The business press continues to roll out the 0.1 percent porn.
Now it’s The Wall Street Journal launching a new weekly real estate section called, no joke: Mansion.
It’ll fit right in with WSJ. magazine, the NYT’s T, the FT’s How to Spend It, Bloomberg Pursuits, Forbes Life. Apparently, uber-rich are the last folks with discretionary cash who still read magazines and newspapers.
If you can make it through it, read Journal editor Robert Thomson’s hacked-out note on the launch:
The mantra for real estate has always been location, location, location - the location for the most intelligent, original, trustworthy and insightful journalism on prestige property is now The Wall Street Journal,” said Robert Thomson, editor-in-chief of Dow Jones & Company and managing editor of The Wall Street Journal. “We all like to think of our home as a mansion, even if it is a humble abode, and we all have the license to aspire, so we have created Mansion to be the home of both aspiration and real estate realization.”
— I think Mother Jones’s Kevin Drum is dead on with his theory of the financial crisis.
1. Income inequality goes up.
2. As a result, earnings of the middle class become sluggish….
3. And earnings of the rich skyrocket, a trend reinforced by lower tax rates on both labor and capital income.
4. Rich people eventually run out of sensible things to invest all this money in (because consumer demand is sluggish, see #2), so they get stupid.
5. Stupid money finances stupid loans to middle-class borrowers who can’t afford them (because their incomes are sluggish, see #2).
That fits in neatly with another sharp Drum post from last week on capital gains tax rates:
The usual reason for taxing capital lightly is that this encourages investment, and investment is what drives economic growth. But that presupposes that more capital is always and everywhere a good thing. I think this assumption deserves a closer look. The experience of the 90s, reinforced in spades by the experience of the aughts, suggests that, in fact, you can have too much capital. By taxing it so lightly, we may have encouraged too much capital formation. Without a thriving real-world economy to go along with it, this produced a housing bubble and a global economic crash.
I’d read a deep dive on that.
— The Financial Times reports that “JPMorgan suit heralds wave of US action.” Here’s the lede:
—A fraud suit against JPMorgan Chase is expected to be the first in a new wave of US regulatory action against banks for alleged wrongdoing in the run-up to the financial crisis.
The lawsuit, launched on Monday by the New York attorney-general, is being seen as a final attempt by US authorities to win fines and concessions from Wall Street before November’s presidential election.
I bolded the passive voice above to point out how the FT asserts things without backing them up. There’s no evidence at all here that this weak-tea suit (read Jon Weil on that) against JPMorgan, but not against any of its bankers, is the leading edge of a new wave of prosecutions.