Now super-rich face a backlash as credit crunch hits home in America

[Joanne98]

The 'American dream' of unashamed wealth and the opportunity for all to acquire it has reached a crisis point before: in the Depression, the oil shock, in the 'greed is good' Eighties and the madness of the dotcom bubble.

But America's relationship with wealth - uncomfortable as it has sometimes been - has always been built on the same foundation. Even as charted in the salutary tales of Fitzgerald, Steinbeck or Wolfe over the decades, or in the endless fascination with Howard Hughes and the fictional Ewings of Dallas, the aspiring masses never quite lost their admiration for blatant enrichment, nor the elite their pride in it. Now, however, all that appears to be changing.

Confronted by the revelation that Wall Street's biggest earners are pulling down figures that the chancelleries of many small countries would be happy to have banked, and in the midst of an election cycle that has focused on the impoverishment of ordinary Americans, a cultural backlash is under way. It is not only from those impoverished US householders, or from the usual suspects on the left, either. Even those who might normally be considered filthy rich are declaring themselves offended by the obscene levels of remuneration of the country's uber-wealthy. The latest backlash - which has seen even the Republican nominee for President John McCain (married to an heiress) weigh in - has been prompted by the news last week that Wall Street's biggest ever pay packet topped $3.7bn (almost £2bn) in 2007 for one hedge fund manager for a fortune he made from gambling on the collapse in the mortgage market that has caused millions to lose their homes.

And as the financial crisis spawned in the US spreads globally, there is even unprecedented talk of 'shame' in the ranks of the super-rich. 'There is something really obscene going on. This is an era of ridiculous excess. We have not seen the worst of it and there is going to be real anger,' said David Rothkopf, author of a new book, Superclass

The man with history's biggest annual pay packet is hedge fund manager John Paulson of Paulson & Company. But he is not alone, as the 'Alpha 25 list' of the super-rich published by Alpha financial magazine last week made clear. Up with Paulson were global markets gambler George Soros and rival dealer James Simons, who made $3bn apiece. Meanwhile ordinary Americans are being squeezed harder by inflation and the credit crunch, a stagnant economy, falling house values and rising unemployment - and, in a tax system rigged against them by successive conservative administrations, often pay proportionately twice as much tax as Paulson, Soros and their cohorts.

The widening gap that these trends are producing in US society is shaking traditional values to their roots. There are growing signs that the majority are losing faith in the remains of the American dream, while the chief beneficiaries of it feel guilty as never before. 'It's unprecedented that the superwealthy would express so much shame in public', said Robert Frank, author of the book Richistan, which chronicles the rise of America's new super-wealthy to a point where they live in a separate world of rarefied exclusivity. 'It is not just people like Bill Gates and Warren Buffett standing up and saying "it's not fair". I spoke to 100 people earning over $10m who would not even admit to being rich: they feel ashamed about the inequality.'
http://www.guardian.co.uk/world/2008/apr/20/usa.subprimecrisis

[Berry Cool]

1. So McCain feels guilty about being so rich?

Where was this talk back when John Kerry was making the point about his own wealth, and his wife's, and saying it was unfair that they paid such disproportionate taxes on it compared to the income of the average working person?

I hope we're not being set up to believe that McCain is the one who's going to change all this, merely because he feels so...guilty.

One thing's for sure, GWB never has. He loves the "haves" and the "have-mores" he calls "my base."

[Joanne98]

2. I don't think he does. But there does seem to be some kind of guilt

up there. I'm not hoping for any help from them though.

[DemReadingDU]

4. McCain isn't rich, but his wife is. McCain released taxes

4/18/08 McCain releases his taxes, not wife's

Sen. John McCain is considered one of the wealthiest members of Congress, but you wouldn't know it by looking at tax returns released Friday by his presidential campaign.

In 2007, McCain's total income was $405,409; his taxable income was $258,800; he paid $188,660 in taxes.

The campaign did not release tax returns for McCain's wife, Cindy, heiress to a fortune from her father's beer distribution company, Hensley and Company, for which she now serves as chairman.

According to last year's Senate financial disclosure form, the McCains have assets of at least $36.5 million. Some estimates put her worth at $100 million.

more...
http://www.cnn.com/2008/POLITICS/04/18/mccain.taxes/index.html


edit: another article in post #5

[DemReadingDU]

5. Nah, it's his wife who is rich

4/19/08
In 2007, McCain earned a Senate salary of $161,708 and book royalties of $176,508. His wife earned a salary of $432,991 as chairwoman of her company. Since he filed separately, John McCain's return lists half of his income and half of his wife's salary. McCain's return does not include a large stream of dividends, capital gains, private investment profits and interest that went solely to his wife and her dependents.

By contrast, Cindy McCain reported assets of more than $1 million in a single Chase Bank account and assets of up to $1 million in each of about three dozen accounts and investments, according to a 2006 Senate financial disclosure report.

Cindy McCain inherited ownership of Hensley & Co., said to be the nation's third-largest Anheuser-Busch distributor with sales estimated at $178 million, from her late father, James Hensley, according to financial information company Dun & Bradstreet.


more...
http://www.latimes.com/business/la-na-mccaintaxes19apr19,0,3370064.story


edit: another article in post #4

[bronxiteforever]

3. Excellent article- if a depression hits, how will the general public treat the rich?

I think we are a much more violent country than in the 1930s-plus weapons undreamed of in the early nineteen thirties are available to the public-would it be violent? would it be a whimper?

[truedelphi]

6. In a sense this is a shame.

The people who are making money on the crisis are simply making money on a crisis.

Once again, there is this huge need of The Masters and the Powers that Be to continually distract us.

I am sick of the distractions. On account of the distractions, we will not get a real overthrow of the current manner of having a Central Bank that is not even owned by our government.

The Paris Hiltons, The Britney Spears, the low income single mom who took out a sub prime mortgage,
These are all distractions. They are needed so that we misplace our anger on those who are subsidiaries of the crisis rather than those who created the crisis.

And so too is the notion that some of the bigger gamblers are the problem.

The real problem is the Federal Reserve, and the inner circle of a few people who run this country, and are running it into the ground.

I'd rather see Milton Friedman mentioned, or Alan Greenspan.

Or several others including those at the top of the JP Morgan financial dealings.