Guest Post: The End of a 30-Year Wealth Bubble?

Submitted by Leo Kolivakis, publisher of Pension Pulse.

David Leonhardt and Geraldine Fabrikant of the NYT report that the Rise of the Super-Rich Hits a Sobering Wall:

The rich, as a group, are no longer getting richer. Over the last two years, they have become poorer. And many may not return to their old levels of wealth and income anytime soon.

Perhaps the broadest question is what a hit to the wealthy would mean for the middle class and the poor. The best-known data on the rich comes from an analysis of Internal Revenue Service returns by Thomas Piketty and Emmanuel Saez, two economists. Their work shows that in the late 1970s, the cutoff to qualify for the highest-earning one ten-thousandth of households was roughly $2 million, in inflation-adjusted, pretax terms. By 2007, it had jumped to $11.5 million.

The gains for the merely affluent were also big, if not quite huge. The cutoff to be in the top 1 percent doubled since the late 1970s, to roughly $400,000.

By contrast, pay at the median — which was about $50,000 in 2007 — rose less than 20 percent, Census data shows. Near the bottom of the income distribution, the increase was about 12 percent.

Some economists say they believe that the contrasting trends are unrelated. If anything, these economists say, any problems the wealthy have will trickle down…Other economists say the recent explosion of incomes at the top did hurt everyone else, by concentrating economic and political power among a relatively small group….

Mr. Saez, a professor at the University of California, Berkeley, said he believed that the rich had become poorer. Asked to speculate where the cutoff for the top one ten-thousandth of households was now, he said from $6 million to $8 million.

For the number to return to $11 million quickly, he said, would probably require a large financial bubble…..

“We are coming from an abnormal period where a tremendous amount of wealth was created largely by selling assets back and forth,” said Mohamed A. El-Erian, chief executive of Pimco, one of the country’s largest bond traders, and the former manager of Harvard’s endowment.

Some of this wealth was based on real economic gains, like those from the computer revolution. But much of it was not, Mr. El-Erian said. “You had wealth creation that could not be tied to the underlying economy,” he added, “and the benefits were very skewed: they went to the assets of the rich. It was financial engineering.”….

The possibility that the stock market will quickly recover from its collapse, as it did earlier this decade, is perhaps the biggest uncertainty about the financial condition of the wealthy. Since March, the Standard & Poor’s 500-stock index has risen 49 percent.

Yet Wall Street still has a long way to go before reaching its previous peaks. The S.& P. 500 remains 35 percent below its 2007 high. Aggregate compensation for the financial sector fell 14 percent from 2007 to 2008, according to the Securities Industry and Financial Markets Association — far less than profits or revenue fell, but a decline nonetheless…..

Beyond the stock market, government policy may have the biggest effect on top incomes. Mr. Katz, the Harvard economist, argues that without policy changes, top incomes may indeed approach their old highs in the coming years. Historically, government policy, like the New Deal, has had more lasting effects on the rich than financial busts, he said.

One looming policy issue today is what steps Congress and the administration will take to re-regulate financial markets. A second issue is taxes.

In the three decades after World War II, when the incomes of the rich grew more slowly than those of the middle class, the top marginal rate ranged from 70 to 91 percent. Mr. Piketty, one of the economists who analyzed the I.R.S. data, argues that these high rates did not affect merely post-tax income. They also helped hold down the pretax incomes of the wealthy, he says, by giving them less incentive to make many millions of dollars……

Yet there is also a reason to think that the incomes of the wealthy could potentially have a bigger impact on others than in the past: as a share of the economy, they are vastly larger than they once were.

In 2007, the top one ten-thousandth of households took home 6 percent of the nation’s income, up from 0.9 percent in 1977. It was the highest such level since at least 1913, the first year for which the I.R.S. has data.

The top 1 percent of earners took home 23.5 percent of income, up from 9 percent three decades earlier.

One issue that has perplexed economists on both sides of the political spectrum is how to deal with inequalities in wealth. I am not convinced that the rich are not getting richer, but I will concede that the deflation scenario will wipe out many fortunes.

The fact is that the poor are hurting much more than the wealthy in a downturn. The affluent should be paying more in taxes and they should count themselves lucky and remember Pete Peterson’s wise words on the meaning of enough.

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  1. attempter

    One issue that has perplexed economists on both sides of the political spectrum is how to deal with inequalities in wealth. I am not convinced that the rich are not getting richer, but I will concede that the deflation scenario will wipe out many fortunes.

    The fact is that the poor are hurting much more than the wealthy in a downturn. The affluent should be paying more in taxes and they should count themselves lucky and remember Pete Peterson's wise words on the meaning of enough.

    I don't buy it either. It read to me like PR hype when I read it in the NYT yesterday.

    What's interesting about McAfee as a character study is that he's clearly one of these wealth totalitarians for whom there is literally no level which would ever be Enough.

    There is NO point at which he'd say, it's time to call an end, get off my personal treadmill, and enjoy what I have.

    There's no point at which he'd ever stop hearing the fascist siren described by Marx as cooing,
    "Go on….Go on…."

    Ironically, if he would've been content with less in the first place, he probably would've been able to salvage more than he now can.

    It would be one thing if these totalitarians only wasted and risked ruin with their own worthless lives on their own personal death marches.

    But they set the pace for society; they set the astronomical asset prices, and from there the price of everything; they are the rabbits, the front-runners who force everyone to sprint until dropping dead of exhaustion.

    That's what makes them totalitarians, and that's what gives us the right to constrain them by any means necessary, in self-defense.

  2. "DoctoRx"

    Nice post, Leo. A timely subject.

    IMO the reason a lot of people have swung to the Democratic party is the past decade of worsening income inequality.

    When Mr. Obama began to continue the Bush policies favoring the very financial uber-rich who instigated the Great Financial Crisis, IMO he created such public skepticism that he's lost the public's trust that healthcare reform will be egalitarian. Oh, and then there's the matter of soliciting a mere $150 MM from Big Pharma to advertise for "reform".
    Real reform is indeed now DOA, as Yves stated. The Dems done ruined it.

  3. sharonapple88

    “History told me that you just keep working, and it is easy to make more money,” he said, sitting in the kitchen of his adobe-style house in the southwest corner of New Mexico. With low tax rates, he added, the rich could keep much of what they made.

    Taxes aren't the reason McAfee's fortune went from $100 million to $4 million. Even if he paid 0% in taxes, he would have still have lost most of his money because of the financial advice he got.

  4. Anonymous

    Wrong, wrong and wrong again…..

    If anything, wealth, which happens to be a relative factor, is becoming much more concentrated relatively, as it should.

    The fly by night wealthy, those who just happened to be in the right spot at the right time, are starting to find themselves crowded out of that "right spot" from above. Wealth, will be much more concentrated in the future, however, nobody will notice.

    Real wealth is and should be concentrated amongst the wise and not their agents.

    Best regards,


  5. craazyman

    I don't mind this guy at all. He's not asking for a bailout and at least he made his money through entreprenurial inspiration. He's not leveraging beta and then getting my tax money for his bonus when his bets go the wrong way.

    I don't mind if folks like Mr. McAfee get rich by making and selling something people want.

    He seems kind of cool to me. I'm OK with him.

    But I do mind when "the system" gives banksters, private equity parasites, hedge fund vermin and other noxious human trash — OK, I'm having fun, a little over the top ;) — free money to play with courtesy of the taxpayer and honest savers who can't get 1% for their money. And then they blow a bubble and screw everyone even more. And the Central Banks end up kow-towing to these vultures night and day. What a way to run a system.

  6. pneely

    Be fair in citation. Yes, this article appeared on Yahoo Finance, but it comes directly from the New York Times. No one at Yahoo did any work on it. Newspapers have a hard enough time these days without web readers' disregard for giving credit where credit is due.

  7. Anonymous

    Agreed on giving credit to the New York Times.

    Krugman linked recently to a piece by Emmanuel Saez on income distribution

    and what caught my attention is the source of the income. "Interestingly, the income composition pattern at the very top has changed considerably over the century. The share of wage and salary income has increased sharply from the 1920's to the present, and especially since the 1970s. Therefore, a significant fraction of the surge in top incomes since 1970 is due to an explosion of top wages and salaries. Indeed, estimates based purely on wages and salaries show that the share of total wages and salaries earned by the top 1 percent wage income earners has jumped from 5.1 percent in 1970 to 12.4% in 2007."

    I would think that this source would be far less stable, and much more likely to engender bubbles and risk taking. From his own admission "“History told me that you just keep working, and it is easy to make more money,” he said"

    That kind of thinking leads to blowing it on frivolous nonsense, and less investment in productive endeavors.

    I'm curious whether or not increases in income tax, with less reliance on estate tax might lead to more stability.


  8. kievite

    Econolicious: If anything, wealth, which happens to be a relative
    factor, is becoming much more concentrated relatively, as it should.

    An interesting question is whether the extremely unequal income
    distribution like we have now make the broader society unstable or plebs
    is satisfied with "Bread
    and circuses
    " (aka house, SUV, boat and 500 channels on
    cableuntil loot from the other part of the world is still
    coming… What is the upper limit of ay inequality.

    I would think that Peter Drucker was right. He thought the top exec
    shouldn't get more than 25 times the average salary in the company. I
    would suggest a metric like around a hundred from the average 20% of
    lowest paying jobs for a particular firm. One of the particular
    strengths of the idea of a maximum wage is that if senior managers want
    to increase their own pay, they have to increase that of the lower-paid

    The notion of maximum wages is based on the idea that no matter what
    job a person does and no matter how many hours they work, there is no
    possible way that an individual's skill, expertise, intelligence or
    experience can justify the payment of 200, 300 or even 400 times the
    wages of the lowest-paid 20% workers in the organization at hand.
    Drucker's views on the subject ar eprobably worth revisiting. Rick
    Wartzman wrote in his Business Week article 'Put a Cap on CEO Pay" that
    "those who understand that what comes with their authority is the weight
    of responsibility, not "the mantle of privilege," as writer and editor
    Thomas Stewart described Drucker's view. It's their job "to do what is
    right for the enterprise—not for shareholders alone, and certainly not
    for themselves alone."

    "I'm not talking about the bitter feelings of the people on the plant
    floor," Drucker told a reporter in 2004. " They're convinced that their
    bosses are crooks anyway. It's the midlevel management that is
    incredibly disillusioned" by CEO compensation that seems to have no
    bounds. " This is especially true, Drucker explained in an earlier
    interview, when CEOs pocket huge sums while laying off workers. That
    kind of action, he said, is "morally unforgivable."  There can be
    exceptions but they should be in middle management not in top management

  9. P.K. Prothe

    I think this article illustrates that no matter how wealthy, you need to always be vigilant and cautious. I'd like to think that in light of this collapse, people will be more rational going forward.

    We've been watching the Bend, Oregon real estate market and it's been cataclysmic. Foreclosures far outnumber sales – there's no industry to support the market and far too many expensive homes.

    I still think that wealth will be increasingly concentrated in fewer people. And that no one should consider themselves above failure.

  10. Anonymous

    So what happens when both the rich and poor get poorer in deflation. It won't surprise me to see the rich lose their incomes faster, even if it doesn't put them on the street.

  11. Anonymous

    Forced to give credit to the MSM? How unfortunate for you.

    What a hypocritical gaggle you bloggers are.

  12. Anonymous

    I KNOW nobody cares about the pain and suffering of "the rich" but I think Leo is underestimating the truth behind this NYT piece.

    Earlier this week a guy in the neighborhood–pillar of the community type, mid-50s, very successful, good Catholic–shot himself in the head rather than face the shame and embarrassment of having people see that his family is more or less broke. I don't know how much more "real" you can get. It is so tragic.

    I think everyone needs to think about what should be done if (when) it turns out that the well-off can't pay the kinds of tax increases Obama has been banking on. Yes, at the very top of the heap there is still a lot of dough, but people who rely on their wages and DON'T live off investments will not be able to sustain the tax hikes that are being discussed. Many are hanging by a thread. I'm not saying anyone at this level should be "bailed out" but they will not sustain additional burdens either. It's just not there.

  13. Hugh

    I have maintained for a long time that taxing policies are less about revenue gathering and more about social engineering. Since Reagan, there has been a massive transfer of wealth upward while lower and middle income wages have remained stagnant. These are not just numbers on a data sheet. They create a certain kind of society. The number of women entering the workforce grew. At first, this was seen as a positive change, and it was. But then it became simply an economic necessity. Two wage earners were needed to keep up with or improve the household's standard of living. But it also radically altered the dynamics of the nuclear family. I know I am over generalizing like crazy here but it has redefined the nature of childhood, shortening it and treating children as autonomous "little" adults. And, of course, eventually to keep up the standard of living these households took on considerably more debt. Stagnant wages reflected the disempowerment of the middle class and this occurred not just with wages but with pensions, job security, and benefits in general. At the same time, the rich have been able to use their greater wealth to essentially buy the government, to increase and lock in this transfer of wealth. The result has been a system of crony capitalism where government is largely unresponsive to the needs and interests of the lower and middle classes and at the beck and call of the wealthy.

    This has not been all peaches and cream for the wealthy because the system is inherently unstable creating a series of larger and larger bubbles. The wealth destruction when these bubbles burst affects even the rich, but not as much and not as many, as the rest of society.

    The middle classes have become politically disconnected from their government. This translates as apathy but if economic conditions worsen significantly can turn into revolutionary, often nihilistic, anger. The structure of the family has also been weakened. I do no mean to imply in any way that the improved economic status of women is at fault here. Shared parenting responsibilities are a good thing, but our society does not foster this. Rather what I am trying to say is that a stabler structure has been replaced by a less stable one, and that the primary drivers behind this have been largely economic.

    As for the wealthy, their control of the system can be seen in the trillions that went to shore up the financial system where their wealth is held at the same time that millions of middle class Americans are foreclosed upon. It can be seen in the healthcare debate where the actual health of Americans is not discussed at all but only how the interests and profits of insurance and pharmiceutical companies can be best protected is.

    The social contract is being withered away. The question is what happens when it is gone.

  14. Anonymous

    Let's think about this a bit:
    a) to say that the rich are getting poorer is meaningless; the question to ask is: are the rich are getting poorer to a greater extent than other classes are getting poorer?
    b) the article mentions the top income bracket tax rate; how much of the rich people's income is taxed at that rate vs. long-term capital gains rate?
    c) are the super-rich the intended audience of this article?
    d) how does the intended audience feel towards the super-rich after reading this article?

  15. Anonymous

    That certainly was a "guest post", except the guests were Leonhardt and Fabrikant. Leo contributed nothing.

  16. Anonymous

    This guy is totally atypical, yet he is being trotted out as a typical example. This is just another example of wildly inaccurate New York Times reporting.

    I pity his poor decision-making in real estate and stocks. Buying a house in Rodeo, NM–what was he thinking!? It's a nice place to live if you enjoy border patrol helicopters hovering over your house at night for hours.

  17. Michael

    Hugh, Great post.


    Now how does 100 million become 4 million in a short period? Leverage and margin calls. The simple fact is the former Mcafee guy wasn't satisfied with a 100 million and overextended. He'd always counted on RE as a store of wealth and when he had to liquidate he came up very short. I have zero sympathy for this guy or any uber wealthy person for whom greed was the guiding force and worship of wealth the final meaning.

  18. donna

    I could get by for a long, long, long time on 4 million. I think most of us could.

    THAT'S what is wrong with income inequality — those at the top, who make so much, are doing what with it, exactly? Trying to make more of it. While the rest of us would be either saving it, meaning it would be available for investment, or spending it, meaning it would be circulating.

    "Money is like manure, it's no good unless it is spread around encouraging young things to grow."

    It's about a medium of EXCHANGE, people — not piling up individual wealth. That's what we, as a society, have forgotten, and what needs to be relearned.

  19. Ken G

    Thought I would post McAfee's own comments from the Times article —

    John McAfee
    Rodeo, NM
    August 21st, 2009
    1:15 pm
    I am not surprised by the angry attitude toward myself expressed in many of the comments. In fact, I have to agree with most of them. The article was well written and generous, but space did not allow for a whole story to be written. Much of what Geraldine and I discussed during her three days in New Mexico and numerous phone calls did not make it into the story, most specifically: my attitude toward my own actions.

    I fully agree that I had little need for most of my toys. I spent money on houses that I seldom visited. I conspicuously consumed. A majority of America's wealthy live and act the same, not that that excuses any of my excess. But I achieved a degree of economic success within a culture that was created by the world's most excessive consumer society. I blindly accepted this culture.

    But life changes us. And over the years the absurdity of my consumption came home to rest. Two years ago I began divesting myself of the heaviest of my excesses. I began to give my stuff away. Last year, even after the loss of much of my fortune, I gave away $2 million worth of art, furniture, vehicles etc. to the residents of Hidalgo County, one of the poorest counties in America, in a fun free for all out of a large airplane hangar. I gave a million dollar boat to the Belizean Coast Guard…. I have given to small businesses about to collapse, to individuals, to families. And none of these donations, as the IRS can attest, were listed as exemptions on any of my tax returns. I'm not saying this to make anyone think better of me, but to underscore the change in my attitude toward possessions. Stuff, in and of itself, has little value. It's what we do with it that matters.

    The Entrepreneurial spirit is what made America great. But we have over time equated entrepreneurism with the drive to accumulate wealth, which is a perversion of this spirit. Whatever the entrepreneur creates should be the reward, not just for the entrepreneur, but for everyone. I doubt that the inventor of the wheel made much money from it, but I don't doubt that this person was internally rewarded.

    I am not remotely disturbed by any of my financial losses. I am in good health, and, as one one of the comments noted: tanned and smiling.

    Thank you, Geraldine, for the publicity for my New Mexico auction. You've done a good job.

  20. Anonymous

    "…but I will concede that the deflation scenario will wipe out many fortunes."

    This, I thought, was the most dangerous part of deflation. The people with huge fortunes can still afford to lobby. That lobby is an attempt to preserve what they have.

    If the rich are able to preserve what they have, but on aggregate, the amount of wealth is falling, who is loosing it?

    Those that can't afford to lobby.


  21. Anonymous

    Ken G.,
    Thanks for posting McAfee's response, which I think is apt and pretty classy. I would never have waded through the hate mail to find it, especially after reading the responses to last weekend's WaPo piece about a Westchester divorcee who is having trouble "making it" on $300k/year.

    Let's face it, most of the country lives paycheck to paycheck (or unemployment check, as the case may be) with little "wealth" and sky high debt. The poorer are disproportionately renters or live in low-cost areas; they will benefit from crashing RE prices. If they are underwater, there are programs to help (they suck, but they exist). The tax code has become and will continue to become more progressive, so that should help too.

    In short, things have been bad for the poor and lower middle class for decades, but (apart from having no jobs–a BIG problem) things are actually looking a bit up for them.

    The outlook for the top 10-20 percent of earners (at least those who have to work for a living and can't move assets or selves offshore) is much worse, relatively speaking, and I think it wouldn't kill anyone to address this issue rationally and not with a hateful "serves em right." This is the leadership class, it is the investor class, it is a critical component to American success. Toy with it at your peril. Most of these people can live in any country they choose (many of them aren't even from here to begin with).

  22. Kathleen

    Anyone wonder why? The high income set tends to be very well educated, and to come from 2 parent families. At least 90% of public students are getting a terrible education controlled by teacher unions and their liberal political allies. And a rising number have 1 or no parent families.

  23. DownSouth

    I recall Nicholas Taleb in The Black Swan saying something to the effect that it is easier to have remained poor than to have made $10 million and lost $9 million.

    I suppose the vagaries of life destroy some (like the person who committed suicide that anonymous at 1:56 PM speaks of), but for others they make them stronger and wiser. From McAfee's comment, it sounds like he falls into the later category.

    McAfee alludes to what Hannah Arendt wrote so frequently about, that in the modern age progress has come to mean growth, "the relentless process of more and more, of bigger and bigger." The obesseion with growth is "irrational," Arendt says, and in its most virulent form is coupled with the notion of "creative madness," "creative violence" or "creative destruction," which all too often is used to justify the elimination of anything, anyone or any group that is weaker or smaller.

    It's good that McAfee lost his money, and that he has used this experience to learn something that most people never have the opportunity to learn.

  24. Anonymous

    Leo, thanks for another great post.

    Here's my theory on the increasing wealth discrepancy. It's based on no research whatsoever, and it may be wildly off the mark, and if it is, I'm sure someone will point out why I'm an idiot, which is fine by me:

    When huge fortunes were made throughout the history of the US, they tended to be the result of a single industry (Rockefeller in oil, Carnegie in steel, etc. Two notable exceptions that I know of are John Jacob Astor in furs and NY property and Vanderbilt in Ships, then railways).

    The rich basically concentrated wealth during the booms, and then lost the wealth in the ensuing bust. It was very difficult to prevent the wealth from evaporating during a bust, because there were few places to run with it. This lead, among other things, to reduced disparities in wealth over an entire cycle and to increased mobility (the likelihood of somebody making two fortunes are *much* smaller than making one fortune)

    Whatever the reason, post WWII US has experienced much more moderate boom/bust cycles than the constant booms and panics of the 19th century. Modern booms meant that people could make lots of money, but the lack of panic busts meant that there was no real way to lose significant amounts of it. So the wealthy were able to continue to increase their wealth holdings. The poorer people, meanwhile, continue to barely get by (i guess this is the definition of being poor…)

    So the wealth distribution continues to widen. This next panic will end that widening gap, and if I'm correct, we will not experience moderate business cycles again for a long time (ie, we will revert back to large rises and abrupt panics). Ergo, the wealth inequalities will not continue for a long, long time.

    To summarize: more moderate cycles = greater wealth inequality.

    Just a thought–feel free to argue it.

  25. Leo Kolivakis

    It seems some people are ultra sensitive about my posts because I like to provide a link and quote the whole article. That is my style. I do not pretend this is my material but the fact remains that I found this article very interesting and posted it. If NC or anyone else (you know who you are) has a problem with my style, I will go back to writing my Pension Pulse and you can go on writing your blog. I've been "mished" one too many times!!!

  26. Anonymous

    You should not be so sensitive yourself! Always be ready to back up what you write, even if it is wrong.

    I think most of anyone's "knowledge" is dependent on their immediate circle of friends and acquaintances. If what I think, based on my knowledge of the upper 10 or 5% is different from what others think, so be it.

    The point being, the internet is only useful insofar as it lets us see beyond our immediate social network. If we choose to ignore what we learn, it is on our shoulders.

  27. Leo Kolivakis

    "You should not be so sensitive yourself! Always be ready to back up what you write, even if it is wrong."

    I am not sensitive but deeply disappointed. Henry Miller was right, everything comes down to money. Everyone wants their five minute of fame and they want to profit from it. Well you got it, so enjoy it while it lasts.

  28. Bruce Krasting

    A significant amount of the wealth in America was tied up in high end RE.The balance was in financial assets (common stock/bonds).

    Well that means your wealth was whacked. High end RE is down by at least 1/3. (I think it is 50%!) So are financial assets.

    This is the wealth effect. Maybe this time it will impact the real economy. It did not as far as I could tell in the 98-01 period.

    I was never a believer in the 'Trickle Down' theory. But enough people did so I guess there is validity to it. We are looking at a reverse Trickle Down right now.

    Contractors, plumbers, electricians, painters, law care guys are all suffering because this trickle has stopped.

    A lot of "rich" people have their wallets on the hip. The reason is they are not rich any longer and they are adjusting their consumption.

  29. Siggy

    I don't believe that the fact that some of the wealthy folks are taking a big hit is a bad thing. I don't see it as a good thing either. I don't thing we should give it very much consideration.

    What we should be concerned about is the erosion of the middle class. A have and have-not society will bring excessive government and quite possibly revolution.

  30. run75441


    I apologize for this C & P. These couple of paragraphs again emphasize the increasing income spread from 2002 to the present.

    "The average income of most Americans—the bottom 90 percent—fell dramatically during the Hoover administration, to $6,688 in 1932 from $10,847 in 1929 (measures in consistent 2006 dollars), a drop of 38 percent. Under the Bush administration this same group of American wage earners saw their average income drop to $32,080 in 2006 from $32,371 in 2001, a drop of 0.9 percent (see table below).

    While the drop in average income during the Bush administration has been obviously less severe than that of the Hoover era, it is one of only three instances since the end of the Great Depression in which average income for most Americans has decreased during a president’s tenure. Average income also dropped during the presidencies of Jimmy Carter and George H. W. Bush.

    But there is one key difference between the trends in average income under Presidents Hoover and Bush. In the Hoover years, people of all incomes experienced income declines, but in the Bush years the top 10 percent of income earners boosted their income while the rest of the country experienced a decline. Between 1929 and 1932 the average income of the top 10 percent of wage earners fell to $52,026 in 1932 from $76,625 in 1929, a decline of 32 percent, or roughly the same percentage decline experienced by all other Americans over the same period. In contrast, between 2001 and 2006, the average income of the top 10 percent of wage earners increased to $254,296 in 2006 from $221,115 in 2001, an increase of 15 percent. This makes President Bush the first president since 1917 (the first year for which data is available) under which the average income of the wealthiest Americans went up while the average income of everyone else went down." "A Tale of Two Conservatives"

  31. Leo Kolivakis

    "Leo, don't let the screen door hit you on the way out."

    No problem, I will continue to post on my blog and on Zero Hedge. I wish Yves all the best.



  32. LeeAnne

    a link to provide some balance to Leo's book promotion link on this blog again for his compatriot, Pete Peterson, a guy who has profited mightily by pocketing billions of dollars as a member of the American government/finance cabal during the years of the Greatest American Wealth Heist. I guess Peterson thought that all those soldiers of his generation who died for his country in WW11 were fighting for his right to have those billions for himself on the backs of American workers.

    Now in his retirement, Peterson all dressed down in Friday casual smiling like a warm fuzzy grandpa is bound and determined to use his 'golden' years and those billions of dollars to clean up what's left of an American safety net for others. For further reading on that subject see The Peterson fiscal push against 'entitlements;' Medicare and Social Security for the elderly and the disabled.

  33. Yves Smith

    I am perplexed and disappointed at Leo's anger. I had asked him often to shorten his quotes of published material, since it went far beyond normal fair use (and this is coming from someone who admittedly can go too far in that direction too).

    The original version of this post quoted an entire New York Times article, with only three paragraphs of Leo's commentary. I had to shorten it, per the version you see above.

    Leo want to reproduce the text of the articles he cites at length for archival purposes. While I understand that motive, and have seen material disappear from links in some of my older posts, I have not been entirely comfortable with this practice. I asked him again about relying less on cited content and stressed short posts were fine (look at Felix Salmon) but Leo told me he had decided to cease guest posting here instead.

    I thank him for his time and efforts here and wish him the best in his endeavors.

  34. Michael

    How ridiculous. Yves shouldn't have edited the post without consulting and getting approval from Leo.
    Leo shouldn't be so thin skinned and be bothered by a few anonymous posts and Yves attenuating his post.

    Worthless drama and ego, FFS.

  35. Dan Duncan

    Leo, what planet are you living on?

    You write: "It seems some people are ultra sensitive about my posts because I like to provide a link and quote the whole article. That is my style."

    So your "style" is…

    Left click, Scroll mouse, Right click and paste?

    Are you kidding me? That is some funny shit.

  36. Leo Kolivakis


    I live on the same screwed up planet you live on. Yes, it is easy to cut and paste nonsense…much harder to find interesting articles and post them. And I do not need to explain anything to you. It was weekend reading and I didn't feel like adding a long comment. OKAY?

Comments are closed.