Nomi Prins tracks the acute worsening of inequality since the 2008 financial crisis.
Like a gilded coating that makes the dullest things glitter, today’s thin veneer of political populism covers a grotesque underbelly of growing inequality that’s hiding in plain sight. And this phenomenon of ever more concentrated wealth and power has both Newtonian and Darwinian components to it.
In terms of Newton’s first law of motion: those in power will remain in power unless acted upon by an external force. Those who are wealthy will only gain in wealth as long as nothing deflects them from their present course. As for Darwin, in the world of financial evolution, those with wealth or power will do what’s in their best interest to protect that wealth, even if it’s in no one else’s interest at all.
In George Orwell’s iconic 1945 novel, “Animal Farm,” the pigs who gain control in a rebellion against a human farmer eventually impose a dictatorship on the other animals on the basis of a single commandment: “All animals are equal, but some animals are more equal than others.” In terms of the American republic, the modern equivalent would be: “All citizens are equal, but the wealthy are so much more equal than anyone else (and plan to remain that way).”
Certainly, inequality is the economic great wall between those with power and those without it.
As the animals of Orwell’s farm grew ever less equal, so in the present moment in a country that still claims equal opportunity for its citizens, one in which three Americans now have as much wealth as the bottom half of society (160 million people), you could certainly say that we live in an increasingly Orwellian society. Or perhaps an increasingly Twainian one.
After all, Mark Twain and Charles Dudley Warner wrote a classic 1873 novel that put an unforgettable label on their moment and could do the same for ours. “The Gilded Age: A Tale of Today” depicted the greed and political corruption of post-Civil War America. Its title caught the spirit of what proved to be a long moment when the uber-rich came to dominate Washington and the rest of America. It was a period saturated with robber barons, professional grifters and incomprehensibly wealthy banking magnates. (Anything sound familiar?) The main difference between that last century’s gilded moment and this one was that those robber barons built tangible things like railroads. Today’s equivalent crew of the mega-wealthy build remarkably intangible things like tech and electronic platforms, while a grifter of a president opts for the only new infrastructure in sight, a great wall to nowhere.
Twain’s Gilded Age
In Twain’s epoch, the U.S. was emerging from the Civil War. Opportunists were rising from the ashes of the nation’s battered soul. Land speculation, government lobbying, and shady deals soon converged to create an unequal society of the first order (at least until now). Soon after their novel came out, a series of recessions ravaged the country, followed by a 1907 financial panic in New York City caused by a speculator-led copper-market scam.
From the late 1890s on, the most powerful banker on the planet, J.P. Morgan, was called upon multiple times to bail out a country on the economic edge. In 1907, Treasury Secretary George Cortelyou provided him with $25 million in bailout money at the request of President Theodore Roosevelt to stabilize Wall Street and calm frantic citizens trying to withdraw their deposits from banks around the country. And this Morgan did — by helping his friends and their companies, while skimming money off the top himself. As for the most troubled banks holding the savings of ordinary people? Well, they folded. (Shades of the 2007-2008 meltdown and bailout anyone?)
The leading bankers who had received that bounty from the government went on to cause the crash of 1929. Not surprisingly, much speculation and fraud preceded it. In those years, the novelist F. Scott Fitzgerald caught the era’s spirit of grotesque inequality in “The Great Gatsby” when one of his characters comments: “Let me tell you about the very rich. They are different from you and me.” The same could certainly be said of today when it comes to the gaping maw between the have-nots and have-a-lots.
Income vs. Wealth
To fully grasp the nature of inequality in our 21st-century gilded age, it’s important to understand the difference between wealth and income and what kinds of inequality stem from each. Simply put, income is how much money you make in terms of paid work or any return on investments or assets (or other things you own that have the potential to change in value). Wealth is simply the gross accumulation of those very assets and any return or appreciation on them. The more wealth you have, the easier it is to have a higher annual income.
Let’s break that down. If you earn $31,000 a year, the median salary for an individual in the United States today, your income would be that amount minus associated taxes (including federal, state, Social Security and Medicare). On average, that means you would be left with about $26,000 before other expenses kicked in.
If your wealth is $1,000,000, however, and you put that into a savings account paying 2.25 percent interest, you could receive about $22,500 and, after taxes, be left with about $19,000, for doing nothing whatsoever.
To put all this in perspective, the top 1 percent of Americans now take home, on average, more than 40 times the incomes of the bottom 90 percent. And if you head for the top 0.1 percent, those figures only radically worsen. That tiny crew takes home more than 198 times the income of the bottom 90 percent. They also possess as much wealth as the nation’s bottom 90 percent. “Wealth is power,” as Adam Smith so classically noted almost two-and-a-half-centuries ago in “The Wealth of Nations.” Sadly, the adage seldom seems outdated.
Inequality and the Federal Reserve
Obviously, if you inherit wealth in this country, you’re instantly ahead of the game. In America, a third to nearly a half of all wealth is inherited rather than self-made. According to a New York Times investigation, for instance, President Donald Trump, from birth, received an estimated $413 million (in today’s dollars, that is) from his dear old dad and another $140 million (in today’s dollars) in loans. Not a bad way for a “businessman” to begin building the empire (of bankruptcies) that became the platform for a presidential campaign that oozed into actually running the country. Trump did it, in other words, the old-fashioned way — through inheritance.
In his megalomaniacal zeal to declare a national emergency at the southern border, that gilded millionaire-turned-billionaire-turned-president provides but one of many examples of a long record of abusing power. Unfortunately, in this country, few people consider record inequality (which is still growing) as another kind of abuse of power, another kind of great wall, in this case keeping not Central Americans but most U.S. citizens out.
The Federal Reserve, the country’s central bank that dictates the cost of money and that sustained Wall Street in the wake of the financial crisis of 2007-2008 (and since), has finally pointed out that such extreme levels of inequality are bad news for the rest of the country. As Fed Chairman Jerome Powell said at a town hall in Washington in early February, “We want prosperity to be widely shared. We need policies to make that happen.” Sadly, the Fed has largely contributed to increasing the systemic inequality now engrained in the financial and, by extension, political system. In a recent research paper, the Fed did, at least, underscore the consequences of inequality to the economy, showing that “income inequality can generate low aggregate demand, deflation pressure, excessive credit growth, and financial instability.”
In the wake of the global economic meltdown, however, the Fed took it upon itself to reduce the cost of money for big banks by chopping interest rates to zero (before eventually raising them to 2.5 percent) and buying $4.5 trillion in Treasury and mortgage bonds to lower it further. All this so that banks could ostensibly lend money more easily to Main Street and stimulate the economy. As Sen. Bernie Sanders noted though, “The Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world… a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else.”
The economy has been treading water ever since (especially compared to the stock market). Annual gross domestic product growth has not surpassed 3 percent in any year since the financial crisis, even as the level of the stock market tripled, grotesquely increasing the country’s inequality gap. None of this should have been surprising, since much of the excess money went straight to big banks, rich investors and speculators. They then used it to invest in the stock and bond markets, but not in things that would matter to all the Americans outside that great wall of wealth.
The question is: Why are inequality and a flawed economic system mutually reinforcing? As a starting point, those able to invest in a stock market buoyed by the Fed’s policies only increased their wealth exponentially. In contrast, those relying on the economy to sustain them via wages and other income got shafted. Most people aren’t, of course, invested in the stock market, or really in anything. They can’t afford to be. It’s important to remember that nearly 80 percent of the population lives paycheck to paycheck.
The net result: an acute post-financial-crisis increase in wealth inequality — on top of the income inequality that was global but especially true in the United States. The crew in the top 1percent that doesn’t rely on salaries to increase their wealth prospered fabulously. They, after all, now own more than half of all national wealth invested in stocks and mutual funds, so a soaring stock market disproportionately helps them. It’s also why the Federal Reserve subsidy policies to Wall Street banks have only added to the extreme wealth of those extreme few.
The Ramifications of Inequality
The list of negatives resulting from such inequality is long indeed. As a start, the only thing the majority of Americans possess a greater proportion of than that top 1percent is a mountain of debt.
The bottom 90 percent are the lucky owners of about three-quarters of the country’s household debt. Mortgages, auto loans, student loans, and credit-card debt are cumulatively at a record-high $13.5 trillion.
And that’s just to start down a slippery slope. As Inequality.org reports, wealth and income inequality impact “everything from life expectancy to infant mortality and obesity.” High economic inequality and poor health, for instance, go hand and hand, or put another way, inequality compromises the overall health of the country. According to academic findings, income inequality is, in the most literal sense, making Americans sick. As one study put it, “Diseased and impoverished economic infrastructures [help] lead to diseased or impoverished or unbalanced bodies or minds.”
Then there’s Social Security, established in 1935 as a federal supplement for those in need who have also paid into the system through a tax on their wages. Today, all workers contribute 6.2 percent of their annual earnings and employers pay the other 6.2 percent (up to a cap of $132,900) into the Social Security system. Those making far more than that, specifically millionaires and billionaires, don’t have to pay a dime more on a proportional basis. In practice, that means about 94 percent of American workers and their employers paid the full 12.4 percent of their annual earnings toward Social Security, while the other 6 percent paid an often significantly smaller fraction of their earnings.
According to his own claims about his 2016 income, for instance, Trump “contributed a mere 0.002 percent of his income to Social Security in 2016.” That means it would take nearly 22,000 additional workers earning the median U.S. salary to make up for what he doesn’t have to pay. And the greater the income inequality in this country, the more money those who make less have to put into the Social Security system on a proportional basis. In recent years, a staggering $1.4 trillion could have gone into that system, if there were no arbitrary payroll cap favoring the wealthy.
America is great at minting millionaires. It has the highest concentration of them, globally speaking, at 41 percent. (Another 24 percent of that millionaires’ club can be found in Europe.) And the top 1 percent of U.S. citizens earn 40 times the national average and own about 38.6 percent of the country’s total wealth. The highest figure in any other developed country is “only” 28 percent.
However, while the U.S. boasts of epic levels of inequality, it’s also a global trend. Consider this: the world’s richest 1 percent own 45 percent of total wealth on this planet. In contrast, 64 percent of the population (with an average of $10,000 in wealth to their name) holds less than 2 percent. And to widen the inequality picture a bit more, the world’s richest 10 percent, those having at least $100,000 in assets, own 84 percent of total global wealth.
The billionaires’ club is where it’s really at, though. According to Oxfam, the richest 42 billionaires have a combined wealth equal to that of the poorest 50 percent of humanity. Rest assured, however, that in this gilded century there’s inequality even among billionaires. After all, the 10 richest among them possess $745 billion in total global wealth. The next 10 down the list possess a mere $451.5 billion, and why even bother tallying the next 10 when you get the picture?
Oxfam also recently reported that “the number of billionaires has almost doubled, with a new billionaire created every two days between 2017 and 2018. They have now more wealth than ever before while almost half of humanity have barely escaped extreme poverty, living on less than $5.50 a day.”
The rich are only getting richer and it’s happening at a historic rate. Worse yet, over the past decade, there was an extra perk for the truly wealthy. They could bulk up on assets that had been devalued due to the financial crisis, while so many of their peers on the other side of that great wall of wealth were economically decimated by the 2007-2008 meltdown and have yet to fully recover.
What we’ve seen ever since is how money just keeps flowing upward through banks and massive speculation, while the economic lives of those not at the top of the financial food chain have largely remained stagnant or worse. The result is, of course, sweeping inequality of a kind that, in much of the last century, might have seemed inconceivable.
Eventually, we will all have to face the black cloud this throws over the entire economy. Real people in the real world, those not at the top, have experienced a decade of ever greater instability, while the inequality gap of this beyond-gilded age is sure to shape a truly messy world ahead. In other words, this can’t end well.
Nomi Prins, a former Wall Street executive, is a TomDispatch regular. Her latest book is “Collusion: How Central Bankers Rigged the World” (Nation Books). She is also the author of “All the Presidents’ Bankers: The Hidden Alliances That Drive American Power” and five other books. Special thanks go to researcher Craig Wilson for his superb work on this piece.
Does the problem with lie with money (a money system) or with the fact of the existence of so many scammers? I believe that most caring people would assert that the problem lies with the fact of the existence of so many scammers. They may be right. Regardless, I also believe that we don’t need money. And I don’t think that there’s any truly good reason for a money system. It may sound simplistic, but I believe that money exists for one reason only, namely so that a few can have more of it, and more of the things and power that it buys, than others.
Nice article! loved to read it!
General Strike FOR The Common Good!!!
History shows us this is all about The Empire. The Empire is going to eat Venezuela. It will eat America eventually too. Uncontrolled growth for the sake of growth itself is the malignant ideology of cancer.
That’s about right. As others have noted, it’s the missing dimension in much commentary about Venezuela. Capitalist expansion is a b. I ‘enjoyed’ Todd Gordon’s book, “Imperialist Canada,” which explains in detail the problem for vulnerable people in not only the (so-called) Third World, but in the hinterlands of the imperial marauders’ home countries.
The global debt clock Our interactive overview of government debt across the planet
The clock is ticking. Every second, it seems, someone in the world takes on more debt. The idea of a debt clock for an individual nation is familiar to anyone who has been to Times Square in New York, where the American public shortfall is revealed. Our clock shows the global figure for almost all government debts in dollar terms.
Oct. 23, 2018 America Owes the Largest Share of Global Debt
While policymakers in the United States wrestle with a growing federal budget deficit, America isn’t alone in facing soaring government debt.
Thank you Nomi Prins. If only people would wake up and realise the power is in their hands to change things. But part of the syndrome seems to be that people feel helpless when they are not. WE have to make the changes happen. If we do not I do not see a future for the West and possibly not for Planet Earth and all its inhabitants.
You may enjoy on this topic:
All Governments and Nations of the world must take back their Sovereign rights that enable them to create their own supply of domestic, Interest free, Debt free, Social Capital; two American States still do this and they are free of financial woes depressing the rest. The creation of money and credit must be returned to our Democratic Parliament; Private Banks, Corporations and Financial Institutions, must not control this important economic function.
This first step eliminates untold quanta of inflation and Government debt.
Every Sovereign independent Nation, or co-operating group of Nations, will then use this Social Capital to totally eliminate Poverty and deprivation in their communities by issuing to all that need it a Social Wage, structured to provide a basic break even living standard, a wage that will continue until death. The first duty of Government is to take care of it’s population; A Government controlled and issued Social Wage is the only way to successfully do it.
The Government will finance all conceivable Public Support and Infrastructures, Health, Housing, Education, etc.
The Capital so created will be the sole means of financing the Nations Money Supply. This will become a “trickle Up” economy, replacing the nonsense and fraud of trickle down.
No Capital or subsidy will go to Private Enterprise directly, for if it did it would cause serious inflation.Capital created, issued, and “spent” directly into circulation, as described above, would not create inflation.
There would be no interference with Private Free Enterprise. The Private Sector could employ those in receipt of the Social Wage by offering wages and hours of employment capable of inducing people to do the work offered; the wage so earned would supplement the Social Wage, not replace it. Thus inducing mutually agreed working conditions at much lower wage costs to employers. This will create a community of independent wage earners , no longer working as wage slaves, always in fear of job loss and penury. Will this not negate the export of jobs to China etc.?
Thus far no or very little taxpayer money has been expended. The burden of support for the poor and the provision of social and community infrastructure has been lifted from the backs of Corporate enterprise and the wealthy.
Control of Social provision has passed out of the hands of those not willing to vote for higher taxation to facilitate it. Working people are no longer at the total mercy of Market forces, that all too often deprive them of livelihood and take away hard won assets such as homes and pension funds. Working people can more easily change employment to escape unsatisfactory masters and conditions.
Price and cost inflation will be substantially reduced by ceasing tax collections from wage and salary earners. Instead individuals will pay tax only once, and that when they are deceased, when the taxman will be empowered to asses deceased estates for tax liability. Avoidance will place the whole estate in danger of confiscation. Is there a better time to pay tax other than when we are dead?
Corporations and all other commercial enterprise will pay an annual flat rate tax levied against total net profits. Avoidance and imaginative minimisation schemes will not be allowed. Tax allowances will be strictly limited to running,overheads and development expenditures.
Government will not subsidise free enterprise, this great engine, by it’s own rules, must stand or fall on it’s own merits.
The value of Sovereign currencies for international purposes will be decided by co-operating Governments, taking into account the requirements concomitant with considerations related to employment levels and relative standards of living between co-operating Nations, and by Supply and Demand balancing. Exchange rates will be fixed, stable, out of the influences of manipulators and traders.
There is much more to be said in explanation, however your own knowledge and experience will enable you to foresee the many attributes such a system delivers. My title for it is “THE UNIVERSAL ECONOMY” for it will work anywhere and for every person, fairly and equitably.
A very small “coterie” of Bankers and money power people is holding the world to ransom, they spend untold quanta of money spreading lies about the evils of Social Capital, and the “Printing” of money, for their own narrow self interested purposes; populations around the world are in mortal danger because they are at mercy and threat of money lenders and commodity traders, somehow the money power must be diluted.This dilution will come about when we elect independent politicians who will stop our representative system from being dominated by Corporate and private billionaire funding, intended to create and bend the World to their selfish undemocratic intentions; often requiring many death sacrifices, violent destructive War, resource theft , and all without regard for human-rights and the general well-being of innocent civilian populations. We need to change our system from being “representative” to being one of “participatory”; and return the Economy to one operating on sound money. This formula, most importantly,takes care of the constantly increasing costs due to population growth and other demographics.
Have you read this far? then you have my thanks, your commentary would also be most appreciated.
Thomas I’m part of a family business going on to its fourth generation. I always say to my family executive peers of how nice it would be if every job applicant came to work for us already covered under a National Single Payer Healthcare system. I would further stress how nice it would be if every one of our employees had not only single payer healthcare but, that they would have tax subsidies towards their utilities. No more advances in pay due to an overdue utility bill. No more our struggling to provide the correct healthcare plan. Now that would be a welcome game changer by any measure.
Thomas what you wrote here makes so much sense yet, why is it no American will entertain anything different of what we now got? Where we Americans should have expanded the FDR model of a democratic socialism we Americans instead prefer to struggle inside of a capitalistic system only built for the rich. Socialist ideas are threatening to the so called American way of life as, the Cold War Commie days have over played it’s hand and still many an American buys into this notion of a Stalin type world to the point these Americans ignore their own situation.
Good read Thomas… in fact I’m going to read your comment again to better understand it. Joe
I imagine that it is hard to compete in today’s world of unfettered “free trade” when many of the countries you are competing against do have a single payer health care system. I would think that doesn’t make for a “level playing field”. Unfortunately, small family business’s have virtually zero say with their so-called “representatives”, all of whom feed at the trough of “big pharma” and the private “insurance” lobby.
Looking Backward: 2000–1887 by Edward Bellamay was first published in 1888. The premise of this book was that a parasitic class of investors was evolving in economic markets which looking backward into the history of the economy and the blood sweat and toil of workers was gist for the mill for the financial markets which contributed not to the actual forging of the nation but were just profiteers gaining their riches through trading in securities.
This was a best seller in its day and the tale of the rise of the investor class as parasites profiting on the toil of of labor class back in 1888 rang true for laborers when Edward Bellamy launched his book and it was a best seller. No doubt that it was the case that many Americans identified with the theme of the book but fast forward to today with the major media spinning the truth and telling lies we have no conception of how these elite rulers of our economic and political high offices hold almost complete control over our government, our supposedly independent national media in support of our corporations which pay no taxes, depend on corporate bailouts by the government and have a lock on any anything that might throw a candle on their crimes.
There is nothing new under the Sun. Great wealth becomes a self serving and widely broadcast tool time and time again.
When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time, a legal system that authorizes it and a moral code that glorifies it.
Frederic Bastiat – (1801-1850) in Economic Sophisms
“Extraordinary Popular Delusions and The Madness of Crowds” by Mackay (1841) is another great tome to understand human folly….
Until the Reagan era, the wealthy were taxed at higher rates even with deductions, under Carter was 65%. Reagan lowered taxes suddenly to about 30%, started US on the credit card path also. The US has never looked back.
“Although ignored by the US media, the message to come out of The World Economic Forum this year was nothing short of revolutionary: the movers and shakers of the world have been informed that globalization is in need of a serious overhaul. As one lone congressman from Ohio, Tim Ryan, recently put it, summing up a largely unspoken concern among American politicians as well: “We need to rescue capitalism from itself.”
If you have the time then read this.
During the hard-fought 2018 election season, I reminded fellow activists, “Beating the far-right GOP is just the price of admission to the real battle: defeating business-as-ususal corporate Dems, a longer and harder fight.”
A few courageous and visionary souls are already seeking substantive change. They deserve our full support. But please, when deciding which candidates to back, look at their records more than rhetoric. “It’s the outcomes, stupid.”
“Ye shall know them by their fruits.” —Matthew 7:20
Na0mi Prins cites Animal Farm. In Orwell’s tale, the animals start their revolt against their human master as equals. But pigs gradually game the system and take over, in the end joining with their ostensible enemy but natural ally, human bosses. Orwell’s concluding line: “The creatures outside looked from pig to man, and from man to pig, and from pig to man again: but already it was impossible to say which was which.”
This scene reminds me of business-as-usual corporate politicians. Look at economic outcomes for the past 40 years under ‘competing’ parties; there’s little difference. “The poor looked from Democrat to Republican, and from Republican to Democrat, but in terms of economic outcomes it was all but impossible to say which was which.”
Moving from allegory academic study: https://scholar.princeton.edu/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf. It confirms that Congress consistently serves the interests and preferences of the donor class, not you and me.
Strictly in terms of outcomes — not rhetoric, but economic outcomes — it’s like you and I don’t exist. We’re less than the dirt under their shoes. You think not? Read the study findings.
I agree that the government serves the donor class. I has basically always sought undue political influence through the process of donating large amounts of money to politicians and their campaigns. Thus the politicians that serve the donor class get reelected and the cycle continues.
But what has changed in the last 30 years is the systematic undermining of and possibility that the citizens of the Nation can undo this through democratic processes. Gerrymandering has been used to diminish the power of voters to change the status quo. Elimination of campaign finance regulations have enabled the wealthy to have even greater influence and control over the voters by increasing the influence of the donor class. Elimination of media regulations have freed our commercial telecommunications industry to skew and spin current events portraying favor for the rich and disdain for social justice candidates. The rise of cable news has only made the problem of right wing propaganda which serves the interests of the wealthy more influential. Suffice it to say that the sole goal of the news organizations is to present the views that are pleasing to the wealthy and which drive their own economic interests as well as the donor class which can also be applied to the media defined as advertisers. who control the content of the information presented by the power of the purse. Media consolidation also enabled by the elimination of regulations has collapsed the diversity of sources of 90% of everything most Americans see on TV, read in newspapers or hear on the radio or what is published in books to just six giant commercial corporations with the same profit driven motives seeking the bucks to fund their operations by providing information that is not informative or useful to citizens but is useful to the wealthy advertisers and corporations that fund these few giant corporations. Their reach extends to magazines, movies, newspapers, books, school curriculum, to the selection of the advertising dollars they will or will not accept based on their corporate self interests.
The Supreme Court has sided with the commercial interests and the donor class be protecting unlimited political donations as protected free speech and has even defined those donations as secret and protected from any disclosure or reporting requirements as more protections for the free speech rights of the very wealthy to wield unlimited influence over the government in secret.
All of these events have received little coverage from the media since they stand to gain tremendously from the new laws because all of the dark money flows to them in the form of political advertising dollars spent by the politicians out of their fat coffers to win elections. So Americans are largely in the dark that the courts and the legislative and administrative branches of government are now largely controlled by the funds coming from the donor class.
The investment has been a boon for the wealthy as conservatives slash taxes on the wealthy and cut social programs and eliminate regulations on their industries enabling them to increase their profits. Environmental, financial, legal, regulations are all on the chopping block as the wealthy count their new piles of cash.
The past several Republican administrations have been on bended knee offering their services to wealthy corporations to do their bidding from ending Net Neutrality to scraping environmental protections to battling all government social programs. A few of these big deregulations were also provided by Democrats. Bill Clinton signed banking deregulation into law. Reagan deregulated the savings and loan industry. In each case massive corruption and greed destabilized those institutions shortly after the news laws went into effect resulting in huge government industry bailouts directly resulting from their own deregulatory laws without any recrimination or examination by the courts or the government or the media. The government simply created trillions of dollars in debt to prop up the failed examples of their policies.
In the case of energy deregulation masterminded by Dick Cheney Enron and Williams Energy became the poster children of the manipulation of energy markets resulting in the energy crisis in California with additional fees charged to customers as rolling blackouts served to shakedown the population and fleece them of billions. Enron later imploded as 20 billion dollars went up in smoke. The resulting Senate hearings were laughable as they did not address the root cause of the financial crisis which was the government deregulations themselves. I thought Jeff Skilling was going to say “I broke what laws?” “you guys rewrote the laws” but he never did. Or if he did it was squashed. He was one individual that went to jail and he was just released from prison after twelve years. Personally, I would have liked the outcome to be that Phil Gramm be publicly sanctioned for his role in ushering the energy deregulations through Congress and his other adventures as the God of Deregulation. But he retired with honor.
Laws are passed to eliminate the ability of the government to control any excesses of corporations and all of it is enshrined in the hallowed halls of free market economics embedded by now in the very marrow of the bones of our economy and our government as the inviolable holy grail to salvation of our economy. The high priests of the conservative movement have granted themselves a status above the law as regulators such as the SEC have gone deaf dumb and blind to rampant insider trading and instead choose to prosecute Elon Musk to the fullest of the law for a Tweet because the technologies his company are developing are a disruption to the power status quo. Even the financial dealings of our president are never pressed and the reasons for our agitation with Venezuela which are obviously all about oil are never vetted by the media.
Pharmaceutical corporations were granted the ability to advertise via deregulation of laws that forbade it. Now, the news hour is flooded with pharmaceutical advertising dollars while the pharmaceutical companies jack up the prices of their products to obscene levels knowing that the media, locked into a financial arrangement, will say nothing to potentially interrupt the flow of advertising cash. It was interesting to watch as Trump made public statements recently that he was going to do something to curb price gouging by pharmaceutical companies. During this time, drug ads were greatly diminished. The drop in the number of ads was very noticeable. The message to the media was clear. Cover this and you will feel the pain in your wallets. So much for the “ethicals” industry ethics. The combination of the high prices for drugs compared to other nations and the insurance and healthcare industry price hikes have resulted in 18% of our GDP going to healthcare with results that place us at the end of the list of advanced nations for healthcare outcomes despite the propaganda we have the best system in the World. If the measure is healthcare corporate profits then this is certainly true.
The philosophy of deregulation as the cure and the government as the problem as originally defined by Reagan will never be called into question despite its numerous costly failures in nearly every segment of our economy. I have not touched the deregulation of our Military by Cheney and the excesses of companies like Halliburton and the trillions of dollars that have gone “missing” which the DOD and GAO cannot account for in the Iraq war. We don’t even think in terms of how our military wastes money despite its 700 billion dollar annual budget that increases by tens of billions of dollars every year signed into law by our elected politicians who are supposed to control wasteful spending.
Suffice it to say that the largely ignored price tag for the numerous deregulatory schemes engineered by our elected officials over the last 40 years have cost our nation many trillions of dollars that have simply vanished by hook or by crook. Wars, financial collapses, the financial harm done to tens of millions of citizens by the deregulations the government passed into law litter our history with the corruption and failures that resulted in US taxpayers holding the bag for bailing them out time and time again. Currently the national debt is 21 trillion dollars. In 1980 before the election of Reagan it was under 1 trillion. These numbers are disputable depending on how the calculations are made but the trend is clear.
Here is a quote from long ago.
“When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time, a legal system that authorizes it and a moral code that glorifies it.”
Frederic Bastiat – (1801-1850) in Economic Sophisms
Good post. You covered a lot of ground. I suspect that near total collapse will have to occur before real structural change will become possible. It will not be pretty, and I fear for the future for our youth.
If you want to see more of Nomi’s genius, watch the movie , Heist:who stole the american dream?
An excellent article. It follows the works of economist Jack Rasmus.
Before the civil war, land speculation was more and more important. In
earlier history, there was little money. There were many land speculators
such as George Washington who stole land which had been promised
as payment to his soldiers. Land speculation was an institution and
Andrew Jackson was a successful speculator of his era.
Benjamin Franklin was, among other things, a slaveholder and in
the process of engineering a company to own land.
A special thanks should be to the mention of the many Obama
tax cuts. (See Rasmus, THE OBAMA RECOVERY which
describes the programs in detail as well as their origins and
Does this system need reform or is it a total failure and we need a new system ?A science based,sustainable, efficient ,abundance program that promotes our better angels.This capitalistic system does the opposite. IT IS EVIL.We must invent one that works.NLRBE NATURAL LAW RESOURSE BASED ECONOMY.
Predator Take All — Investor State Capitalism..
LBJ & the Congress opened up the Mexican border to Export Processing Zones in 1965. .. And now, 54 years later, what would you say is the percentage of Americans who even know what an Export Processing Zone is? .. Is your guess, next to zero? .. I would agree. .. But yet back then, in just 10 years by 1975, the unionized North East, it had already been dubbed “..the Rust Belt..” .. Why?
Let’s ask a few quick questions about what the EPZ Predator – Investor State enjoys – over your business enterprise:
* Does your business have access to very special & privileged loans?
* Does your business have access to very special exemptions from tax laws?
* Does your business have access to very special duty free & tariff exemptions?
* Does your business have access to the the premiere U.S. corridors, & their costs have been shifted away from you?
* Does your business enjoy a strong hold to artificially set, and exploit workers wages?
Back in 2006, this film was made in Tijuana. .. It was 41 years after 1965. Take a look at the workers housing conditions, etc.. .. Leave alone, the $1.69 per hour wage that the consumer gouged American has to compete against..
‘Maquilapolis, City Of Factories’
About 10 years ago, working with AZ State insiders (Predators), Williams Air Force Base, it was Federally designated an EPZ. This Air Force Base is inside the interior of the U.S. (..Mesa, Arizona), and has since been renamed, Gateway Airport. .. (.. As an Investor, how would you like to throw out your workers? Reduce your staff to 2 salesman & an engineer. Email your order to Mexico. And upon it’s arrival, back the 18 wheeler down to the tarmac to receive your tax exempt duty free goods?) … Just move inside the chain link fence, bb.. .. Hurry now. .. It’s going fast..
.. But yet again, today (54 years later), how many Americans are equipped to read this article from just this past week, and know what it really means for themselves – and for the future of the Predatory Investor State?
‘At Gateway Airport, U.S. and Mexico are one’
Anyone who thinks the US: is a democracy with open information for voters; has free and open business enterprise; isn’t plagued by deeply corrupt politicized law enforcement and justice – is just a fool.
Since the 1990s, liberals overall have made the “inequality” discussion simpler by marginalizing minimum wage workers and simply disappearing those who are far worse off. Only those who are of current use to employers are deemed human beings, a part of the public discussion. Certainly, preference is given to “regular Americans” — the middle class (reframed as “working class” in 2016). What could be more normal in a capitalist state?
the working class became something called a middle class after the salvation of capitalism – the new deal – helped create home owners from among previous renters and brought other creature comforts previously unknown to a growing minority taught they/we were a “middle” class high above those lowly workers..in a non-class society, no less..the capitalist collapse of the present era has forced some of us to face reality, as the slaves once did when they were divided into house negroes, who lived a helluva lot better than field negroes, until political economic reality forced some to face that they were still slaves..others became a black bourgie class below white bourgies but operating as most of our (?) government does in service to its minority masters..still true, sadly, but hopefully changing, fast, or else. the reframing or branding of people into smaller identity groups is the problem but solving it involves the overwhelming majority who work for a living to see themselves/ourselves as what we are: a working class majority, ruled by minority great wealth, as this piece by nomi prins clearly points out .
While accounting is fine, I wish articles like this were more geared towards understanding the meaning of this wealth inequality. Otherwise it just becomes a game of envy, which is unattractive and boring. The reason to despise wealth inequality is not envy, it is that (as quoted) wealth is power.
The ultra rich have real power – control over land, labor forces and politicians. An accounting of wealth inequality should make clear the differential in these terms, not just dollar amounts.
From another perspective, “inequality” is about survival itself. We fret about the gap between middle class and rich, while ignoring the canyon between poor and middle class. A great deal has changed since our government (Clinton administration) stripped the US poor of the most basic human rights (UN’s UDHR) to food and shelter, but those who are still doing OK aren’t interested. We talk about “wealth inequality,” to the exclusion of our poverty crisis.
USGOVT . needs to tax this wealth–stocks etc.—the intangibles–and provide Medicare For All —-for all the people living in this country—-#yeswecan—
Piggies by George Harrison
Have you seen the little piggies
Crawling in the dirt
And for all the little piggies
Life is getting worse
Always having dirt to play around in.
Have you seen the bigger piggies
In their starched white shirts
You will find the bigger piggies
Stirring up the dirt
Always have clean shirts to play around in.
In their styes with all their backing
They don’t care what goes on around
In their eyes there’s something lacking
What they need’s a damn good whacking.
Everywhere there’s lots of piggies
Living piggy lives
You can see them out for dinner
With their piggy wives
Clutching forks and knives to eat their bacon.
The picture / Beatles picture of this was exhibited brilliantly in the ending of their movie “The Magic Christian”
hard to find now [ probably censured ] but emphatically encapsulated in The Closing Scene of the movie…
. . .Please Find.
Who’s Coup – ing Who?
The United States Federal Gov’t
to arrogate or appropriate the manufacture and sales of
OPIOID addictive drugs
in the face of 48000 deaths 2017
that are predicted to rise to 200000 avoidable deaths by 2025.
In other words
the Dark Cloud of Negligence by Gov’t Agencies will
continue to Take the Lives
thru the Power of Addictive Dependance
upon Pharma Prescribed Pain Medications where Accidental/Overdose
brings either Immediate Accidental Death or Habitual Dependance. …
The United States Gov’t Agencies were setup for
of We The People Against Corporate/Gov’t Maladroit Infringement
Who’s Coup – ing Who?
Why doesn’t Az-hole Trump recognize the DRUG MULES of
Prescription Marketeers / War Profiteers inside his own cabal?
48000 deaths in 2017 / 76000 by 2022 / 82000 by 2025–
Pharma gets away with murder as you Trump for a WALL !!!
The charlatan quack tax cheating fraudulent Pretender /
Who? Money Loving Death Angel
linage of Ivory Tower Vanity
Welcome to the Red -Brick Reality
— (cobble stones )
(of) The Fall Of The High & Mighty. …
It’s the clutching that really gets me.
“…. today’s thin veneer of political populism covers a grotesque underbelly of growing inequality that’s hiding in plain sight.”
I disagree when Naomi Prins states this condition.
Instead, the most “grotesque” aspect of the carnage in American society are the millions and millions of Americans who remain completely ignorant of what, how and who has destroyed this nation.
We’ve been brainwashed into believing that happiness is synonymous with “consuming.” We’ve been brainwashed into believing “socialism” is evil, or any other system that supports average citizens, and we’ve been brainwashed into completely dismissing the words of sages – sages of the Western World, The Eastern philosophers, and the few wise people of today.
There is NO moral or ethical courage left in America’s soul because all of them have failed to educate themselves on this great evil force that is decapitating us all. That’s the raw truth.
YES,BLAME THOSE WITH NO MONEY,POWER OR TIME FOR THIS.Really?
I didn’t get that from Rowena’s comment. Rowena appears to say that most all people of all stripes are willfully oblivious to the ever worsening situation. I didn’t read anything about blaming the poor and powerless.
My slogan is this: We need to recognize that we are Citizens living in a society First, not CONSUMERS living in an economy.
Rowena may not be blaming them, just not including your observation.
We’ve been brainwashed (and put to sleep) by the
“Vampires” and “Zombies” of FICTITIOUS television and movies.
The actual vampires hit us with the DOD created AIDS epidemic –
The actual zombies hit us when Opioids were unleashed as “pain killers”
(Federally Legalized Pharmaceutical Addition to Drugs)
(as Vampires drain the blood / AIDS was/is blood defiling man made killer)
( an open eyed look at street level opioid addicts is as a picture of Zombies )
As the Zombies are Irretrievably Addicted in their human flesh
So the Vampires are Habituated into a craving to swallow human blood
(Lust of the Flesh, Lust of the eyes , and the Pride of life” )
*#@&*%$ — and so, we tolerate Mass Murder in the name of “American Exceptionalism ”
and/or the Establishment
of the “New World Order”
created under the guise of
“God Bless America” as if
Anglo Saxon Europeans
stand as owners/rulers of
the whole of planet earth !
Now With CRISPR and
looming battles over DNA
Strands, Sequences, Armies… .
New killing fields with the
Darkness of Death looming. …
The rotting soul of America is stinking to high heaven.
That the rich are oppressing the rest of us is so obvious, that someone writing a book about it is a sign that people are so asleep to reality that they are being robbed blind while looking the other way. Propaganda against “socialism” is truly magically effective.
As Tony Soprano says: “Money goes up, shit flows down. It’s that simple.”
Or, as David Harvey says: “Capitalists are trapped inside the system they created.”
David Harvey has also said: “The future is foreclosed.”
When William, Duke of Normandy, won the battle of Hastings in 1066 and the landmass that would become today’s Great Britain, he divided the country up and handed it out to his supporters and hangers on. And today, roughly 1,000 years later something like 75% of Great Britain is still owned by either the descendants of those supporters and hangers on or the British government itself. Think about that.
Bread and circuses during ancient Roman times.
Junk food and cable TV nowadays.
Instead of average voters learning and thinking about the effects of things like wealth concentration and demonization of various foreign leaders , they’re fed gay rights, transgenderism, and “Kavanaugh hearings” by a garbage media.
Anyone who thinks it’s happening like this without guidance, just naturally, is clueless.
Benjamin Franklin visited London and was shocked at how destitute much of the population was relative to a relatively prosperous America. He attributed the difference to the differences in the banking systems.
The clamoring from financiers for a European-style central bank so they could compete on international markets, led to the Establishment in 1913 of the Federal Reserve, a private central bank which loaned Treasury (taxpayer) money to banks at low interest, to be loaned to Main Street and bring in higher interest return, or to be ‘invested’ in Wall Street (and generally manipulated wherever possible), high risk, high reward. The guaranteed high, compound interest return on “lending” to the government what is basically at root the taxpayers’ money, is the institutionalized swindle that was the difference between what Franklin saw in London vs what worked so much better in Philadelphia. The stock market has increased exponentially, with occasional reverses (recessions), and the return has been so great, that the basic banking role of lending capital to industry for a small return, is hardly worth bothering with (unless that can be tied in to bundled, insured commodities in the Market or developed into Debt, which brings in a much higher usurious interest rate). No doubt the $tens of trillions Obama gave to guarantee Wall Street’s bad loans and risks and Trump’s corporate and tax cuts for the Rich went into buying up companies’ stock (thus manipulating the price) or gambling in much higher yielding derivatives /hedge funds (since the government will bail out the speculators and bank stock holders if the market collapses, as it always does).
The obvious solution is to have the Treasury take back the role of lending taxpayers’ money to both banks and government, and dissolve the Federal Reserve. Banks which fail should be treated like any other businesses that fail; badly. Having a system that manipulates and controls the stock markets means the Big NYC Banks will always prosper (and no doubt they will weather most financial storms).
Alternatives to the high yield stock market are much needed. Perhaps if the Treasury controls the money, taxpayers could directly invest in secure, long-term higher interest government bonds, and cut out the bank middlemen. Maybe direct funding to local business ventures, with tax incentives similar to what Amazon always gets? Communities need to find a way to control their own financial climate, otherwise there will be the continual gutting of Main Street America, with pennies-on-the-dollar schemes to further enrich our parasitic Coastal Elite bankers, who don’t enrich their customers and create nothing (debt?) of products or service.
Of course you are correct. Money needs to be re-marketed:, a dollar should be a “unit of fiscal energy,” and people need to understand that money should be socialized because it is a device of exchange COMMON TO US ALL. The dollar should say “Common Currency” instead of Federal Reserve Note.
Most of the original heads of the CIA were banksters or lawyers, Sullivan and Cromwell is Wall Street’s go to law firm,and where the Kennedy murderer Allan Dulles hailed from. Trumps Steve Munuchin is one of them. You can’t read very far in any respectable, well researched deep state study without coming across Allen Dulles’s name. He’s ubiquitous in the founding of the BIS in Basel, Switzerland, in laundering Nazi stolen gold, in various coupes and military overthrow. Kennedy fired him and wanted to shatter the CIA into a thousand pieces.
But more to the point, the CIAs main reason for existence is to preserve, protect and expand the self-granted privilege of a cabal of banksters to control the creation and issuance of money in their respective countries. They realized long ago that owning and controlling media was paramount to keeping this money monopoly.
It’s not coincidental that most of the countries we’re invaded were decoupling from the almighty US Petrodollar. Most all else is a distraction and sideshow not least is this carefully protected duopoly, two-party system.
The ultra paranoia over “socialism is because as the public realizes the advantages of socializing those things we have in COMMON, then eventually people are going to want to socialize money into a COMMON CURRENCY.
When we do that the rumbling sound you hear will be the Rothschilds rolling in their graves.
whatever the financial institutions are and do, whether banking locally, statewide or globally, they exist to pursue private profit first, to be gained at a market where forces prevail that leave a global majority unable to survive and a fast nearing national american majority close to drowning in debt in order to do so..whatever this or that individual or institutional force has done historically or hysterically or both, those forces have led to the current condition outlined in the article and need to be radically changed to a democratic political economy that puts humanity first in its/our need for food, clothing and shelter before dabbling in other pursuits at a market, whether it’s free or not..it will take a social revolution to bring about real democracy and not the fake form some of us still think “we” have because “we” can vote for lesser evils in self defense that finds polio better than cancer..blaming people for not seeing what some of us think we see is a form of bigotry that reduces us all, rather than seeing to it that if we are correct, we need to communicate with all those unfortunates not as smart as we think we are, if we truly wish democracy and not just continued rule of a master race of self chosen people deluded into divisions that strengthen minority rule when it is most critical to replace it, for the first time in history, with true majority governance .
No doubt much truth there, although I will suggest that bank failures should be prevented rather than punished, because their depositors are not guilty, and their money has already been siphoned off when the collapse comes.
The usual progress of “The Great Wave.”
I just read yesterday that Trump is proposing loosening up the recent restrictions on “payday” lenders. The people with power in our society are heartless vultures feeding on roadkill. Someone like Bill Gates or the Koch brothers could give away 90% of their money tomorrow, and still have lifestyles more lavish than most of us can even dream. Yet “anti-trust” and “usury” laws have fallen by the wayside, and monopolies like Amazon thrive because the rich can buy the legislators. Bill Gates is so rich it is literally not worth his time to pick up a hundred dollar bill if he drops one on the ground!
Check out this map for an easy way to see the disparity of wealth in America.
This land was your land, this land’s now my land.
From California, to Venezuela.
From the Gulf Stream waters,
To the Gulf War oil wells
This land was made for me and me.
Social Darwinism. Survival of the Richest. It’s the New Normal. Until it isn’t.
“The crisis consists precisely in the fact the old is dying and the new cannot be born; in this interregnum, a great variety of morbid symptoms appear.” ~Gramsci
A false underlying premise in this article is that a flawed economic system has been corrupted. The system was designed in an era of widespread slavery. It is designed to shift profits from workers to the owners of capital, it is working exactly intended. It was never designed to create a prosperous working class. There were some reforms in the 30s to the system, but these have since been eroded by modern day robber barons.
Exactly a century ago, Yeats wrote:
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
We’ve learned nothing in that century.
What seems like hundreds of years ago when I was a very young man back in the 1960’s, I used to work in a factory setting and during our lunch break politics was what the older men used to talk about. I recall an old sage saying to then, “John, money always goes to money and you and I don’t have any money so we never will have any money” At the time I thought he was wrong, but now I’m in my dotage and just as hard up as ever I was, I know he war right.
John – as another “very young man back in the 1960’s” I remember my father, a steelworker for 30 years, regularly reading the union paper which focused on the obvious issue of “class” faced by hourly workers. My father, a first generation Pole, shared the shop floor with African Americans, Mexican Americans, and other minority men. Everyone knew one thing quite clearly, when the cost of living went up and their wages didn’t, they and their family’s suffered. The only power they had was to act collectively to go on strike. I remember those strikes occurring over and over as a child. Whenever my parents were able to save a little money, it would all be spent surviving the strike. But not going on strike wasn’t a realistic option either because it meant one could afford less and less as inflation ate away at one’s paycheck. So standing up to the forces of capitalism required solidarity, and my dad’s generation, at least in the Detroit steel mills, still had that sense of solidarity.
It seems that through generations of effective brainwashing we’ve managed to create a society in which one’s own personal gain is all that matters. Step on the next guy if you need to in order to get ahead. Every man/woman for themselves. Solidarity, strikes and strikers have been vilified rather than respected and revered as the voice of the working class. Until and unless we realize our commonality, our collective plight, and our potential “collective power” we remain invisible to the oligarchy, just as the French were invisible until they donned their yellow vests and joined each other on the street. I wonder just what it would take to rekindle those old values and the knowledge those men on the shop floor had when you were a young guy.
Much appreciation for your comment Gary. Solidarity means everything to those who have each other.
Does this system need reform or is it a total failure and we need a new system ?A science based,sustainable, efficient ,abundance program that promotes our better angels.This capitalistic system does the opposite. IT IS EVIL.We must invent one that works.NLRBE NATURAL LAW RESOURSE BASED ECONOMY.
Mechanics are stupid. The fact of it is the problem,
which if in near time we do it, will mean we survive, if
not then not.
It will all end in tears, as they say, but it will be the tears of those trampled in the race to become one of the “pigs”. Until people start to despise the glamorous wealthy instead of revering them, they are just supporting their own demise. Luck, wishes, and prayers (and climate change by the way) are just delusions to keep you hoping you can benefit from others instead of your own effort.
In other words, the sad part is that the 90% mostly only wish they were one of the “lucky” 1%.
Yes, that is moral corruption of mass media controlled by the rich, working a cultural degradation that may not be reversible for generations after the crisis that collapses the US. May it come sooner than later, by means less violent than would likely be sufficient.