All Over the World, People Are Getting Rich

Goldman Sachs (NYSE: GS) paid out $16.5 billion in salaries and bonuses last year.

A group of 11 top executives carved up $150 million, while all employees made an average of $622, 000. Slurp!

Was ever there a better time to work on Wall Street…or in London’s equivalent, the City?

Probably not.

Now, the do-gooders are howling about it. Even Congressional blowhards are beginning to blow. They see a headline or two coming out of it…maybe a lift in their ratings.

On the one hand, voters like to press their noses to the glass and look in on the rich and famous – it gives them hope for the future. And they know that it doesn’t take any special brains to become rich; they’ve seen Kevin Federline and Ted Kennedy on TV. They imagine there must be some kind of luck behind it. So they buy lottery tickets and stocks…and hope some of the moolah flies their way.

On the other hand, they sense that something is not quite right. “How come these fellows make so much money?” they wonder. “Where does it come from?”

 They feel a little left behind.

“Retirees Up Against Debt”, says the headline on today’s USA Today newspaper.

While the rich get richer, the poor seem to get poorer. And the old seem to be getting poorer faster than most.

“From 1992 to 2004, the percentage of households 55 and older with overall debt grew faster than the rate of the overall population,” says USA Today. “Those 75 and older packed it on most quickly: The average load for those households with debt shot up 160% to an average of $20,234 during this time, according to research by the Employee Benefit Research Institute, a non-partisan group that studies economic security.

“Among households 65 and older, the average amount of credit card debt more than doubled from 1992 to 2004, to $4,907, according to Demos, a New York think tank. Seniors’ debt levels are catching up to those of younger people.

“Seniors in and approaching retirement – such as the oldest baby boomers – are carrying ‘debt loads that their parents would not have considered,’ says Sally Hurme of AARP, the advocacy group for people 50 and older. ‘This does not bode well for financial health.’ A record number of old people are going bust, continues the report, with people 65-and up the fastest growing group in the bankruptcy courts.”

Their eyesight may not be what it was, but they can still squint at the papers. And what they see is a strange sight: all over the world, people are getting rich.

 

Bill Bonner

Bill Bonner

Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America’s most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind Markets and Money.

Bill Bonner

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