All Signs Point to a Class-War Armageddon

By Ed Raymond
Staff Writer
The Real Irish Republican Army of Ireland , a thorn in the side of the English for many decades, recently warned Great Britain’s bankers that they weren’t going to get away with what they called “a crime spree that benefits a social elite.”  The Real IRA has launched many deadly attacks on English forces in the past during the Irish “troubles,” so they have to be taken seriously.
They promised to attack the financial system in this statement: “Let’s not forget that the bankers are the next-door neighbors of the politicians. Most can see the picture: the bankers grease the politician’s palms, the politicians bail out the bankers with public funds, the bankers pay themselves fat bonuses and loan the money back to the public with interest. It’s essentially a crime spree that benefits a social elite at the expense of many millions of victims…We have already shown our capacity to launch attacks on the British military, judicial, and policing infrastructure. As we rebuild, we are confident that we will increase the volume and effectiveness of attacks.”

Knowing the IRA’s bloody, insurgent history, the bankers should know they are not kidding.

The rich-poor gap is increasing to dangerous chasms around the world, and particularly in the United States. Even former Fed Chairman Alan Greenspan, a free marketeer if there ever was one (and perhaps the person most responsible for our current financial situation), recently described the U. S. income gap: “The income gap between the rich and the rest of the U.S. population has become so wide, and is growing so fast, that it might eventually threaten the stability of democratic capitalism itself.” 

You betcha. Perhaps the fragile world peace between rich and poor was finally broken when a billionaire Indian businessman, desperately looking for a home to satisfy his position among India’s elite, built a home in Mumbai – a 27-story personal skyscraper. 

The gap in Minnesota may be best demonstrated by the 2009 compensation paid the CEO of Minneapolis-based United Health Benefit Group. Stephen Helmsley was paid $101,959,866 which would pay for over 7,400 family life insurance policies at 2010 prices ($13,370-single policies at $5,049).

Although our health care system is ranked 33rd in the world by the World Health Organization (WHO), we spend $7,290 per capita, or about twice as much as any other “civilized” country. We currently have 50.7 million people without any health insurance.  France, rated by the WHO as having the best health care system in the world, covers everyone—even visitors—and has a per capita cost of $3,601.

The right-wing nuts always describe Americans as being “exceptional.” In this case we are “exceptionally” dumb to pay such extreme costs set by a “free market” led by fat cats such as Helmsley.

A few other signs of the U.S. rich-poor gap. Sunglass maker Oakley has now launched a line of $4,000 sunglasses in the $200 billion luxury goods market, surpassing its previous $600-a-pair Pit Boss model. The company claims that the 80 layers of composite materials used to make the frames require 90 hours of machine time! CEO Colin Baden says the target customer for these glasses is “the guy who doesn’t blink at spending $300,000 on a car.” 

Michael Jackson’s “moonwalk” white glove was recently sold for $420,000, a jacket worn on his 1989 “Bad” tour brought in $225,000. Roy Rogers’s stuffed horse “Trigger” and his dog “Bullet” brought in $266,000 at Christie’s in New York. A white and blue toilet that was owned by dead Beatle John Lennon was purchased in London by a collector for $14,740. Bart Simpson would certainly call that a “craptacular” sale.

Want to take your family to see the most expensive team in baseball? Four season tickets for the best seats in the “new “ house of Ruth will cost you about $800,000.

Ponzi schemer Bernie Madoff, now doing lots of time in a federal prison, no longer had a need for the 17 Rolex watches he collected when he was rich, so his timepieces were sold at his fraud auction. One Rolex sold for $65,000.  Bernie’s blue satin NY Mets jacket brought $14,500.

I still remember the trial of former Tyco CEO Dennis Kozlowski, who testified that he simply forgot to include $25 million in salary on his W-2 form when he filed his income taxes. I think he’s still in jail for fraud and theft.

Perhaps the most obscene example of the rich-poor gap is the personal expenditures of Prince Jefri Bolkiah, head of the kingdom of Brunei’s investment agency. In a 10-year period he spent an average of $747,000 per day, a total of $2.725 billion.

He bought for himself in that decade 2,000 cars, 17 airplanes, several yachts, more than a dozen homes, and entire display cases of jewelry. After being accused of embezzling $8 billion, the prince finally settled with his brother the Sultan , promising to return all assets purchased with government money.

Although he had asked for a monthly living allowance during the trial of $500,000 for “ordinary expenses” because he had four wives and 35 children, he was given only $300,000 per month. The chief justice denied the prince’s request because he had exhibited “an extremely expensive lifestyle” by spending $2,000 on new bed sheets.

The accumulation of wealth by families was recently noted by the divorce settlement of the owner of the Los Angeles Dodgers and stadium in Chavez Ravine. The husband ended up with the Dodgers and accouterments; his ex-wife ended up with their seven homes. Their lawyers made $20 million on the deal. (I wonder if John McCain and his wealthy wife Cindy ever sold any of the nine homes they owned.)

Even more richly bizarre than the case of Frank and Jamie McCourt of Dodgerville, is the personal estate of Huguette Clark, the 104-year-old childless daughter of a disgraced former senator from Montana who made a fortune in the copper mines by bribing politicians.

William Andrews Clark (Clark County, Nevada is named after him), who battled John D. Rockefeller for the title of “richest man in America,” bribed so many politicians he was actually caught.  His defense: “I never bought a man who wasn’t for sale.” (Isn’t that the story of today’s political landscape?)

Clark’s daughter has made a New York hospital home for 22 years. She is not ill. She just likes the ambiance. It’s not that she lacks “homes.”  She was raised in a huge mansion in New York City that contained 121 rooms. The mansion had four velvet-lined art galleries stuffed with 225 famous paintings, statues by Rodin, Donatello, and Canova, Gothic tapestries, Persian carpets, and hundreds of other unique and expensive pieces of art too numerous to mention.

She now owns three magnificent homes but has not occupied them for decades. Bellosguardo is the Clark family estate in California. The estate has a 23,666 sq. ft. house on 23 acres and is surrounded by beautiful, well-cared-for rose gardens. The dining room is a bit unusual. The paneling is from Robin Hood’s Sherwood Forest (where Robin stole from the rich and gave to the poor!).

No member of the Clark family including Huguette has visited the home estate for over 50 years–but Huguette has declined an offer of $100 million for the estate. A staff of 25 has keep the unoccupied estate in tip-top shape. Huguette also owns the largest apartment (42 rooms in 15,000 sq. ft.) on New York’s Fifth Avenue, valued at well over $100 million. She has not been in it for 22 years. The taxes on it are currently $342,000 a year.

She also owns a Connecticut country house of 12,766 sq. ft. on 52 acres which is actually for sale for $24 million. She bought it in 1952 but she has never moved in. She owns 51,432 sq. ft. of prime real estate but chooses to live in a 140 sq. ft. hospital room.  Go figure!

Two grown children of billionaire Donald Bren recently sued their father for $134 million in unpaid child support—although he had paid many millions toward their support earlier. The case went to a jury which decided the children had been paid enough millions. (Selfish brats!)

Boeing is going into the space tourism business to give the Russians some competition.  Russia has taken seven tourists into space in their Soyuz capsules, charging them about $40 million each. Boeing is developing a seven-seat capsule to use in reaching the International Space Station in 2016.  Three of the seats will be for paying customers—at the Russian rate of $40 million.

In contrast, if a blue-collar worker wants his daughter to join the cheerleading squad in a Dallas public school he must pay $1,833. Texas is a low-tax state, you know.

Sometimes millions of dollars is just pocket change. Think fines will stop corporations from committing illegal acts and violations of regulations? Think again.

BP (British Petroleum) was fined $554 million between 2005 and 2009 for violating safety rules, clean air laws, oil leaks, chemical spills, and breaking numerous environmental laws. In 2007, BP was fined $391 million for anticompetitive practices and illegally manipulating energy markets.

Sound like a lot of money? The fine represented 0.14 percent of its total revenue of $284 billion. Do you think the fines are stiff enough to change attitudes? Fines are becoming just another cost of doing business. 

Massey Energy, the owner of the Upper Branch coal mine in West Virginia where 29 miners were killed in a huge explosion, had 65,832 violations of mine laws between 2005 and 2009 and was fined $49 million. Massey has paid only $2.8 million and has challenged the rest. Even if Massey paid all of its fines it would represent only half of 1 percent of revenue. Do you think it will spend a lot of money improving safety conditions in their mines? 

Goldman Sachs of Wall Street fame was fined $550 million in 2009 for insider trading, illegal stock advice, illegal short selling, and other violations too numerous to mention. The fines worked out to be only four days of revenue. Think they will change their ways?

In 2009 corporate profits were up 40 percent, while blue-collar wages went up 1.3 percent. Tony Blair of Great Britain has done rather well in and out of politics. He has made $30 million since quitting politics three years ago. He charges $250,000 for a “lecture.” Some businesses think it’s a bargain.

The gap between the rich and the poor in the U.S. over the last decade is exemplified by the $3 billion income “earned” by Wall Street hedge fund manager John Paulson in 2008, which is 75,000 times the average annual household income over the last ten years.

The national wage growth for the wage earners in the first through 90th percentile for 2002 through 2008 amounted to 1.7 percent. The richest one percent of Americans have incomes of over $500,000 a year. The poorest members in the one-tenth of one percent group have incomes of over $2 million a year.  The average member of the group makes $7.7 million a year.

Bank of America CEO Ken Lewis got a $73 million salary in 2009–while the bank struggled through loan losses and took a federal bailout. His beneficiary will also receive a $10.3 million life insurance payment upon his death. He retired at the end of 2009.

Why haven’t the consumers of America started to consume?  THEY DON’T HAVE ANY MONEY. The bottom 10 percent lost 3.6 percent of income between 2002 and 2008.  The bottom 25 percent lost 2.9 percent.  The bottom 50 percent lost 2.3 percent. The bottom 75 percent lost 0.7 percent.  The bottom 90 percent only gained 1.7 percent when adjusted for inflation. A worker earning the median wage in 2007 earned less than the median wage of a worker 30 years earlier.

Almost 45 million Americans live in poverty, that’s about one in seven. In 2008 the poverty level for a family of four was $22,025. The poverty-rate increase from 13.2 percent to nearly 15 percent is the highest single-year increase since 1959.

Child poverty has reached 20 percent in the richest country on the face of the earth. The number not covered by health insurance has reached 50.7 million.

We have 17 million households that cannot afford to put food on the table every day. The use of food stamps is at an all-time high and 62.5 percent of our children receive free or reduced lunches, also an all-time high.

Meanwhile, the top one percent continue to increase their share of America’s wealth.  They had an eight-percent share in 1970.  At the end of the 80s it was 14 percent, which increased to 19 percent by the end of the 90s. In 2005 it passed 21 percent. And by 2007 (the last year for which records are available) the richest one percent were squirreling away 23 percent of all income.

Perhaps some shrink will do a study on why households earning less than $25,000 give away 4.2 of their income to charity—while those with incomes above $75,000 give only 2.7 percent.

Questions and comments: .(JavaScript must be enabled to view this email address)