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The 0.01% Have Never Had It Better

Tyler Durden's picture




 

Over the years, as the WSJ notes, the only way inequality has really mattered to professional investors is 'if the rich are getting richer, companies that cater to them have better prospects'. Lately, though, some big investors have worried increasing income and wealth gaps threaten the economy's ability to expand (discussed here and here most recently.) One reason U.S. corporate profit margins are at records is the share of revenue going to wages is so low. An economy where income and wealth disparities are smaller might be healthier; but it would also leave less money flowing to the bottom line, something that is increasingly grabbing fund managers' attention.

 

Via WSJ,

...

 

Over the years, the only way inequality has really mattered to investors has been as a factor when considering stocks. If the rich are getting richer, companies that cater to them have better prospects. Goldman Sachs Group, for example, recently conducted a survey that showed optimism among high-income consumers relative to low-income ones at a high and pointed investors toward companies like department-store operator Nordstrom and luxury-bag maker Tumi Holdings.

 

 

Lately, though, some big investors have worried increasing income and wealth gaps threaten the economy's ability to expand. They also fret that public anger over it

 

...

 

Former Morgan Stanley equity strategist Gerard Minack notes the U.S. Gini index, a gauge of income disparities that is also at a record, tracks with measures of political polarization. So he worries inequality could give rise to more political dysfunction that risks damaging the economy.

 

Another concern is that rising inequality creates financial instability. Raghuram Rajan, the economist now heading India's central bank, has posited that the credit bubble in the early part of the last decade was a consequence of inequality.

 

...

 

But if inequality has risen to a point in which investors need to be worried, any reversal might also hurt.

 

One reason U.S. corporate profit margins are at records is the share of revenue going to wages is so low. Another is companies are paying a smaller share of profits on taxes. An economy where income and wealth disparities are smaller might be healthier. It would also leave less money flowing to the bottom line, something that will grab fund managers' attention.

 

So the dilemma is - any "attempt" to 'narrow' the inequality gap will be necessarily restructive of the factors that are juicing stock prices and exaggerating the inequality gap BUT if stock prices take a hit, with ZIRP, firms will simply relever more, layoff (cut costs) more, and re-iterate dividend/buyback programs... A vicious circle with only one outcome - aptly described by Kynikos Associates founder James Chanos, who worried people have less incentive to participate in the economy if they have concluded "the game isn't fair."

 

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Mon, 11/11/2013 - 11:57 | 4142720 LawsofPhysics
LawsofPhysics's picture

and the guillotines have never been sharper...

Go ahead, don't pass a farm bill and shut down that SNAP program...

Add capital gains to that data and it's even better for the 1%...

However, "money" and all that "wealth" will become irrelevant overnight when people start starving.

Tick tock motherfuckers...

Mon, 11/11/2013 - 12:00 | 4142733 edifice
edifice's picture

Oh, believe me, they will do anything it takes to keep SNAP and the NFL/wings/beer complex fully funded and flowing to the unwashed masses.  Even if this requires nationalizing the NFL (it won't; NFL has zero financial problems).

Mon, 11/11/2013 - 12:20 | 4142782 Beam Me Up Scotty
Beam Me Up Scotty's picture

Funny thing is, most of the people that voted for Obama, did so under the belief that things would "change".  Instead, he accelerated the money flow to the top.  Meanwhile, the 50% that voted for him are happy as pigs in shit because they get a free Obamaphone.  Baah.  Baaaah.   BAAAAAAAAAAAH!!

The guillotines should be used on the parasites that helped enable this shit too.  Get rid of the .01% and you will still have the 50% of parasites around.

Mon, 11/11/2013 - 13:21 | 4142944 SoilMyselfRotten
SoilMyselfRotten's picture

Get rid of the .01% and you will still have the 50% of parasites around.

 

 

If the .01% made reasonably less of their enormous profits, maybe the lower 50% would be less parasitic.

Mon, 11/11/2013 - 13:43 | 4143002 silverserfer
silverserfer's picture

Scotty, it would not have mattered who was "voted" in. Bankers rule and your a sucker too for STILL being caught up the the left right BS. 

Mon, 11/11/2013 - 13:51 | 4143021 RaceToTheBottom
RaceToTheBottom's picture

At some point a person graduates from being a sucker to being downright FUCKING STUPID

Mon, 11/11/2013 - 14:01 | 4143046 SilverDOG
SilverDOG's picture

Scotty proves as such, with a typical normalcy biased blame degree.

 

Mon, 11/11/2013 - 14:18 | 4143084 Citxmech
Citxmech's picture

Ha ha - looks like an exponential curve!  Could we be experiencing a bubble in 0.01%ers?

Peak concentration of wealth.  I love it. 

Mon, 11/11/2013 - 16:14 | 4143441 Beam Me Up Scotty
Beam Me Up Scotty's picture

Ya right, Ok, Silverdog, because we all know if the .01% shared their wealth, the bottom 50% of takers would suddenly be at their job with a smiley face on.  Sure.  They'd still be sucking on whomever's tit they could get their mouth on.  Talk about normalcy bias.....

Mon, 11/11/2013 - 16:12 | 4143435 Beam Me Up Scotty
Beam Me Up Scotty's picture

Where in my post did I mention left/right?  Fact is at least half of this country are in the parasite class.  And they enable whoever happens to be in power, be it left right, up or down.  Get it?

Mon, 11/11/2013 - 12:57 | 4142876 Id fight Gandhi
Id fight Gandhi's picture

Speaking of the NFL.... Did you know it's a non profit organization?

The team fees paid to it are even tax deductible.

Mon, 11/11/2013 - 13:18 | 4142937 edifice
edifice's picture

"Non-profit" (with quotation marks the size of Texas).

Mon, 11/11/2013 - 14:28 | 4143116 MachoMan
MachoMan's picture

The amount of non-profits that are actually non-profit are few and far between...  they're nothing more than a gigantic loophole for people sophisticated enough to use them.

Mon, 11/11/2013 - 13:29 | 4142969 disabledvet
disabledvet's picture

Plus you get massive tax abatement a for building Stadiums, all sorts activities at the ten thousand casinos now dotting our land scape and some quality time at the bar starting at 900AM. Are people even going to the games anymore? Most of these stadiums sit empty now. We'll see if popping the bubble this summer has the usual impact of "shoot"(higher) and "scoot"(sell into strength) or not. A lot of TRUE competitive pressures are starting to build in the economy...and if you think equities care one but about the massive debt loads created by this "jobless prosperity" I've got a bridge that needs unloading to someone with just a dollar in his pocket.

Mon, 11/11/2013 - 12:04 | 4142738 diesheepledie
diesheepledie's picture

"However, "money" and all that "wealth" will become irrelevant overnight when people start starving.".

 

You don't think the top 0.01% have been preparing? You can buy a lot of nice weaponry, training, food, fortified shelter, and trained body guards with $100M. The people that do well in today's ponzi are smarter than the sheeple and will do just as well (if not better) when the system collapses into chaos.

Mon, 11/11/2013 - 12:23 | 4142801 Platinum
Platinum's picture

All that money will allow them to survive, but these fuckers want more than wealth. They want power, and when things start collapsing, they'll lose a lot of the power that was tied to people buying into the system.

The regular people that are smart enough to prepare for the collapse, will be the ones providing the resistance as the system resets.

Mon, 11/11/2013 - 12:28 | 4142816 TrumpXVI
TrumpXVI's picture

Don't kid yourself.

They'll have the power, too.

Because in addition to the gold and the guns, they'll have the productive farmland, too.

You know how the Middle Ages worked?  See the short list in the above sentence.

Mon, 11/11/2013 - 13:01 | 4142884 Platinum
Platinum's picture

They still require people to give their consent. A lot do, and still will, no matter what.

 

But a determined person can do a lot. The more people that wake up before the reset, the better. Are the odds stacked? Yes.

 

I just refuse to give in to despair. My life was far worse growing up and I survived that.

 

Interesting times. Really strong strains.

Mon, 11/11/2013 - 13:57 | 4143034 James_Cole
James_Cole's picture

The very rich definitely arent smarter, just bigger assholes.

Mon, 11/11/2013 - 13:44 | 4143007 Wahooo
Wahooo's picture

Yep, these mega-rich fuckers won't even be touched. They'll find somewhere in our country to another country surrounded by that country's paid-off military and drug lords and no one will get near them. Look, these guys' wives are the most devious, power-driven cunts in the world, and if their boys begin to falter, they will whip them into all sorts of criminal activity to maintain their positions. It's all easily justifiable, too. They tried to help us with government assistance and we simply turned our backs. "Fuckin' low-brows" they'll say. And 2 billion rounds will get spent and then some. Don't count on our cops and military to be on our sides, those people are highly trained to take orders even in the face of death. Reason won't even enter the picture when they're dropped into a domestic war zone.

Mon, 11/11/2013 - 14:02 | 4143037 Acet
Acet's picture

And yet the wealthy had it much better during the times of the Roman Empire and the Renaissance than in the Middle Ages, even though wealth was much more evenly spread in the epochs before and after the Middle Ages than during it.

Not only that but those who were wealthy before the Middle Ages mostly lost everything with the coming of the Middle Ages.

 

Translating it in modern terms: the collapse of the system will hurt the wealthy as much or more than the poor, and even though a new elite will arrise with far more power over everybody else, they will still have it nowhere near as good as they would in a more equal society were people are fairly treated and allocated to doing what they do best independently of their parentage.

When a society is producing closer to it's ideal output, there is much more wealth to go around, so even a much smaller slice of the pie of a well balanced, productive society is far more that the entire pie in a time like the Dark Ages.

Mon, 11/11/2013 - 14:31 | 4143121 TrumpXVI
TrumpXVI's picture

An interesting aside to this theme is the probabilty that the Third Reich would have been better off (in terms of total volume of goods) engaged in a normal free trade arrangement with the Ukraine rather than by enslaving and murdering everyone in the Reichskommisariat Ukraine (which was hugely damaging to output).  Germany was able to get everything it needed from Stalinist Soviet Union; coal, oil, grain, etc. in normal trade agreements.  But Hitler wanted all of Europe to the Ural mountains for settlement, not just for trade.

At the end of the day, I agree completely that the wealthy will be hurt almost as badly as the poor.  For one thing, they have far further to fall, and for another, they don't have any more of a clue as to how to negotiate the radically changed landscape we're likely to inhabit as anyone else.  No one is prepared for what is coming.  But if collapse can be managed slowly enough, the wealthy will be the ones best equipped to make some sort of transition and maintain their positions of privilege.  I think this is the plan; the collaboration between government and the elites; manage contraction to the benefit of the few.

Mon, 11/11/2013 - 15:11 | 4143238 aerojet
aerojet's picture

I agree with that assessment.  It fits what is taking place better than the typical inter-generational conspiracy theories being thrown around. 

The Nazis were ideologues who hated communists and humans of lesser breeding.  It was insane, and thus insane policies were the outcome.  Lebensraum was that desire for a German empire re-settling surrounding lands with like-minded people in order to create a buffer zone that could protect the 1000 year reich.

Mon, 11/11/2013 - 14:37 | 4143141 MachoMan
MachoMan's picture

There are no guarantees on productivity, regardless of how evenly distributed the benefits therefrom may be...  Further, productivity is not caused by a perfectly distributed profit system.  What we've been evolving toward is a system that keeps pushing the boundaries to which the common man will accept government intrusion into his life and confiscation of the spoils of his labor.  We're pinpointing exactly the minimum amount of standards and things that will keep a revolt from happening.  The formula isn't far from being perfected.

The only things that stop this process are unforseen and external.  Thankfully, there is a reset every so often and we begin the process again.  However, each successive cycle, we're inching towards something.

Mon, 11/11/2013 - 17:55 | 4143717 Ying-Yang
Ying-Yang's picture

Well said Macho. They are testing, tweaking and recalibrating daily.

Thu, 11/14/2013 - 04:05 | 4153253 Acet
Acet's picture

Agreed.

The thing is, given my Physics and Electronics training and having observed how time-delayed reaction is typical of human beings (in physics terms it would be called hysteresis), I very much doubt that there is a static stable state for human societies: at best what we can have is a stable ciclical system.

Sadly most of the Economic and Political theories out there focus on static societal and economic states to solve humanity's problems, when by our very own nature we're always changing in response to our environment and past inputs, hence the great thinkers keep coming up with solutions that don't work.

 

Mon, 11/11/2013 - 18:16 | 4143777 Liberty2012
Liberty2012's picture

Well said Acet, although I disagree that the reset will result in a Middle Ages. It's possible, but not probable.

We are actuallly in the modern "dark ages" now. Central Planning has squelched initiative. The reset will release that energy and a reordering of relative values will commence. The transition period will be unpleasant, but it will last months / years, not decades / centuries.

Many more people are awake than we think. More and more all the time.

Mon, 11/11/2013 - 14:23 | 4143102 presk_eel_pundit
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Like the song said, "We're going to Serf City"!

Mon, 11/11/2013 - 17:56 | 4143719 yrbmegr
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Interesting that you mention the Middle Ages, referring of course to feudalism.  Under feudalism, one guy owned the land and let people live on his land, and extract wealth from it, under certain circumstances.  The usual arrangements involved something roughly equivalent to local taxation and an obligation to defend the lord's property.  Under feudalism, land was the key to wealth and power.  Fast forward: today, instead of land, it's capital, but the system is roughly the same, as are its social effects.  

Mon, 11/11/2013 - 18:24 | 4143803 Liberty2012
Liberty2012's picture

I agree yrbmegr, see my post above. However, a ponzi / fraud / central planning / tax scheme is not capital. It is theft of labor.

Capital is tools we use to make things. Debt is not capital.

:)

Mon, 11/11/2013 - 12:26 | 4142809 Yousif
Yousif's picture

http://youtu.be/fwf6KQnekHo

In all honesty, I do not believe an armed revolution is necessary.  It is, however, probably what they are looking to provoke.

History has shown that the 99% are disposable and, even better, the 99% will gladly dispose of itself without the 1% needing to get their hands dirty.  What an amazing deal?

I'm not advocating lieing down in the feutal position and allowing life to pass by, howeve, I am saying that the system is so manipulated right now, that there are very few outcomes that will be genuinely in our favour (whichever tax farm you were delivered in).

What is required is not "more of the same", what we need is a new paradigm.  The word "tribe" and "tribal affiliations" need to be reviewed.

I'm more than happy to sit down and prepare for history to repeat itself.  At the pace things are going, that is exactly what is going to happen.

Mon, 11/11/2013 - 15:07 | 4143224 aerojet
aerojet's picture

Yes, except with nuclear weapons.  The pressure will only build until a war breaks out and when someone starts to lose that war, then the nukes will be used.

Mon, 11/11/2013 - 12:27 | 4142813 LawsofPhysics
LawsofPhysics's picture

Unfortunately, that won't work forever unless they have their own oil fields.  Sorry, they will eventually have to feed on each other.  Basically, the future of the world is a return to tribal cultures, just like Afghanistan (who'd a thunk it?).  I don't know if I would consider that "winning".

Mon, 11/11/2013 - 13:35 | 4142986 Kirk2NCC1701
Kirk2NCC1701's picture

I agree.  Furthermore... What is going and and what you describe reminds one of the era of the Robber Knights and their fortresses they created along the trading routes and nodes.

Mark my words: We have a new era of Feudalism breathing down our necks...

With the exception of a update in the actors' titles and names, and a change in the stage setting, the PLOT, the GAME, the OBJECTIVE remains the same:  TRANS-GENERATIONAL RIGHT TO RULE by the Few over the Many.  The same shit we had for over a thousand years, aka Feudalism by the Aristocracy. 

Mon, 11/11/2013 - 16:03 | 4143406 TeresaE
TeresaE's picture

Of course they have been preparing.

If I had the funds I'd have a bug out shelter well-stocked too.

BUT, feel assured, most of the 0.1% have NO capability of taking care of their own needs. Hell, most of the bottom 20% can't either.

So, whom will be working for them? Cooking for them? Cleaning? Manning the walls and protecting the gardens? Do you think the neighbors won't notice that their workers' kids are fed and that you are working for the man?

If I remember what I learned (long, long, ago) about the French Revolution, it was that the servants of the rich either helped overthrow their masters or were killed along with them by the starving hordes.

Why would this time be any different?

Mon, 11/11/2013 - 12:55 | 4142872 TahoeBilly2012
TahoeBilly2012's picture

All Hail the "Protocols of the Learned Elders of Zion" (and a few friends)

Mon, 11/11/2013 - 15:11 | 4142995 Kirk2NCC1701
Kirk2NCC1701's picture

[que the song]..."That ain't working. That's the way you do it. Money for nothing, and Shiksas for free."  We are in dire straights indeed.

Whatever label of convenience you apply, if I had to use modern models of System Analysis, I'd conclude that they are using a "Series of nested, leveraged controls", where the few control the many.  For example...

A few like-minded people (clan or tribe members) work in tandem*.  They 'position' themselves to gain dominance, then effective control of a company.  They work together, to promote their kind/members up the corporate ladder.  It's about Positioning and Leverage, repeated over and over.  This type of corporate leverage by its executives is "strategic operational leverage".  Likewise, when some wealthy individuals buy controlling shares in a public company, they have "strategic ownership leverage" of a company.  When this (operational and ownership leverage) happens in a number of companies in an industry (where a few control both its operations and ownership), you have leveraged control of an entire industry.

When you repeat this process in a number of key industries (finance, media, the MIC), you end up attaining leveraged control over a country's structure of power and influence.  With it, you attain control over its Judiciary.  The Judiciary can enforce and interpret laws to its liking/agenda, and it lasts far longer than most politicians-of-convenience (useful fools and tools).

When you've repeated these strategic processes internationally, by starting out with the most powerful countries that allow your Leverage Games to get established and grow, you can eventually subjugate the weaker countries.  You thus gain control of the entire world, or most of it.  This all happens via this "nested hierarchy of leveraged control". 

And since such an Agenda for World Domination takes several generations and must occur on a global scale, it can only be carried out if the ahderents/followers of such a Plan are bound together in an iron-clad fashion by the multiple bonds of genetic/tribal, cultural and religious kinship.  You have to see yourself not only as 'Seperate' entities in a larger organism, but as superior (or even 'divinely chosen') group of people.  It's all part of the Jedi Mind-trick of being told endlessly that "You are special. You are chosen." Eventually, this belief becomes hard-wired and then becomes self-fulfilling.

 

* It is said that 3 above-average people working as "one" can outperform and outmaneuver almost all of the "best" individuals.  The secret is not so much in being "THE Best", but in (a) becoming very good, and (b) "The Very Good working as One". 

Christians have an inbred handicap -- given that their religion is By, Of and For the WEAK.  They are raised to be Sheep, not Wolves.  Any foreign invasive species (in a political or religious sense) can take advantage of the Christians' built-in weaknesses (of passive acceptance of misfortune or abuse).  /Thanks, Jesus**!  And thanks Church of Rome and Church of England! / sarc.

 

** Jesus of Nazareth (or his indirect followers who actually wrote the Scripture decades later), screwed up BIG time.  Let's not have any of this "the meek shall inherit the earth" or "turn the other cheek" bullshit!  Instead, they should have built it on... Reciprocity.  EQUITABLE RECIPROCITY.  Get it straight, JC, it's "Quid pro Quo".  Sure the Golden Rule is great to live by, but the minute 'they' do not, all bets are off and Equitable Reciprocity (aye for an aye, or an eye for an eye) applies.

In today's context... Ok, so you want to build a religious building (of foreign faith) in our Christian country.  No problem... We get to build a nice Christian Church in yours.  Oh, you want to build 100?  No Problem... We build a 100 in yours. 

Quid Pro Quo, baby, this for that, value for value exchange in kind.  No "freebies out of the goodness of our sheep/Christian hearts.

Oh, you want to have people of your faith be in positions of corporate and political leadership in our company, legislature or judiciary?  No problem... We'll just have our Christian executives and politicians appointed to positions of power and influence in your companies, judiciary and legislature. 

If you're about to panic because of The Constitution, you need to think about it deep and hard... This still does not contradict the "separation of Church & State".  For one, none of these foreign faiths are "Churches".  They go by other labels: Mosque, Synagogue, Temple, etc...

Mon, 11/11/2013 - 15:12 | 4143240 aerojet
aerojet's picture

Well, plus it was all made up.

Mon, 11/11/2013 - 18:42 | 4143867 Liberty2012
Liberty2012's picture

Interesting way of describing the situation. I will agree that the Christian mind set can lead to being taken advantage of in the short term. Long term is a different story. People who value the principles of living and working together freely always come out on top in the end.

We the people create the world we live in with every choice we make.

:)

Mon, 11/11/2013 - 13:21 | 4142949 tempo
tempo's picture

The developed countries are aligned against the 3 billion poor who live on $2/day. Because of automation labor is becoming cheaper and entitlements must increase to maintain social order in the developed countries, therefore all developed countries engage in competitive devaluation which hurt the 3 billion poor. Only the .01% gain from this worldwide program. The population in the developed world will continue to live comparatively well. The 3 billion poor will suffer. The developed countries will arm the 3 billion with small arms so they can kill each other but keep the real nasty stuff to protect their interest.

Mon, 11/11/2013 - 15:04 | 4143213 aerojet
aerojet's picture

The SNAP program is about corporate welfare, not about feeding poor people.  People are just the conduit of the wealth transfer in that case.

Mon, 11/11/2013 - 15:40 | 4143335 Kirk2NCC1701
Kirk2NCC1701's picture

T-Shirt:  RTFG ONC!*  Tick tock. [large font, on 2 rows]

* [small font] Roll The Fucking Guillotines, Or Nothing Changes!

Mon, 11/11/2013 - 11:58 | 4142721 RaceToTheBottom
RaceToTheBottom's picture

"people have less incentive to participate in the economy if they have concluded "the game isn't fair.""

It is not just the economy, it is the financial system, the tax system, the "meritocracy system", etc.

people have less incentive to participating if they have concluded "the game isn't fair."

there, fixed it for you.

Mon, 11/11/2013 - 12:01 | 4142729 LawsofPhysics
LawsofPhysics's picture

Bingo,  I remain long black markets and sharecropping as less than half of the people on earth have any capital invested in any publicly traded "market".  They don't give a shit, a can of fucking beans or a laying hen has far more value than paper script printed out of thin air.

Mon, 11/11/2013 - 12:15 | 4142766 y3maxx
y3maxx's picture

... This Canadian's Remembrance/Veterans Day Thoughts ...Help End all Wars and Pursue Human Rights through one’s own Calling and Art. ...The U.S.A. has become a Country of “Bread and Circuses” As Canadians, Be Careful What and Who You support South of the Border. ...Our four Western Provinces. own a plethora of Natural Resources with only 12.5 million Citizens. We Westerners are but an “Annex/Manifest Destiny” moment away from our Canadian Freedoms. http://en.wikipedia.org/wiki/Bread_and_circuses

Mon, 11/11/2013 - 13:33 | 4142983 disabledvet
disabledvet's picture

I did read that Canadians have the highest savings rate by far in the Western Hemisphere. If Europe is any guide "that is cause for concern."

Mon, 11/11/2013 - 15:14 | 4143245 aerojet
aerojet's picture

And probably also the highest alcoholism rate. 

Mon, 11/11/2013 - 11:58 | 4142725 yrad
yrad's picture

As a 0.02%er I am upset that I am missing out on all the fun!!!

Mon, 11/11/2013 - 12:03 | 4142748 Sofa King Confused
Sofa King Confused's picture

You must be in the bottom 0.02%.

Mon, 11/11/2013 - 13:45 | 4143009 Wahooo
Wahooo's picture

You must be lazy.

Mon, 11/11/2013 - 12:00 | 4142726 Dre4dwolf
Dre4dwolf's picture

All the more proof that democarts support theft and fraud for the 1% more than republicans.... who are universally thought of as "the bastards that wont tax the rich".

Lets put it this way,

Its easier to pay off a democratic politician, than it is to pay of a republican politician, because the very idea of being conservative means that you are more stubborn about your values and have a higher level of conviction even if your ideaology is a little flawed.

 

Rich people will never pay higher taxes, because they already pay the bulk of them and its cheaper for them to bribe a politician or government official to get out of more taxes than it is to pay the taxes.

And ontop of it, taxing rich people wont make poor people any richer anyway.

 

The 1% love Obama.

The 99%? not soo much, but they are woo'd by his blackiness and bling.

 

Most mega rich people in the U.S. right now got that way by actions that would of been considered illegal 30 years ago.

Most of the mega rich people in the U.S. right now probably broke numerous laws to get there even today.

 

You don't get rich without stepping on someone or breaking the law someway somehow.

Mon, 11/11/2013 - 12:07 | 4142758 Singelguy
Singelguy's picture

What the mega rich fail to appreciate is that as the disparity grows, they eventually shoot themselves in the head. Consumers with no disposable income cannot buy the mega rich's products and services. They can only cut costs so much and then the bottom lines begins to fall along with the top line. It is all very short sighted. Better to be less greedy now so they continue to earn significant income over the long term.

Mon, 11/11/2013 - 12:26 | 4142806 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Singelguy, this is the argument I have been stating for years now against the outsourcing of manufacturing and majority of jobs. In a consumer based economy, no consumers means no economy, plain and simple.

Mon, 11/11/2013 - 12:56 | 4142870 Dre4dwolf
Dre4dwolf's picture

Singelguy, this is the argument I have been stating for years now against the outsourcing of manufacturing and majority of jobs. In a consumer based economy, no consumers means no economy, plain and simple.

Thats why we have welfare, social security, EBT Snaps.

 

The government is paying people to consume.

 

Since people can't go out and find work, the government just borrows money and gives it to people to spend.

 

Without government, consumption would drop by 65% right now because the government through horrible policy has destroyed the economy to the point where it no longer functions without communist policies.

When the governments ability to borrow disapears, atleast 20% of the population will starve to death.

Its very sad, because the people who do work and contribute get less and less in return for their labor , while those that don't contribute get more and more from those who do.

The rich don't care, because they already own everything, all inflation means to them is that they can charge more rent.

 

Its the middle class vs the poor right now, the rich are sitting back laughing all the way to their private bank located on their private yacht thats floating in their private pool aboard their private jet while middle class americans are wondering how the fuck they are going to survive the onslaught of welfare zombies when this shit finally collapses.

Mon, 11/11/2013 - 13:42 | 4143000 disabledvet
disabledvet's picture

My view is that the "war aim" from the bad guys is our debt but we'll see. Turning a drilling rig company into a REIT? Really? I thought those were called "workers" not "stay-cationers." The point of the tax reform act of 1986 was not as I recall to have the folks doing all the hiring to declare themselves tax free. These are publicly traded companies domiciled in the USA and extracting our resources with the protection of our Armed Forces. Say what again?

Mon, 11/11/2013 - 12:59 | 4142883 outamyeffinway
outamyeffinway's picture

Only problem Singleguy is they'll just pack up and go somewhere else. You're thinking is ethnocentric. They could give a shit about Americans and our way of life. They'll just go to where the consumer has money.

 

Basically, we are tragically fucked. Time to leave.

Mon, 11/11/2013 - 13:37 | 4142992 FredFlintstone
FredFlintstone's picture

They might be shooting themselves in the foot, but not in the head as you suggest. The mega rich are not relying on the rest of us buying their products. 

 

Fred

Mon, 11/11/2013 - 14:53 | 4143185 MachoMan
MachoMan's picture

Risk aversion has dictated that they take the profits now rather than later...  Further, the concept of slowly milking economies is a bit naive, given economics can have massive shifts of all sorts that could cause a disruption to the profit stream.  To say that they ought to be less greedy is nonsensical.  It's no different than the self interest that demands each of our actions on a daily basis...  the fact that they get to do it on a larger scale doesn't make outsourcing any more or less moral.

Mon, 11/11/2013 - 18:59 | 4143914 Liberty2012
Liberty2012's picture

Singleguy, its not about the people who are "mega rich" . They acquired their wealth in a variety of ways and have a variety of purposes. It's about those whose purpose is power over other people. Those people want control; they are not trying to earn an honest living; they don't care about a "sustainable" process. Some of them would enjoy a bit of chaos and destruction.

Most people care. Some do not.

;)

Mon, 11/11/2013 - 12:11 | 4142761 Almost Solvent
Almost Solvent's picture

Interesting.

So democrats are like soft shit and republicans are like hard shit?

 

 

Mon, 11/11/2013 - 12:42 | 4142848 Dre4dwolf
Dre4dwolf's picture

Yea , democrats are more like diarrhea and republicans are like wet turds.

Mon, 11/11/2013 - 12:24 | 4142803 HulkHogan
HulkHogan's picture

For Christ's sake, take Ronald Reagon's dick out of your mouth.

Mon, 11/11/2013 - 13:13 | 4142925 Dre4dwolf
Dre4dwolf's picture

?I don't think my comment was even pro-republican.

All I said is democrats are more corrupt than republicans.... I didn't say republicans aren't corrupt..... I struggle to see where my post was even pro-republican.

Comparing republicans and democrats is like comparing shit and vomit and asking which one smells worst, it is of my opinion that the shit smells worst than the vomit.

Mon, 11/11/2013 - 13:50 | 4142953 RSloane
RSloane's picture

Relax, Dre. I did not get the impression from your post that your hero is Reagan. We have a two party system in which both parties stink to high heaven. I don't believe anyone would disagree with that.

Mon, 11/11/2013 - 11:59 | 4142728 OwnSilverPlayMusic
OwnSilverPlayMusic's picture

Can we finally stop this meme of Obama the communist?  The man is a fascist through and through.

Mon, 11/11/2013 - 19:02 | 4143922 Liberty2012
Liberty2012's picture

The different names of slavery are somewhat irrelevant. The scenery along the road may be different, but the destination is the same.

;)

Mon, 11/11/2013 - 12:00 | 4142730 Bearwagon
Bearwagon's picture

"The game isn't fair"? Who's the fucking nihilist around here?  ;-)

Mon, 11/11/2013 - 13:18 | 4142936 yrad
yrad's picture

The rug really tied the room together

Mon, 11/11/2013 - 15:19 | 4143271 aerojet
aerojet's picture

You think the carpet pissers did this?

Mon, 11/11/2013 - 12:00 | 4142734 venturen
venturen's picture

Obama has them fooled or is that they have Obama fooled?

Mon, 11/11/2013 - 12:40 | 4142735 Mercury
Mercury's picture

Over the years, as the WSJ notes, the only way inequality has really mattered to professional investors is 'if the rich are getting richer, companies that cater to them have better prospects'.

 

Indeed - witness the WSJ's new 'MANSION' section which more or less reflects this reality. Not even delightfully trashy, it's just plain trashy.

Have America's megarich ever been so vulgar, crass and inelegant?

Unfortunately, you can't redistribute good taste.

Mon, 11/11/2013 - 12:01 | 4142736 icanhasbailout
icanhasbailout's picture

I went semi-Galt years ago. Why should I work harder than I need to to survive when other people are stealing all the benefits of my labor?

Mon, 11/11/2013 - 12:14 | 4142773 kralizec
kralizec's picture

I did that too.  Purposely under-employed.  To Hell with this kleptocracy!  Soon I will be full-Galt.  :)

Mon, 11/11/2013 - 13:54 | 4143029 silverserfer
silverserfer's picture

there are thousands of people out there going full Galt out there. Newsflash your not that talented. Get back to running script, shoveling hay, or whatever it is you do.  

Going Galt is the Libertarian excuse for being a lazy ass. There is plenty of work to do for yourself and your family. 

Mon, 11/11/2013 - 17:13 | 4143611 A Nanny Moose
A Nanny Moose's picture

Going Galt is not about not producing. It is about producing as little as possible, in ways which elude government enumeration, thus taxation. Gardening vs. shopping at Walmart, or RalphBertVonsway is a good example. Taking it a step further, one might learn to gather seeds (capital) instead of repeatedly buying them at LowesDespot.

Mon, 11/11/2013 - 12:18 | 4142785 seek
seek's picture

I'm heading in this direction. I'm a 1%-er (about a 0.5%er) and have only seen declines in my income since '08, meanwhile watching my neighbors (I live in a middle class, blue-ish collar neighborhood) struggle, lose houses, and go bankrupt, even though my real effective tax rate is 32-35% (and higher this year.) I've gifted more money to friends/family in trouble this year than I've spent on myself.

Then I'll go to the grocery store and see the pretend poor roll up in a new caddilac and pay with a SNAP card. WTF?!?

I have zero motivation to grow my business or work at retaining income -- since I can see the collapse coming, I know it will be plunging, perhaps to zero, regardless of height it starts at, and in the meantime the more I make, the better funded the ass-grabbers with blue gloves are and ironically the lower the inflation, since they don't have to print as much if I pay more in taxes. So yeah, Galt is the way to go until we get to the post-reformation US.

Mon, 11/11/2013 - 12:27 | 4142811 Beam Me Up Scotty
Beam Me Up Scotty's picture

"my real effective tax rate is 32-35% (and higher this year.)"

Seek, I always enjoy your enlightened posts here on ZH.  I'd venture to guess your real effective tax rate is much higher than that though, when you factor in all the taxes and fees you pay.  Its probably more like 60% and maybe even more.  And you pay twice the social security everyone else does because you own a business too.  So you are working at least 6 out of every 10 days for .gov, and probably more like 7 out of ten days.  And of those 3 or 4 remaining days of your labor that you get to keep, they will take half of that again when you die, if you don't protect it properly.  If you end up in a nursing home for an extended stay, they might even take it all.

So in the end they will get everything you worked for.  10 out of 10 days of work will be for .gov.  SLAVERY BITCHES!!

Mon, 11/11/2013 - 13:08 | 4142906 icanhasbailout
icanhasbailout's picture

When you add in everything, real effective tax rates are around 75% for most everybody, except the folks at the very top who pay next to nothing.

Mon, 11/11/2013 - 13:54 | 4143026 falak pema
falak pema's picture

during the Eisenhower Kennedy days marginal tax on rich and corporates were much higher than today. But, we didn't have a crony capitalist financialista warmongering America. We had Marshall Plan and benign governance. Those years, the US entrepreneurs never bitched as they had come out of depression and war and thanked their stars to be alive and vibrant. Paying taxes was not their main problem. It was to maintain a trajectory that avoided the depression/war syndrome.

Today, people bitch about the Oligarchy super capitalist model, now 0.1%, those whose mentors OSTENSIBLY created this model all the while these deniers bitch about marginal tax rates which are lower than during the golden age.

Something wrong with that logic. Admittedly, the big difference with that age is the entitlement spiral since Great Society. But that does NOT explain the debasement of society created by warmongering MIC and financial neocon USA mantra. 

You reap what you sow and you forget what your parents happiiy accepted as common bind to their fellow citizens; something life  had taught them the hard way. 

Well hard times are back with a vengeance. We relive the past.

Mon, 11/11/2013 - 13:59 | 4143040 icanhasbailout
icanhasbailout's picture

High income tax rates for "the rich" were always superficial. The truly wealthy make little to no "income", it's all in capital gains.

Mon, 11/11/2013 - 14:49 | 4143162 falak pema
falak pema's picture

and how was capital gains taxed under Eisenhower and Kennedy?

If my memory serves me right capital gains was no big deal in those days as WS was FLAT.

As for during the last thirty years, all those bonuses that CEOs and traders get paid are part of their salaries. 

We do have a rich salaried class in the current financial age; all the while they get stock options on top of take home pay. 

Just look at CEO of Yahoo as example or CEO of Apple, or CEO of GE.

Mon, 11/11/2013 - 15:51 | 4143367 seek
seek's picture

Indeed, I should have said my real effective income tax rate. Add in everything explicitly labeled as a tax (property, auto licenses, sales tax) and I'm pretty sure I'm north of 50% without even trying to look for other taxes and fees.

Mon, 11/11/2013 - 12:02 | 4142744 Benedict Farse
Benedict Farse's picture

The poor are fat. The master stroke that will stop all revolution. Genius.

Mon, 11/11/2013 - 12:11 | 4142770 edifice
edifice's picture

And ignorant.  They have a completely different set of education for dynastic families.

Mon, 11/11/2013 - 13:01 | 4142885 RSloane
RSloane's picture

They are not only fat, they have heart disease, and diabetes, and chronic pulmonary obstruction, and high blood pressure, and artery disease, and so on and so on. You cannot build a revolution on people that could not walk two blocks without a coronary event. Being sedentary is fatal, where do you excercise if going outside means taking your life in your hands. How do you organize a revolution if most people would opt to watch it on TV?  Its more diabolically genius than it appears at first glance.

Mon, 11/11/2013 - 13:08 | 4142902 fonzannoon
fonzannoon's picture

If technology can give us the next push there will be no need for a revolution.

http://www.youtube.com/watch?v=h1BQPV-iCkU

Mon, 11/11/2013 - 13:43 | 4143001 RSloane
RSloane's picture

Our local Wal Mart is being sued for not providing enough motorized shopping carts/vehicles for fatties to peruse the aisles in comfort. I kid you not. A woman claimed she had to wait for forty five minutes before she could shop and this infringed on her rights as a consumer - she can't obviously walk because she has extremely poor circulation due to diabetes. She is 28 yrs old and has three kids. No dads in the picture. Two of her kids are already obese and they are under thirteen yrs old. Your youtube vid was perfect. I was listening to a discussion about the law suit on local radio and callers were told before making their comments that prejudice against fat people would not be tolerated. They eventually changed the topic because no one was calling in. Bizarro world we live in.

Mon, 11/11/2013 - 15:07 | 4143225 Almost Solvent
Almost Solvent's picture

Good for that fattie. She's right to sue Walmart - they failed her in providing the basic needs of the morbidly obese.

 

These immobile whales are doing their part of the great consumption Walmart relies on to make their business model so glorious.

 

Walmart needs to increase the number of scooters per store -also bullish for consumption!

 

 

Mon, 11/11/2013 - 12:08 | 4142760 OwnSilverPlayMusic
OwnSilverPlayMusic's picture

Let's not forget that inflation was 27.6% over the same time period.

Mon, 11/11/2013 - 12:12 | 4142771 withglee
withglee's picture

We are watching the collapse of capitalism ... plain and simple. It, like communism, is an obviously flawed system. Both seem to have a similar half life ... about 2 or 3 generations.

Mon, 11/11/2013 - 12:16 | 4142778 OwnSilverPlayMusic
OwnSilverPlayMusic's picture

I must have skipped a chapter in "Wealth of Nations' not once did i see bailouts, QE nor corporate welfare mentioned.

Mon, 11/11/2013 - 12:32 | 4142827 Beam Me Up Scotty
Beam Me Up Scotty's picture

"We are watching the collapse of capitalism ... plain and simple"

Sure right, because we have had a capitalist system all along?  We haven't had anything more than out and out crony capitalism for the last 40+ years and probably more like 100 years.  Quit blaming free market capitalism, thats not the system we have today.

Mon, 11/11/2013 - 12:39 | 4142836 withglee
withglee's picture

That's what they always say about communism. It's a great system but no one has done it right yet. What utter nonsense. Why should someone who works give to someone who doesn't. Both systems have this trait.

With a properly managed Medium of Exchange ... one that knows money is "a promise to complete a trade", you have truly free trade. Such a system requires no "state" control. Such a system requires no capital to function.

Under capitalism, you must first find someone with capital before you can make a trading promise. Under communism, someone else makes your trading promises for you. Both systems are cons.

Mon, 11/11/2013 - 14:28 | 4143065 malek
malek's picture

Bla, bla, bla
But state sponsored theft on a broad and regular basis (a/k/a socialism which always means redistribution) will make it all better.
At least until Margaret Thatcher's famous quip comes into effect... and then? Just apply more force. People need to be forced into their happiness.

Mon, 11/11/2013 - 15:18 | 4143241 MachoMan
MachoMan's picture

Exactly.  The paradox of capitalism is that no rational actor will ever allow anyone to force him to compete to the point of normalization of his profits (or anywhere remotely near).  The paradox of communism is that humans have finite ingenuity and central planners doubly so (aside from the fact there is no marginal incentive to produce).  These flaws are completely fatal.  Humans have yet to devise and implement a system that corrects these flaws.  It may not even be possible.

The other issue is that it's a fool's errand to even debate the issue considering it is the market, through self interest, that dictates the economic system, not bureaucrats (although not at all times).  We classify economic systems based upon how the market behaves, not on how we demand it to behave.  Frankly, people act however the hell they want to and will go to any length to do so.  Economics has yet to predict human behavior on the macro scale for any material period of time.  Many of the governing structures we consider to be solid are merely the bed time stories we tell ourselves so we can sleep at night.   

Mon, 11/11/2013 - 17:26 | 4143648 A Nanny Moose
A Nanny Moose's picture

Anyone with two brain cells to rub together, has capital. Whether they use them or not, in a productive fashion, is another matter entirely.

Mon, 11/11/2013 - 19:15 | 4143953 Liberty2012
Liberty2012's picture

Thank you Nanny Moose! ;)

Mon, 11/11/2013 - 12:17 | 4142780 Walt D.
Walt D.'s picture

There is one problem with this canard - everything is quoted in dollars, which is a fiat currency. A million dollars ain't what it used to be. You would get a better picture if this was expressed in barrels of oil, or gold. Bernanke is not an alchemist, and I don't think that he has worked out how to create a barrel of oil out of thin air.

One other point - you expect the ultra rich to do better as time goes on, just due to the increase in population - collect 15 cents from everyone in the world and you become a billionaire.

Mon, 11/11/2013 - 12:17 | 4142783 QE49er
QE49er's picture

They control us because we empower them.  Happy Victims Day.

Mon, 11/11/2013 - 19:17 | 4143958 Liberty2012
Liberty2012's picture

;)

Mon, 11/11/2013 - 12:18 | 4142786 Diogenes
Diogenes's picture

The guaranteed annual income = the guaranteed annual consumer. As long as the government can print it and hand it out, it will wind up in the hands of the rich.

Mon, 11/11/2013 - 12:18 | 4142788 PeeramidIdeologies
PeeramidIdeologies's picture

Lately large investors have become concerned... Lately lol I believe it would be almost impossible to quantify the impact this wealth concentration has had on the real economy. The real question is: Why is it so difficult to get this money re-invested into real world projects? We have real energy, water, agricultural, climate and social issues that require a new comprehensive form of investment. More yachts, diamonds, and extravagant lifestyles are not part of the solution.

Time to wake up.

Mon, 11/11/2013 - 12:46 | 4142852 Raging Debate
Raging Debate's picture

Peeramid - Success from prior generations creates excess. You have generational dynamics as a general human problem. It is demographic imbalance, time takes care of that one.

I have seen fits and starts in small caps the last few years. As the boomers finish retiring you'll see shortage of labor and goods. Necessity is the mother of all invention. I look at 2021 as a year to begin rescaling investments and in particlar a new wave of innovation. Until then lots of kicking and screaming.

Seer - Invest some money into tax sheltering and avoidance. I learned the hard way. My 2012 revenue as a SOHO was $130k and earned income was $27k. Dont fight the tape as they say on this one.

Mon, 11/11/2013 - 13:26 | 4142963 PeeramidIdeologies
PeeramidIdeologies's picture

RD - That is a far removed solution for some fairly pressing issues. It is the lack of investment that is allowing your described "phenomenon" to take place. I also find it a bit humourus that you believe that people will readily accept a new paradigm from the money gods should the world experience a Greek moment.
The world, IMO, is changing far faster then most wish to believe, and they may find that their dated ideas on money and control no longer apply in 2021.

Mon, 11/11/2013 - 12:20 | 4142790 John___Connor
John___Connor's picture

Obama is undertaking one of the greatest wealth redistribution programs in US history. Only it is taking from the poor to give to the rich. All this outright theft and the progressive liberal left still love him. 

http://knowmadiclife.com/blog/2013/10/21/five-years-of-obams-wealth-redi...

Mon, 11/11/2013 - 12:41 | 4142845 andrewp111
andrewp111's picture

Obama is actually taking from the Middle Class to give to the poor and the rich.  His Party represents the poor and the rich. Duh!!

Mon, 11/11/2013 - 12:23 | 4142799 Yen Cross
Yen Cross's picture

   This article is plain stupid! First of all most companies have already cut back to "bare bones" employment levels. Suggesting deeper cuts just doesn't add up. Secondly, the past has clearly shown that a stronger middle class contributes to a more robust economy. The retard that wrote this piece needs to go crawl back under his rock in the Hamptons!

Mon, 11/11/2013 - 12:26 | 4142802 razorthin
razorthin's picture

These blood suckers are like the AIDS virus, pre-AZT cocktail.  The host is about dead.

Mon, 11/11/2013 - 12:34 | 4142831 TradingTroll
TradingTroll's picture

The dumbass .01% live in the same toxic world they created. All the billions they have cant

 

-remove the radiation from the air, water and soil around them

-ensure the food they eat isnt GMO-laced

-remove chemicals from their environment

-turn off cancer causing EMF waves from the wireless equipment around them

 

The .01% are just winning at this round of Monopoly. When them game ends, they're finding they're in the same hell as everyone else-but that they are at higher risk of being accused of doing nothing.

 

No excuses for the .01%

 

Mon, 11/11/2013 - 13:02 | 4142890 GrinandBearit
GrinandBearit's picture

I've had the very same thoughts.

Maybe TPTB are aliens... or perhaps they have some special immunity/radiation antidotes we don't know about.

Mon, 11/11/2013 - 15:20 | 4143276 edifice
edifice's picture

C'mon, we all know they're Reptilians, from Alpha Draconis.

http://en.wikipedia.org/wiki/Reptilians

Mon, 11/11/2013 - 12:40 | 4142842 firstdivision
firstdivision's picture

..and yet the bottom 90% still line up to buy the new iPhone and max out their credit card in the hopes of making the minimum monthly payments.  The bottom 90% are at the bottom for a simple reason, they're as greedy and insecure as the 0.01%, they just lack drive to educate themselves.

Mon, 11/11/2013 - 13:10 | 4142917 ItsDanger
ItsDanger's picture

Some people will never learn that the economy is more healthy when everyone has the opportunity to do better.  Right now it just benefits the poor and rich.  Middle class is getting the shaft.

Mon, 11/11/2013 - 13:14 | 4142929 Mister Ed
Mister Ed's picture

Where's Robespierre when you need him??

Mon, 11/11/2013 - 13:21 | 4142945 hangemhigh77
hangemhigh77's picture

The -01er's money will allow them to run but they won't be able to hide.  Soon the masss will awaken and then we will have REAL change you BETTER believe in.

Mon, 11/11/2013 - 13:52 | 4143023 etudiant
etudiant's picture

Indeed there will be change, for the much worse.

Why do you expect the 'mass', undereducated and stupefied by our media, to come up with improved governance? That is even less likely than that the 0.01% would suddenly decide to reform.

Imho, we will get what we deserve, a military dictatorship, possibly following a civil war. Think a General Alexander equivalent with an active duty pedigree as the likely candidate.

Mon, 11/11/2013 - 14:08 | 4142951 ThisIsBob
ThisIsBob's picture

Headed to hell in a handbasket, I say.  Used to be that the 1.0% never had it so better.

Mon, 11/11/2013 - 13:35 | 4142988 Colonel Klink
Colonel Klink's picture

EAT THE RICH!

Mon, 11/11/2013 - 14:12 | 4143073 DaveyJones
DaveyJones's picture

too fatty

Mon, 11/11/2013 - 14:22 | 4143095 ajax
ajax's picture

 

 

Don't eat the rich: Expose them for who they truly are and what they really do/did to get so rich, stay so rich and become even wealthier. Expose them all, each and every one.

Mon, 11/11/2013 - 15:06 | 4143184 dizzyfingers
dizzyfingers's picture

In addition, serious threats to the valueless dollar...

 http://www.larsschall.com/2013/10/28/the-dollar-reserve-equilibrium-is-breaking-down/

 

Mon, 11/11/2013 - 15:32 | 4143308 CHX
CHX's picture

The game was never fair, never will be fair, and the end game will be the unfairest of all.

Mon, 11/11/2013 - 17:17 | 4143619 Trimmed Hedge
Trimmed Hedge's picture

Enough talk

Time for action...

 

Who wants to go first..?

Do NOT follow this link or you will be banned from the site!