NYT
Past the initial schadenfreude, it’s hard to figure out what to think about the shrinking of the nation’s 400 most gilded fortunes. It is reassuring that the super-rich can lose money too — $300 billion in the last year, according to Forbes, bringing their total down to $1.27 trillion. It’s about the same percentage that was lost by Americans’ private pensions, whose assets dropped by about $1.1 trillion, nearly 19 percent.
It can hardly hurt as much. Warren Buffett lost $10 billion but still has $40 billion. Kirk Kerkorian has $3 billion left, after losing $8.2 billion. Citigroup founder Sanford Weill dropped off the billionaires list, but still has many millions.
Every year as I get worked up over Forbes’s latest billionaire review, I try to convince myself that accumulation of wealth at the top can serve a social function. I tell myself that inequality of income is a standard feature of capitalism, pushing the best and brightest into the most profitable jobs. It encourages people to study hard and work hard, or at least to become a banker. Big financial rewards push people to excel, and thus the economy to grow.
But $1.27 trillion? That’s a decade of health care reform in one of the more expensive versions. This isn’t garden-variety inequality — this is a winner-take-all deal that can destroy incentives for everyone except those in the upper crust.
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