What If the Rich Lost 40% of Their Wealth?

by James Carville

Let's imagine that Wednesday there was a front page story in The New York Times that read the following:

"The recent economic crisis left the top 1% of Americans in 2010 with no more wealth than in the early 1990s, erasing almost two decades of accumulated prosperity, the Federal Reserve Monday.

"A hypothetical family richer than the median net worth of the top 1% of the nation's families had a net worth of $77.3 million in 2010, compared with $126.4 million in 2007, the Fed said. The crash of the stock market, in addition to the collapse of housing prices in Greenwich, Connecticut, the Upper East Side of New York City, Beverly Hills, Highland Park in Dallas and the North Shore of Chicago, directly accounted for three-quarters of the loss."

What do you think the reaction would be to that?

The elite would call for the suspension of habeas corpus, the government would call out the National Guard, invade Honduras and the Supreme Court would announce that it is in session 24/7 to take any action deemed necessary to help their friends.

The Wall Street Journal would have a black border on the newspaper. The Financial Times would go from pink to gray. CNBC would play funeral music for nine months. Steve Schwarzman would compare it to the H-word. Cable networks would roadblock all coverage.

Minimum wage laws would be suspended, the 40-hour work week would be thrown out, perhaps they would even do away with child labor laws to get productivity up so profits could increase to make up for lost revenue.

OK, we know that story did not appear in Wednesday's New York Times, and we would certainly agree that a massive loss of wealth in the top 1% would wreak economic havoc on the country. But there was, if anything, a worse story on that front page with only minor variations from our hypothetical scenario.

The story said that the recent economic crisis left the average American family in 2010 with no more wealth than in the early 1990s, erasing almost two decades of accumulated prosperity, reducing their net worth by almost 40%.

And the response of the national elite, the people Paul Krugman refers to as "very smart people" or I like to call the "chin-scratchers," was a barely audible whimper.

To put it bluntly, the middle class in this country has been screwed, blued and tattooed.

Rising health care costs, job insecurity, declining real estate values, massive cuts to public education and public safety (no Mitt, we don't need fewer police officers, we actually need more of them and yes, the federal government has a large hand in this.)

It is a depressing state of affairs when about two-thirds of our fellow citizens are caught in an economic trap that is wrecking their lives financially and emotionally.

And the reaction to all of this has been limp at best.

The Republicans say that if we just give the rich more tax cuts, it will make everyone's life better -- seems as though we've tried this before, doesn't it?

The Democrats have done some things that have been helpful, such as payroll tax cuts and the Affordable Care Act, but there is much more work to be done. As far as other institutions around the country, the response has been pathetic.

There is an entire industry devoted to denying that this is even a problem.

I read a piece written by Andy Kessler in The Wall Street Journal, stating that thanks to "consumption equality," the wealthy work their 60- to 80-hour weeks inventing things for the masses, but there's not much they can buy with their money that the middle class can't afford.

You can only afford a product, because some rich person invented it for the masses, just like they did with smartphones, hard drives and affordable air travel.

Who cares if you can't afford to send your children to college or pay for your health insurance premium or what you owe on your house is more than what it's worth? Hey, you can buy them a cell phone, now that they don't cost $4,000, and talk to them as they stand in line for a job interview at McDonald's.

Where are our nation's institutions that should be raising holy hell about this? Lets start with my own Catholic Church: They are spending all of their time hunting down masturbators and birth-control takers.

Academics: Have you ever heard of the Princeton Center for Middle Class Studies? Not hardly.

The press: There is much more coverage on George Zimmerman's wife than on the destruction of the middle class in this country.

The lobbyists: Give me a break. When was the last time you heard of a lobbyist for the middle class? The point here is that we are reading the most significant economic story of our time and its effect on the psyche of the people who should know better is minimal.

In the words of Warren Buffett, "There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning."

The big scandal in America is that our middle class is shrinking, and no one seems to care. Maybe someone somewhere somehow should consider doing something else.

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