Understanding the hyperrich through the lens of tomorrow's history

Discuss

59 Responses to “Understanding the hyperrich through the lens of tomorrow's history”

  1. Mordicai says:

    It almost seems like the unregulated capitalist system has some pretty irrational elements built into it.

    • heavystarch says:

      This isn’t an unregulated capitalist system we live in.  This is Corporatism.  Crony capitalism.  It ain’t capitalism. 

      Laws are written to benefit the few, powerful, well connect and elite.  

      A central Bank (The Federal Reserve) was created for the sole purpose of allowing these powerful banking families (JP Morgan, Rothschild..and now Bank of America, Citigroup, Goldman Sachs).  It allows the legal counterfeiting of currency (fiat money) which is secretly lent out the open window of the Federal Reserve to these well connected banking/investment corporations. 

      Just look at the GAO audit of the Federal Reserve from 2008 – that revealed $16 Trillion Dollars in essentially secret loans to these very corporations. 
      Doesn’t anyone get that this system isn’t Capitalist? We have a central bank that has been granted privilege to legally counterfeit money out of thin out.   It’s no more complicated than that but every bit as sinister as we know it. 

      • Mordicai says:

        I was with you until you claimed fiat currency was counterfeiting (note, edited to replace “capitalism” with “counterfeiting,” which is what I meant, just a mindblank) & held the Fed up as a scapegoat. I mean– yeah, Corporatism is a fine term, but I like Corporate Welfare better, I guess.

        Anyhow, while corporate bailouts & the slide into plutocracy is super awful, there is a strong strand in this whole set of shenanigans that represents the bubble– this ACTUAL recession was the fault of bad loans (predatory lending should be regulated), bundling & reselling of bad loans (should be regulated), & the housing bubble (mellowing boom/busts is the point of the Fed!).

  2. anansi133 says:

    OK, so there is a clear limit on how much a person can improve their own life given additional funds. When that limit is reached, then the only other way the extra wealth can do any work, is to impact how other people are living their own lives.

     If  I’m already spending $10,000 a day on myself and the money is still coming in faster than i can spend it, then I suppose I could try to spend some of that flood making things possible for other people to benefit. But that would make my own position more precarious. It would make far more financial sense to make it harder for other people to approach my level of wealth, to keep the competition down. And I don’t even have to consciously conspire to make this happen, it’s the impulse that every person will have who touches any of my money.

     The top half of the top 1% are not really in competition with anyone else in the top 10%, at least not for resources. They are in competition with the bottom 80% who would like to make our own lives slightly less hellish. (they are maybe in competition with their peers to find the most efficient way to steal from the rest of us, like two con men in a gentleman’s wager with each other. Neither is going to rat the other out just to win the bet.)

    So the only real question to be answered, is whether or not all that money can correctly guess what it needs to do to protect itself from those who don’t have it. Given the history of copy protection in the computer realm, I’d say their chances don’t look very good.

    • digi_owl says:

      I do wonder where a couple of articles i read ended up.

      One claimed that once basis like food, clothing and housing was covered, one did not really need much spending money. At least not if the goal was happiness. Much more important was the kinds of people one spent the free time with.

      The other claimed that it was better for the economy overall that say 10 people spent 1000 each month, then 1 person spending 10000. This because it was more likely that the 10 people was able to find ways to spend their 1000 then the 1 person was able to find ways to spend the whole 10000. This in part because one only have so many hours in the day that one can use to look for things to spend it on.

    • heavystarch says:

      Was that Steve Jobs’ M.O.?  Spend $10k/day on himself and then horde the rest to keep everyone else down. 

      Does Richard Branson spend $10k on himself every day and then work on ways to make sure the other 80% of the world can’t get ahead? 

      How would helping others benefit (which most companies do – even the evil ones) make the wealthiest’s people’s position more precarious? 
      That doesn’t even follow any sort of rational logic. 

      Also I don’t think that most corporations are trying to steal from their customers. There are however some very greedy, evil and well connected entities on this planet…Goldman Sachs…JP Morgan…Citigroup…>Bank of America…Deutche Suisse…

      But these all lead back to the most insidious operation of them all – The Federal Reserve. The world’s most pivotal central bank upon which all other central banks are focused for their direction.  This legal counterfeiter does in fact benefit pretty much only the well connected companies I mentioned above and a few select others. 

      End the Fed and you end much of the Crony Corporatism that is going on today. Then we need to get congress to respect/honor their oath of office and not the lobbyists giving them campaign contributions.  

      • oomatter says:

        “Was that Steve Jobs’ M.O.?  Spend $10k/day on himself and then horde the rest to keep everyone else down. ”

        Well, not to speak ill of the deceased, but try googling “apple cash stockpile”. The first number it kicks out for me is $81.6 billion. Does that qualify as hording?

        As for keeping people down, how’s this to start? http://en.wikipedia.org/wiki/Foxconn_suicides

        Those shiny Apple products are made by Foxconn, right?

  3. nosehat says:

    Here’s the statistic that jumped out at me from this piece:

    By some estimates, 20-25% of the labour employed in the USA today is guard labour, work devoted to preventing the poor from expropriating the rich.

    War on terror, indeed!

    • jeligula says:

      I can’t believe that.  If it’s true, we are in deep shit, indeed.  Over 30% of the workforce is engaged in law enforcement, incarceration (or ARE incarcerated) and practicing law, clerking law, etc.  Add 25% of the labor force as guards of the wealthy, and that leaves very little to produce the necessities of life. From where I am sitting, it seems that America’s greatest export is jobs.

  4. WiseOdd says:

    This makes me think of Peter F. Hamiltons books. Many of his books revolve around the super rich in the far flung future, and what they do to either stay the top half percent or to just retain some sort of recognizable link to the bottom 99,5 percents of humanity. This is also why I think SF is almost the only litterature interesting to read, precisely because it tackles these sort of themes. Stross himself is definately part of my canon of worthy reads :)

  5. CharredBarn says:

    Stross cites Steve Jobs as evidence of the claim that money can’t buy health. Arguably, if Jobs had spent his fortune on mainstream medical treatments instead of juice cures or whatever, he could have bought a few more years of life. If you get very sick, it’s better to be rich than poor (all else being equal) and to say that money can’t buy health is true to the same extent that money can’t buy you a reliable car if you spend it only on vintage Fiats.

    Also, the suggestion that Stross is describing things from a millionaire’s “point of view” isn’t right. Lots of millionaires would lose a week of sleep if they picked up a 1000 dollar lunch tab. Being rich is no guarantee that you aren’t also a cheap bastard.

    • EH says:

      You ever see the people who get those “few more years of life?” It ain’t sunshine and lollipops.

      And cut it with the “juice cures or whatever” BS, you think we can’t come up with disparaging interpretations of the term “CharredBarn,” especially in the context of this story?

      • CharredBarn says:

        I don’t know what you’re talking about. Google “juice cure” and you’ll see that all the top hits aren’t sites that disparage the idea, but which claim that carrot juice, etc., can cure any number of diseases including cancer. If you don’t like the term, take it up with people who promote the idea, not with me.

        And this whole “surviving cancer ain’t all sunshine and lollipops” meme is a ridiculous argument against turning to modern medicine to prolong your life. Go to someone who’s going through chemotherapy so that they can enjoy their families and friends for a while longer, and tell them they’d be better off dead. Some might disagree with you, despite your admirable concern for their happiness.

  6. ROSSINDETROIT says:

    Stross’ analysis of needs and wants from the perspective of great wealth is the clearest and most concise thing I’ve read on the subject.  It’s not well understood that when you’re materially well provided for your motivations should change drastically.  Unfortunately we’re all still wired with survival instincts to accumulate what we might ‘need’ like shelter, security, food, uh… reproductive opportunities, and so on.  In the presence of plenty, the urge to get more persists.

  7. James O'Brien says:

    A good essay. It’s always useful to put the wealth of the super rich in perspective by outlining specifics. Nevertheless, the super rich should be thought of  as not merely being super rich but as capitalists; that is, the owners of capital.

    One of the distinguishing features of capitalism from previous social systems is that the surplus accrued by a tiny elite is reinvested in production. Unlike feudal times when Lords and nobles accumulated silly trinkets and blew the wealth siphoned off from the peasants on castles and wars, capitalists – who also siphon off a surplus from workers – have to reinvest a lot in production if they are not to be out-competed in the market.

    This is one reason why capitalism is, on a historical scale, more progressive than feudalism. The constant investment in production contributes to increasing productivity and technological advancement which creates the basis for a life of plenty for everybody.

    It is also profoundly undemocratic that crucial investment decisions are in private hands. To build railways, factories and hospitals or bombs, trucks, and spyware? These choices should be made by society as a whole rather than a tiny, tiny minority, particularly a tiny minority whose primary goal is to maximise short-term personal profit rather than long term social health.

    The exorbitant wealth of the capitalists is obnoxious but not fatal. Their control over the investment decisions of society may well be.

    • ROSSINDETROIT says:

      “This is one reason why capitalism is, on a historical scale, more progressive than feudalism. The constant investment in production contributes to increasing productivity and technological advancement which creates the basis for a life of plenty for everybody”
      This is probably largely true on historical scales.  Railroad barons built railroads.  Shipping magnates moved cargo.  But what tangible social benefit has come from people who have gotten filthy rich trading derivatives?  If there’s a real answer to that I’d like to hear it.
      Also, many monarchs have improved and stabilized their societies with national defense and public works.  Roman Senators were expected to endow projects to improve civic life.  

      • James O'Brien says:

        “This is probably largely true on historical scales. Railroad barons built railroads. Shipping magnates moved cargo. But what tangible social benefit has come from people who have gotten filthy rich trading derivatives? If there’s a real answer to that I’d like to hear it.Also, many monarchs have improved and stabilized their societies with national defense and public works. Roman Senators were expected to endow projects to improve civic life.”
        ——

        It is true that monarchs of the past provided useful services and that plenty of old time aristocrats did construct a myriad of majestic civic monuments that enhanced the lives of generations. The Parthenon is a beautiful example of a democratic version of the same.

        But the economic system was not based on it and their investment was civic rather than economic in nature. The builders did not, for the most part, invest in order to return a profit. Prestige rather than wealth was a signal of social worth. Their economic system did not depend on reinvesting the surplus in improving the means of production in order to generate an even bigger future surplus.

        Capitalism excels at that. While the super wealthy get to waste obscene sums on silly yachts, that is, in the scheme of things, only a small amount of the surplus produced in a modern society.

        Companies that make things are constantly looking for ways to maximise efficiency in order to make the greatest profit possible. Toyota, Apple, Nestle and a horde of other companies are constantly improving their methods of production. Businesses need constant injections of capital if depreciation and competition isn’t to render their machines and techniques obsolete.

        It is true that investors often put their money in functionally useless derivatives, but enough of them put their capital into real production for it to matter. Corporations don’t get their capital from trees. In any case, it’s not mutually exclusive with the fact that the super-wealthy control the allocation of capital.

        In contrast, in past times, the wealthy rarely reinvested the surplus in the production process. Some of it, yes, but not on the same scale and not systematically. Roman nobles didn’t invest to improve more efficient ploughs. Why bother when you have hundreds of slaves? The same applies to feudal times. The lords of the manor didn’t spend too much on improving the plough of medieval times

        Capitalism is different. A lot of the actual surplus is reinvested in production. A company that merely treads technological water is only going to succumb to more efficient rivals.

        So I think it is worth emphasising that the super rich aren’t just obnoxiously wealthy, but that the key investment decisions lie in their, or their representatives’ hands.

        • ultranaut says:

          The Roman nobles may not of invested in more efficient ploughs but certainly they invested in something to maintain the economic power necessary to sustain their social privilege. More slaves, more soldiers? Not so different than Capitalism it seems. 

      • heavystarch says:

        Numerous pension funds, city pensions and the like are invested in Derivatives. 

        However that is not to say that the derivative market isn’t without blemish.  It’s a huge legal gambling outfit. 

        The biggest problem with the Derivatives market (other than it’s ridiculously huge size – 500Trillion to 1.5 Quadrillion) is the fact that some of the huge bad debt created out of this derivatives market is coming to rest on the shoulders of the US Taxpayers via the FDIC and Federal Reserve Open Market window. 
        http://dailybail.com/home/holy-bailout-federal-reserve-now-backstopping-75-trillion-of.html

        This again is more proof of Corporatism/Crony Capitalism than real true free market capitalism. 

      • rainsingin says:

        It seems to me that people keep confusing the gross income generated by businesses with the net income that is paid directly to the 1%.  Stross’ example is the net income that goes into one person’s pocket.  This is after all operating expenses have already been accounted for in the business that generated the income for the executive.  The highly compensated person, who received this compensation, is not going to reinvest in the production of the company.  R&D is not in this equation.  This is the fallacy that taxing the personal income of the 1% somehow hurts job growth.  If the company paid the executive $1 million, instead of $5 million, then the company would have an extra $4 million to hire new workers.  Once they pay the $5 million to the executive, the money is off the table to create jobs by the company.

    • digi_owl says:

      “reinvested in production”, if only…

      These days it in reinvested not in production but in the stock market, and that is so many layers of derivatives these days that one can be lucky if 0.01% of that actually reach some kind of actual production system.

    • jeligula says:

      You are completely correct, James.  But the problem is that how things should work is not how they are being run at this point in time.  These capital owners you are talking about are NOT putting the capital back into the production, they are increasing their own take by cutting expenses: wages, benefits, etc.  The current paradigm is that less is more.  We can obviously live with less while taking on more work, because this is how it is being done at every company in the United States.  The capital is being held onto, not being reinvested in the production.  The costs of production are being met by screwing the worker, plain and simple.  This is the problem that we are faced with, and why there is so much ill will against millionaires.  If Americans have any pioneering grit left over at all, then we will demand that things be done in a different manner.  How?  I don’t know, but I know it needs to happen.  If it doesn’t, corporate slavery and indentured servitude is all we can look forward to, because if we don’t stand up for our rights, we will lose them.  And we have lost so much already.

      • James O'Brien says:

        Jeligula: “These capital owners you are talking about are NOT putting the capital
        back into the production, they are increasing their own take by cutting
        expenses: wages, benefits, etc. ”

        It was ever thus.

        Well, not exactly, but the attempts to cut wages, benefits, etc is a time-honoured practice of capitalists in all times and in all places. It used to be called the class struggle, back when socialism was capable of broaching our consciousness. They attempt to minimise the share going to labour in order to maximise the share going to themselves, some of which they extract as personal wealth, some of which they reinvest as capital. The extent of their need and capability to force down the share of income going to labour depends both on what their competition in the market is doing and how strong the labour movement is in defending and even increasing its share.

        So there isn’t a contradiction between revinvesting in production and screwing the worker. Capitalism always gains its surplus via the labour of the workers. The only question is the extent to which the workers are screwed. The more they screw the worker for doing the same job, the more surplus they get as a result, and thus the more capital they can revinvest.

  8. mr_frakypants says:

    So, when these 1% spend all of those egregious amounts of cash on things like lunch, what happens to that money? Does it just go into a furnace somewhere?

    I’ve always thought that one way to get a lot of money (i.e. become normal-rich as opposed to live-off-the-interest-rich) is to identify some product or service that actually costs a regular amount of money, then re-brand and re-sell it to people like those theorized in the linked article for a enormous profit. I mean, the food that they are eating for a $1,000 lunch didn’t actually cost 100x more than the food that goes into a $10 lunch. It costs more, for sure, but not THAT MUCH more.

    So, if there are “super-rich” folks ripping around everyone spending exorbitantly, explain to me how that hurts the rest of us. I see it as an enormous value-gap that someone needs to fill.

    • corydodt says:

      As far as rebranding things to be expensive and “value gaps” to fill, google the “I AM RICH” ios app that came out very early in the iphone’s history. Never has there been a more wonderful illustration of your point about rebranding things. Nevertheless, I disagree with the basic assertion that this means everything is hunky-dory with the current distribution of wealth.

  9. asuffield says:

    People are getting distracted by the examples. Stross isn’t saying that rich people spend $1k/day on food, he’s saying that they can afford to if they want to – they can eat whatever they like and it’s not going to matter, financially. Similarly for the others: this is not about what they spend, it’s about what they no longer need to worry over.

  10. Into_anus says:

    I’d love to part of this 1%, if enough of us make it there then it’d even up the imbalance, who’s with me ?

  11. ierdnall says:

    Did anyone actually read the article and calculate the #’s here…
    I think the social engineer who wrote this needs to go back to the Uni for a refresher course in basic math
    “Food is essentially free; you can afford to spend $1000 per meal,.. and not make a dent in your income.” .. all entries were described as “free”

    Food                                      $1,095,000  (20 pct. is not a bite)
    Clothing                                       235,000  (we don’t get underwear,shoes, etc)
    Housing                                        365,ooo  (no utilities.or media)
    Staff    5 at avg. 50K                 250,000 (no cars, fuel, or air travel)

    Total so far                            $1,945,000 (this free thing is taking a bite out of my _ss)

    Of course they don’t have children or belong to the country club they just sit at home in the dark wearing a suit and a evening gown…

    The writers analogy is ridiculous… I understand how a  disproportionate income can distort a person’s view of the world around them.

    I wonder how many protesters have boycotted Sporting events in the last decade , even on TV, for the ridiculous amount, most of  the players get.

    Occupy The Stadium
    Occupy The Stadium
    Occupy The Stadium

    • ROSSINDETROIT says:

      “I wonder how many protesters have boycotted Sporting events in the last decade , even on TV, for the ridiculous amount, most of  the players get.”

      Cite evidence that ‘most’ athletes make a ‘ridiculous amount’.  This seems to be central to your argument so I’m sure the numbers are right at hand.

    • PhosPhorious says:

      I’m honestly not sure what your point is.  The article talks about those with an annual income of $5 million a year or more.  So take your figure and double it, so that it includes underwear, utilities cars for staff etc.  After living an extremely luxurious lifestyle where they don;t have to lift a finger to do anything (it’s all handled by personal assistants) they STILL have over a million dollars left. 

      The writer’s point stands: after a certain point more money doesn’t bring noticeably more happiness.

      • ierdnall says:

        “After living an extremely luxurious lifestyle where they don;t have to lift a finger to do anything”

        By saying ‘anything” you forgot  the part where they have to go to work everyday and earn the money

        • PhosPhorious says:

          “By saying ‘anything” you forgot  the part where they have to go to work everyday and earn the money”

          Two things: I had thought that one of the points being made is that after a certain level, the money is earned through investment.  For the super rich, money makes money, so technically, they don’t even have to go out and earn more, they can hire someone to invest it for them.

          And the second point is that even if they do have to earn it, it’s more than they can reasonably spend.  Remember the figures you use assume they are spending $1,000 per meal, which is over the top. 

          At the very least, Stross’s article makes a good argument for progressive taxation.

          • ierdnall says:

             Ok I don’t nessecaraly take up for the super-rich…

            I guess we have come to a point where people should not make more money than they can spend… but that is NOT the America where you grew up..maybe your thinking of another country?

            My post are going all wanky and one of them looks to have been removed…so I am checking out of here….Later

          • PhosPhorious says:

            “I guess we have come to a point where people should not make more money
            than they can spend… but that is NOT the America where you grew
            up..maybe your thinking of another country?”

            “The America I grew up in”  Why, we fought the Nazis and put a man on the moon and enjoyed the highest standard of living in the world at the time. . . and had a marginal tax rate of 90% for the top bracket.

            I’m not really that old, but the basic empirical facts seem to be against the Tea Baggers and other conservatives: America’s shining moment was when the wealth was redistributed most widely through whopping big taxes on the rich.

            20 years of Reaganomics, and we were barely able to win second place in Iraq.

    • atimoshenko says:

      I wonder how many protesters have boycotted Sporting events in the last decade , even on TV, for the ridiculous amount, most of  the players get.

      That’s because their incomes are highly time-limited, and because they come from a very large number of people happily giving them a small amount of their money. OWS is not against high incomes per se, it is against entrenched wealth from rent extraction.

    • foobar says:

      I wonder how many protesters have boycotted Sporting events in the last decade , even on TV, for the ridiculous amount, most of  the players get.

      I don’t get this argument. Yes, sports players get ridiculous salaries, but they’re the ones bringing the money in, and if it didn’t go to them, who would it? The 1 percenters who own the clubs?

  12. ierdnall says:

    first # is ttl pay role …second is avg…third is median… forth is standard deviation

    Washington Redskins $ 99,953,611 $ 1,784,885 $ 901,500 $ 2,098,759
    Tennessee Titans $ 113,494,050 $ 2,141,397 $ 1,010,000 $ 2,099,092
    Tampa Bay Buccaneers $ 84,592,822 $ 1,458,496 $ 735,880 $ 1,774,029
    St. Louis Rams $ 99,707,892 $ 1,661,798 $ 537,990 $ 3,016,850
    Seattle Seahawks $ 89,075,820 $ 1,649,552 $ 917,875 $ 1,750,118
    San Francisco 49ers $ 103,738,952 $ 1,957,338 $ 1,177,280 $ 2,259,187
    San Diego Chargers $ 117,458,935 $ 2,025,154 $ 927,880 $ 3,540,888
    Pittsburgh Steelers $ 119,292,960 $ 2,056,775 $ 792,500 $ 2,761,268
    Philadelphia Eagles $ 106,493,095 $ 1,804,967 $ 1,017,280 $ 2,412,917
    Oakland Raiders $ 111,527,250 $ 2,065,319 $ 830,000 $ 2,634,432
    New York Jets $ 120,634,420 $ 2,079,903 $ 762,750 $ 2,776,685
    New York Giants $ 138,354,866 $ 2,470,622 $ 890,000 $ 3,718,306
    New Orleans Saints $ 121,552,424 $ 1,992,662 $ 870,000 $ 2,580,010
    New England Patriots $ 96,913,133 $ 1,642,595 $ 857,280 $ 1,664,966
    Minnesota Vikings $ 99,802,010 $ 1,919,269 $ 952,665 $ 2,309,590
    Miami Dolphins $ 126,383,421 $ 2,256,846 $ 978,290 $ 3,206,135
    Kansas City Chiefs $ 81,829,650 $ 1,410,856 $ 560,000 $ 2,596,781
    Jacksonville Jaguars $ 106,879,214 $ 1,875,073 $ 817,450 $ 2,596,032
    Indianapolis Colts $ 103,360,985 $ 1,782,085 $ 542,280 $ 3,159,957
    Houston Texans $ 122,258,610 $ 2,037,643 $ 848,640 $ 3,159,274
    Green Bay Packers $ 113,959,603 $ 1,931,518 $ 812,500 $ 2,647,804
    Detroit Lions $ 99,910,434 $ 1,693,397 $ 896,040 $ 1,783,126
    Denver Broncos $ 101,658,735 $ 1,918,089 $ 1,016,370 $ 2,125,478
    Dallas Cowboys $ 90,340,939 $ 1,613,231 $ 818,265 $ 2,339,350
    Cleveland Browns $ 93,932,182 $ 1,647,933 $ 870,000 $ 1,789,584
    Cincinnati Bengals $ 93,840,588 $ 1,617,941 $ 623,965 $ 2,179,741
    Chicago Bears $ 120,672,110 $ 2,154,859 $ 820,616 $ 3,353,848
    Carolina Panthers $ 112,963,398 $ 1,947,644 $ 823,700 $ 3,120,365
    Buffalo Bills $ 111,253,126 $ 1,765,922 $ 771,000 $ 2,014,947
    Baltimore Ravens $ 109,503,397 $ 1,795,137 $ 735,760 $ 2,667,159
    Atlanta Falcons $ 95,062,952 $ 1,728,417 $ 877,280 $ 2,198,487
    Arizona Cardinals $ 111,138,646 $ 1,984,618 $ 812,440 $ 3,074,368

    • ROSSINDETROIT says:

      Nice.  Care to add context on how this proves that most players are ridiculously overpaid?  Cause I’m not seeing that in your column of digits.  It’s your argument.  Feel free to make it any time.

    • ernunnos says:

      As long as people spend millions of dollars on spectator sports, that money will go somewhere. Should it all go to the managers & owners?  The players deserve a cut, and considering that many of them are spending the best years of their lives on the sport, sacrificing their health and opportunities to develop a more long-lasting career, the compensation is not as high as it might seem. That money’s going to have to last.

      • ierdnall says:

         Pro sports in America is the essence of OWS.. it provides nothing in the way of goods or products ( and i am not talking about the stupid jersey on sale at walmart) that is only a minuscule amount of the total team revenue.. It is derivatives on a sporting scale..

        I lived in Dallas for several years and most local fans could not even afford to go to the game…I attended a play-off game one year and had to cough up $15 just to park in a grass field…that is retarded

        It is true capitalisum.. you will pay what the market will bare

    • Antinous / Moderator says:

      You might want to investigate a little something called a ‘link’ for your next data dump.

  13. ierdnall says:

    You asked the last question as such, I’ll ask the next…How much is to much ?

  14. msbpodcast says:

    You’re assuming that the rich get to spend that money.

    Its all handled by accountants (who are duty bound not to waste any on useless sh*t like taxes,) who take care he the bills from the ash accounts and dump the rest into owner equity accounts.

    The rich really don’t know how much they’ve got, they just know its “enough” and they use their salary figures in a game of “one ups man’s ship” using these abstract numbers what they negotiated and which bear no relation to anything (though WE know better, [they're throwing around millions like it was as meaningless as they are...])

    “Gannett CEO Craig Dubow resigned last week for health reasons, saying that back and hip problems prevent him for fulfilling his duties. He leaves a job that could pay him as much as $9.4 million this year, but don’t feel too bad for Dubow: He’s eligible for severance pay of up to $37 million”

    NOTHING he could have done would make him worth $9.4 million, never mind the $37 million faretheewell he’s angling for.

    If he gets ANYTHING but two weeks severance and a slap on the ass, the same deal he gave to the thousands of Gannett employees who got laid off, Gannett is people’d by idiots.

  15. TimRowledge says:

    OK, so super-rich-bastard-John spends money and that ends up going through the hands of various people, yippee, they all make some profit. Maybe.
    But the point is that SRBJ gets to use the money to do *what he wants* which, being a large amount, has a large effect on what is produced, who gets to profit from it (probably SRBJ and his buddies anyway) and what *doesn’t* get produced. And one of the things that SRBJ and his buddies want, and spend money on, is making sure they get to keep the money and power. 

  16. bcsizemo says:

    http://www.businessweek.com/magazine/content/11_06/b4214058615722.htm

    Average NFL salary: 1.9 million
    Average NFL career: 3.5 years
    1.9 x 3.5 = 6.65 million dollars

    If I started a career at 20, retired at 65, that gives me 45 years of making money.  To make 6.65 million I need to make ~$148k per year.

    Considering athletes produce nothing other than enjoyment for their fans they are grossly over paid.  When scientists who do things like cure illness, produce new technologies, research advanced fuels, ect..  are paid less than 1/10 of what a football player makes it reeks of corporate greed.

    -and you can tout that playing sports is dangerous.  But so are things like being a firefighter, and very few of them make six figures.

  17. ultranaut says:

    I aspire to spending $1000 on lunch. Wish I could find a job in an ethical industry that could support a habit like that. Dinner last night was ~$300, totally worth it but I can’t afford to eat like that regularly on my salary.

  18. robuluz says:

    I think this article is a little short sighted. Yes, it makes sense that quality of life can’t be improved beyond a certain point for most of us, who have fairly basic expectations. But say your idea of acceptable privacy is owning an island. Having your own jet with your own crew to fly there. An extra jet to avoid downtime during servicing.

    I did some work at a Superyacht marina, and was shown a cruising vessel with living quarters for around 200 people and it’s own helicopter landing pad, complete with helicopter. It was owned by a South African diamond mine magnate. It was his third largest vessel.

    These people don’t occupy the same reality as us, and they see potential to improve the quality of their lives way, way, way beyond what a measley 5 mill a year will get you.

  19. mpmuno says:

    I’m sure the Internet will correct me if I’m wrong on this, but athletes and actors are paid very differently from corporate and finance managers.

    Athletes and actors have their salaries set through negotiations with owners and producers, respectively. This ensures that their salaries are proportionate to the value they bring into the business. Moreover, we the people decide how much we want to spend being entertained, so we have an indirect say in how much athletes and actors are worth to us. They get paid a lot, but I find it hard to argue that it is “too much” so long as we pay to watch sports and go to the movies.

    Corporate and financial managers have their compensation set through negotiations with boards of directors. Boards of directors are composed of… corporate and financial managers. So, I rather doubt that there is any incentive for boards of directors to reign in the compensation of high-level management. If a board votes for high compensation for person A, won’t board member B go to the board that decides their salary and say, “Look how much A is paid, I need a competitive package?” If shareholders in companies had a say, it might help, but so long as most shares are managed by people getting a lot of compensation from large financial corporations, it might be hard to find sufficient motivation to keep executive salaries in check…

  20. Why do companies pay CEO’s 5 million a year anyway? Are they really getting value for money? I bet they could find someone who would do just as good a job for  a million or even 250K. Maybe even less. Why do shareholders put up with this?

    Maybe high CEO pay is like those Easter Island statues. A way to show off instead of addressing real problems.

    And seriously, why do people even show up for work after they make their first 20 million? I sure as hell would retire at that point.  I’d travel the world and become a rugged adventurer. I’d invest in weird venture capital schemes in offbeat industries. Most would fail, but one of them might change the world. But mostly I’d use the money to retire and attempt to transform myself into the Dos Equis Guy. I suppose Richard Branson has done pretty close to this.

    • penguinchris says:

      I think there are probably more people like that than we realize – they’ve made enough to retire on quite comfortably, but aren’t extravagantly rich. People like that probably walk among us all the time (more or less depending on where you live)… they don’t work, they just go out and do whatever they want (this goes along with the “who are all these people at the coffee shop when they should be working” discussion we had a while back ;)

      I know personally that I’d be beyond happy with $1-2 million – that’s more than enough to live comfortably (though not extravagantly) for the rest of my life (I’m 25), even without making anything but boring investments.

      I wouldn’t flaunt it, though – random people who saw me would know I wasn’t a bum, surely, but I’d buy a decent condo or house, a decent car, nice clothes, nice new electronics when I want an upgrade, and that’s it really.

      I’d try to find something to do with myself that could conceivably be useful (I’d probably fund myself as a travel photographer, my dream job – or maybe fund exploration-type expeditions, which I would tag along on as photographer).

      I wouldn’t just sit around and be idle, but I wouldn’t be too conspicuous. Richard Branson has managed to do this – not being a rich douche, essentially – while being incredibly conspicuous, which is impressive and admirable :)

      • Devilbunny says:

        You’re probably going to live another 52 years (or 56 if female). $1M will, in a more or less reliable fashion, allow you to take maybe $10k/year without touching the principal+inflation. You’ll be living in a trailer in the rural South with a ten-year-old Honda. If you want to burn the principal, that’s a bit less than $20k/year added to it, plus your interest income is going to be continuously declining.

        Depending on your definitions of “nice”, you’re talking about a lifestyle of roughly $80-100k/yr minimum.

  21. Mister44 says:

    I confused by the term “essentially free”. Nothing mentioned is “essentially free”. In fact it is all very expensive. Does it have to cost $1 million or something like that to no longer be “essentially free”?

    I am not sure of a better term, but I am sure there is one out there.

    • bruckelsprout says:

      I agree.  I totally understand what he’s trying to say there, but I don’t think “essentially free” is the right term for it.

      Maybe “relatively inconsequential?”

    • Brainspore says:

      “Essentially free” for a hyper-rich person in the same sense that drinking an extra glass of tap water every day would be “essentially free” for you. Yes, you’re actually paying for all the water that comes through your tap- but the cost of a single glass would probably be so inconsequential that it would never even occur to you to figure it into your budget.

  22. Mister44 says:

    Maybe not even relatively, but inconsequential I think is accurate.

  23. gwailo_joe says:

    Nice thread…

    Yeah: ‘hella/dirt cheap’ (relatively speaking)…but not ‘free’.  Free means -no money-.

    Still: when I imagine that kind of lifestyle…I see where un-bright poor folks vote Republican.  It sounds Soooooo Niiiiiiice: and SURE I’d give plenty of money to them starving kids with cleft palates…right after I built my faux-marble Parthenon to house my 30 cars (more than 30 is gauche, as everyone knows)…

    And..(of course) I’d need to crush my enemies first; all those chumps and big-mouths who were mean to me?  Gonna send goons to pop tires Every Day…whatayagonnado?  Call the cops?  I gave the DA $150K through my PAC: suck it peon, and face the facts: a millionaire might have to face the music…he’s the 10%.  Far removed from suffering, but still slightly vulnerable.  In quite a few area codes, millionaires be livin’…you might even know one.

    But a Buh buh Billionaire??  They safe.  Mostly… 

    Well insulated from the shenanigans of the bitter and/or insane low-single-digit percent that would consider doing them harm…but it’s a madmadmad etc world out there  

    Love ain’t the only thing money can’t buy…total safety is another.

    • bruckelsprout says:

      To be fair, I think the reason poor and lower middle class people vote Republican are (in no particular order):

      1) Their parents did.  This goes for Democrats, too.  There are a lot of people that never go beyond having the opinions that their parents had.

      2) Guns.  My dad is one of them.  They don’t want the government to take away their semi-automatic sniper rifles.

      3) Religion.  They reap in the votes with the religious side of views of issues like abortion, or they jack up the rhetoric about “Christian family values.”  A lot of Christians, not all, but especially uneducated ones, snap that shit up.

      4) They just plain hate welfare.  Many people seem to think that they have a work ethic second to none.  Just ask and they’ll tell you about how they had to work 3 jobs and go to school.  They had to scrimp and save and crawl until their fingernails fell out to climb out of the pit of poverty.  Nothing disgusts them more than someone who receives assistance.

      5) They just plain don’t like taxes, and are willing to accept gigantic tax cuts for the super wealthy as long as it exempts them from 400 bucks in taxes at the end of the year.

  24. Amelia_G says:

    When I moved back to the US, I was struck by the impression that some people here thought they could extract theirs through damaging means and then retreat with all their relatives and acquaintances behind walls and not be affected. Your children will not be unaffected. Also, it’s not fun unless everyone has access to education, communication, &c.

Leave a Reply