John McAfee of the famous software company has seen his net worth go from $100 million to $4 million. He is just one of many of the wealthy who have experienced similar things over the past couple of years.
The NYT recounts some of these stories. (h/t, Mankiw). I have seen quite a bit of this happening in clients at the firm - none on the scale of McAfee, but plenty of folks who have dropped from, say, $4 million to $700,000 or $1 million. A few folks who were heavy in Citibank, for example, and a couple of families in Madoff. That hurts if you are 70 and thought you were all set for a comfortable retirement.
The collapse of the value of stocks, real estate, and other investments has led to greater "equality." Achieving greater financial equality in this way doubtless evokes schadenfreude in the envious, happiness in the hate-the-rich populists, and delight in those who erroneously believe that money and wealth are zero-sum games.
But does it do any good for anybody? Probably not. When the rich lose money, government revenues drop, requiring higher taxes on the middle class. When the rich lose money, those who provide the goods and services they enjoy end up in trouble too - like boatmakers, travel companies, landscaping businesses, interior decorators, masseuses, restaurants, furniture-makers, hospital employees, government employees - and lawyers (our firm's income is down 27% thus far this year).
I believe that the Lefty notion of economic equality is insane. If anything, we need more rich people - the more, the better. I want everybody to be rich - if that is what they want in life.
