Friday, July 24, 2020

The Blasted Thing's Invisible...,

charleshughsmith |  The word privilege is much bandied about now. I've been writing about privilege for many years, and ended up writing a book about the source (and thus the end) of privilege: Inequality and the Collapse of Privilege.
Privilege and inequality are two sides of the same coin. Those with privilege get more than everyone else without actually creating more value, which is the definition of inequality.
What few seem to grasp is the absolute source of inequality / privilege is our financial system, specifically the way we create and distribute money.
Few people connect the dots between a central bank (the Federal Reserve) creating money out of thin air and giving the super-wealthy first dibs on this new money, and the vast inequalities of wealth and power that are widening to the point of social disorder on a grand scale.
While the majority may not fully understand the source of inequality, they do intuit that billionaires got the mine and the rest of us got the shaft. Since humans are social apes and social apes have a sense of fairness, even within pecking orders with a few at the top, the inherent unfairness of our financial system generates resentment and indignation, while the lack of understanding generates frustration.
My colleague Mark Jeftovic penned a post explaining how those closest to the Fed's money spigot get wealthier for doing absolutely nothing but being close to the spigot. This is the most basic structure of our financial system and economy. Everything else flows from this simple mechanism. On Cantillionaires, Sycophants and Losers.
Put another way: while the rest of us earn money by creating goods and services, those close to the Fed's money spigot create absolutely nothing but they get billions of dollars at rates of interest that are essentially zero, or adjusted for inflation, less than zero.
 As a result, they can outbid the rest of us for all the assets that generate income.