How did the rich react to the 2008 financial crisis?
Mike Dolan of Reuters finds they started hoarding massive amounts of cash:
Estimates of the amount of cash that non-financial U.S., European and Japanese companies are sitting on is as high as $5 trillion — twice the levels of 10 years ago as capital expenditure and investment has largely seized up. A pick up in mergers and acquisitions this year is modest by comparison with bloated balance sheets. [Reuters]
Dolan points to a recent survey, which shows rich investors are storing a humongous 27 percent of their portfolios in cash — a greater amount than they held in any other asset class — including stocks, bonds and real estate — and double pre-crisis levels.
Hoarded cash loses purchasing power due to inflation. But that is a price worth paying for keeping wealth in a liquid and mobile form, which cash is.
Dolan argues that fear of higher taxation due to rising inequality is what is bugging corporations and the ultra-rich. That may be one motivating factor, but a larger one seems to be that the 2008 collapse unleashed deep and lingering fears of investment in general and the stock market in particular. With bond prices having remained ultra-high for years, and with stock markets having recovered from the 2008 crisis, and now making new highs, investors — who want to buy cheap and sell expensive — just don't see much that looks cheap to buy.
This has driven some investors and firms into alternative (and bubbly) markets like gold, Bitcoin, fine art, and London, Dubai and New York real estate, but the vast bulk is just sitting as cash, waiting for better opportunities to appear. John Aziz
"I don't want to be here tonight. I should not be here tonight," said Erica Smegielski, the daughter of the principal who died protecting her students in the Sandy Hook Elementary shooting, as she stood before the Democratic National Convention on Wednesday night. "I'm here alone without my mother."
In an emotional speech calling for gun control, Smegielski reminisced about her mother Dawn and urged America to elect "another mother who is willing to do what's right." "I am here alone without my mother, while too many politicians cower behind the gun lobby," Smegielski said.
Erica Smegielski: “I am here alone without my mother, while too many politicians cower behind the gun lobby.” https://t.co/BSQOX2e41o
— BuzzFeed News (@BuzzFeedNews) July 28, 2016
Smegielski was one of several speakers Wednesday urging action on gun control, including survivors and relatives of those killed at Mother Emanuel Church in Charleston, South Carolina, and the Pulse nightclub in Orlando, Florida. Becca Stanek
California Gov. Jerry Brown (D) takes climate change seriously, and slammed Donald Trump for not doing the same.
"Make no mistake: Climate change is real," Brown said. "The vast majority of world leaders and climate scientists like those at NASA and the Department of Defense, indeed almost anyone who chooses to think believes in the crisis of climate change and sees the moral imperative to take action." Listening to Trump talk at the Republican National Convention last week for "76 long and painful minutes," Brown said he heard Trump "conjure up a host of dark threats but never once mentioned the words 'climate change' or 'global warming.'"
Brown called climate change "unlike any other threat we humans face," and said it "will take heroic effort on the part of many people and many nations" to combat it. "Trump says global warming is a hoax," Brown said. "I say Trump is a fraud. Trump says there's no drought in California. I say Trump lies. It's not surprising that Trump chose as his running mate a man who denies there's such a thing as evolution." As president, Hillary Clinton will continue the work she did to fight climate change as secretary of state, Brown said, and will usher in a "clean energy revolution." This year is like no other, Brown added, since "rarely in American history have two parties diverged so profoundly. Even the know-nothing, anti-immigration party of the 1850s did not stray this far into sheer ignorance and dark fantasy as have the Republicans and their leader, Donald Trump." Catherine Garcia
At the Democratic National Convention on Wednesday, former Maryland Gov. Martin O'Malley (D) shared some wisdom from the playground: "Bullies are really just cowards in disguise." That knowledge, the one-time Democratic presidential candidate said, can also come in handy during the 2016 election, which is being dominated by Donald Trump's messages of fear and anger. "I say, to hell with Trump's American nightmare," O'Malley said. "We believe in the American dream."
The choice, O'Malley said, essentially comes down to Hillary Clinton — who he called "as tough as they come" — versus an "immigrant-bashing carnival barker." "Put a bully racist in his place, a tough women in hers: the White House," O'Malley said.
Watch a snippet of the speech, below. Becca Stanek
— ABC News Politics (@ABCPolitics) July 27, 2016
Senate Minority Leader Harry Reid (D-Nev.) let Donald Trump and the Republican Party have it Wednesday at the Democratic National Convention.
"When Trump decided to run for president, he probably said to himself, 'I'm an egomaniac, I don't believe in science, I believe women are inferior. Where would I feel at home?'" Reid said. "You know where that is." He went on to call Senate Majority Leader Mitch McConnell (R-Ky.)'s actions "craven" and said the only thing the GOP has accomplished is "setting the stage for a hateful con man, Donald Trump." Parents should be rightfully concerned about their children listening to the words coming out of Trump's mouth, Reid added, and "Republicans, you should have been careful also, because Donald Trump learned it from watching you. They say they believe in country first; what a joke."
The Republicans who refuse to stand up to Trump "believe in one thing and one thing only: party first," Reid said. "And this year, 2016, they've gone even further, nominating the poster child of 'Me first.' Trump knew that hateful rhetoric and dangerous policies are the way to win in today's GOP, but that's not how you win in America and that's not how America wins in the world." Reid then went on to plug his own party. Catherine Garcia
The Democratic National Convention is handing the microphone over to Republicans on Wednesday night. A damning video of conservatives declaring their party's presidential nominee Donald Trump unfit to lead the country is set to play in primetime on the big screen.
The video contrasts past Republican leaders' wisdom on what makes a true leader with worries from present-day GOPers over what a Trump presidency would mean for America. Some Republicans go so far as to suggest handing the nuclear code over to a man with the "temperament" of Trump would lead America into World War III.
Republicans including former Massachusetts Gov. Mitt Romney, Sen. Marco Rubio (R-Fla.), Sen. Lindsey Graham (R-S.C.) make appearances.
Check out the video, below. Becca Stanek
Rev. Jesse Jackson called for an assault rifle ban and end to the shootings of "young black men" during his speech Wednesday at the Democratic National Convention, adding that Hillary Clinton "understands the historic dimensions of the agony, hope, and promise of Black Lives Matter."
The civil rights leader also took a moment to congratulate Sen. Bernie Sanders (I-Vt.) for "energizing this campaign season," and told supporters that "the Bern must never grow cold." Jackson shared that he met Clinton years ago in Arkansas, and has watched her work tirelessly for children and the poor for decades. "There is a tug of war for America's soul," he said. "We have a clear choice, to take down the walls of separation and build bridges of hope and build unity." Love must "trump ignorance," Jackson said, and overcome "fear and hatred and violence." At the end of his speech, Jackson led the audience in a chant of "It's healing time, it's hope time, it's Hillary time." Catherine Garcia
New York City Mayor and very tall person Bill de Blasio spent his speaking slot at the Democratic National Convention reminding everyone just how "little" Donald Trump is. Trump, de Blasio said on Wednesday evening, "has degraded women to make himself feel big while showing us the truly little man that he is." He called Trump "one of the least generous billionaires our country has ever seen" and wondered how Trump can "pretend to be for American workers when he didn't even pay his own workers."
As much as Trump is "reckless, risky, wrong, and scary," de Blasio said, Hillary Clinton is "smart," "steady," "right," and "ready."
Watch a clip of the speech below. Becca Stanek
Bill de Blasio: Trump "has degraded women to make himself feel big while showing us the truly little man that he is" https://t.co/MFA7TsWkPw
— CNN (@CNN) July 27, 2016