Friday, Oct. 2
Posted 3 p.m. EDT
It appears that the 30-year ride of the rich has stalled.
A report in the New York Times cites data that indicate the rich aren't getting richer anymore -- in fact, over the past two years, they have become poorer as a group.
Previous statistics have shown that from the 1970s to 2006, the rich were gaining wealth at a faster pace than the rest of the population. You know what they say: You need money to make money.
A further indication of the sucker punch to the wealthy is the rise in bankruptcies. Bloomberg reports that Chapter 11 bankruptcies (the kind of bankruptcy that requires a person to have at least $1,010,650 in secured debt and $336,900 in unsecured debt) have risen 73 percent in the second quarter, compared to a year earlier.
So what's behind the statistics? Rich or poor, the decline in the real estate market blasted everyone who was overextended on credit. It wasn't just the middle class who stretched to afford a bigger home, whatever the cost. And then, of course, there was the stock market. It's been rallying since its low in March, but it will have to recover a lot more than it has to make up for what was lost.
Some of the wealthy also bet big on investments because they could. But as any gambler knows, when the bet goes the wrong way, you pay.
But lest you're inclined to say "so sad, too bad" over the sorry state of the wealthiest in society, remember back to the days when that unstoppable combination of hubris and money made possible huge endowments to universities, museums and other nonprofits and charities. Maybe you think taxing the wealthy would make up for the deficit in philanthropy -- after all, before the tax cuts in the 1980s, the highest levels of income were taxed at 70 percent, compared to today's rate of 35 percent. But with a much smaller pool of wealthy to tax, that likely won't make up the difference.
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