big on love, tolerance, and the human potential
1) Turning our markets into playpens for predatory behavior didn’t happen overnight, and it will not be fixed overnight.
2) But until we have public servants strongly focused on justice for all, we can expect the crime spree to go on.
3) After all, what we’re all learning is that, at least for large banks, crime pays.
Whether they maintain primary residences in New York or Hong Kong, Moscow or Mumbai, today’s super-rich are increasingly a nation unto themselves.
Alan Greenspan made a forceful case that the U.S. economy had become “very distorted.”
In the wake of the recession, high-income individuals, large banks, and major corporations had experienced a “significant recovery”; the rest of the economy, by contrast—including small businesses and “a very significant amount of the labor force”—was stuck and still struggling. What we were seeing, he argued, was not a single economy at all, but rather “fundamentally two separate types of economy,” increasingly distinct and divergent.
When the high priest of capitalism himself is declaring the growth in economic inequality a national crisis, something has gone very, very wrong.
Our light-speed, globally connected economy has led to the rise of a new super-elite that consists, to a notable degree, of first- and second-generation wealth. Its members are hardworking, highly educated, jet-setting meritocrats who feel they are the deserving winners of a tough, worldwide economic competition—and many of them, as a result, have an ambivalent attitude toward those of us who didn’t succeed so spectacularly.
Perhaps most noteworthy, they are becoming a transglobal community of peers who have more in common with one another than with their countrymen back home.
1 in 4 earn less than $9 per hour.
I was focusing on parents in low-wage families, documenting their accounts of working, being poor, and trying to keep children safe. But that changed when I spoke with Jonathan, a middle-aged “top manager” in a chain of grocery stores in the Midwest. I was asking him about the stresses of running a business that employed lots of low-wage parents.
He spoke of parents whom he got to know pretty well, who headed home each week with less than they needed to feed their families.
Yes, he said, it is the “going wage”—America’s “market wage”—that doesn’t cover the market cost of basic human needs. Still, it didn’t seem right to Jonathan. He described how it changed his job, tainted it, to be supervising people who couldn’t get by on what he paid them.
Jeffrey Winters, author of the 2011 book Oligarchy.
Winters coined the term “wealth defense industry” to describe this veritable army that serves the super-rich, and in a recent article in the American Interest he explained that it “is comprised of lawyers, accountants, wealth management consultants, revolving-door lobbyists, think-tank debate framers and even key segments of the insurance industry whose sole purpose is income defense for America’s oligarchs. “
It’s “a multi-billion dollar industry per year, and it feeds completely on the need of wealthy people to defend their wealth,” Winters says in an interview.
The paramount goal is simple and specific: “To not pay taxes and to keep as much of their fortunes as they possibly can across generations.”
The means are extremely complicated and expensive, typically involving individually tailored, painstakingly crafted techniques — or “structured tax products”– based on arcane interpretations of the nation’s 70,000-page tax code.
Those schemes often involve moving money through offshore tax havens and anonymous shell corporations — generally with the goal of sheltering the money and creating paper losses that can be applied to the client’s tax bill.
“The wealth defense industry arose as part of the demand on the part of wealthy people, but it’s now taken on a life of its own and is proactive.”
Exactly What Is Crony Capitalism, Anyway?
Crony Capitalists use the coercive powers of government to gain an advantage they could not earn in the market.
Well, we should know this stuff.
Yo!
The point of an economy isn’t to make money.
The point of money is to make an economy.
Six Walmart heirs are worth as much as the entire bottom 30 percent of Americans.
We awake each day to give our labor to a new feudalism. Nuts.
Well? This is THE question of the era.
The financial system is like an organ in the body of the economy. But is it the heart or the appendix?
It appears likely that official statistics overstate the financial sector’s contribution to GDP, and we now have evidence that this is indeed the case.
Once returns due to term and credit risk are removed, banks look like the average for all US firms.
In fact, banks appear to generate slightly lower returns than average firms !
Boy o’ boy. Have we been hustled.
Here, I Plead
Each Hold A Key,
A Part To Guarantee
Our Great Liberty.
Never Let It Be Said
We Are Succumbed By Dread.
Speak, “Don’t Tread!”
Shriek, “I’m Led
By Liberty’s Forum,
Our People’s Quorum!
Reason Is Our Day!
Justice Is Our Way,
Whistles On The Eagle’s Wing.
This Is What We Dream And Sing!”
Of All We’ve Seen Or Ever Knew
It Rests On What We Say And Do,
Regardless The State Of Style,
The Yard Of Cloth, The Mile Of Smile.
Face The Trouble!
Burst The Bubble!
Dissolve Our Pain.
Achieve Our Gain.
Each Can Reach,
So Reach To Each,
The Best Restitution
For Any Institution.
Network From Matrix,
Matrix From Node,
To Coin A Modern Ode.
Income inequality rose as banking regulations were eased…
From about 1933, when the federal regulation of banks was put in place, to 1980 when Chicago School theories began to shape policy, bank failures were rare. During those years incomes were much more equal, with a prosperous middle class.
Interview with Australia economist Steve Keen:
The best we can hope for is a lost two decades?
If we leave it to the basic mechanism by which capitalism eliminates excessive debt which is bankruptcy and a slow grinding process of paying the debt down. Once we get back down to the level of debt that the system actually needs which is far lower than the level of private debt we have now then the process will be over. But that could take something like 20 years.
You’ve also suggested that it could take a rising level of violence.
The trouble is when you have a growing population and an economy that is used to growth and people expecting to get employed when they leave school and they find that in fact there are not enough new jobs coming on to handle the new entrants into the labor market, even if you grow slightly less than the rate of population change, that means that [you have] a population which you’re saying in the recent media is a lost generation. Well, that lost generation only has one outlet and that is frustration and violence. It is not the way to manage an effective society to be caught in a trap like this.
Your argument is that politicians won’t listen until there is something to make them listen.
Absolutely. Politicians are reactive individuals. They’re not leaders most of them. The vast majority of them. They’ve been going along with the general trend of believing that a larger financial sector, more deregulation, is a good thing.
Will Hutton warns on Britain:
What is going to make the years ahead doubly fraught is that the ideologies that used to provide the basis for our democratic discourse have been as torched as the economy. This is a first-order crisis to which socialism, certainly as conceived and practised over the past 100 years, is no plausible answer.
But equally, nobody can dare argue that the solution is to press ahead with yet more of the free-market capitalism that has laid Britain and the west so low. The simple-minded nostrums that have poured from the great American neocon thinktanks have been tried and found wanting. An ideological vacuum coincides with the most testing economic times for decades.
We need vision and visionaries – but what we have is journeymen espousing bankrupt world views.
The illusion of infinite growth, like the Emperor’s New Clothes, is maintained by the Emperor. The citizenry see something naked and ridiculous which can’t be sustained.
Much like the housing crisis and the dot-com boom/bust, the Wall Street Empire is revealed as naked, even to the emperor himself. #OWS has already succeeded by one measure, they broke the shared fiction about Wall Street for all of us.
And:
What was once a useful distinction between the left and the right has become artificially crafted polarity of two sides to the same position.
The majority of the left and the right have come so close to the center to serve corporate interests and woo uncertain voters, that they collapsed into each other in a meaningless muddle.
Barry Ritholtz breaks it down for you.
No matter the GOP spin, we cannot blame housing policies from the 1930s or mortgage tax deductibility from even before that.
It is a statistical invalid argument, as the data show.
Examining the big lie: How the facts of the economic crisis stack up.
An examination of public documents involving Mr. Lauder’s companies, investments and charities offers a glimpse of the wide array of legal options for the world’s wealthiest citizens to avoid taxes both at home and abroad.
His vast holdings — which include hundreds of millions in stock, one of the world’s largest private collections of medieval armor, homes in Washington, D.C., and on Park Avenue as well as oceanfront mansions in Palm Beach and the Hamptons — are organized in a labyrinth of trusts, limited liability corporations and holding companies, some of which his lawyers acknowledge are intended for tax purposes.
HA!
‘What has the country so angry,” says Fred Siegel, “is the sense that crony capitalism has produced a population that lives off the rest of us without contributing. They’re right. It’s not paranoid.”
Great slogan but “we are the 99%” aims too low.
Why do Republicans advocate further tax cuts for the very rich even as they warn about deficits and demand drastic cuts in social insurance programs?
Well, aside from shouts of “class warfare!” whenever such questions are raised, the usual answer is that the super-elite are “job creators” — that is, that they make a special contribution to the economy.
It’s really the top 0.1%, not 1%, that have escaped with such a large slice of the pie.
And who are they? Let’s get one thing straight: They are not, on the whole, “job creators”.
Ian Walsh:
Which leads us to the sudden surge in the price of oil to $107 a barrel. On the face of it, this is crazy.
Yes, the US has had a bit of a recovery, but Europe is going hard core austerity. But this is the game the hot money is playing: they move out of bonds and into oil, out of oil and into bonds. $107/barrel oil means the US recovery (such as it is, which isn’t much) isn’t going to last much longer.
Being rich is about being liquid when everyone else isn’t, so you can buy up assets on the cheap.
When [IF] the rich are properly under control (ie. when you keep them terrified of government and the people, as they should be) they can’t create such buying opportunities, they have to wait for them….
Right now the rich can and are crashing asset prices by forcing countries into austerity through attacks on their currencies and control of their political elites. They then buy up assets for fire-sale prices.
These attacks …are deranged.
These attacks are about power: the global rich were bailed out after the crash, now they are using their hot money in attack after attack, demanding austerity, which will cause semi-permanent depression in those countries which accept it.
All of this is crazy.
The financial elites are on a plundering spree, gleefully using their power to force entire nations into poverty, blackmailing governments into huge payouts.
BBC’s Robert Peston: UK’s debt ‘biggest in the world’
The indebtedness of the UK – that’s the sum of household debts, company debts, government debts and bank debts – had risen to 492% of GDP, or almost five times the value of everything we produce in a single year.
…and is still the biggest relative to GDP of any of the big economies.
Japan’s debts were also 492% of GDP. US indebtedness is less, at 282% of GDP.
So what’s going on?
Well partly it’s to do with a phenomenon, that debt has been shuffled from the private sector to the public sector.
When banks stopped lending, and private-sector spending and investing collapsed, governments continued to spend, even though tax revenues were falling. So public-sector borrowing exploded.
To be clear, if governments had not continued to spend, our recession might well have become something much worse, a 1930s-style depression.
But it is fair to say that a consequence of banks, households and businesses trying to repay their debts has been a big increase in government borrowing.
What it means is that we must brace ourselves for many years of relatively low growth, perhaps 1% versus the 3% of the 16 boom years before the crash, because we no longer have the fuel of borrowing more and more every year.
The Divine Right of Capital, by Marjorie Kelly [link to .pdf]
In an era when stock market wealth has seemed to grow on trees—and trillions have vanished as quickly as falling leaves—it’s an apt time to ask ourselves, where does wealth come from?
More precisely, where does the wealth of public corporations come from? Who creates it?
To judge by the current arrangement in corporate America, one might suppose capital creates wealth—which is strange, because a pile of capital sitting there creates nothing.
“I tasted a beer and tried a cigarette once, as a wayward teenager, and never did it again.” —Mitt Romney
Whole sectors of the economy are dying.
Christensen retells the story of how Dell progressively lopped off low-value segments of its PC operation to the Taiwan-based firm ASUSTek —the motherboard, the assembly of the computer, the management of the supply chain and finally the design of the computer.
In each case Dell accepted the proposal because in each case its profitability improved: its costs declined and its revenues stayed the same. At the end of the process, however, Dell was little more than a brand, while ASUSTeK can—and does—now offer a cheaper, better computer to Best Buy at lower cost.
…the impact of foreign outsourcing on many other companies, including the steel companies, the automakers, the oil companies, the pharmaceuticals, and now even software development.
…steadily becoming primarily marketing agencies and brands: they are lopping off the expertise that is needed to make anything anymore.
George Monbiot on socialism for the rich:
For corporate welfare queens and their crystal baths, there is no benefit cap.
Limited liability, offshore secrecy regimes and state handouts ensure those at the top bear none of the costs they inflict on us.
…soon it will be impossible to actually arrive anywhere because everywhere will be full of people trying to get somewhere else…
Motor Car Madness,
written & produced in 1970 by Alan Wakeman.
…soon it will be impossible to actually arrive anywhere because everywhere will be full of people trying to get somewhere else…
Nations and their cities around the world suffering the fact that corporations have created damage rather than growth.
“The problem society faces, says Roger Martin, is that the best way to become rich is to trade value, not create value.”
This may seem counterintuitive at first.
After all, analysts have long painted a picture of growing inequality over the past few decades in whichthe top quintile’s share of the national income has risen while the share of the other 80 percent has fallen.
Almost all the gains for the top 20% was for the top 1%.
And half of that is accounted for by a tiny group within the top percent —the top 0.1 percent.
“No society ever thrived because it had a large & growing class of parasites living off those who produce.” -Thomas Sowell
here’s a fine fine fella pointing out something we didn’t know
It should not be forgotten in this debate that the greatest objection to the pipeline seemed to come from Nebraska.
Lest you forget Nebraska is the largest producer of corn ethanol west of the Mississippi River.
It has 34 ethanol plants, converting 769 million bushels of corn a year into 2 billion gallons of ethanol.
How big is Big Ag,
how big is Big Corn?
The equivalent of 130,000 barrels per day of our national oil production of around 900,000 barrels per day.
our headlines are so-o-o poor…
The economy has to grow faster than the population !
e is greater than p