Monday, March 17, 2014

plutocratic risk inequality is what chaps me...,



nationofchange |  There’s been a lot of discussion about the historically high levels of income and wealth inequality lately—mostly from people on the shorter end of that stick—with good reason: There’s no end in sight.

In his new book, “Capital in the Twenty-First Century,” economist Thomas Piketty argues that worsening inequality is inevitable in a mature capitalist system, based on his analysis of 200 years of data. But inequality isn’t just an evolving condition like a crippling allergy that comes and goes, or just grows, enumerated by horrifying statistics. Nor is it just the result of a capitalist-utopian idea of free markets in which everyone gets a fair shot armed with equal information (which simply don’t exist in the real world, where markets are routinely gamed by the biggest players).

Inequality is endemic to the core structure of an America that operates more as a plutocracy than a democracy. It is an inherent result of the consolidation of a substantial amount of both financial power and political influence in the hands of a few families.

In my upcoming book, “All the Presidents’ Bankers,” I trace the lineage of the banking and political families and their associates who have had the most combined influence on American policy. Inequality of income or wealth is a byproduct of the predisposition and genealogy of this coterie of America’s power elite. True, being born into wealth means having a greater chance of accumulating more of it—but take it a step further. Expanding on the adage of “it takes money to make money,” we get a much better idea of why inequality is so rampant: Because aside from income and wealth issues, it takes power to keep power.

By nature of the construct and self-reinforcing behavior of a small circle of American families and their enterprises—particularly over the past century since financial capitalism replaced productive capitalism as the means to expand power, wealth and influence—a comparative handful of families and their connections run Wall Street and Washington collectively. They run America as two sides of one political-financial coin, not as divided factions but as co-influencers of policy through public and private office.

There have been times during the past century when the specific individuals commanding this joint effort paid credence to the public interest, or were imbued with more humility. During those times, levels of inequality happened to decrease. At other times, the power elite solely promoted private gain, as from WWI through the crash of 1929, and since the 1970s, particularly since the 2008 crisis. At those times,  inequality happened to grow. This is not to imply that the moods of the elite were the sole arbiters of the direction of inequality, but that whatever the direction of these levels, general economic health is more dependent on the actions of this long-term, tightknit and concentrated few than on the ideal of a democracy. In this environment of such power inequality, economic inequality is unavoidable—and unsolvable.

7 comments:

CNu said...

Capitalism is a phantom adversary. It isn’t an economic system. It isn’t
an ideology, really, or a belief system. If the word means anything, it
describes the behavior of accumulated surplus wealth in concert with
the known laws of physics — the movement of energy through time and
space — and the choices we make organizing society in relation to that.
The energy is embodied as capital, represented in money for
convenience. Interest expresses the cost of money over time and the
risks associated with lending it
. By the way, interest rates work the
same way under all political systems, despite attempts in some societies
to criminalize it.The behavior of surplus accumulated wealth in concert with the known laws of physics and the tendency of these killer apes to opportunistically CHEAT every single chance they get to..., thus the lack of risk associated with capital when it achieves the scale required to deform the proper operation and functioning of the political system.

John Kurman said...

The reason markets tend to be robust against deceit and corruption is because the losses from this are distributed (the gains from such not so much). The reason for this (and the reason a certain flavor of libertarian is to be ridiculed) is that force and fraud are THE salient features of capitalism. Interest rates work under any political system for the same reason criminality does.

woodensplinter said...

Have you seen this yet? http://cigeography.blogspot.fr/2014/03/russian-invasion-of-crimean-peninsula.html

makheru bradley said...

Brother Dunn, the real issue with the Neo-Nazi faction of the Ukrainian coup is not Russia’s opportunistic propaganda. It’s the abject hypocrisy of the United States which consistently demonstrates its willingness to align itself with anyone, e.g. with Hussein vs Iran, with Al-Qaeda vs Qaddafi and Assad, while preaching democracy to the rest of the world.

I did not see your statement of free-markets. Surely you are not referring to the City of London. However, the revolt in Ukraine has nothing to do with free-markets. This is Brzezinski 101--the containment of Russia--in action. Let’s see how the people of Ukraine like their “free-markets” when their new leaders institute Greek-styled austerity measures.

CNu said...

It’s the abject hypocrisy of the United States which consistently
demonstrates its willingness to align itself with anyone, e.g. with
Hussein vs Iran, with Al-Qaeda vs Qaddafi and Assad, while preaching
democracy to the rest of the world.lol, anyone willing to sell his/her country's sovereign national resources or future tax revenues in the form of nationalized debts owed to the World Bank or the IMF. I believe it's worth remembering that Russia still operates under the auspices of a state-owned central bank. http://en.wikipedia.org/wiki/Central_Bank_of_Russia

BigDonOne said...

Michael Corleone did not align himself with anyone......


"Today I settle all family business..."


"You want to do business with me?...I *WILL* do business with *you*..."


"...be REASONABLE..."

CNu said...

lol, BD goin hard on St. Patrick's day? Since I haven't gotten my hardcore smoke or drink on, would you please translate your cryptic pop cultural reference for the edification of a sober reader? Here, I'll reciprocate.If the American people ever allow private banks to control the issue of their currency ... “Let me issue and control a nation's money and I care not who writes the laws.” Mayer Amschel Rothschild (1744-1812), founder of the House of Rothschild.

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