The Rich and the Recession

| February 27, 2009

No one feels sorry for the rich, but the rich are people too, and this financial crisis has shaken them to the core, just as it has the less fortunate—all of us really. I’m not suggesting that you pick up the violin for the top 1 percent—those who still control over 35 percent of the nation’s total wealth, albeit dwindling; I’m simply reporting that their pain is real, too. They’ve seen their stock portfolios ravaged, their real estate values decline and their companies (the source of most of their wealth) affected by this economic tsunami. So how are they reacting?

Taxing the Top 2% Solution is No Solution

| February 26, 2009

The Wall Street Journal has a great opinion piece today on the fallacy of President Obama‘s plan to raise the much-needed governmental revenues to institute his economic recovery plan. They call it the “2 Percent Illusion.” See this link: The Journal points out that if you look at 2006 IRS data—the most recent year for which such tax data are available, and coincidentally a good year for the economy and “the wealthiest 2%”—there is no way that further soaking of the rich can fund his rescue plans.

The President’s Message to Those Making $250,000 or More

| February 25, 2009

Amid all of President Obama’s eloquence last night, there was one clear message from our Salesman-in-Chief: The economic bailout will come from two sets of pockets—those of the wealthy, defined by the President’s economic team as any household making over $250,000, and those of our children, in the form of future taxes. The rich control the largest percentage of the nation’s wealth—the top 20 percent controls over 84 percent of the nation’s wealth, and the top 1 percent controls an astounding 35 percent. But if we shell-shock the rich with huge tax increases at a time of such economic uncertainty, I don’t see them opening their wallets and fueling an economic revival. I don’t see them hiring more people or expanding their businesses. The rich are scared, too! Mr. President, how do you propose to inspire the rich to feel rich again? That’s a sales pitch I can’t wait to hear.

How Low Will It Go?

| February 20, 2009

As Citibank becomes the Two-Buck Chuck of the Dow and those 201(k)s we joked about are quickly turning into 101(k)s, it’s a good time to be flush with cash, because bargains are plentiful. Even so, the rich, like everyone else, are staying on the sidelines, and if that continues, so will the recession. Until President Obama stimulates the wealthy to start spending again, this economy will never get satisfactorily stimulated.