Meet the Global Financial Elites Controlling $46 Trillion In Wealth
By David DeGraw, Amped Status
Posted on August 11, 2011, Printed on August 13, 2011
http://www.alternet.org/story/151999/meet_the_global_financial_elites_controlling_%2446_trillion_in_wealth
The following is an adapted excerpt from David DeGraw's new report on the
financial destruction of the United States. The full report can be read
here: Analysis of Financial Terrorism in America.
"There's class warfare, all right, but it's my class,
the rich class, that's making war, and we're winning."
- Warren Buffett, Chairman and CEO of Berkshire Hathaway
How Much Wealth Do The Economic Elite Have?
While 68.3 million Americans struggle to get enough food to eat and wages
are declining for 90 percent of the population, US millionaire household
wealth has reached an unprecedented level. According to an extensive study
by auditing and financial advisory firm Deloitte, US millionaire households
now have $38.6 trillion in wealth. On top of the $38.6 trillion this study
reveals, they have an estimated $6.3 trillion hidden in offshore accounts.
In total, US millionaire households have at least $45.9 trillion in wealth,
the majority of this wealth is held within the upper one-tenth of one
percent of the population.
If all this isn't obscene enough, to further demonstrate how the global
economy has now been completely rigged, Deloitte's analysis predicated,
based on current trends, that US millionaire households will see a 225
percent increase in wealth to $87.1 trillion by 2020. Accounting for wealth
hidden in offshore accounts, they are projected to have over $100 trillion
in total within the next decade.
Most people cannot even comprehend how much $1 trillion is, let alone $46
trillion. One trillion is equal to 1000 billion, or $1,000,000,000,000. To
put it in perspective, last year the entire cost of feeding all 40 million
Americans on food stamps was $65 billion.
Now consider, according to the latest IRS data, only 0.076 percent of the
population, less than one-tenth of one percent, earned over $1 million in
2009.
The graph below, based on data from the Tax Policy Center, shows how much
income is earned by a household at any given percentile in income
distribution:
The highest bracket for annual income is $50 million or more. Only 74
Americans are in this elite group. The average income within this category
was $91.2 million in 2008. As astonishing as that is, in 2009 they averaged
$518.8 million each, or about $10 million per week. This means, in the
depths of the recession, the richest 74 Americans increased their income by
more than five times within this one year. These 74 people made more money
than 19 million workers combined.
In context, overall, the richest 400 people in the US have as much wealth as
154 million Americans combined, that's 50 percent of the entire country. The
top economic 1 percent of the US population now has a record 40 pecent of
all wealth, and have more wealth than 90 percent of the population combined.
Who Rules America? Revealing The Economic Top 0.1 Percent
Here is an analysis from an investment manager with mega-wealthy clients
breaking down the economic top 0.5 percent of the population, recently
published by William Domhoff, sociology professor and author of Who Rules
America?:
"Unlike those in the lower half of the top 1%, those in the top half and,
particularly, top 0.1%, can often borrow for almost nothing, keep profits
and production overseas, hold personal assets in tax havens, ride out down
markets and economies, and influence legislation in the US. They have access
to the very best in accounting firms, tax and other attorneys, numerous
consultants, private wealth managers, a network of other wealthy and
powerful friends, lucrative business opportunities, and many other benefits.
Folks in the top 0.1% come from many backgrounds but it's infrequent to meet
one whose wealth wasn't acquired through direct or indirect participation in
the financial and banking industries.. Most of the serious economic damage
the US is struggling with today was done by the top 0.1% and they benefited
greatly from it.. For example, in Q1 of 2011, America's top corporations
reported 31% profit growth and a 31% reduction in taxes, the latter due to
profit outsourcing to low tax rate countries.. The year 2010 was a record
year for compensation on Wall Street, while corporate CEO compensation rose
by over 30%..
In 2010 a dozen major companies, including GE, Verizon, Boeing, Wells Fargo,
and Fed Ex paid US tax rates between -0.7% and -9.2%. Production,
employment, profits, and taxes have all been outsourced..
I could go on and on, but the bottom line is this: A highly complex and
largely discrete set of laws and exemptions from laws has been put in place
by those in the uppermost reaches of the US financial system. It allows them
to protect and increase their wealth and significantly affect the US
political and legislative processes.
They have real power and real wealth. Ordinary citizens in the bottom 99.9%
are largely not aware of these systems, do not understand how they work, are
unlikely to participate in them, and have little likelihood of entering the
top 0.5%, much less the top 0.1%..
. the American dream of striking it rich is merely a well-marketed fantasy
that keeps the bottom 99.5% hoping for better and prevents social and
political instability. The odds of getting into that top 0.5% are very slim
and the door is kept firmly shut by those within it."
To get into the top economic 0.01 percent (one-hundredth of one percent) of
the population, you have to have a household income of over $27 million per
year.
If you look at some of the central players who caused this economic crisis,
you will see that they are among this Economic Elite group.
Former Goldman Sachs CEO and Bush Treasury Secretary Hank Paulson had
already amassed at least $700 million prior to moving to the US Treasury in
2006. Current Goldman Sachs CEO Lloyd Blankfein and a few other top
executives at Goldman Sachs just received $111.3 million in bonuses.
Blankfein just took home $24.3 million, as part of a $67.9 million bonus he
was awarded. Goldman's President Gary Cohn took home $24 million, as part of
a $66.9 million bonus he was awarded. Goldman's CFO David Viniar and former
co-president Jon Winkelried both took home over $20 million in bonuses.
Citigroup CEO Vikram Pandit just took home $80 million, in what may
eventually total more than $200 million in compensation and bonuses. Coming
in at the top of the list is JP Morgan Chase CEO Jamie Dimon, who just took
home $90 million.
If you think people in this income level don't control the US political
process, you are not paying attention. After they caused this economic
crisis, they got the government to give them trillions of dollars in
taxpayer support, and then, after taking our tax dollars, they gave
themselves all-time record-breaking bonuses. 2009 was an all-time
record-breaking year for Wall Street executives bringing in a total of $145
billion. And then, in 2010, they raised the bar even higher, breaking the
all-time record set the year before by pulling in another $149 billion. The
audacity of it all is stunning.
Finding people more grotesquely greedy than Wall Street executives would
seem to be impossible. However, health insurance CEOs are giving them a run
for their money. As the LA Times reported:
"Leaders of Cigna, Humana, UnitedHealth, WellPoint and Aetna received nearly
$200 million in compensation in 2009, according to a report, while the
companies sought rate increases as high as 39%..
H. Edward Hanway, former chief executive of Philadelphia-based Cigna, topped
the list of high-paid executives, thanks to a retirement package worth
$110.9 million. Cigna paid Hanway and his successor, David Cordani, a total
of $136.3 million last year..
Ron Williams, the CEO of Hartford, Conn.-based Aetna Inc., earned nearly
$18.2 million in total compensation, down from $24.4 million in 2008."
Aetna CEO Ron Williams has recovered from hisdownyear in 2009 by making $72
million in 2010.
Given this level of obscene profiteering within the health care industry, it
is not surprising that Americans pay more for medical care than any other
nation in the world. In fact, Americans are forced to pay twice as much as
most nations, and get lower quality care in return. As health insurance
companies admitted, they have been reaping windfall profits because
peoplewith health insurance plansstill cannot afford to go to the doctors
and have stopped going unless it is an absolute emergency. With well over 50
million people unable to afford health insurance and the skyrocketing costs,
it is not surprising that over 60 percent of all personal bankruptcies are
the result of medical bills. In fact, 75 percent of the medical bankruptcies
filed are from people whohave health insurance.
Within this Economic Elite group, you also have the war profiteering oil
companies, which themselves are in large part owned by the big Wall Street
banks. The biggest five oil companies, while gas prices have been
skyrocketing, reaped $36 billion in profit last quarter. These companies
also receive an average of $6 billion per year in tax subsidies.
Tax Breaks For The Rich, Budget Cuts For The Rest Of Us
To further demonstrate how the mega-wealthy have seized control of our
political process, consider that the richest 400 Americans paid 30 percent
of their income in taxes in 1995, but they now pay only 18 percent.
In fact, 1,470 Americans earned over $1 million in 2009 and didn't pay any
taxes.
The average tax rate for millionaires was 22.4 percent in 2009, down from
30.4 percent in 1995. The average millionaire saves $136,000 a year due to
reduced tax rates.
Looking at the tax rate from a long-term perspective, the amount of money
the richest people and most profitable corporations pay in taxes has fallen
dramatically since 1955. Corporate tax accounted for 27.3 percent of federal
revenue in 1955. In 2010, corporate tax accounted for only 8.9 percent of
federal revenue. Corporate taxes accounted for 4.3 percent of overall GDP in
1955, in 2010 they accounted for only 1.3 percent.
Deliberate Systemic Attacks
The dramatic increase in economic inequality and poverty, along with the
unprecedented rise in wealth within the topone-tenth of one percentof the
population has not happened by mistake. It is the designed result of
deliberate governmental and economic policy. It is the result of the richest
people in the world, and the "too big to fail" banks, using the campaign
finance and lobbying system to buy off politicians who implement policies
designed to exploit 99.9 percent of the population for their financial gain.
To call what is happening a "financial terrorist attack" on the United
States, is not using hyperbole, it is the technical term for what is
currently occurring.
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