This Week

The United States has witnessed, over recent years, the most massive redistribution of wealth in modern world history, a redistribution entirely upward, with dollars rushing from folks at the middle and the bottom of our economic order to a fortunate few at the top.

Centuries ago, in the heyday of chief executives like Genghis Khan, societies only saw massive shifts in who owns what when the powerful felt a sudden hankering for pillage and plunder.

These days, we don't run into pillage and plunder much anymore. So just how, today, do massive amounts of wealth percolate up? Last week's record-breaking earnings report from Exxon Mobil offers us what may be the ultimate opportunity to “follow the money” and see. More down below in this week's Too Much.

Greed at a Glance: A Slight Change of Heart

Has William McDonough, the first chair of the federal accounting watchdog agency created after Enron, gone over to the Dark Side? Two years ago, McDonough called CEO pay “grotesquely immoral.” Last month he joined Merrill Lynch as an adviser to CEO E. Stanley O'Neal, whose pay doubled in 2003 — to $28.1 million — after the company completed a “restructuring” that wiped out over 20,000 jobs. O'Neal took home another $32 million in 2004 . . .

India's finance minister, P. Chidambaram, has acknowledged that he's actively considering a package of unusual taxes on the super-rich first advanced by left deputies in India's parliament. Among the proposed new levies: a tax on extravagant weddings . . .

The British House of Lords last week began deliberating on a case that will determine what happens financially to the divorced wives of deep-pocketed husbands. Alan Miller, a London financier worth near $62 million, started the case by suing to overturn the $8.9 million awarded his ex-wife, who gave up her career to care for Miller's three kids. Miller had offered $2.5 million. Mr. Miller, claims his lawyer, would be better off today “if he had knocked Mrs. Miller down with his car and caused her severe injuries, instead of leaving her for another woman.”

You probably won't be reading about Miller v. Miller in Spear's Wealth Management Survey, the glossy new quarterly that bills itself as the first title “targeted at the UK-based global super-rich.” That's because only swells worth at least $9 million can subscribe. The new mag, says editor William Cash, speaks to the wealthy “in their own language.” Cash apparently speaks that language. His wife, Italian jewelry heiress Ilaria Bulgari, stands to inherit $1 billion from her family's business . . .

The federal estate tax — the “death tax” to the lawmakers who want to repeal it — will impact the assets of only 6,343 of the 2.3 million people in the United States expected to die this year. In 2006, the estate tax will only kick in on fortunes over $2 million per person, notes United for a Fair Economy, up a half-million over last year's exemption level . . .

Overall compensation for American workers — wages and benefits — fell 0.3 percent in 2005, the first annual decrease since 1996. For the year, reports the Commerce Department, Americans “spent $42 billion more than they earned,” the first time the nation has registered a negative savings rate for an entire year since 1933, near the height of the Great Depression . . .

Meanwhile, according to the latest monthly survey of U.S. millionaire households, Americans who hold at least $1 million in investable assets are feeling “mildly bullish” about the future. Sums up George Walper, the president of the Spectrem Group, the Chicago company that conducts the monthly millionaire polling: “Without concerns about surging oil and gas prices holding them back, the nation’s wealthiest individuals and families clearly hold a fairly positive view of the investing environment.”

A Finely Tuned Wealth Concentration Machine

Exxon Mobil last week reported $36.1 billion in 2005 earnings, the largest single-year profit in American corporate history.

Where are all these earnings going? Over two-thirds are going to the company's shareholders, the New York Times reported last week, via dividends and share “buybacks.” Companies “buy back” their own shares to jack up demand for their stock — and pump up their share price.

In 2005, overall, Exxon funneled over $25.4 billion back to shareholders.

This generosity actually represents quite a substantial departure from Exxon's traditional operating procedure.

A generation ago, Exxon routinely plowed over half its profits back into the company, into exploration, research and development, and capital expenditures for new equipment. But since 1997 over half the company's profits have simply gone to shareholders.

And who are these shareholders? No one can answer these questions with any certainty. Exxon keeps no statistics on the net worth of its individual shareholders.

But we do have some new national stats on who owns America's corporate wealth, from the Congressional Budget Office, and the Center on Budget and Policy Priorities, a Washington, D.C. think tank, has just released a fascinating analysis of what the new CBO figures have to tell us.

The basic message from this eye-opening analysis: The ownership of America's corporate assets has become significantly more concentrated — at the top — over the past quarter-century. We have more.

Corporate America's
Two Degrees of Separation

The new Golden Rule of our increasingly unequal world — “They who have the gold rule” — is now coming visually alive in an imaginatively designed Web site from artist Joshua On. Visitors to the They Rule site can even create their own “maps” of the interlocking movers and shakers who call the shots in contemporary Corporate America.

The power-suits who run America's biggest companies, notes On, the Web site's designer, “swap on and off the boards from one company to another, and in and out of government committees and positions.”

“These people run the most powerful institutions on the planet, and we have almost no say in who they are,” On adds. “This is not a conspiracy. They are proud to rule. And yet these connections of power are not always visible to the public eye.”

To check out the connections that visitors to On's site have scoped out — maps on everything from “Halliburton and the media” to “where Coke meets Pepsi” — click your way to the They Rule Load Maps option.

Stat of the Week: United We Gorge

Total windfall the top 400 executives at United Airlines now stand to clear if the company's share price essentially maintains its current level over the next four years: $300 million.

United emerged from bankruptcy last week with nearly 30 percent fewer employees and, for the workers who remain, no pension plan and reduced paychecks. But United's execs face a far rosier future. On January 20, the federal court handling the United bankruptcy okayed a plan that gives United's executive corps 8 percent of the company's new shares of stock.

The biggest chunk of stock will go, naturally, to United CEO Glenn Tilton, who now stands to walk off with $40 million.

“That's a generous work-study allowance,” notes a USA Today analysis, “for someone hired three years ago with no experience in airlines.”

Quote of the Week: Let Them Eat Prescriptions

“A vote for this bill is a vote, literally, to take away from health care from our children so we can give more money to the super-rich.”

Rep. Louise M. Slaughter (D-N.Y.), during the House debate over a $39.5 billion budget-cut package that will, among other mandates, slice prescription drug aid for poor families on Medicaid. The budget cuts passed in a 216-214 February 2 vote.

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