Not Funny At All

Here is a decent article: Funny How? by Ben Hunt. It’s not the type of thing I normally read, but it’s worth a quick perusal.

My dad regularly reads this guy because of his investment views and he thought I’d like it. Like my dad, the author of this piece is strongly pro-capitalist with the standard advocacy of deregulation and such. That is what makes the following statements so powerful:

“I’m pretty sure that I agree with absolutely none of Thomas Piketty’s policy prescriptions. And the impact of his bugbear – tax policy – on wealth inequality is laughably minor compared to the impact of a triple in the S&P 500 market cap or central bank purchases of trillions of dollars of bonds. But if you don’t recognize that Piketty has a point when he says that today’s wealth inequality is both outrageous and poisonous, you’re just not paying attention. Increased wealth inequality always leads to increased political polarization, within and between countries, within and between political entities. That was true in the 1870s, that was true in the 1930s, and it’s true today.”

I’ve been telling my dad that for years. And he is finally coming around to appreciating why this matters. He used to dismiss it. Many people did. Even this guy might have not given inequality the time of day in the pre-recession early 2000s or further back in the booming 1990s.

So, many of those who are normally disconnected from the reality on these issues are coming around. Fear of consequences is finally hitting home. They are realizing that this isn’t just effecting poor minorities and third world countries. They are realizing that the entire status quo is being threatened… and that the time of externalizing costs has ended.

* * * *

For those who wonder about the consequences of high inequality, I came across two other relevant articles:

This might be the most controversial theory for what’s behind the rise of ISIS
by Jim Tankersley

The new argument, which Piketty spelled out recently in the French newspaper Le Monde, is this: Inequality is a major driver of Middle Eastern terrorism, including the Islamic State attacks on Paris earlier this month — and Western nations have themselves largely to blame for that inequality.

Piketty writes that the Middle East’s political and social system has been made fragile by the high concentration of oil wealth into a few countries with relatively little population. If you look at the region between Egypt and Iran — which includes Syria — you find several oil monarchies controlling between 60 and 70 percent of wealth, while housing just a bit more than 10 percent of the 300 million people living in that area. (Piketty does not specify which countries he’s talking about, but judging from a study he co-authored last year on Middle East inequality, it appears he means Qatar, the United Arab Emirates, Kuwait, Saudia Arabia, Bahrain and Oman. By his numbers, they accounted for 16 percent of the region’s population in 2012 and almost 60 percent of its gross domestic product.)

This concentration of so much wealth in countries with so small a share of the population, he says, makes the region “the most unequal on the planet.”

Within those monarchies, he continues, a small slice of people controls most of the wealth, while a large — including women and refugees — are kept in a state of “semi-slavery.” Those economic conditions, he says, have become justifications for jihadists, along with the casualties of a series of wars in the region perpetuated by Western powers.

His list starts with the first Gulf War, which he says resulted in allied forces returning oil “to the emirs.” Though he does not spend much space connecting those ideas, the clear implication is that economic deprivation and the horrors of wars that benefited only a select few of the region’s residents have, mixed together, become what he calls a “powder keg” for terrorism across the region.

Inequality is Fundamental to U.S. Capitalism: Tweaking the Edges Will Accomplish Nothing
by Steven W. Thrasher

The economic hoarding by those at the top has been termed “income inequality”, but that’s neither a strong nor accurate enough phrasing. I have never heard poor people complain about “income inequality”; poor people complain about being screwed out of housing , or about working more hours for less pay or about having to choose between medicine and food. […]

Income inequality is better termed structural racism. White people earn more money with less education than black people and consistently have half the unemployment of black people. And, as new research has shown, “family wealth” predicts outcomes for 10 to 15 generations. Those with extreme wealth owe it to events going back “300 to 450” years ago, according to research published by the New Republic – an era when it wasn’t unusual for white Americans to benefit from an economy dependent upon widespread, unpaid black labor in the form of slavery.

Income inequality is better viewed as structural sexism. Women earn 78 cents on the dollar overall compared to white men, but black women only earn 64 cents and Latinas 56. Women are also routinely discriminated against economically for bearing children.

Income equality is better viewed as structural child abuse. In the United States, one in five children needs government help to eat. As Aisha Sultan recently wrotein the Education Writers Association, if a 30-child classroom looked like the nation at large, seven of the children would be living in poverty, six would be victims of abuse and one would be homeless. These kids aren’t just unequal; they are never offered the opportunity to achieve equality.

Income inequality is better viewed as economic genocide, which shortens the lives of the poor. As the New York Times bluntly put it last year, “where income is higher, life spans are longer”. For one of the most jarring examples of how this plays out, look no further than the Ferguson Report, which shows how just in St Louis County, the average life expectancy ranges from 91 in the whitest neighborhood to 56 in the poorest, blackest neighborhood.

3 thoughts on “Not Funny At All


    When things go backward in nations accustomed to middle-class stability, people start to ask questions. What is the use of capitalism if its rewards go to the few and its risks are dumped on the many? The rights of property do not seem so enticing if the value of what you own collapses or if that property is trapped by debt

    But three years later, as the crisis of inequality continues to deepen—and after Piketty and Corbyn and Sanders and Pope Francis—the WSJ seems to have changed its tune. The system question—that is, the question of how the ownership of capital should be structured in society that purports to be a democracy—is clearly on the table in a remarkable long essay published this past Saturday, written by the authorized biographer of Margaret Thatcher.

    The piece begins with the simple imperative: “If Western countries want to disprove the dire forecasts of Karl Marx, we must think creatively about how to make the middle class more prosperous and secure.“

    Let that sink in for a minute. The threat, according to this featured piece in The Wall Street Journal, is not just Marxists and their ideas, but the possibility that they might be right about capitalism after all. The author strikes the same note in his conclusion:

    “[…] Marx did have an insight about the disproportionate power of the ownership of capital. The owner of capital decides where money goes, whereas the people who sell only their labor lack that power. This makes it hard for society to be shaped in their interests. In recent years, that disproportion has reached destructive levels, so if we don’t want to be a Marxist society, we need to put it right.”

    We might pause for a second to wonder who it is that Moore is addressing when he says “we don’t want to be a Marxist society.” Surely, it can’t be the squeezed middle class, for why would its members object to a society shaped in their interests?

    When Moore says “we need to put it right” he means conservatives need to put it right in a way that preserves their ability to exploit “the middle class” to maintain their wealth and privileges; it’s just that they need to improve the condition of the middle class with a little less squeezing. It’s as if a prescient slave-owner is warning his class cohorts that “The slaves are getting restless. There are two ways this can be put right. We can improve the conditions of our slaves. Or the slaves can take it into their hands to abolish slavery. Let’s do the first before the slaves do the second.”

    One wonders whether Moore is as familiar with the work of Marx’s intellectual companion, Friedrich Engels, as he appears to be with that of Marx? In the last paragraph of his The Condition of the Working Class in England, Engels wrote:

    “The classes are divided more and more sharply, the spirit of resistance penetrates the workers, the bitterness intensifies, the guerilla skirmishes swell into more important battles, and soon a slight impulse will suffice to set the avalanche in motion, then, indeed, will the war-cry resound through the land: ‘War to the palaces, peace to the cottages!’—but then it will be too late for the rich to beware.””

    Moore appears to be sounding the same warning. But Engels wrote an important sentence which immediately precedes the paragraph cited above: “It is too late for a peaceful solution.”

    After more than four decades of serving as the nation’s economic majority, the American middle class is now matched in number by those in the economic tiers above and below it. In early 2015, 120.8 million adults were in middle-income households, compared with 121.3 million in lower- and upper-income households combined, a demographic shift that could signal a tipping point, according to a new Pew Research Center analysis of government data.


    GEORGE: Well, another way of saying it is that the capitalists can thrive as much as they want until the first bomb destroys their factory or until the first mob loots them. They aren’t independent of the state. The very idea of a corporation is a political idea. That someone should be able to own part of a company but not be liable for all its debts is a very modern idea. It’s also a very radical idea.

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