DU, I need some help understanding the increased number of millionaires.

[leftist.]

I'm searching and reading, but I wanted to ask here as well. I'm having trouble understanding the rise in the number of millionaires over the last few years. Republicans like to say it's a result of the "Bush Boom" and that more millionaires is a good thing because more people are getting richer and Amerika is the greatest nation et cetera et cetera.

I'm not looking to counter or debunk the claim so much as I'm just looking to understand it.

Thanks!

[GreenPartyVoter]

1. Search for articles on that at Common Dreams. I know I saw something there on it.

[zabet]

2. You may want to compare the numbers

of increased millionaires to the rise of the number of Americans living
below the poverty level and the massive loss of 'middle class' Americans.

More have gotten poor than have gotten rich.

[wildhorses]

3. at the expense of the middle class.

there are also more poor people.

[Rosemary2205]

4. Think real estate bubble

We have 1000's upon 1000's of people (investors/speculators/Developers) holding multiple homes or other property with a combined value of well over a $million. Their wealth is on paper only because the property was generally originally mortgaged at 100% or sometimes even at 150% in the case of rehabs with risky loans.

As the bubble keeps popping you'll see more and more these "millionaires" having to get a job so they can pay back Carlton Sheets.


BTW -- you might want to look at ABC -- just this past week on World News, Betsy Stark reported Banks are going to eating $260 Billion in subprime loans over the next 2-3 years. That's a lot of "Millionaires" going bust.

[Solo_in_MD]

17. Is being a millionaire haveing that much annual income, or is it measured by assets

$1M is not all that hard to come by. A family farm in No. California could easliy get there, but the owners are most likely sweating it out season to season, not living the high life. Also if one was dilligent, having that much in an IRA as you approach 65 would not be that hard.

[Rosemary2205]

18. Assets

wealth is always measured in assets not income. Even when the Donald declared bankruptcy he was worth Billions (on paper) You won't find many millionaires or billionaires who have that much lying around in liquid assets. Most of it is tied up being used to increase wealth in investment income.

[Lasher]

29. Technically correct but there is another point here.

Net worth = total assets - liabilities. That's pretty simple.

Back in the olden days (late '50s) there was a TV show called, The Millionaire. Each week a mysterious benefactor presented people with the astonishing amount of $1 million. Viewers dreamed of having that much money that would pretty much guarantee a life of luxury for the rest of their years.

http://en.wikipedia.org/wiki/The_Millionaire

Times have changed. You can't buy a coke for a nickel and $1 million ain't what it used to be. Of the true family farmers who are left it is not unusual to find people who are worth $1 million or more. Of them, however, there are many who are not actually raking in the big bucks every year.

And with the demise of Defined Benefit Pension Plans, many have managed to acquire lump sums instead of traditional annuities. Retirees can't rush out and buy yachts and Hummers because they have to live off the earnings of such a nest egg for the rest of their lives. A prudent 5% annual drawdown would get you an income of $50K a year before taxes. Fairly comfortable, but I don't think that would qualify someone as a member of the wealthy elite.

I think the point here is this: A person with a net worth of $1 million is not necessarily 'rich' as we would have thought them in 1955. Perhaps an annual income of that amount is a better benchmark to use in determining who really is part of the wealthy elite.

[tanyev]

5. Republican policies redistribute wealth upwards.

It is a good thing if you're one of the lucky few at the top of pyramid.

[leftist.]

27. Agreed 100%, though with this thread I'm trying to enumerate why.

Don't misunderstand, you and I are on the same page ... but with this thread I'm hoping I can learn how to enumerate the "whys" behind saying that. I have read today that the number of millionaires increased dramatically under Clinton as well (in part due to the booming stock market late in his term). How can I relate this current "boom" of millionaires to Republican policies under bush and his Congress?

[in_cog_ni_to]

6. Did you see Bill Moyers Journal last night? This was the subject. You can watch it at the link:

http://www.pbs.org/moyers/journal/index-flash.html

Bill Moyers had a show about this last night. He interviewed Barbara Ehrenreich, author of, "NICKEL AND DIMED: ON (NOT) GETTING BY IN AMERICA" You can watch it at the link above. Here's some references and reading links from Moyers site:

References and Reading:
More from Barbara Ehrenreich:

Barbara Ehrenreich's Web site
Read Ms. Ehrenreich's latest articles, learn more about her books, upcoming speaking engagements, etc.

Selected Articles by Barbara Ehrenreich:

* Healthcare vs. the Profit Principle, THE NATION, July 12, 2007
* It's Easier to Insure Pets Than Kids, THE NATION, July 26, 2007
* This Land is Their Land, June 29, 2007
* Welcome to Cancerland: A Mammogram Leads to a Cult of Pink Kitsch, HARPERS, November 2001 (pdf)
* Wal-Mars Invades Earth, NEW YORK TIMES, July 25, 2004

Read Barbara Ehrenreich's blog on working in America

UnitedProfessionals.org
Barbara Ehrenreich founded United Professionals in 2006 and continues to serve as the organizations director, along with Bill Holland. The organization was formed, as Ms. Ehrenreich explains, "to build a response to the 'war on the middle-class' that is undermining so many lives." On the Web site, you'll find action-oriented news about such middle class issues as income, health care, mortgages, etc.

Read the first chapter of NICKEL AND DIMED

A Guided Tour of Class in America with Barbara Ehrenreich, TOMDISPATCH, June 04, 2006

Watch a clip featuring Barbara Ehrenreich from The American Ruling Class, a "dramatic-documentary-musical" starring HARPER'S MAGAZINE editor emeritus Lewis Lapham.

Read Barbara Ehrenreich's commencement speech she gave at Haverford College entitled, THE APOCALYPSE IS YOURS NOW.

More about the Middle Class:

Welcome to Richistan, USA, THE OBSERVER UK, July 30, 2007
"As the rest of the country struggles to get by, a huge bubble of multi-millionaires lives almost in a parallel world of private education, private health care and gated mansions. They have their own schools and banks. They even travel apart - creating a booming industry of private jets and yachts. Their world now has a name, thanks to a new book by THE WALL STREET JOURNAL reporter Robert Frank, which has dubbed it 'Richistan'."

Yawning Rich-Poor Gap Could Hobble Economy
CHRISTIAN SCIENCE MONITOR, July 30, 2007
"The US probably will continue to have a much higher proportion of its people ranked as poor than almost all other rich industrial nations. At the turn of this century, it ranked 24th among 25 countries in the proportion of its population having incomes below half of the median income - the level where half of the people have a bigger income, and half have a smaller income."

Don't Let the Supreme Court's Discrimination Ruling Stand
By Rep. George Miller, HUFFINGTON POST, July 21, 2007
"Lilly Ledbetter, who worked at a Goodyear facility in Alabama for 19 years, was the plaintiff in a pay discrimination lawsuit against the company. Ledbetter alleged - and a jury agreed - that Goodyear had paid her less than what her male counterparts were receiving, even though she had more experience than many of the men and had received positive performance evaluations. But the five right-wing ideologues on the U.S. Supreme Court saw it differently. They sided with Goodyear in a sharply divided 5-4 decision. Now Goodyear wants $3,165.20 to cover court costs."

Harness market forces to share prosperity
By Lawrence Summers, FINANCIAL TIMES, June 24, 2007

Economic Policy Institute
The Economic Policy Institute is a nonprofit, nonpartisan think tank that seeks to broaden the public debate about strategies to achieve a prosperous and fair economy. The EPI Web site includes such web features as analyses of key government data; a weekly presentation of downloadable charts and short analyses; issue guides providing data, charts, fact sheets, and links to relevant publications; opinion pieces and speeches; and tables on historical labor market, earnings, and income data.

25 Ideas for Working Families in America (2007)
Collected by The Roosevelt Institution, the nation's first student think-tank, here you'll find 25 resources designed especially for working families. Range of topics include access to housing, income support, childcare and health care.

photo by Robin Holland

posted August 3, 2007

http://www.pbs.org/moyers/journal/08032007/profile.html

[CrispyQ]

8. "Nickel & Dimed" was such an excellent book!

Everyone should read it. I've been through a bad spell financially, but never anything like the people she wrote about. It was an eye-opening read. I never realized how much of an advantage having a car makes. Or having even a little money in a savings account. It broke my heart to read about the woman who hoped all day that the shirt she needed to buy, to wear at her Walmart job, would be marked down even further so she could afford it. I just watched the movie "Walmart: The High Cost of Low Price." In one scene the manager admitted that he stopped bringing his lunch to work & would go without because he noticed how many of his employees went without. ~~gasp! I know how hard it was to dig out of our financial problems. I cannot imagine how difficult it must be at this level of poverty. I just cannot. :cry:

Thank you for this link. I will check it out!

[fed-up]

10. just wait until you have health issues-you'll find out what poverty is-at least I have a roof nt

[Warpy]

7. Inflation plus a cozy tax code

are part of the reason. A millionaire now is just like the man who'd made his first hundred thousand in the 50s.

It takes a minimum of ten million to join the rich man's club.

However, the tax laws become beneficial once that first million is made. Back in the 50s, there was a disincentive to greed built into the tax code, so that first hundred thousand wasn't likely to grow to a million very quickly.

[Turbineguy]

9. Well, one day you're worth

$999,928.00 and a nobody and the next day, you're a millionaire!

It would be interesting to see the growth of this number in the context of the growth in the national debt. I suspect if we were to do that kind of an analysis we would find the the growth in the number has slowed down. It is my contention that many have become wealthy because of cheap credit and government borrowing. That borrowed money goes somewhere. Some day this will have to be paid for. The increase in the number of poor is the real indicator of the "Bush Economic Miracle". They became poor because of their inablility to borrow.

Since 2000 my home has more than doubled in value. I did not do anything to earn that. But it shows up as an increase in net worth. But somebody who buys my house will most likely have to borrow the money to do so.

[Changenow]

11. There are many more poor people

who have lost everything so there can be a few more millionaires. What's funny is that when it all settles those millionaires will be poor as well. The goal is to create a small ruling class.

[kestrel91316]

12. The rich are certainly getting richer. However, the poor are getting poorer.

I am in a middle class suburb of LA with adjacent upper-middle class neighborhoods. An ever smaller minority of my clients have no money cares whatsoever and are doing just fine. An increasing majority is having trouble making ends meet. Young people, even those with college educations, are having more and more trouble getting anywhere. Except, of course, the spoiled rich children (who behave like brats but have plenty of unearned $$ to throw around).

Foreclosures are way up. Gas is way up. People are afraid.

[elehhhhna]

16. that sort of scenario has all the makings of social unrest and revolution.

Not a pretty picture at all.

[kestrel91316]

19. The proles still have their bread and circuses, so the time is not

ripe. But Bush is working hard to get us to the cliff.

[Richard Steele]

13. Simple- the top 10% have a lot of $$$ that belonged to the bottom 90% a few years ago.

That's how B*sh's economy has been working-
the less you have, the more you pay.

Our economy has actually been shrinking, but
the money has been running to one end as it does.
This creates more "wealthy" even as the total
dollar amount decreases.

It's like a 4-foot swimming pool with 2 feet of water in it.
If you lean it to a 45-degree angle, most of the water runs out....
but the Repubs are pointing at the low end and saying,
"Hey, it's 4 feet deep now! Hooray for our end!"

[Warren Stupidity]

14. east coast/west coast metro real estate markets

Plus inflation. Having 1,000,000 in assets is not exactly fabulously wealthy. Even having 1,000,000 in income generating assets is not going to produce a 'rich and famous lifestyle', just a comfortable middle class life style.

[izzybeans]

15. Imagine a pot filled with scarce resources. As more and more capitalize on those resources

more and more are left without. There may be more millionaires, however even their dollar is stretched thin. They aren't even worth that much in historical/inflationary terms. Most of them were those teetering on millionaire status already, so they aren't really that new. They just reached out and grabbed the resources that were placed in front of them and they are doing it at the expense of others.

With simple math you can imagine that adding wealth to some subtracts wealth from many.-hence the massive income polarization of the past 30 years. "Bush Boom" = the love and care for the nobility. He's the perfect emperor, just like Reagan. They provide influxes of wealth for the greedy at the expense of the needy. That's why wealthy republicans worship him like blood sucking sycophants. "Thanks for the largess, sire. I am humbled by your idiotic presence."

Those who have seen their debt levels rise, have also seen their wages decrease relative to the consumer price index (hence the debt)...and yet the length of their workday is steadily rising and keeping up with the productivity demands of the market (You've heard the upper class wonder at the immense productivity of the American worker, ironically even). In simple terms this means the working class does more and more to contribute to the big pot of scarce resources and recieves less and less in return. The leisure class gets more time for leisure and more money to support their sloth. A deadly sin the liesure class feels they are entitled to.

That's how I understand it.

[onenote]

20. who is being counted as a 'millionaire'?

A question: if you have assets of more than a million, represented almost entirely by a house assessed at $1.25 million (although you probably can't realistically expect to get that price anymore given the downturn in the housing market) and you have a mortgage of $600,000 on the house, are you considered a millionaire for purposes of the statistics referenced in the OP?

If so, I think there are a lot "paper" millionaires who aren't really millionaires at all.

[Solo_in_MD]

21. I'm with your, there seems to be millionaires and MILLIONAIRE$$$

[Lasher]

31. No.

If your total assets total $1.25 million and if your liabilities total $600K, your net worth is $650K - well short of a million.

[ThomWV]

22. Shit - Millionaire doesn't mean jack shit anymore. Hell, I'm a millionaire

I'm 60 years old and worth well over $1,000,000. That is to say that the value of everything I own minus all the debts I have would give you a number over a million. One wonders why my father, a well paid Engineer during his working life, never achieved that lofty goal. Well, look at the price of shit these days. I've got a paid for truck parked out front that cost just under $40,000 new and is worth about $25,000 right now. My father never paid more than $3,000 for a car in his life - and he had nice cars. My home of 30 years is my most valuable assert. It and the 100 acres it sits on just 8 miles from the state's 3rd largest city. I paid $65 grand for it when I bought it, the place would sell for $750,000 in less than a week. Twenty years ago we bought a lot down on the Outer Banks of North Carolina (Kill Devil Hills) for the quite reasonable price of $15,000. Last year I was offered $146,000 for it.

You start adding stuff up at todays inflated "values" and the number gets big in a hurry. So, why are there so many millionaires? Its because the price of virtually everything had gone flat ass nuts. It is not because of an improved ability to acquire assets or some magic performed the followers of Ronald Reagan.

[leftist.]

26. Thank you for your reply :)

Please see my other reply below, maybe you can help me understand the relationship between the increased number of millionaires due in part to inflation vs a lower inflation rate here in the US with simultaneous increases in prices across the board.

I'm so confused :crazy:

[LostInAnomie]

23. "Millionaire" isn't the indicator of wealth that it used to be.

Years ago, "millionaire" used to be extremely rich. So rich that almost no matter what situation befell you, you would come out financially intact. Now, because of inflation, cost of living, etc., a millionaire is someone that owns a modestly sized house in a East or West coast city that could be ruined and forced into bankruptcy if they become sick or injured.

[leftist.]

24. That's what I'm reading now

Thanks for the reply!

I found that same sentiment in three or four articles (and even at wikipedia lol) - the growth in the number of millionaires is at least partly due to inflation, meaning that "a million dollars" doesn't have the purchasing power it had as little as a decade ago. However, I don't understand how this fact relates to a low inflation rate here in US, unless one doesn't have anything to do with the other?

[karynnj]

25. Some of it is the gradual raises to the upper middle class has

pushed many upper middle class people in tu the ranks of "millionaire". A big factor i the value of houses. especially in areas where there is less empyt labd available the prices are bid up. (Neighbors on both sides of us bought homes for around $35,000 in 1968 or 1969, as original owners in a new suburbal tract. These homes sold for $500,000 plus. In addition to the that capital gain, consider how low their cost of housing were. It is likely that each have assets that place them as millionaires - though they likely think of themselves as middle class - or maybe upper middle class.

I suspect that generation benefited by those like me in the next generation being double income families. The number of houses was closed to fixed (new construction was small). High demand from people who could afford more and more was likely one major explaination of that steep rise in value.

[leftist.]

28. NEW QUESTION - This one is about the housing market

I have read here that an increase in the number of millionaires could be attributed (and this is in general, as this article is from 2004) to the housing "boom" (or bubble, I'm not smart enough to know which word applies) in the US during the 2000s. I have no clue when this "boom" began to unravel or cool off but I know it's in the process of doing so now.

The question then is, as the housing market declines, will we see a subsequent and extreme DECREASE in the number of millionaire households in the coming years as people are re-classified out of "millionaire" status?

[moondust]

30. It's not a good thing

for a consumer economy. Concentration of wealth means fewer consumers with the money to buy everything from cars to TVs to refrigerators to iPods. Fewer of those items sold means fewer of those items need to be produced which means fewer jobs which means less wealth in the hands of consumers to buy cars, TVs, ...

But Repigs have never really accepted the realities of a consumer economy and the implicit advantage of more or less equal wealth distribution as they mindlessly cling to the feudalism of their fathers that goes back centuries.