Joseph Kishorereports that last week Forbes magazine released its annual inventory of the 400 richest Americans. Their combined wealth, points out Kishore, "soared" to $1.53 trillion this year, up 12% from last year. To clear the list, Kishore explains, you have to earn 10,000 times the median net worth of an American household.
96 of the “super rich” list are investors. Only 4 are from manufacturing.
Kishore pays particular attention to the 17th rung occupant, John Paulson, a hedge fund manager. He is worth $15.5 billion. Forbes attributes to Mr. Paulson something called the “Paulson paradox.” According to Kishore, Paulson’s hedge fund fell 30% last year, due primarily to poor speculation on Bank of America stock, while at the same time Paulson’s personal fortune increased a whopping 25%, amounting to $4.9 billion.
Kishore goes on to further frame the scope of Paulson’s vast fortune. His personal wealth of $15.5 billion is approximately equal to the total net income of the bottom 20 percent of the New York City Metropolitan area, or about 1.6 million people. The "Paulson paradox" making you sick, yet?
The increasing wealth of this layer is a direct product of the infusion of trillions of dollars into the financial system, orchestrated by the Obama administration. Three years after rampant speculation led to the greatest world economic crisis in generations, the speculators are doing better than ever.
Kishore takes a look at our national economic travesty from the non-rich side of the social inequation. He discloses that in Detroit, more than half of all children in the city—or 53.6 percent—live in poverty. For the state of Michigan the median income has fallen to 19.3 percent, nearly one-fifth since 2000. In California, 6 million people were living below the official poverty line in 2010—16.3 percent, up from 15.3 percent a year before. Similar figures are present in virtually every state.
“Soaring poverty is driven by an unprecedented jobs crisis” concludes Kishore, pointing out as one example, “... only 55 percent of young adults aged 16-29 were employed last year, down from 67.3 percent in 2000 and at its lowest level since World War II.”