“We are all in it together” – at least, that is what we are encouraged to believe. Well, a recent blog post by the economist Rick Wolff offers some amazing statistics that help put the lie to this claim.
Wolff notes that every year two major investment companies join together to publish a financial survey – World Wealth Report – of the world’s wealthiest people. These people are divided into two groups: “High Net Worth Individuals (HNWIs) and Ultra-High Net Worth Individuals (Ultra-HNWIs). The first group counts all individuals with at least $1 million of “investible assets” in addition to the values of their primary residence, art works, collectibles, etc. The second group includes individuals with at least $30 million of such investible assets.”
According to the report, there were 10 million HNWIs in 2009, about 0.14 percent of the world’s population. Approximately 3.1 million of these HNWIs live in North America, 3 million in Europe and 3 million in the Asia-Pacific region.
All together, these HNWIs own $39 trillion in “investible assets.” Wolff offers the following comparison to put this number in perspective: “in 2009, the US GDP (total output of goods and services) was $14.6 trillion. The combined GDPs of the world’s 9 richest countries (US, Japan, China, Germany, France, UK, Italy, Russia, and Spain) totaled less in 2009 than the investible assets of the world’s HNWIs.” The Ultra-HNWI’s are really in a class by themselves – they own 35.5 percent of the $39 trillion owned by all 10 million HNWIs.
Significantly, in 2009, a year in which working people continued to suffer worsening living and working conditions, the number of HNWI’s rose by 17.1 percent and their combined wealth rose by 18.9 percent. The number of HNWIs in the US grew by 16.6 percent, despite the fact that the GDP fell by 2.4 percent.
So, what should we make of this picture, in which the super rich-whose decisions were largely responsible for generating the Great Recession-are gaining wealth while advocating austerity for the rest of us? Wolff’s own take is as follows:
Let’s now concentrate on the HNWIs in just the US (including its Ultra-HNWIs). They numbered 2.9 million in 2009: well under 1 percent of US citizens. Their investible assets totaled $12.09 trillion. For 2009, the total US budgetary deficit was $1.7 trillion. Had the US government levied an economics emergency tax of a modest 15 percent on only the HNWI’s investible assets, it could have erased its entire 2009 deficit. Over 99 percent of US citizens would have been exempted from that tax.
The European, Japanese, and other governments could have treated the crisis likewise in their countries. Then governments would not have had to borrow trillions. They would instead have taxed the super rich tiny minority a small portion of its immense wealth. Those governments would not then have had to turn to lenders (often those same super rich). There would be no current “sovereign debt crisis” in Greece, Portugal, Spain, Ireland, etc., and no need for the resulting austerities to satisfy those lenders. Republicans would have no “deficit, deficit” drum to beat hoping for election-day gains.
Taxing the HNWIs and Ultra-HNWIs would be the policy of governments responsive to the needs of their working-class majorities instead of their rich and super-rich patrons. Austerity is not the only policy. Modestly taxing the wealth of HNWIs is the far better policy choice. The two wealth management companies that cater to HNWIs have kindly provided us all with the facts and figures needed to support the better policy.
It is time for some honesty, at least among ourselves: we are, like it or not, involved in a one-sided class war. And, there is little reason to expect any meaningful improvement in economics conditions for the great majority as long as it stays that way.