After recent set backs to the economy it is being estimated that the average family lost approximately 40% of their wealth. James Carville is a Democratic strategist who serves as a political contributor for CNN. After speaking about the the average loss, he briefly theorized what the consequences would be if the rich lost 40% of their wealth as well.
Here’s what he said:
“The recent economic crisis left the top 1% of Americans in 2010 with no more wealth than in the early 1990s, erasing almost two decades of accumulated prosperity, the Federal Reserve said Monday.”
“A hypothetical family richer than the median net worth of the top 1% of the nation’s families had a net worth of $77.3 million in 2010, compared with $126.4 million in 2007, the Fed said. The crash of the stock market, in addition to the collapse of housing prices in Greenwich, Connecticut, the Upper East Side of New York City, Beverly Hills, Highland Park in Dallas and the North Shore of Chicago, directly accounted for three-quarters of the loss.”
He went on to speak of what the reactions to that would be:
The elite would call for the suspension of habeas corpus, the government would call out the National Guard, invade Honduras and the Supreme Court would announce that it is in session 24/7 to take any action deemed necessary to help their friends.
MYB: Family net worth drops nearly 40%
The Wall Street Journal would have a black border on the newspaper. The Financial Times would go from pink to gray. CNBC would play funeral music for nine months. Steve Schwarzman would compare it to the H-word. Cable networks would roadblock all coverage.
Minimum wage laws would be suspended, the 40-hour work week would be thrown out, perhaps they would even do away with child labor laws to get productivity up so profits could increase to make up for lost revenue.
OK, we know that story did not appear in Wednesday’s New York Times, and we would certainly agree that a massive loss of wealth in the top 1% would wreak economic havoc on the country. But there was, if anything, a worse story on that front page with only minor variations from our hypothetical scenario.
The story said that the recent economic crisis left the average American family in 2010 with no more wealth than in the early 1990s, erasing almost two decades of accumulated prosperity, reducing their net worth by almost 40%.
Basically , once again the middle class would take the brunt of any economic crisis. As they do now.
