Why the Super-Rich Love Bubbles

Below, you’ll see the percentage share of US income for the top .01% of Americans plotted against stock market crashes. These crashes always follow speculative asset bubbles that find their way into the stock market or are sometimes native to the stock market.

What I’d like you to pay particular attention to is the last 30 years on the chart. What you’ll see is a regular pattern of stock market crashes followed by the rapid recovery of income share by the top .01%. The super-rich have been benefitting disproportionately from this boom/bust pattern that Alan Greenspan kicked into high gear with his doctrine of defending asset prices at all costs.

This is very different than what had happened after the Roaring 20’s. Once the Depression hit, it would be fifty years before the plutocrats would see their share of national income begin clawing its way back up.

But now, in the aftermath of each successive speculative mania, those from the very top of the pyramid grab a larger piece of the pie for themselves and walk away from the economic wreckage twirling a cane.

To make it into the top .01% (that’s one one-hundredth of one percent) you are earning over $9 million per year. You and the collective .01% earns more than half the income of the top .1% (tenth of one percent). In other words, you make the rest of the One Percent look like pikers wearing fannypacks at Universal’s Islands of Adventure in Orlando, Florida.

And most importantly, it turns out that no matter what happens with the economy, chances are you’ll be able to weather it better and then steer more opportunity your way on the other side.

I don’t care what your political affiliation or stance on central banking is, you’d have to agree this is fucked up: