Billionaires Galore

We were watching Anderson on TV today with the new woman billionaire woman, Sara Blakely, featured on Forbes Magazine. Good for her. But then the country has a lot of them today. Spanx for everyone I say.

1982 Forbes published its first list of billionaires, there were thirteen of them. Twenty five years later the Forbes 400 was all billionaires and 82 billionaires were left of the list because they were not rich enough to make the cut.

Now for the working class; in 1982 the average wage for fulltime workers in 2006 dollars was $34,199. Twenty five years later the average wage for a fulltime worker is $34,861.

So, how does the average worker maintain their standard of living? They borrow. In 2005 US saving went negative for the first time since 1933. They spent more than they borrowed so by 2007 households took on another $1 trillion in borrowing. During George W. Bush’s first 7 years family debt expanded by $7 trillion. The primary place they borrow is from the equity in their homes. When Reagan took office homeowners owned 70% of the homes, the rest was in mortgages. By the end of Bush’s 2^nd term it had dropped to 50%.

And there boys and girls is part of why the top 1% has doubled its share of national income since 1985. They are the lenders. The government followed a similar path.

The above material comes from William Greider’s book that I have referred to a lot lately; particularly from his 10^th chapter, The End of the Conservative Era. In it he blames the politics of Reagan and then Bush that has led us away from traditional conservatism. The “freed” market created prosperity for only a few at the cost to the middle class.

I agree with him we are at a crossroads in politics where no one seems to offer a truly new look at what is needed. Politicians have become more and wimpier with everyone moving to a popular right that lacks sense. Greider says the Democrats lost their way in the 1970’s when the New Deal pieces were no longer needed. They Fumbled, Reagan made his impossible promises and sold them even if they made no sense. And now 30 years later the Republicans are rattled but still promote all that has not worked. Deregulation has messed up the country at a time in world history where we need new ideas and we seem to be out of them. We have a weak federal government and the Democrats he says see themselves as responsible managers rather than reformers. Good point.

The result of all this: a lot of billionaires and a lot of borrowing. And we have old rhetoric which demands smaller government and balanced budgets which was never modeled during the presidencies of Reagan and Bush. Now power has shifted from labor to capital and we are reaping the consequences. If there ever was a time to bring back a progressive tax system it is now. Republicans and Democrats both should understand that.