Arch-Villains Then and Now

Here's a meditation on how crazy the "rewards" for top income earners have become. This is from Paul Krugman on his NY Times blog:

So I’m watching stuff my Tivo thought I might want to see, which happened to include the old Bond film Thunderball.

And I found myself thinking about inequality.

You see, there’s a scene early in the movie when the minions of SPECTRE, the evil conspiracy, are shown reporting on their profits from dastardly activities. And the numbers are … ludicrously small. I know that’s a running gag in Austin Powers, But it’s true, it’s true!

Even the big one — demanding a ransom for two stolen nuclear warheads — is 100 million pounds, $280 million. Adjusted for inflation, that’s about $2 billion — or one-eighth of the Goldman Sachs bonus pool.

It’s just an indicator of how huge top incomes have become that what were once viewed as impressive numbers, the kind of thing only arch-villains might demand, now look trivial. Or maybe the other way to look at it is that we have a lot more arch-villains around than we used to.

PS: Prices haven risen roughly sevenfold since the movie was made. So $280 million is, as I said, around $2 billion in today’s dollars — still a trivial sum by modern Wall Street standards.

One problem with understanding how crazy the distortion of the ultra-rich and how they have held up society for more than a king's ransom is that mere mortals have a hard time understanding the numbers.

The other day I blogged that the $900B Obama "stimulus" (AKA extension of the Bush tax cuts) is a ridiculous waste of money to boost the economy. Supposedly this money is meant to encourage people (mostly the rich) to spend some of what they are get to help reduce the 9 million unemployed. But this number is so big that if you simply divided among the unemployed you could give each of the 9 million a cheque for $100,000. The median household income in the US is $44,389. So this "stimulus" would employ every unemployed for over 2 years with a "salary" equal to the median household!

Of course you couldn't do that because it would drain the swamp of desperate people who will take any job at any wage and employers would hate that. But this shows you how ridiculously wasteful the Obama "stimulus" is. It is mostly going to millionaires and billionaires to tuck away in their investment portfolio.

If you want to understand the iron grip that the ultra-rich have over the economy and the politicians, look at this Wikipedia page on income inequality.