The Wealth Gap and the Collapse of the U.S.
By Sober Realist and Pluto August 8, 2009
A report issued last fall by the Paris-based Organization for Economic Co-operation and Development (OECD) revealed that the United States has the third worst level of income inequality and poverty among the group’s 30 member states. Only Mexico and Turkey ranked higher in those categories.
The OECD report defined those in poverty as households with an income below half of the median national salary. By this definition, 17 percent of the US population is categorized as poor—higher than all the advanced OECD economies and only marginally behind Mexico and Turkey.
The US also ranked among the worst in OECD countries in regard to the length of time people remain “poverty entrapped.” 7% of the US population remain “ persistently poor.” The US also ranks among the worst countries in “inequality of opportunity.”
The current global economic crisis has surely worsened those numbers.
Not since 1929 has the gap between rich and poor been so egregious. Back in 1929, two hundred of the biggest corporations controlled 50% of the nation’s corporate wealth. In 1928, the top 1% of the population had incomes 650% greater that the bottom 10% of Americans. During the early part of the 1900’s, relaxed regulation allowed corporations and investment houses to expand and consolidate into too-big-to fail megaliths. Sound familiar?
According to the Drum Major Institute’s 2006 Injustice Index, the ratio of the average U.S. CEO annual pay to minimum wage worker’s is 821:1 whereas twenty years ago the ratio was 40:1. The richest 0.1% are vanishing off the chart because it would take a bar graph that stretched out of the building to represent them on a societal wealth distribution chart. Below is a chart spanning from 1910 to 2005 which represents the wages in the Financial Sector compared to all other sectors.
What you are seeing is a Wealth Transfer. The first Wealth Transfer happened from about the late 1800’s to 1929 when American workers and consumers were victims of the robber barons --greedy and ruthless businessmen and bankers who amassed incredible wealth by exploiting labor and a lack of government regulation. The first surge on the chart represents a wealth gap where the rich overwhelming took from society and decimated the middle class. The second surge is occurring right now and started around 1980, 30 years in the making and similar to the first Great Wealth Transfer. The second chart shows financial sector profits continuing to rise through June 2009. And this is all happening at a time when hundreds of thousands of Americans are suffering job loss and wage reductions.
Below is a third chart spanning from 1951 to 2005 which shows a correlation between the amount of debt in society and the deregulation of the financial sector. The dip in the middle is when Reagan took office and ushered in a long era of continued corporate tax cutting and “anything goes” corporate capitalism. The black line shows surging profits in the financial sector.
The next chart overlays government policy and banking regulations across the period from 1910 to 2005. There is a long period of stability from 1950 to 1980 where the middle class flourished, corporate tax rates were at their highest, and wages were fairly spread across society.
In 1980 the descent of the middle class started with the beginning of deregulation and the corporatization of our government. Latchkey kids became the norm as both parents needed to hold jobs to make ends meat. Cheap fast-food restaurants became the soup kitchens of America. Fifty years after the first Great Depression, the wealth gap began to grow again and strangulate the middle class
Below is a chart which takes a close look at what was happening to tax rates during this period.
Government policy was to cut taxes for the wealthiest individuals, those who made the most money from exploiting the resources and advantages that America gave them. They gave little back in return. They mainly took, and from their ownership positions, they forced middle class wages down even further. In Doug Henwood’s “After the New Economy” (2003), he exposes that the richest 10% of Americans possess over all the wealth in America and the bottom 50% has almost none of the wealth, but they do have substantial debt. According to a 2006 study by the Center for American Progress, Americans at that time were spending 126.4% of their pay to cover the cost of living. In that same year, investment bank UBS declared that corporations were enjoying the “golden era of profitability” with corporate profits climbing to the highest amount since the 1960’s. Despite double digit increases in productivity levels in the last decade, the American worker’s pay has increased less that 2%. Profit from productivity gains went straight into the pockets of the corporate executives. According to Kevin Murphy of the University of Southern California, the average CEO pay rose 369 times that of the average worker in 2005 while it was 191 times in 1993 and 36 times in 1976 (Krugman, 2002). Paul Krugman (2002), an economist at MIT and regular columnist for The New York Times, reports more troubling statistics stating that in a 29 year period between 1970 and 1999, the average annual salary in America rose ten percent (10%) whereas, during the same period, according to Fortune magazine, the average real annual compensation of the top CEOs in America rose more than 1,000 times the pay of ordinary American workers and, according to a 2001 Congressional Budget Office study, between 1979 and 1997, the after-tax incomes of the top 1 percent of American families rose 157 percent (157%). According to Executive Excess 2007, a study released in August by the Institute for Policy Studies and United for a Fair Economy, the 20 highest-paid fund managers made an average of $657.5 million last year--22,255 times the average annual U.S. salary of $29,500.
Big name firms such as Cerberus Capital Management, The Carlysle Group, The Blackstone Group and Kohlberg, Kravis, Roberts (KKR) are taking advantage of a tax loophole today which allows them to declare earnings as capital gains and pay a 15% tax rate instead of the customary 35% rate. The average American is paying a higher percentage tax rate on their income than a hedge fund manager who made a cool billion last year.
A recent study by Standards & Poors shows that for the first time in history, American multinational companies paid more of their income in foreign taxes than in domestic taxes.
Standards & Poors also notes the difficulty in obtaining detailed data due to the usual practice of corporations trying to hide and mask the actual figures on how many jobs are being moved offshore.
The last chart, spanning a century from 1907 to 2007, combines all the information from the charts above and tells the story of the Wealth Gap in America, a terrible economic injustice that happened from 1900 to 1930 – thirty years. The same injustice has clearly repeated itself today. The green graph measures the concentration of wealth in the hands of the few. The pink graph is the tax rate in the highest income bracket.
The US becomes vulnerable to chaos, collapse, and severe contraction when policies are enacted which steer most of a nation’s free wealth into the hands of only a few individuals and investment houses, causing an increase in the wealth gap across the population. The wealth gap is widened generally through deregulation and reducing taxes on the profits from the exploitation of massive wealth by corporations. Investments become concentrated and self-speculative, corrupting the markets. One single economic blow can topple the entire wealth-holding investment class. As a result, the nation’s economy quickly contracts and is pulled toward collapse. Everything from infrastructure growth to the training and well being of the workers is quickly degraded and the nation’s global competitiveness is compromised. Simply raising taxes cannot fix the problem after a nation’s economic foundation has been gutted by greed.
Paul Krugman in his 2006 paper “The Great Wealth Transfer” said the following:
“In the end, the effects of our growing economic inequality go far beyond dollars and cents. This, ultimately, is the most pressing question we face as a society today: Will the United States go down the path that Latin America followed — one that leads to ever-growing disparity in political power as well as in income? The United States doesn't have Third World levels of economic inequality — yet. But it is not hard to foresee, in the current state of our political and economic scene, the outline of a transformation into a permanently unequal society — one that locks in and perpetuates the drastic economic polarization that is already dangerously far advanced.”
What a great post Xray...Thanks
Now that I skimmed it, I'll go back and read it for real.
I'd like to get Chris Martenson's feedback on this post. Thanks for reading. I think these graphs along with the historical explanations makes it easy to understand how the American middle class has gotten and is getting the shaft.
Great post Mike. The "Financial services" sector adds little or nothing to the real economy - just a giant skimming operation. Too bad they have become so powerful they can act as gatekeeper for presidential candidates and own critical portions of congress so chances for real reform = 0
This is what happens when you take all the well paying jobs in America and export them to other countries. Now we have Walmart and Mcdonalds as our two top employers.
Poverty & Social Inequality
This: http://globalresearch.ca/index.php?context=va&aid=9191 (from a link on the site that you posted), is an excellent summary of the various tools that are used by TPTB to control food and water, thereby controlling the world's population (both in behavior and number). It is sobering to realize that We the People are next in line to be impoverished. Would that we had objected when we had the power to do so with hope of having an impact . . . .
I passionately object to most of the points made in this posting.
First - the two periods mentioned above - 1800 - 1929 and the last two decades - these two periods saw the greatest increases in std of living in the world compared to all other times in history. Given this, there is a natural tendency for the masses to become lazy as its way easier to get buy and still have it better than you did in previous years. Therefore, the few - call it 5% who contintue to work hard - become WAY more wealthy relative to the "poor"
For any real comparason of wealthy to poor in a country, we must also look at how poor the poor in that country really are. In the US, for decades, our poorest people are still among the wealthiest people in the world. Further, to argue that the middle class has it rough with 4 TVs, 2 cars, and more sq ft of living space per person at home than anywhere on the planet....further access to clean water and very reliable electricity......all these factors completely kill the rational comparasons.
Further, is it the financial sector killing america or its greedy lazy citizens? I for one argue this country makes it easy to make a to a decent standard of living if you are willing to abide by the law, work hard, and not spend like an idiot. Most people in this country got what they deserved when they bought the 300k house on a 40k per year income with two new leased cars. Sorry, but if you cant take the time to study personal finances for 3 hours you deserve to lose.
I cannot believe how lazy people have become, and at how much they expect. That is the reason for the wealth gap - not that greed is taking over - but that there is a huge drop in people willing to work hard relative to those who want handouts. I know this doesnt apply to 100%, but it does the majority.
Also, during the last two decades and during 1800 - 1939, the world saw the greatest two periods of increased standards of living in human history. Never have we had it so good and so easy as a whole. This increase in std of living tends to make the masses more lazy as you can get by being lazy. This creates great wealth trasfers to those who work hard.
If anyone has a problem with the pay at hedge funds or with CEOs - go BE ONE. Its a free country. If you dont want to work that hard and still have an issue with it, then dont buy that companies products, or dont work there. There is good reason for their pay, and if you ever try to compete with them you may learn why. Its extremely competitve at the top, and to get there requires extremely hard work, study, and yes - connections which take a ton of time to develop as well. Most people dont want it because it sacrifices other values they have like time with family.
If youre middle class, have the usual 2000 sq ft home on 1/3rd acre, clean water, 3 tvs, 2 cpus, plenty of food then stop crying....you have it better than 99% of all people in the history of man.
Just another article written to fan the flames of discontent among the unjustifiably self-entitled. CEOs work their butts off - certainly a lot harder than 99% of the "poor" people referred to in the article.
But that's what our society has become - demonize those who work hard to make real changes in their lives and amass wealth (however you want to define it, but for argument's sake let's call it the size of one's bank account v. personal debt relative to how it allows you to live your life). On one hand we have the bad guys who worked hard, live within their means and have "wealth". On the other hand you have those who are lazy and unwilling to work hard to enact meaningful change in their lives. The people who go to sleep at night saying "I wish I was rich, I wish I had more money, I wish, wish, wish." Then when they wake up in the morning, they do the exact same thing they have done every day thus far. AND THEY EXPECT, NO DEMAND, THAT THINGS BE DIFFERENT!!!!
They want their lives to be different yet they don't DO anything different to facilitate changes. That is jacked up.
Of course, our wonderful collection of elected officials realize that there are far more people in group B than in group A, so they play to that base. "We need to share the wealth", "Everyone needs to bear the burden" - what that really means is "If you vote for me, I will push legislation that takes money from those willing to work hard and give it to those who aren't."
Too many in our society today want something for nothing - so of course they elect the goofballs we have in office now.
I sadly laugh at those who buy the bill of goods being sold to them. They are allowing themselves to become victimized by "them". I especially am entertained by the crowd of sheep who look under every rock for the bad guy to blame for the world's ills, those who demonize parties they can't even prove exist as being the ginormous evil Transformer, all seeing-eye-of-Vecna bogey man.
If they want to see who the real person responsible for their state of being and victimization, they need to simply take a look in the mirror.
This nonsense ends when people decide to knock their stones together and make changes in their own lives to facilitate changes in the society they live in. Otherwise they are inmates in a prison of their own manufacture. And deservedly so.
You can't be a victim unless you allow it - if life throws you curveballs, do what it takes to learn how to hit one or at least foul it off so you can prolong your at-bat.
ugh, the tone of my post will be more sparring and lecturing than I would normally use because I feel it's necessary to respond with an equal level of contempt in order for rickets to feel his own...
rickets, of course you "passionately" object. if your views are based on ideological programming and repeating the platitudes of free market cheerleaders on TV, your emotional passions will be stirred as your views are threatened...the only way to feel secure in your views is to yell louder with "passion." I love it how you say the periods right before the biggest collapses in history were wonderful, you actually use them as illustrations of dramatic economic success, apparently free-market nirvana in your eyes, yet the vicious collapses came and that doesn't cause you to wonder about your views? you just strike it up to laziness? yep...lazy slobs caused the great depression and this collapse which will end up being worse. gotta love the arrogance in free-market ideologues...I detest it because I used to be one...an arrogant punk swimming in my self-righteousness telling myself others aren't as successful because they just weren't trying hard enough.
your definition of standard of living is wrong (somebody has a couple electronic gizmos called TVs and you think they're living the best lives in history...laughable). your definition of wealth is wrong. you don't understand credit inflation vs. real productive growth. you think "working hard" on wall st equals productive contribution to society (I did a short stint there...they are parasites, not producers). you erroneously worship CEOs as the media and your chosen political orientation has programmed you to view them as great capitalist generals (I used to be one of these people you worship...not a CEO, but close to it before I saw the light and stepped away from the sham...I'm telling ya, you're wrong...stop the hero worship).
most importantly, as you lecture people about "it's a free country" you demonstrate that you have not a clue what debt is or how our monetary system works and how Wall St and DC collude to strip the masses. and you demonstrate no awareness of what's really happening in this collapse. perhaps a simple question might help: do you really think people who have trillions stolen from them and handed over to financiers, the biggest robbery in history, are free? I know you'll feel anxiety as your ideology is threatened by that question, but let that be your own internal proof that something is off-base with your views.
rickets and dogs
I can't believe what elitists you guys are. i don't have time to go into this in any depth right now (I've got too much work to do), but i can't resist at least putting in my $.02 worth. I have a number of good friends who work as hard at sometimes two or three jobs as any CEO, hedge fund manager or pro athlete, not to mention the work on their homes and cars because they can't afford to hire someone else to do it. the simple reason for the huge wealth disparity between the super rich and the rest of us since the Reagan administration is because of deregulation, allowing the hedge fund a--holes to reap huge sums of money on the backs of the rest of us who don't have their connection and/or fiscal acumen. Do not ever delude yourselves into believing that the rich work any harder than the vast majority of people who support their families with less financially remunerative, but necessary to society, work.
Take a break and go read some more Ayn Rand.
Nice post X-Ray, thanks.
One important thing that I keep forgetting - wealth is not destroyed, it is simply transfered.
You don't even know me, so don't be too quick to rush to judge based on a post, the background of which you have no insight on whatsoever.
Think what you want, I don't care.
strabes and I have had this conversation (or variations on a theme) backchannel on numerous occasions and without putting words in his mouth I would suspect he would disagree with your assessment.
Your friends and peers likely aren't in the group I was discussing - but they are also in the vast minority of Americans. Unless they can't pay someone to work on their car or house because they are living beyond their means and they need two or three jobs to sustain such a lifestyle that precludes them from obtaining and paying for such help. Americans need to wake up and realize that they need to live to the standard of living they can afford, not the standard of living they can finance or want for free.
And as far as reading, there is no shortage of material out there for anyone to develop "fiscal acumen", so that is about as lame an excuse as has ever been offered up on this site. It is not privileged information - it is out there, but one actually has to break a sweat and work at it.
What a concept.
Strabes and Doug - ---Strabes - you assume WAY too much in your analysis of my post - and take so much out of context that I questioned the value of any response. For you to assume I know nothing of debt, politics, or energy conservation is arrogant and ignorant. I pounded the table against laziness and made an argument that periods of abnormal innovation lead to wealth skew, and you respond with personal attacks. I thought this site and its community was a bit better than that. You say you used to be an "arrogant prick".....perhaps you should re read my thread and yours and see if you can identify all assumptions and guesses you made and then you may want to look in the mirror again. I thought this community would be a bit more open minded than most....
Here are some areas where you clearly didnt react to my post - rather your idea that I am some jerk:
1) you said " I love it how you say the periods right before the biggest collapses in history were wonderful, you actually use them as illustrations of dramatic economic success, apparently free-market nirvana in your eyes, yet the vicious collapses came and that doesn't cause you to wonder about your views? " Please quote exactly where I stated they were dramatic economic successes.
2) you said "your definition of standard of living is wrong (somebody has a couple electronic gizmos called TVs and you think they're living the best lives in history...laughable). your definition of wealth is wrong. " I stated they were periods of dramatic increases in standards of living. We can agree on one thing, that standard of living is clearly not about how many tvs you have. During those periods, life expectency increased dramatically, literacy, access to information, medicine, energy efficiency (not conservation unfortunately), clean water access....and on and on all increased. My point was that as it becomes easier to live....or let me rephrase - as it becomes easier to survive working less then more people will get lazy, and have, and this leads to wealth skew. I use the word work....but I include that to mean working to make money, yourself better, education...etc. To your point, people are attached to those tvs far too much and pay a dear price. Please show me where in my post I gave a definition of wealth, because I sure dont see it.
3) you said " you don't understand credit inflation vs. real productive growth. you think "working hard" on wall st equals productive contribution to society (I did a short stint there...they are parasites, not producers). you erroneously worship CEOs as the media and your chosen political orientation has programmed you to view them as great capitalist generals..." I dont understand credit inflation vs real productivity growth???? where on earth do you get that from my post? I think I am in the right in not only asking for where you get this from my post but for an apology should you be unable to find it. Do I worship CEOs? no, I never said that. I did say they work hard. As with all things, this is not a 100% pure truth, but I think its very safe to say the average CEO works many more hours than the average american...and I would guess that they not only work hard but work very smart and with lots of connections built from years of dinners and engagements that took them away from family and sacrificed whats really important. That said, there are certainly those CEOs which are corrupt, but you cant say that about most of them. I am not defending them, nor what they make, but just saying its not as easy as people think, and that further they are usually quite good people and quite impressive people. There are bad apples certainly but to paint them in that light is the same as saying all pro athletes are cheaters because a few used steriods. Again, like you did to me, you are assuming you know these people individually and painting them all the same.
4) in response to your comments about freedom: Good point - I get it. Unfortunately I feel less free not as a result of the politicians and leaders I despise, but rather due to the fact the masses will not educate themselves. Another way of saying this is that the masses are too lazy to read, to educate themselves and that is the root of the evil at the top....they prey on ignorance. If this website was read and understood by all, we could rest easy that action would start soon. But, it wont, because it takes 100's of hours of thought and education to understand at a decent level....and most of america would rather not do it. And, thats the point of my first post - - that when things get easy people get lazy. When people get lazy they get blindsided by what they and the media call unexpected events.
I will close with what I think is a bit of irony to both your and Dougs responses. This website is all about educating ourselves with accurate information so we can adapt and be prepared for the future. The way politicians act and ceos act is all very predictable. The crash in the markets was very predictable in my opinion. This started with lowering regulation, but was continued by the masses buying way more than they could afford. The masses provided the fuel to the ceos and to wall st.....the masses bought a 400k home with no money down....the masses didnt educate themselves. In response - some of the masses sold mortgages like arms to the masses because it was legal and they could make a lot. The masses are wall st....the masses are the cause. Its the lack of education and desire to work and understanding anything difficult that led to this and will eventually bring down the house.
I hope this clarifies my stance...and I hope you dont assume to much that isnt written.
xraymike79 - that is a very good post. Did you write it?
It's an important issue because wealth disparities are highly correllated with social unrest during 'transitionary' periods.
Another good thread down the hole....
The only way that we know you is by what you write. And while you made some good points, you did so with some arrogant overtones. Its human nature to judge someone by the manner in which they communicate, rather than what they communicate. That judgement process is even more skewed by this limited medium.
Bottomline: If you don't want to be unfairly judged by this community, then find a more neutral method of delivering your thoughts. Its amazing how much bickering can be avoided by doing so.
Well, your just being Dogs. I have noticed a resurgence in the us-vs-them mindset in your posts lately, but I think that mindset has been rather ubiquitous lately. Don't make me get the Anarkst after you!
I think there is a difference between working hard and making a fortune honestly when you have peoples/environments best interest in mind and working hard and making a fortune with just $$$ on your mind. The incentives are there for people to make $$$ not do whats right.
Dogs and Rickets are looking at the micro which is fine in the right context, but you are forgetting about the macro which seems to be Strabes point.
Don't make me get the Anarkst after you!
Nah, the thread is alive and well, just like a roller coaster you gotta ride to the bottom before you can climb back to the top again. We will self-police.
Look at bmaier's very first post - distilled this whole mess down into the most accurate assessment. Leave it to the new guy to bring a voice of calm and reason into the discussion. Good job, bmaier, sincerely. Welcome, and I hope to see you around more.
99% of this is because there is so much that can't be captured in the written word, but as you addressed correctly, you can only be judged by what you do write and count on the old-timers to be familiar with one's post history and blogosphere personalitiy. That said I owe Doug a PM so off I go.
As far as us v. them, we only get two channels at work - Fox and CNN - and all I see is entitlement program after entitlement program paraded out of the halls of Congress, and I think that contributes far more to causing or fostering the problems than it does to solving them. We the People need to push back on the entitlements and start spreading the work ethic instead of the wealth.
And I'm pretty sure anarkst got "Deleted"
Welcome to the site.
Nice first post wading in and settling things down. I mean that. Yours was probably the most accurate and dispassionate observation on this whole thread. Hope you stick around - despite the fact that some of us old timers can get a little feisty and opinionated.
But don't forget, strabes' macro is made up of my micro.
Okay, I have to weigh in here. While I agree that the Wealth Gap is a key factor in economic and social unrest I really have to question the assumption that deregulation was the cause. I believe it is quite the opposite, that it is manipulated regulation and government interference in the markets that have resulted in unfair advantages for those politically connected.
For example, look at the whole mess we are currently in. Easy money by the Fed, taxpayer guarantees for too big to fail companies, banks, GSEs, etc result in much larger risk taking than would be done if all this interference in the market had not taken place. If your a giant bank and you know you will be bailed out by the government/taxpayers, why wouldn't you take unreasonable risks. Free markets (which we haven't had for a very long time) will not allow this type of malinvestment to occur.
Also, I find the chart showing regulatory legislation versus deregulatory legislation laughable. Look at all the taxpayer funded wealth transfers listed in 2008. These aren't regulation, these are bailouts for the financial sector you are complaining about at taxpayer expense.
I also agree with Dogs and Rickets that we have become lazy. Perhaps lazy isn't the right word, perhaps complacent is more accurate. How many of your friends and family are just too busy to research what is going on even now when they have been dramatically impacted. It has been so easy to just cruise along on auto-pilot, not pay attention to what politicians were doing, not vote, not manage their personal finances, etc. It's only now people are beginning to realize that things are very wrong. Sometimes it takes a good slap to wake us up! I know because until a year ago I was just happily cruising along, but I have awoken, and I'm trying to get others to as well. Thanks to the Crash Course it makes the task a bit easier.
Here are some links that discuss the "laissez faire" propaganda being pushed by many to justify even more government interference in markets and our personal lives:
The Myth of the Laissez Faire President
The Benefits of Free Markets
rickets, indeed I owe you an apology because I now see you are not just repeating the free-market template cheered on by Kudlow, Cramer, Limbaugh, etc, etc nor are you on the other side just repeating the big-government template cheered by ABC, NBC, CBS, CNN, etc, etc. I apologize. I'm impressed at the wisdom in your last post that admits we're all in this together rather than blaming lazy people, or some other "those people." I agree with you there...Wall St could not have done what it did without the participation of most people, me included. I need to be careful that I don't project all the blame "out there" on the system or Wall St just like I don't think people should project it all onto "lazy masses." I played a role in the system. A few people tried to warn me. But I was too defensively stuck in my ideology, so it took the collapse and the 2 parties stealing trillions to wake me up to reality. I wish I had stumbled on Chris or others like him that were talking about this years before the collapse.
Part of the reason I used such strong language (emotional, attacking) is because I did feel some of that in your post and it's the only type that would've had a chance of cracking my ideology back in my Matrix days. I figured if you were stuck in that, it might be helpful to come at you with a left hook. But that's a violent type of dialogue and I prefer to leave my violent ways in my past. Lakhota (a wise member I haven't seen post in a while) sets a good example for that and I want to emulate those ways.
I think JAG and bmaier make helpful points.
I also think Chris implicitly makes a good point--let's stick to the facts and the topic of this post. Though I do think it can be helpful to move into the deeply human aspects of dialogue, psychology, emotions, feelings to explore what type of social dynamic created the situation we live in in the first place, it's probably best on this site to stick to the facts of the topics posted, so I will do so unless people show an interest in taking this dialogue further.
Happy to dialogue more about your points 1-4 but would suggest we do it in private so we don't take this thread off-topic. Thank you for being open to my point about freedom. And thank you for honoring my post with a reasoned response.
rhare, I agree we need to be careful about the regulation/deregulation issue. In truth I think this is another false split setup by the media to distract everyone from the reality of the situation--the regulation is coming from the very people who should be regulated. So people who trumpet deregulation simply empower Wall St, and those who trumpet regulation likewise empower Wall St because they're the regulators. It is a dangerous game to deregulate within the current regulatory framework that's been created by Wall St. It's also a dangerous game to further regulate while Wall St serves as the regulator (Rubin, Paulson, Bernanke, Geithner, and all the ex-Goldman folks staffing our Treasury and other regulatory agencies). For example giving the Fed its desired role as systemic regulator would only be handing over more power to Wall St. Real regulation can only happen if the regulators truly represent the people. I think that can only happen if it originates at the state level. Anything that comes out of the current DC establishment (GOP or Dem) will serve Wall St.
"There is good reason for their pay, and if you ever try to compete with them you may learn why. Its extremely competitve at the top, and to get there requires extremely hard work, study, and yes - connections which take a ton of time to develop as well."
Bbut if it turns out that those CEO's had acted in a way that destroyed the company,while feathering their own nest, a reasonable expectation would be that they would be terminated without bonuses, because their "financial acumen" has been revealed to be lacking.
But it now appears that because of their "connections" they will get billions of taxpayers dollars to backstop their mistakes, and keep getting bonuses.
Bbut if it turns out that those CEO's had acted in a way that destroyed the company,while feathering their own nest, a reasonable expectation would be that they would be terminated without bonuses, because their "financial acumen" has been revealed to be lacking.
Hau kola. I have been away and return to a site that is much changed.
This was a heavily traveled thread and caught my eye. What of the CEOs who performed honorably?
I want to address something else in this article. It discusses the "Robber Barons" of the late 19th and early 20th century and describes them as "greedy and ruthless businessmen and bankers". Hmm, doesn't that sound a bit like the descriptions we are hearing today. However, the article below discusses the difference between market and political entrepreneurs. The problem is with the "political entrepreneurs" that use political power and the government to enact legislation that favors them over their competitors rather than creating a better product. It's an interesting read and you discover we are just repeating history.
Here is the article: The Truth About the "Robber Barons"
Somewhat related is a very interesting article that talks about generational cycles. I may have got this link from the CM website in the past, not sure: Boomers - Winter is Coming
Welcome back!! We certainly have missed you.
It's an understatement to say that the site has changed - unfortunately a few of the veteran posters are no longer with us. Lots of new people following Dr. M's post last week about the Fed buying back Treasury notes. It looks like the message is getting out.
If you don't mind my prying, how was your time on Pine Ridge?
I gotta say that I took your initial post much the same way Strabes did . . . It came across as arrogant, condescending, and self-congratulatory, by implication . . . frankly, everything I don't like about self-described "successful" Americans. (Your broad categorization of "lazy" unsuccessful Americans lends me license to paint thus broadly). Your subsequent post qualifies the temper of your initial remarks, but I am left wondering which post more accurately represents your more candid viewpoint. I know Dogs from his many posts, and so, I have context within which I can judge the intent of his posts. Not having that advantage, in your case, I will accept your expanded explanation of your position, but am waiting for more context to draw my conclusions.
Hello Mr. Dogs,
For your welcome back, pilamaya yelo.
My journey back to Pine Ridge was very sobering. There is so much despair among many of the members of Lakota Nation on Pine Ridge it is as thick as smoke in the air. I did accomplish much concerning my effort to personally reconnect with my heritage so despite the sadness there was cause for much celebration.
I must respectfully disagree with your response post to Mr. Rickets. I believe you have fired an entire quiver of arrows when a single one was called for. It is not so easy to categorize people as you have and I believe you greatly oversimplified both the problem and the solution. I do not say these words with intent to insult, but instead offer this observation made from my time among my people.
Despair is a horribly crippling affliction and I would offer that some number of the people you have broadly labelled are in this place. For them, their situation has deteriorated to such an extent that they see no way out, despite what opportunities may exist, and they have simply given up and await their final days. Do you not understand that they would embrace the easy way out, even if it is on the shoulders of others?
As I said, it is not my intent to cause insult. I have enjoyed our past conversations both here on Dr. Martenson's site and privately and look forward to more such conversation. I think that a less sterile view of things from both sides might be in order in this thread.
rhare, thank you for the link to the "Robber Barons" article -- fascinating read! I will be looking for the author's book in my local bookstore.
I, too was a bit put off by some of Rickets initial comments. I'm not going to deny that there are plenty of lazy people out there and that "good times" make it easier to be that way. But, it's just really irksome to me to have generations of people in this country (1800 to 1929) be lumped together into a big pile of laziness. I think that more than 5% of the population were hard-working during that century.
And, as for the past two decades, perhaps complacent is a better way to describe many. I know that up until a couple of years ago I was quite complacent. I was never motivated by fame, fortune, fancy this and that. I just wanted to do a good job at whatever I did and live an honorable life. That seemed possible. Leave the big money to somebody else. If that makes me "lazy", well, I don't think so, but I sure wasn't lazy in the "give me a handout while I sit on the couch" kind of way. But, I didn't realize that I needed to be way more aware of what was going on in the world. I was like a child wandering through the woods. Well, at least these days I'm paying a lot more attention to every little twig snap sound in those woods!
Hau kola Ms. Becky,
You have far more clearly than I stated what I believe is the challenge in this conversation. There is no winnowing rake that can be applied to society to separate people into the correct category.
For all people, their lives are a constant journey. At different ponts in their lives they are paddling with the current, at other times against it and at some times on a difficult and challenging portage. It is easy to get complacent when going with the current, who would not want to stop and enjoy the ride. It is when we are against the current that it quickly becomes evident who is working and who is not. Most realize that the journey will not end without effort so they keep paddling and compensate for those who don't without complaint. Some are willing to let others do the work because they know they can get away with it.
It is the difficult portage that will separate the two. I believe we are approaching unnavigable rapids and our portage is going to test us to our very souls. It will then become clear who belongs in what group. I strongly believe that the vast majority of us will realize the need for working through things together and I take hope in the belief that many previously labelled as lazy will rise to the challenge and surprise all of us.
Ms. Becky, for your post, pila maya, thank you. Your call for reason and calm approach is greatly appreciated and you conveyed my intent better than I did.
on the robber barons, true the difference is massive between political entrepreneurs and market entrepreneurs, but it's a mistake to claim Rockefeller et al were purely market entrepreneurs. I used to be a disciple. The book "Titan" was my bible on the issue. Ida Tarbell was indeed a yellow journalist from a competitive interest. But it's FAR more complex to claim somebody is purely one side or the other. Note most of the sources for the posted article are from "Entrepreneurs vs. the State." It's a book with an agenda, just like any book. Mises.org is an org with an agenda (and I'm a big fan of their agenda) so it's prudent to read sources from organizations with equal/opposite agendas to ensure balance is reached. The Mises article covers well the disciplined business practices Rockefeller instituted. But it ignores the well-known activity Standard Oil engaged in that went far beyond good microeconomic discipline. They infiltrated competitive companies with their own people, they indeed worked with government interests, they built a spook network, they strong-armed government and competitors to enact their acquisition strategies, etc.
The eventual breakup of Standard came from government interests that gained power who were not under Standard's influence. Standard had their share of government support. By the time the breakup happened, Standard and JD Rock's private wealth was so-well protected with help from the government types and lawyers that did their bidding, that all the breakup ended up doing was empowering them more because it forced them into hiding and it kept future competitors at bay...Rockefellers still have controlling interest in Exxon and their multiple foundations and other institutional power-wielding continues to this day to dominate the US. Much of what JD did to build Standard was good, but once built, as the need for exponential growth (which we all at CM understand well) took over, the people around him and his descendants engaged in empire-building...they're still doing it today.
A perfect analogy to today: JPM Chase. It seems Mises.org would trumpet Chase as an exemplar of free-market capitalism as well and paint Jamie Dimon as an amazing business leader. One could easily write a paper about their scrupulous business practices, intense internal management processes, etc. and it would be true. But it would be ignoring the bigger picture. They are where they are because of government. Jamie Dimon is a smooth-harvard-tongued empty suit. Chase is controlled by the same Rockefeller interests, and they've demonstrated they still control our government. It's the bank with the biggest derivatives position, i.e. it's the most insolvent, but government just made it the most powerful commercial bank in the country...not an accidental result of market competition...neither was Standard Oil's position 100% pure.
Hau kola Mr. strabes,
You have given me some homework with the information on your post. My thanks to you.
As we have discussed in the past, anytime money is involved, ethical standards and moral practice are among the first to go. One need only look at the impact the railroads had on Lakota and other Native American Nations. It is certainly true that the railroads greatly benefited America and her growth, but the hidden costs should make most ashamed. One can only wonder what hidden costs are being incurred today that we will not measure until many years from now.
And to think that today, a single endangered snail or river darter brings a grinding halt to progress. Where were such sentiments 6 generations ago?
As you have probably determined by my previous posts, I have been gone for some time now and have missed reading the insightful and well thought posts of you and the others on Dr. Martenson's site. I spent nearly 8 weeks with Lakota Nation on Pine Ridge immersing myself in a culture I had left. That will be a long journey back.
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