# What would happen if all the rich people left America? **URL:** \ **Category:** Great Debates\ **Created:** [August 3, 2011, 9:55am UTC](https://boards.straightdope.com/t/what-would-happen-if-all-the-rich-people-left-america/591304 "2011-08-03T09:55:00Z")\ **Posts on this page:** 20\ **Page:** 13
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [August 7, 2011, 5:51pm UTC](https://boards.straightdope.com/t/what-would-happen-if-all-the-rich-people-left-america/591304/241 "2011-08-07T17:51:04Z")
In front of a congressional committee ,the ratings agencies admitted they would give whatever rating the bank demanded. Their agency was raking in mega millions for providing the service. It was clear the banks would take their business to another ratings agency if they did not give the AAA they wanted. That included mortgages and CDOs. The system was corrupted by money and greed. The ratings agencies have a regulatory aspect to their business. When they rated crap AAA, investors trusted it. It burned millions of investors. In one email a rater said they would AAA a cow if the banks asked. ---
**Author:** ![emacknight](https://avatars.discourse-cdn.com/v4/letter/e/3ec8ea/32.png) [@emacknight](https://boards.straightdope.com/u/emacknight)\ **Post date:** [August 7, 2011, 5:52pm UTC](https://boards.straightdope.com/t/what-would-happen-if-all-the-rich-people-left-america/591304/242 "2011-08-07T17:52:10Z")
> [@gonzomax](#): > > [Credit rating agencies and the subprime crisis - Wikipedia](http://en.wikipedia.org/wiki/Credit_rating_agencies_and_the_subprime_crisis) The bankers p[aid them millions to rate their crap as AAA when it deserved a D. have you been living under a rock? I went to your link, neither the word “banker” nor “millions” appear in that article, nor any mention of rating agencies being paid. Did you mean to link to something else that says bankers paid millions? ---
**Author:** ![emacknight](https://avatars.discourse-cdn.com/v4/letter/e/3ec8ea/32.png) [@emacknight](https://boards.straightdope.com/u/emacknight)\ **Post date:** [August 7, 2011, 5:53pm UTC](https://boards.straightdope.com/t/what-would-happen-if-all-the-rich-people-left-america/591304/243 "2011-08-07T17:53:44Z")
> [@gonzomax](#): > > In front of a congressional committee ,the ratings agencies admitted they would give whatever rating the bank demanded. Did they admit to being paid millions by bankers? ETA: > [@gonzomax](#): > > In one email a rater said they would AAA a cow if the banks asked. Asked? Or paid millions, which is it? ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [August 7, 2011, 6:19pm UTC](https://boards.straightdope.com/t/what-would-happen-if-all-the-rich-people-left-america/591304/244 "2011-08-07T18:19:00Z")
> [@emacknight](#): > > Did they admit to being paid millions by bankers? > > ETA: > > Asked? Or paid millions, which is it? Yes they admitted they did it for the money. Yes they admitted they did it for the money. Yes they admitted the did it for the money. ---
**Author:** ![emacknight](https://avatars.discourse-cdn.com/v4/letter/e/3ec8ea/32.png) [@emacknight](https://boards.straightdope.com/u/emacknight)\ **Post date:** [August 7, 2011, 6:22pm UTC](https://boards.straightdope.com/t/what-would-happen-if-all-the-rich-people-left-america/591304/245 "2011-08-07T18:22:42Z")
> [@gonzomax](#): > > Yes they admitted they did it for the money. Yes they admitted they did it for the money. Yes they admitted the did it for the money. So you do you have a cite for that? So far you’ve said they did it because they were demanded of, and asked of. You provided a link that talked about conflicts of interest. But you have yet to show a link where, “They also knew enough to pay off the rating agencies like S&P.” You then said, “The bankers p[aid (sic) them millions to rate their crap as AAA when it deserved a D.” ---
**Author:** ![emacknight](https://avatars.discourse-cdn.com/v4/letter/e/3ec8ea/32.png) [@emacknight](https://boards.straightdope.com/u/emacknight)\ **Post date:** [August 7, 2011, 7:00pm UTC](https://boards.straightdope.com/t/what-would-happen-if-all-the-rich-people-left-america/591304/246 "2011-08-07T19:00:18Z")
> [@DMC](#): > > Much like earlier with your funny math that you have yet to back up, you’re very wrong. Clayton Anti-trust Act, Section 8. Oddly enough it seems to exclude financial corporations. [15 U.S.C. § 19 : US Code - Section 19: Interlocking directorates and officers](http://codes.lp.findlaw.com/uscode/15/1/19) ---
**Author:** ![DMC](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dmc/32/18049_2.png) [@DMC](https://boards.straightdope.com/u/DMC)\ **Post date:** [August 7, 2011, 7:16pm UTC](https://boards.straightdope.com/t/what-would-happen-if-all-the-rich-people-left-america/591304/247 "2011-08-07T19:16:35Z")
> [@emacknight](#): > > Clayton Anti-trust Act, Section 8. Oddly enough it seems to exclude financial corporations. > > [15 U.S.C. § 19 : US Code - Section 19: Interlocking directorates and officers](http://codes.lp.findlaw.com/uscode/15/1/19) When you have to move the goalposts from New York to San Francisco to get the answer you want, that doesn’t really count. The exchange was: [QUOTE=jayjay] It would be nice if we could have some regulation that says you can’t be the CEO of one company and simultaneously be on the BoD of another. If that doesn’t say “incipient cartel”, I don’t know what does. [/QUOTE] [QUOTE=emacknight] I’m pretty sure there is. [/QUOTE] You’ll note that there is nothing in that exchange that limited itself to corporations that fall under the Clayton act. ---
**Author:** ![DMC](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dmc/32/18049_2.png) [@DMC](https://boards.straightdope.com/u/DMC)\ **Post date:** [August 7, 2011, 7:24pm UTC](https://boards.straightdope.com/t/what-would-happen-if-all-the-rich-people-left-america/591304/248 "2011-08-07T19:24:36Z")
[QUOTE=emacknight] The bottom 80% of wage earners have only 16% of total wealth in America. When a spaceship leaves with 34% you have 66% left. The bottom 80% will have 24% of the remaining wealth. Hence my statement that after the top earners leave with their wealth, the next group will the lions share of what’s left over, so I guess you’re right, it’s not 20%. That’s disparity in America, the bottom have very very little. [/QUOTE] Again, this does nothing to back up your claim. Your claim was that those in in the $220-249K would have “probably” four times the combined wealth of those in the $0-219K range. THAT is what you were asked to back up and, after multiple attempts, have still failed to accomplish. Want to try again? Why don’t you tell us the combined wealth of those in the $220-249K range and the combined wealth of those in the $0-219K range and I’ll happily do the division. ---
**Author:** ![emacknight](https://avatars.discourse-cdn.com/v4/letter/e/3ec8ea/32.png) [@emacknight](https://boards.straightdope.com/u/emacknight)\ **Post date:** [August 7, 2011, 7:59pm UTC](https://boards.straightdope.com/t/what-would-happen-if-all-the-rich-people-left-america/591304/249 "2011-08-07T19:59:31Z")
> [@DMC](#): > > Again, this does nothing to back up your claim. Your claim was that those in in the $220-249K would have “probably” four times the combined wealth of those in the $0-219K range. THAT is what you were asked to back up and, after multiple attempts, have still failed to accomplish. Want to try again? Why don’t you tell us the combined wealth of those in the $220-249K range and the combined wealth of those in the $0-219K range and I’ll happily do the division. You seem so sure that I’m wrong, but all you can say is that you think I’m wrong. I’ve shown you plenty of data, none of which you are willing accept. Ignoring the reality that what I said was not a specific statement of fact, but that after the rich people leave, the next highest group will probably have 80% of what’s left. Unless you think the meek shale inherit the Earth after the rich people get raptured. What does “80% of the bottom earners owning 16% of the wealth” mean to you? Or do you consider people in the $220-249K part of that bottom? That pretty accurately backs up my claim. When you compare someone making $249k with someone making less than $50k (which currently includes half the population) how much will each have in relative 401Ks? House size. Number and value of cars. Are you that unfamiliar with how wealth is distributed in the US? Do you think there is some sort of inflection point, where people over $250k have lots, then people between $250 and $220 have very little, then it goes back up? ---
**Author:** ![DMC](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dmc/32/18049_2.png) [@DMC](https://boards.straightdope.com/u/DMC)\ **Post date:** [August 7, 2011, 7:59pm UTC](https://boards.straightdope.com/t/what-would-happen-if-all-the-rich-people-left-america/591304/250 "2011-08-07T19:59:33Z")
> [@emacknight](#): > > The bottom 80% of wage earners have only 16% of total wealth in America. When a spaceship leaves with 34% you have 66% left. The bottom 80% will have 24% of the remaining wealth. Hence my statement that after the top earners leave with their wealth, the next group will the lions share of what’s left over, so I guess you’re right, it’s not 20%. That’s disparity in America, the bottom have very very little. I think I see your mistake, so I’ll try to address this in a manner that makes sense to you, and I’ll leave out the snark for this purpose. 🙂 Note: I’m going call the 2-19% group “top 20%” for these purposes to avoid getting hung up on decimal places. I’m even going to assume a 100% overlap between income and wealth, because while I don’t think it’s that great of an overlap, there is definitely correlation. In other words, I’m going to bias this in your favor as much as possible. You are correct that using the numbers from your link means that the the top 20% remaining after the “spaceship to nowhere” leaves would have 76% of the wealth, leaving 24% for the bottom 80%. While that isn’t the 80% you claimed, I’d even call it close enough if it fit the scenario. The problem is that the scenario you put forth was that the $220-249K group would have 80%. The $220-249K group is but a tiny subset of the top 20% of those remaining. In fact, the top 20% is going to be made up of households starting below $100k. If you want to make the claim that those remaining who make between say $80-249K would control 80% of the wealth, then sure, but that’s not close to the original claim. ---
**Author:** ![emacknight](https://avatars.discourse-cdn.com/v4/letter/e/3ec8ea/32.png) [@emacknight](https://boards.straightdope.com/u/emacknight)\ **Post date:** [August 7, 2011, 8:06pm UTC](https://boards.straightdope.com/t/what-would-happen-if-all-the-rich-people-left-america/591304/251 "2011-08-07T20:06:03Z")
> [@DMC](#): > > When you have to move the goalposts from New York to San Francisco to get the answer you want, that doesn’t really count. The exchange was: Goal posts? Let’s look at that exchange again shall we, try to follow along: > [@jayjay](#): > > It would be nice if we could have \*\*some \*\*regulation that says you can’t be the CEO of one company and simultaneously be on the BoD of another. If that doesn’t say “incipient cartel” > [@me](#): > > I’m pretty sure there is. “it would be nice if we could have some regulation” “I’m pretty sure there is some regulation” > [@you](#): > > you’re very wrong No I’m not, because there are **some** regulations the limit interlocking board of directors, specifically related to anti-trust laws, which are meant to limit cartels. So it seems I was not wrong, and once again you failed to read properly before throwing a little tantrum. > [@DMC](#): > > You’ll note that there is nothing in that exchange that limited itself to corporations that fall under the Clayton act. And there was nothing in that exchange to preclude them. He asked about “some regulation” and I provided a link to “some regulations.” ---
**Author:** ![DMC](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dmc/32/18049_2.png) [@DMC](https://boards.straightdope.com/u/DMC)\ **Post date:** [August 7, 2011, 8:52pm UTC](https://boards.straightdope.com/t/what-would-happen-if-all-the-rich-people-left-america/591304/252 "2011-08-07T20:52:21Z")
> [@emacknight](#): > > And there was nothing in that exchange to preclude them. He asked about “some regulation” and I provided a link to “some regulations.” That’s just stupid pedantic bullshit and yet it is still not accurate. Since you want to go that route, the words were: [QUOTE=jayjay] It would be nice if we could have some regulation that says you can’t be the CEO of one company and simultaneously be on the BoD of another. [/QUOTE] The Clayton Antitrust Act doesn’t prevent any CEO, without exception, of being on the BoD of another company. The only thing it does is prevent you (the few times it is actually enforced) from being on certain other boards. Every single CEO is allowed to be on numerous other boards. So no, there is not “some” regulation that says you can’t be the CEO of one company and simultaneously be on the BoD of another. Man, you are grasping hard here and still failing. With the level of stupidity in your posts in this thread, it’s actually hard to avoid being snarky. ---
**Author:** ![treis](https://avatars.discourse-cdn.com/v4/letter/t/bc79bd/32.png) [@treis](https://boards.straightdope.com/u/treis)\ **Post date:** [August 7, 2011, 10:16pm UTC](https://boards.straightdope.com/t/what-would-happen-if-all-the-rich-people-left-america/591304/253 "2011-08-07T22:16:02Z")
> [@Sam\_Stone](#): > > Are you joking, or perhaps being hyperbolic to make a point? Because if you seriously think you could run a company like HP without being laughed out of the place, I don’t know what to tell you. You have no idea what a job like that entails on a day to day basis. Admittedly, I’ve never worked at the CEO level, but at every job I’ve been at, there’s always been someone at one level who could easily step up and do the job of their boss. I find it hard to believe that there aren’t a bunch of VPs out there that would be perfectly capable of stepping up to the spotlight if we lose the top 1%. Someone brought up sports, and indeed, that is a good example. Off the top of my head, I can count three HoF NFL QBs that got their start when the player in front of them was injured. In '99 Kurt Warner was slated to be the back up to Trent Green. Green tore his ACL, and Warner went on to win the MVP. 2001 Brady was the back up to Bledsoe. Bledsoe goes down, and Brady ends up having a pro-bowl season on route to winning the title. In '92, Favre was the backup. Same story as above. Starter goes down, and Favre has a pro bowl season. So yeah. I think there are obviously people we are going to sorely miss. There are serial inventors and guys that found profitable business after profitable business. But the guy that spent 35 years in an industry before finally getting to CEO? Pshh, there are a dozen guys just as good. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [August 7, 2011, 11:56pm UTC](https://boards.straightdope.com/t/what-would-happen-if-all-the-rich-people-left-america/591304/254 "2011-08-07T23:56:34Z")
> [@Sam\_Stone](#): > > I’d have to think about that, but I don’t see what’s wrong with the board determining the salary. If the shareholders don’t like it, they can throw the board members out. > > One of the problems with corporate governance now is that the shareholders are increasingly disconnected from the company - they’re often large mutual funds or other institutional investors. Their interests are not necessarily the same as the long-term interests of the company. So having a middleman with vested powers like a board of directors seems to me to be a good check on what could be capricious decisions made by people with short-term gains in mind. Just as long as you agree that the owners don’t set the salary, I’m satisfied. But saying that the shareholders can throw the board out is kind of like saying the Cubans could throw Castro out. There are the same number of candidates on the ballot in both cases. Lots of shares are owned by pension funds, which are a bit more hands on than your average shareholder. Perhaps elections not being a joke would get more people to be more involved, but that’s no excuse for the system we have today. ---
**Author:** ![Zeriel](https://avatars.discourse-cdn.com/v4/letter/z/58956e/32.png) [@Zeriel](https://boards.straightdope.com/u/Zeriel)\ **Post date:** [August 8, 2011, 1:22am UTC](https://boards.straightdope.com/t/what-would-happen-if-all-the-rich-people-left-america/591304/255 "2011-08-08T01:22:47Z")
> [@emacknight](#): > > So put your hat in the ring. What’s stopping you? Quit wasting so much time on the internet and go get a CEO position. Then report back to us on your findings, we’ll still be here. > > If you could do the job better, and cheaper, why haven’t they hired you for the position? Why haven’t you started your own business that you could run better? Primarily? Because I enjoy IT, and I’m on my third Director of IT/CTO posting. I just think it’s hilarious that some jackoff whose fires I end up having to put out is getting paid 3-6x as much as me to jack around and, say, play EVE during work hours. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [August 8, 2011, 1:30am UTC](https://boards.straightdope.com/t/what-would-happen-if-all-the-rich-people-left-america/591304/256 "2011-08-08T01:30:16Z")
> [@Sam\_Stone](#): > > People at those levels almost always have other sources of income. If not while they’re in government, then as soon as they get out. They go to work for lobbying firms, or they get speaking fees or appearance fees, or they wind up on the boards of organizations, being paid a salary, just so the organization can trade on the cachet of their names. > > Go look at some legislator who entered government relatively poor and who puts in a term or two in Congress, then check out their net worth five years after leaving. > > Barack Obama had a net worth of a few hundred thousand bucks when he became President. He’ll probably be worth 50 million dollars within a few years after he leaves office. > > Bill Clinton has a net worth of $80 million dollars. Clinton’s wife has a good job. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [August 8, 2011, 1:34am UTC](https://boards.straightdope.com/t/what-would-happen-if-all-the-rich-people-left-america/591304/257 "2011-08-08T01:34:50Z")
> [@DMC](#): > > For the record, it’s not just us little “peons” who think this way. Warren Buffett is in the same camp, and while I make a higher salary than he does, there aren’t a lot of people who are going to challenge his business acumen. Buffet says it is a class war and his class won. The beauty of this thread .is it shows how. Guys are begging to cut taxes to the rich. The rich love it when people buy stupid stuff like that. They are laughing all the way to the Cayman Islands. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [August 8, 2011, 2:01am UTC](https://boards.straightdope.com/t/what-would-happen-if-all-the-rich-people-left-america/591304/258 "2011-08-08T02:01:58Z")
> [@DMC](#): > > Are there people on this board begrudging the salary of Bob Lutz (who wasn’ t the CEO) or people like him? I don’t have a problem with the salaries of Lutz, Jonathan Ive, and other rock stars like them. Of course not being CEOs, their compensation is typically far more driven by market forces. I’m pretty sure Ive doesn’t pick his own compensation committee, for instance. Not just people on this board. across the world execs are amazed how overpaid ours are. Chinese , Indian and Japanese execs are doing far better jobs. they are better managers. They make a fraction of what our overpaid primadonnas get. They are subjected to real scrutiny in their jobs. They can get fired. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [August 8, 2011, 3:04am UTC](https://boards.straightdope.com/t/what-would-happen-if-all-the-rich-people-left-america/591304/259 "2011-08-08T03:04:26Z")
> [@emacknight](#): > > I went to your link, neither the word “banker” nor “millions” appear in that article, nor any mention of rating agencies being paid. Did you mean to link to something else that says bankers paid millions? That explains a lot. \The article says the agencies were put under huge pressure to lower ratings standards in order to make huge salaries and bonuses. The banks paid them to provide lower standards and crank them out. It also says the ratings companies were receiving record salaries and profits. Really, you can not see the connection. You did not see where they were pressured to pass substandard mortgages and that is how they made record profits. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [August 8, 2011, 5:05am UTC](https://boards.straightdope.com/t/what-would-happen-if-all-the-rich-people-left-america/591304/260 "2011-08-08T05:05:44Z")
> [@gonzomax](#): > > That explains a lot. \The article says the agencies were put under huge pressure to lower ratings standards in order to make huge salaries and bonuses. The banks paid them to provide lower standards and crank them out. It also says the ratings companies were receiving record salaries and profits. > Really, you can not see the connection. You did not see where they were pressured to pass substandard mortgages and that is how they made record profits. It was even simpler than that. The banks got to choose who did the rating. The agencies knew that if they gave a lower rating than the bank wanted, (i.e., an honest one) the bank would go to another agency who would play ball. No one got paid directly, but the people involved knew that their bonuses depended on getting business. They also published their criteria, which allowed the banks to create instruments with just the right amount of crap to be AAA. That is why there is a proposal to randomly assign new products across agencies, so that there is no more incentive to rate things higher than they deserve to be rated. [Previous page](https://boards.straightdope.com/t/what-would-happen-if-all-the-rich-people-left-america/591304.md?page=12)