The horizon is not so far as we can see, but as far as we can imagine

This is what happens when you bail out the rich

David Cay Johnston:

Every 34th wage earner in America in 2008 went all of 2009 without earning a single dollar, new data from the Social Security Administration show. Total wages, median wages, and average wages all declined, but at the very top, salaries grew more than fivefold…

…The number of Americans making $50 million or more, the top income category in the data, fell from 131 in 2008 to 74 last year. But that’s only part of the story.

The average wage in this top category increased from $91.2 million in 2008 to an astonishing $518.8 million in 2009. That’s nearly $10 million in weekly pay!

You read that right. In the Great Recession year of 2009 (officially just the first half of the year), the average pay of the very highest-income Americans was more than five times their average wages and bonuses in 2008. And even though their numbers shrank by 43 percent, this group’s total compensation was 3.2 times larger in 2009 than in 2008, accounting for 0.6 percent of all pay. These 74 people made as much as the 19 million lowest-paid people in America, who constitute one in every eight workers.

They’re cashing out as fast as they can.

Go read the entire thing.


Personal Attacks and Trolling in Comment Threads


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  1. cathyx

    At least there are 74 people are living the American dream. The other 19 million people just need to work a little bit harder.

  2. Bolo

    How much of a gradient can the ultra-rich stand within their own ranks? Are those 57 people who no longer make >$50 million/year still on-board (in a class-interest sense) with those who now make $500 million/year? I’d guess yes since they’re all still filthy rich, but its also an order of magnitude difference in income. I’m just wondering if we’re going to see increased fracturing among the elite, in which case politics in this country will get mighty frightening in the next couple years (even more so than it appears now).

    And that income statistic is frightening. No demographic’s income is supposed to go up by a factor of 5 in just one year, even with a sample size reduced to 74 individuals or households. The number of economic indicators that are now in radically nonlinear territory is worrying. I’d be curious to see some sort of comparison of the sharpness of nonlinearities in recent economic data (income, housing values, unemployment, etc.) compared to that from 1950 – 2005. Forget about the exact meanings of the data sets, just look at the deltas as compared to historical deltas. How many standard deviations out are we?

    There are massive shifts in wealth and power going on right now. Its mostly the rich getting richer and the poor getting poorer, so the broad outcome is easy to track. But I’d guess that the fine details and final arrangements of power will be very important too. The US elite may be preparing for the final decline of the US from primary world power to mere great power (like Russia after the Soviet collapse). They’re shoring up resources so they can ride at the top on the way down. Either that or they’re just greedy, disconnected, and don’t realize they’re running the whole country into the ground.

  3. jcapan

    And in lieu of going pre-Reagan on their asses (top marginal tax rates of 70%) I just read that the WH may compromise with Speaker-Boner on the Bush tax cuts. I’m shocked, well, in a Claude Rains’ sort of way.

  4. jeer9

    In a just world, David Cay Johnston would be the head of the IRS.

  5. Is there anyone out there who can bust through the Washington consensus? Is there a modern-day Huey Long, maybe, who is actually willing to do what needs to be done? Surely someone in power sees we can’t go on like this.

  6. anon2525

    The average wage in this top category increased from $91.2 million in 2008 to an astonishing $518.8 million in 2009. That’s nearly $10 million in weekly pay!

    Johnston left out the verb that is used in every corporate media outlet’s depiction: earned

    No wonder he doesn’t work for the ny times any more.

  7. Fester

    Wow. We are starting to get into Russia-under-Yeltsin territory.

  8. Bernard

    this is more like Weimar Germany in so many ways. i can only imagine how tight a grip these 74 people, men i suppose, have over the remaining 330 million. America, Inc. if only we were French!

    the Good times have just begun. hold on tight folks, we are in for a bumpy ride.

  9. Suspenders

    That is scary.

  10. who?

    seems increasingly likely that the machetes will come out, or should come out – – – if only we had someone who could and would summon them.

    they are out there, with ready hands and arms attached to them…

    just saying

  11. John

    Thom Hartmann had a propagandist from Heritage Foundation or AEI on today and Thom pointed out that US prosperity was greater under Eisenhower with 90 % tax rates on the top incomes than any time since Reagan and his tax cuts. The guy could just not accept it or acknowledge it no matter how much Thom repeated the statistics.
    The con spokesman actually said that he personally didn’t want to tax the rich because he hope to join that class one day.
    There’s a lot of magical thinking going on in America today.
    Propaganda does work and there’s a lot of wishin’ and hopin’ when empires fail.
    I just hope we can go through all this without the big war to wipe the slate clean.

  12. Ian Welsh

    War or inflation are the traditional ways countries get out of such messes. So to speak…

  13. Bernard

    Wall St. has to fail if we are going to survive as a country. not that i have a clue how or if this might happen. with Wall St. owning the Presidency, the Congress and the Supreme Court, i don’t much think there is much “Hope. And Change” isn’t going to happen easily.

    Timothy Leary’s Drop Out part is still the best advice. Course most of us don’t have that option to do at the moment. we shall have to prepare one step at time.
    what is sure is that Wall St. won’t stop till there isn’t anymore to steal.

    Thanks to Congress and the Elites working together we are the American version of Weimar Germany and Yeltsin’s Russia. A real free for all for the Haves and Have Mores, Ayn Rand’s paradise for capitalism. no holds barred. Paul Rand’s libertarian paradise.

    well, history has now shown Capitalism as we know it doesn’t work for the Middle Class and Poor. Capitalism is a one way trip to the Debtors Prison. For only the Middle Class and Poor go to jail, while the Have and Have Mores get promoted when they steal.

    only the French dare speak the name of Voldemort!

  14. Oscar Leroy:
    One guy is too old(Bernie Sanders) and the other died eight years ago today(Wellstone).

  15. I have a little bit of an OT comment. Why is it, lately anyway, that hereditary Democrats(Evan Bayh, Andrew Cuomo, Harold Ford, Jr.) are right-wing nuts. Harold Ford, Jr. is just a plain idiot. But what happened to Cuomo and Bayh? It seems like both sold their souls to the devil for corporate cash.

  16. guest

    Wow, 57 fewer masters of the universe in 2009. I hope it was death and not the economy that got them. And I hope the other 74 get bumped off by their ungrateful offspring in 2010, the year of Throw Mama from the Train. Still looking for the silver lining to repeal of the “death tax”.

  17. Jennifer

    why don’t we groom and independent candidate to replace Obama?

  18. beowulf

    In a just world, David Cay Johnston would be the head of the IRS.

    Seriously, that guy has just had an astonishing number of scoops on the tax beat over the years. The NY Times was crazy to let him go. He was at a presser earlier this month with Ron Wyden and Wyden’s reaction to him is a trip…

    “MR. JOHNSTON: Senator, David Cay Johnston, I’m a columnist for Tax Notes.

    SENATOR WYDEN: Oh, my goodness, all the stars of all tax reform. Go buy David’s book.”

  19. I don’t know if anybody has read Ursula LeGuin’s City of Illusion? “There are not very many of the shing [in fact, 74]. That’s a great piece of news and wisdom and advice.”

  20. anon2525

    why don’t we groom and independent candidate to replace Obama?

    Do you have a “short” list?

  21. anon2525

    War or inflation are the traditional ways countries get out of such messes

    Does it get the losers of wars out of such messes? People like to use the U.S. and WWII as the example, but what about WWI and Germany?

    Also, the WWII example is a bad one. The U.S. had begun making large discoveries of oil in the late 1920s that became available during the 30s and 40s, and continued making those discoveries up to the 1960s. That provided an immensely valuable resource base during the post-war period that is not available today. If the U.S. had a similar war today, it would not have the oil needed to fuel ships and armament in the way it did in WWII. And if it diverted what domestic supply it has to military use, then it would not have what it needs for the domestic economy. A large-scale, multi-front war would not rescue the U.S. economy — it would bankrupt it (see post-WWI Britain).

    Of course, a war is also a bad solution because it is economically inefficient (in that way, it mirrors bernanke’s QE1/QE2 — trillions spent with minimal results) — it uses natural resources, manpower, and time to create products that are then blown up, leaving the country poorer. And it kills or maims a generation of productive young people.

    The “backwards” solution:

    1. Legislate a jobs guarantee — any citizen over 18 who wants a job can have one by showing up at a gov’t. jobs center.

    2. Decide on what goals the country wants to accomplish and create programs to work towards them.

    3. Figure out how to pay for it — Tax corporations and wealthy households, eliminate parasites, both public and private, have congress run a deficit while printing money — whatever can be agreed upon.

    This is the “war solution,” but without the killing, maiming, and destruction.

  22. anon2525

    Also, require that this have no “war profiteers” — no private companies, no private profits. This is public money — public risk/public profit. Some actual socialism, for a change — it will help keep the capitalists honest and competitive. No more kleptocracy. And if private companies want to hire away gov’t. employees, they are free to do so, but not at public expense.

  23. Ian Welsh

    By “get out of”, I didn’t mean “come out well”. Germany didn’t have a financial crisis after it’s bout of hyperinflation, after all and it did have essentially full employment.

    Fascism is one solution set. It isn’t a good solution set, but it is a solution set. It’s the one America is heading towards.

  24. anon2525

    By “get out of”, I didn’t mean “come out well”.

    Thanks for the clarification. I certainly wouldn’t have guessed that from “get out of such messes.”

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