“Although low inflation is generally good, inflation that is too low can pose risks to the economy – especially when the economy is struggling.” – Ben Bernanke
“The true measure of a career is to be able to be content, even proud, that you succeeded through your own endeavors without leaving a trail of casualties in your wake.” – Alan Greenspan
There you have it – the wisdom of two Ivy League educated economists who are primarily liable for the death of the American middle class. They now receive $250,000 per speaking engagement from the crooked financial parties their monetary policies benefited; write books to try and whitewash their legacies of failure, fraud, and hubris; and bask in the glow of the corporate mainstream media propaganda storyline of them saving the world from financial Armageddon. Never have two men done so much damage to so many people, so quickly, and are not in a prison cell or swinging from a lamppost. Their crimes make Madoff look like a two bit marijuana dealer.
The self-proclaimed Great Depression “expert” Ben Bernanke peddles pabulum about inflation being too low and posing dire risk to the economy, but is blasé that swelling the Federal Reserve balance sheet debt from $900 billion in 2008 to $4.4 trillion today with his digital printing press poses any systematic risk to the country and its citizens. Either his years in academia have blinded him to the reality of his actions upon the lives of real people living in the real world, or his real constituents have not been the American people, but the Wall Street bankers that pulled his puppet strings over the last eight years.
Now that he has passed the Control-P button to Yellen, he is reaping the rewards of bailing out Wall Street and further enriching them with QEfinity. Ben earned a whopping $200,000 per year as Federal Reserve chairman. He now rakes in $250,000 per speech from the very financial interests who benefited from his traitorous monetary machinations. I don’t think he will be invited to speak at any little league banquets by formerly middle class parents whose standard of living has been declining since the 1980s. Is it a requirement that every Federal Reserve chairperson lie, obfuscate, misinform, hide the truth, and do the exact opposite of what they say they will do?
“It is not the responsibility of the Federal Reserve – nor would it be appropriate – to protect lenders and investors from the consequences of their financial decisions.” – Ben Bernanke – October 2007
Greenspan, Bernanke and Yellen have always been worried about deflation, while even the government suppressed CPI calculation reveals that inflation has risen by 108% since the day Greenspan assumed office in August 1987. The dollar has lost 52% of its purchasing power in the last 27 years of Fed induced bubbles and busts. And these scholarly academic bozos have been worried about deflation the entire time. Since Nixon closed the gold window in 1971 and unleashed the two headed inflation loving gargoyle of debt issuing bankers and feckless self-serving politicians upon the American people, the dollar has lost 83% of its purchasing power (even using the bastardized BLS figures).
Any critical thinking person with their eyes open knows the official inflation figures have been systematically understated since the 1980’s by at least 3% per year. Should the average American be more worried about deflation or inflation, based upon what has occurred during the 100 years of the Federal Reserve controlling our currency?
I’m sure Greenspan is content and proud, as he succeeded through his own endeavors in rewarding, encouraging and propagating excessive risk taking by the Wall Street cabal during his 19 year reign of error. He exited stage left as the biggest bubble in history, created by his excessively low interest rate policy, blew up and destroyed the 401ks and home values of the middle class. This was the second bubble under his monetary guidance to burst. The third bubble created by these Keynesian acolytes of easy money will burst in the near future, further impoverishing what remains of the middle class and hopefully igniting a long overdue revolution.
Greenspan’s pathetic excuse for a career has benefitted those who owned him, while leaving a trail of casualties that circles the globe. His inflationary dogma, Wall Street enriching doctrine and Keynesian motivated schemes have drained the savings and confiscated the wealth of the middle class through persistent and devastating inflation. And it was done by a man who knew exactly what he was doing.
“Under the gold standard, a free banking system stands as the protector of an economy’s stability and balanced growth… The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit… In the absence of the gold standard, there is no way to protect savings from confiscation through inflation” – Alan Greenspan – 1966
The abandonment of the gold standard in 1971 set in motion four decades of consumer debt accumulation on an epic scale, currency debauchment, and real wage stagnation. The consumer debt accumulation was a consequence of the American middle class being lured into debt by the Too Big To Trust Wall Street banks and their corporate media propaganda machine, as a fallacious response to stagnating real wages when their jobs were shipped to China by mega-corporations using wage arbitrage to boost quarterly profits, their stock prices, and executive bonuses.
The bottom four quintiles have made no progress over the last four decades on an inflation adjusted basis. The middle quintile, representing the middle class, has seen their real household income grow by less than 20% over the last 43 years. And this is using the understated CPI. In reality, even with two spouses working today versus one in 1971, real household income is lower today than it was in 1971.
The more recent data, during the Greenspan/Bernanke inflationary era, is even more disconcerting and destructive. Real median household income has grown at an annualized rate of less than 0.5% over the last thirty years. During the bubblicious years from 2000 through 2014, while Wall Street used control fraud and virtually free money provided by the Fed to siphon off hundreds of billions of ill-gotten profits from the economy, the average middle class family saw their income drop and their debt load soar. This is crony capitalism success at its finest.
The oligarchs count on the fact math challenged, iGadget distracted, Facebook focused, public school educated morons will never understand the impact of inflation on their daily lives. The pliant co-conspirators in the dying legacy media regurgitate nominal government reported income figures which show median household income growing by 30% over the last fourteen years. In reality, the real median household income has FALLEN by 7% since 2000 and 7.5% since its 2008 peak. Again, using a true inflation figure would yield declines exceeding 15%.
Greenspan and Bernanke’s monetary policies loaded the gun; Wall Street bankers cocked the trigger with their no doc negative amortization mortgages, $0 down – 0% interest – 7 year subprime auto loans, introducing the home equity line ATM, and $20,000 lines on dozens of credit cards; the media mouthpieces parroted the stocks for the long run and home prices never fall bullshit storyline, encouraging Americans to pull the trigger; government apparatchiks and bought off politicians and their deficit expanding fiscal policies, pointed the gun; and the American people pulled the trigger by believing this nonsense, blowing their brains all over the fine Corinthian leather interior of their leased BMWs sitting in the driveway in front of their underwater McMansions.
Median household income in the United States peaked in 1999. The internet boom, housing boom and now QE boom have done nothing beneficial for middle class Americans. They have been left with lower real income, less home equity, no savings, and no hope for a better tomorrow. Most states saw their median household income peak over a decade ago, with more than half the states experiencing double digit declines and ten states experiencing declines of 19% or higher. It’s clear who has benefitted from the fiscal policies of spendthrift politicians and the spineless inhabitants of the Mariner Eccles Building in the squalid swamplands of Washington D.C. – the pond scum inhabiting that town. The median household income in D.C. stands at an all-time high. Winning!!!!
A former inhabitant of Washington D.C. spoke the truth about inflation and the men who benefit from it in the 1870’s. He was later assassinated.
“Who so ever controls the volume of money in any country is absolute master of all industry and commerce and when you realize that the entire system is very easily controlled, one way or another, by a few powerful men at the top, you will not have to be told how periods of inflation and depression originate.” – James Garfield
The Federal Reserve, a private bank representing the interests of its Wall Street owners, has been in existence for 100 years. It has managed to diminish the purchasing power of the dollar by 95%, while causing depressions, enabling never ending warfare, allowing politicians to expand the welfare state to immense unsustainable proportions, and enriched its true constituents on Wall Street beyond the comprehension of average Americans. In 2002 Ben Bernanke made his famous helicopter speech where he promised to drop dollars from helicopters to fight off the ever dangerous deflation. After the Fed created 2008 worldwide financial collapse he fired up his helicopters, but dropped trillions of dollars on only one street in America – Wall Street. He dropped turkeys on Main Street, and we all know from Les Nesman what happens when you drop turkeys from helicopters.
Les Nesman: Oh, they’re crashing to the earth right in front of our eyes! One just went through the windshield of a parked car! This is terrible! Everyone’s running around pushing each other. Oh my goodness! Oh, the humanity! People are running about. The turkeys are hitting the ground like sacks of wet cement! Folks, I don’t know how much longer… The crowd is running for their lives.
Arthur Carlson: As God is my witness, I thought turkeys could fly.
The intellectual turkeys running this treacherous institution create a new and larger crisis with each successively desperate gambit to keep their Ponzi scheme alive. Even though Greenspan, Bernanke and Yellen are highly educated, they are incapable or unwilling to focus on the practical long-term implications of their short-term measures to keep this perverted financial scheme from imploding. Denigrating savings and capital investment, while urging debt financed spending on foreign produced trinkets and gadgets passes for economic wisdom in the waning days of our empire. Courageous and truthful leaders are nowhere to be found as the country circles the drain. Farewell middle class. It was nice knowing you.
“There are men regarded today as brilliant economists, who deprecate saving and recommend squandering on a national scale as the way of economic salvation; and when anyone points to what the consequences of these policies will be in the long run, they reply flippantly, as might the prodigal son of a warning father: “In the long run we are all dead.” And such shallow wisecracks pass as devastating epigrams and the ripest wisdom.” – Henry Hazlitt – Economics in One Lesson
Llpoh — Kudos, you have certainly defended your position. I’m dizzy reading all the posts and I’m late to the party. Never the less, I wish to make a few salient points.
IQ is a variable as has been shown. It is not fixed as once was thought.
Labor has always been stratified with wages correspondingly so. Skills are developed over time and society values those skill appropriately. Remember, Albert Einstein was a lowly patent clerk when he developed his major theory. Yes, I know, he was an exception, but the world is replete with exceptions.
IQ test for measuring intelligence have a built in bias as all tests do. That’s why we have triple blind studies.
Surveys, tests and other computational rigamarole often supply the results that the authors had theorized. (intentional bias) As a Ph.d. friend, once, lamented , “If the facts disagree with the theory, so much the worse for the facts.”
Now to you. Llpoh!– “Let us assume that income very broadly and basically tracks intelligence – which it does to a significant extent.”– PROVE IT. I’m not buying your supposition. Correlation is not causation. I feel that, more often than not, we seek to justify our advantage in life with a philosophy that which supports that advantage. “We are exceptional, the chosen ones, history has chosen us, we are better than the Hop Polloi, etc.”… to lead, to rule, to make more money, etc. etc. etc.
Kudegras is right. Your position in society is very much influenced by familial, educational, business associations. You want to be part of the 1% , choose your parents, carefully and buy into your exceptional-ness, and tow the party line, your IQ not with standing.
Education, once the stepping stone to higher wages, elevated social standing and all the privileges that go with it, has proven, as a whole, to be illusory to the middle and lower classes, again. IQ not with standing.
Lipoh, I feel that your looking for justification for your advantages in these graphs. I see that you are very intelligent and focused. But, I remind you that the Progressives, from the 1800’s, have espoused a philosophy of exceptional-ism that led to the decimation of the American Indians, the Tuskegee Experiment, the subjugation of the Negro, Hitler, and a myriad of other sins. People in power, structure society to their aims and these graphs may demonstrate that.
Lipoh–Like the other commenters, I can’t let your idea go unchallenged, historically, the consequences are, for society, so dire.
Intelligent people also realize that All information provided by government or the federal reserve is either misleading or completely false in order to placate and fool citizens – and keep them under control.
Any discussion of topics that waver from ending the federal reserve and completely reforming government to save the middle class and our country’s future is a waste of time. There are many good comments and the Admin makes excellent points as well – that’s why I closely follow this site and some others.
As many posters here already believe, perhaps the “die is cast” regarding our economy. However until this happens, everyone who understands the reality of what’s happening in our country (government corruption, massive overspending and waste, federal reserve dollar devaluation, job losses, Derivatives gambling, increasing debt, etc.) has a obligation to themselves and their families to keep making whatever effort they can to persuade others of the need for reform – however pointless it may seem considering widespread public apathy.
The Admin and others are doing what they can with their sites. All others must also do what they can to convince their family, friends, etc. of the need for major and immediate reforms of government despite the odds. Without this, collapse is certain – sooner than later.
It’s funny. The real money makers, today, work for the government. Government income per capita is higher than the per capita income of the private sector.
Does this mean that Government workers are more intelligent than private sector workers??? Gasp!!!
I’m going to have to re-adjust my thinking the next time I go to the Post Office.
Can I play?
“The Community Reinvestment Act is a United States federal law designed to encourage commercial banks and savings associations to help meet the needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods. Congress passed the Act in 1977 to reduce discriminatory credit practices against low-income neighborhoods, a practice known as redlining.
The Act instructs the appropriate federal financial supervisory agencies to encourage regulated financial institutions to help meet the credit needs of the local communities in which they are chartered, consistent with safe and sound operation. To enforce the statute, federal regulatory agencies examine banking institutions for CRA compliance, and take this information into consideration when approving applications for new bank branches or for mergers or acquisitions.”
Translation of this message by the federal government to the banks: “We got you by the balls.” Translation of the message of the burst housing bubble by the banks to the federal government: “We got you by the balls.”
And the real outcome? Another nail in the coffin of the middle class.
In no particular order:
Agent P – hahahahahahaha! You must be truly new. We use bad words like poopoo, weewee, and darn all the time around here. Get used to it.
Homer – I already proved that intelligence tracks income. Seriously, can anyone really argue it does not? That someone from the bottom 10% has the same chance of making good money as someone from the top 10% of incomes?
I never said being smart causes higher earnings. I said that, in (almost) any given cohort, the cohort that is smarter will make more money. Statistics prove this is so. And common sense would of course indicate the same. But what folks choose to do is to pull anecdotes – we all have some – similar to “I know someone with a PHD who is dumpster-diving for a living”. I know those sorts, too. But mostly, I see smarter folks making more money.
Re your comments on earnings being more related to birth status – ummm, no. What the research show that earnings relate far more to intelligence.
HOWEVER – the research shows that WEALTH relates to birth status. In other words, people inherit wealth, and that is truly luck of the draw. I really do not like that extreme wealth transfers via birthright. That creates dynastic oligarchies, in my opinion.
“But the fact is, the middle class was unsustainable, and owed its position to 1) the hugely beneficial position the US found itself in post WW11, and 2) it held its position via huge consumption of debt.”
—-llpoh
Well, tons of words on this thread, but that single sentence sums up the truth ….. meaning I agree with Llpoh. Big steel, gone. Big machine and tool, gone. Big car, gone. I could name more major manufacturing industries that were protected by the result of WWII, but you get the picture. We were the last man standing after the war. That’s a fact. The homeland didn’t even suffer a scratch, much less a minor flesh wound.
Then the spending spree (debt) kicked in, fueled by Keynesian economics at the policy-making level. Game over. Took about 3 generations, but game over.
Thanks, SSS. When one of your caliber says such a thing, it makes my day better.
The IQ stuff was just to inflame the masses.
The US came out of WW2 with huge manufacturing capacity, and a ton of natural resources, which it used to its advantage while the rest of the world began to climb out of the rubble.
When that advantage began to wane, the US turned to debt.
Consumption has been preferred to investment in the future. The people chose cars, TVs, and such, and the govt poured money into the military. Consume now was preferred and chosen over investment in roads, transport, water, electricity, etc.
The advantages that existed have largely disappeared, and the govt has done much to expedite the problems, for sure and certain. And major corps and banksters and oligarchs have certainly taken unfair and often illegal advantage of the situation.
But the problems were coming – the US people have very much contributed to their own downfall. The developed a sense of entitlement rather than understanding that they had been given an enormous and unique opportunity to solidify the future of the country. They chose to consume the future now, and let the next generations pay for it. It is a disgrace.
But there is no stopping the demise of the middle class now. It was always going to fall back toward the mean, but now it is going to be more like a crash than a gentle bump in the road.
The sooner people see this, and change their behavior, the more likely they are of coming through the crisis in one piece. I believe the best chances for any individual lie in the old order of things – honesty, integrity, hard-work, thrift, education, appreciation of family and community. I have tried hard to establish these things in my children. Time will tell if they have learned, and whether it will work for them.
I have little to gain by this. I am going to head to pasture reasonably soon, and am structuring my life so as to be insulated, best as possible, from the coming crisis.
But I am sorely aggrieved at what is happening to the young.
“I am going to head to pasture reasonably soon, and am structuring my life so as to be insulated, best as possible, from the coming crisis. But I am sorely aggrieved at what is happening to the young.”
—-Llpoh
I’m already in the pasture and have done as you plan. I share your sentiments.
BTW, your views on IQ are largely accurate, but I think you could have saved yourself a lot of trouble by just posting the following comment:
YOU CAN’T FIX STUPID.
I would not be so concerned about the shallow end of the gene pool if it were not so damn wide.
Llpoh says—“I already proved that intelligence tracks income. Seriously, can anyone really argue it does not?” You’ve proved nothing of the sort. You have just shown a correlation between income and intelligence and a small sampling at that. You’ve left yourself quite an escape hatch in framing your thesis with “very broadly and basically tracks”. Who could argue with that? There is more here than meets the eye. Define intelligence and income. I would think that intelligence is a nebulous concept (subject to interpretation of variables) and that income is concrete (except in Title 26). One would have to take all persons with incomes and give them an IQ exam to discern the validity of your thesis and not a weak sampling using extrapolation to prove your point. What kind of intelligence are you talking about? There is more than one, although the definition tries to be all inclusive.
So, we’re moving into a technological world as that’s the future and those of us who are intelligently challenged are left to deal with your shit or rig the flight controls of a 767? I think not! The world is running out of easily obtained resources, of which technology is dependent. There may be a nuclear war in the offing. Then the cockroaches can carry on and sort things out. How intelligent are they?
The future is never what we think it will be and the past is only constructed in hind sight to serve our agenda, It is obvious from these posts that many are in disagreement with your interpretation of the present and vision of the future.
Homer – people do not object to what I am saying because of the reasons they give.
They object because they want to believe that the loss of the middle class is not inevitable and that it was avoidable.
So far, reality seems to be supporting my position. Time will tell.
Sorry, meant to say “the reasons you give”.
All that bullshit to find out what we already knew, Bretton Woods gave the USA a tremendous advantage and the pent up demand in the US gave us the 50’s boom.
Evangelist Lino Lopez said in 1999, Americans are proud of their status but God can take the money out of this country. Perhaps the bankers are doing God’s work after all.
Thomas Edison said success is 10% inspiration and 90% perspiration. Even as kids we knew the smart-ass retort, if your so smart, why aint you rich?
The truth is that one unrecognized factor is opportunity, not the kind government hands out but the kind that chance gives to the one smart enough to take advantage of it.
I was hoping someone would add to the topic on money printing. Old Sarge said, I don’t want a lot of money, just enough to buy and sell you. When you have access to a printing press, you can buy and sell a lot of people.
Llpoh says to SSS—”The IQ stuff was just to inflame the masses.” Thanks for the buggy ride!
I have been reading your posts often and sensed this was out of character, which is why I replied to your posts respectfully. Your post to SSS convey my sentiments. However, I am a little more optimistic as to the outcome. Blame it on my belief in God. I know what you’re thinking, “They say that God is everywhere, and yet we always think of Him as somewhat of a recluse.”–Emily Dickinson. I never wanted to go through life with ‘eyes wide shut’. I look at the stars and I marvel. I wonder at the complexity it all and I am over whelmed at its intricacy, its beauty, its splendor. I feel Him in me and in you. I’m sorry, I believe in God. I can’t help myself. Carl Sagan once said that we are all made out of star stuff. We are all made out of God stuff and all things are possible.
I have a different opinion about inheritance. I believe in inheritance. I don’t think it should be taxed. We have inheritance taxes now and we have and oligarchy now. They pass on their wealth through foundation, exemptions from laws, corporations, etc. to their heirs. It matters little who owns a thing, what matters is if you have 100% exclusive use of it.
Tax the rich is the biggest lie to come down the pike! Inheritance tax, the redistribution of wealth, is a socialist scheme. It always seems to enrich the people doing the redistribution. It impoverishes the middle class and the poor and keeps them that way. It restricts familial upward mobility. Passing on your wealth to your heirs enhances their future and provides a head start for them. The inheritance tax steals from one and gives undeservingly to another, robbing the heir of his rightful due. “Thou shall not steal, except by popular vote.” — Gary North.
Homer – I do not mind passing reasonable wealth on to ones family. By reasonable I mean tens or perhaps hundreds of millions. But tens of billions is far too much, and it creates hereditary dynasties. I really hate it when I discover that rich dunces got their money via inheritance (wealth does not reflect intelligence – that has been shown. 🙂 )
I also do not believe in taxing the rich – it is bullshit, and it will solve nothing in any event. When people say rich, they generally mean folks like doctors, small businessmen, etc. they just do not seem to realize it is those that are netted in the class warefare,
Re the passing on of wealth, the massively rich can pass on say a billion, or whatever, but they can either establish a charitable foundation with the rest, or lose it to the govt. it should not be able to be hidden behind trusts.
That is my opinion, anyway. I do not want to strip anyone of the right to create a future for their families. But leaving tens of billions in inheritance creates a hereditary oligarchy that is really very damaging to the opportunities of others.
Llpoh, let’s suppose you are right. Income tracks IQ in general groupings of people. OK, well, generally speaking, those referred to as “blacks” have lower IQs than those referred to as “whites”, and they in turn, as a group, have lower IQs than those referred to as “Jews”, and they in turn, as a group, have lower IQs that those referred to as “Asians.” All we have seen since the 1950s, then, is the inevitable movement of income/wealth from blacks to whites to Jews (who still dominate the financial industry, despite a great deal of rhetoric to obfuscate that fact), to Asians. In fact, if your theory is correct, you are merely describing the inevitable process of Asians gradually taking over the wealth of the world. THEY are smart enough to realize that to do so, they need to keep as many of their people employed and earning incomes as possible. So, they underbid higher Western labor costs, while keeping internal prices low, so their overall standard of living keeps rising. I have spent most of my adult life in and around Asia representing the US government in a variety of roles. Speak Chinese. Know what I am talking about. I’ve watched a people rise from grinding poverty to providing the largest single ethnic group in the world an increasingly decent living. They’ve gone a long way to capturing the largest portion of the global income stream (think third largest economy – Japan + second largest economy – China + add in Korea, Indonesia, Vietnam – I am correct in this – this is not a false statement). The reason manufacturing in the US has had to become so efficient, which mostly means reducing labor costs, is that the Asians, as a group, captured those jobs. They did so cleverly, smartly, and seemingly permanently, or at least for our lifetimes. If they were playing a game of “Go” (which they are, for the global economic prize), they would now be at the stage the Japanese call “Atari” which is one move away from surrounding a cluster of your pieces and taking them off the board, We were warned (albeit in Japanese, and in a subtle way) that that was exactly what they were doing. So, your continued blatherscathe, which essentially pats yourself on the back for all the goodness you are doing, misses the point. YOU may be providing some decent jobs – and thank you for that – but the overall majority of the US economy isn’t. And now Asia is coming for the higher paying service jobs too. They are already taking their newly earned wealth, and buying much of the real wealth of this nation – the productive farmlands, mines, etc. They have allowed us to clean up the pollution we created in the 50s and 60s and 70s. In the not too distant future, they will be our masters. Just like you are positing – they are smarter than the “whites” and “blacks” and “Jews”. So, it’s inevitable, right? Hope your kids and grandchildren can read characters, Llpoh. Going to come in pretty handy fairly soon. Heck, it already IS a way to earn a fairly decent income… Of course, not a lot of stupid people can learn Asian languages, but then, that’s been your point all along, right? Higher IQs are the inevitable winners in the grand game of “go get it?”
llpoh said:
“They object because they want to believe that the loss of the middle class is not inevitable and that it was avoidable. ”
I’m late to the discussion and I’ve not read every comment but I too believe that the middle class (as we know it) was an anomaly and doomed to extinction. It was only possible due to the printing of unlimited fiat currency and the post WWII advantage that the USA enjoyed. A large, affluent middle class, much like retirement for the masses is exceedingly rare prior to the 1900’s.
Old soldier – much of what you say is correct.
Blatherscape?
I personally see deflation as a threat, but asset inflation actually that is not a part of core inflation makes that deflation more of a threat. So the more QE they do, the more they have to do or it will crash. But the less effective it is.
You wonder what happens when they run out of bullets.
But don’t be fooled, they are doing this to save the banks and facilitate the banks betting on the low interest rate side of the swaps. The banks take the low and floating side, and the small company borrowers are forced to take the high fixed side of the bet. And the banksters always win, because if they don’t they will all crash together.
from LIPOH below:
The top 5 or 10 percent will do well. The rest better do something to lift their game, or they are screwed.
This is a democracy.
The disenfranchised whose jobs were sent to China to enrich the .001% will vote
to take those jobs and that money back.
The only thing stopping them now is as you said, their own stupidity by being
befuddled with FOX lies.
The elite better keep feeding them and not just food but phones, beer and cable
or it will be 1933 again.
zetroit – those jobs are not coming back. Voting to bring back jobs? Just how does that work?
Creating jobs requires capital. Who will provide the capital? Poople with it will only provide it if they can make a profit by so doing.
If you confiscate all the money from the .001 as you are saying – say from all of the US billionaires, , it amounts to less than $2 trillion. So if you take all of their money, it amounts to about one year’s deficit.
Plus, most of that wealth is not money – it is the value of shares. Taking it from them would result in a massive plunge in the value of the shares. You would be lucky to realize $500 billion or so from so doing.
And that money would be immediately consumed.
And then again the question would arise – where is the capital going to come from to create jobs?
In my opinion, there is only one hope of creating jobs. Jobs must be created from the ground up – jobs must be created by individuals and small businesses. But it is currently almost impossible to start a small business.
Those are the laws that we need to vote to change. Along with banking laws, etc. But if we do not have politicians that will do the bidding of the voters in that respect, voting will not matter.
BTW – taking the net wealth of the rich will be of not benefit whatsoever. They do not have enough net wealth to cover the debt.
The problem with the mega- wealthy is not so much their wealth, but it is their power and influence over the political and economic processes. Their wealth is relatively inconsequential, and would dissipate in short order if confiscated. The power they wield with that wealth is the issue.
If you take the $2 trillion from the billionaires – assuming you can get it all in cash, which you cannot – and redistribute it, each US citizen would get around $6000. That money would be immediately spent on TVs and such.
I do not envy the megarich their wealth – far from it. I do hate those that use their wealth to buy power and influence. Taking their wealth will not make me rich, but taking away their power and influence will offer me, and everyone else, a far better chance of accumulating wealth than now exists.
llpoh says:
“If you confiscate all the money from…from all of the US billionaires, , it amounts to less than $2 trillion. ..
Plus, most of that wealth is not money – it is the value of shares. Taking it from them would result in a massive plunge in the value of the shares. You would be lucky to realize $500 billion or so from so doing.”
I had calculated the wealth of the top layer around 1 trillion$, why dump all those billions$ into the market if you can only sell it at a yard sale for 500 billion$?
Obama or Hillary WILL be confiscating money from billionaires, and millionaires and business owners, and everyone else with money in the bank. It’s called a “bail in”, like in Cyprus, and it will be used to keep the banks and government solvent awhile longer. There’s $17 trillion sitting in off-shore accounts as we speak. The IRS has forced every off-shore bank, every Swiss bank, every bank in the world (except Singapore) to turn over records of deposits and depositors. The banks have complied, and the government and IRS now has ALL this data. They will “nationalize” this money when the T-bill market (issuance of IOU’s—debt) implodes. Anyone with money in banks is a fool, period. It will be gone with the wind, into the pockets of the criminals in Washington, and redistributed to the FSA and union government drones until the last dollar is gone.
The best way to destroy the capitalist system is to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.
John Maynard Keynes
The clueless one attempts to defend idiotic points as follows:
1) “what on earth do you do for a living? I run/own a manufacturing business. Yet you think you know more about my business than I do? You are really less than bright, aren’t you?”
Given that this is the internet – what you say is completely unsupported and cannot be automatically trusted as true.
But let us assume that it is for the sake of argument. First, what are you actually manufacturing? Is it something which actually competes on the world stage, or is it a protected industry like defense? Or perhaps something which cannot be economically offshored like cement? The detail matters considerably; the former is a legal monopoly, the latter is an economic one.
As for knowing about the business – I run businesses of my own both in the US and outside. Do you? If you don’t, then clearly you are the one who doesn’t actually understand what the differences are.
2) “Corporations move overseas because of a range of reasons, but they all come down to one thing – money. First, the corporate tax rate in the US is the highest in the world. Second, wages are very high in the US – even at the minimum wage, wages are very high relative to many other nations. Third, there is massive red-tape and EPA issues, etc., that drive up costs. Fourth, many other nations offer larger pools of skilled employees ( for instance, if you have a need, you LITERALLY can hire THOUSANDS of engineers in China in a week. It would be impossible to EVER fill those positions in the US, much less to do that in a week.).”
Meh. Again, your ignorance is terrifying. Corporations who are moving overseas are doing so not because of corporate taxes. For one thing, the actual tax rate corporations pay as a percentage of profit or revenue is very low in the US. The rate doesn’t matter if no one actually pays it.
Secondly, the wage argument is idiotic. Are US wages lower than Germany? Sweden? Norway? The answer is NO. Yet those economies are doing fine. Clearly wage cost isn’t the issue.
Jobs skills: Again, you talk without actually having a clue. The reality is that there are plenty of Americans with skills – but why pay them when you can bring in H1B’s and pay 3 of them for the same wage? The H1B is pure corporate indentured servitude.
3) “What does bad government policy have to do with the cost of labor being cheaper elsewhere? What do you propose, you Einstein you – huge import taxes?
Government policy could have reduced the corporate tax rate, the cost of red tape, etc. It would not have effected the decline in manufacturing employees to the extent of eliminating the decline – it would have flattened the slope of the decline somewhat, but not eliminated it.
Here is a little tidbit – the US is a major exporter of manufactured goods. The US exports around a trillion dollars in manufactured goods per year. What do you think would happen to the export market if the US put in place import taxes?”
Nice try at a straw man. Sadly, I never once mentioned taxes – what I mentioned was a pathetic health care regime, a pathetic Social Security setup, financial feudalism, and corporate cronyism.
Note yet again that in Europe, there are plenty of nations with both high wage rates AND a strong social safety net. Neither wages nor taxes are the issue.
4) “Your point re transfer schemes is idiotic. Transfer schemes are used to transfer costs to the US, and away from offshore entities so as to put the profits in the offshore entities. The problem is not the transfer scheme, as you put it, the problem is that the US corporate tax rate is the highest in the world.
So what would happen if the transfer schemes were eliminated? Well, the corporations would move ENTIRELY offshore, now wouldn’t they. The problem is ENTIRELY the absurd corporate tax rate.”
I, for one, am willing to try this “bluff”. If you want to move to Rwanda in order to take advantage of its cheap wages – and have your kids go to Rwandan schools, your family live in Rwandan infrastructure – be my guest. Don’t let the door hit your ass on the way out.
5) “And finally, you say “Combine this with executives who are rewarded for the short term financial illusion of greater productivity”, which proves you are a total, blithering idiot.
Greater productivity is no illusion. If CEOs are rewarded for increasing productivity, then I applaud them, I cheer them, I congratulate them on their success. That is high achievement indeed. Business desperately needs increased productivity in order to survive and thrive.
Unfortunately, it is rare that executives are rewarded for this. Instead, they tend to be rewarded for increasing share prices, or for increasing profits. Those indeed can be “short term financial illusions”, and they are rampantly manipulated and abused by executives. ”
What a load of bollocks. CEO’s are no more productive now than they ever were. The idea that the CEO is creating value is pure propaganda – as the Nardelli’s of the world amply demonstrate.
That you believe the propaganda … speaks for itself.
C1lue – my bona fides are well established. Yours are not, especially given your total lack of understanding of so many things.
Your understanding of the handful of countries doing well in Europe is limited. Check out Germany!sbanking health, which funded the German mfgs via the Eastern bloc, and get back to me.
You did not mention taxes, I did. You healthcare argument, while undoubtedly playing a part, as it is a cost to business, is not the major cost. There are many more severe issues to business than that.
I never said CEOs are more efficient. I said they should be paid for their companies being increasingly efficient, as opposed to being paid for increasing profits or share prices.
And, as I said, transfer schemes only exist because of the idiotic corporate. To deny that is idiotic.
I really love the way, when you ate getting your ass kicked, that you simply imply the other person is a fake.
Re what I make, I do have the advantage of distance over China. All mfgs do. But that would in itself be insufficient if I was not good at what I do. My major competitor has moved 90 percent f his business overseas in the last 12 months. I have never moved a job offshore, and have no intention of doing so. But I do on occasion lose business when my advantages – quality, service, deliver, etc are perceived by a customer as insufficient. I do not compete on price. I do have some offshore interests, but they do not export to the US.
Glad to see you are as stupid as I first thought you were.
Dear Mr. Quinn-
Check this out
http://thedailyshow.cc.com/extended-interviews/z9b8f1/timothy-geithner-extended-interview
(42 minutes of deer in the headlights)
Here is from Dave Collum’s twitter page:
Dave Collum @DavidBCollum • 8h
Wonder how many book sales Geithner’s @TheDailyShow cost him last night.
Llpoh—“Stupid is as stupid does.” Name calling only inhibits verbal communication. It’s cross-transactonal.—Eric Berne, ‘Transactional Analysis’
Old Solder says–” blatherscathe” He means ‘blatherskite’.— a person given to voluble, empty talk— nonsense; blather.