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How are these huge gains possible for the top 400? It's due to cuts in the tax rates on capital gains and dividends, which were down to a mere 15% in 2007 thanks to the tax cuts proposed by the Bush Administration and passed by Congress in 2003. Since almost 75% of the income for the top 400 comes from capital gains and dividends, it's not hard to see why tax cuts on income sources available to only a tiny percent of Americans mattered greatly for the high-earning few.
In terms of types of financial wealth, the top one percent of households have 38.3% of all privately held stock, 60.6% of financial securities, and 62.4% of business equity. The top 10% have 80% to 90% of stocks, bonds, trust funds, and business equity, and over 75% of non-home real estate. Since financial wealth is what counts as far as the control of income-producing assets, we can say that just 10% of the people own the United States of America.
Most amazing of all, the top 0.1% -- that's one-tenth of one percent -- had more combined pre-tax income than the poorest 120 million people (Johnston, 2006).
"I recognize, however, that many Americans are skeptical about the contribution of investment banking to our economy and understandably angry about how Wall Street contributed to the financial crisis," the testimony said. "What we and other banks, rating agencies and regulators failed to do was sound the alarm that there was too much lending and too much leverage in the system—that credit had become too cheap."
"I recognize, however, that many Americans are skeptical about the contribution of junkies to our economy and understandably angry about how we contribute to personal crises, like when some old lady gets knifed in the park for the lousy $5-bill in her purse," the testimony said. "What we, as well as the dealers, major suppliers, street-lookouts, and even the cops failed to do was sound the alarm that there was too much super-fine...I mean, some seriously high-quality, uncut product flooating around in the city [short break while defendent's eyes grow misty at the recollection; wipes drool from chin and attempts to surpress suddlen little twitches of rhapsody]...uh, where was I? Yeah,... flowing into the city, and too many new gangs and moving in on our turf and disrupting the system—that the stuff had become too cheap."
They had to use one of their own, is it any wonder Obama had meetings with Lloyd Blankfein, four times recently?
Blankfein supports financial reform bill
By Vicki Needham - 04/27/10 06:45 PM ET
A financial regulatory reform bill has at least one supporter outside of Congressional Democrats, Lloyd Blankfein, the head of investment bank Goldman Sachs.
"I'm generally supportive," Blankfein told the Senate Permanent Subcommittee on Investigations.
Wall Street will benefit from the bill because it will make the market safer, Blankfein said.
"The biggest beneficiary of reform is Wall Street itself," he said. "The biggest risk is risk financial institutions have with each other."
American consumers also would benefit from better regulations, he said.
Blankfein said he didn't know all the bill's details and couldn't speak to provisions that affect community and consumer banks and mortgage originators because they are "remote" to our experience.
Originally posted by poet1b
While eventually Wall Street investment firms lost money and got bought out, the executives that controlled those investment firms still walked away with hundreds of billions of dollars. It was a win win situation for them all the way.
The investment bankers who created the whole scam?
No, they planned their way out when they wrote this scam.
All the people with their 401k plans in the system are the ones who get screwed, so thus the bailout, and that is what Wall Street has counted on from the beginning.
Once again, America's home-grown Savonarolas are alighting the shiny Bonfire of the Vanities - the golden baubles and bangles of a time of wretched excess. More so than the turgid 1987 novel by Tom Wolfe, or the even more torpid 1990 film that likewise virtually sank the careers of Bruce Willis and Melanie Griffith, the people seem not to be satisfied until having put under the flame the icons they so recently venerated. 
On April 15, the US government's Securities and Exchange Commission filed charges against Goldman Sachs, accusing it of civil offenses resulting in securities fraud in regards to mortgage-backed securities Goldman sold by recommendation with John Paulson's hedge fund. Chan Akya and I dealt with these events on this website at the time. (See Goldman: the charade of honesty and Banking with piranhas, Asia Times Online, both April 20, 2010.)
Now, 36 months after the first vanities met the first flames, after the mobs have dispatched everything from Bear Stearns to General Motors, from Citibank to the Bush family dynasty - "you've fought hard and you've saved and earned" Arthur Brown sang in 1966, "but all of its going to burn" - the US Senate Permanent Subcommittee on Investigations on Tuesday put Goldman on the docket for a whole day of obligatory flaying.