12 Mar

Ah, the Rich! They Are Different From You and Me.

By Walter | 2 comments

2

Oh, joy! Forbes’ annual billionaires issue just arrived, and it does not disappoint.

You have certainly heard about the financial crisis. But let’s review: The cracks in the system began to appear in 2007, right about the time the stock market reached an all-time high in October of that year. By September of 2008, less than a year later, the world financial system was on the brink of total collapse and the entire international financial community was in a panic. Six months later, four years ago, the stock market tanked, losing more than half its value. Since then, as if by magic, the stock market has fully recovered and is now breaking records daily.

What are we to make of this remarkable recovery? It’s a teachable moment that confirms Scott Fitzgerald’s observation: “Let me tell you about the very rich. They are different from you and me.” How different? Let us count the ways.  

In March 2008, the year the market reached an all-time high, there were 1,125 billionaires on the planet. The following year, when the market tanked, that number dropped to 793. Oh, the devastation! Masses of unemployed, homes foreclosed by the millions, individuals declaring bankruptcy, companies going under, sovereign nations unable to pay their bills.

But then, there are the billionaires. They are different. One year after the market bottom, their number climbed back up to 1,011, and has been moving on up ever since. In 2011, there was a 20% increase to 1,210. In 2012, a slight bump up to 1,226. But then this year, an explosive increase of 17% to a new high of 1,426. The average billionaire is worth $3.7 billion, and their collective worth amounts to $5.4 trillion. And the wealthiest of the wealth? Carlos Slim Helu, Mexican telecoms magnate, $73 billion.

Meanwhile, for the non-billionaires, the world economy is at a standstill and starting to drift backward. The future is bleak. Some are predicting a recovery five or even ten years into the future. Such a quick recovery for the billionaires; such a long slog for the rest of us.

Pray tell, what’s wrong with this picture?

W.S.

Tell it like it is, Bing: “Brother, can you spare a dime?”


2 comments

  • 01 Hans 03/13 08:05
    Hans

    From an emotional perspective playing on our natural reactions of envy
    this is a very nicely written piece .
    From the perspective of economic realities it misreads this bit of welcome
    news , a sign of economic recovery. The new billionaires are a sign that new, major employment and profit centers have come into existence and
    are evidence of a faster recovery than we expected. There should exist a tax structure that would help to siphon off excessive wealth for the few,
    in order to allow programs in healh and education to be funded, but that is a different issue.

  • 02 Frank Owarish 03/13 11:28
    Frank Owarish

    Coalescence comments March 13, 2013
    Looking at finance, the world has been coalescing since the end of the Second World War and the establishment of the Breton Woods systems, with the IMF, World Bank and GATT turned into WTO. The process is often referred to as globalization as national businesses expand overseas at a fast rate. The process accelerated after the economic system based on communism failed in producing economic results as compared to the one based on capitalism. There are 150 shades of grey when it comes to capitalism but with appropriate oversight and self responsibility capitalism is generally good. It is good to see someone as young as Mark Zuckerberg with good ideas was able to develop an electronic system that took the world by storm with the system continuing to grow, again pointing to a social coalescence taking place in the world (of course social networking has to be done with fair degree of responsibility and there are risks out there). Of course Zuckerberg and his close partners got rewarded and turned into a billionaire. It is good to know that this kind of opportunity is open to practically anyone from any part of the world. The young man who came up with gangnam dance from South Korea became famous overnight in the world which is definitely coalesced when it comes to music; he is on his way to becoming a millionaire and possibly billionaire. The special issue of Forbes Magazine listing this year’s billionaires is interesting, again showing coalescence at work; there are more billionaires and they come now from all over the world. There should not be a dilemma for accepting the billionaires who were fortunate to get into specific legitimate business useful to society resulting to their high amount of wealth. We had no difficulty watching the Academy Awards as the best in the movie entertainment business got recognized.
    Frank Owarish


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