The world’s high net worth wealth grew strongly in 2004 for a second consecutive year, increasing 8.2% to $30.8 trillion, according to the 2005 World Wealth Report, released today by Merrill Lynch and Capgemini.
The number of high net worth individuals (HNWIs) — individuals with a net worth of at least US$1 million, excluding their primary residence — grew by 7.3% to 8.3 million, a net increase of 600,000 worldwide. North America led with a nearly 10% growth rate to 2.7 million HNWIs, surpassing the 2.6 million in Europe. Asia-Pacific’s growth rate of over 8% — to 2.3 million HNWIs – was twice that of Europe.
Low and stable interest rates throughout 2004 drove spending on fixed investments, which doubled from 2003. HNWIs continued to benefit from tax reform, with protection from estate taxes steadily rising through the the end of the decade, before “sunsetting” by the end of 2010.
Low interest rates increase the value of financial assets, and lower taxes mean, well, lower taxes.
Thank you, “Bubbles” Greenspan, for making the rich richer (at the expense of the middle classes who cannot afford to buy their homes anymore without taking unseemly risks). Thank you Bushco, letting them keep a growing portion of it (at the exense of all the future generations of Americans).
Yeah, it was realy shameful to have more millionaires in Europe than in the US, and that slight has finally been corrected. The “base” is growing…
Thirty trillion dollars – that is incomprehensable. One percent of that amount is $300 billion, just think what that could do:
As an alternative point of view, consider that last year’s change in net worth was 8.2% of 30 trillion, or 2.4 trillion. The US share was roughly one third, or $800 billion, which is larger than the entire US budget deficit.
OK, I’ve got to stop here, I think my head is going to explode.
Every time I read those stats I try to think of a rational, forward-looking, and fair remedy. Nothing politically palatable comes to mind.
[And our friends @ google are trading at a P/E ratio over 100. Irrational exuberance is alive and well.]
In what sense of fair and what sense of politically palatable?
What’s wrong with simply structuring the tax and welfare system so that those who get lucky under the economic structure give some of that back to those who didn’t get lucky?
Nothing’s wrong with your solution that a complete “regime change” in the WH and congress wouldn’t cure. But keep in mind that “welfare” in this country has historically gone to corporations and the wealthy; and the democrat’s answer to eradicating poverty is an incremental raise in the minimum wage.
Sorry, but absent a complete takeover of the democratic party by the “old left”, coupled with a sweep of congress in ’06, and the WH in ’08, it ain’t gonna happen.
Redistribution of wealth is a tricky business indeed.
Well alternatively you could enforce the various laws designed to level the business playing field. (What’s that? Bush appointed who to chair the SEC? Oh).
Yup, you’re screwed. Remember: Marx was only wrong about the revolution because the welfare state was invented. I still think that Bush’s advisors only pretend to be anti-commie. Really they’re trying to provoke the proletariat into a proper revolution.
I call it “NFL Capitalism” but I’m hardly an expert on it, so I could have it wrong. But this is how it appears to me as a casual observer.
Maximum sacrifice of wealth and opportunity at the top, which funds maximum support at the bottom, leaving maximum freedom in the middle.
There are still winners, there are still losers, and there’s a perpetually competitive market. The NFL slogan is “on any given Sunday” any team might win.
The football world is supported by free government education (school and college football teams), they provide health care (team doctors and trainers, even onfield), and the world’s greatest regulatory system.
Think of it–a 60 minute game takes 3 hours to execute, of which only around 11 minutes consist of ball handling. The entire rest of the time is occupied with onfield team planning meetings, regulatory inspections and penalties, and diversionary propaganda from announcers and bands and dancers. There’s no other human activity which is so nearly pure exercise of socialistic bureacracy as football–and it’s a multibillion dollar profitable industry.
What do the billionaires know that liberals are missing?
So if the number of HNWIs grew by 7.3%, and the total wealth grew by 8.2%, doesn’t that mean that the wealth per HNWI grew by less than 1%? I wonder if that is corrected for inflation? Perhaps the rich aren’t getting that much richer, but there are just more of them.
Here’s a graph from Scientific American Feb. 2001 that I have posted on occasion on dKos. The period is Reagan through Clinton, and I’d love to see an analogous breakdown for recent years.
Family Financial Net Worth
The groups shown are the “bottom” 90% of Americans, the next 9%, the top 1% minus what I call the winners, and the winners meaning the Forbes 400 richest families.
Notice that the bottom 100% of Americans, minus the Forbes 400, use the scale at left calibrated in millions of dollars. The 400 richest use the scale at right in billions.
We can see that the only important action was in the top 400. Growth of the top 1% minus those 400 was extremely mild even during the 90’s boom. And no other groups shown gained net worth at all.
A recent report focused on the top 0.1% but I think what we need for a clear understanding and good policy making is to have is a breakout of several layers within that .1%.
This looks to me like an entire economy is the property of a small club.
I see. so the rich aren’t getting that much richer, only the ultra-super rich, who are getting unimaginably wealthy. I wonder if those bottom two groups are actually trending downward now?
Also, this chart only covers the US, correct? I bet most of the rest of the world is even poorer than that bottom group.
Al Franken is covering this with David Cay Johnston re: his NY Times Article.
The result of these tax cuts is that the rich have actually begun subsidizing the hyper rich.
The article is the first to mention the top 1%, 0.1%, 0.01% and top 400 families. Sadly there’s no charts, which would make the article meaningful the way my chart above does, and figures aren’t available post 2001 so we can’t demonstrate what Bush did till after he leaves.
This began with JFK cutting the top tax rate from 94% or so to 70%.
We have 2 separate problems. One is income distribution, the other is our Constitutional system’s ability to cope with forces of vastly different size, speed and reach.
In ballistic terminology, we’ve given the hyper rich “escape velocity” but nobody’s talking about what all that ultimately means.
Thanks.
I trust everyone has seen this?
Remember to zoom out as well. Anyone still in favour of a flat tax rate?