included names such as Ford, Du Pont, Whitney, Duke, and Harriman, to name a few. These empires were associated with the expansion of US industrial production.

It is notable that on today’s list there are few whose fortunes were built up through the production of industrial goods, except indirectly through inheritance.

Two categories, “finance” and “investments,” provided the fortunes of 106 of the wealthiest Americans. Other major sources of wealth that Forbes identified include media, real estate, oil and retail.

TOM ELEY writes for the World Socialist Web Site.

Obama’s tonguelashings are just window-dressing—

Financial fraternity flaunts its obscene compensation in the face of widespread unemployment, benefit cutbacks and foreclosures

Dateline: 15 October 2009  [print_link]

By Barry Grey, WSWS

ACCORDING TO THE Wall Street Journal, the major US banks and financial firms are on track to hand out a record $140 billion in compensation this year. This is a 20 percent increase from 2008 and $10 billion more than the previous record, set in 2007.

The stock market celebrated the news, outlined in a front-page Journal article on Wednesday, along with the release of JPMorgan Chase’s third-quarter earnings report, which showed a seven-fold increase in profits from last year to $3.6 billion. The Dow Jones Industrial Average rose 145 points, closing above the 10,000 mark for the first time in a year.

The record pay being handed out by the 23 largest publicly traded banks, hedge funds, asset management firms and stock and commodity exchanges (the report did not include privately held companies) underscores the class interests being served by the Obama administration and the subordination of the entire political system to a financial aristocracy which essentially dictates government policy.

The American financial elite, aided and abetted by the White House and Congress, is profiting from an economic disaster that is driving hundreds of millions of working people in the US and around the world into poverty—a disaster precipitated by its own methods of financial speculation and fraud and its manic pursuit of personal gain.

One year after the financial crash of 2008, the richer-than-ever compensation packages for bankers give the lie to Obama’s occasional protests against Wall Street “excesses” and talk of tough, new banking regulations. It demonstrates that the administration’s economic policies, including trillions in subsidies to the banks, have been devoted to paying off the bad debts of the bankers at public expense and protecting the wealth of a miniscule section of the population.

There is an element of provocation in the pay awards being doled out by the banks. Far from curbing their avarice, they are flaunting their wealth and power in the midst of soaring unemployment and deepening social misery for millions of Americans.

The Journal based its estimate on an analysis of the financial firms’ earnings reports for the first half of 2009 and projected earnings for the rest of the year. It predicted the firms’ total revenues would hit $437 billion this year, surpassing the $345 billion they recorded in 2007, before the financial crisis erupted.

The projected $140 billion in compensation includes salary, bonuses, health benefits, retirement plans and stock awards. Average compensation for employees at the 23 firms will top out at $143,000, but this figure obscures the eight-digit sums that will go to the top executives and traders, who will receive a disproportionate share of the total outlay.

The Journal projects that Bank of America, which has not paid back the $45 billion in cash it received in Troubled Asset Relief Program (TARP) funds, will award more than $30 billion in compensation, a 64 percent increase over last year. JPMorgan Chase will pay out $29.5 billion, an increase of nearly 30 percent. Goldman Sachs is on track to dispense $21.8 billion, nearly double its pay tab for 2008. The average Goldman employee will receive over $743,000.

While bank pay is reaching new heights, workers’ wages are being systematically slashed. The New York Times reported Wednesday that pay cuts in the US “are occurring more frequently than at any time since the Great Depression.” It cited Bureau of Labor statistics showing that weekly pay for production workers, representing 80 percent of the workforce, has fallen for nine consecutive months. This is a record for the 44 years since the bureau began tracking weekly pay. The previous record was a two-month period during the 1981-82 recession.

The assault on workers’ pay reflects a deliberate policy of the Obama administration to use mass unemployment to drive down the wages and living standards of the working class and effect a further redistribution of wealth from the bottom to the top.

While Obama demands that the American people “take responsibility” for the crisis and “live within their means,” he implements policies designed to further enrich the financial elite. Even as he continued and expanded the bank bailout begun under Bush, he intervened last March to scuttle bills in Congress, following the public furor over millions in bonuses awarded by the bailed-out insurance firm AIG, which would have imposed certain restraints on executive pay.

He followed this by rejecting the turnaround plans of General Motors and Chrysler and forcing the auto companies into bankruptcy, in order to impose sweeping layoffs and cuts in pay and benefits for auto workers. This was a sign to big business to launch a wage-cutting drive against the working class as a whole.

The White House is pushing a health care overhaul that will dramatically cut coverage for workers, which is to be a down payment on austerity measures and cuts in basic entitlement programs, such as Medicare, on which tens of millions of people rely.

No government measures are being proposed to create jobs. Nothing is being done to provide relief for millions who are facing foreclosure, the cutoff of utilities, the loss of life savings and the prospect of destitution. The administration has flatly refused to provide additional money to states and localities that are being bankrupted by the fall in tax revenues. As a result, savage cuts are being made in education, health care and other social services across the country, and tens of thousands of public workers are being laid off.

The $140 billion in compensation reported by the Wall Street Journal for a section of the financial industry equals the total amount allocated in the administration’s stimulus plan for aid to the states.

To put this sum in perspective, it is more than twice the federal outlay in 2008 for education ($67 billion), close to three times federal spending that year for highways and mass transit ($53 billion), and far in excess of allocations for unemployment benefits ($37 billion); community and regional development ($27 billion); general science, space and technology ($27 billion); training, employment and social services ($26 billion) and housing and commerce ($7.4 billion). The total federal outlay for homeless assistance programs in 2008 was $2.4 billion.

This $140 billion is greater than the gross domestic product of Egypt, a country of 82 million people, slightly less than the GDP of the Philippines (population—96 million) and nearly three times the GDP of Ecuador (14 million).

This colossal squandering of resources is rooted neither in psychology nor the “culture” of Wall Street, but rather in the capitalist system itself. The profit system subordinates all social needs to the accumulation of personal wealth by the narrow stratum that owns and controls the means of production, dominated by finance capital—the most parasitic and predatory section of the ruling elite.

The social disaster threatening the working class can be reversed only on the basis of a struggle for socialism, in which the productive forces created by the working class are taken out of private hands and developed under democratic control for the benefit of society as a whole.

The working class must break the stranglehold of the financial aristocracy. The ill-gotten gains of the CEOs and financiers must be expropriated, without compensation, and these funds, which add up to trillions of dollars, used to meet the needs of working people for jobs, housing, education and health care, and to rebuild the crumbling social infrastructure.

The books and business dealings of the big banks must be opened to public scrutiny, with criminal investigations undertaken into their illegal practices.

This requires the building of a mass socialist movement directed against the Obama administration, the two-party system and the capitalist system which they defend.

Barry Grey is a senior analyst with the World Socialist Web Site.

ONCE AGAIN President Obama and his team demonstrate that they’re more interested in selling us the Brooklyn Bridge via high-handed p.r. tricks than delivering the real product. (Physicians for single payer were excluded.)

[print_link]

Single payer MD’s not invited to White House

President meets with doctors who support his reforms but excludes MD’s who support “medicare for all” view

THE REAL NEWS NETWORK (TRNN)

October 5, 2009, 12:21 PM

White Coats in the Rose Garden, as Obama Rallies Doctors on Health Overhaul

By SHERYL GAY STOLBERG

President Obama, seeking to pitch his plan for a health care overhaul as the Senate Finance Committee moves toward a critical vote, invited a group of white-coated doctors to the Rose Garden on Monday, telling them that “nobody has more credibility with the American people on this issue than you do.’’

In brief remarks to the doctors – all of whom support Mr. Obama’s plan and have vowed to fan out in their home states to advocate for it – the president sought to make the case that reforming the health care system would benefit the medical profession as much as patients.

He said the bills moving through Congress would streamline paperwork and let doctors spend more time caring for patients and less time haggling with insurance companies. Mr. Obama drew especially hearty applause when he said that the reforms would include “loan forgiveness for primary care physicians’’ who agree to work in rural or underserved areas.

The Senate Finance Committee is set to vote this week on health legislation, and the president is trying to use his platform to keep public attention on the effort.

The 150 doctors, representing all 50 states, were planning to do media interviews with home state newspapers and television stations about their White House visit — a kind of local marketing effort.

The White House said it assembled the group of doctors by working with several medical organizations, including the American Medical Association, which has publicly supported the president’s plan for an overhaul, as well as the American Osteopathic Association and the American Academy of Pediatrics. Many were members of Doctors for America, a new grassroots organization that has advocated a health care overhaul — and is an outgrowth of Doctors for Obama, which worked to help elect the president.

Dr. Vivek Murthy of Brigham and Women’s Hospital in Boston, a founder of Doctors for America, said Mr. Obama ‘’understands that the current system isn’t working for patients, but it’s also not working for doctors.’’

Update | 3:42 p.m.

As noted below, the group that supplied many of the doctors for the Rose Garden event, Doctors for America, is a nonprofit organization that grew out of Doctors for Obama, which worked to help elect the president. But it also appears to be working closely with Organizing for America, Mr. Obama’s political organization. Its members include physicians like Dr. Alice Chen, an internist at UCLA Medical Center, who said during an interview in the Rose Garden that she often feels as if ‘’my hands are tied’’ in trying to provide quality care to patients who lack insurance.

Dr. Chen said she intended to speak to fellow doctors and encourage them to write letters to the editor in support of Mr. Obama’s plan. She is currently doing just that on the Organizing for America Web site, which has posted a letter in which Dr. Chen asks fellow doctors to “help influence the debate at this crucial moment’’ by making their voices heard.

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