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The Super Rich Are Out of Sight

The top 0.25 percent owns more wealth than the other 99 percent combined . . . the Census Bureau revealed that for years they never interviewed anyone who had an income higher than $300,000. Or if interviewed, they were never recorded as above the "reportable upper limit" of $300,000 allowed by the bureau's computer program. In 1994, the bureau lifted the upper limit to $1 million--still excluding the very richest who own the lion's share of the wealth, the hundreds of billionaires and thousands of multimillionaires who make many times more than $1 million a year. The super rich simply have been computerized out of the picture.
Published on Friday, December 27, 2002 by CommonDreams.org

The Super Rich Are Out of Sight
by Michael Parenti

The super rich, the less than 1 percent of the population who own the lion's share of the nation's wealth, go uncounted in most income distribution reports. Even those who purport to study the question regularly overlook the very wealthiest among us. For instance, the Center on Budget and Policy Priorities, relying on the latest U.S. Census Bureau data, released a report in December 1997 showing that in the last two decades "incomes of the richest fifth increased by 30 percent or nearly $27,000 after adjusting for inflation." The average income of the top 20 percent was $117,500, or almost 13 times larger than the $9,250 average income of the poorest 20 percent.

But where are the super rich? An average of $117,500 is an upper-middle income, not at all representative of a rich cohort, let alone a super rich one. All such reports about income distribution are based on U.S. Census Bureau surveys that regularly leave Big Money out of the picture. A few phone calls to the Census Bureau in Washington D.C. revealed that for years the bureau never interviewed anyone who had an income higher than $300,000. Or if interviewed, they were never recorded as above the "reportable upper limit" of $300,000, the top figure allowed by the bureau's computer program. In 1994, the bureau lifted the upper limit to $1 million. This still excludes the very richest who own the lion's share of the wealth, the hundreds of billionaires and thousands of multimillionaires who make many times more than $1 million a year. The super rich simply have been computerized out of the picture.

When asked why this procedure was used, an official said that the Census Bureau's computers could not handle higher amounts. A most improbable excuse, since once the bureau decided to raise the upper limit from $300,000 to $1 million it did so without any difficulty, and it could do so again. Another reason the official gave was "confidentiality." Given place coordinates, someone with a very high income might be identified. Furthermore, he said, high-income respondents usually understate their investment returns by about 40 to 50 percent. Finally, the official argued that since the super rich are so few, they are not likely to show up in a national sample.

But by designating the (decapitated) top 20 percent of the entire nation as the "richest" quintile, the Census Bureau is including millions of people who make as little as $70,000. If you make over $100,000, you are in the top 4 percent. Now $100,000 is a tidy sum indeed, but it's not super rich--as in Mellon, Morgan, or Murdock. The difference between Michael Eisner, Disney CEO who pocketed $565 million in 1996, and the individuals who average $9,250 is not 13 to 1--the reported spread between highest and lowest quintiles--but over 61,000 to 1.

Speaking of CEOs, much attention has been given to the top corporate managers who rake in tens of millions of dollars annually in salaries and perks. But little is said about the tens of billions that these same corporations distribute to the top investor class each year, again that invisible fraction of 1 percent of the population. Media publicity that focuses exclusively on a handful of greedy top executives conveniently avoids any exposure of the super rich as a class. In fact, reining in the CEOs who cut into the corporate take would well serve the big shareholder's interests.

Two studies that do their best to muddy our understanding of wealth, conducted respectively by the Rand Corporation and the Brookings Institution and widely reported in the major media, found that individuals typically become rich not from inheritance but by maintaining their health and working hard. Most of their savings comes from their earnings and has nothing to do with inherited family wealth, the researchers would have us believe. In typical social-science fashion, they prefigured their findings by limiting the scope of their data. Both studies failed to note that achieving a high income is itself in large part due to inherited advantages. Those coming from upper-strata households have a far better opportunity to maintain their health and develop their performance, attend superior schools, and achieve the advanced professional training, contacts, and influence needed to land the higher paying positions.

More importantly, both the Rand and Brookings studies fail to include the super rich, those who sit on immense and largely inherited fortunes. Instead, the investigators concentrate on upper-middle-class professionals and managers, most of whom earn in the $100,000 to $300,000 range--which indicates that the researchers have no idea how rich the very rich really are.

When pressed on this point, they explain that there is a shortage of data on the very rich. Being such a tiny percentage, "they're an extremely difficult part of the population to survey," pleads Rand economist James P. Smith, offering the same excuse given by the Census Bureau officials. That Smith finds the super rich difficult to survey should not cause us to overlook the fact that their existence refutes his findings about self-earned wealth. He seems to admit as much when he says, "This [study] shouldn't be taken as a statement that the Rockefellers didn't give to their kids and the Kennedys didn't give to their kids." (New York Times, July 7, 1995) Indeed, most of the really big money is inherited--and by a portion of the population that is so minuscule as to be judged statistically inaccessible.

The higher one goes up the income scale, the greater the rate of capital accumulation. Economist Paul Krugman notes that not only have the top 20 percent grown more affluent compared with everyone below, the top 5 percent have grown richer compared with the next 15 percent. The top one percent have become richer compared with the next 4 percent. And the top 0.25 percent have grown richer than the next 0.75 percent. That top 0.25 owns more wealth than the other 99 percent combined. It has been estimated that if children's play blocks represented $1000 each, over 98 percent of us would have incomes represented by piles of blocks that went not more than a few yards off the ground, while the top one percent would stack many times higher than the Eiffel Tower.

Marx's prediction about the growing gap between rich and poor still haunts the land--and the entire planet. The growing concentration of wealth creates still more poverty. As some few get ever richer, more people fall deeper into destitution, finding it increasingly difficult to emerge from it. The same pattern holds throughout much of the world. For years now, as the wealth of the few has been growing, the number of poor has been increasing at a faster rate than the earth's population. A rising tide sinks many boats.

To grasp the true extent of wealth and income inequality in the United States, we should stop treating the "top quintile"--the upper-middle class--as the "richest" cohort in the country. But to do that, we need to look beyond the Census Bureau's cooked statistics. We need to catch sight of that tiny, stratospheric apex that owns most of the world.

~ ~ ~

Michael Parenti is a noted author and political commentator. Among his widely read books are "The Terrorism Trap," "Democracy For the Few," "History as Mystery," and "Against Empire." His most recent forthcoming book is "The Assassination of Julius Caesar: A People's History of Ancient Rome." For more information, visit his web site,  http://www.michaelparenti.org

homepage: homepage: http://www.commondreams.org/views02/1227-06.htm
address: address: Common Dreams NewsCenter


57,000 Ultra-High Net Worth Individuals 30.Aug.2003 19:05

Cap Gemini

Hard numbers describing the finances of the parasite class are available from non-government sources. Cap Gemini, a global management consulting company based in France, puts out an annual report on the super rich, available on the Merrill Lynch website.

World Wealth Report - 2001
 http://www.ml.com/about/press_release/pdf/05142001_worldwealthreport2001.pdf

The report is full of eye-opening facts such as that the number of people on the face of the earth who control $30,000,000 or more in liquid assets is about 57,000. Cap Gemini has coined the term "Ultra High Net Worth Individuals", or UHNWIs to refer to these few parasites who are perched on top of the world capitalist wage system pyramid. "The Capitalist has no Heart. He uses the Club over you So that he can wear Diamonds. By organizing right, we can give him a Spade with which to earn an honest living."

To find out about the Abolition of Wage Slavery, visit the Industrial Workers of the World  http://iww.org/

Merrill Lynch press release on World Wealth Report: WEALTH OF WORLD'S HIGH NET WORTH INDIVIDUALS ROSE 6%, DESPITE DROP IN FINANCIAL MARKETS NUMBER OF MILLIONAIRES GREW IN 2000, MERRILL LYNCH AND CAP GEMINI ERNST & YOUNG REPORT SHOWS "World Wealth Report 2001" (PDF)

NEW YORK, 14 May The wealth of high-net-worth individuals around the world rose 6% to U.S. $27 trillion in 2000, despite drops in most of the world's equity markets, according to the "World Wealth Report 2001" published today by Merrill Lynch (NYSE: MER) and Cap Gemini Ernst & Young. "The number of high-net-worth individuals worldwide grew 2.9%, or by 180,000 individuals, to almost 7.2 million people last year," said Winthrop H. Smith, Jr., chairman of Merrill Lynch International and president of the firm's International Private Client Group.

High-net-worth individuals (HNWIs) are those people with investable assets of at least U.S. $1 million, excluding real estate. Mr. Smith noted the wealth of ultra-high-net worth individuals (UHNWIs) have investable assets of more than $30 million) increased 6% to $8.37 trillion. The number of UHNWIs rose 3% to an estimated 57,000 people at the end of last year. "Many wealthy investors acted wisely in 2000, taking measures to protect their capital in the increasingly volatile markets," said Mr. Smith. "This demonstrates that appropriate asset allocation and sound professional financial advice can make a difference."

Keith Stock, global head of financial services at Cap Gemini Ernst & Young, noted: "In the buoyant first three months of 2000, strong growth in the creation of HNWIs continued, with an additional 260,000 millionaires generated by the end of March 2000. But, as the markets turned, the number of new millionaires fell more than 30% over the remainder of the year. As a result, there were 180,000 new HNWIs remaining at the end of December, taking the total number of HNWIs to almost 7.2 million," said Mr. Stock.

Wealth Forecast to Continue to Grow
"While the 5.9% growth in wealth created in 2000 was down from the 18% increase posted in 1999, the combined wealth of the world's HNWIs has grown more than threefold, 375%, since 1986," Mr. Smith added. As for the future of wealth generation, "The 'World Wealth Report 2001' forecasts growth of 8% a year for the HNWI market over the next five years, to reach U.S. $39.7 trillion in 2005." "As global wealth continues to expand, individuals with complex financial needs require innovative solutions, solutions that recognize no national borders," Mr. Smith said. "Our skilled financial consultants combine global resources with local expertise and experience to address each client's individual needs with personalized service, comprehensive range of innovative and institutional-style products and customized solutions."

The benchmark report, the fifth annual study, also reported on regional trends.

North America Strong Increase in Wealth

More than a third, or 35% of the world's HNWIs, reside in North America (Canada and the United States). Their number grew 2.4% to 2.54 million individuals over the past year. The value of their combined wealth rose an even greater 9% to $8.8 trillion, and in sharp contrast to the 10.5% drop in the value of the Standard & Poor's 500 index over 2000. Flourishing 1999 corporate profits distributed in the form of bonuses early in 2000, along with generous stock option packages, and strong Gross Domestic Product (GDP) growth contributed to the increase in this wealth.

The North American market share of the world's HNWIs' wealth accounts for 32.7% of the world's total HNWIs' wealth. It has grown 313% since 1986, and is forecast to grow a further 48% to $13 trillion by the end of 2005. In Canada, there was an almost 3% rise in the number of HNWIs to an estimated 177,000 people at the end of last year. This rise was attributed to the 4.2% increase in the value of the Canadian stock market last year, the fourth best performing market in the world in 2000. The number of Canadian HNWIs is up some 28% from 1998.

Europe: Strongest Growth in Number of Wealthy

The number of HNWIs in Europe grew 6% to 2.3 million in 2000, the best growth in terms of number of new wealthy individuals reported in any region. Together, they account for 32% of the world's HNWIs, up 3% from 1999 and closing the gap with the number of wealthy in North America. The dollar value of Western European HNWI wealth rose 7.5% to $7.2 trillion, accounting for a 26.8% market share of total world HNWI wealth. Initially buoyant European bourses accounted for most of this rise. In addition, the average European HNWI was relatively less invested in U.S. and Japanese equities. However, European millionaires were not immune to stock market declines France's CAC ended down 0.5%, Germany's DAX down 7.5% and Spain's IBEX down 15%.

Central and Eastern Europe accounted for a further 200,000 HNWIs, with their combined wealth valued at $900 billion. It is forecast to rise to $1.3 trillion at the end of 2005.

Taking a longer-term perspective, the wealth held in 2000 by Western Europe's HNWIs has risen 440% since 1986, and is forecast to grow a further 46% to $10.5 trillion by the end of 2005.

Asia: Only Region to Report a Fall in Wealth

Asian HNWIs, whose wealth jumped more than 22% in 1999, last year watched the value of their wealth drop more than 9% to a combined $4.9 trillion. The Asian region, including Japan, was the only one to report a drop in wealth. Their combined wealth accounted for 18.2% of the world's HNWIs' wealth, down from a market share of 21%.in 1999. Even though some Asian economies grew, such as China (8%) and South Korea (9%), and China's stock markets registered a nearly 50% rise in value, the stagnating Japanese economy and the 26% decline in the Nikkei outweighed any new wealth creation elsewhere in the region. Also, South Korea's stock market was down 51%, India's 23%, Hong Kong's 11%, Singapore's 22% in dollar terms.

The number of HNWIs in Australia rose 4.3% over the 2000 year to an estimated 74,000 people. The number of HNWIs in New Zealand was steady at 11,000 people. The wealth held in 2000 by Asia's HNWIs has jumped sixfold, or 600%, since 1986. It is forecast to rise a further 69% to $7.3 trillion by the end of 2005, the strongest growth forecast by the report for any region.

Japan: Number of Millionaires Dropped There was a 5.7% drop in the number of Japanese HNWIs over the past year, to an estimated 1.08 million people. The drop was attributed to the stagnating Japanese economy and the dramatic 26% decline in the Nikkei. Millionaires in Japan reacted to the increasing market turmoil by reducing their involvement in domestic stock markets, investing instead in the U.S. and Europe. The expected influx of new funds into the Japanese stock market, which some analysts expected to occur as investors switched to collective equity investments from low-yielding cash and fixed-income instruments, did not materialize. Many Japanese investors ended the year extremely wary of the stock market. Despite this decline, there were almost 30% more HNWIs in Japan than in 1998.

Latin America: Growth in Share of the Wealth Market

The value of HNWIs wealth in Latin America (including Mexico) rose 6.5% to $3.3 trillion as, despite the downturn in most major Latin American stock markets last year, most HNWIs in the region continued to grow their wealth. While Latin America continues to account for only 3% of the world's millionaires, in value terms Latin American HNWIs hold 12.3% of total world wealth. The number of millionaires in Latin America stands at an estimated 190,000 people, with few new fortunes created in the region in 2000. The wealth held today by Latin America's HNWIs has increased 275% since 1986, and is forecast to increase 45% to $4.8 trillion by the end of 2005.

Middle East: Continued to Grow Value of Wealth

There were an estimated 220,000 HNWIs in the Middle East at the end of 2000. The combined value of their wealth grew 18% to $1.3 trillion over the past year, despite the volatile financial markets last year, as most HNWIs in the Middle East continued to grow their assets. The wealth held by HNWIs in the Middle East has increased 216% since 1986, and is forecast to rise almost 54% to $2 trillion by the end of 2005.

Africa

The number of HNWIs in Africa remained static at 40,000 and the value of their wealth was steady at $500 billion throughout 2000. About 60% of these HNWIs are in South Africa. The wealth held today by African HNWIs is up 166% since 1986. Growth in High-Net-Worth Wealth, by Region Region Rise Since 1999 Rise Since 1986 Market Share Africa Steady 166% 1.9% Asia - 9% 600% 18.2% Europe 7.5% 440% 26.8% Latin America 6.5% 275% 12.3% Middle East 18% 216% 4.8% North America 9% 313% 32.7%

Ok, so we know they are crazy rich, but... 01.Sep.2003 00:10

Portland Ponderer

I think it is pretty much common knowledge in America that no one has the likelihood of being Bill Gates or Warren Buffet rich. The uber-wealthy rule, we all know this, it is the structure of the world. We know the numbers, maybe not by heart, but even the least educated American knows them, my guess is that anyone who knows what "money " is has a sense of the reality the world faces.

The question is - how do we unite and make sure the uber-poor get more help? How do we make sure the ratio of richest to poorest is less dramatically large? How do we make Bill Gates buy us a Krispy Kreme?

The answers to these questions, if worked on, could help draw the roadmap to a better future for all of humanity.