From the Wall Street Journal's Wealth Report blog:
For the American wealthy, the year 1932 always conjures The Nightmare Scenario.
It was the year of reckoning both financially and politically.
After the 1929 crash and anemic recovery, American voters rose up in a wave of populist anger and sought to bring down the powerful cartels and plutocrats that they blamed for the country’s ills. Labor unrest was rife. In 1932, thousands of war veterans marched on Washington to demand their promised cash bonuses.
The year 1932 was the year Huey Long, “The Kingfish,” became a U.S. senator and launched his “Share Our Wealth” crusade, announcing that 4% of the American people own 85% of America’s wealth. (Today it’s closer to 60%). Long proclaimed, Michael Moore-like, that new limits had to be placed on the nation’s millionaires and billionaires:
“Giv’em a yacht! Giv’em a Palace! Send ‘em to Reno and give them a new wife when they want it, if that’s what they want. [Laughter] But when they’ve got everything on God’s loving earth that they can eat and they can wear and they can live in, and all that their children can live in and wear and eat, and all of their children’s children can use, then we’ve got to call Mr. Morgan and Mr. Mellon and Mr. Rockefeller back and say, come back here, put that stuff back on this table here that you took away from here that you don’t need. Leave something else for the American people to consume.”The same year, FDR was elected President and pushed through a tax increase on the wealthy that included a hike in the top rate to 63% from 35%.
The year 1932 was also the year that many of the wealthy recorded their biggest losses, as the “false bottoms” of 1930 and 1931 finally caved. In 1929, there were 413 Americans earning more than $1 million a year. In 1932, there were only 20, marking a 95% decline.
It was, in short, the annus horribilis for the American rich – both politically and financially.
Will 2012 mark a replay? It’s unlikely in politics, but financially, anything is possible....MORE