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Insane Levels of Inequality – Which Hurt the Economy – Are Skyrocketing

George Washington's picture





 

Preface: All capitalist systems have some inequality.  We don’t want to prevent all inequality … just economy-wrecking levels:

Lawrence Katz, a Harvard economist, adds that some inequality is necessary to create incentives in a capitalist economy but that “too much inequality can harm the efficient operation of the economy.”

And you might assume that conservatives don’t worry about rampant inequality … but that is a myth.

Inequality - Which Hurts the Economy - Is Skyrocketing

A who’s-who’s of prominent economists in government and academia have all said that runaway inequality can cause financial crises.

Extreme inequality helped cause the Great Depression, the current financial crisis ... and the fall of the Roman Empire.

But inequality in America today is actually twice as bad as in ancient Rome , worse than it was in in Tsarist Russia, Gilded Age America, modern Egypt, Tunisia or Yemen, many banana republics in Latin America,  and worse than experienced by slaves in 1774 colonial America.

Inequality has grown steadily worse:

Aevrage Household income before taxes.

Gini ratio

It is worse under Obama than under Bush.

A  recent study shows that the richest Americans captured more than 100% of all recent income gains.  And see this.

There are 2 economies:  one for the rich, and the other for everyone else.

Alan Greenspan said:

Our problem basically is that we have a very distorted economy, in the sense that there has been a significant recovery in our limited area of the economy amongst high-income individuals…

 

***

 

They are fundamentally two separate types of economies.

Why is Inequality Going Through the Roof?

The world’s top economic leaders have said for years that inequality is spiraling out of control and needs to be reduced. Why is inequality soaring even though world economic leaders have talked for years about the urgent need to reduce it?

Because they're saying one thing but doing something very different.  And both mainstream Democrats and mainstream Republicans are using smoke and mirrors to hide what's really going on.

And it’s not surprising … Nobel prize winning economist Joseph Stiglitz says that inequality is caused by the use of money to shape government policies to benefit those with money.  As Wikipedia notes:

A better explainer of growing inequality, according to Stiglitz, is the use of political power generated by wealth by certain groups to shape government policies financially beneficial to them. This process, known to economists as rent-seeking, brings income not from creation of wealth but from "grabbing a larger share of the wealth that would otherwise have been produced without their effort"[59]

 

Rent seeking is often thought to be the province of societies with weak institutions and weak rule of law, but Stiglitz believes there is no shortage of it in developed societies such as the United States. Examples of rent seeking leading to inequality include

  • the obtaining of public resources by "rent-collectors" at below market prices (such as granting public land to railroads,[60] or selling mineral resources for a nominal price[61][62] in the US),
  • selling services and products to the public at above market prices[63] (medicare drug benefit in the US that prohibits government from negotiating prices of drugs with the drug companies, costing the US government an estimated $50 billion or more per year),
  • securing government tolerance of monopoly power (The richest person in the world in 2011, Carlos Slim, controlled Mexico's newly privatized telecommunication industry[64]).

(Background here, here and here.)

Stiglitz says:

One big part of the reason we have so much inequality is that the top 1 percent want it that way. The most obvious example involves tax policy .... Monopolies and near monopolies have always been a source of economic power—from John D. Rockefeller at the beginning of the last century to Bill Gates at the end. Lax enforcement of anti-trust laws, especially during Republican administrations, has been a godsend to the top 1 percent. Much of today’s inequality is due to manipulation of the financial system, enabled by changes in the rules that have been bought and paid for by the financial industry itself—one of its best investments ever. The government lent money to financial institutions at close to 0 percent interest and provided generous bailouts on favorable terms when all else failed. Regulators turned a blind eye to a lack of transparency and to conflicts of interest.

 

***

 

Wealth begets power, which begets more wealth …. Virtually all U.S. senators, and most of the representatives in the House, are members of the top 1 percent when they arrive, are kept in office by money from the top 1 percent, and know that if they serve the top 1 percent well they will be rewarded by the top 1 percent when they leave office. By and large, the key executive-branch policymakers on trade and economic policy also come from the top 1 percent. When pharmaceutical companies receive a trillion-dollar gift—through legislation prohibiting the government, the largest buyer of drugs, from bargaining over price—it should not come as cause for wonder. It should not make jaws drop that a tax bill cannot emerge from Congress unless big tax cuts are put in place for the wealthy. Given the power of the top 1 percent, this is the way you would expect the system to work.

Bloomberg reports:

The financial industry spends hundreds of millions of dollars every election cycle on campaign donations and lobbying, much of which is aimed at maintaining the subsidy [to the banks by the public]. The result is a bloated financial sector and recurring credit gluts.

Indeed, the big banks literally own the Federal Reserve.  And they own Washington D.C. politicians, lock stock and barrel. See this, this, this and this.

Two leading IMF officials, the former Vice President of the Dallas Federal Reserve, and the the head of the Federal Reserve Bank of Kansas City, Moody’s chief economist and many others have all said that the United States is controlled by an “oligarchy” or “oligopoly”, and the big banks and giant financial institutions are key players in that oligarchy.

Economics professor Randall Wray writes:

Thieves … took over the whole economy and the political system lock, stock, and barrel.

No wonder the government has saved the big banks at taxpayer expense, chosen the banks over the little guy, and

No wonder crony capitalism has gotten even worse under Obama.

No wonder Obama is prosecuting fewer financial crimes than Bush, or his father or Ronald Reagan.

No wonder:

All of the monetary and economic policy of the last 3 years has helped the wealthiest and penalized everyone else. See this, this and this.

 

***

 

Economist Steve Keen says:

“This is the biggest transfer of wealth in history”, as the giant banks have handed their toxic debts from fraudulent activities to the countries and their people.

Stiglitz said in 2009 that Geithner’s toxic asset plan “amounts to robbery of the American people”.

 

And economist Dean Baker said in 2009 that the true purpose of the bank rescue plans is “a massive redistribution of wealth to the bank shareholders and their top executives”.

Quantitative easing doesn’t help Main Street or the average American. It only helps big banks, giant corporations, and big investors. And by causing food and gas prices skyrocket, it takes a bigger bite out of the little guy’s paycheck, and thus makes the poor even poorer.

As I noted in March 2009:

The bailout money is just going to line the pockets of the wealthy, instead of helping to stabilize the economy or even the companies receiving the bailouts:

  • A lot of the bailout money is going to the failing companies’ shareholders
  • Indeed, a leading progressive economist says that the true purpose of the bank rescue plans is “a massive redistribution of wealth to the bank shareholders and their top executives”
  • The Treasury Department encouraged banks to use the bailout money to buy their competitors, and pushed through an amendment to the tax laws which rewards mergers in the banking industry (this has caused a lot of companies to bite off more than they can chew, destabilizing the acquiring companies)

As I wrote in 2008:

The game of capitalism only continues as long as everyone has some money to play with. If the government and corporations take everyone’s money, the game ends.The fed and Treasury are not giving more chips to those who need them: the American consumer. Instead, they are giving chips to the 800-pound gorillas at the poker table, such as Wall Street investment banks. Indeed, a good chunk of the money used by surviving mammoth players to buy the failing behemoths actually comes from the Fed.

Government Policy Is Increasing Inequality

Without the government’s creation of the too big to fail banks (they’ve gotten much bigger under Obama), the Fed’s intervention in interest rates and the markets (most of the quantitative easing has occurred under Obama), and government-created moral hazard emboldening casino-style speculation (there’s now more moral hazard than ever before) … things wouldn’t have gotten nearly as bad.

Goosing the Stock Market

Moreover, the Fed has more or less admitted that it is putting almost all of its efforts into boosting the stock market.

Robert Reich has noted:

Some cheerleaders say rising stock prices make consumers feel wealthier and therefore readier to spend. But to the extent most Americans have any assets at all their net worth is mostly in their homes, and those homes are still worth less than they were in 2007. The “wealth effect” is relevant mainly to the richest 10 percent of Americans, most of whose net worth is in stocks and bonds.

AP writes:

The recovery has been the weakest and most lopsided of any since the 1930s.After previous recessions, people in all income groups tended to benefit. This time, ordinary Americans are struggling with job insecurity, too much debt and pay raises that haven’t kept up with prices at the grocery store and gas station. The economy’s meager gains are going mostly to the wealthiest.

 

Workers’ wages and benefits make up 57.5 percent of the economy, an all-time low. Until the mid-2000s, that figure had been remarkably stable — about 64 percent through boom and bust alike.

David Rosenberg points out:

The “labor share of national income has fallen to its lower level in modern history … some recovery it has been – a recovery in which labor’s share of the spoils has declined to unprecedented levels.”

The above-quoted AP article further notes:

Stock market gains go disproportionately to the wealthiest 10 percent of Americans, who own more than 80 percent of outstanding stock, according to an analysis by Edward Wolff, an economist at Bard College.

Indeed, as I reported in 2010:

As of 2007, the bottom 50% of the U.S. population owned only one-half of one percent of all stocks, bonds and mutual funds in the U.S. On the other hand, the top 1% owned owned 50.9%.***

 

(Of course, the divergence between the wealthiest and the rest has only increased since 2007.)

Professor G. William Domhoff demonstrated that the richest 10% own 98.5% of all financial securities, and that:

The top 10% have 80% to 90% of stocks, bonds, trust funds, and business equity, and over 75% of non-home real estate. Since financial wealth is what counts as far as the control of income-producing assets, we can say that just 10% of the people own the United States of America.

As Tyler Durden notes:

In today’s edition of Bloomberg Brief, the firm’s economist Richard Yamarone looks at one of the more unpleasant consequences of Federal monetary policy: the increasing schism in wealth distribution between the wealthiest percentile and everyone else. … “To the extent that Federal Reserve policy is driving equity prices higher, it is also likely widening the gap between the haves and the have-nots….The disparity between the net worth of those on the top rung of the income ladder and those on lower rungs has been growing. According to the latest data from the Federal Reserve’s Survey of Consumer Finances, the total wealth of the top 10 percent income bracket is larger in 2009 than it was in 1995. Those further down have on average barely made any gains. It is likely that data for 2010 and 2011 will reveal an even higher percentage going to the top earners, given recent increases in stocks.” Alas, this is nothing new, and merely confirms speculation that the Fed is arguably the most efficient wealth redistibution, or rather focusing, mechanism available to the status quo. This is best summarized in the chart below comparing net worth by income distribution for various percentiles among the population, based on the Fed’s own data. In short: the richest 20% have gotten richer in the past 14 years, entirely at the expense of everyone else.

 

***

Lastly, nowhere is the schism more evident, at least in market terms, than in the performance of retail stocks:

Saks chairman Steve Sadove recently remarked, “I’ve been saying for several years now the single biggest determinant of our business overall, is how’s the stock market doing.” Privately-owned Neiman- Marcus reported “In New York City, business at Bergdorf Goodman continues to be extremely strong.”

 

In contrast, retail giant Wal-Mart talks of its “busiest hours” coming at midnight when food stamps are activated and consumers proceed through the check-outs lines with baby formula, diapers, and other groceries. Wal-Mart has posted a decline in same-store sales for eight consecutive quarters.

CNN Money pointed out in 2011, “Wal-Mart’s core shoppers are running out of money much faster than a year ago …”  This trend has only gotten worse:  The wealthy are doing great ... but common folks can no longer afford to shop even at Wal-Mart, Sears, JC Penney or other low-price stores.

Durden also notes:

Another indication of the increasing polarity of US society is the disparity among consumer confidence cohorts by income as shown below, and summarized as follows: “The increase in equity prices has raised consumer spirits, particularly among higher-income consumers. The Conference Board’s Consumer Confidence index for all income levels bottomed in February/March of 2009. The recovery since then has been notable across the board, but nowhere as much as for those making $50,000 or more.”

Over-Financialization

When a country's finance sector becomes too large finance, inequality rises. As Wikipedia notes:

[Economics professor] Jamie Galbraith argues that countries with larger financial sectors have greater inequality, and the link is not an accident.[66][67]

Government policy has been encouraging the growth of the financial sector for decades:

http://2.bp.blogspot.com/-2DxXTVc4xnc/USfwvMBlO-I/AAAAAAAAB_Y/a1dyx_5U5Hs/s1600/financial+and+nonfinancial+sectors+-+compensation+Les+Leopold.jpg

(Economist Steve Keen has also shown that “a sustainable level of bank profits appears to be about 1% of GDP”, and that higher bank profits leads to a ponzi economy and a depression).

Unemployment and Underemployment

A major source if inequality is unemployment, underemployment and low wages.

Government policy has created these conditions.  And the pretend populist Obama - who talks non-stop about the importance of job-creation - actually doesn't mind such conditions at all.

The“jobless recovery” that the Bush and Obama governments have engineered is a redistribution of wealth from the little guy to the big boys.

The New York Times notes:

Economists at Northeastern University have found that the current economic recovery in the United States has been unusually skewed in favor of corporate profits and against increased wages for workers.

 

In their newly released study, the Northeastern economists found that since the recovery began in June 2009 following a deep 18-month recession, “corporate profits captured 88 percent of the growth in real national income while aggregate wages and salaries accounted for only slightly more than 1 percent” of that growth.

 

The study, “The ‘Jobless and Wageless Recovery’ From the Great Recession of 2007-2009,” said it was “unprecedented” for American workers to receive such a tiny share of national income growth during a recovery.

 

***

 

The share of income growth going to employee compensation was far lower than in the four other economic recoveries that have occurred over the last three decades, the study found.

Obama apologists say Obama has created jobs.  But the number of people who have given up and dropped out of the labor force has skyrocketed under Obama (and see this).

And the jobs that have been created have been low-wage jobs.

For example, the New York Times noted in 2011:

The median pay for top executives at 200 big companies last year was $10.8 million. That works out to a 23 percent gain from 2009.

 

***

 

Most ordinary Americans aren’t getting raises anywhere close to those of these chief executives. Many aren’t getting raises at all — or even regular paychecks. Unemployment is still stuck at more than 9 percent.

 

***

 

“What is of more concern to shareholders is that it looks like C.E.O. pay is recovering faster than company fortunes,” says Paul Hodgson, chief communications officer for GovernanceMetrics International, a ratings and research firm.

 

According to a report released by GovernanceMetrics in June, the good times for chief executives just keep getting better. Many executives received stock options that were granted in 2008 and 2009, when the stock market was sinking.

 

Now that the market has recovered from its lows of the financial crisis, many executives are sitting on windfall profits, at least on paper. In addition, cash bonuses for the highest-paid C.E.O.’s are at three times prerecession levels, the report said.

 

***

 

The average American worker was taking home $752 a week in late 2010, up a mere 0.5 percent from a year earlier. After inflation, workers were actually making less.

AP pointed out that the average worker is not doing so well:

Unemployment has never been so high — 9.1 percent — this long after any recession since World War II.  At the same point after the previous three recessions, unemployment averaged just 6.8 percent.

 

– The average worker’s hourly wages, after accounting for inflation, were 1.6 percent lower in May than a year earlier. Rising gasoline and food prices have devoured any pay raises for most Americans.

 

– The jobs that are being created pay less than the ones that vanished in the recession. Higher-paying jobs in the private sector, the ones that pay roughly $19 to $31 an hour, made up 40 percent of the jobs lost from January 2008 to February 2010 but only 27 percent of the jobs created since then.

Alan Greenspan noted:

Large banks, who are doing much better and large corporations, whom you point out and everyone is pointing out, are in excellent shape. The rest of the economy, small business, small banks, and a very significant amount of the labour force, which is in tragic unemployment, long-term unemployment – that is pulling the economy apart.

Money Being Sucked Out of the U.S. Economy ... But Big Bucks Are Being Made Abroad

Part of the widening gap is due to the fact that most American companies’ profits are driven by foreign sales and foreign workers. As AP noted in 2010:

Corporate profits are up. Stock prices are up. So why isn’t anyone hiring?

Actually, many American companies are — just maybe not in your town. They’re hiring overseas, where sales are surging and the pipeline of orders is fat.

 

***

 

The trend helps explain why unemployment remains high in the United States, edging up to 9.8% last month, even though companies are performing well: All but 4% of the top 500 U.S. corporations reported profits this year, and the stock market is close to its highest point since the 2008 financial meltdown.

 

But the jobs are going elsewhere. The Economic Policy Institute, a Washington think tank, says American companies have created 1.4 million jobs overseas this year, compared with less than 1 million in the U.S. The additional 1.4 million jobs would have lowered the U.S. unemployment rate to 8.9%, says Robert Scott, the institute’s senior international economist.

 

“There’s a huge difference between what is good for American companies versus what is good for the American economy,” says Scott.

 

***

 

Many of the products being made overseas aren’t coming back to the United States. Demand has grown dramatically this year in emerging markets like India, China and Brazil.

Government policy has accelerated the growing inequality. It has encouraged American companies to move their facilities, resources and paychecks abroad. And some of the biggest companies in America have a negative tax rate … that is, not only do they pay no taxes, but they actually get tax refunds.

And  a large percentage of the bailouts went to foreign banks (and see this). And so did a huge portion of the money from quantitative easing. More here and here.

Capital Gains and Dividends

According to a study published last month by a researcher at the U.S. Congressional Research Service:

The largest contributor to increasing income inequality…was changes in income from capital gains and dividends.

Business Insider explains:

Drastic income inequality growth in the United States is largely derived from changes in the way the U.S. government taxes income from capital gains and dividends, according to a new study by Thomas Hungerford of the non-partisan Congressional Research Service.

 

Essentially, what Democrats have been saying about income inequality — that it's in a large part due to favorable taxation and deduction policies for high income Americans — is largely right

 

***

 

The study ... conclusively found that the wealthy benefitted from low tax rates on investment income, which in turn caused their wealth to grow faster.

 

Essentially, taxing capital gains as ordinary income would make the playing field more fair, and reduce over time income inequality.

Joseph Stiglitz noted in 2011:

Lowering tax rates on capital gains, which is how the rich receive a large portion of their income, has given the wealthiest Americans close to a free ride.

Indeed, the Tax Policy center reports that the top 1% took home 71% of all capital gains in 2012.

Ronald Reagan's budget director, assistant secretary of treasury, and domestic policy director all say that the Bush tax cuts were a huge mistake. See this and this.

 


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Sun, 02/24/2013 - 15:54 | Link to Comment blindman
blindman's picture

"..Grotesque wealth, and particularly such wealth which shares nothing of value in its creation, breeds social inequality which fuels envy and jealousy. The have-nots will be increasingly forced to observe the possessions and life-styles of those who have, and we will reap the whirlwind of social disaffection and class warfare.
The fire next time (with apologies to James Baldwin), will not be easily extinguished, but we shall know who to blame! " ...
.
http://rowans-blog.blogspot.co.uk/2013/02/the-greedy-crooked-banksters-w...
.
"Sunday, February 24, 2013The greedy crooked banksters who have ruined this country are still taking home even more money than anyone else!

I don't think there is much dispute that the financial crisis and the recession which has followed which has done so much to destroy the living standards and the future hopes of so many millions of working people in this country, was caused by the criminal antics of the investment bankers, who allowed their greed and their avarice to overcome any sense of prudence and sound banking judgement, they might once have possessed." ....

Sun, 02/24/2013 - 12:01 | Link to Comment Pemaquid
Pemaquid's picture

GREED! Nothing new here.

Sun, 02/24/2013 - 10:43 | Link to Comment kaiserhoff
kaiserhoff's picture

Katz?  Another Harvard Jew Economist to the rescue??????

What do you use for a brain George?  I know you sold your soul long ago.

Now about this royal "We".  DC has never been shorter on Weness.  The rest of the country would love to see the place go up in smoke, so let me tell you what I would like to see done about "inequality."

Cut government salaries in half, benefits by 90%.

Wipe out all section 8 housing and let the Hoochie-Mommas fend for themselves.

Extend affirmative action rules to the Jews.  Since the tribe is more or less 1%, without the honest, religious Jews, limit them to 1% of the media, government, banking, medicine, etc. ad infinitum.

As ye sow, so shall ye reap.

PS  Jimmy Carter can take his Habitat For Humanity and cram it up his ass.  New housing should be reserved for those who do an honest day's work.  Why not try it, George.  It might make a man out of you.

 

Sun, 02/24/2013 - 13:25 | Link to Comment RKDS
RKDS's picture

Oh yeah, that's really smart.  You think government is stupid and lazy now?  Wait and see what you get offering wages on par with McDonalds.  Hey, who knows, maybe the public sector's executive class will do everything uphill both ways and then some like the private sector's executive class.  You've really got shit for brains, buddy...

Sun, 02/24/2013 - 10:47 | Link to Comment AnAnonymous
AnAnonymous's picture

Why not stop all the affirmative actions for the middle class?

That will do wonders.

Sun, 02/24/2013 - 10:45 | Link to Comment dick cheneys ghost
dick cheneys ghost's picture

+1000000000000

 

I like ur affirmative action plan.................

Sun, 02/24/2013 - 10:22 | Link to Comment AnAnonymous
AnAnonymous's picture

But inequality in America today is actually twice as bad as in ancient Rome , worse than it was in in Tsarist Russia, Gilded Age America, modern Egypt, Tunisia or Yemen, many banana republics in Latin America, and worse than experienced by slaves in 1774 colonial America.
__________________

This is where 'americans' shine: rejection of most immediate reality.

Instead of stepping back from their models, and see how they relate to reality, they trust them and shamelessly report the results given by their models, even though they go directly against the most immediate reality (see in another vein, UK in a worst recession than during the 1930s,1940s)

One must admit though that 'americans' have no choice than this self blinding. Admitting that their models are so wrong would be self indiction big time.

And 'americans' at this moment can not afford self indiction.

Sun, 02/24/2013 - 10:18 | Link to Comment Stuck on Zero
Stuck on Zero's picture

Workers’ wages and benefits make up 57.5 percent of the economy, an all-time low. Until the mid-2000s, that figure had been remarkably stable — about 64 percent through boom and bust alike.

If you look at it not in terms of gross income but disgressionary income the results would look catastrophic.  I would guess that 95% of the disgressionary income in the United States goes to the top 1%.

 

 

 

 

Sun, 02/24/2013 - 10:18 | Link to Comment AnAnonymous
AnAnonymous's picture

Virtually all U.S. senators, and most of the representatives in the House, are members of the top 1 percent when they arrive, are kept in office by money from the top 1 percent, and know that if they serve the top 1 percent well they will be rewarded by the top 1 percent when they leave office.
___________________________________

No.

In actual terms, the political personal in 'american' societies is put and maintained in position by the 'american' middle class.

The 'american' upper class has to buy favours from them and they have to do in such a way it benefits the 'american' middle class.

Because themselves, the 'american' middle class, are a product of the aggregated consumption brought by an 'american' middle class.

You go nowhere in an 'american' society if you do not do the bidding of the 'american' middle class.

Sun, 02/24/2013 - 10:21 | Link to Comment TheFourthStooge-ing
TheFourthStooge-ing's picture

I'm AnAnonymized
Obsessive urges make me say
I'm AnAnonymized
It's up my butt, the USA
I'm AnAnonymized
'americans' are blobbing up
I'm AnAnonymized
I'm hypocritical, but still you suck

U.S.A. -- I blame the whole damned nation
U.S.A. -- for my insanitation

I'm AnAnonymized
With facts as firm as quicksand
I'm AnAnonymized
Rewriting history of Easter Island
I'm AnAnonymized
Beware my skills in cooking
I'm AnAnonymized
I'll wok your dog when you're not looking

U.S.A. -- I blame the whole damned nation
U.S.A. -- for my insanitation

Drop a load
Drop a load
Squatting down beside the road
Give a push
Crack a smile
Repeat this several times a mile

http://www.youtube.com/watch?v=YCtGlJ4NtOg

Sun, 02/24/2013 - 10:46 | Link to Comment AnAnonymous
AnAnonymous's picture

Since when 'americanism' is limited to the US?

Sun, 02/24/2013 - 12:18 | Link to Comment TheFourthStooge-ing
TheFourthStooge-ing's picture

AnAnonymous asked:

Since when 'americanism' is limited to the US?

Since 1776,July,4th.

Sun, 02/24/2013 - 12:24 | Link to Comment akak
akak's picture

Unless, of course, one is referring to the purported US 'american' citizenism invasion of Eastern Island even before the founding of the USA itself, in which case the appropriate date is 4July, 1576, due to utilizationizing of magical time-traveling flying rickshaw of Benjamin Franklin inventionism of Chinese Citizenism mythical fabled past.

Sun, 02/24/2013 - 12:15 | Link to Comment akak
akak's picture

Lead-tainted playthings and slow-roasted kittens
Black cooking marmites and foul public shittins'
Denial, bigotry and middle class kings
These are a few of my favorite things

Crap-covered roadsides and crisp Szechuan puppies
Truncheons and sweat shops and Chink neo-yuppies
Rare tiger penis that makes big the shwing
These are a few of my mattering things

When the dog woks
When the prole shites
When I'm feeling sad
I simply remember my favorite theme:
That every 'American' is bad.

Dead female fetuses on toxic waste mountains
Resource depletion and shit-tainted fountains
Naked hypocrisy and trolling in spring
These are a few of my monolized things

Citizenism and insanitation
The criminal rape of the Tibetan nation
Circular arguments that run 'round in rings
These are a few of my blobbing-up things

When I troll blogs
When my butt stinks
When I'm feeling mad
I simply remember my favorite meme:
That every 'American' is bad.

Sun, 02/24/2013 - 12:16 | Link to Comment TheFourthStooge-ing
TheFourthStooge-ing's picture

Alas, alas, once more than twice alas, it's good to see the occasional reprise of such classic favorites.

As Confusius once said:

"A small communauty of Chinese citizenism citizens have means to exploit the blind spots of a roadside and ssshweeee, you can make a stinky mudslide out of it. This kind of mindset is annoying. Recycling the stereotype the guy pooping on the roadside gets the chick."

Sun, 02/24/2013 - 13:00 | Link to Comment akak
akak's picture

Confucius also say:

"A journey of a thousand roadside squattings begins with a single wokked dog in garlic sauce."

Sun, 02/24/2013 - 10:16 | Link to Comment Fix It Again Timmy
Fix It Again Timmy's picture

It is better to educate the masses than be another politician since we have more than enough of them...[535 clowns, buffoons, morons, clueless fuckwads, etc. - Don't think so?  Then you obviously haven't watched C-SPAN]

"Knowledge makes a man unfit to be a slave." - Frederick Douglass

Sun, 02/24/2013 - 11:30 | Link to Comment Room 101
Room 101's picture

-1

Who said anything about actually winning political office?  The problem isn't so much that the banksters are winning. The usually do.  The problem is that they're winning on the cheap. Make sure that it costs the banksters more, a lot more, to have their butt-boys in office to do their bidding and then you start forcing them to prioritize.  If you take a look at the costs for a politician when they have an opponent, any opponent, and you see they'll increase exponentially. See victory, pyrrhic. 

As for education, one of the most cost efficient ways to educate is by running for political office.

Sun, 02/24/2013 - 09:59 | Link to Comment Room 101
Room 101's picture

George, this is all nice and illuminating..so why don't you get off your ass and run for office?  Or better, start something like a political party?  The ZH party or some such.

Knowing what is what and who is doing who does us no good without action to change it. Without action, information like this is just a form of intellectual masturbation.     

Sun, 02/24/2013 - 11:26 | Link to Comment shovelhead
shovelhead's picture

Yeah,

somebody ought to do something...

http://www.youtube.com/watch?v=ta_iKeH4tsg

 

Sun, 02/24/2013 - 11:35 | Link to Comment Room 101
Room 101's picture

+1  That's a good one.  Thanks for posting the link. 

Sun, 02/24/2013 - 09:59 | Link to Comment Bungalow
Bungalow's picture

The Zero interest rate policy of the last 5+ years are killing the modest earning, cash saver.  These people (Me) stay away from the market playground.  Getting killed!

 

 

Sun, 02/24/2013 - 09:33 | Link to Comment andrewp111
andrewp111's picture

 

A  recent study shows that the richest Americans captured more than 100% of all recent income gains.

That is the consequence of short circuiting nature's mechanism for reducing inequality - bank failures. If the banks were allowed to fail in 2008-2009, the little guy would have got his 250K in deposit insurance, and the banks would have taken the millionaires and billionaires down with them.

 

 

Sun, 02/24/2013 - 09:22 | Link to Comment fijisailor
fijisailor's picture

So what's wrong with being a 3rd word country?

Sun, 02/24/2013 - 09:32 | Link to Comment Weisbrot
Weisbrot's picture

 

 

because the USA is the greatest 2nd world nation thier ever was or ever will be!

Sun, 02/24/2013 - 09:49 | Link to Comment falak pema
falak pema's picture

Maggy Thatchter's acceptance speech when she became the Tory leader...

and went on later as PM to enact the City Big Bang revolution that started this inequality spread rolling fast along with concommitant Reaganomics  in US :

 

Where there is hatred, let me sow love;
Where there is injury, pardon;
Where there is doubt, faith;
Where there is despair, hope;
Where there is darkness, light;
Where there is sadness, joy.
From St Francis of Assise's prayer.
Well, she and Ronnie really started the ball rolling to ensure that the "Road to Serfdom" would never be theirs nor that of their countries ! And Tony Blair did nothing to change it, nor did Clinton. Right??
AS another famous Philosopher said : WE ARE WHAT WE  REPEATEDLY DO... Aristotle.

And here is one person who did it repeatedly, truly fight against the road to serfdom,  and paid for it with her life 70 years ago : 

On the 70th Anniversary of the Execution of Sophie Scholl, 22 February 1943


Jesse's Café Américain

Sun, 02/24/2013 - 09:03 | Link to Comment Notarocketscientist
Notarocketscientist's picture

At the end of the day a very small group of skunks control the world.   Whatever happens they will continue to control the world.

In fact they will probably exert even greater control of the world when this crisis hits because their primary goal is to get rid of the pesky middle class, the unions, and others who create hassles for them

What they want is a world that is similar to say the Philippines with them running the show unopposed - a small professional class to do their bidding and keep quiet - and the rest of the world scratching to survive.

Sun, 02/24/2013 - 09:14 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

The pesky "middle class" and the unions are the ones who keep returning them to their positions of power.  They do not want to get rid of them, they want to keep stringing them along.

Sun, 02/24/2013 - 09:08 | Link to Comment overmedicatedun...
overmedicatedundersexed's picture

jon corzine says this inequality thing is way over blown and too much attention is being paid to it..so stop it.

Sun, 02/24/2013 - 08:46 | Link to Comment Edward Fiatski
Edward Fiatski's picture

"Lawrence Katz, a Harvard economist, adds that some inequality is necessary to create incentives in a capitalist economy but that “too much inequality can harm the efficient operation of the economy.”

Which is to say, that there must be at least 60% of peasants out of the total population in any given economy to do the dirty work at break-even wages.

Heh-heh-heh.

Sun, 02/24/2013 - 08:36 | Link to Comment Supernova Born
Supernova Born's picture

Morlocks and Eloi.

H.G. Wells was no Eloi.

Sun, 02/24/2013 - 08:37 | Link to Comment mayhem_korner
mayhem_korner's picture

 

Ronald Reagan's budget director, assistant secretary of treasury, and domestic policy director all say that the Bush tax cuts were a huge mistake. See this and this.

 

Agreed.  They weren't nearly deep enough.  Tax rates are not the issue, in large part because the fiscal problems cannot be solved by them.  $3.7T of annual spending is, too much of which amounts to the "income" for the self-fulfilling-prophecy that is the statists' welfare nation, and the interest of continually refinancing those unpayable obligations.

The problem with the thrust of this post is that it demonizes everyone perceived to be in a higher income/wealth bracket than the "average" or "middle class".  For those of us who fall into that 'label' and have earned it through hard work and integrity, and pay our disproportionately significant share of taxes, it's a real turn off.

Sun, 02/24/2013 - 09:27 | Link to Comment midtowng
midtowng's picture

Yeh. Something tells me you aren't nearly as wealthy as you say you are.

Sun, 02/24/2013 - 22:26 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

I'd wager I pay more a year in taxes than you make.  Especially now that the payroll tax rate went up to 12.4% (that's the rate we self-employeds pay).  But there was a time not so long ago where my annual income was zero for the better part of 24 months.  So I understand a much broader range of the spectrum than most...but I never demonize those with more than me.  As it is, we are just stewards of what has been entrusted to us.

Sun, 02/24/2013 - 08:28 | Link to Comment John Law Lives
John Law Lives's picture

"Our problem basically is that we have a very distorted economy, in the sense that there has been a significant recovery in our limited area of the economy amongst high-income individuals…"

A stock market recovery bolstered by $6+ Trillion in deficit spending, an increase of $2+ Trillion in the Fed's balance sheet, and massive Fed intervention in global affairs over the past ~5 years...

Some recovery...

FUBAR.

Sun, 02/24/2013 - 08:24 | Link to Comment mayhem_korner
mayhem_korner's picture
Government Policy Is Increasing Inequality

 

 

That's all you needed to print, GW.

Sun, 02/24/2013 - 08:17 | Link to Comment Oldrepublic
Oldrepublic's picture

the political coup d'etat of 9/11 and the financial coup d'etat of 2008 have started the US on the long road to nowhere

Sun, 02/24/2013 - 08:13 | Link to Comment AON
AON's picture

Its trickle down theory run amok.  Maybe the 1% will put in another tennis court or swimming pool so some poor schmuck can have a job.  Godamnit.  Isn't it time for a Bolshevik revolution yet?

Sun, 02/24/2013 - 08:07 | Link to Comment Fix It Again Timmy
Fix It Again Timmy's picture

Being above the law and consumed with greed, the 1%, the bankers, the financiers, the key players of the oligarchy are the grave diggers of the system that supports them and as a former commentor has stated: "It always ends ugly"...

Sun, 02/24/2013 - 07:11 | Link to Comment Hobbleknee
Hobbleknee's picture

The only inequality that matters is the application of the rule of law.

Sun, 02/24/2013 - 06:20 | Link to Comment falak pema
falak pema's picture

the world of "behind the curtain" despotism.

Those who decide abide by the manipulative mantra of "consumerism" and forget the underlying foundation of citizenship and collective destiny/values.

Oligarchies never survive once that divide between 1% and 99% becomes so visible the people question its relevance to society as its predatory and "liberticide".

We may be getting there soon.

But it requires blood n guts to make the system fall; alas always.

We are seeing today how the system accelerates to protect its extractive empires and destroy the nation fabric in the ME right in front of our eyes. 

The deeper in debt, the more perverse is the reasoning, the more desperate the consequences.

Homogenisation of sheeple to protect the upper echelon construct can only work so long...that is history's lesson.  

These guys are now trying to thrive and increase the divide by outsourcing to the 1$/hr labour proletariat of third world.

If their first world base crumbles under debt their ability to make short term antisocial profits does as well.  Without government armies to protect their assets in third world they are cake; baked at home as abroad, they will look like runaway Byzantine potentates without Constantinople or fugitive Russian princes without a mother land.

A whole new world game then begins and it won't be US/ Euro centric. 

Sun, 02/24/2013 - 20:11 | Link to Comment NidStyles
NidStyles's picture

I really do hate you violent collectivists.

Sun, 02/24/2013 - 04:58 | Link to Comment John_Coltrane
John_Coltrane's picture

There's a reason dividends and capital gains are taxed at a lower rate.  They were already taxed as earned income prior to investment.  So, unless you believe in double taxation, its silly to have any tax on divdends or capital gains.  Same applies to any inheritence tax-taxing income once is more than enough.  There's a reason why envy is one of the deadly sins-it distracts you from improving your own life by taking personal responsility.  The welfare state is a giant ponzi financed by the FED.  Eliminate both and base society on free interactions, merit and skills.

Are readers really so foolish to believe their life would be happier with a bigger bank account and/or higher consumption?

Sun, 02/24/2013 - 09:30 | Link to Comment midtowng
midtowng's picture

There's a very good reason for double-taxation: you don't want to encourage a rentier economy. You want to encourage a productive economy. Taxes should be lifted off of labor, where production happens, and onto speculation, where capital gains happens. That would give the economy proper incentives.

Adam Smith, and just about every other economist in history knew this, right up until the corrupted economists of today.

Sun, 02/24/2013 - 20:10 | Link to Comment NidStyles
NidStyles's picture

Adam Smith stole most of the real economics he wrote on from the Physiocrats, and even they got a lot wrong. If you're going to quote someone, at least understand what they are saying.

 

The Economists today are far better than they were in Smith's time. It was recently that we had Mises, Rothbard, and we still have Hans-Hermann Hoppe and a few other great economists like David Friedman.

 

 

In essence what I'm saying is that you haven't a clue what you are talking about. That you glorified Smith who is responsible for Mathus and the Utopian Socialists, displays how ignorant of history the typical American tends to be.

 

 

Sun, 02/24/2013 - 09:21 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

+1 Bravo.  You will be met with skepticism from the cultists here that follow GW.  Too few here it seems understand that worldly possessions are not a path to happiness. 

Sun, 02/24/2013 - 11:09 | Link to Comment shovelhead
shovelhead's picture

I agree,

Being unemployed, living under a bridge and roasting fresh caught pigeons is the key to psychic

contentment. Nirvana comes when your shopping cart has 4 good wheels.

Lets roll.

Sun, 02/24/2013 - 22:28 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

Nice try at sarcasm, but you miss the thrust here.  Too many here demonize those that they perceive "have" out of envy.  Those that "have" must be criminal, so the thinking goes.  That's the core thrust of the inequality argument. 

But please enjoy your vagabond experience if that's what does it for ya.

Sun, 02/24/2013 - 02:35 | Link to Comment ISEEIT
ISEEIT's picture

The only solution that does not result in accepting absolute totalitarianism is to take out the Mafia. I call BS on GW for his pinning the blame on anything other than the whores who've sold us into this deplorable condition. It is precisely the collectivist/utopian by administration bullshit "tax the rich and corporations fairly" bullshit that has brought us to this precipice.

We need to be let free and you will never be free as so long as a 'government' approaching even a fraction of these size and scope of this monstrous entity exist.

Central banks are the vessel by which collapse and 'rebirth' are to be accomplished...Kinda like a a 'new world order' sorta thing.

 

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