A story on NPR this morning on the growing gap between the wealthy and the rest of us in the United States, equaled only by the gap in the 1920’s.
The 400 people on Forbes magazine’s list of the richest Americans saw their combined net worth climb 8 percent this year. The good news for the wealthy comes as the poverty rate has reached a 15-year high and unemployment remains stuck near 10 percent.
“They” say the recession ended last August. This says we are headed deeper into an economic Bermuda Triangle. What do you think? What data makes sense to you? What choices are you making – that you are willing to tell blog readers?
It is obvious to me that “wealth” begets wealth. They always say the first million is the hardest, right? It is not surprising to me that the rich get richer…it is hard not to when you have that sum of money to work with (BILLIONS). And the poor getting poorer is not surprising either…as once at an economic disadvantage it is EXTREMELY difficult to get out of it, until you change your mindset. And that is where Your money or your life comes in.
My wife and I have realized what is important. Expensive dinners are not important. Expensive vacations are not important. Expensive cars are not important. Our time together though, is. We have cut out all of the things that give us little or no enjoyment and instead focus on the things we do enjoy and the time we can spend together doing them. The whole while, we are able to save money like never before and plan to get even more of our time back in the future.
That is really what wealth is all about right? A wealth of time!
The recession ended?
Hardly.
The rich get richer, and it’s often off the backs of those who are not in the top 5% of the population.
My concern, though, is whether investing is safe or even profitable at this point. Compound interest, such as our grandparents used, no longer “cuts it” these days. Investing in the market when who-knows-what will happen next seems risky.
Yes, saving money is a good thing, but one doesn’t want to hide it in the mattress, either.
The wealth gap and continued economic distress is a direct result of the government’s bailout mania. When the government rewards criminality and rewards bad business practice, how can we expect a real economic recovery? The closest political economy I can find to what’s happened in D.C. over the past 3 years is pre-Enlightenment aristocracy – a powerful ruling class which makes all the decisions and doesn’t obey any laws, and the masses who are plundered as a source of wealth and power.
TARP (the 2008 bailout) was an excellent example: politicians reported that their constituencies had two opinions on the subject: no, and Hell no! It passed anyway because the aristocracy wanted it to. Let them eat debt!
The Federal Reserve’s bailouts have been even larger, and is the Fed is explicitly a cartel of bankers with blank checks written on the backs of the American people. Nobody ever voted for these people – all except one are selected by the banks themselves!
Instead of keeping the bailout money in the banks to make sure they are solvent, which was the entire point of the bailouts, the bailout money was simply categorized as “profit” and nearly every cent of the bailout became “performance bonuses” for company executives, leaving the banks as shaky as ever. And why not – they’ll get get more bailouts, right?…
The financial criminals (and I don’t use that word lightly) who caused this problem in the first place should have had their money taken and disbursed to their victims, then have been sent to prison. Instead they are free and the government continues looting the victims again to keep the zombie banks alive.