What you need to prepare for
Tuesday, January 8, 2013, 12:30 AM
- Paper wealth will revert to its intrinsic value
- Risk will continue to be transferred onto the taxpaying public
- Moral hazard and fraud will by the norm, not the exception
- Complexity will be used to mask failure
- Individuals will increasingly opt out of the system through means both covert and overt
If you have not yet read The Trends to Watch in 2013, available free to all readers, please click here to read it first.
In Part I, we examined eight dynamics which will likely influence society, politics, and finance in the next few years. In Part II, we examine different manifestations of the one dynamic that counts: the inability of the Status Quo to make meaningful structural reforms. This inability has many facets, but only one root: political sclerosis caused by entrenched, vested interests seeking to protect their perquisites and power.
An economy that is controlled by the government is one in which political power, not the market, controls the distribution of national income. A government in which political power is for sale to the highest bidder puts the wealthy at an extreme advantage, as they have the means to buy political power to protect and expand their share of the national income.
In order to do the bidding of the financial Elite, the political Elite redistributes enough national income to the bottom 50% and retirees to buy their complicity in the arrangement.
A nation in which political power is for sale is one in which the rule of law is bent to serve those with power.
This is the U.S. in a nutshell.
Among the many manifestations of this arrangement, I have selected these as prominent examples of systemic financial and political rot: » Read more