As The Rich Get Poorer

RealClearPolitics - Articles - As the Rich Get Poorer

Good article, everything in there has been covered in this Blog, and to anyone that understands even the basics of economics, the conclusions are on the order of "the sky is blue", "many people like chocolate" -- however, we seem to live in a country where something over 50% don't quite get these basics, so I guess this kind of article is needed.

First, when the stock market goes down, then there aren't any capital gains to get $100 Billion a year or so in taxes from. True, the rich folks are less wealthy, but so are all the rest of us. You take 7.5 Trillion out of the economy and folks tend to feel less wealthy for some reason. I'm thinking at some point Democrats may understand that "losing $7.5 Trillion is bad", but I guess I might be wrong:

Unfortunately, the mine has less gold. All the financial turmoil has
left the wealthy -- however defined -- much less wealthy. Stock
ownership is highly concentrated. In 2001, the richest 1 percent owned
34 percent of stocks and mutual funds, estimates economist Edward N.
Wolff of New York University. Let's see. Since the market's high in
October 2007, stocks are down (through Oct. 31) 38 percent, or $7.5
trillion, reports Wilshire Associates

Second big point. If you like to redistribute wealth, it is kind of important to have something to redistribute. If it is gone, you can't redistribute it. I guess this is tough to fathom for the left, but I remain nearly certain that they are going to "get it" here at some point in the next few years.

But the redistributionist argument is at best a half-truth. The
larger truth is that much of the income of the rich and well-to-do
comes from what they do. If they stop doing it, then the income and
wealth vanish. No one gets it. It can't be redistributed because it
doesn't exist. Everyone's poorer.

Ever helpful to those leftys that may be reading here, Samuelson points out that if your cookie jar is empty, you can be really really generous, but there will be no cookies to redistribute! Now I know that BO will be printing a lot of imaginary cookies (debt/inflation), but I really think that the leftys will realize that an imaginary cookies are a whole lot less satisfying after awhile.

This isn't just theory. Last week, Gov. David Paterson of New York
pleaded with Congress to provide emergency aid to states. Heavily
dependent on Wall Street for taxes, he testified, New York faces a
$12.5 billion budget deficit next year and expects joblessness to rise
by 160,000. Wall Street bonuses will drop by 43 percent and capital
gains income by 35 percent, he estimated. People in New York would be
better off if the securities industry were still booming, even if there
were more economic inequality.

Conclusion, the sky is still blue, up is up and down is down. Perhaps BO believes he will repeal all that is factual, but I'm one of those nasty doubters.