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Rich get richer, everyone else not so much in the US expansion

NEW YORK (Reuters) – Last month, David Flomour, Defense Secretary David Gilmour, sold his $ 21.5 million guitar collection, including a piece – his famous Black Strat fender Stratocaster – for nearly $ 4 million to the owner of the US National Football League is the Indianapolis Colts.

FILE PHOTO: The painting by Claude Monet, part of the Haystack's "Les Meules" series, is featured on Sotheby's during a preview of its upcoming Impressionist and Modern Art Sales in New York, USA, May 3, 2019. REUTERS / Lucas Jackson / File Photo

The singer "Money" put a musical instrument sales record in the charity auction, marking yet another milestone for a thriving market just a few weeks after New York-based art dealer Sotheby & # 39; s Holdings ( BID.N ), Claude Monet's "Meules" auctioned for $ 110.7 million, the most ever for an impressionist painting.

And it is not just instruments or paintings in high demand among the world's billionaire sets. The auction houses now seem to be valuable vanity purchases: Just a few days before the Pink Floyd auction, French-Israeli cable dimer Patrick Drahi, which the company Altice earned in the US, made an offer of $ 3.7 billion for Sotheby & # 39; s, who had just hosted the Monet sales.

Welcome to the longest American economic expansion in history, one perhaps best characterized by exaggeration of extreme wealth and an ever-greater divide between the unimaginable kingdom and everyone else.

In fact, when the expansion entered its record position on the 121st month of Monday, signs of a new Gilded Age are everywhere.

Big-money deals are getting bigger, from corporate confessions and acquisitions, to individuals who buy luxury penthouses, sports teams, yachts, and all-frills pilgrimages to the ends of the earth. And while these deals take hold of headlines, it's a deeper trend at work. The number of billionaires in the United States has more than doubled in the last decade, from 267 in 2008 to 607 last year, according to UBS.

"The rich have become richer and they have become richer faster," said John Mathews, head of Private Wealth Management and Ultra High Net Worth at UBS ( UBSG.S ) Global Wealth Management. "The drive or consumption need has just been upscale."

But there are also signs of struggle and stagnation at lower income levels. The richest fifth of Americans hold 88% of the country's wealth, a share that has grown since the pre-crisis, the Federal Reserve data through 2016 shows. Meanwhile, the number of people receiving federal food stamps has peaked at 39 million, below the peak in 2013, but still up 40% from 2008, although the country's population has only grown by about 8%.

A decade ago, this type of growth was not thought possible. The American financial system was in a stroke and people feared bankruptcy could permanently undermine capitalism. Politicians encrypted to stabilize the markets and increase property prices when US homes emerged. They did less to cope with income and wealth inequality.

Now, many of the signs of mega-riches were going on that financial crisis on the screen.


The examples are large and small.

The cost of a dinner at the French Laundry, the elegant California restaurant, is up 35% to $ 325 per person, from $ 240 10 years ago, and hit inflation by nearly 20%.

Teaching at the Ivy League headquarters Columbia University is a hair below $ 60,000 a year, up half from $ 39,000 in the 2008 school year.

The US stock market, measured by the S & P 500. SPX, has tripled in it last decade.

Hedge fund manager Ken Griffin set a US home sale record when he bought a $ 238 million penthouse condominium at "Billionaires & # 39; Row" just outside New York City's Central Park.

Nevertheless, renting in New York has risen twice as fast as wages, according to StreetEasy data from 2010-2017, which pushes resident residents. US home prices were close to their lowest cost since 2008, according to ATTOM Data Solutions. And the number of homeless people sleeping in the town's homes is 70% higher than a decade ago, according to the Coalition for Homeless, a defense group.

"Under-resourced areas do not get any better; housing opportunities for them do not improve," said Carolyn Valli, chief executive of Central Berkshire Habitat For Humanity, in Pittsfield, Massachusetts, at a recent economic political event. Lack of large employers means fewer jobs in some areas, food, utilities and housing costs remain high. "It doesn't feel like a boom yet."

Undo what someone sees as the unfair economy has bubbled into their policies, with Democratic presidential candidates who promise to reduce health costs, guarantee jobs and tax the wealthy.

Economic decision makers believe that the expansion can be weak as a stimulus from tax cuts and low interest rates faint while an American-Chinese merchant breaker, worried that even the underrated The gain that low-income workers have made in the last decade is fragile and that people who just recently stayed in nn in the workforce, could be the first kick when a recession hit.

"The benefits of this long recovery are now reaching these communities to an extent that has not been felt for many years," said Federal Reserve Mayor Jerome Powell last week. "Many who have previously struggled to stay in the workforce now have the opportunity to add new and better chapters to their life stories. All of this underlines the importance of maintaining this expansion."

Reporting Trevor Hunnicutt; Further reporting by Conway G. Gittens; Editing by Dan Burns and Andrea Ricci

Our Standards: Thomson Reuters Trust Principles.

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