As we discussed last week (The Disconnect and Economic Classes), the middle class is starting to
disappear mean revert, while the group we described as the "ultra-wealthy" are expanding.
Here’s an excerpt from Sunday’s NYT:
"Twenty years ago, there were 14 American billionaires on the Forbes 400. Today, the list includes 374 (known) billionaires. In 1985, the combined wealth of the Forbes 400 was $238 billion, adjusted for inflation. Today, the 400 richest people in America are together worth $1.13 trillion. To put that number in perspective, $1.13 trillion is more than the gross domestic product of Canada. And it is more than the G.D.P. of Switzerland, Poland, Norway and Greece – combined.
The median household income of Americans has been stuck at around $44,000 for five years now. The poverty rate is up. Members of the Forbes 400, meanwhile, are richer than Croesus, and every hour they are getting richer."
As previously mentioned, I find the significance of this to be the waning middle class — a group that increasingly appears to be a mostly post-war phenomena.
The author of the Times piece takes a different perspective, lamenting that there is not much change amongst the top of the Ultras:
"A few days ago, I read through the newest Forbes 400 list of the richest people in America, hoping to find many names I’d never heard of. They’re not there. Through no fault of its own, the list no longer reflects a dynamic and elastic economy; instead, it reflects a growing concentration of wealth and economic power. Warren E. Buffett, Paul G. Allen, Kirk Kerkorian, John W. Kluge, Carl C. Icahn, Michael R. Bloomberg, Ronald O. Perelman, Leona Helmsley, Henry R. Kravis, the Waltons, the Pritzkers, the Newhouses, the Lauders – the same old names, one after another.
It’s hard to say when the Forbes 400 list started to stagnate, but 1999 may have been a turning point. That was the year when Bill Gates’s estimated net worth hit $100 billion. So quickly had his fortune grown that over the previous 12 months, according to Forbes’s calculations, Mr. Gates had made himself another $1 billion every eight days. Mr. Gates, who has held the No. 1 position on the list continuously since 1994, is an extreme example of accumulated and self-generating wealth, but he’s part of a trend."
What a shame that this accellerating economic shift isn’t more entertaining . . .
Don’t Blink. You’ll Miss the 258th-Richest American
NYT, September 25, 2005