Super Rich Have Been Hurt to Some Degree

By on August 23, 2009

David Leonhardt and Geraldine Fabrikant at the N. Y. Times have written an article exploring the implications of the worst financial crisis since the Great Depression on the mega-wealthy.

The Greenspan bubbles benefited the rich, but there has been a reversal of fortune; and it doesn’t appear that, in many cases, the extreme wealth will be restored anytime soon. Analysts don’t believe the orgy of borrowing during the bubble years will recur anytime soon. The repercussions of this will effect those institutions (elite universities, museums, religions, and governments) that fed off lavish donations and taxes generated from those able to harness wealth as a result of lax regulation.

Leonhardt and Fabrikant analyze the extreme case of software mogul and free-spirit John McAffee, whose personal fortune collapsed from $100 million to $4 million. In order to raise cash, McAfee has had to auction off his prized real estate at fire sale prices.

SMA Comment: The manipulators at Goldman Sachs have worked (schemed) harder than most to maintain their income. It takes a lot of looting and “good old boy” connections to maintain their lifestyles. It’s doubtful that any of them will suffer the fate of McAfee.



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