8 Signs the Rich Have WAY Too Much Money
The statistics about wealth inequality in this country are both astonishing and alarming. But statistics can’t tell the entire story if they’re presented in isolation. Our country is increasingly being turned into a plaything for the ultra-rich.
Here are seven signs that the ultra-wealthy Americans have way too much money.
1. Jeff Bezos bought the second most influential newspaper in the country—and it barely dented his net worth.
Two things always get a lot of coverage from reporters in this country—what billionaires do with their money, and anything that affects reporters. When Jeff Bezos bought the Washington Post, we got both.
There’s been a lot of speculation about what the Amazon founder might do with his new personal acquisition. Here’s an aspect of the story that’s gotten much less attention: The Post’s $250 million sale price is roughly 1/100th of Bezos’ reported net worth, which is said to be in excess of $22 billion.
That’s a lot of net worth for one individual. Granted, Bezos is much smarter than most of his peers. He’s got skills and he’s worked hard. Why shouldn’t he be rich? It’s the American way, after all. But does he need to be that rich? He didn’t get all that money on merit alone. Bezos has accumulated his massive fortune in part because tax policy has coddled him and his fellow billionaires, while most of the country is mired an ongoing financial struggle.
2. They literally don’t know what to do with their money.
A new study shows that the wealthy are holding on to far more of their money than before: 37 percent of their income goes unspent, a figure which is three times as large as it was in 2007. What’s more, they have more cash on hand, and 60 percent say they don’t plan to spend or invest it.
In other words, they’re getting more of out national income than ever before—and they’re hanging on to it, which means it isn’t creating jobs or economic growth.
3. Corporate profits and wealthy income.
Corporate profits are capturing more of the nation’s income than they have for more than half a century. They stood at 14.2 percent as of the third quarter of 2012, which is higher than they’ve been since 1950, and their after-tax performance has stayed just as robust since then.
At the same time, the portion of our national income which goes to employees is the lowest it’s been in nearly half a century. (More here.)
Wall Street greed and criminality caused the crisis of 2008, but government efforts since then have concentrated on rescuing banks, and on boosting stock market performance and other forms of profitability for corporations. And it shows: Corporate earnings have risen by more than 20 percent each year on average since then, while disposable income has only risen by a meager 1.4 percent on average.
And even that isn’t equitably distributed. A recent study showed that the top 1 percent of earners has capture 121 percent of income gains since 2008, while the rest of the country fell behind. The top 10 percent’s share of income is the highest it’s been since 1917—and maybe longer. This imbalance isn’t an act of God or a force of nature. It’s the result of a series of bad policy decisions, about workplace rights, taxation, and where we expend our government’s resources.
4. Internet billionaire Sean Parker had a multimillion-dollar “Lord of the Rings”-style wedding, and trashed a beautiful public glade to do it.
Sean Parker is the Internet tycoon who was portrayed by Justin Timberlake in The Social Network, probably to his everlasting regret. He was recently married, and wedding party caused quite a stir after it was written up on the Atlantic’s website as “the perfect parable for Internet excess.”
The Atlantic piece came after the California Coastal Commission wrote a scathing report claiming that Parker trashed an ecologically sensitive campground with a multi-million-dollar fantasy bash. The report said that bulldozers flattened part of the area, fake ruins were built, and other irreversible damage was done to the area, including a space that was set aside for public use.
Parker makes some decent points in his rebuttal, reminding people of his charitable good works and claiming that great care was taken to preserve the site. But what’s not in dispute is that Parker spent $4.5 million on the party and paid $2.5 million in fines as the result of the party’s environmental impact. (“We made some mistakes,” Parker acknowledges.)
It’s also not in dispute the party’s design was intended to “evoke” the coronation of Queen Elizabeth II, that Parker sang a song from The Little Mermaid to his bride—“Look at this trove, treasures untold / How many wonders can one cavern hold?”—which is actually kind of sweet, when you think about it, or that Sting stood up to sing one of his songs a capella. The costume designer for Lord of the Rings designed outfits for all 354 guests at the party.
What Sean Parker doesn’t seem to understand is that, at its heart, this wasn’t about trashing Sean Parker. People were reacting about the unreal – and often deeply insensitive – world in which Sean Parker lives.
As Andrew Leonard wrote in an excellent piece, this “extravagant wedding was a slap in the face to anyone struggling to make ends meet in the United States. It was the perfect snapshot of 1 percent entitlement, as is the shock and anger that anyone would dare criticize it.”
Sean, best wishes to you and your bride on the occasion of your wedding. But you need to understand that other people fall in love, too, and have kids, and do all the things you do—but lots of them are struggling just to survive. They’re going to be a little touchy about something like this. So seriously, man: Have a little empathy—and a lot of gratitude.
5. Just 400 families have more money than 60 percent of the entire country.
Sean Parker and his friends might do well to ponder the inequality which allows them to live so well while so many suffer. They could start by considering this:
A mere 400 households have more net worth among them than is held by more than 60 percent of all US households. That comes to more than 60 million households, who among them possess less than these few families.
Americans are accustomed to feeling horrified at South American countries or medieval principalities in which a few powerful families rule over a struggling population. Guess what? In today’s USA, ancient feudalism lives again.
6. Billionaires frequently aren’t ‘the best and the brightest.’
Billionaires love to believe our society is a meritocracy, where the most talented become the most wealthy and successful. Of course, they would say that.
There’s no doubt that Mark Zuckerberg or the guys who created YouTube are smart and energetic. But do their accomplishments really deserve billions in compensation? Consider:
Zuckerberg didn’t foresee what Facebook would become. If he had, it wouldn’t be called “Facebook,” which is what they called the printed books Ivy League colleges used to print up with students’ pictures so they could get to know one another. Facebook.com was going to do that digitally—a cute idea, but not an especially profound one.
The users were the ones who turned it into a more flexible type of "social media." It’s true that Zuckerberg & Co. were aggressive in capitalizing on that, but they weren’t visionaries.
The same is true of YouTube. While its three founders don’t entirely agree about its origin, the most plausible story is that it’s called “YouTube” because they thought people would make videos of themselves and upload them – a lame idea which pretty much nobody wanted to do. Instead they figured out how to grab other media and put them up. (Another founder says it was supposed to be a video dating service.) The billions followed shortly thereafter.
You can list on one hand the Internet billionaires who have truly combined both vision and execution: Google. Amazon. eBay … we’re not even out of fingers yet.
There’s “You didn’t build that,” and now we can add “You didn’t think of that.” And even the brightest billionaire’s success includes a lot of lucky accidents. (And we haven’t even begun to talk about the heirs and heiresses yet.) So why do they have all that money?
We’re not saying they can’t be rich. But how much money do a few people need—or deserve?
7. Lucky or not, they’ve got a lot of control over our government.
“Of the people, by the people, and for the people”? That’s still true—for a few very rich people. The Sunlight Foundation offers these staggering statistics:
A mere 31,385 people – less than 0.01 percent of the nation’s population – contributed 28 percent of the country’s total political contributions. Nobody was elected to the House or Senate without their money.
As the Sunlight Foundation also notes, this elite group contributed at least $1.62 billion to political campaigns in 2012. (They probably also contributed the lion’s share of the $350 million in “dark money” which was spent that year.) Their median donation of $26,584 is larger than the average household income in this country.
84 percent of Congress took in more from the 0.01 percent than they did from all other donors combined.
They’re also spending like crazy at the state level. State candidates collected nearly $2.8 billion in 2012. It’s money well-spent, and not just for the influence it gives donors at the state level. This spending has also allowed them to gerrymander Congressional districts.
Gerrymandering has turned the House of Representatives into such an unrepresentative body that Republicans now control it despite a 1.4 million loss to Democrats in the popular vote. It’s like they say: You get what you pay for.
8. They control the media, too, which means they control what we see and hear as 'news.'
The sale of the Washington Post barely scratches the surface of our media problem. There’s a reason why revolutionaries from 1919 onward have always gone for the radio stations (and later, the television stations) first. They understand that the media hold enormous power.
Thirty years ago, 50 companies controlled 90 percent of all the media in this country. Today it’s six companies.
Those six companies include GE, owner of serial corporate criminal GE Capital, and Newscorp, owned by the scandal-plagued Rupert Murdoch. (The others are Disney, Time Warner, Viacom, and CBS)
Americans rightfully despise totalitarian nations’ “state-controlled media.” But what happens when the same few people hold undue influence over the state and the media?
The ultra-rich don’t even understand why people resent them or think they’re detached from real-world problems.
The ultra-rich have used the wealth and political influence to promote policies which allow them to capture an ever-increasing share of our national income. That’s an unjust but self-perpetuating spiral that endangers our democracy, our financial security, even the free exchange of news and information.
And yet, one of their defining characteristics is their deep and abiding rage at the rest of the country. They resent the resentment of others. This fury was exemplified by Mitt Romney’s bitter but heartfelt “47 percent” rant, an outburst that echoed others from the group we’ve called “the radical rich.”
Even a relatively benign billionaire like Sean Parker isn’t immune to this affliction, as his angry rebuttals to the wedding criticism attest. Parker wrote of his wedding, "Our guests reached a beautiful gate in a clearing, just prior to entering the forest. Through that threshold, they left the ordinary world behind and entered an extraordinary world imagined as a kind of collaborative art project between me and my wife-to-be, Alexandra.”
That’s pretty much the problem in a nutshell: Billionaires increasingly control our world. But they don’t live here. They dwell in a Hobbit-like fantasy, far from our worries and fears, where our nation is becoming “a collaborative art project,” a media-made myth, a post-middle-class theme park – call it “AmericaLand” – complete with a make-believe middle class and an animatronic democracy.
But the rest of us are suffering the effects of growing wealth inequality: joblessness, soaring poverty rates, lack of access to education or municipal services. The ultra-wealthy may have passed through “a beautiful gate in clearing,” but the rest of us stand on the “threshold” of an increasingly grim world.
Forgive us for not willingly joining in the make-believe, but we have a nation to rebuild.