PDA

View Full Version : Do the Rich Need the Rest of America?



Buzz
08-03-2010, 08:25 AM
An interesting read from the WSJ.

http://blogs.wsj.com/wealth/2010/08/02/do-the-rich-even-need-the-rest-of-america-anymore/?blog_id=25&post_id=3375


By Robert Frank

Late last year, the U.S. economy experienced a surprising decoupling.

As stocks boomed, the wealthy bounced back. And while the Main Street economy was wracked by high unemployment and the real-estate crash, the wealthy–whose financial fates were more tied to capital markets than jobs and houses– picked themselves up, brushed themselves off and started buying luxury goods again.


Seeking their fortunes elsewhere?
Who knows what the next few months and years will bring. But one thing seems clear: the economic fate of Richistan seems increasingly separate from the fate of the U.S.

Some argue that the decoupling has gone even further. Michael Lind, a policy director for the Economic Growth Program at the New American Foundation, argues in Salon that the American rich no longer need the rest of America.

He says the wealthy increasingly earn their fortunes with overseas labor, selling to overseas consumers and managing financial transactions that have little to do with the rest of the U.S. “A member of the elite can make money from factories in China that sell to consumers in India, while relying entirely or almost entirely on immigrant servants at one of several homes around the country.”

He adds:

If the American rich increasingly do not depend for their wealth on American workers and American consumers or for their safety on American soldiers or police officers, then it is hardly surprising that so many of them should be so hostile to paying taxes to support the infrastructure and the social programs that help the majority of the American people. The rich don’t need the rest anymore.

Some would argue this is a vast overstatement. The U.S. remains the largest consumer market in the world and still matters to Bill Gates, Warren Buffett and Lloyd Blankfein alike. The American wealthy benefit greatly from the country’s legal system and business transparency, not to mention its armed forces.

Yet the increasingly global elite do seem to be forming something of their own financial culture, unattached to any single nation or set of rules, and increasingly free to move their money and resources (and tax dollars) wherever they are treated best.

Rather than having a second home in Richistan, an increasing number of rich people seem to be moving their money there full time.

Do you think the rest of America matters anymore to the rich?

Terry Britton
08-03-2010, 09:34 AM
There are risks and traps for those moving their $$ around to different countries. In China, one may not move capital earned from investments out of the country. This forced Jim Rogers to move there where all of his wealth he built on the backs of Chinese is located. Other risks may be the nationalization of your investments like we can see in Venuzuala. Then what risks do the uncertainty of Obama's anti business ideas bring?

road kill
08-03-2010, 02:23 PM
"Late last year, the U.S. economy experienced a surprising decoupling.

As stocks boomed, the wealthy bounced back. And while the Main Street economy was wracked by high unemployment and the real-estate crash, the wealthy–whose financial fates were more tied to capital markets than jobs and houses– picked themselves up, brushed themselves off and started buying luxury goods again."
__________________________________________________ _________________

Say what????? :confused:


RK

Buzz
08-03-2010, 02:49 PM
RK, in the last year the DOW went from around 6600 to around 10,600 today.

That is a 60% increase. Wouldn't you call that a boom?

I'm not rich, but I doubled my retirement savings in the last year.

If you saw the market plunging and pulled your money out, then dumped it back in when buying stock seemed like a terrible idea, you made out BIG.

There are some securities that I got a 10 banger on.

If you didn't have cash to invest you were screwed. You were left with a poor job market with downward pressure on wages and a house that may not be worth what you're on the hook for.

Seems pretty clear to me...:-P

The truly wealthy make the majority of their money investing. Then they pay 15% on that income, regardless of how much they made that year, while the guy getting his money in wages might pay a 28% marginal rate, or higher...

US consumer spending is down, but corporate profits are up, up, up!

road kill
08-03-2010, 02:59 PM
RK, in the last year the DOW went from around 6600 to around 10,600 today.

That is a 60% increase. Wouldn't you call that a boom?

I'm not rich, but I doubled my retirement savings in the last year.

If you saw the market plunging and pulled your money out, then dumped it back in when buying stock seemed like a terrible idea, you made out BIG.

There are some securities that I got a 10 banger on.

If you didn't have cash to invest you were screwed. You were left with a poor job market with downward pressure on wages and a house that may not be worth what you're on the hook for.

Seems pretty clear to me...:-P

The truly wealthy make the majority of their money investing. Then they pay 15% on that income, regardless of how much they made that year, while the guy getting his money in wages might pay a 28% marginal rate, or higher...

US consumer spending is down, but corporate profits are up, up, up!

There is some AWESOME collective genius on this site amongst the "middle of the road independents."

Us dumb ass "right wing radicals" know nothing!!

Why I am barely eating.

Thanks for the tip!!



RK

YardleyLabs
08-03-2010, 03:01 PM
The easy mobility of capital has been the central factor allowing money to be diverted from labor to profits over the last 20 years. As the loss of real wages and the loss of borrowing power has strangled the American consumer's ability to serve as the "engine for growth", marketing efforts have shifted overseas. Increasingly, US businesses have, as the article states, become less and less dependent on America for either production or consumption. However, they are dependent on America's political and military power to protect their profits. That has increased the stakes for them in maintaining a controlling influence over American political institutions. The Supreme Court's decision to remove almost all constraints on their ability to use their financial leverage could not have come at a better time.

JDogger
08-03-2010, 03:42 PM
Seems like an appropriate link, but it is George Carlin, so don't open if you're offended by strong language.



http://www.metacafe.com/watch/2011028/george_carlin_who_owns_you_americans/

Buzz
08-03-2010, 03:54 PM
There is some AWESOME collective genius on this site amongst the "middle of the road independents."

Us dumb ass "right wing radicals" know nothing!!

Why I am barely eating.

Thanks for the tip!!



RK

Not sure what I said that made you angry at me.

Taking advantage of the situation over the last year probably took more balls than genius...

road kill
08-03-2010, 04:17 PM
Not sure what I said that made you angry at me.

Taking advantage of the situation over the last year probably took more balls than genius...

Buzz, I am not angry with you at all.

WTH, we even agreed once.
It is an old man's cynical sense of humor.:D
No anger.

stan b

dnf777
08-03-2010, 04:26 PM
Seems like an appropriate link, but it is George Carlin, so don't open if you're offended by strong language.



http://www.metacafe.com/watch/2011028/george_carlin_who_owns_you_americans/

Oh man. Thanks JD ,that was totally depressing. I could only get to 2:40 and had to go play with my dog to forget what I just heard.

He's right. It started under Reagan, and has continued with every president since, republican AND democrat.

road kill
08-04-2010, 01:15 PM
RK, in the last year the DOW went from around 6600 to around 10,600 today.

That is a 60% increase. Wouldn't you call that a boom?

I'm not rich, but I doubled my retirement savings in the last year.

If you saw the market plunging and pulled your money out, then dumped it back in when buying stock seemed like a terrible idea, you made out BIG.

There are some securities that I got a 10 banger on.

If you didn't have cash to invest you were screwed. You were left with a poor job market with downward pressure on wages and a house that may not be worth what you're on the hook for.

Seems pretty clear to me...:-P

The truly wealthy make the majority of their money investing. Then they pay 15% on that income, regardless of how much they made that year, while the guy getting his money in wages might pay a 28% marginal rate, or higher...

US consumer spending is down, but corporate profits are up, up, up!
I used to have money, but I spent it on broads, booze, bikes, gambling and I squandered the rest!!



RK

Buzz
08-04-2010, 01:23 PM
I used to have money, but I spent it on broads, booze, bikes, gambling and I squandered the rest!!



RK


YOU LIE!

I guess that message was too short. lol

road kill
08-04-2010, 01:26 PM
YOU LIE!

I guess that message was too short. lol
I thought we were all done with name calling!!:cry:

RK

Buzz
08-04-2010, 01:56 PM
I thought we were all done with name calling!!:cry:

RK

Wasn't name calling and I'm not saying that I don't believe it went away. I just don't believe that you squandered it and pee'd it away.

road kill
08-04-2010, 02:22 PM
Wasn't name calling and I'm not saying that I don't believe it went away. I just don't believe that you squandered it and pee'd it away.

Buzz, it's as joke.

Don't tell anyone........;-)



RK

Buzz
08-04-2010, 02:27 PM
Buzz, it's as joke.

Don't tell anyone........;-)



RK

That's what I thought, the then you had to attach that sad sappy face thingie.:(

You shouldn't use that one, it makes you look wimpy... ;-)

road kill
08-04-2010, 02:30 PM
That's what I thought, the then you had to attach that sad sappy face thingie.:(

You shouldn't use that one, it makes you look wimpy... ;-)


"I'll gladly pay you Tuesday for a hamburger today!!"
http://www.youtube.com/watch?v=NJ6xBaZ92uA

That wimpy??



RK:D