The new 'Gilded Age'

The Sunday NYTs has an excellent article on this new 'Gilded Age'. Only twice before over the last century has 5 percent of the national income gone to families in the upper one-one-hundredth of a percent of the income distribution -- 1915 -1916 and again briefly in the late 20's just ahead of the crash.

The former Fed Chairman, Paul Volcker, calls 'bullshit' on those who've suggested their fabulous accumulation in wealth is a natural result of their contributions to the overall national economy.

The great fortunes today are largely a result of the long bull market in stocks, Mr. Volcker said. Without rising stock prices, stock options would not have become a major source of riches for financiers and chief executives. Stock prices rise for a lot of reasons, Mr. Volcker said, including ones that have nothing to do with the actions of these people.

“The market did not go up because businessmen got so much smarter,” he said, adding that the 1950s and 1960s, which the new tycoons denigrate as bureaucratic and uninspiring, “were very good economic times and no one was making what they are making now.”

Robert Crandall, the former CEO of American Airlines agrees,

The nation’s corporate chiefs would be living far less affluent lives, Mr. Crandall said, if fate had put them in, say, Uzbekistan instead of the United States, “where they are the beneficiaries of a market system that rewards a few people in extraordinary ways and leaves others behind.”

“The way our society equalizes incomes,” he argued, “is through much higher taxes than we have today. There is no other way.”

The bulk of this wealth comes from enormous stock options and the wholesale transfer of corporate profits to a few people. The GOP has done an amazing PR job convincing the working class that the taxes on the super-rich designed to prevent such enormous accumulations of wealth is bad for workers and now the super rich are reaping those rewards.