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Guest Post: Still Not Spreading the Wealth Around

Tyler Durden's picture




 

Via John Aziz Of Azizonomics blog,

Obama has always claimed to want to spread the wealth around. Yet, as I stressed this June (and in my first ever blog post way back in July 2011!) that’s the exact opposite of what he has achieved.

And it’s getting worse, not better.

Wages-as-a-proportion-of-GDP just hit another all-time low:

WASCUR:GDP

And corporate-profits-as-a-proportion-of-GDP just hit another all-time high:

cp:gdp

Obama might throw a lot of rhetoric about fighting for the middle class.

But the reality has been the opposite. America today is all about the enrichment of big banks, financial corporations and the military-industrial complex, while the working class has rotted.

The truth of Obama’s policies (and successive administrations prior to Obama) is more concentrated wealth within the financial elites and Wall Street. Banks get bailed out. Campaign donors get stimulus money. And the middle class and future generations pay for it in taxation and the Cantillon Effect.

The Obama reinflation is a rotten bubble built on rotten foundations. Trying to reinflate the economy from a starting debt ratio of over 350% of GDP through crony corporatism and helicopter drops to the rich is an absurd notion that is doomed to abject failure.

And the growing gap between the rich and the poor is steadily beginning to resemble neofeudalism.

 

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Mon, 12/03/2012 - 19:51 | 3031129 WhyDoesItHurtWh...
WhyDoesItHurtWhen iPee's picture

Only thing getting spread is ass cheeks.

Mon, 12/03/2012 - 19:56 | 3031134 tsx500
tsx500's picture

  <------  FORWARD !

   <------ BACKWARDS !

 

Mon, 12/03/2012 - 20:11 | 3031162 flacon
flacon's picture

Gaps get filled. 

Mon, 12/03/2012 - 21:08 | 3031264 economics9698
economics9698's picture

Germany 1920s repeat.

Mon, 12/03/2012 - 21:21 | 3031287 Dr. Richard Head
Dr. Richard Head's picture

Will there be a rinse in this cycle?

Mon, 12/03/2012 - 20:40 | 3031186 LetThemEatRand
LetThemEatRand's picture

 

"Forward" or "Backwards."

Ironically, his campaign slogan "forward" is most accurate.  He is moving forward with the same policies that have led us to this mess over the last 40 years (or really much longer via the federal reserve system).  If you substituted "forward" with "more of the same," it would be dead on.

 

Mon, 12/03/2012 - 22:59 | 3031507 NachoLiebor
NachoLiebor's picture

Forward (that debt to future generations)

Tue, 12/04/2012 - 04:50 | 3031809 andrewp111
andrewp111's picture

Forward lemmings. Over the Cliff!

Tue, 12/04/2012 - 08:47 | 3031935 Chuck Walla
Chuck Walla's picture

FORWARD SOVIET!

Apparatchiks of the World, Fight for the glory of the rich!

Mon, 12/03/2012 - 20:00 | 3031140 Grinder74
Grinder74's picture

BUCK FARACK

Mon, 12/03/2012 - 19:52 | 3031131 LawsofPhysics
LawsofPhysics's picture

Define "wealth".  I don't necessarily consider holding paper promises being wealthy.  Especially since fraud is the status quo.

Mon, 12/03/2012 - 20:28 | 3031203 walküre
walküre's picture

Someone obviously knee deep in Benny's fraud bux has junked you.

Guess what? They think they get to keep all that "wealth" at face value and eat their pie too!

Over my dead body.

Mon, 12/03/2012 - 20:59 | 3031250 Winston Churchill
Winston Churchill's picture

Their pockest will be stuffed with their wealth to aid the drop.

Tue, 12/04/2012 - 07:26 | 3031869 e-recep
e-recep's picture

as long as you can buy physical PMs with those paper promises methinks they are fucking valuable.

Mon, 12/03/2012 - 19:57 | 3031136 Insideher Trading
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But the reality has been the opposite. America today is all about the enrichment of big banks, financial corporations and the military-industrial complex, while the working class has rotted.

Has colloquially been defined in modern parlance as "crony capitalism" which is nothing other than a euphemism for fascism, which is what it should be justly refereed to as.

Mon, 12/03/2012 - 20:02 | 3031142 Grinder74
Grinder74's picture

"Only thing getting spread is ass cheeks..."

Happy to spread hers!

Mon, 12/03/2012 - 20:08 | 3031153 Joe moneybags
Joe moneybags's picture

It's not the job of the POTUS to spread wealth around.  So, author Aziz should be giving Obama credit for not having done so.

Mon, 12/03/2012 - 20:39 | 3031217 LetThemEatRand
LetThemEatRand's picture

I think you missed the point of the article (or at least the point that I took away) -- he is redistributing wealth, just not the group for whom he claims to be the champion.  He is redistributing wealth from the middle masses to the wealthy few.   What I find so frustrating debating with various characters here at ZH, is that many of them want to end the role of government in distributing wealth AND let the winners of the last 100 years or so who made their wealth through crony capitalism, keep theirs because otherwise we would be using "violence" to "redistribute wealth."  

Mon, 12/03/2012 - 21:08 | 3031266 cossack55
cossack55's picture

Agreed. Violence should only be used to "redistribute justice".

Mon, 12/03/2012 - 21:40 | 3031329 GeorgeHayduke
GeorgeHayduke's picture

Oh, the owners have used violence for decades to redistribute wealth upwards. This violence has been institutionalized and their propaganda mouthpieces, which morons call the "liberal" media, reinforce this violence as normal and the lesser minds buy it. These are the same dim bulbs who have been calling Obama a Socialist, Communist, Marxist, etc... The owners sit back and laugh.

Below is the hierarchy of violence as defined by Derrick Jensen. After observing the culture of the USA for 51 years I would say it's a dead on assessment.

Hierarchy of Violence: Civilization is based on a clearly defined and widely accepted yet often unarticulated hierarchy. Violence done by those higher on the hierarchy to those lower is nearly always invisible, that is, unnoticed. When it is noticed, it is fully rationalized. Violence done by those lower on the hierarchy to those higher is unthinkable, and when it does occur is regarded with shock, horror, and the fetishization of the victims."

Mon, 12/03/2012 - 22:38 | 3031460 escargot
escargot's picture

God I'm so sick of hearing dickweeds and dingbats talking about the "liberal media" and the "socialist" Obama, too.  Thanks for making me feel less isolated.

I read that Derrick Jensen book a few months back.  It's a good read, although that guy really needs to lighten up a bit.

Mon, 12/03/2012 - 20:08 | 3031154 NoDebt
NoDebt's picture

He hasn't gotten around to it YET.  He's trying the best he can, ya know.  If you would all just shut up, sit down and let him raise taxes on the "rich" this trend will surely be reversed and everything will be all 1954 again.

I mean the man single-handedly fixed health care in his very first term and all of a sudden you don't trust him with a simple task like income disparity?  You don't know how hard it is to get stuff done in D.C.  No man could do it all in 4 short years.

The next 4 years he will tackle income disparity.  The 4 after that will be global warming.  The 4 after that will be comprehenive immigration reform.  And by his 5th term he should have things pretty much straightened out.

Mon, 12/03/2012 - 20:16 | 3031180 Beam Me Up Scotty
Beam Me Up Scotty's picture

If the Republicans were smart, they would step aside and let Obama have whatever he wanted. They should just vote present. Then there is no question who threw the shit into the fan.

Mon, 12/03/2012 - 20:47 | 3031236 knukles
knukles's picture

Hah ha ha ha ha

That is brilliant
The whole bloody lot of 'em vote "Present" and then walk out, en masse.

Yesseriee Bob's Boner...
Officially usher in the end of it's "Bush's fault" and a bless the formal initiation of it's "Obama's fault"

Ta da da da dah da dah
Ta dah da dah da dah

Mon, 12/03/2012 - 21:00 | 3031251 fattail
fattail's picture

Let it burn.  Let the parasites and moochers consume their host.  Then we can burn the carcass and start over clean and healthy without the infection of the past 50 years.

Mon, 12/03/2012 - 21:08 | 3031267 Dr. Engali
Dr. Engali's picture

That's funny you used republicans and smart in the same sentence . I do agree with your idea though. I've felt the same way. Just give him everything he wants and watch this fucker burn to the ground.

Mon, 12/03/2012 - 21:19 | 3031284 Withdrawn Sanction
Withdrawn Sanction's picture

If the Republicans were smart...

Wait...you lost me on that one.

If a frog had wings, it wouldn't bump its butt, or if your Aunt had balls, she'd be your uncle....and so on

Mon, 12/03/2012 - 21:31 | 3031311 Ballin D
Ballin D's picture

Especially since Obama has been so successful at convincing the stupid that the Republicans are keeping him from fixing things.

The only problem would be if this happens and the gov't ends up being able to print its way through the next couple decades ala Japan.  We'd be waiting a long time for our laugh and it would get blamed on the person holding the ball when shit blows up anyway.

Mon, 12/03/2012 - 21:50 | 3031345 GeorgeHayduke
GeorgeHayduke's picture

"If the Republicans were smart...."

...they wouldn't be Republicans. (Unless they were already quite wealthy.)

Mon, 12/03/2012 - 22:49 | 3031479 tsuki
tsuki's picture

You're right.  Santorum said so.

Mon, 12/03/2012 - 23:10 | 3031541 MyBrothersKeeper
MyBrothersKeeper's picture

I have been saying this as well.  Get them to drop the debt limit stipulation and tell Obama he has the votes...then vote present.

Mon, 12/03/2012 - 20:09 | 3031157 MyBrothersKeeper
MyBrothersKeeper's picture

In the bigger picture the thing that drives up wages are employment as a percent of population and competition.  The biggest inhibitors to those things are currently the govt.  Just like with bank bailout the govt has, in effect, fostered monopolies.  the bailouts and subsequent regulations drove away small/regional banks.  The crony capitalism that favors big business vs small business has created a more monopolistic economy.  New regulation pertaining to EPA, credit etc have all pinned down innovation/entrepenuerism.  The propoganda has led people to believe that all business owners are rich.  They want you to believe the stock market is a reflection of the overall economy.  If this were true then why is the FTSE index in England up 11% as the country has re-entered recession?  In America there are only about 5,000 public traded companies.  There are over 22,000 private companies that start with the letter "A" alone.  It's these private companies that create 2/3 of all jobs yet they are being strangled by policies and regulation. Big companies not only use economies of scale, but are then given tax and regulatory advantages that small companies don't have.  They use this leverage and the ability to layff or downsize employees to keep profit margins high.  Small companies have no such luxury.  Innovation is the mother of job creation.  As long as innovation is supressed you won't see any drastic change in unemployment...which we all know is really between 11-15% if you have the ability to look behind the real numbers.

As I've said for a long time, either Obama and those that surround him are the most economic incompetent people to ever hold public office or they are intentionally destroying the economy.

Mon, 12/03/2012 - 20:46 | 3031231 spooz
spooz's picture

They're just taking care of the corporate cronies who pay for the priviledge.  If corporations like McDonalds and Walmart were forced to pay a living wage to their employees, it would make small restaurants and businesses more competitive.  I think a two tiered system of regulation is needed.  Small businesses should be exempt from regulation for the most part, while big corporate interests, because of their outsized impact on our economy, should be more heavily regulated.  And regulatory expenses should be reimbursed from corporate profits, not taxes.

Tue, 12/04/2012 - 11:22 | 3032431 MyBrothersKeeper
MyBrothersKeeper's picture

Using companies that require a mostly minimum wage workforce is not a good example imo.  Nobody should aspire to a minimum wage job.  You should be saying "I don't want to be stuck doing this my whole life, i'm going to improve my skills and move on"....unless you are a retiree that just wants to supplement income. Face it, most 12 year olds would have no problem doing those jobs. Raising the minimum wage will only hurt competition and small/med size businesses...even if only larger companies had to pay it. Having lifetime cashiers at McDonalds would hurt the labor market as it would inhibit both teenagers/college students and also retirees. So the last thing you want is employee complacency at that level.  If you are trying to provide for your family by working a minimum wage job you have made some serious mistakes and it's not mcDonalds job to make up for your mistakes....it's up to you to gain some additional skills and maximize your God given talents.....or stay there and have a plan to move up in the org.

Mon, 12/03/2012 - 21:32 | 3031314 Withdrawn Sanction
Withdrawn Sanction's picture

Big companies not only use economies of scale, but are then given tax and regulatory advantages that small companies don't have. They use this leverage and the ability to layff or downsize employees to keep profit margins high.

Quite true.  And yet despite these advantages, the big boyz still die off.  Of the 12 members of the Dow Jones Industrial average in 1912, only GE and US Steel remain (an 80+% mortality rate).   Or maybe it's because of, not despite the "advantages."  Advantages that lead to lethargy, bureaucratic sclerosis, and the diminishment if not outright disparagement of innovation.

Mon, 12/03/2012 - 23:06 | 3031526 MyBrothersKeeper
MyBrothersKeeper's picture

Your last sentence is a great statement and 100% true.  Those corporations that rely on government favor to suppress competition vs innovation and free market dynamics tend to get less innovative and more lethargic.  They, in fact, become more like government entities..buerocratic to the core.  Unfortunately, the crony capitalism is so rampant now and the policies so anti-innovation that the problem has become exacerbated due to the monopolistic nature of the economy. Furthermore many are more entrenched as part of the political/corporate oligarchy that they can still thrive based on government contracts and favors...all the while using taxpayer money to help each other.  Many corporations outside of the defense sector are now doing what the defense sector has been doing for decades....getting rich by ripping off the taxpayers. The defense contractors have the advantage due to the procurement cluserfuck/security clearence hurdles.  Corp's like GE tie themselves to specific legislation (ie green energy). The corporations aren't evil per se.  They have just bamboozled politicians to play by the rules that give favor to them and in return the corps give money to keep them in office.  Hard to sue corporations for violation of anti-trust law (via Rockafella's Standard Oil) when the government has created the monopoly.

How do small/medium size companies compete with that?  Historically, they become more niche oriented and use flexibility to their advantage.  But now with the policy raodbloacks (taxes, regulation/lack of access to credit/Obamacare) they can't even get off the ground or grow in a way that they have historically been able to.  They have to spend so much time/money dealing with these things that it takes away their ability to be flexible in meeting what the market demands. Thay can't hire a team of lawyers/pr people etc to make sure they are compliant...they have to figure it out themselves and it's killing them.

People need to ask themslves 2 questions when government does anything:  1) Does this create competition in the private sector; and 2) Does it increase the level of transparency.  If it doesn't the govt should not be doing it and they shouldn't be "taking over" anything.  The most underutilzed resource in the world is human capital.....which requires leadership.  Imagine if college football only allowed coaches to coach 2 hours per week.  This would eliminate the advantage of leadership/innovation of guys like Brain Kelly at Notre Dame, Urban Meyer, or Chris Peterson at Boise State or a Brad Stevens at Butler.  You simply cannot unleash human capital while suppressing innovation and leadership.

Tue, 12/04/2012 - 02:44 | 3031755 prains
prains's picture

regulatory capture; it's when your balls are being tickled but you don't know by whom

Mon, 12/03/2012 - 20:13 | 3031169 woggie
woggie's picture

the beast is on the gobble
and all that matters is we're all headed for it's belly
http://youtu.be/ntmthFyaYzY

Mon, 12/03/2012 - 20:35 | 3031214 walküre
walküre's picture

are you Barry or the Budda? I'm confused

Mon, 12/03/2012 - 21:07 | 3031261 A Middle Child ...
A Middle Child of History's picture

Hickory dickory dock
Out slithered Woggie from under his rock
To post anew on an article or two
The same old tired and worn out schlock.

Mon, 12/03/2012 - 20:18 | 3031188 Wakanda
Wakanda's picture

The Second American Revolution, unfolding now at kitchen tables, taverns, and fishing holes near you.

Mon, 12/03/2012 - 20:23 | 3031192 alien-IQ
alien-IQ's picture

More evidence (as if we really need it)

Study: American Households Hit 43-Year Low In Net Worth

By CBS December 02, 2012 - WASHINGTON (CBS DC) – The median net worth of American households has dropped to a 43-year low as the lower and middle classes appear poorer and less stable than they have been since 1969.

According to a recent study by New York University economics professor Edward N. Wolff, median net worth is at the decades-low figure of $57,000 (in 2010 dollars). And as the numbers in his study reflect, the situation only appears worse when all the statistics are taken as a whole.

 

http://www.informationclearinghouse.info/article33197.htm

Mon, 12/03/2012 - 20:26 | 3031201 surf0766
surf0766's picture

And now for the wealth tax so everyone can pay their fair share.

Mon, 12/03/2012 - 20:26 | 3031200 surf0766
surf0766's picture

There is a good joke.  GDP   !

Mon, 12/03/2012 - 20:41 | 3031222 nmewn
nmewn's picture

"...through crony corporatism..."

John, much better descriptor than the term "crony capitalist"...me likey ;-)

Mon, 12/03/2012 - 21:06 | 3031259 Hedgetard55
Hedgetard55's picture

The only crony anything Barry Choomboi gives a fuck about is his crony Reggie Love's head, as in Barry ain't gettin' any lately.

Mon, 12/03/2012 - 21:48 | 3031337 Bob
Bob's picture

Nice post on your site, John.  The possibility of Creative Destruction is behind us, I gotta think.  I share your wishes for what could have happened in 2008, but that was a long time ago. 

Letting it happen "organically" now would be just plain deadly for the common man, woman and child. 

Only a RICO campaign that hammered virtually everybody now in charge, public and private, could set this shit right. 

Ain't gonna happen. 

Oh yeah, the real progressives loathe Obama with a passion that is unique in their modern experience. 

If only our libertarian brethren would meet us halfway on civil liberties and war, we could find a way out of this. 

If pigs could only fly. 

 

 

Mon, 12/03/2012 - 22:12 | 3031401 Abrick
Abrick's picture

Neo-whatever is what everyone wanted. Anything but actually having to work for a living.

Mon, 12/03/2012 - 23:15 | 3031554 IamtheREALmario
IamtheREALmario's picture

I have noticed that corporations, living by the "growth paradigm" are doing two things; first raising prices to make up for the lack of volume growth .. they are creating inglation to make rowth targets and they can because they lakc competition a laws protect them ... and they grow profits through increases in labor arbitrage.

... all to pay overpaid and crimininally complicit execs (who the elitists have enlisted through salary bribery) and to inflate stock prices, Ponzi style.

Just FYI: the growth paradigm has NEVER been a certainty and assuming it is just leads to theft, draud and sociopathic activity.

Mon, 12/03/2012 - 23:48 | 3031611 StychoKiller
StychoKiller's picture

Use a keyboard much?

Tue, 12/04/2012 - 00:37 | 3031676 three chord sloth
three chord sloth's picture

Obama is a technocrat. His "solutions", like all of the "solutions" offered by technocrats over the past 50 years, will only advance the interests of the technocratic class. The upper 20 percent will prosper... all others fall behind. That is the track record of technocrats... that is what they do, that is who they are. It cannot be any other way in a technocracy.

Government bureaucrats are technocrats. Corporate lawyers are technocrats. C-level execs are technocrats, as are bankers and increasingly (as they become more credentialed) hot-shot tech workers. The social sciences and MBA programs are the training grounds of these new aristocrats. The core of their belief system is "Shut up. We know best." And the end results of their policies/programs, whether "left" or "right", are always the same... more for the technocrats, less for everyone else... all the rest is just rhetoric.

It's quite simple when you step back and see it for what it is. The West after WWII decided that it needed a well-educated technocratic elite to run things... to balance the greed and self-interest of the various factions in the nation, so they handed the reins of society to the "best and brightest". The best and brightest said "Thanks!" and proceeded, step by step, little by little, to remake the entirety of society in their own image. They became the ultimate greedy self-interst group.

In short; we handed the power to a small group of properly credentialed academic elites, and half a century later, we have a world made for a small group of properly credentialed academic elites. When you do the former is it really surprising that you get the latter?

Tue, 12/04/2012 - 10:04 | 3032152 sessinpo
sessinpo's picture

Up arrow for you. Johh Aziz, as well as many others, miss one important point. Wealth has been spread around.

The assumption, false I may say, is that when they say they want to "spread the wealth", "redistribute the wealth" is to say we want to spread the wealth from from the upper class to the lower class.

That is the big lie. And it comes from BOTH parties.

 

Here is where I differ from you, and facts and history support my position over yours.  In any given time period and in any society, there is a wealthy elite. Now you use the phrase "properly credentialed academic elites". But aren't the wealthy always that? After all, they always have the means, the ability to pay for such circumstances. That has always been and will always be. It's not that we have handed the power to a small group, they have always had it.

 

As another example, it's the same debate I would have with occupy wallstreet or whatever that "think" they are fighting the elite. And if only the occupy group had their way, everything would be fair. But when you bring up facts and look at things logically, even if occupy had their way, there would be some elite group that would be in position to take advantage of those circumstance. And guess what? It is generally those in political office or those already wealthy that are the elite to take advantage of a ignorant, misinformed, propagandized public. In other words, very little changes but the names.

 

So in every economic and political system, you still have the elite that control most of the wealth and power of a given region. And that goes back as far has human history has recorded nations of kings and empires. And that continues on with all the uprisings, recessions, depressions, whatever. We even see it in real time to this day with Egypt as a new elitist group arises.

Now the questin becomes are you one able to recognize that and take advantage of it (hopefully morally and ethically such as simply protecting yourself from such changes).

 

Tue, 12/04/2012 - 01:35 | 3031708 yabyum
yabyum's picture

Sloth, Very interesting point....thanks for that thought!

Tue, 12/04/2012 - 02:21 | 3031740 q99x2
q99x2's picture

The economy looks like Obama.

Tue, 12/04/2012 - 02:51 | 3031762 prains
prains's picture

The economy looks like Obama........rummaging through a giant Dick Cheny steaming turd looking for the dime in a birthday cake. It's called a "Chene" of events.

Circular muthafwucka......... that's how ya jerk it....in a circle..... don't go linear now when it's just startin to get good

Tue, 12/04/2012 - 03:15 | 3031773 Lord Of Finance
Lord Of Finance's picture

Spreading the wealth leads to spreading the blame.

Tue, 12/04/2012 - 09:51 | 3032107 Being Free
Being Free's picture

America today is all about the enrichment of big banks, financial corporations and the military-industrial complex

I would add to this list the "scientific-technological elite" who empower and sustain our warped reality. 

It is often forgotten that in his farewell address, Eisenhower in addition to warning of the dangers to our liberties from the "military-industrial complex", went on to warn of the hazards of a "scientific-technological elite" to those same liberties;

THE PROSPECT of domination of the nation's scholars by Federal employment, project allocations, and the power of money is ever present -- and is gravely to be regarded.  YET, in holding scientific research and discovery in respect, as we should, we must also be alert to the equal and opposite danger that public policy could itself become the captive of a scientific-technological elite.

Public funds in the form of direct government grants and student "loans" are flowing to universities (the "scientific-technological elite") in unprecedented amounts.  In return we get an army of indoctrinated non-critical thinking sheep/voters, and acedemic elites to man the government bureaucracies and direct public policy in order to enrich themselves and thier corporate brethren.  Keynesian economics and "climate change" policies come to mind.

Note: While painting with a broad brush in order to make a point I do not intend to offend or diminish the importance of scholarship and the many young people who do not fall prey to the indoctrination.  They are the bedrock of change and if there is any hope for a better society it will be their efforts that bring it about.

Eisenhowers' farewell address: http://www.youtube.com/watch?v=CWiIYW_fBfY

 

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