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Why Does Maryland Have The Most Millionaires Per Capita? The Answer Might Make You Angry

Raining MoneyThe fat cats in Washington D.C. are living the high life, and they are doing it at your expense.  Over the past decade, there has been one area of the country which has experienced a massive economic boom.  Thanks to wildly out of control government spending, the Washington D.C. region is absolutely swimming in cash.  In fact, at this point the state of Maryland has the most millionaires per capita in the entire nation and it isn’t even close.  If you have never lived there, it is hard to describe what the D.C. area is like.  Every weekday morning, hordes of lawyers, lobbyists and government bureaucrats descend upon D.C. from the surrounding suburbs.  And at the end of the day, the process goes in reverse.  Everyone is just trying to get their piece of the pie, and it is a pie that just keeps on growing as government salaries, government contracts and government giveaways just get larger and larger.  Of course our founders never intended for this to happen.  They wanted a very small and simple federal government.  Sadly, today we have the most bloated central government in the history of the planet and it gets worse with each passing year.

If you were to ask most Americans, they would tell you that the wealthiest Americans probably live in cities such as New York or San Francisco.  But thanks to the Obama administration (and before that the Bush and Clinton administrations), the state of Maryland is packed with millionaires.  In particular, the Maryland suburbs immediately surrounding D.C. are absolutely overflowing with government fat cats that make a living at our expense.  Every weekday morning, huge numbers of them leave their mini-mansions in places such as Potomac and Rockville and drive their luxury vehicles to work in the city.  As the Washington Post has detailed, at this point approximately 8 percent of all households in the entire state of Maryland contain millionaires, and the rest of the area is not doing too shabby either…

In Maryland, nearly 8 out of every 100 households in 2014 had assets topping $1 million, giving the state more millionaires per capita than any other in the country, according to a new report from Phoenix Marketing International.

The rest of the Beltway isn’t lacking in millionaires either: The District and Virginia ranked in the top 10 among those with the highest number of millionaire households per capita in 2014. In Virginia, which was No. 6 on the list, 6.76 percent of the state’s 3.17 million households are millionaires. And in the District, which rounds out the top 10, 6.25 percent of its more than 292,000 households are millionaires.

And while not too many of them are millionaires, your average federal workers that toil in D.C. are doing quite well too.

Once upon a time, it was considered to be a “sacrifice” to go into “government service”.

Not anymore.

If you can believe it, approximately 17,000 federal employees made more than $200,000 last year.

Overall, compensation for federal employees comes to a grand total of close to half a trillion dollars every 12 months.

In fact, there are tens of thousands of federal employees that make more than the governors of their own states do.

Does that seem right to you?

If you want to live “the American Dream” these days, the Washington area is the place to go.  Just check out the following description of the region from the Washington Post

Washingtonians now enjoy the highest median household income of any metropolitan area in the country, and five of the top 10 jurisdictions in America — Loudoun, Howard and Fairfax counties, and Falls Church and Fairfax City — are here, census data shows.

The signs of that wealth are on display all over, from the string of luxury boutiques such as Gucci and Tory Burch opening at Tysons Galleria to the $15 cocktails served over artisanal ice at the W Hotel in the District to the ever-larger houses rising off River Road in Potomac.

And of course let us not forget the fat cats in Congress.

According to CNN, our Congress critters are now wealthier than every before…

The typical American family is still struggling to recover from the Great Recession, but Congress is getting wealthier every year.

The median net worth of lawmakers was just over $1 million in 2013, or 18 times the wealth of the typical American household, according to new research released Monday by the Center for Responsive Politics.

And while Americans’ median wealth is down 43% since 2007, Congress members’ net worth has jumped 28%.

Not only that, there are nearly 200 members of Congress that are actually multimillionaires

Nearly 200 are multimillionaires. One hundred are worth more than $5 million; the top-10 deal in nine digits. The annual congressional salary alone—$174,000 a year—qualifies every member as the top 6 percent of earners. None of them are close to experiencing the poverty-reduction programs—affordable housing, food assistance, Medicaid—that they help control. Though some came from poverty, a recent analysis by Nicholas Carnes, in his book White Collar Government: The Hidden Role of Class in Economic Policymaking, found that only 13 out of 783 members of Congress from 1999 to 2008 came from a “blue-collar” upbringing.

Incredible.

But even though almost all of them are quite wealthy, they don’t hesitate to spend massive amounts of taxpayer money on their own personal needs.

For example, according to the Weekly Standard, more than five million dollars was spent on the hair care needs of U.S. Senators alone over one recent 15 year period…

Senate Hair Care Services has cost taxpayers about $5.25 million over 15 years. They foot the bill of more than $40,000 for the shoeshine attendant last fiscal year. Six barbers took in more than $40,000 each, including nearly $80,000 for the head barber.

And in one recent year, an average of $4,005,900 was spent on “personal” and “office” expenses per U.S. Senator.

So the grand total would have been over 400 million dollars for a single year.

That seems excessive, doesn’t it?

And even when they end up leaving Washington, our Congress critters have ensured that they will continue to collect money from U.S. taxpayers for the rest of their lives

In 2011, 280 former lawmakers who retired under a former government pension system received average annual pensions of $70,620, according to a Congressional Research Service report. They averaged around 20 years of service. At the same time, another 215 retirees (elected in 1984 or later with an average of 15 years of service) received average annual checks of roughly $40,000 a year.

If you can believe it, there are quite a few former lawmakers that are collecting federal pensions for life worth at least $100,000 annually.  The list includes Newt Gingrich, Bob Dole, Trent Lott, Dick Gephardt and Dick Cheney.

Of course the biggest windfalls of all are for our ex-presidents.  Most Americans would be shocked to learn that the U.S. government is spending approximately 3.6 million dollars a year to support the lavish lifestyles of former presidents such as George W. Bush and Bill Clinton.

So does this make you angry?

Or are you okay with these fat cats living the high life at our expense?

Please feel free to add to the discussion by posting a comment below…

New Law Would Make Taxpayers Potentially Liable For TRILLIONS In Derivatives Losses

Derivatives - Banksters - Public DomainIf the quadrillion dollar derivatives bubble implodes, who should be stuck with the bill?  Well, if the “too big to fail” banks have their way it will be you and I.  Right now, lobbyists for the big Wall Street banks are pushing really hard to include an extremely insidious provision in a bill that would keep the federal government funded past the upcoming December 11th deadline.  This provision would allow these big banks to trade derivatives through subsidiaries that are federally insured by the FDIC.  What this would mean is that the big banks would be able to continue their incredibly reckless derivatives trading without having to worry about the downside.  If they win on their bets, the big banks would keep all of the profits.  If they lose on their bets, the federal government would come in and bail them out using taxpayer money.  In other words, it would essentially be a “heads I win, tails you lose” proposition.

Just imagine the following scenario.  I go to Las Vegas and I place a million dollar bet on who will win the Super Bowl this year.  If I am correct, I keep all of the winnings.  If I lose, federal law requires you to bail me out and give me the million dollars that I just lost.

Does that sound fair?

Of course not!  In fact, it is utter insanity.  But through their influence in Congress, this is exactly what the big Wall Street banks are attempting to pull off.  And according to the Huffington Post, there is a very good chance that this provision will be in the final bill that will soon be voted on…

According to multiple Democratic sources, banks are pushing hard to include the controversial provision in funding legislation that would keep the government operating after Dec. 11. Top negotiators in the House are taking the derivatives provision seriously, and may include it in the final bill, the sources said.

Sadly, most Americans don’t understand how derivatives work and so there is very little public outrage.

But the truth is that people should be marching in the streets over this.  If this provision becomes law, the American people could potentially be on the hook for absolutely massive losses

The bank perks are not a traditional budget item. They would allow financial institutions to trade certain financial derivatives from subsidiaries that are insured by the Federal Deposit Insurance Corp. — potentially putting taxpayers on the hook for losses caused by the risky contracts.

This is not the first time these banks have tried to pull off such a coup.  As Michael Krieger of Liberty Blitzkrieg has detailed, bank lobbyists tried to do a similar thing last year…

Five years after the Wall Street coup of 2008, it appears the U.S. House of Representatives is as bought and paid for as ever. We heard about the Citigroup crafted legislation currently being pushed through Congress back in May when Mother Jones reported on it. Fortunately, they included the following image in their article:

Derivatives Bill From Liberty Blitzkrieg

Unsurprisingly, the main backer of the bill is notorious Wall Street lackey Jim Himes (D-Conn.), a former Goldman Sachs employee who has discovered lobbyist payoffs can be just as lucrative as a career in financial services. The last time Mr. Himes made an appearance on these pages was in March 2013 in my piece: Congress Moves to DEREGULATE Wall Street.

Fortunately, it was stopped in the Senate at that time.

But that is the thing with bank lobbyists.  They are like Terminators – they never, ever, ever give up.

And they now have more of a sense of urgency then ever, because we are moving into a period of time when the big banks may begin losing tremendous amounts of money on derivatives contracts.

For example, the rapidly plunging price of oil could potentially mean gigantic losses for the big banks.  Many large shale oil producers locked in their profits for 2015 and 2016 through derivatives contracts when the price of oil was above $100 a barrel.  As I write this, the price of oil is down to $65 a barrel, and many analysts expect it to go much lower.

So guess who is on the other end of many of those trades?

The big banks.

Their computer models never anticipated that the price of oil would fall by more than 40 dollars in less than six months.  A loss of 40, 50 or even 60 dollars per barrel would be catastrophic.

No wonder they want legislation that will protect them.

And commodity derivatives are just part of the story.  Over the past couple of decades, Wall Street has been transformed into the largest casino in the history of the world.  At this point, the amounts of money that these “too big to fail” banks are potentially on the hook for are absolutely mind blowing.

As you read this, there are five Wall Street banks that each have more than 40 trillion dollars in exposure to derivatives.  The following numbers come from the OCC’s most recent quarterly report (see Table 2)

JPMorgan Chase

Total Assets: $2,520,336,000,000 (about 2.5 trillion dollars)

Total Exposure To Derivatives: $68,326,075,000,000 (more than 68 trillion dollars)

Citibank

Total Assets: $1,909,715,000,000 (slightly more than 1.9 trillion dollars)

Total Exposure To Derivatives: $61,753,462,000,000 (more than 61 trillion dollars)

Goldman Sachs

Total Assets: $860,008,000,000 (less than a trillion dollars)

Total Exposure To Derivatives: $57,695,156,000,000 (more than 57 trillion dollars)

Bank Of America

Total Assets: $2,172,001,000,000 (a bit more than 2.1 trillion dollars)

Total Exposure To Derivatives: $55,472,434,000,000 (more than 55 trillion dollars)

Morgan Stanley

Total Assets: $826,568,000,000 (less than a trillion dollars)

Total Exposure To Derivatives: $44,134,518,000,000 (more than 44 trillion dollars)

Those that follow my website regularly will note that the derivatives exposure for the top four banks has gone up significantly since I last wrote about this just a few months ago.

Do you want to be on the hook for all of that?

Keep in mind that the U.S. national debt is only about 18 trillion dollars at this point.

So why in the world would we want to guarantee losses that could potentially be far greater than our entire national debt?

Only a complete and utter fool would financially guarantee these incredibly reckless bets.

Please contact your representatives in Congress and tell them that you do not want to be on the hook for the derivatives losses of the big Wall Street banks.

When this derivatives bubble finally implodes and these big banks go down (and they inevitably will), we do not want them to take down the rest of us with them.

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