Billionaires Up, America Down

When it comes to producing billionaires, America is doing great.

Until 2005, multimillionaires could still make the Forbes list of the 400 richest Americans. In 2006, the Forbes 400 went billionaires only.

This year, you’d need a Forbes 482 to fit all the billionaires.

A billion dollars is a lot of dough. Queen Elizabeth II, British monarch for five decades, would have to add $400 million to her $600 million fortune to reach $1 billion. And she’d need another $300 million to reach the Forbes 400 minimum of $1.3 billion. The average Forbes 400 member has $3.8 billion.

When the Forbes 400 began in 1982, it was dominated by oil and manufacturing fortunes. Today, says Forbes, “Wall Street is king.”

Nearly half the 45 new members, says Forbes, “made their fortunes in hedge funds and private equity. Money manager John Paulson joins the list after pocketing more than $1 billion short-selling subprime credit this summer.”

The 25th anniversary of the Forbes 400 isn’t party time for America.

We have a record 482 billionaires — and record foreclosures.

We have a record 482 billionaires — and a record 47 million people without any health insurance.

Since 2000, we have added 184 billionaires — and 5 million more people living below the poverty line.

The official poverty threshold for one person was a ridiculously low $10,294 in 2006. That won’t get you two pounds of caviar ($9,800) and 25 cigars ($730) on the Forbes Cost of Living Extremely Well Index. The $20,614 family-of-four poverty threshold is lower than the cost of three months of home flower arrangements ($24,525).

Wealth is being redistributed from poorer to richer.

Between 1983 and 2004, the average wealth of the top 1 percent of households grew by 78 percent, reports Edward Wolff, professor of economics at New York University. The bottom 40 percent lost 59 percent.

In 2004, one out of six households had zero or negative net worth. Nearly one out of three households had less than $10,000 in net worth, including home equity. That’s before the mortgage crisis hit.

In 1982, when the Forbes 400 had just 13 billionaires, the highest paid CEO made $108 million and the average full-time worker made $34,199, adjusted for inflation in $2006. Last year, the highest paid hedge fund manager hauled in $1.7 billion, the highest paid CEO made $647 million, and the average worker made $34,861, with vanishing health and pension coverage.

The Forbes 400 is even more of a rich men’s club than when it began. The number of women has dropped from 75 in 1982 to 39 today.

The 400 richest Americans have a conservatively estimated $1.54 trillion in combined wealth. That amount is more than 11 percent of our $13.8 trillion Gross Domestic Product (GDP) — the total annual value of goods and services produced by our nation of 303 million people. In 1982, Forbes 400 wealth measured less than 3 percent of U.S. GDP.

And the rich, notes Fortune magazine, “give away a smaller share of their income than the rest of us.”

Thanks to mega-tax cuts, the rich can afford more mega-yachts, accessorized with helicopters and mini-submarines. Meanwhile, the infrastructure of bridges, levees, mass transit, parks and other public assets inherited from earlier generations of taxpayers crumbles from neglect, and the holes in the safety net are growing.

The top 1 percent of households — average income $1.5 million — will save a collective $79.5 billion on their 2008 taxes, reports Citizens for Tax Justice. That’s more than the combined budgets of the Transportation Department, Small Business Administration, Environmental Protection Agency and Consumer Product Safety Commission.

Tax cuts will save the top 1 percent a projected $715 billion between 2001 and 2010. And cost us $715 billion in mounting national debt plus interest.

The children and grandchildren of today’s underpaid workers will pay for the partying of today’s plutocrats and their retinue of lobbyists.

It’s time for Congress to roll back tax cuts for the wealthy and close the loophole letting billionaire hedge fund speculators pay taxes at a lower rate than their secretaries.

Inequality has roared back to 1920s levels. It was bad for our nation then. It’s bad for our nation now.

Distributed by McClatchy-Tribune News Service

Holly Sklar is co-author of A Just Minimum Wage: Good for Workers, Business and Our Future and Raise the Floor: Wages and Policies That Work for All of Us. She can be reached at: Read other articles by Holly, or visit Holly's website.

5 comments on this article so far ...

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  1. AJ Nasreddin said on October 23rd, 2007 at 9:24am #

    When the dollar collapses, will it really mean anything if you have a billion dollars compared to few thousand?

    When Iraq was invaded, their dinar was destroyed. One Iraqi billionaire burned his worthless banknotes to keep warm in the winter.

  2. Jeremy Raikes said on August 3rd, 2008 at 3:40pm #

    What ever happened to our nation’s conscience? Was it bought, for
    a mess of pottage, on a need artificially created and supported by that most ridiculous of fears … the Grand Daddy of fears ! …the fear of death?
    Dear hearts, we have been made less of, by those who for so long have promised to give us more … we have been sold the ultimate evil, in the
    the name of commerce, and security. And we have been made small, in
    our souls, by being told that we must believe that what is happening is
    in and for our “best interests”.

    Bullshit! And bullshit mounted on Bullshit, and supported by those
    whose only interest is in getting your strength for themselves – for
    they equate money and possessions with strength, and they are made
    inhuman and immoral by that fear-created belief… and in fact, they –
    and you know who they are – would have your last dollar, and food,
    and shelter, and clothing … and would rejoice in the symbolic success
    manifested by your failure to survive.
    They – are you listening? – are the true face of evil incarnate … and –
    sadly – they are you and i and everyone … that fails to listen to that
    still small voice … the heart that is the seat of love, and life, and all
    Stop listening to them with your head, i say … start running what they
    offer you past your heart: only then will you know what is right and just and fair and sweet and correct for every one of us. And – newly hopeful –
    will you start to do what is right for us all, and for all time.

    With love, i – who know nothing , but have a whole lot of delicious
    suspicions! – salute you. And wish you well in all that you attempt.

    Gonna start listening to your heart? Attagirl…attaboy!


  3. debra phillips said on December 14th, 2008 at 9:18am #

    Lets shout it on the rooftops!!!!!!!!!!!!

  4. debra said on April 4th, 2009 at 9:16pm #

    my heart says the wicked will have thier due when its time. that ole saying, “what goes around, comes around!” is really true, just look at our own lives. it’s “you reap, what you sow.” or like my grandmaw always said,” every dog has his day!” there’s a reason people always said this stuff, cause it’s true!

  5. bozh said on April 5th, 2009 at 9:12am #

    i wld phraze it differently: people are not wicked butonly call them wicked.
    however, a minority of people in US control knowledge. they have an iron grip on all [mis]education; this is the biggest cause for all iniquities on interpersonal level.
    remove miseducation, and introduce enlightenment/education and most iniquities vanish. guaranteed or 100 lashes for me!

    we need to search for causes for miseducation. we know some; others we can postulate: lust for control, fear of losing wealth, supremacism are probably the mainstay of deliberate miseducation.
    enlightenment for all, which cannot be obtained without higher education, diminishes the power of the plutocracy- the modern feudal lords. tnx