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Ear to the Ground

An Investment Manager Dishes on the Richest

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Posted on Jul 20, 2011
Flickr / PeterJBellis

Rarely do we get to hear criticism of the American oligarchy from within the ranks of its crowning institution: the financial services industry. This anonymous author, who handles investments for the wealthiest 1 percent of Americans, takes us on a brief tour of numbers through the financial considerations of the über-rich. What these people believe they must earn to feel secure will appall most readers, and the excerpt below is sure to curdle some blood. —ARK

Who Rules America?:

Recently, I spoke with a younger client who retired from a major investment bank in her early thirties, net worth around $8M. We can estimate that she had to earn somewhere around twice that, or $14M-$16M, in order to keep $8M after taxes and live well along the way, an impressive accomplishment by such an early age. Since I knew she held a critical view of investment banking, I asked if her colleagues talked about or understood how much damage was created in the broader economy from their activities. Her answer was that no one talks about it in public but almost all understood and were unbelievably cynical, hoping to exit the system when they became rich enough.

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CJ's avatar

By CJ, July 21, 2011 at 10:45 am Link to this comment

First:
“While an after-tax income of $175k to $250k and net worth in the $1.2M to
$1.8M range may seem like a lot of money to most Americans, it doesn’t really
buy freedom from financial worry or access to the true corridors of power and
money.”
Ha, don’t know about the rest of you, but $1.2M would buy this commentator a
life free of labor for the remainder, and then some, of his life. Easily. If people
earning so much aren’t free of worry, they have no idea how to manage money
and so maybe should hire some poor person to act as financial planner. But
yeah, these earners probably don’t have much access to corridors.
Then:
“While income and lifestyle are all relative (indeed, as I’ve long maintained,
wealth is a function solely of massive poverty), an after-tax income between
$6.6k and $8.3k per month today will hardly buy the fantasy lifestyles that
Americans see on TV and would consider “rich”. In many areas in California or
the East Coast, this positions one squarely in the hard working upper-middle
class, and strict budgeting will be essential. An income of $190k post tax or
$15.8k per month will certainly buy a nice lifestyle but is far from rich. And, for
those folks who made enough to accumulate this much wealth during their
working years, the reduction in income and lifestyle during retirement can be
stressful. Plus, watching retirement accounts deplete over time isn’t fun, not to
mention the ever-fluctuating value of these accounts and the desire of many to
leave a substantial inheritance. Our poor lower half of the top 1% lives well but
has some financial worries.”
The first part is true: Even that income won’t buy the fantasy life depicted, or
rather offered up as bait part of the American-dream bait and switch, in TV ads
and programs. But certainly $15k per month qualifies as rich, whether upper
middle-class or upper class. And again, any in financial stress while earning
that income or somewhat less needs to have his head examined or undero
rehab for whichever behavioral excess.
(That amount is my annual income, and yes I’m taxed at 10%. I could tell them a
little something about real stress.)
No surprises otherwise, though always helpful when one of the insiders gets to
reporting some truth, and maybe reaches a few who never knew. And no
surprise the attitudes among the investment bankers who couldn’t be so dense
as to not know the damage they do, but then a tad too cleverly justify to
themselves via a widespread, absolutely instilled from childhood on capitalist
ideology: “After all, we earned it and so deserve it.” (Already a lie, but good
enough) That’s catch-all, serve-all, too convenient excuse for taking (which
really is expropriating) more than is needed, or rather one’s share, very often
also out of a very real feeling of insecurity.
And in the U.S. the threat of “freedom” to starve is certainly ever present, if
rather a lot more for many than for few under discussion.
Last, the laws and exemptions are of course in place to benefit those with
access to, or rather buyers of, power.
Quite right, most Americans have no idea, and not by accident when mega-
media that presents fantasy refuses to present facts. That very few Americans
gain access to the top 0.5%, or even top 20% or 30%, is the switch part of the
American-dream bait and switch.
And no one who does know of “these systems” could be so naïve as to imagine
those at the very top would ever so much as contemplate changing the rules.
Because ideology (and insecurity) runs deeper than any religious faith ever did
or ever could. Ideology is about the here and now, and even if a few—like the
woman mentioned—have some idea of the damage they do, they still believe
that damage to be the inevitable outcome of “natural (law or selection),” or in
other words, of human nature as conveniently mistakenly because circularly
defined by an ideology that is also a tautology.

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By SarcastiCanuck, July 21, 2011 at 8:37 am Link to this comment
(Unregistered commenter)

I love her last line,and I quote,“no one talks about it in public but almost all understood and were unbelievably cynical, hoping to exit the system when they became rich enough”.
  Yes,once they made enough money for a Gucci lifestyle,enough coke for weekends and a cushy retirement portfolio,they jump onto thier self righteous pedestals and start to criticize the system that enriched them.There is the core of the problem right there.I wonder how much of her fortune she is going to give to the needy.I also wonder how much of her narcissistic bullshit she actually believes.

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By frecklefever, July 20, 2011 at 2:30 pm Link to this comment

VOTING ONLY GIVES LEGITIMACY TO AN ILLEGITIMATE PROCESS…AND
ABETS THE CRIMINAL MARKETEERS…CLEAN HANDS PROTECT A CLEAN
MIND..

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By Lewis, July 20, 2011 at 1:18 pm Link to this comment
(Unregistered commenter)

how is this state of affairs enforced domestically and worldwide?

increasingly by lawless violence- read memoirs of an economic hitman - tactics once reserved for foreigners have become commonplace domestically since the “swinging” sixties.

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By TDoff, July 20, 2011 at 11:16 am Link to this comment

Very interesting reading, not only the referenced article, but the side-bar topics, such as the Bohemian Grove’s function, etc. Will give you the inside scoop on the financial facts and figures of the top 1%, .5%, and especially the very top .1% who run this figmental democracy.

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By felicity, July 20, 2011 at 10:34 am Link to this comment

Fascinating article, but no surprise.  The rough
definition of a banana republic pretty well defines our
Republic - a politically unstable entity dependent upon
Wall Street and ruled by a small, self-selected,
wealthy, corrupt politico-economic plutocracy or
oligarchy.

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By lynette, July 20, 2011 at 10:29 am Link to this comment
(Unregistered commenter)

Then let’s scare them. We can, you know. They are an itsy bitsy fraction of the population and many of the little people are growing very, very angry. I sense some of them are already becoming uneasy. They should be.

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By Dave, July 20, 2011 at 10:29 am Link to this comment
(Unregistered commenter)

Ergo, the collapse of a nation. 

From Sheldon Wolin:

“Representative institutions no longer represent voters. Instead, they have been
short-circuited, steadily corrupted by an institutionalized system of bribery that
renders them responsive to powerful interest groups whose constituencies are
the major corporations and wealthiest Americans. The courts, in turn, when
they are not increasingly handmaidens of corporate power, are consistently
deferential to the claims of national security. Elections have become heavily
subsidized non-events that typically attract at best merely half of an electorate
whose information about foreign and domestic politics is filtered through
corporate-dominated media. Citizens are manipulated into a nervous state by
the media’s reports of rampant crime and terrorist networks, by thinly veiled
threats of the Attorney General and by their own fears about unemployment.
What is crucially important here is not only the expansion of governmental
power but the inevitable discrediting of constitutional limitations and
institutional processes that discourages the citizenry and leaves them politically
apathetic.”

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