By Bill Boyne
Post Bulletin (Rochester, MN), 12/28/07
America is still the land of promise -- for billionaires.
A recent news report by Holly Sklar for McClatchy-Tribune News Service told the happy stories of those who live in the top 1 percent of the U.S. income brackets.
It noted that only two years ago, even lowly multi-millionaires could qualify for the Forbes list of the 400 richest Americans. That is no longer the case. As of 2007, only billionaires are on the list -- and there are even 82 billionaires who don't quite make the top 400.
As the report notes, "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."
The Forbes 400 listing dates back to 1982. At that time, most of the members were in the oil business or manufacturing. Not so today -- most of them spend their days on Wall Street, dealing with hedge funds and private equity.
In the last seven years, the U.S. has added 184 billionaires -- and, at the other end of the scale, 5 million more Americans live below the poverty line.
In 2006, the poverty line was $10,294 for an individual and $20,614 for a family four. As the McClatchy report indicates, that income wouldn't buy much caviar at $9,500 for two pounds.
Things have changed since 1982. At that time, the highest-paid CEO in the U.S. made $108 million a year (adjusted for inflation as of 2006), and the average full-time worker made $34,199. By last year things had changed for both sides. Then the highest-paid hedge fund manager made $1.7 billion, the top CEO made $647 million and the average worker was paid $34,861 (mostly without health care or a pension) -- a gain of $662 or .019 percent in 14 years.
Those figures -- reflecting no meaningful gain in ordinary workers' income in 14 years -- demonstrate the monumental unfairness of this country's income distribution and tax system. They also prove the need for placing a more realistic value on everyone's contribution to the economy, without gross distortions at the top or at lower levels.
These distortions also can be seen if you calculate the combined incomes of the Forbes 400 members. That total is $1.54 trillion dollars -- or 11 percent of the nation's Gross Domestic product of $13.8 trillion.
The GDP is the total annual value of all the goods and services produced by 303 million people. Contrast that with 1982, when the combined wealth of the Forbes 400 members amounted to less than 3 percent of the GDP.
Generous tax cuts for the nation's elite have made life easier for the members of the Forbes 400.
According to a report by Citizens for Tax Justice, the richest 1 percent of Americans will save $710 billion in taxes for the period 2001 to 2010.
Here is Holly Sklar's verdict on these trends:
"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 1920 levels. It was bad for our nation then. It's bad for our nation now."
Holly Sklar is a 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."
Those books should be prescribed reading for members of Congress and President George W. Bush, who have fallen far short of their obligation to develop a fair and workable economy.
Bill Boyne is a retired editor and publisher of the Post-Bulletin. His column appears weekly. Send comments to [email protected]
Copyright 2007 Post Bulletin
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