Billionaires Got 50% Richer During the Crash.

[Big Orange]

In 2009 the wealthiest Americans made themselves richer, with 44 more billionaires added to America's richlist under the Obama, when it was all going to shit for the US Middle Class:

World’s billionaires grew 50 percent richer in 2009

2009 will be remembered by millions of ordinary people as the year they lost their job, their house, or the prospect of an education. For the rich, however, it was a bonanza.

The world’s billionaires saw their wealth grow by 50 percent last year, and their ranks swell to 1,011, from 793, according to the latest Forbes list of billionaires.

The combined net worth of these 1,011 individuals increased to $3.6 trillion, up $1.2 trillion from the year before. On average, each billionaire had his or her wealth increase by $500 million.

Four hundred and three billionaires reside in the United States. They constitute just 0.00014 percent of the country’s total population, but control 8 percent of the national wealth. Each of these individuals holds over 300 million times more wealth than the average US resident.

The list included 21 hedge fund managers, who as a group more than made up for whatever losses they incurred in 2008. Some of them, including James Simons, John Arnold, and George Soros, raked in profits during both the collapse and the market recovery.

Topping the list of wealthiest hedge fund managers was John Paulson, at $32 billion. Paulson made billions in 2008 by betting that the housing market would collapse, and billions more through the stock market recovery of 2009.

Only one of the 21 hedge fund managers on last year’s Forbes list fell off. This was Raj Rajaratnam of Galleon Group, who was arrested last year on charges of insider trading.

Hedge fund managers James Simons, John Arnold, and David Tepper got average returns of 62, 52, and 31 percent, respectively, between 2008 and 2010. David Tepper made $2.3 billion over the past year, while John Paulson’s wealth grew by $6 billion.

The number of US billionaires grew to 403, up from 359 last year. The Asia-Pacific region had 234 billionaires, up from 130 the last year. Europe has 248 billionaires, despite having twice the population of the United States.

The 1,011 people on this list command a phenomenal amount of personal wealth. Their holdings are larger than the gross domestic products of every country besides China, Japan, and the United States. The wealth of the 403 US billionaires could more than cover the 2008 US federal deficit, with money left over for the states.

While the number of billionaires on the list is just short of the all-time high of 1,125 reached in 2007, it represents a phenomenal rebound. At this rate, the number of billionaires will once again hit record levels next year.

Carlos Slim Helú, a Mexican telecommunications tycoon, moved up to the first position on the list at $53.5 billion, beating out Americans Bill Gates ($53 billion) and Warren Buffet ($47 billion). The wealth of all three men rose dramatically. Over the last several years Slim Helú made roughly $27 million a day compared with the average daily income of $16.50 for Mexican workers.

The rich in India and China gained among the most. “For the first time, mainland China has the most billionaires outside the US,” Forbes said in its statement. “US citizens still dominate the ranks, but their grip is slipping.”

The hedge fund managers and financiers on the list benefitted directly from the bank bailout, which transferred huge sums of public funds into the accounts of the largest financial companies. But the billionaires in every other industry were the indirect recipients the government’s wealth transfer program also.

The Wall Street Journal, commenting on the figures, wrote, “How did the world’s rich get so much richer? Stock markets…. In short, what the stock market had taketh, the stock market hath giveth back–-at least to the billionaires.”

But the stock market recovery itself is no accident; it was the direct outcome of policies pursued by both US political parties. The bailout has been financed by a policy of fiscal austerity and high unemployment. The rapid increase in the wealth of the billionaires is the result of the impoverishment of tens of millions; it is the other face of mass unemployment, poverty, utility shutoffs, and foreclosures.

Aside from direct government handouts to the banks and super-rich, the major driver of the recovery of corporate profits—and thus the stock market—was productivity growth and corporate downsizing.

In 2009, the unemployment rate rose from 7.7 to 10 percent, three million jobs were lost, and wages fell dramatically. Millions of families lost their homes and became dislocated. But productivity, the amount of output that is produced from each hour of work, rose by 7 percent.

The money freed up through the destruction of social programs, higher employee output, and corporate restructuring has found its way into the pockets of the people on Forbes’ list.

World Socialist Web Site

[JME2]

I'm not surprised by this at all. Still, in the words of a wise man I once knew, fuck the fucking fuckers...

[Illuminatus Primus]

Look we can't raise taxes because that'll hurt the economy, we should not punish prosperity, and now is the time for tight government belts.

[Ritterin Sophia]

Look we can't raise taxes because that'll hurt the economy, we should not punish prosperity, and now is the time for tight government belts.

You're either going to have to put a smilie on that or tell me if it's real, this feels like Poe's Law in action.

[Illuminatus Primus]

I don't know many libertarian socialists who would say that seriously, especially in a U.S. Democrat-aligned board like this one.

[ArmorPierce]

Considering stocks rallied about 50%, this is not much of a surprise.

[hunter5]

Considering stocks rallied about 50%, this is not much of a surprise.

Not to mention most of the billionaires have been though a few of these down turns and have learned to plan accordingly.

[Steel]

each of these individuals holds over 300 million times more wealth that the average US resident

The average american has a net worth of just over 3 dollars?!

How the hell does that work? Did someone fuck up the numbers?

[aerius]

The average american has a net worth of just over 3 dollars?!

How the hell does that work? Did someone fuck up the numbers?

Debt. Student loans, car loans, mortgages, credit cards, lines of credit, it all adds up. A lot of Americans have a negative net worth since a) they kept doing cash-out refinancing on their homes and b) housing prices have cratered in the past couple years.

[White Haven]

It's telling when someone working part-time with insufficient income to put away any significant savings after rent, bills, and food (i.e. me) has a hugely higher net worth than most of the country. Lack of debt is a wonderful thing, and is way too uncommon. :/

[mr friendly guy]

each of these individuals holds over 300 million times more wealth that the average US resident

The average american has a net worth of just over 3 dollars?!

How the hell does that work? Did someone fuck up the numbers?

Question. When people mention wealth do they mean assets or net worth? Because I am sure most Americans with houses would have positive asset value even if the house prices fell. However falling house prices can lead to negative net worth if the houses are now worth less than you paid for it and if you haven't made much headway into the mortgage. With a lot of people having negative net worth it will average out that the average American's net worth isn't a lot.

[Phantasee]

Even if they have some equity in their home, they are usually over their head in credit card debt, or student loans, or other loans or bills (medical expenses come to mind).

[Illuminatus Primus]

Considering stocks rallied about 50%, this is not much of a surprise.

Not to mention most of the billionaires have been though a few of these down turns and have learned to plan accordingly.

The point is these people got the lion's share of the benefit from the good times, the corporate successes, the government collaboration with profit, etc., and take the least pain when it falls apart. Socialism is here, only for the rich; for the average person there's "market discipline".

[K. A. Pital]

The point is these people got the lion's share of the benefit from the good times, the corporate successes, the government collaboration with profit, etc., and take the least pain when it falls apart. Socialism is here, only for the rich; for the average person there's "market discipline".

It's not just socialism. It's communism for the rich. The rich can take anything, according to their needs. A billionaire is hardly constrained in any possible amount of luxury spending. He can dedicate himself to the "full development of personality" and hang around in social clubs of his peers, where he can engage in "free creativity" by making amateur photos, doing any sort of hobbies, from ultra-expensive to universal. He can aquire any number of higher educations, up to 4, and finish enormous amounts of side education courses. He is fully the master of his labour time.

At the same time as an ordinary person is being raised, educated and prepared as nothing more than expendable labour resource for these folks. Often labouring more than 10 hours a day, receiving wages below life minimum.

In Russia we have a grim joke about rich people dying - when an oligarch dies and gets buried, you could fire an MRBM into the cemetery without a single good person as casualty.

[Invictus ChiKen]

It's not just socialism. It's communism for the rich. The rich can take anything, according to their needs. A billionaire is hardly constrained in any possible amount of luxury spending. He can dedicate himself to the "full development of personality" and hang around in social clubs of his peers, where he can engage in "free creativity" by making amateur photos, doing any sort of hobbies, from ultra-expensive to universal. He can aquire any number of higher educations, up to 4, and finish enormous amounts of side education courses. He is fully the master of his labour time.

At the same time as an ordinary person is being raised, educated and prepared as nothing more than expendable labour resource for these folks. Often labouring more than 10 hours a day, receiving wages below life minimum.

In Russia we have a grim joke about rich people dying - when an oligarch dies and gets buried, you could fire an MRBM into the cemetery without a single good person as casualty.

May I sig this!?

[Zixinus]

Who said that nobility hasn't died out?

I wonder what would happen if these people would suddenly start becoming assassinated and dropping like flies.

[Invictus ChiKen]

Who said that nobility hasn't died out?

I wonder what would happen if these people would suddenly start becoming assassinated and dropping like flies.

Martial Law and a firearms ban.

[Flagg]

Why are there billionaires? Novel idea: Tax every penny someone makes who has $999,999,999.99 in assets. Fuck that, why are there people with more than $100,000,000 in assets? What right do these people have to consolidate so much of the wealth and resources of the world into the control of a single individual?

[ShadowDragon8685]

Why are there billionaires? Novel idea: Tax every penny someone makes who has $999,999,999.99 in assets. Fuck that, why are there people with more than $100,000,000 in assets? What right do these people have to consolidate so much of the wealth and resources of the world into the control of a single individual?

I think you'd find that taxing every single penny someone makes would make them stop contributing - by taking their cash and going to the Cayman Islands and then to some other place.

Of course, the soloution to that, too, could also be my soloution to the outsourcing problem and problem with corporate HQs abandoning the states to set up somewere with more favorable tax laws; if someone says "Fuck it" to pull up stakes and leave, detain them at the border for a very thorough shake-down.

Even so, I think you'd find such opposition to the idea that it would be unworkable - hilarious on the face of it, given that definitionally most people could only benefit from the action of redistribution of wealth from the uberrich to everyone else.

[K. A. Pital]

May I sig this!?

Sure.

[aerius]

Why are there billionaires? Novel idea: Tax every penny someone makes who has $999,999,999.99 in assets. Fuck that, why are there people with more than $100,000,000 in assets? What right do these people have to consolidate so much of the wealth and resources of the world into the control of a single individual?

I think you'd find that taxing every single penny someone makes would make them stop contributing - by taking their cash and going to the Cayman Islands and then to some other place.

Got news for you, they already do that. Those billionaires all have some sort of tax-sheltered accounts and pay far less tax as a percentage of income than the average person. In addition to those accounts they can and do setup all sorts of structured investment vehicles to exploit all the loopholes in the tax system. With a few exceptions, they don't contribute, and never will.

[ShadowDragon8685]

Why are there billionaires? Novel idea: Tax every penny someone makes who has $999,999,999.99 in assets. Fuck that, why are there people with more than $100,000,000 in assets? What right do these people have to consolidate so much of the wealth and resources of the world into the control of a single individual?

I think you'd find that taxing every single penny someone makes would make them stop contributing - by taking their cash and going to the Cayman Islands and then to some other place.

Got news for you, they already do that. Those billionaires all have some sort of tax-sheltered accounts and pay far less tax as a percentage of income than the average person. In addition to those accounts they can and do setup all sorts of structured investment vehicles to exploit all the loopholes in the tax system. With a few exceptions, they don't contribute, and never will.

Even paying far less as a percentage of income, they still pay something; which is contribution.

The don't want to contribute, but they enjoy living here, and they've set it up so that their contributions hurt them far less.

I don't think you should institute a 100% tax burden on something... But going very, very high - say, 80-90% - shouldn't be unreasonable.

Of course, we could start by instituting a 90% tax burden on any and all money being deposited in foreign banks by US citizens.

[JME2]

Why are there billionaires? Novel idea: Tax every penny someone makes who has $999,999,999.99 in assets. Fuck that, why are there people with more than $100,000,000 in assets? What right do these people have to consolidate so much of the wealth and resources of the world into the control of a single individual?

Times like this, there's a quote from the film Chinatown that I'm reminded of:

Gittes: Why are you doing it? How much better can you eat? What can you buy that you can't already afford?

[Alan Bolte]

What can you buy that you can't already afford?

Yachts, houses, prestige and political power.

[Phantasee]

Submersible yachts, specifically.