Shed a tear for the rich. In some of the most cringe-making reporting I've seen yet, we have the news that number of millionaires in the United States has fallen by more than a quarter because of the financial crisis. There are 2.5 million fewer of them and the rich are crying poor.
The thing that gets me about reports like this is that it ignores the fact that a lot of this so-called prosperity was actually fake because it was was based on massive consumer borrowing on bubble-priced assets where people used their homes as automatic teller machines to borrow big and invest with other people's money. That's not the real deal.
Not to be outdone, Forbes has a similar piece telling us there are now 332 fewer billionaires. Warren Buffett and Bill Gates have dropped a few billion each.
Let's get this in some context. Unemployment is rising, trillions of dollars of value have been destroyed around the world, the economic impact of the recession will hit Asia and Africa hardest, and as commentator Robert Kuttner points out in the Boston Globe, this one could be worse than the Great Depression because the securitization of loans and the various financial instruments ensures we don't know who owns what, American households are out several trillion dollars, the US Government deficit is now running at more than 11% of GDP (compared with 6% under Roosevelt) and America is now the world's biggest debtor nation.
So all this talk about fewer rich people is misleading. The so-called prosperity was just an illusion created by the financial bubble. This is a tragedy that's not about the rich losing money.
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