Winner-Take-All Politics: how America's super-rich got so much richer

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120 Responses to “Winner-Take-All Politics: how America's super-rich got so much richer”

  1. wil9000 says:

    When you let a bunch of rich white guys run the show, guess who’s going to benefit the most? Rich. White. Guys. And when it was decided by them that the almighty bottom line is the only line that matters, all other priorities rescinded, guess what happens? This book sounds perfect at explaining HOW it happened and is happening, but is the train going so fast that anything can be done about it? I hope so, but I’m not holding my breath.

    By the way, representative of the hyper rich denying this all due to comment in 5, 4, 3, 2………

    • Anonymous says:

      “When you let a bunch of rich white guys run the show, guess who’s going to benefit the most? Rich. White. Guys.” Interesting – I think this principle applies regardless of colour – take a look round the world and you will find that kind of corruption everywhere – US just does it bigger :) Lets not cloud issues with colour – its an easy cop-out.

  2. Jordie says:

    I haven’t read this book, but I recently read The Trouble with Billionaires by Linda Mcquaig and Neil Brooks which highlights similar problems with the super rich though from a slightly more Canadian angle. Anyone interested in these problems would probably be equally fascinated by this book: http://www.amazon.ca/Trouble-Billionaires-Linda-Mcquaig/dp/067006419X

  3. Rayonic says:

    The rich tend to get richer at a faster rate whenever the economy grows, simply because they have more money to invest. Even among regular wage earners, your promotion at the office is worth a lot more than being promoted to manager at McDonalds.

    Which is why all this concern over widening wealth gaps is mostly nonsense — its an unavoidable consequence of economic growth.

    That’s not to say that corruption doesn’t happen and that it shouldn’t be stamped out. Even from a purely economic standpoint, corruption retards growth and/or destroys wealth outright. (Albeit not for the corruptors themselves. At least not in the short term.)

    • wil9000 says:

      Yes, that is true, but now we have a system where the rich get richer whenever the economy grows, or when it shrinks. And just because they have more to invest, that doesn’t mean that they necessarily do invest. A lot of the hyper-rich are sitting on their wealth, or spending it on second, third, fourth, and seventh houses, like McCain, who is so disconnected from his (wife’s) wealth that he doesn’t even know how many houses they own. I applaud those who do invest their wealth, but the “trickle down” theory is pretty much on the scrapheap of history at this point. Seriously, how much wealth does a 200,000 dollar wristwatch spread around? And how many of them do you really need?

      • Walt Guyll says:

        For one thing, that hypothetical $200,000 watch spread $200,000 around and that money went into pockets to spend and banks to lend.

        • wil9000 says:

          If you listen to the news, banks aren’t lending very much these days. They’re mostly sitting on their assets, and getting a low return rather than risking no return or the hassles of foreclosure. And the watch is anything but hypothetical, and just an example of the wretched excessive luxuries that are indulged in rather than investing, and a small example, at that.

        • rebdav says:

          Unfortunately banks stopped lending based on reserves a few years ago and it was pretty loose even before that.

          What is happening to the stimulus money is that it is all flying into the world of finance, a paralel economy that has gone from being a bee colony that carries and seeds the fiscal pollen(financing projects and reinvesting profits into new enterprise) to one where the bees grab most of the pollen and store it up since it is too risky to let the flowers(companies and people who make things and provide real world service) have the precious pollen.
          Trillions of dollars are recirculated inside the finance markets between brokers who would rather stay inside the beehive all day while the flowers wither and die, now socialism for the rich kicks in, our pollen is printed and distributed exclusively for the bees by the Federal Reserve.

          I had hoped when I was younger that the Internet and free information would collapse the big guys like the Soviet Union did. But now I know that the Soviet Union collapsed because it lacked finance and fiscal discipline not because of freedom of information. I fear we are pointed toward a feudal society where rights become something only enjoyed by peers not working serfs. When only the wealthy can buy an election the representatives will cater exclusively to the wealthy, the electorate is too lazy and the media is too narrow because too many still depend on the boob-tube for its oracle of infotainment. I need to watch Idiocracy again.

      • Rayonic says:

        I’m not sure how you sit on your wealth, putting it in the bank just ends up with the bank investing it somehow. Even buying property is an investment of sorts. Mansions don’t grow on trees, after all, and there’s the implicit assumption that they’ll sell for more than the buying price eventually.

        A $200,000 wristwatch does seem pretty wasteful, but it’s not like that $200k disappears. Putting all your millions into expensive wristwatches is probably a quick trip to the poor house, though.

        • shannigans says:

          Here’s how you sit on wealth and provide absolutely no economic benefit. You invest it in the $1.2 quadrillion dollar derivatives market. Our ultra wealth aren’t injecting capital into bright ideas and future jobs, they’re gambling with it. I say we do bring back the 90% tax bracket for all gains on derivative assets using a mark to market basis with no loss carry forward allowances.

          • Wally Ballou says:

            You don’t need to have a 90% tax bracket on gains from derivative assets.

            All you need to do is make damn clear that the word “bailout” is to be used only in reference to parachute jumping, and that bad loans will be 100 percent eaten by the bondholders.

            90 percent of Americans both liberal and conservative were and are against bank bailouts. Our opinions unfortunately did not outweigh those of Bush, Paulson, Bernanke, McCain, Obama and Geithner.

      • Anonymous says:

        Everything you point to is investing. You buy a watch, you’ve invested in that watch company. You’ve provided income to the working watch makers. THINK about it.

    • sdmikev says:

      The problem has been that there has been an institutional (if you will) wealth transfer that really kicked into high gear in the last 30 years.
      It’s not that just rising economic times lifted all boats, thus the richer more so because of their means. It’s that the literal policies put in place have been an assault on working people in the USA.
      And the best part is that the ultra-rich and the ultra right wing and other assorted plutocrat apologists (see David Brooks) have convinced ordinary working people to vote against their own best interests (consistently) AND to in effect take up arms against their own fellow working class families and individuals.
      When you get to the point where middle American wage earners are writing letters to the editor of your local paper decrying unions, and at the same time saying that universal health care or working towards a less regressive tax system is “socialism”, the man has won.

      • Rayonic says:

        It’s that the literal policies put in place have been an assault on working people in the USA.

        i.e. the governmental corruption I mentioned.

        Though the exact bad policies can be debated. For example, I’m not sure that not having a 90% top tax rate is an “assault on the working people” in and of itself.

      • Lobster says:

        Parents teach their children not to lie. Does that benefit the child by making them a better person, or the parent by making the child more reliable?

        We are taught that if we work very hard without complaint, we will be rewarded for our efforts. Does that benefit the worker as he hopes to some day be recognized, or the employer who now has a quiet, hard worker?

        Honesty is a virtue, as is hard work and a positive attitude. Too bad you also need to stab someone in the back from time to time to get ahead.

        • codesuidae says:

          Parents teach their children not to lie.

          Parents provide a fitness algorithm for their children’s development of lying skills. Parents who are very permissive about lying do not encourage their children to develop the skills necessary to lie well, which may impact their ability to detect skillful lying.

          This is why even workers who don’t complain know when the boss is a lying sacka.

      • 5ynic says:

        sdmikev
        That’s the message. Exactly what you said. We need to keep repeating that message, and link to all the facts that back it up. On as many forums as possible, as often as possible.

      • Anonymous says:

        “And the best part is that the ultra-rich and the ultra right wing and other assorted plutocrat apologists (see David Brooks) have convinced ordinary working people to vote against their own best interests (consistently) AND to in effect take up arms against their own fellow working class families and individuals.
        When you get to the point where middle American wage earners are writing letters to the editor of your local paper decrying unions, and at the same time saying that universal health care or working towards a less regressive tax system is “socialism”, the man has won.”

        I agreee completely. So then what can we do reverse this? I realized during the last election that nobody on the left seems to be going out of their way to make those people feel welcomed on the left. If anything, the left’s been completely hostile towards them. Fighting fire with fire, I guess, not a winning strategy.

    • MrJM says:

      “Which is why all this concern over widening wealth gaps is mostly nonsense — its an unavoidable consequence of economic growth.”

      Perhaps I can demonstrate the shortcomings in this “argument” with the following parallel statement:

      Which is why all this concern over traumatic brain injury to servicemen is mostly nonsense — it’s an unavoidable consequence of modern combat.

      My statement — like the one defending growing wealth gaps — contains a self-evident statement about the relationship between a consequence and its cause. But neither statement does anything to advance the argument that the concern in question is “nonsense.”

      • Rayonic says:

        Which is why all this concern over traumatic brain injury to servicemen is mostly nonsense — it’s an unavoidable consequence of modern combat.

        Except that Bill Gates being rich doesn’t harm me in any appreciable way. Also, my neighbor has a better house than me, but that doesn’t hurt either. Well unless envy = harm nowadays.

        • Unmutual says:

          Except that Bill Gates being rich doesn’t harm me in any appreciable way. Also, my neighbor has a better house than me, but that doesn’t hurt either. Well unless envy = harm nowadays.

          Whoah boy.

          Well to be perfectly frank I don’t have the time or the inclination to describe in detail the myriad ways super rich people like Gates have to undermine the domestic workforce and the consumers and indirectly cause you “harm” to get where they are today.

          But the reality is that the rich people themselves are the ones who are at risk and live in constant fear. Why do you think the security, military and para-military apparatus of the United States has grown to such monstrous proportions? It is because this is the cost of maintaining American hegemony . . . the world if full of literally billions of poor people who have been f*cked over by the US at one point or another, even here at home. The bigger the wealth gap gets, the more these TSA-style boondoggles will become the norm as the government (who is owned by the rich) spends every last tax penny keeping the super rich safe and keeping the public subdued, ignorant and broken rather than angry and storming gated communities with pitchforks and torches.

        • MrJM says:

          Except that Bill Gates being rich doesn’t harm me in any appreciable way.

          I believe you’ve misconstrued the issue. It isn’t the effects of people like Bill Gates being rich. It the effect of people like Bill Gates being profoundly richer than the vast majority of Americans.

          And that distinction is consequential.

          For instance, when the United States Supreme Court has declared the expenditure of money to be equal to speech, one can see how such a vast disparity of wealth, and the subsequent disparity of political power, could be recognized as appreciable harm.

          • chgoliz says:

            For instance, when the United States Supreme Court has declared the expenditure of money to be equal to speech, one can see how such a vast disparity of wealth, and the subsequent disparity of political power, could be recognized as appreciable harm.

            Excellent point.

        • Anonymous says:

          > Except that Bill Gates being rich doesn’t harm me in any appreciable way.

          Actually, it has hurt you in far more ways than you can imagine:
          - Microsoft lobbies for H1B visas, allowing lower wage foreigners to enter the country and take over jobs from local talent
          - the State of WA has regularly declined to create a personal income tax on the basis of lobbying by Microsoft’s top people. This has required the state sales tax to be raised to one of the highest in the nation which disproportionately harms lower-earning folks who spend a much higher percentage of their income on simple living needs.
          - Predatory pricing and marketing-driven software products combined with strategic “relationships” designed to kill off competitors have resulted in a software ecosystem which costs the end users, (yourself and small business owners), billions of dollars per year in lost productivity and costs of ownership.
          …need I go on? All of this puts a ton of money in Bill Gates’ (and a few others) pockets, much of which is now out of circulation due to the “financial beehive” described above.
          Tell me again how this hasn’t hurt you?!?

          • Devilbunny says:

            allowing lower wage foreigners to enter the country and take over jobs from local talent

            That’s the argument against illegal immigrants. Do you think Arizona had it right? Honest question.

            The problem with all of these schemes is that truly wealthy people can afford the best possible advice to avoid them (or buy new loopholes). Taxes aren’t paid by the really wealthy (for discussion’s sake, let’s say net worth > $10M, which is just enough money to afford an upper-middle-class lifestyle on interest alone). They’re paid by the upper reaches of the middle class, because those people are so likely to occupy jobs that have high, W-2 reported salaries.

      • wil9000 says:

        Thank you, MrJM.

        And boy, I seem to have stirred up a hornet’s nest with my 200K watch, haven’t I?

        And, by my reckoning, although it is just an example, let’s also inject that the watch was probably made in France or Switzerland. So money is being transferred OUT of the system.

    • Anonymous says:

      Well the problem isn’t really that the rich don’t invest rather than spending their money. The problem IMHO is that they have MORE money to invest than Wall Street can find productive uses for. Most of that money ISN’T building new factories, or researching new drugs, or hiring people to turn raw materials into goods. Rather it has been bidding up the prices of equities, real estate and/or being leant out at interest. Make no mistake higher prices just mean that the purchaser of those assets has paid more today for any of the dividends* that they get in the future. In short, speculation. Which leads to bubbles like the dot com mess or the RE bubble.

      *either actual dividends, or rental equivalant, or whatever else one gets as a result of ownership

    • Unmutual says:

      The rich tend to get richer at a faster rate whenever the economy grows, simply because they have more money to invest.

      That’s only half the story. As has already been pointed out, the rich get richer whenever the economy grows, and when it shrinks. Stock shorting is one mechanism, but when the economy shrinks certain sectors do even better than in a strong economy, and then of course there are always government windfalls. If you had bought Bank of America stock in early 2009 it was at $3, after all the bailouts it shot up to around $18. 600% growth in a matter of, I think, 6 months. Go chart it yourself it you want to . . . the thing is, I knew it was going to happen, everyone who knows even the tiniest bit about economics knew it was going to happen, but did we all get rich? No . . . because I could only scrape together a small amount of money to invest. However if you had a small fortune to invest, you’d now have a large fortune.

      This is just the most recent example though, but it highlights something that is terribly wrong with modern economics: the super rich love and actively promote bubble driven economics. It’s not just growth that makes rich people richer, its volatility, and the more money you already have, the more you are able to hedge your high risk investments and come out ahead every time.

      This is also why the middle class and poor never get ahead . . . small prudent investments will maybe keep up with inflation if you are lucky . . . at best you will retire comfortably someday. You could take bigger risks and get rich quick . . . or end up penniless. Most people never even bother to try, the stock market is daunting, it is essentially a high stakes casino.

      • Rayonic says:

        Well yes, “the economy” isn’t a monolithic entity. Some parts do better when other parts do worse, even if on average it’s all down. If you know where to invest and have the money to, of course you’ll get ahead. There’s a lot of examples of rich people who lost it all through bad investment, but you could turn around and tell me “well they’re not rich anymore”; and you’d be right. It’s kind of a self-perpetuating definition.

        As for bubble economies, I daresay that most of them have their roots in government corruption and/or ineptitude. Either through unbalanced regulations, pumping out bad loans, or virtually guaranteeing bailouts for mismanaged companies.

        • Unmutual says:

          As for bubble economies, I daresay that most of them have their roots in government corruption and/or ineptitude. Either through unbalanced regulations, pumping out bad loans, or virtually guaranteeing bailouts for mismanaged companies.

          Those are some examples, sure, but the premise that “government corruption” is an isolated phenomenon without a root cause is false.

          Behind every corrupt government stands powerful moneyed interests . . . errant wack jobs like King Jong Il are not the norm, most of the time, corrupted legislators and puppet dictators all have the same paymasters. And even KJI was able to solidify his power because of the resources his country provided to China (fuel, food) and the fact that way back when, the communist regime of China was friendly towards him. I think now they’ve had enough of him, but that’s a whole ‘nother topic.

          This is the way the world works. The wealthy not only own but are actual members of our governments, they take your tax money and start a war here, covertly overthrow a government there, and then put in place a regime that is favorable to their business interests. Then they secure natural resources, cash crops, or cheap human labor, to make products to sell back home. They take that profit and live high on the hog, but prudently funnel some of it back into PACs and propaganda to further their interests and drum up support for more bloody adventures.

          Domestically, they lobby congress for pork legislation that dumps money into their coffers as well. They work to make the police state even stricter and keep citizens in line and subservient. Often times the two efforts meet in the middle (like with the TSA scanners or the prison industry).

          This is all at the expense of taxpayers (who pay for it!), consumers (who are cheated out of a fair, competitive market) and worst of all, the poor working peasants of developing nations, some of which unfortunately grow up hating us and wanting to blow us up with airplanes and underpants bombs.

          Superficially, no there is nothing wrong with my neighbor having a nicer house than me, and if I am jealous of that person, that is a flaw in my own character. But Bill Gates is not my neighbor. Bill Gates is not just some guy who invented a really great product and then became the richest man in the world (for a time at least). Part of that process was lobbying congress to expand H1B visa programs to allow for imported, cheap labor, and then outsourcing to jobs overseas, it was market manipulation, unethical and illegal business deals designed to shut out competition and in short make sure that the environment that allowed for his astronomical success would never exist again.

          Whenever there is some huge leap in technology or some sort of paradigm shift you find a handful of wealthy industrialists who become extrordinarily wealthy . . . but during that process they also do everything in their power to dominate that market forevermore.

          For things like intellectual properties (software) it is a lot harder to sustain this shutout because open source freeware and piracy and hackers will perpetually chip away at it. This is why it is such a farce watching all this legislation designed to protect these business unfold and then fail catastrophically.

          But for real, physical resources, like minerals and oil and farmland and such, it’s easier, all you really need is men with guns. And if you can send the bill to the taxpayer, so much the better.

          Um what were we talking about again?

          • petertrepan says:

            This is all at the expense of [...] worst of all, the poor working peasants of developing nations, some of which unfortunately grow up hating us and wanting to blow us up with airplanes and underpants bombs.

            I’m not endorsing terrorism or excusing terrorists – that should be clear, but I have to head off the Ad Hominem crowd – but I think there was a political message in the 9-11 terrorists choice of targets. If they wanted to send a message that they hated our freedom, they could just as easily have hit the Statue of Liberty. The fact that they chose the World Trade Centers and the Pentagon says to me that they hate our military industrial complex.

          • Unmutual says:

            No kidding huh? I thought the same thing.

            And having seen Fight Club, I assumed that plenty of Americans, since this movie was insanely popular, would be cheering them on. After all, what happens at the end of Fight Club?

            SPOILER ALERT!

            They rally all the different fight club groups around the world (terrorist cells?) and blow up the world’s financial buildings!

            So what went wrong? Well I guess the problem was that these terrorists were brown skinned, foreign born “others”, for starters. I mean yeah we talk about change and revolution and stuff here at home, but the minute some alien militants set foot on our soil, we rally together and fight back. Makes sense I guess.

            And yet somehow we were all beffudled when Iraqis started throwing IEDs at the feet of our soldiers instead of rose peddles.

          • Rayonic says:

            Why does everyone keep giving me examples of why corruption of government is bad? I think I conceded that in my first post. Yes, obviously it comes from both outside and inside the government.

            And yes, being rich certainly makes bad behavior a lot more feasible.

            I’m just saying that the income gap itself is a red herring. It’s a symptom of several different factors. And ironically, if we ever finally clean up government and implement sensible regulations, laws, and policies, then the economy will do better overall and the gap will increase.

            Well unless that sounds like a bad outcome. Then I can think of a few ideas to get that evil wealth gap down to zero.

          • Unmutual says:

            I’m just saying that the income gap itself is a red herring. It’s a symptom of several different factors. And ironically, if we ever finally clean up government and implement sensible regulations, laws, and policies, then the economy will do better overall and the gap will increase.

            The first and second sentences do not reconcile . . . if it is a “red herring” than it is an irrelevant distraction. It can’t simultaneously be a symptom of the real problem(s) that need to be addressed. That’s kind of like saying my high fever is a red herring, the real issue is the sepsis in my body. Well sure, but that is how your attention is drawn to the real problem, and then at a certain point, the “symptom” is capable of killing the patient all by itself.

            As was pointed out earlier, the Citizens United ruling is now compounding on the problems caused by the “symptom”, the wealth gap, particularly the gap between the average private citizen and aggregate corporate wealth. Corporate wealth now has “speech” and the volume of this speech in the electoral process is roughly translatable in dollars . . . in other words your “speech” is measured in the tens or hundreds of dollars, corporate speech, in the tens or hundreds of millions.

            But in all fairness I like to throw rocks and play devil’s advocate . . . realistically, when it comes to actual solutions, I have few. I don’t think there is a system of government, or economics, or anything else, that “works” in perpetuity. I think, given enough time, aristocracy will form again and again, often times in continuity with previous nobility.

            My solutions are small scale . . . stop consuming and wasting so much, live simply and sustainably, avoid debt, reject military industrialism, reject attempts by the elites to turn you against your neighbors. But these ideas have been around for literally thousands of years and they have still failed to catch on.

          • Rayonic says:

            It’s a red herring in that it’s a symptom of both good and bad factors, and that attacking it for its own sake is counterproductive. And besides, a place that enforces a zero wealth gap is generally a dystopia.

            People get pretty upset about Citizens United, but isn’t most speech tied to money somehow? You think this bandwidth is free? It was a bad precedent for the government to have that kind of censorship power.

          • MrJM says:

            a place that enforces a zero wealth gap is generally a dystopia.

            And an argument based on misrepresenting the other position is generally a straw man argument.

            No one has suggested enforcing a zero wealth gap.

          • Rayonic says:

            And an argument based on misrepresenting the other position is generally a straw man argument.

            I was just throwing it out there as an absurd extreme, I know nobody here advocated a zero income gap.

            The real problem with trying to control the gap at all is how do you decide where to draw the line and how do you enforce it? Seems like the solution would require a draconian bureaucracy. One that’s just as prone to corruption as the current system, albeit with more power.

            So rather than concentrate on that, I’d rather make it so the rich can’t unfairly (versus fairly) influence the government. Preferably via consequences and/or transparency for our elected officials. Not to mention more comprehensive punishment for white collar crimes and less bailouts*. I know that sounds really hard, but there’s always going to be people a lot richer than the rest of us so it’s the only option.

            You know, this whole idea of making the rich less rich in order to reduce their influence reminds me the “starve the beast” strategy, where we cut taxes in order to force a cut in spending. How’s that been working out for us anyway?

            (*There’s a fine line between the government having your back in a crisis and them propping up your failing business.)

          • Anonymous says:

            Um, Rayonic, you do realize that the economy has grown in past periods, at rates even higher than it has over the last few decades, without the significant over-concentration of gains for the top most earners, right?

            Growth does not equal disproportionate distribution. It is the various economic policies that have been implemented since 1980 or so that have resulted in disproportionate distribution.

          • Walt Guyll says:

            “It is the various economic policies that have been implemented since 1980 or so that have resulted in disproportionate distribution.”

            And yet a vocal minority have complained about unequal wealth since the invention of the printing press. Just shows you how far sighted people can be.

      • halfacre says:

        This is also why the middle class and poor never get ahead…

        True. They also don’t get ahead because they’re too busy fighting off the god-killing atheists, family-hating gays, and freedom-stealing commies. That’s why they voted for Pat Toomey in my state.

        • nutbastard says:

          Your bole is rather hyper.

        • Unmutual says:

          True. They also don’t get ahead because they’re too busy fighting off the god-killing atheists, family-hating gays, and freedom-stealing commies. That’s why they voted for Pat Toomey in my state.

          Well that’s just a variation on the same old same old. Sending the poor of our own country off to fight the poor of another country, to secure resources for the rich.

          Some poor midwestern farm kid has no reason to want to shoot an afghan wheat farmer. They have more in common with each other than with the president, legislators and businessmen that put them in Afghanistan. And yet they have been convinced that the afghani is their enemy.

          Same thing unfolds here in the states . . . the corporate owned media spins its wheels all day and night manufacturing outrage, telling us who is threatening our “way of life” and our “values” and they are just people like ourselves, trying to get by, looking for a little bit of happiness in life.

          When the economy gets really really bad, crime skyrockets, but who are the victims? The rich? Not usually, maybe a house in a gated community gets burgled here and there, but by far, the poor simply victimize their poor neighbors, then end up in prison, where a privatized prison corporation collects federal money to house them and then makes a profit on their below minimum wage labor. The rich, literally, have got every angle covered. And when all else fails (like with the banks) they just go to the government for a handout, and you pay for it.

          The fact is that the middle and lower class have already lost this battle because they aren’t fighting, or rather, they aren’t fighting their real enemies. They are fighting each other, while the rich wage war on them from behind the scenes. Civilized society is misleading, one thinks of “survival of the fittest” and conjures up images of lions and gazelles and zebras or whatever . . . but just because we live in a society of laws and etiquette and other human constructs does not mean we can stop fighting for what we want and / or need, because you can bet your bottom dollar somebody else IS fighting to take those things from you.

          IMHO this is the most distressing thing about our modern society . . . a combination of consumer debt, mass media, technological trinkets and cheap products have satiatated us. The fighting spirit is gone. The class resentment is gone. We have rolled over and we are now too fat and lazy to get up and fight.

          • Anonymous says:

            The US can look forward to becoming a third world country that has a core elite that hold onto power via any means necessary and the vast majority of Americans barely getting by with no in between. It would look similar to medevial life except with less agriculture.

            The economic elite will continue to live in isolated communities and mold the laws to benefit themselves. American mythology (e.g. upward mobility, the “self-made man”, etc), cheap, poorly made goods, along with fundementalist religion will keep the rest of the population just barely content and hopeful enough to tow the line. The best oppurtunities for the average person will be working for the police propping up their rich bosses against their own neighbors and themselves.

            Our manufacturing capacity will continue to decline with only those factories supporting the military being retained. Raw materials will be sold in larger amounts to the up and comers like China and India.

            Our future looks more like Haiti every year.

    • BB says:

      The rich tend to get richer at a faster rate whenever the economy grows, simply because they have more money to invest.

      What you fail to recognize is that the rich have gotten richer as the economy shrunk. People lost jobs, people have taken cuts, and some have been forced to take days off without pay, and yet businesses have posted record profits. When the economy plummeted what did the government do? It gave money to banks and corporations. Corporations and the wealthy essentially own and run the government. If you are in power, you can influence policies that make you richer, if you are richer, you can invest money towards more power and influence .

      Lather, rinse, repeat.

    • slideguy says:

      “Which is why all this concern over widening wealth gaps is mostly nonsense — its an unavoidable consequence of economic growth.”

      It was avoidable in the 50s and 60s when we had amazing economic growth and the wealth was spread much more evenly. But workers’ wages, factored for inflation, have been stagnant since 1973 and the widening spread between rich and poor really began around 1982.

      Why all this concern? Because gross income inequality is the sign of a third world country and makes for the kind of social unrest that requires a police state to suppress.

    • Anonymous says:

      Which is why all this concern over widening wealth gaps is mostly nonsense — its an unavoidable consequence of economic growth.

      I have to wonder where this comes from, since societies throughout history have had many different levels of wealth gaps and economic growth, without obvious correlation. However, there is a fair correlation between extremely large wealth gaps and social unrest or even collapse, which makes me concerned about them.

      I’m not sure how you sit on your wealth, putting it in the bank just ends up with the bank investing it somehow. Even buying property is an investment of sorts.

      There is something wrong with counting money put in the bank as both saved and lent out. Putting too much stock in the investment it creates is how we ended up with the housing crisis; people tried to find the money behind their investments, and realized the stuff there had been over-counted.

      If you’ll recall rich people were compensated by the government, since economic measures focus on them, and poor people lost their homes, which are less important. Our wealth gap is in no small part from such systematic differences in treatment.

  4. Unmutual says:

    And besides, a place that enforces a zero wealth gap is generally a dystopia.

    Nobody (at least, as far as I can tell) is advocating for such a thing. So that would be a straw man argument. You are reducing a complicated problem down to platitudes and that’s not really productive now, is it?

    The reality is that the chickens have come home to roost. Meaning, the spread of globalism in an attempt to provide developed nations with cheap, disposable products has ended up ensuring that our own jobs have been shipped overseas and that the United States has moved away from being a productive country, to a nation that consumes rather than produces. This is unsustainable, wouldn’t you agree? Eventually, if we are not producing anything, we will not be able to pay for the things we consume. We’ve been living on borrowed time (and money) for a few decades now, and by all accounts it sure looks like nobody in DC gives a rat’s ass about this. Simply put, it only hurts the middle and lower classes, not the super rich, so why should any of our leaders care?

    If we want to live in this world of global supply chains and trade deficits then we have to acknowledge that double digit unemployment is unavoidable. You can not just get rid of all the productive jobs and then throw tax breaks and subsidies at the private sector and hope more jobs will magically appear. They won’t. Instead you have to provide copious social programs to deal with the growing poverty and declining quality of life, OR simply come to terms with poverty and high crime rates and declining statistics related to healthcare, education and so on.

    So we either get a country where half of everyone is on the dole somehow or another, or we live in a 3rd world country.

    People get pretty upset about Citizens United, but isn’t most speech tied to money somehow? You think this bandwidth is free? It was a bad precedent for the government to have that kind of censorship power.

    That’s another complicated topic innit? But I would first challenge the a priori argument that ALL government censorship is bad. Is that true? I wonder. If the end result of unrestricted free speech gets us either of the above two scenarios, then what is the benefit of policy making that comes purely from ideology instead of pragmatism?

    Of all the developed countries in the world, the US has been the most reluctant to enter into this dialog. European nations, Australia, Japan, etc, have been wrestling with increased social programs, some kind of government censorship, and so on, and for better or worse, it appears these nations are appearing to make an effort. But the whole unrestricted free speech, especially when applied to the corporate media, has been championed here in the US by the rich and powerful. Why is that? I’ll tell you why: because they are the primary beneficiaries.

    In fact I find the way the whole Wikileaks thing is unfolding to be very telling . . . suddenly you have conservatives all over the place advocating for hunting down and killing somebody for forcing transparency on the government. I guess free speech is fine and dandy so long as it does not create an embarrassment for the powers that be or disrupt the status quo.

    At the end of the day, who do you suppose will be protected in US courts?

    The pundit who advocates hunting and killing suspected enemies with no due process?
    The political “advocacy group” that is just a front for millions of corporate dollars to be pumped into political elections?
    Or the group that exposes state secrets in an attempt to disrupt American hegemony?

  5. Anonymous says:

    @Walt (“Two yeas so far, saying it is better to destroy wealth rather then see it not equally distributed. “)

    Intentionally or not, please don’t mis-read between the lines. Nothing of the sort was said.

    • bmcraec says:

      Newsflash! BoingBoing discovered to be False Flag operation run by the minions of the 900 families to identify and root out those proto-revoplutionaries most likely to write libellous and seditious comments, meant to foment rebellion and disrupt the rule of law!

      I suspected something of the sort when the Lenovo advertisements started to overpower the site branding…

  6. wil9000 says:

    I guess in the end, free speech is free, as long as you have enough money to pay for it.

  7. Lobster says:

    The man who works only to advance another destroys himself.

    Still kind of wondering how to get off that treadmill, because there’s no way I’m going to get rich doing a 9-5.

  8. chgoliz says:

    This would be a good place to link to my favorite Economist magazine cover ever: [url=http://www.economist.com/printedition/displayCover.cfm?url=/images/20060617/20060617issuecovUS400.jpg]June 17th 2006: Inequality and the American Dream.[/url]

  9. Walt Guyll says:

    That $200,000 is almost charity. The buyer injects hard cash into the economy and only gets a token to show for it.

    • petertrepan says:

      It’s hardly charity. The $200,000 takes the skilled labor of people who could have been working on things more broadly beneficial to society and diverts it toward some billionaire’s watch. It also inflates the cost of living for ordinary people. If one can make $200,000 by building either a house or a watch, one will choose to make a watch, and the price of building a house will increase.

      So the $200,000 does not help. If money was worth anything all by itself, the government could enrich society just by printing more of it.

      • Walt Guyll says:

        “The $200,000 takes the skilled labor of people who could have been working on things more broadly beneficial to society and diverts it toward some billionaire’s watch”

        If someone can make a nice living making watches who are you to say they should dig socially useful ditches? And why should I live in a house built by watchmakers? I’d rather have a house made by someone who knows what they are doing.

        • Rayonic says:

          Or just cut to the chase: If I could sell a few $200k watches, I would buy an awesome house.

        • petertrepan says:

          There’s more to making a nice living than having lots of paper money. Try taking a million dollars to Somalia and having the same sort of lifestyle that any suburbanite currently has in the United States. It’s impossible, because their social infrastructure does not support it. Money is only a placeholder for value. For real wealth, you must also have a system where there’s something useful for the average person to buy. If everyone is making diamond watches and no one is digging ditches, what does an old watchmaker “making a nice living” do when his property floods, and he can’t possibly compete with the rich to buy labor?

  10. Lobster says:

    A poor man can point out that the Emperor has no clothes, but at the end of the day the poor man is still a poor man, and the Emperor is still an Emperor.

  11. DSMVWL THS says:

    Hey Matt, where do you get your fantasy notion of “the constantly ratcheting minimum wage”?

    The minimum wage is only increased occasionally and erratically by Congress. And after inflation, it’s lower today than it was 40 years ago:

    http://lifeinc.todayshow.com/_news/2010/11/19/5495013-good-graph-friday-minimum-wage-is-worth-less-than-in-1968

    Maybe you can also explain why middle-class jobs at my non-union company are being sent to India.

  12. Walt Guyll says:

    The rich will always have disproportionate influence with politicians. The best defense for the relatively poor is a small, limited government that offers little opportunity for corruption.

    • halfacre says:

      The rich will always have disproportionate influence with politicians. The best defense for the relatively poor is a small, limited government that offers little opportunity for corruption.

      Um, no again. The best defense is to live in Finland.

  13. cameronh1403 says:

    I wonder if this is how the French Revolution started…the rich at the top not caring about the people at the bottom until those people showed up with that marvelous shortening device, you know, the one that removes a little from the top.

    I hope it happens in my lifetime…

  14. Anonymous says:

    With the surplus in social security purchasing special US Treasuries it allowed the working class to subsidize the deficits created through reductions in capital gains, income taxes, that lovely SUV subsidy, as well as perpetuating our inability to clamp down on corporate tax evasion (2/3 of multinationals don’t pay US income taxes due to transfer pricing). Recent scholarship also suggests that the majority of economic benefit from home interest deduction is for homes over 500K (pretty regressive). The subsidy itself comes from an artificially low interest rate produced by SS purchase of treasuries versus bond market and purchase by foreign governments.

    To state clearly I believe in the value of a program like social security, the problems it has can be solved easily (by making it slightly more progressive or raising the tax by an incredibly low margin), and I don’t suggest privatization at all. However, it is quite interesting that it is basically a regressive forced system of savings that has partially allowed, with political stamp, for concurrent explosion in government spending (military) and tax cuts for the most privileged members of US society.

    Now that the government has quite a significant amount of IOUs to social security it is time to pander to our fears through framing it in the context insolvency and reducing benefits or raising age requirements which will obviously have regressive impacts. But it is not a bunch of white men thinking about white men in congress, it is a bunch of wealthy people fleecing the poor.

  15. Anonymous says:

    Back to work, rabble!
    No ones paying you to sit around fomenting revolution against your social betters! Actually, most of you just aren’t getting paid. We live in a country where the party of the super-rich also successfully bills itself as the party of hard-working, average Americans. You can’t fool all the people all the time . . .fortunately you only need to fool half of the voters.

  16. Wally Ballou says:

    It seems blindingly obvious that the rich are richer, and the middle class is struggling, more because of globalization than anything else.

    It’s pretty easy nowadays for someone with liquid assets in the seven-figure range (and up) to shift them across national boundaries to wherever they can receive the most protection. No country wants to be the one which taxes those assets to the point where they decamp. Therefore, we tax income, not assets… a policy which results in the middle and upper middle class bearing by far the bulk of the tax burden.

    In the golden age of 1945-1975 America had the natural resources, the technological advantages, and the transportation infrastructure to out-compete the rest of the world. That’s what made the American middle class, not “small government”, not unions, not tax policy. That golden age is not coming back, no matter how much we may wish for it.

  17. Avram / Moderator says:

    I’ve been wondering what would happen if we passed a law establishing the marginal tax on the top bracket as automatically equal to the US’s Gini coefficient (on a 0-100 scale). So right now, the top marginal tax rate would be about 47% (instead of the 35% it actually is), but if the wealth gap returned to where it was in 1970, that rate would drop to 40% (a lot lower than 1970′s actual historical top marginal rate of almost 72%).

    Granted, that’s still a higher rate than the wealthy want to pay, but that’s always going to be true.

    Also, we’d need a way of setting the level of income that the top rate kicks in at, to keep it from being set to a level higher than the wealthiest American actually makes.

  18. edgore says:

    I thought the problem with the AMT was that it was *not* indexed for inflation and therefore, over time, middle class/upper middle class people get caught in it due to the impact of inflation on their wages. The number of dollars in their salary goes up above the AMT line, even though the value of those wages is a fraction of what the value was when the AMT was set.

    As far as $200,000 watches goe, pretending that is injecting money into the economy is laughable. Most of that is a transfer of money between the wealthy. The wages going to the people who make the watches, mine the gold and the diamonds that encrust it, and who sell it to you is probably far, far less than 10% of the price of the watch. The rest of the money goes to people who are, I assure you, already very wealthy – the owners of the mines, the owners of the watch company etc.

  19. Rayonic says:

    You know what? I just came to a revelation. To paraphrase Arthur C. Clarke:

    Any sufficiently advanced economy is indistinguishable from magic.

    It explains so much about modern economic debate.

    • Crashproof says:

      “Any sufficiently advanced economy is indistinguishable from magic.”

      I’m totally stealing that.

    • bmcraec says:

      I like the paraphrase I saw on Twitter a few weeks back:

      “Any sufficiently complicated investment vehicle is indistinguishable from fraud.”

      Musical chairs with money, that’s what the economy currently is. Probably always has been, but people couldn’t see as far back then.

  20. ace0415 says:

    I know I’m late getting in on this one, especially the “$200k Watch” bit, but I need to throw my 2 cents in. This idea that some are voicing here that a $200k watch injects 200k “into the economy” in any broad sense is false, plain and simple. That money goes into the hands of the company that sold the watch and the company that made the watch, that’s all. Very few people are impacted by that purchase, and even if they make a hefty profit from the sale of that watch they will probably invest that money, locking it up and keeping it out of the larger economy. Plus, how many people are there that will buy 200k watches? Very few compared with the people who buy $50-$200 watches.

    What fuels a robust economy is a healthy, large, and profitable middle class. If you make $40k a year you spend a good amount of that buying things in your community, and to a lesser degree from the national marketplace, that you need and want to live. If you make $80k you don’t spend much more than the first person in the market place, you start to invest and lock your money up. When you make $800k you still don’t spend much more than than the other people in the marketplace. Instead you invest heavily, getting richer and richer and locking up more and more of the money you have. You don’t buy more groceries, more clothes, more of anything than the first people. And since there are a much smaller number of rich people they can’t even begin to impact the larger economy in the way that 50 million middle class people can.

    If we want a healthy economy we need the majority of people to make between $50k and $100 a year, the VAST majority of people. If a few make more, great, let’s hope they came by it honestly, and let’s try to keep too many from making less than that. $200k watches and other luxury items will never lead to trickle down anything, and certainly won’t lead to a healthy economy.

  21. Walt Guyll says:

    If the wealth gap is a real problem, consider this thought experiment:
    Confiscate all the “extra” wealth from the rich and burn it. Now all incomes are roughly equal.
    Is the world better off?

    • petertrepan says:

      If you qualified this by saying confiscate and burn all extra money from the *idle* rich – that is, people who make money by having money – then yes. It would force them to contribute something useful toward society, and force people who otherwise would have worked for them to look to average people for a need to fill in exchange for money.

      The reason I wouldn’t endorse the unqualified measure is because it would remove some incentive from people who seek to become wealthy by trading a service. Bill Gates, for instance, is fabulously wealthy because he produced software that people bought. The Walton children, on the other hand, are fabulously wealthy because they inherited money that people must pay to borrow. Even in the management of Wal-Mart, they contribute nothing to society that someone else couldn’t contribute for much cheaper. Not only would society be improved if their money were taxed, society would be improved if their money were *burned.*

      How about if we start paying off the national debt with a massive progressive inheritance tax?

  22. Anonymous says:

    Re: The Watch.

    Early in the industrial revolution the French made luxury goods like custom coaches and gold table services and the English made goods for the common man. The English became a “nation of shopkeepers”. The French economy floundered.

    Example 2:
    The Easter Island people diverted all their resources to building statues. One tribe competed with another to build more and bigger statues for prestige. The statues did not increase crops or trees or make more fish. If the people spent the time planting trees, building boats, fishing, exploring, establishing trade routes to the south american continent they would have grown their economy and made everyone richer. Instead, they chopped down all their trees to help move and erect their statues. Soon, they had no wood, could not fish, had their land eroded and were cut off from the world leading to war and poverty.

    The point is, we can give all our money to rich people so they can spend it on parties and luxury goods trying to out do each other, or we can invest and expand the economy. Luxury watches and $10,000 shower curtains do spread money around but are not good for the economy. If the rich cannot figure out a better way to employ their money except to play status games, we are doing them a favor by taking it away from all of them equally and leveling their playing field. They can continue to play their games, just with less wasted money.

    • Anonymous says:

      @Walt (Confiscate all the “extra” wealth from the rich and burn it. Now all incomes are roughly equal.
      Is the world better off?):

      Technically, yes. Most of the ultra-rich got that way through socio-pathic tendencies. (For those who doubt this, consider two people, one a socio-path. They are both given the opportunity to rob a little old lay of her life savings virtually risk free. The decent person will decline, the socipath will do so willingly. Wash, rinse, repeat, and you end up with a lot of rich sociopaths.)
      Back to the point, wealth has a tool with a powerful magnifying effect. Take away the wealth and you still have the sociopaths but they have a lot less impact on society.

      • Walt Guyll says:

        “(Confiscate all the “extra” wealth from the rich and burn it. Now all incomes are roughly equal.
        Is the world better off?):

        Technically, yes. Most of the ultra-rich got that way through socio-pathic tendencies.”

        Interesting. Two yeas so far, saying it is better to destroy wealth rather then see it not equally distributed.

  23. Anonymous says:

    From this description, is sounds as if the book ignores the fact that the inflation is created by government, and it is a symptom of printing money, which funnels riches from the people, and into the pockets of the banks. The banks can do whatever they like with it, and then even gets bailed out when it goes bad.

    If this is ignored in this book, it is ignoring the biggest wealth transfer in history, and the fact that it is happening from the poor to the rich.

    It is also no coincidence that this took off after 1970. I’ll let people research that reason for them selves.

    And the minimum wage is the greatest lie ever, and it only hurts the poorest and takes away their jobs. To raise it is to bring even more people into unemployment, hurts businesses ability to make stuff, and all around makes everybody poorer.

    • Anonymous says:

      Instead of commenting blindly, you really should read the book. You talk as though you’ve come up with the root cause, completely missed by the authors.

      Their point is that the rich decided, about 30 years ago to use their superior organization and wealth to influence governmental policies and elections in a way that hadn’t been done in 100 years or maybe ever. Printing more money is a government action. If it transfers money from poor to rich, then the rich know that, and have used their legal influence to make that happen. But, they have used legal means to do MUCH, MUCH more than that to transfer money from EVERYBODY to themselves. So, your solution is subsumed by their overall point.

      Read and learn.

  24. Daddyology says:

    Which is why all this concern over widening wealth gaps is mostly nonsense — its an unavoidable consequence of economic growth.

    If that were true, we’d see the rich taking a bath every time there’s an economic downturn. But that never happens — in fact, the wealthy made more money in 2009 than any year since the 1990s … while the economy was barely gaining jobs and the “official” unemployment level was at 9.7%.

    It’s simple, really.

    – The rich started by destroying any type of labor advocacy in this country, demonizing any efforts to organize, while politicians ignored (or even advocated) illegal union busting. This took away any power workers had.

    – They then killed off things like guaranteed pensions so they could funnel trillions into the stock market. And if millions of Americans have their life’s savings wiped out due to the incompetence/greed/evil nature of some jerks on Wall Street? Well, too bad — that’s just “capitalism!”

    – They then moved (with Nixon, then Reagan) to lowering marginal tax rates for the upper brackets, thus shifting the burden onto the rest of us. Even better, they convinced all sorts of people that any tax increase was an evil socialisticfastistastic plot to destroy America.

    – Deciding that wasn’t enough, they then reduced or outright eliminated every social safety net designed to help people whose lives are destroyed by the results of the above. They tell everyone to just “pull themselves up by their bootstraps” … but only after stealing everyone’s boots.

    – And then, to put a cherry on a gigantic turd cake, they turned the stock market from a way for companies to raise capital and people to invest in companies they believed in, into a giant casino for rich people. Prices are now based less on actual performance, and more on projected performance that’s decided by computer algorithms.

    Sorry for the rant, folks, but it’s not like any of this has been an accident. It’s a plan created and carried out by the rich and powerful to ensure they remain rich and powerful. One political party has had their back the whole way, while the other has occasionally acted like it does as well.

    And through it all we have had (and still have) millions of Americans so willfully, painfully ignorant that they vote to continue a system that is designed to destroy their economic lives.

    **sigh**

    I don’t even know what to say or type any more.

    • petertrepan says:

      Prices are now based less on actual performance, and more on projected performance that’s decided by computer algorithms.

      That is my pet rant. This practice even indirectly hurts businesses that still choose to pay dividends, and worse, it even removes the incentive for a business to support its own long-term self-interest.

    • sdmikev says:

      You hit all the correct marks.
      The financial sector has morphed from providing the means with which to fuel the building of sustainable growth to a means with which to fuel asset bubbles. Asset bubbles are NOT sustainable and wind up transferring wealth from the working class (anyone that has to get up every day and actually do something for a living) to the top 1 to 5 percent.
      Matt Taibbi has written extensively on this in the last couple years and coalesced much of it in his latest book.
      Privatize the profits, socialize the risk has been the theme. And we’re seeing it play out this week again in Ireland. The middle class there is being held up by the IMF and the EU. The banks will be bailed out and the people will take it on the chin in higher taxes, reduced pensions and fewer services.
      Same thing happened here. And this week, another round of “austerity” with the freezing of federal employee wages.
      This was the most amazing global theft that could ever be conjured up, and it was right out in the open..

    • halfacre says:

      And through it all we have had (and still have) millions of Americans so willfully, painfully ignorant that they vote to continue a system that is designed to destroy their economic lives.

      Amen. IF ONLY more non-right-leaning voters would go to the polls, we might have some hope.

      • turn_self_off says:

        If only it was that easy. I have seen multiple people say that they would love to vote left-ish, if only the left didn’t try to take away the voters guns…

        Highly focused self interest, the essence of reaganomics and its bastard child that calls it self libertarianism, is the problem. Scientists are baffled that while before Regan people would be demanding collective action, now they blame themselves for being to careless.

    • Rayonic says:

      Well anyone who does “take a bath” when the economy nosedives is dropped out of “the wealthy”, however you’re defining it. (Top 1%? .01%?) And the survivors, well, have probably gotten pretty good at it by now.

      Not all corporations have busted unions and eliminated pensions and great benefits. Take GM for example.

      I can tell by your scattershot rant that you really care, but you seem to be unable to distinguish between reasonable pro-business policy and rampant cronyism (though to be fair some bills have both). Wrapping it in a soft conspiratorial tone doesn’t help either — most profit-driven organizations are pretty nearsighted.

      • joeposts says:

        “Not all corporations have busted unions and eliminated pensions and great benefits. Take GM for example.”

        In your worldview, GM is considered union friendly? LOL.

      • Unmutual says:

        Well anyone who does “take a bath” when the economy nosedives is dropped out of “the wealthy”, however you’re defining it. (Top 1%? .01%?) And the survivors, well, have probably gotten pretty good at it by now.

        You have to understand the closed rank nature of the elite. Some upstarts will make a fortune and then lose it, sure.

        But then you have people like Donal Trump, who famously said at one point (while riding in a limosine) “You see that homeless man over there? He has more money than I do!”

        The reason of course is because at the time The Donald was millions of dollars in the red. But the rich do take care of their own, and through networking and lending and new business adventures, The Donald came out of it just fine.

        By contrast that homeless man, even if he does have the next great tv concept rattling around in his head or an idea for a really terrific product, will never have the audience to present it to, he will never have the capital necessary to get it off the ground.

        And for the most part, when upwards mobility occurs, how does it happen? usually venture capital is involved in some way, i.e. you make your case to the already rich, convince them that you can make them even richer, and then secure their blessing so that you may join their ranks.

      • Emo Pinata says:

        Those rose tinted glasses must be nice. Last time I checked the gap (which anyone will admit should be there) drastically increased with tax cuts became single-issue voter wildfire and when corporations were given the same (or very similar) rights as an individual. It only amplified in the past twenty years with the blurring of political positions with corporate “interests” (mostly being on the payroll).

        A better example of how companies treat their employees is Stanley Hand Tools, a better example of how companies treat their customers is Merck, a better example of the influence business has on government is Monsanto, and a better example of how policy has lined the pockets of business is SallieMae.

    • bmcraec says:

      Succint, and to the point. You aren’t channelling the ghost of George Carlin, are you? Where are you, George? We need you now!

  25. wil9000 says:

    Boy, I’m a bit out of touch.

    http://www.luxois.com/article/2009/01/22/top-10-most-expensive-watches-in-2009

    The cheapest of the top 10 watches is 300,000 buckazoids, and the highest numbers run into the millions.
    Yikes.

  26. Anonymous says:

    I’m having difficulty connecting “the enormous gains made by the richest Americans” with “the decline in the fortunes of the middle- and upper-middle-classes.” Don’t get me wrong, the latter is real but is it due to kleptocracy as Doctorow suggests? The economy is not the zero-sum game he makes it out to be. A more damning criticism would be the gains of the ultra-rich are mostly illusionary. It’s all funny money not tangible assets.

    The theme of the book seems to be that rich people should pay more taxes. I can understand why liberals would want that as it means more bread and circuses for their favored constituencies (which may or may not be the “middle and upper-middle classes”) but isn’t it blindingly obvious that “not giving” is not the same as “taking.”? And the idea that any kind of American is being denied the good life because their income taxes are creeping up is ridiculous. A majority don’t pay income tax at all.

    I don’t find the money is taking over politics trope to be persuasive either. Ask Meg Whitman what $165 million bought her. Or look at the Tea Party phenomenon which for good and bad is about mobilizing doorbell ringers (and people who actually bother to vote) not corporate donations.

    What is actually hurting the average American is globalization (outsourcing, illegal immigration etc.) The ultra-rich can be held responsible for that but for reasons which are orthogonal to their ability to purchase solid-gold toilet seats. And it should be noted that it is the same infrastructure that allows some Wall Street fat cat to move a factory to Bangladesh that allows Cory to hot air balloon around the world writing science fiction.

    I am slowly realizing that a pure free market approach is not going to be sufficient to solve our woes. Government is going to have to play some part. But if leftists are going to be primarily motivated by jealousy of the rich than I’m not going to have much trust in their proposed solutions.

  27. Anonymous says:

    Rayonic

    “The rich tend to get richer at a faster rate whenever the economy grows, simply because they have more money to invest…Which is why all this concern over widening wealth gaps is mostly nonsense — its an unavoidable consequence of economic growth.”

    ” It’s that the literal policies put in place have been an assault on working people in the USA.
    i.e. the governmental corruption I mentioned. ”

    “Except that Bill Gates being rich doesn’t harm me in any appreciable way. ”

    Hey, Ray; you should read the book. It makes absolute mincemeat of your simple explanations. These people did their homework.

    The biggest problem is the rich have bought the government. Only they didn’t have to corrupt anybody to do it. They did it all legally. Bill Gates can get the laws and government policies he wants, while you can’t. Democracy is dead – but, it still works well as propaganda.

    ========================================

    Walt Guyll

    “The rich will always have disproportionate influence with politicians. The best defense for the relatively poor is a small, limited government that offers little opportunity for corruption.”

    Your teacup is too full to take in more. You really should read the book. You’d almost have to learn things.

    Corruption isn’t the problem. These people have legally bought the government by financing elections, and, more importantly, by bringing superior organization and massive wealth to an extended, comprehensive effort to influence legislation – and the lack of it. A smaller government would simply be cheaper for them to buy. A smaller government means less regulation – did you notice that diminished regulations had much to do with the latest meltdown? – and lower budgets to enforce what regulation remains. The super rich would LOVE a smaller government. It was one of the key ideas that business-supported conservative foundations like The Heritage Foundation and the American Enterprise Institute came up with, when they set out to gain greater government influence. You are proof that propaganda works.

    ========================================
    Wally Ballou

    “It seems blindingly obvious that the rich are richer, and the middle class is struggling, more because of globalization than anything else.”

    Only, the gap in the US has grown MUCH more than in other rich, mixed economies, that are subject to pretty much the same globalization issues that we are. You should read the book. You’d know more.

  28. Anonymous says:

    The rich and powerful lost some grip on things after the second World War, when unions gained power and common people got more and more protection from laws and regulations.

    This grip began to come back in the 80′s with the invention of globalization which resulted in the availability of much cheaper labour first abroad in sweatshops and then in Western countries with the massive immigration of cheap qualified manpower. Already workers rights began to get knocked down one by one and unions lost power.

    Then came the reinvention terrorism as a global threat with it’s drive to instigate an increasingly tighter control on all aspects of our activities. There again acquired rights were stripped down one by one, leaving the common people with few rights on the labour market and not so many in their private lives.

    When few regulations are in place, raw power thrives, and raw power comes from money. Is it really surprising that the rich are getter richer faster and that middle class is either stagnating or actually disappearing?

  29. Ugly Canuck says:

    Time for a little catch-up:

    http://www.equalitytrust.org.uk/why/remedies

    What does great income inequality do for the other “types” of equality – help or hinder their maintenance?

  30. nutbastard says:

    Sigh. Did some math the other day, turns out I make 2 cents an hour less than when I started this job (in terms of buying power/inflation) five. years. ago. This is after surviving 2 rounds of layoffs and picking up the slack, as well as going well above and beyond what I was hired to do in the first place. I’m at least 10 times more effective at my job than I was when I started. Thanks for showing how much you appreciate me, oh glorious employer.

  31. Ugly Canuck says:

    Ah, consider…the evidence:

    http://www.equalitytrust.org.uk/why/evidence

    Really, that the Brits have anything to teach Americans about equality indicates a degree of “backsliding” on the part of American society concerning this topic, IMHO.

  32. Ugly Canuck says:

    Stop all that back-sliding! And get to working, to working on a building:

    http://www.youtube.com/watch?v=yBDZ3G4RCHc

    A building wherein all the rooms are equal one to the other, and each room equally necessary to the whole edifice.

  33. Matt says:

    I am tired of people saying “the rich get richer, and the poor get poorer”. The “poor” in this country still have cell phones and flat screen TVs. At no time in history, has a group of “poor” people had it as easy as they do in this country today.

    You want to know why corporations/billionaires are making bank while the middle class has stagnant wages? Union wages (which are indexed to the constantly ratcheting minimum wage) are driving jobs over seas.

    You can hire five guys in India (if not more) for what it would cost you to hire one in the States!

    Minimum wage is part of the problem, indexing it to inflation would be like throwing gas on a fire!

    • Anonymous says:

      Read and learn. You are more ignorant than tired, trust me.

      The book isn’t about how the poor should have more. It’s about how just about EVERY family, other than the top 5% – and especially, the top 0.01% – is only making more money (inflation adjusted) than it did 30 years ago BECAUSE OF INCREASED WORK HOURS.

      The poor are actually poorer than they were 30 years ago – and they’re working more hours to be poorer. One of the causes of this is that the rich used their organization and wealth to keep the government from raising the minimum wage – the authors call this ‘drift’ – so as to keep pace with inflation. Lower wages means more of the money trickles up. The rich get richer.

      Unless you are in that top 5%, you really should read the book. They have you blaming the victims. Divide and conquer is an old idea but, as you demonstrate, still very effective.

    • Anonymous says:

      Tell us more about what it’s like to be poor, Matt. It sounds like you have a lot of personal experience.

  34. Anonymous says:

    My feeling is that the right managed to convince low and middle class Americans to vote against their own self interests by:

    - Blaming there difficulties on social programs for those at their level or below (lift yourself by beating the weak). “Welfare queens!” “Moochers!”

    - Justify corporate welfare as vital for job creation even if years later their tax breaks and cheap loans show no job gains or even layoffs. The outcomes will never be publicised.

    - Any talk of increasing taxes on the rich will be reduced to a single “they want to increase taxes!” mantra. The rich will be portrayed as caring folks who would love to help you if you just didn’t tax them. In reality the money is used to buy a trophy home from another megarich person.

    - Taxation of the wealthy will be portrayed as anti-American while ignoring the burden that is passed onto the majority of Americans and the lack of burden born by a tiny fraction of these megarich. Issues like estate taxes have been warped to make it look like an attack on “humble farmers” when in reality it only truly effects America’s aristocracy.

    - In the meantime the megarich use their wealth to further erode the rest of the nation’s freedoms such as extending copyrights to beyond the century mark so someone’s grandkids can keep milking grandpa’s work (or more likely a corporation like Disney keeping a grasp on their cash cows).

    Good luck fighting this. Congress will ignore you. The rich and corporations will outspend you. The Supreme Court has already declared companies to be equal to real human beings. The media will make you look anti-American. And our ever growing police and intelligence empire will crush you as effecively as they do in China if you try more than just talking.

  35. 2k says:

    Adso of Melk: And what was the word you both kept mentioning?
    William of Baskerville: Penitenzhiagite.
    AoM: What does it mean?
    WoB: It meansh that the hunchback undoubtedly wasj wonsh a heretic. Penitenzhiagite wasj a rallying cry of the dolshinites.
    AoM: Dolcinites? Who were they, master?
    WoB: Thoshe who believed in the poverty of Chrisht.
    AoM: So do we Franciscans.
    WoB: But they alsho declared that everyone musht be poor, sho they shlaughtered the rich. Ha! You shee, Adsjo, the shtep between ecshtatic vision and shinful frenzjy isj all too brief.
    AoM: [looking at the Hunchback] Well, then, could he not have killed the translator?
    WoB: No. No, fat bishops and wealthy priesjts were more to the tashte of the dolshinites, hardly a speshialist of Arishtotle.

  36. slideguy says:

    If you’re really interested in why the rich need to be curbed, and why it probably won’t happen, I highly recommend Charles Fergusan’s “Inside Job” You’ll walk out thinking that the French Revolution was a better idea than ours. They finished the job.

  37. Anonymous says:

    I don’t think it should be legal for any single person to have over let’s say £10.000.000

    I find it amazing how most middle class people worship the super wealthy, instead of realising how wrong it is to have that kind of money whilst pretending that ignorance, which is the root of all the world’s suffering, is someone else’s fault.

    Being rich is nothing more than walking on everyone else’s head, instead of walking beside them.

    Hurting people just so you can feel good about yourself, that’s insane, right?

    • turn_self_off says:

      well, supposedly there is a higher then average number of sociopaths in corporate management…

      not sure if it was in one of the comments here or somewhere else, but i have read a claim that once basic daily needs are covered, having 1000 or 10000 makes little difference in the grand economic scheme of things. This because having much money just means more of it will be stored away for a “rainy day”.

  38. Anonymous says:

    Why do I get the feeling the comment section of this article is inhabited by two ultra rich individuals testing poor people’s convictions like they always do?

  39. Anonymous says:

    Taxes on wages keep working people poor.

    Illegal immigration keeps working people poor.

  40. petertrepan says:

    And also because gross income inequality means gross power inequality, and the power inequality will inevitably be used to tilt the playing field still further.

    And it means an unfair system, when someone is thousands of times wealthier than me without being thousands of times (or even one time!) as productive or worthwhile.

    And it means people being less likely to abide by a social contract that they can see is unfair.

    And it means fewer people living up to their full potential. That is, what they could have been had the opportunity of education – or even of minimal resources plus free time – been available.

    And that means a less capable, less innovative, generally lower level of civilization, which hurts even the rich.

    • bmcraec says:

      Hmm, you mentioned the social contract. My personal experience, hanging around rich people, is that they are the last people doing any honouring of social contracts, if it doesn’t suit their purposes. “Parking restrictions? Fuck that! I’m rich!” “Insider trading? Screw the rules! I didn’t get this rich by obeying petty bureaucrats!” “I don’t care what your advice is… I want it NOW!”

      Entitlement is a disease of power, which as everyone knows, corrupts. The more I think about it, the more I think I know what Larry Niven was writing about when he created the Pak Protectors. They didn’t just fuck up a planet. They fucked up multiple planets.

  41. Jason Rizos says:

    Great stuff in this thread.

    Does anybody want to speak to the point of real wages being replaced by increasing credit over the last 30 years? Such as easy access to home loans, second mortgages, student loans, etc., rather than real wages? I might be getting my terminology wrong….

  42. misterx001 says:

    What I don’t understand is the impetus on the part of some commenters to so vehemently defend the “right” of the Croesus-rich to be so.

    Suppose you’re right, oh partisans on behalf of capitalism’s titans. Do you really think Bill Gates needs your help to defend himself? Do you think he stays up all night trolling comment threads on BoingBoing obsessively looking for people criticizing him for being one of the most powerful men on the planet? (Do you secretly think you’ll be rewarded someday for your unerring loyalty?)

    Even if I accept your arguments (which I don’t), there’s nothing in it for you. By your own principles, you shouldn’t care. God knows I don’t. The rich can defend themselves quite capably without your help.

    • turn_self_off says:

      They are pinning their hopes on that long since obsolete “american dream”. That they can, by hard work, join those that they are currently defending…

      • misterx001 says:

        I think it’s simpler than that, turn_self_off. The Just World Phenomenon (link) could explain the knee-jerk impulse to blame the poor for their fate. After all, if the poor are the way they are because they’re shiftless layabouts (and not because the John Galts on Wall St. flushed the economy down the commode) then one can take action to avoid their fate.

        A corollary of this is, of course, that the rich are the way they are because they deserve to be so.

        To sum up, I agree with you generally, but I don’t think it’s just an American thing.

  43. rawbacon2 says:

    Investing is not always in the interests of society. Trickle-down only works if the rich invest in productive things, investing in finance just creates more finance, which ends up being worse for the rest of us (higher mortgage, rising food prices). Most staple countries have figured out that having a large middle-class is the only way to stabilize a country. After all, why march in the streets, when you have a flatscreen and 2 cars?
    BUT, what people don’t realize is why the rich do it. It’s not because they are evil sociopathic leaches (although you would probably find the same ratio of sociopaths at Goldman Sachs as you would at Sing-Sing). They do it, because they care about the environment.
    You see, while the top 1% might own 42% of the cake, they don’t produce 42% of the co2 (which would be roughly 980 tons compared to the 20 tons American average). So by leaching the wealth away from the masses (who’d just buy a 4WD) and mainly investing the money in non-producing entities like CDO’s, swaps & what-have-you’s, they’re slowly pulling us back from the brink. They know that we don’t have enough resources for all 7 billion to live like westerners, but if 6,93 billion of us live 20% below the 2,5 tons co2 threshold, they each get about 50 tons to play with.
    Sadly, I might be wrong. There just seems to be a disconnect between the bleeding-hearts all wanting us to be richer and the fact that we live on world with finite resources (until we can start to mine the Kuiper Belt). It would be nice, if we awarded those, who worked hard to better our lives & not those who fuck it up.
    To be poor in wealth & rich in knowledge is glorious (to anti-paraphrase Xiaoping).

    • bmcraec says:

      That’s the most eye-browing raising comment on this page. There may be something to it, intentional or not. I also liked the bit about mining the Kuiper belt. I always wanted to be a ‘Belter, when I was a kid.

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