Tag Archives: wealthy

Mitt Romney (Really) Doesn’t Have That Much Money

Romney’s “2 Cadillacs” and “my friends own NASCAR teams” stories might seem like old news now, but if he gets the GOP’s nod, you can bet that stories about his wealth will begin to circulate again in preparation for this fall’s election.  Since 80% of Conservatives seem to think he’s going to win the nomination (and he has the largest amount of delegates), this piece will focus on some the criticisms about Romney’s wealth.

Romney Doesn’t really have that much money.

As unbelievable as that statement sounds, it’s very much true.  Mitt Romney is said to be worth anywhere between $190-$250 Million.  And as hard as it is to believe, that’s just not very much dough.

To put it in perspective, let’s look at how much money some other famous people happen to be worth.

1.  Peyton Manning has a net worth of $115 Million (about half of what Romney is said to be worth)

2.  Justin Bieber has made $105 Million in just about the same amount of  time it takes to complete high school.

3.  Gossip blogger, Perez Hilton is worth $30 Million.  Let that sink in for a minute…  And if you don’t know who Perez Hilton is, consider yourself blessed.

4.  Michael Bloomberg, a lowly mayor (even if he is mayor of the USA’s largest city), is worth $19 Billion (with a “B”).  So if politicians aren’t supposed to be wealthy, somebody should let him know.

5.  But to put things into even better perspective, Allen Iverson has made (and spent) about $200 Million between his NBA salary and his Reebok endorsements.  So, if a basketball player is allowed to earn, in fourteen years, what Mitt Romney has earned over the course of his 65 year lifetime, then there seems to be little reason to begrudge the former governor for buying a couple of Cadillacs.  And if it makes you feel any better, you should know that Allen Iverson’s $400,000 Lamborghini is worth about 8 of what Mrs. Romney’s Cadillac’s are believed to have cost.

And this is just “classic Democrats”.  Remember when Barack Obama was a candidate for the highest office in the land?  As a candidate, he considered George W. Bush’s debt of $4 Trillion to be “unpatriotic”, a debt that was amassed over 8 years.  But when President Obama racked up $4 Trillion of debt in only three years, he decided to have Tom Hanks narrate a documentary talking about how heroic our current president is.  Democrats will hammer Republicans for their sins, then commit the SAME sin, only twice as worse, and then applaud themselves.  And on top of that, they get the media to tell everybody that they’re doing a good job.  …for doing the SAME thing they just hammered Republicans for.
http://www.youtube.com/watch?v=zUPZJDBJI84

This is the same party who ran the richest president of all time, John F. Kennedy.  JFK was said to be worth $1 Billion (again, with a “B”), and his successor, Lyndon Johnson, was also said to be worth $98 Million.  These figures were published on MSNBC’s website, of all places, and they were adjusted for 2010 dollars.  But again, they’ll have you believe that Mitt Romney, and by extension, the Republican Party are both out of touch.  Furthermore, did you know that  William Jefferson Clinton is said to be worth $38 Million?  And last but not least, Jane Harman, a Democrat congresswoman from California who recently resigned, is said be worth between $150 Million and $430 Million.  From the looks of things, Democrats only think that being a rich politician is bad if it’s a REPUBLICAN who is the rich politician.

The hypocrisy is not only staggering, but it needs to be pointed out on a daily basis, if Republicans ever want to dispel the meme that they are all out-of-touch and 1 percenters.

So in a world where basketball players and teenage kids have earned as much (or half as much) as Mitt Romney has, and in a world where Liberal politicians can easily outspend him, it’s hard to see the outrage over Romney’s wealth as being anything genuine.  Romney’s real crime isn’t that he’s amassed money, it’s that he’s been unable to control the narrative.

What’s wrong With the Rich

The rich are the least understood minority.  That fact lends them to be vilified by the very politicians at the root of our serious economic problems.

The facts are:

The rich take risks with their money.  When they invest their expendable income, they are risking the loss of that income.  Often the rich loose a great deal of money in failed businesses.  Most middle and lower income people would not take that kind of risk, even if they could.  Generally the greater the risk, the greater the potential reward as well as the potential loss.  There is nothing unfair about that equation.

The rich employ people.  They hire people to do a multitude of tasks for businesses.  This adds to the risk.  The wrong people can quickly destroy an investment.  They depend on effective employees and reward them accordingly.  Those who do not, suffer the consequences.  Basically, you get what you pay for.  As President Reagan pointed out, “nobody ever got a job from a poor man.”  Conversely the rich must not overcompensate.  Overcompensation easily leads to the demise of a business for the owner and eventual loss of employment.  Unions were originally designed to fairly compensate employees, and ensure unsafe working conditions.  However many unions have overstepped their principles and done harm to many businesses thus harming the very employees they supposedly intend to help.

The rich provide benefits, give to charities, and help employees save for retirement.  Monetary compensation alone has evolved to group insurance plans, 401K’s, other matching plans, and other perks and benefits.  The employer can provide group benefits far more efficiently than individuals can.  Choosing and managing these are another responsibility that the rich take on.  It is in their best interest to maximize what they can provide in order to draw and maintain effective workers.

The rich have to compete.  No business is without competitors who wish to capture a greater market share.  In order to do so, the business owner must run the business as efficiently and effectively as possible or risk reduced demand, thus a reduced workforce.  Basically the rich look out for their workers by looking out for the business.

The rich have headaches.  That’s a general expression for all that a business owner has to think about to make ends meet in his/her business.  These headaches come in the form of the economy, market fluctuations, suppliers, connected services, fashion or technical trends, political changes, taxes (many kinds), accounting, making changes, growth, retooling, human resources, discipline, establishing a corporate culture, advertising, etc, etc, to include balancing the priorities of all the above and more.  If the rich don’t address these carefully, they quickly suffer greater headaches.

The rich make large charitable contributions.  Often contributions provide tax breaks, but a tax break doesn’t exceed the contribution.

The rich hoard very little money, (percentage wise).  They understand that simply saving does not produce what investing can.  Therefore the money that the rich earn is recycled to do more of the same, employ more people, boost the economy, provide benefits, etc.  Most of their money creates more employment.  To blame the rich for having too much money is like blaming your heart for having more blood in it than any other organ.  The rich are the most effective stimulus to the economy.

When the rich stimulate the economy it is done effectively and efficiently for all the reasons above.  When the government attempts to stimulate the economy it is neither efficient nor effective because the government is not accountable.  Furthermore Government “stimulus money” is first removed from the economy through taxes, not earned by adding value to anything.  Government stimulation is like opening the refrigerator door in an attempt to cool a room.  The result is a net heating of the room because the heat expelled out the back of the refrigerator is always greater than the refrigeration it creates.

The rich spend their money.  Yes, they live extravagant lives; possess tremendous homes; and own luxurious yachts.  Consider all who are employed servicing those lives, building those homes, making and maintaining the yachts.  All that the rich spend is returned to the economy.

The rich pay taxes.  We hear of the huge tax shelters and deductions that “fat cats” get.  However it is their businesses that have such tax breaks not the individuals.  In fact due to our “graduated tax” system, the rich pay a much greater percentage of personal income.  Tax breaks are government incentives to influence how a business operates.  If there is any unfairness, it is the government (politicians) who are at fault, not the businesses who use such breaks wisely or else fail.

The rich sometimes fail.  With some wrongful exceptions of late, the rich run the risk of  “loosing everything.”   Safety nets such as the FDIC only insure losses up to a certain amount.  The rich do business that far exceeds those amounts; thus they often “work without a net.”  When a business fails, the rich often become devastated.  Interestingly enough, they often find their way back to wealth because once they have traveled the road to success they understand how to do it again, often with better results.  It is not money that creates money; it is knowing how to venture.

The rich are responsible.  When a poor man breaks something expensive, he walk away because he can not compensate the loss and there is no recourse.  When a person of means financially harms someone, they make restitution.  If not, they may find themselves paying court fees as well.

The rich are vulnerable.  No one files suit against a poor man.  However people take advantage of the rich in every way imaginable.  Because the rich have “deep pockets” they risk carrying the brunt of any conflict.  It is not uncommon for the rich to be found 1% at fault, yet assigned 99% of the financial burden for no other reason than the ability to pay.  So, do you still want to be rich?

How is a failing economy the fault of the rich not being taxed enough? First they are taxed more.  What they aren’t taxed, they reinvest, thus stimulating the economy more effectively than through the government.  What they don’t invest, they spend, which is also good for the economy.  There is almost nothing the rich can do with their money that isn’t good for everyone.  Even if they store it away in a bank, it provides liquidity for the bank to invest.

God bless the rich man because he carries the real burden of our economy.

Redistribution of Wealth Through Taxation

Blame the rich, they’re responsible for everything wrong anyway right. That’s the media’s message. Meanwhile the politician’s sing, “Make them pay.” Here’s a few examples

http://www.youtube.com/watch?v=iBPSrqMcmDM

Those evil rich people just have too much money, we need to tax them more and more. Nevermind that the current administration is intentionally throwing money away in the name of the  Cloward-Piven Strategy. If you don’t accept the Cloward-Piven strategy you surely see that the Obama Administration has nearly tripled the National Deficit and plans on running deficits for years with no slow down to spending in sight. The media has put the blame for almost everything on rich people.

The Politicians are moving in to capitalize on this blame by letting the Bush Tax Cuts expire, reinstating the Estate (Death) Tax, as well as Cap & Trade and a VAT still lurking around the corner, and the HealthCare taxes coming online. The top 1% of income earners already pay 40% of all taxes within the United States.

This is nothing more than Redistribution of Wealth through taxation. Forcing the rich to pay for continued Government Spending.

Here’s CNN in 2009 on the HealthCare Taxes debate

And Laura Ingraham sitting in for Bill O’reilly hosts a debate between Mark Levine & Stuart Varney.

In Obama’s quest to bankrupt America, he has to also bankrupt the rich. The media has helped paint a  target on the wealthy and the politicians are moving to exploit it. Economics 101 tells if you take more money from the people who create jobs, you will have fewer jobs. There will be layoffs if the Bush tax cuts expire. Obama knows this, and will use it too. The rich will be villianized and blamed for these layoffs and forced to pay even more, all the while the real villian was the Obama Administration.

Our politicians have become Michael Moore, the Communist.

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Blame Capitalism?

You may have noticed a new theme within the mainstream media. Sometimes its subtle, somtiemes its blunt, but its there. “Blame the Rich”, blame the wealthy, blame capitalism, blame .. “God Damn America” as Rev. Wright would say.

It has emerged as the left’s rallying cry once again, just as it has throughout history. In my post on Cloward-Piven Strategy, I discussed how the creators of this strategy simply expected us to embrace Socialism because we would be told that Capitalism had failed and Socialism was needed to save us. They are laying that foundation now in order to get popular support against the rich, in the hopes that, when the economy fails, you will support Socialism in order to “Save America.”

Here are some examples:

From Newsbusters:

MSNBC: American Capitalism To Blame For Financial Crisis
By Mike Sargent

File this one under Liberal Guilt Syndrome.

In the second hour of MSNBC’s “Morning Joe”, correspondent Savannah Guthrie gave a live report on the upcoming G-20 summit from London. This was a fairly straightforward report, hitting on issues that the major parties were interested in hammering out – the French want more financial regulation, for example. And then, at the very end of the report, Mika Brzezinski threw a hanging curveball. Guthrie did not disappoint:

MIKA BRZEZINSKI,“Morning Joe” co-host: What are you hearing in terms of who the Europeans blame for this financial mess and is there any blame being put on the United States? SAVANNAH GUTHRIE, MSNBC correspondent: Absolutely. I don’t think there’s any question that here in Europe and in other places around the world, people place the blame squarely on the shoulders of the United States. And in ways, this G-20 summit which, in years past, was just kind of a meet and greet and a photo op has a lot of importance. In some ways, capitalism itself is on trial, people will really be looking at hard at some of the free market principles that have really governed the day up till now. I don’t think we’re going see some huge sea change but you know, people are taking a hard look at how we got here and a lot of people do blame this American-style capitalism, lax regulation and the pursuit of money above all things with moral responsibility sort of shoved to the side. And I think we’re going to hear a lot of those themes in the coming days.
BRZEZINSKI: All right. Savannah Guthrie, thank you very much. Great report.

For those of you keeping score at home, let’s break this down in slow motion. The economic collapse is the fault of capitalism as a system, and thus, not the fault of individuals who over-leveraged their capital – or, for that matter, individuals who overextended their financial capability by buying overpriced homes.

The normally-meaningless G-20 summit is now important because it has now become Nuremberg for capitalism itself. Scratch that. American-style capitalism – the European version is perfectly fine, because it pays attention to the moral responsibility of the successful to subsidize the unsuccessful individual’s lack of success.

Of course, although the real issue lies with the fault of the few who tarnished the success of many an honest businessman, We the Press will rouse a populist lynch mob to destroy the career of every American capitalist pig.

The Ronald Reagan quip rings all too true for the mainstream media: “We have so many people who can’t see a fat man standing beside a thin one without coming to the conclusion that the fat man got that way by taking advantage of the thin one.”

How about the New York Times claiming the Rich are keeping us in the recession with the following article :” Wealthy Reduce Buying in a Blow to the Recovery“.

The economic recovery has been helped in large part by the spending of the most affluent. Now, even the rich appear to be tightening their belts.

Late last year, the highest-income households started spending more confidently, while other consumers held back. But their confidence has since ebbed, according to retail sales reports and some economic analysis.

“One of the reasons that the recovery has lost momentum is that high-end consumers have become more jittery and more cautious,” said Mark Zandi, chief economist for Moody’s Analytics.

How dare those rich people not spend in order to get us out of this recession. It’s all their fault. According once again to the New York Times, these “ruthless”  rich people don’t even pay their mortgages.

Biggest Defaulters on Mortgages Are the Rich

Whether it is their residence, a second home or a house bought as an investment, the rich have stopped paying the mortgage at a rate that greatly exceeds the rest of the population.

More than one in seven homeowners with loans in excess of a million dollars are seriously delinquent, according to data compiled for The New York Times by the real estate analytics firm CoreLogic.

By contrast, homeowners with less lavish housing are much more likely to keep writing checks to their lender. About one in 12 mortgages below the million-dollar mark is delinquent.

Though it is hard to prove, the CoreLogic data suggest that many of the well-to-do are purposely dumping their financially draining properties, just as they would any sour investment.

“The rich are different: they are more ruthless,” said Sam Khater, CoreLogic’s senior economist.

So now the evil wealthy don’t pay their mortages, are guilty of prolonging the recession, and caused the financial crisis. If that’s not enough for you lets blame them for Climate Change too.

From Tech Herald: “U.S. study pins blame for climate change on wealthy

In the context of the ever tricky debate of how to involve developing nations in the battle against global warming, a group of researchers at the U.S.’s Princeton University has said a fairer method of controlling carbon emissions would be to focus on the highest emitters in each country (ie the rich).

The new study, released at a time when the world looks to a new global compact for cutting carbon emissions at the Copenhagen climate talks in December, contends that a more practical way of combatting excessive emissions is to concentrate on those wealthier individuals in all countries who contribute most to increased greenhouse gases.

“Most of the world’s emissions come disproportionately from the wealthy citizens of the world, irrespective of their nationality,” explained physicist Shoibal Chakravarty, a lead author of the report and a research scholar at the Princeton Environmental Institute.

“We estimate that in 2008, half of the world’s emissions came from just 700 million people,” he said.

“We are not actually suggesting you go after the high using individuals. But we are using this approach to better capture the notions of equity and fairness in bettering national targets,” Chakravarty said in an interview with Scientific American. “So, if a country has a lot of high-emitting people, it must do more to reduce carbon emissions.”

The authors of the report say their system is a fairer way to apportion “blame” for global warming and may lead to a breakthrough in the impasse in climate negotiations.

Many developing nations, such as India and China, say because their contribution to greenhouse gases is far lower historically and per capita than those countries of the affluent West, they should be exempt from stringent emission cuts levels. However critics of this approach say that a global approach is required to combat the climate crisis.

I’m sure by now you are seeing the pattern, but I can’t resist throwing one more at you, the latest attack on the rich blames them for the ever shrinking middle class.

From Yahoo Finance: ” The Middle Class in America Is Radically Shrinking. Here Are the Stats to Prove it

The rich are getting richer and the poor are getting poorer at a staggering rate. Once upon a time, the United States had the largest and most prosperous middle class in the history of the world, but now that is changing at a blinding pace.

So why are we witnessing such fundamental changes? Well, the globalism and “free trade” that our politicians and business leaders insisted would be so good for us have had some rather nasty side effects. It turns out that they didn’t tell us that the “global economy” would mean that middle class American workers would eventually have to directly compete for jobs with people on the other side of the world where there is no minimum wage and very few regulations. The big global corporations have greatly benefited by exploiting third world labor pools over the last several decades, but middle class American workers have increasingly found things to be very tough.

The reality is that no matter how smart, how strong, how educated or how hard working American workers are, they just cannot compete with people who are desperate to put in 10 to 12 hour days at less than a dollar an hour on the other side of the world. After all, what corporation in their right mind is going to pay an American worker 10 times more (plus benefits) to do the same job? The world is fundamentally changing. Wealth and power are rapidly becoming concentrated at the top and the big global corporations are making massive amounts of money. Meanwhile, the American middle class is being systematically wiped out of existence as U.S. workers are slowly being merged into the new “global” labor pool.

What do most Americans have to offer in the marketplace other than their labor? Not much. The truth is that most Americans are absolutely dependent on someone else giving them a job. But today, U.S. workers are “less attractive” than ever. Compared to the rest of the world, American workers are extremely expensive, and the government keeps passing more rules and regulations seemingly on a monthly basis that makes it even more difficult to conduct business in the United States.

So corporations are moving operations out of the U.S. at breathtaking speed. Since the U.S. government does not penalize them for doing so, there really is no incentive for them to stay.

What has developed is a situation where the people at the top are doing quite well, while most Americans are finding it increasingly difficult to make it. There are now about six unemployed Americans for every new job opening in the United States, and the number of “chronically unemployed” is absolutely soaring. There simply are not nearly enough jobs for everyone.

While the author mentions “Globalism” and that “the government keeps passing more rules and regulations seemingly on a monthly basis that makes it even more difficult to conduct business in the United States” he has settled on blaming the rich who surely must be responsible.

The government is already limiting executive pay where it can, taxing it where it can’t (expiration of Bush tax cuts, estate tax reinstatement – all to take from the evil rich.  Where does it go?  The intent appears to be Obama’s “re-distributive change”.  Taking from the wealthy and using it to fund programs or outright hand the money to the poor.  How long before the case is directly made that the middle class needs to be rebuilt using money from the wealthy to lift-up the poor?

The media is pushing the message that, “The rich” are responsible for all our problems. They are hoping you will hold to blaming them after an economic collapse and allow a Socialist Economic Revolution to replace “Failed Capitalism.” They are trying to make you angry enough to turn a blind eye to the Nationalization of each and every company, and the forced redistribution of wealth because those evil rich are responsible for all our problems.

Are Wealthy Americans Leaving the Country?

I thought I would share my process for gathering viewpoint and facts.  Perhaps others would offer to put articles together in the future, but if nothing else, a look into how I brainstorm a publication:

The high-middle and high-earners in America  pay for the majority of social programs implemented by Congress.

With states facing nearly $100 billion in combined budget deficits this year, we’re seeing more governors than ever proposing the Barack Obama solution to balancing the budget: Soak the rich.

American Senators and Representatives should be thrilled, but instead disparage them for making the money that those Congressmen desperately need to tax.  What happens if they leave?

Perusing democraticUnderground.com, one would find the following comment:

“LEAVE. Take your money and go. America will survive without you… So rather than ruin our country for the other 90% whom you despise. Go away. Take all of your precious money and go elsewhere. Even if it means depression we will be better off in the long run without your manipulation..”

Liberals would love to see anyone with capitalist or free-market ideals leave, but seriously, would they really?  Sure, the populist view is to hate the wealthy – go Robin Hood and such.

Last September, Bob Bauman reported that, “Indeed, the growing trend of Americans voluntarily ending their status as U.S. citizens — the only legal way by which they can escape U.S. taxes and government controls — has reached a new peak and shows no signs of abating.”  Heck, even the radical left site, DailyKOS.com reported that the Bush family bought thousands of acres in Paraguay.  Although Obama doesn’t see what he’s causing, apparently his predecessor and his family did.

How serious are these ex-patriots:

Interestingly, although such a move offshore means departing Americans may have to pay an exit tax that the Democrat Congress and George Bush imposed in 2008, lawyers say this is a price people have become more willing to pay this year, now that recession and decreased asset values has reduced the size of this onerous and unfair tax.

So why do the non-wealthy care?  The top 1% of all earners pay 40 percent of all taxes. Examine the recent health care bill that relies heavily on the wealthy to fund the measure.  If there are not enough wealthy people, the rest of will be left to foot the bill.  A cost the rest cannot afford.

Continuing to hate top-earners for working hard and taking risks is counter-productive.  At some point, the government has to realize that not everyone can work for unions for middle-class wages unless the government is willing to tax middle-class wages at much higher rates.  It is well-known that our legislative branch would never admit such a truth.   Why should they, it would cost them their precious seats.

Wealth Bulletin quotes Jay Krause, a partner at private-client specialist law firm Withers who says he’s seen a rise in those interested in expatriation lately

We also found that over these same years the no-income tax states created 89% more jobs and had 32% faster personal income growth than their high-tax counterparts. -wsj.com

Those who disapprove of tax competition complain that lower state taxes only create a zero-sum competition where states “race to the bottom” and cut services to the poor as taxes fall to zero. They say that tax cutting inevitably means lower quality schools and police protection as lower tax rates mean starvation of public services.

The Live Free or Die State has no income or sales tax, yet it has high-quality schools and excellent public services. Students in New Hampshire public schools achieve the fourth-highest test scores in the nation — even though the state spends about $1,000 a year less per resident on state and local government than the average state and, incredibly, $5,000 less per person than New York. And on the other side of the ledger, California in 2007 had the highest-paid classroom teachers in the nation, and yet the Golden State had the second-lowest test scores.

Christian Kälin, a partner at residence and citizenship planning consultancy Henley Partners, said his firm has had a big rise in such inquiries.
He said: “Tax reasons might be the biggest reason why US citizens will want to drop their passports..” – clubconspiracy.com

Jay Krause, a partner at private-client specialist law firm Withers, said: “The number of inquiries from US citizens wanting to expatriate from their citizenship has increased rapidly in the last year.” – wealth-bulletin.com

To become a resident of Costa Rico for instance only requires proving an income of $50,000 USD per year.  Put $1,000,0000 in the bank and cut a crappy 5% annual and you’re in.   That is nothing serious for a middle-upper earner in their mid-50’s.

*notes:

  1. what would keep the wealthy here
  2. what is the worth of upper-middle income ($200,000) to the American economy
  3. Is the ObamEconomy more about bringing everyone to the same lower-middle class status?
  4. How does Obamacare and the financial reform bill increase Americans worth/income?