Still thinking about your list of New Year’s resolutions? Here’s one. Read a comic book in 2009. And we have just the comic book for you. No caped crusader in this comic book. No super powers either. Just a ton of insights, ladled with humor and verve, on the national and global economic collapse that now besets us.

Interested? Read on. This week’s Too Much has the scoop on this clever new comic — and lots more, too.

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The worldwide economic meltdown has so far sliced the fortunes of Britain’s 1,000 wealthiest by just over half, reports the Times of London. But the UK’s richest still hold at least £200 billion in wealth, or about $290 billion. British high-rollers seem to be making do in their newly constricted circumstances. Sportswear tycoon Sir Tom Hunter, for instance, has seen his personal fortune shrink to under $1.1 billion. Announces Hunter: “I am tightening my belt like everybody else. Yes, I still have the private jet, but we have sold our house in the south of France.” That belt-tightening isn't impressing UK lawmakers like MP Michael Meacher. He's calling on Britain’s Labor Party government to up taxes on high incomes more than the 5 percentage-point hike the government is already seeking. Says Meacher: “The ultra-rich, whose wealth has grown astronomically over the last three decades, should now make their contribution.”

In South Florida, the legions of designers and event planners who owe their livelihoods to the upper-crust set are breathing a sigh of relief. The super rich are still spending — at least, as one local wedding planner noted last week, on “the big emotional events.” Indeed, points out Bruce Sutka, a top exec with a West Palm Beach event-staging firm, his company has one affair upcoming with a $225,000 budget just for decorations. Dream Concierge, another South Florida event planner, is now putting together a $500,000 black-tie spring wedding. The 130-guest bash will feature $110,000 worth of filet of beef and lobster tail and “a canopy of 12-foot-tall birch trees draped with hanging orchids.” Smiles a satisfied Breeze Taylor, a planner with Dream Concierge: “In these circles, people want their guests to be wowed and surprised.”

Meanwhile, up in Aspen, the super rich aren’t spending — at least not on homes that list for over $10 million. High-end sales in this Colorado ski resort have dropped over 40 percent since 2007, and Aspen realtors went into December with a record 79 unsold properties in the double-digit millions. Among them: a $43.8 million residence that comes with seven bedrooms and 16,000 square feet, over six times the size of the standard American home. The local realtor hawking the $43.8 million sale, notes the Aspen Times, is staying optimistic. A buyer, explains realtor Kelli Gardner, “could come tomorrow.” Adds the defiant realtor: “I’m not buying into that negativity.”   

George W. Bush invaded Iraq. What locale should our new President invade? David Cay Johnston, the Pulitzer Prize-winning former New York Times tax analyst, has a suggestion: the Cayman Islands. This Caribbean outpost may now be the world’s top tax-avoidance haven for America’s wealthy. Enron parlayed Cayman hospitality to billions in payouts, and the hedge funds that played footsie with Bernie Madoff’s Ponzi fraud have Cayman connections, too. The United States, says Johnston, should be demanding that Cayman officials “make available all records on American-related entities and individuals.” And if they don’t? Send in the Marines, says Johnston, along with plenty of auditors. Quips Johnston: “The Caymans has no military, only about 300 cops, so marching up the tourist-laden beaches should be a breeze.”

America’s 22 most prestigious elite institutions of higher education, National Association of College and University Business Officers research revealed last year, hold more endowment wealth than the entire rest of the 785 schools the business officers are currently tracking. But this enormous concentration of endowment wealth hasn’t created more seats for students from lower-income families. In fact, over the last decade, undergrad enrollment at the Ivies, MIT, and Stanford has actually dropped. Who is benefiting from the largely untaxed billions in elite university endowments? The biggest beneficiaries may be the financial advisers universities hire to manage their endowment investments. In the last fiscal year, Bloomberg news reports, five managers of Harvard’s endowment — higher ed’s largest — pocketed a combined $25.9 million.

Quote of the Week

“We don’t need super rich, not when that money is needed to take care of little kids in pre-school, and there’s no money for pre-school. No, we need a radical change in the tax structure.”
Howard Zinn, Boston University historian, interviewed on Democracy Now, January 2, 2009

New Wisdom
on Wealth

Roger Catlin, In Hard Times, Dominance Of Rich Characters On TV Is Sick-Making, Hartford Courant, January 2, 2009. The distorted reality of “reality” shows where “the main decision may be how many expensive options to load into a $1 million yacht purchase.”

Barton Parks, New ways to look at our lives, Greensboro News Record, January 2, 2009. The chair of Justice and Policy Studies at North Carolina's Guilford College asks us, in the new year, to listen “closely across lines of race, class and gender” — and resist any who endeavor “to keep us angry at each other instead of at those living in multiple mansions.”

A Striking A+ for America's Super Rich

Two days before Christmas, with hardly anyone at all paying much attention, the nonpartisan Congressional Budget Office delivered up a final report card on the Reagan era. The highest grades? They went, almost exclusively, to the super rich.

You won't, to be sure, find any As, Bs, and Fs in this new Congressional Budget Office report card. And the CBO's researchers certainly didn't set out to grade America on the years since Ronald Reagan became President a generation ago. But they've done just that. On taxes and income distribution, their new report makes vividly clear, the United States desperately "needs improvement."

That may or may not be the message Senate Finance Committee chair Max Baucus from Montana had in mind, last year, when he asked the Congressional Budget Office to dig a little deeper into the data on taxes and income than the CBO had dug in a report released late in 2007.

The CBO's December 2007 study, Historical Effective Tax Rates, 1979 to 2005, had looked at the federal taxes Americans at different income levels have been paying since the year before Ronald Reagan's election.

But the report had a hole. Nothing in it indicated how the really rich have fared in the near three decades that the basic principles of Reaganomics — tax rate cuts, deregulation, and privatization — have set the public policy pace.

Senate Finance Committee chair Baucus asked the CBO to fill that hole — by focusing on the richest of the rich. The CBO's new report meets that request, with dramatic results.

Americans in the overall top 1 percent, the 2007 CBO data showed, did quite well in the Reagan era's first quarter-century. Their average incomes, after taking inflation into account, essentially tripled, rising 201 percent.

But these top 1 percent stats, the new CBO data help us understand, hardly tell the full story. The truly stunning income increases over recent decades have gone to the tippy-top of the U.S. income distribution, not the top 1 percent, but the top tenth — and top hundredth — of that top 1 percent.

The higher up you go on the income ladder, in other words, the sweeter the Reagan era.

Between 1979 and 2005, the bottom half of the top 1 percent saw their average incomes only double, after inflation. These incomes increased 105 percent. The next highest four-tenths of the top 1 percent somewhat raised the income bar. Their average incomes, after inflation, rose 161 percent.

That brings us to the top 0.1 percent of Americans. Their incomes, from 1979 to 2005, rose a staggering 294 percent after taking inflation into account. Not bad at all. But the top 0.01 percent did even better. The 11,000 households in this rarified air took home an average $35.5 million in 2005, a 384 percent increase over average top 0.01 percent incomes in 1979.

Need some perspective here? Let's compare Americans at the top to Americans in the middle. Between 1979 and 2005, the average income of America’s statistical middle class — the 20 percent of Americans in the exact middle of the U.S. income distribution — rose, according to the CBO figures, a mere 15 percent. That's less than 1 percent a year.

But many middle Americans never saw that less than 1 percent. That's because the CBO takes a kitchen-sink approach to defining income. CBO researchers include in their “comprehensive income” calculations all the standard household revenue streams — wages, dividends, interest, and the like — and lots more, too, from food stamps and Social Security to employer-paid health benefits.

All these add-ins tend to inflate average household “incomes.” If your employer’s health insurance company jacks up prices, for instance, the extra dollars in premiums that your employer has to pay count as income to you, at least in the CBO calculations.

The CBO actually has a good reason to take this "kitchen-sink" approach to defining income. Conservative cheerleaders for the Reagan era have been arguing for years that the United States isn't growing that much more unequal, not when you calculate in the various benefits that poor and average Americans get from government and their employers.

But the CBO figures, by adding in all those benefits, neatly expose the flim-flam behind this cheerleading. The United States definitely has become substantially more unequal. Overall, after taxes, the very rich — the top 0.01 percent — have nearly quadrupled their share of the nation's income since 1979.

These super-rich Americans in the top 0.01 percent, even more amazingly, now pay a lower share of their incomes in federal tax than the merely rich.

The overall top 1 percent paid federal income tax at an average 19.4 percent rate in 2005. The top 0.01 percent paid at just a 17 percent rate, mainly because the richest of the rich get nearly half their income from capital gains — and capital gains enjoy preferential tax treatment.

Under George W. Bush, the tax rate on capital gains income — income from the sale of stocks, bonds, and other assets — dropped to 15 percent, less than half the current top 35 percent tax rate on “ordinary” income from paychecks.

And that brings us to about the only hopeful news we can take, of late, from the Congressional Budget Office. No one on Capitol Hill has spoken out more clearly on the noxious consequences of preferential treatment for capital gains income than Peter Orszag, the CBO director until last month.

Taxing capital gains at a lower rate than other forms of income, as Orszag has testified to Congress, “creates opportunities for tax avoidance and complicates the tax system.”

As CBO director, Orszag couldn’t do much about capital gains tax breaks for mega millionaires. Now he can. President-Elect Barack Obama last month named Orszag his choice to direct the Office of Management and Budget, the federal government’s most powerful fiscal agency.

A Comic Book Worth a Good Look

Economic Meltdown Funnies. Text by Chuck Collins and Nick Thorkelson, drawings by Nick Thorkelson. A co-production of Jobs with Justice and the Institute for Policy Studies Program on Inequality and the Common Good. 16 pp.

Why is the global economy cratering? A simple question. But most Americans would be hard-pressed to give a good answer. That’s not their fault. The news media haven’t, by and large, helped much. If you have hours to kill scanning newsstands or scrolling online, the story behind our great meltdown will eventually come into focus. But most people, of course, don’t have that sort of time.

Most people need what we so far haven’t had: an easily digestible — and entertainingly presented — tour into our economic past that uncomplicates why we’re now sinking into such a colossal mess.

Two veteran activists, Chuck Collins and Nick Thorkelson, have now delivered just what we need, the Economic Meltdown Funnies, a witty and welcome economic guidebook in comic book format.

But don’t let that comic book format fool you. Even sophisticates on matters economic will walk away from these imaginatively packed pages with a new take or two. Collins and Thorkelson haven’t dumbed down our economic predicament. They’ve explained it.

Their new Economic Meltdown Funnies takes us through the thicket of credit default swaps and collateralized debt obligations and helps us better fathom the “unprecedented concentration of wealth” that has so shaped our contemporary political world.

Collins and Thorkelson don’t stop there. They close their comic with ideas for the change we ought to be demanding “not just to get the economy moving, but to address the inequality that brought about the meltdown.”

You won't likely find the Economic Meltdown Funnies on any neighborhood comic book rack. But you can read the Funnies free online. You can also order hard copies online, at a bulk discount price, and pass them around.

And if you do go online, don’t miss the “added value” the Meltdown Funnies Web site offers, especially the “Cry Until You Laugh” jokebook page, a soon-to-be-expanded collection of gallows humor.

What’s the difference, this jokebook page asks, between an investment banker and a pigeon? A pigeon can still make a deposit on a new Ferrari.

Actually, plenty of bankers still can, too. But if the Meltdown Funnies starts circulating widely enough, maybe the Ferrari set will have a bit less reason to be laughing — at our expense.

Stat of the Week

If the CEOs of America's top 200 publicly traded companies make as much this year as they made in 2007, the last year with data available, they will, on average, make more in one day of 2009 labor than the average American worker will take home for the entire year. Annual top 200 CEO pay, at last count, averaged $11.7 million.

Too Much is published by the Council on International and Public Affairs, a nonprofit research and education group founded in 1954. Office: Suite 3C, 777 United Nations Plaza, New York, NY 10017. E-mail: editor@toomuchonline.org.