Robert Frank at the Wall Street Journal contends that the rich don’t need the rest of us all that much (hat tip reader Don B):
Late last year, the U.S. economy experienced a surprising decoupling.
As stocks boomed, the wealthy bounced back. And while the Main Street economy was wracked by high unemployment and the real-estate crash, the wealthy–whose financial fates were more tied to capital markets than jobs and houses– picked themselves up, brushed themselves off and started buying luxury goods again.
Who knows what the next few months and years will bring. But one thing seems clear: the economic fate of Richistan seems increasingly separate from the fate of the U.S.
Some argue that the decoupling has gone even further. Michael Lind, a policy director for the Economic Growth Program at the New American Foundation, argues in Salon that the American rich no longer need the rest of America.
He says the wealthy increasingly earn their fortunes with overseas labor, selling to overseas consumers and managing financial transactions that have little to do with the rest of the U.S. “A member of the elite can make money from factories in China that sell to consumers in India, while relying entirely or almost entirely on immigrant servants at one of several homes around the country.”
This is an interesting line of PR. To the extent those at the top of the food chain believe it, and better yet, can get the great unwashed to buy into it, the more they will be able to get their way.
Yes, the rich increasingly live lives apart from those not in their economic cohort. But separation is not the same as independence. The Southern plantation owner had little interaction with his slaves (his overseer took care of that), yet he clearly depended on their labor. The financial crisis resulted in the greatest looting of the public purse in history. While the banksters were the obvious beneficiaries, most of the rest of the rich were carried along with them. The sudden recovery in the fortunes of the wealthy was no accident, but the result of a host of policies to prop up asset values.
This line of thinking is hardly new. James Galbraith, in The Predator State, discusses how the corporate elite have come to serve their own interests rather than those of their companies, and have become adept at using the state to further their personal aims. Thus the profit potential of remaining engaged in the US (albeit at as much of a remove as the top echelon can manage) is too great to be ignored.
The “Eggers” have moved on.
Do the Rich Need the Rest of America?
They needed the middle class to be the consumer of last resort, unfortunately that’s less lucrative than it was in the past.
But they’ll be back for one last crack at stealing what’s left of the boomer’s retirement; they’d love for the Republicans to declare the SS trust fund null and void, but in lieu of that, cutting benefits might be an acceptable means of further tormenting the middle class.
I believe that scam is currently called the “privatization of Social Security”, a scheme which restores solvency not to the program, but to the bankers and stockbrokers of Wall Street.
But where do the rich live that arbitrage labor costs so effectively? Can America easily transition to a country like all the others where the rich are even more separated and protected from all the other citizens? I’d like to say no but the world is replete with examples of protected oligarchies among a populace who know those who raped them and their economies. It is easy to pick them out, they have the armored Range Rovers, Mercedes and Suburbans that blast past in the special lane for their use.
The jet-set type will be found in carefully controlled environments with cameras and security, world class hotels and restaurants. Kinda like the capital cities around the world…
Already there is many cities and wealthy vacation spots.
They rich never interact with the “small people” now. Not is their guarded by police workplaces, not in their guarded homes, not in their private jets or helicopters or armored vehicles.
It’s not that it hasn’t already happened, it’s just that the American middle class soon to be lower class, haven’t seemed to notice reality since they spend their time watching TV where they can pretend they live like that too.
American peasants are the most gullible in the world. It’s how “the rich” have managed to create themselves a perfect society.
The dumbasses still believe the myths. And they will until the cable is turned off and the corn-old-saturated food runs out. We’re a long long way from that happening.
I’ve been saying this, too, for a while now. At least 2 years.
They don’t need us, except as waiters, garbage haulers, and landscapers. They can order what they want from Amazon. It’s fulfilled via mechanized warehouses and a few humans. All the product comes from offshore.
My overall investment thesis the past 8 years has been simply this: “short American labor”.
What Yves says is ultimately right…it will all circle back around eventually, meaning that the rich will ultimately feel some pain from the lower classes feeling it. However, at that point it’s impossible to say whether they will find a new avenue to fleece the poor/government. This cycle will unfortunately never end until we put the right policies in place to support the poor and middle class in this country.
They won’t feel any pain unless you tax them.
DJ…” This cycle will unfortunately never end until we put the right policies in place to support the poor and middle class in this country.”
Great Britan’s new government announced that their austerity program calls for cutting 40% of government spending. Look for similar cuts in the US. The rich don’t give a damn about the poor and middle class. During the Victorian era the few scraps that the poor received came in the form of charity from rich victorian’s. We will be back to depending on the charity of others to live. If you are ill or injured or too young or too old to work…tough.
There is an old saw among the rich…you can never be too wealthy or too thin…and another…living well is the best revenge.
The French followed by the Bolsheviks eliminated the rich when they became angry and hungry enough. Napolean and the Bolsheviks were a very real threat to the remaining aristocracys of Europe.
They sure need our taxes in order to loot as much as possible. David Cay Johnston made this case perfectly clear in Free Lunch and Perfectly Legal.
One thing should be obvious: the elites are more prepared than ever to repress any attempt to reverse the established order. Just read the WaPo series Top Secret America.
Also, see this:
If that doesn’t scare the heck out of you, nothing will.
The correct phrasing of the question is, “Does humanity need the rich? And now that the answer has proven to be a resounding NO!, should humanity tolerate their crimes and their existence?”
Although the parallels between today’s America and 18th century France are not complete, one overwhelming concurrence is how there’s this stagnant, worthless mass of the feudal rich which does nothing but steal, set up tollbooths and roadblocks, and assert unproductive, oppressive prerogatives. But it contributes absolutely nothing even remotely constructive to the society, and hardly even bothers pretending to. On the contrary, it makes an ostentatious show of its complete irresponsibility, asociality, antisociality. It’s simultaneously oppressive, destructive, and worthless. It’s an existential drag by any measure of political freedom, moral justice, or economic efficiency. According to any rational or moral criteria, as well as any true capitalist criteria, it should be wiped out completely.
It’s possible that the people are by now such terminal, subhuman slaves that they’d acquiesce in the new fortress/serf paradigm. But historically that hasn’t been the case, and how these worthless criminals, the offensiveness of their evil crimes rivalled only by the offensiveness of their parasitic worthlessness, think they’re going to be able to hide forever behind a flimsy wall, a camera, and a fat, stupid, shoplifting security guard, is a mystery.
There are no big true independent shareholders anymore…they are all funds looking for short term gains. When every single corporation employs the same pay practices it’s simply seen as business as usual to those funds. They don’t give a shit about corporate pay because, to them, it’s peanuts compared to the apples that may fall given a short term deal/spike. The only way to prevent this from continuing is for individual state governors and/or attorney generals say publicly that it is not in the public interest for CEO’s and other executives to have these huge pay packages…and refuse their products entry into a state unless that changes.
You can disagree with this analysis and simply say that better shareholder rights is the answer…I argue that times have changed since the 40s/50s/60s and that you cannot depend on independent shareholders to cry wolf when their is a race to the bottom among ALL corporations out there. I’d like to see which one shareholder will cry and be successful, driving those ceo’s/executives away from the company and to another one. Again..it’s a race to the bottom. It needs control from the top.
sorry this was a response to Francois-T not you attempter
I’m confused. I thought that the liquidation that was under way in 2008 had to be short-circuited to help the middle class & poor, so they could still get credit to buy overpriced, unaffordable goods & services with their low wages. What is the conventional economic wisdom, if not that? Now it turns out the whole thing was just a rescue operation to keep the illiquid assets of the wealthy from being properly reassessed at their true values?
What productive, useful, and sustainable restructuring or triage of the economy was accomplished by the bailouts? I would argue, none. They were the worst of all possible outcomes, a continued looting of the lower & middle classes to bail out the elites. Now, when the bailouts inevitably fail, the government will be in an even worse position to provide the assistance which the bailouts’ proponents claim to desire.
The best outcome for the middle class & poor would have been for the government to try and minimize the damage to Main Street, propping up the productive economy while thoroughly restructuring and/or liquidating the excess debt and dreck on Wall Street (and in the portfolios of the wealthy). Failing that, it seems to me it would have been an infinitely better outcome for the middle class for the liquidation to simply have been allowed to proceed without interruption, regardless of the additional pain which would have had to be endured in the short run. In the resulting mass default the phantom “assets” of the middle class might have vanished in a cloud of smoke, but so would have their debt burdens.
You are absolutely right, Andrew. That is precisely what has happened and what would have happened, you’re right on the mark.
Was that reply also meant for someone else? When have I ever done anything but revile the Bailout, in principle and in detail?
Sorry, yes, it was meant to be posted as a general comment.
Hay man its the american way, its called making a buck. You make yours and stick someone else with the check.
You need a refresher, please wear your ism goggles whilst viewing see:
Skippy…what season: http://www.youtube.com/watch?v=rTOBR9TjMjo&feature=related
The first video you linked is mislabeled. “Anti Communist Propaganda” really doesn’t describe the video. The video is an attack on “isms,” and I think that would include National Socialism as well as Communism.
Notice that the video takes a very pro-labor and pro-labor union stance. That is a far cry from the vitrioloic labor-hating and labor-baiting that Mish is engaging in.
Actually, I thought the video was quite good and took a stand against all isms, both the left-wing type and the right-wing type, including the right-wing variants that people like Mish and Patrick Buchanan are pushing.
To be more specific, Mish engages in labor-baiting, Buchanan engages in race-bating. But they’re really twins wearing different hats.
The key line from the video is this:
When anybody preaches disunity, tries to pit one of us against the other through class warfare, race hatred or religous intolerance, you know that person seeks to rob us of our freedom and destroy our very lives.
I agree, just thought a blast from the past would be fun.
Having worked from the bottom to the top I understand the attitudes inherent in present day vertical structures and quite a few regional mindsets too.
Mish has a battlefield mindset, reminds me of Gallipoli Generals, maybe WWI too, with so many dead before change occurred.
Personally I think we have taken this post industrialisation about as far as it can go, *innovative finance* is all they have left. The speed of money now days is astounding and the effects are evident in social behavior, history has something to say about humans and speed.
Skippy…sticky electrons are becoming a problem, equilibrium is trying to act according to the laws of physics and they don’t want that over all other considerations, people be damned.
PS take care.
Which is exactly why I have dubbed thee “Lou Mish”. He’s what Lou Dobbs was to the illegal immigrant issue. Getting the sheeple to wage war on one another instead of at the real culprit and enemy. I wonder why that is? Consider who Mish’s clients are when answering that question.
So Skippy, sadly in WW I, _nothing_ changed. One side was about to run out of food, and in imminent certainty of running out of the critical number of soldiers, so they just went home and stood down because the terms were better than the alternatives. It was logistics which ended the main conflict; the strategy and tactics didn’t move a hair, and in fact the side which was demonstrably better at both lost.
What WW I did do in the way of change is that it finally and completely destroyed the credibility of the European ruling class as then constituted, specifically the clinging remnant of the titled nobility. _They_ lost the war, no matter which side they lived on. I’m not certain that an analogy plays from that circumstance to our own time, or that even it one does it fits your point here. I do think, apropos the subject of Yves post there, that that will be the end game for the rich in the US as well: it’s the middle game which is uncertain; might take thirty years, and at this point I wouldn’t be on under five. We know how this will end, though.
Yeah Richard that’s the big picture, although the Generals were not privy to all things, save their orders to advance or maybe latrine whispers. Hence my inference, he can stare at charts and graphs all day long and still not smell the battlefields dead and dying…umm…
“McNamara’s most notable example of systems analysis was the Planning, Programming and Budgeting System (PPBS) instituted by United States Department of Defense Comptroller Charles J. Hitch. McNamara directed Hitch to analyze defense requirements systematically and produce a long-term, program-oriented Defense budget. PPBS evolved to become the heart of the McNamara management program. According to Enthoven and Smith, the basic ideas of PPBS were: “the attempt to put defense program issues into a broader context and to search for explicit measures of national need and adequacy”; “consideration of military needs and costs together”; “explicit consideration of alternatives at the top decision level”; “the active use of an analytical staff at the top policymaking levels”; “a plan combining both forces and costs which projected into the future the foreseeable implications of current decisions”; and “open and explicit analysis, that is, each analysis should be made available to all interested parties, so that they can examine the calculations, data, and assumptions and retrace the steps leading to the conclusions.” In practice, the data produced by the analysis was so large and so complex that while it was available to all interested parties, none of them could *challenge* the_____conclusions_____”
and then there is always the application of math to bombing strategies in the later part of the pacific war and the fascination with body-counts and winning..eh…maybe them and theirs will finds some small patch way from everyone else then they can feed on each other for sport.
Your comments below remind me of a report I read years ago. Where the Hutu/Tutsi was portrayed in MSM as the classic tribal pay back. Where in fact it had many layers, ethnic was just the fact set for dummies, where its seems lots of land issues were settled in the mist of all the buchery (even in family, do to oldest son getting his patch of land and second supporting the father in his old age). Wish I could find it again, sure you would enjoy it, too real. Who will play the part of the french banks IDK.
Street court in America, yep it could happen.
About a decade ago I worked near Sun Valley Idaho. A new Bell Jet Ranger helicopter was always parked outside by the airport terminal. My curiosity aroused, I asked an acquaintance who worked at the airport what the story was. “That is the McCaw brothers (ATT, America’s Cup yachts etc.) helio. They fly a pilot out in advance of their arrival in their private jets so it will be warmed up and ready to take them to their fortified compound. They are afraid to drive the six miles to their homes because of the risk to their families of kidnap for ransom.”
What amazes me is why there have been no instances of the McCaw’s paranoia coming to pass as the curtains hiding bankster capitalism have been at least partially drawn back. We live in a country where AR-15s are the fantasy playthings of every Billy-Bob. A Remington “Sendero” that you can buy off the shelf in any gun shop is completely capable of ruining Tim Geither’s day from 600 yards. Yet not a single “patriot” out of a population of 200 million has correctly identified the enemy and attempted to resolve it in the traditional American way.
The NRA fear that “they” are going to “take away our guns” is irrelevant because “they” have already taken away their minds. The power of propaganda and consciousness control is more powerful than any lead bullet.
All REAL Merican dumbasses know – in their hearts – that the problem isn’t “the Rich”, it’s “those people”.
In fact (the dumbass thinks) “the Rich” are exactly like him. They “give their hard earned tax money to those people” who are ruining this great and glorious nation. The AR-15’s, btw, are needed to protect the daughter for “those people” too. The dumbasses will happily die for “the Rich”.
So NOTa, you’ve got that one pegged in the proper hole. The real reason most of those putative ‘patriots’ cling to their firearms isn’t to backdown the rich or repel the Rooskies. All those Murricans stay heavily armed so that they can threaten their neighbors, and live in hope of a bit of lynch law and gauntleeering against Those People ‘and other sinners’ when and as they get a chance. If any real rich come round, those Murricans can’t yessir, nosir fast enough. Because let’s face it, all those Murricans ever really want is to be the family on the big spread themselves, so they’re choking on greenback envy.
Not that I’m advocating opening fire on the rich. Nonviolence works faster and much more thoroughly. The downside is that you spend years losing ugly until you finally win outright. And that’s not ‘the American Way.’ Just look up on the big screen in every summer multiplex, where ‘nother righteous Regulator with a rod goes in blasting at the climax, no worry about cop, court, prison, or even that Those People in 2-D can shoot back straight.
The media, lead by the Murdochs, works hard at making sure the American public identifies the enemy as the neighbor who may be getting a hand out they aren’t getting.
But you never know, the Wall Street bailout might have been the starting point for class awareness in this country.
And when the ruling class comes after Social Security they might just awaken the “small people” from their slumber.
FYI, Remington is no longer making the Sendero. At about 800.00, as mentioned above, it was a cost effective weapon for long range targets. Pretty popular weapon to pull off the market?
“the corporate elite have come to serve their own interests rather than those of their companies, and have become adept at using the state to further their personal aims.”
That is why, short of a true electoral upheaval, shareholders will never be given true voting rights. That is capitalism turned on its head; the owners have practically no say…property rights my derriere!
This is what I meant in an earlier comment some people misunderstood, about how the criminal rich are attempting a form of secession. They want to abscond with the physical land and all the wealth of the country, along with the governmental instruments of violence and any other aspect of government which can be turned to thug purposes. Meanwhile they want to leave “the country” itself as a social and legal entity behind. That’s to be left in a vestigial gardbage dump state, a place to dump risks and costs.
Boy are you right. They want the power and the wealth that comes from that power to grab as much as the assets of America as they possible can. But they have made sure to find a place outside of the country to set up when the whole society collapses from their taking it all.
There is nothing in life more dangerous than believing one’s own PR. Sometimes it’s a fatal mistake. I think this could all end very badly.
Most countries are decoupled. The upper crust of, say, Mexico participates in the developed world’s economy, buying their products, selling their services to the developed world, driving the same cars, seeing the same films, drinking the same coffee, attending their universities, etc. The decoupling that could happen here turns the US into a country like Mexico. It would be ironic if millions of Americans “jumped the border” into Canada for a better life…
“Most of the world”? Let’s look at the exceptions: Japan (where I’ve had billionaires as clients), Australia, Canada as you mention, most of Europe. I’m not sure re Southeast Asia, but I suspect they are not terribly isolated (the thinness of their upper classes plus Buddhist/Confucian values argue against it).
I agree with your comments about Mexico (I live there), and that the Mexicanization of the U.S. is fully underway. But I also agree with Yves that Mexico doesn’t represent “most countries.”
What I find missing from this discussion is the recognition that it is U.S. military might that installed and maintains the, as you put it, “upper crust of Mexico,” or as Carlos Fuentes put it, “ a highly privileged local minority “ that serves as “intermediaries” for their U.S. overlords. Without U.S. military might, this “upper crust” would be out on their asses in a heartbeat.
Robert Frank writes: “He [Michael Lind] says the wealthy increasingly earn their fortunes with overseas labor, selling to overseas consumers and managing financial transactions that have little to do with the rest of the U.S.”
That is a true, but incomplete, statement. What is missing is that this situation did not happen by accident, nor will it be maintained by accident. How the U.S. oligarchy believes it can maintain this reality without the participation of the American public defies all logic.
And even with the participation of the American public it is a dicey proposition. As Jonathan Schell points out, a wave of “people’s wars” and a desire for “self determination” swept the world beginning in the 1950s. Prominent examples include Vietnam and Afghanistan. These are powerful obstacles to U.S. domination and imperialism.
I disagree any “people’s war” wave will swept America. Americans are fully narcotized by their cable TV and sports. The secret to the oligarchs continued rule to how to keep the cable and TV on in millions of homes that have no jobs and can’t afford to pay the bills.
Perhaps I didn’t make myself clear.
The chances of the American people engaging in any “people’s war” are rather remote.
However, the day may arrive when the American people may refuse to participate in wars against those who are engaging in people’s wars. Or in other words, the American people may get to the point where they refuse to participate in the imperial adventures of the U.S. oligarchy.
Perhaps, but I don’t see it.
What liberals (progressives, whatever) in America can’t admit to themselves is that American society is macho-mean. A majority of the peasants will continue to fight in the nobility’s war because 1) they enjoy it 2) the American mythology is strengthened by war (which is why #1 is true).
It’s pointless to try to change this too. It’s natural. The US is the biggest dick in the world. Somebody has to be. Liberals (the mommy party – or another word) can’t shrink-the-dick. The dick can only be shrunk by another dick becoming bigger.
We have been participating for the last nine years and counting in wars that steal wealth from middle America to give to the rich who run them.
They keep us in line with the talk of defending our freedom and supporting our troops. And it will always be our troops since the rich don’t let their kids join up and get killed protecting the kleptocracies’ theft of foreign peoples’ resources.
If the US Military is the only job available some will join for ‘three hots and a cot’…always have, always will.
Unless you see some miracle driver for US Jobs that I don’t see?
Since the gains have been privatized and the risks socialized to American citizens, it will only be natural for the elite to continue to expand wars. The fallacy is that such can always be contained.
The Chinese and Russians gamed the gamers this time. I don’t expect all of this to end in anything but global thermonuclear war. When it is over and 1/3 are dead, it will not matter to the elite that are saddened their global playground is soiled, they will be on the run for the rest of their lives.
Like all other nobles that felt entitled to the fruits of the producer, they are building their own prison as we speak while they jeer at the unwashed masses as suckers.
I remember watching Marc Faber last week on an interview. He HOPES he lives long enough to come back in ten years for a follow up interview as the reported suggested.
The ruling class requires a large pool of labor (much of it unemployed) to depress and keep wages stable. And I’m not only referring to manual service jobs. IT, technical support is clearly one example, but there are others: higher education isn’t going to require a tenured prof anymore, particularly, since (in this view) the only function of education is to produce workers skilled enough to run the non-automated parts of the system. Hmm.. I think we need to compute an eigenvalue for a large Leontiev I/O matrix
Increasingly the elites do not need the lower classes. Over the next 30 years — as *anything* a human can do becomes possible with automation and AI that are many times faster and cheaper — the lower classes will shift to being entirely employed in make-work service jobs in a closed-loop economy (i.e. you scratch my back, and I’ll scratch yours). Major manufacturing and infrastructure capital will be owned and operated by and for elites (i.e. the existing rich and also the upwardly mobile engineers, scientists, doctors, and lawyers that are good toadies to the establishment). At some point the elites will see the teeming masses as just useless animals that are destroying the environment. Then genetically engineered diseases will be unleashed to kill off billions of undesirable people. Today’s problem becomes tomorrow’s fertilizer. You are the weakest link; goodbye.
anonuma: Your claim is almost the exact opposite of mine. Even with highly automated and intelligent systems, a cadre of skilled workers will be needed to run them. These skilled workers, however, could potentially wield enormous power over the “controllers” of capital (ownership is an antiquated relation) if there weren’t enough of them to keep their wages low and insure that none of them were indispensable.
The rich need a few million engineers, scientists and technicians to design and maintain automation systems. On the technician side this becomes increasingly less as systems become more fault tolerant, self-repairing, and even self-replicating. Eventually with increasing AI (even through brute force) the systems can also be largely self-designing. The rich may continue to need scientists to push the boundaries of possibility, but even scientists may become unnecessary if there’s a giant leap in AI that surpasses even the creativity of the human mind (and if/when this happens, soon it will ramp up to superhuman intelligence by directly enhancing itself).
But the rich certainly have no need for the remaining billions of people — for anything at all, other than target practice maybe. Keeping billions of people alive is destroying the ecosystem. It can’t be sustained. But maybe they’ll be nice and let them live out their days — after forcibly sterilizing them.
WikiLeaks is interesting in that it shows a substantial portion of the potential technical elite are abandoning the State. The Pentagon, probably the most powerful organization on the planet, has been unable to block it.
I don’t think it will be so easy to recruit the technical help as some think.
another way to look at it, continual automation will give us serious deflation – everything will become cheaper against existing wealth.
We also have the societal infrastructure in place for such a scenario – corporations will actually be persons of a sort as artificial agents, or agent collectives. No humans needed, except those who own them.
Indefinite property rights and title, privileged access to political and financial power. This allows a never-ending compounding of power and resource acquisition.
The residents of Non-Richistan have a power, but it will take focus, some temporary self deprivation, and a solidarity not seen in decades to use it.
Buy local. Buy made in USA. Buy engineered in USA. Reconstruct a functioning economy where we make things for consumption by each other. Minimize the use of oil. Create a new economy based on conservation, closed loop use of resources, etc. Dump the old economy in the toilet.
Do the Rich need France any more? Editorial seen in French newspaper on July 13, 1789. Many know what happened the next day. Many smart and wealthy people lost their heads subsequently. Or, maybe we can petition Canada to annex the United States. That WSJ piece wasn’t worth the paper or the computer it was written on.
Gregory King took the same attitiude a century earlier when he wrote his “Natural and Political Observations and Conclusions upon the State and Condition of England, 1696”. This contains estimates of the population and wealth of England at the close of the 17th century.
He categorised households (which for the middle and upper classes included servants), and as far as he could enumerated each category. From a modern perspective, however, it is interesting that when he groups the categories into two overall classes of productive (“Increasers of the wealth of the nation”) and non-productive (“Decreasers of the wealth of the nation”) he only uses income and expenditure.
The clergymen living on the peasants’ tithes are therefore classed as productive, the peasants themselves (and in fact all the working classes and below) non-productive.
Parasites need *a host*, but not a specific one. So when this host’s processes have broken down to the point where it interferes with the ability of the super-wealthy to pursue their lifestyles, they’ll use their private jets to leap in a flea-like manner to a new host. And they’ll sell their non-portable assets to foreign bottom-feeders who will hire their own US thugs to collect rent without concern about laws intended to enforce safe housing conditions because local jurisdictions will be too bankrupt either to enforce housing codes or protect its citizens from the actions of thugs hired by foreign nationals.
The problems here are not only that finding a healthy host is going to get increasingly difficult in the years ahead because every nation has a parasitic class that’s feeding greedily at its own life forces, but the ability to buy new high-tech goods and services or even to repair high-tech artifacts depends on a consumer base large enough to sustain the worldwide vendor chains they are based on. The superwealthy are by definition too small a group to do this.
Why don’t we require them to live in the country where their wealth is made. That is, if you make your money in India, you are required to live there. If you stash your money in some off shore account, you are required to live there. Do not let them rape us and live here, lest we try to get our money back. The Justice system in this country has broken down. Not one of these thieves has been indicted let alone charged. Time for the vigilantes is my guess. Back to the wild wild west.
I came across this story in the free local paper today. I did not come across elsewhere in my net wanderings today. But it is nice tie-in for Yves article:
As spending by wealthy weakens, so does economy
August 02, 2010
Jeannine Aversa, The Associated Press
WASHINGTON — Wealthy Americans aren’t spending so freely anymore. And the rest of us are feeling the squeeze.
The question is whether the rich will cut back so much as to tip the economy back into recession — or if they will spend at least enough to sustain the recovery.
The answer may not be clear for months. But their cutbacks help explain why the rebound could be stalling. The economy grew at just a 2.4 percent rate in the April-June quarter, the government said Friday, much slower than the 3.7 percent rate for the first quarter.
Economists say overall consumer spending has slowed mainly because the richest 5 percent of Americans — those earning at least $207,000 — are buying less. They account for about 14 percent of total spending. These shoppers have retrenched as their investment values have sunk and home values have languished.
http://smdailyjournal.com/article_preview.php?type=business&title=As spending by wealthy weakens, so does economy&id=137384
What a truly pathetic article. It’s BS like that that prevents the populace from understanding what is truly happening here.
The only thing wrong with the article is that it conflates “top 5%” with the truly wealthy. A family making $200K a year has a lifestyle not all that different from the rest of us. Probably one house, one car per adult member of the household, their cars are probably newer, kids in public school, two working parents, no servants, and they’re probably in 401Ks for retirement which did take a big hit in the market.
The Richistani are the only people making money here, at the expense of just about everyone in the working class, and even at the expense of those who are merely rich.
I beg to differ. How well one lives on $200K depends very much on how one is set up tax wise, whether one is past the accumulation phase and has a paid for house. A single person or empty-nester couple with $200K that was substantially tax sheltered, and/or in an area with a comparatively low cost of living (particularly low/no state taxes) would be doing very well indeed. You need to see net worth. Someone like that would not be able to have a live-in, but could afford paid personal service: whether a gardener, cleaning person 2-3X a week, secretary once a week, at home massage visits, personal trainer, etc. People on $40K a year are not hiring personal service on a rental (as opposed to Richistan employee) basis. For instance, $200K person could afford tutors for kids, that’s out of the question for true middle class types.
Point is that minimizing the differences between the upper middle and middle classes is misleading.
You need to see net worth.
Yes, of course. “Income” is just a way to mislead, because people who work for a living have a high income/wealth ratio.
My household lives in a suburb of DC, and we earn about $250K. Two small children. Are we rich? Compared to most of the world, yes. Are we truly rich as far as Americans go? No.
“Are we rich? Compared to most of the world, yes. Are we truly rich as far as Americans go? No.”
This is to insistently miss the point. As far as Americans go, at $40K, yes, $250K is rich.
And, you have the Tea Party rabble out taking the hit for you.
Perhaps the real “wealthy” (the top .5% or so) don’t need “us” but they never really did anyway, not in any direct sense. Stories like this are designed to appeal to the vanity of the medium-rich — stoke class pride and disgust for their “inferiors” — so that these “upper-middle class” types continue to serve the true elite, who truly do depend on them to manage their finances etc. on a daily basis. Its just more class warfare from the same people who brought us to this dismal point in our economic and political history. If working people really could see what’s going on they’d be hanging these banksters from lamp-posts for their crimes. Class warfare has always been nurtured by the upper class first (after all normal people (non-sociopaths) just don’t feel the need to subjugate others on an ongoing basis). But once the sleeping beast wakes…
On a systemic level the rich still need the American peasant masses in the short to maybe medium term. But after that time frame it gets rather dicey for average Americans. This is because much of the wealth flowing to rich Americans is as a result of diverting percentages the deluge of foreign produced goods consumed daily by American peasants. This system began running on all cylinders in the early 2000’s reached its peak efficiency in say 2006 with the housing bubble allowing free money to flow from foreigners to greedy American consumers and most importantly for the wealthy to divert healthy amounts of these flows to themselves. The beauty of this system is that the rich never had to put any of their own wealth at risk – they only had to start the cycle by issuing loads of T-Bills. The system blew a gasket with the advent of the housing crisis and the rich have been under the hood ever since trying to find a way to get that engine – and the resulting flows of wealth into their wallets –humming again. But they have yet to find a cost efficient (for them) way to restore the previous efficiency of the system. For the time being though, they will remain content with the current sputtering engine since they are still diverting the ever-diminishing flows of wealth associated with the reduced level of consumption by American peasant.
But just as England once was the workshop of the world, then America, and now China; eventually even the Chinese sweatshop workers currently toiling in a Dickensian hell, will acquire the means to consume. At this point the American consumer will be outsourced and it will be the Chinese elite who benefit from the consumption of their own peasants. In other words the engine of American peasant consumption will finally blow a rod and be sent to the scrap heap.
And this is likely to happen in a increasingly zero-sum game world of rising populations and diminishing resources. How will wealth in American react and what will happen to the over-consuming American peasant in this Darwinian environment? The answer is clear if seen from the perspective of a zoo-keeper who profited neatly by over-feeding his animals. Sure while he was able to profit directly by taking a percentage of the cost of feed (and being able to “buy” this feed on the credit of US T-bills) the zookeeper is happy to make a spectacle of his obese beasts by piling more and more fodder in their troughs. From the animal’s perspective, they have never had it so good. The few among them who mention the unsustainability of this system and suggest making a break for it back to the wild are taken for rabid fools. But when the time comes that our zookeeper’s percentage on the feed is cut to nothing, and /or worse still, when his credit is cancelled and he is forced to pay for all this voracious gluttony, not with useless T-Bills, but with real wealth, then this will be the day his obese peasants find themselves suddenly with very empty troughs.
technically every country has a price, it is easily estimated using population and a minimum “benefit”.
If: “A member of the elite can make money from factories in China that sell to consumers in India” then what has this to do with the US? I hope that this economic activity gets correctly taxed in India and China. By trying to make the most extreme case possible (throwing in dirty “immigrant” domestic servants in as well, reminds me on the note on xenophobia in the NC links last week…) he made it useless at furthering his case.
Now this is not to say that basically all rich people try to minimise their taxes and that a significant chunk of the super rich do their level best to avoid getting their income and wealth taxed altogether. Something more needs to be done about it than some feeble tax treaties with tax havens.
However ranting about wanting a slice of the pie of the wealth generated half way around the world with no direct US involvement and complaining about immigrant labour who do pay tax in the US (the good old quip about the cleaner paying more income tax than the CEO…) is not the way to do it.
Oh, I forgot that US citizens have to pay tax in the US even if they live and work abroad. Ah well, I believe that the country where you choose to live and work has far more of a claim on you than the place you happen to have been born in.
Then again my attitude probably stems from the fact that I lived in three different countries whilst growing up, moving since and not really wanting to settle in a single country yet.
As do the rest of humanity, the rich ‘need’ a sustainable relationship with their environment. This idea of course gives rise to pondering the planet’s carrying capacity, but this is an area where no clear answer is possible due to humanity’s inventiveness and adaptability, so I won’t go into that here. What bothers me about questions of this kind is how they are couched. Like attempter I believe we tend to look at things arse-about-tit, but want to look one level deeper than a reversal of who needs whom.
Humans need humans, pure and simple (amongst other things of course). We are a very social animal incapable of healthy (or optimal) functioning outside of human society, where the health of the society is an extremely important though complex variable. To leap straight to my main point, the way stubborn, artificial divisions are generated by rich-poor axes is at the root of our problems. Wealth and poverty as measured financially are artifacts of our scarcity-based paradigm (which has come to believe a medium of exchange can store value), as are therefore the consequent and wholly uneven distributions of that wealth and poverty throughout human society (globally too). It is through our inaccurate and unwise perceptions of money-based wealth that this appears currently to be the only way of doing things. I’m not going to get into genuine alternatives here (a blog post cannot do them any justice), so focus instead on one aspect of why we want to debate rich-poor problems in the first place. We’re looking at the problem through the wrong lens.
If the ‘solution’ within the current paradigm is to get rid of the economically useless, no way of doing so will get rid of rich-poor divisions. By definition, and bound by the paradigm’s logic, only the few can be rich. Logically speaking the rich need the poor definitionally. And yet the very way we understand ‘need’ in this analysis assumes ‘economic’ need is the only one that matters. It is too limited a filter to understand the underlying assumptions giving rise to the problem. The economic system is itself the problem. It is unsustainable, predicated as it is upon perpetual competition and growth, which logically requires deep rich-poor divides on its way to collapse by burning through the recourses it must transform into consumer items to fuel its non-stop linear growth. This is the deeper process that must be addressed in the mainstream before healing change can happen, before questions about who needs whom can be couched in more human and environmental terms. In its current form this discussion is rearranging deck chairs on the already sinking Titanic.
The Wall Street Urinal Article was meant to create divisiveness. Its all perpetual conflict agitation and deflection from here on down.
Attempter and Kevin de Bruxelles have it right.
Its INTENTIONAL ‘deflationary’ herd thinning plain and simple.
The rich need to be shown the exits. The sooner the better.
Deception is the strongest political force on the planet.
The answer to whether the “rich” need the rest of us or not is both YES and NO. As far as material consumption goes, since much of it involves imported luxury items – clothes, automobiles, etc – the rich don’t need us per se. What the “rich” really do need us for though is the belief that “I want to be rich too”. Otherwise, why would the other 95% of the ‘unrich” population spend billions on lottery tickets if not for the desire to be rich? How many times have you heard “If I win the lottery” or “When I win the lottery”.
Why is this desire to be rich among the “unrich” 95% so pervasive? Isn’t this the secret to the whole game/scam? Because once you want to be rich, you “buy” into the value system and supportive structures/institutions that result in 5% of the population being defined as “rich” and the other 95% as “unrich”. If 95% of the population didn’t buy into this would the “rich” be able to exert the pull and influence – CONTROL – over US that they do? So, the “rich” are dependent on the rest of us wanting to be rich. If “we” decide that we don’t want to be rich – game over!
Moreover, when we say “rich” are we talking about all of those whose net worth exceeds a certain amount [5% of the population] or are we talking about the 5% within this group who make decisions on a daily basis that affect our lives. Because 90% of the “rich” are content to spend their INHERITED money, contribute to charitable causes and the like, travel the social circuit, and leave the day-to-day running of the show to someone else, usually someone from the “lower classes” on the way up who wants to be rich. Then with sufficient wealth, his/her children are sent to elite universities for “polishing” and ascendance into the “ruling aristocracy”. But the “process” usually requires a generation or two for it to become institutionalized. Along the way INHERITANCE or marriage becomes the vehicle whereby one becomes rich – the genetic lottery if you will. Since most of the wealth in this country is inherited – not earned – then it becomes a question of which “rich” are we really talking about? The ‘wanna bees” or the “bees”? But since the “wanna bees” are usually hungrier and originate from the ranks of the “unrich” we come back to the question of why they want to be rich in the first place. Because so long as some of “unrich” want to be rich – defined as SUCCESSFUL – and the others accept/acquiesce to the values supportive of this system it will continue.
Ask yourself, do I want to be rich and why? If the answer is affirmative then are you more a part of the problem than the solution or vice versa? To pretend that it’s the “rich” – THEM – and not US may play well in the blogosphere but it does little to alter the value system underlying the playing field that make for the “rich”. And so long as many of us want to be rich without understanding why or the consequences of such thinking, very little will change. In this context, the “rich” are DEPENDENT on us – or at least some of us. The “rich” may be decoupled from us vis-à-vis material consumption, but their value system is forever coupled to some of us wanting to be rich. It is only when we quit wanting to be rich or redefine what “rich” means and translate it into a viable alternative to their definition that we will be “decoupled” from the rich. So don’t focus your anger and frustration on what the “rich” do or don’t do, focus on yourself and those around you in finding a viable alternative to not wanting to be rich. Quit playing their game and work to create a replacement from the bottom up – not from the top down. Think longterm and act with purpose on a day-to-day basis. This is the only way to sever this “gordian knot” and change the game permanently.
GREAT post Mickey. Well said! But the decoupling will also have to include taking the rich down, given that they are so intent now on pitting the prudent against the not so prudent by creating INTENTIONAL divisive conflict.
Excessive wealth of an individual is tyranny against the masses.
Deception is the strongest political force on the planet.
The wealthy need the U.S. military to protect and secure their interests throughout the world. One telling sign about the growing despeation in rural and small town America is that despite two wars with large casualties (multiply the number of dead by about 10 and you will get a approximate number for those who suffered serious physical injuries, then double that number for those suffering from pscyhic and minor traumas). the U.S. Army is easily meeting its recruiting goals as military jobs are one of the few opportunites of a job with benefits that folks with just a high school education can get. And since the right is beating a drum not just for a war with Iran, but a world-wide struggle with all Muslims, they are looking for a situation of endless war and a U.S. police state, something that glibertarians would be most comfortable with to control the rest. (The movie “Blade Runner” seems to be becoming more prophetic every day.)
If you’re an average person, best just to get used to licking some rich man’s boots for your daily crumbs.
You can convince yourself it’s a valid profession, one that you excel at, and that you can even take pride in, bootlicker that you are.
And if somebody tries to take your job away from you — through some kind of machine that licks boots “efficiently” or with a few million dwarfs from some remote part of the world who willingly lick boots AND suck toes for a few less crumbs than your boot licking alone brings in — well, it’s you and the rich dude on one side, and the enemy on the other. You always knew you were part of the right crowd. Right? LOL
Ecce Homo, Horatio Alger
Re: If you’re an average person
Sadly, liberals (progressives, whatever) helped destroy America’s liberal democracy by their inability to admit “average people” exists (we’re all above average, don’t cha know?).
Most of the dumbass peasants don’t know they are dumbasses (and liberals keep telling them they aren’t). This stupidity is encouraged by the nobility (of course) as it strengths the myth of “rugged individualism”, one of the fundamental myths the American peasants exist on.
Of course, dumbasses believing they are above-average is what allowed them to accept: NAFTA (who needs those loser union jobs, just the stupid people are in unions), 401k’s instead of pensions (I’m smarter than the average person, I can “invest” and beat anybody), the perpetual class-warfare against “those people” (I’m better than those “welfare queens” who are the REAL below average people!), etc…
Liberals (now) simply can’t admit to themselves how mean and stupid a majority of the American population is, because if they did they’d see that 50+ years of liberals policies simply allowed the fascist to win (easier). Pretty sad.
The rich need the US army to protect their interests abroad. I don’t see any other reasons why the US are spending so much on military expenditures. The rich can’t or don’t want to pay for that. The American peasants pay for this under the propaganda that is this army is there to protect them or to propagate freedom or whatever.
Yes, but the majority of the US economy is domestic and certainly the majority of the US population bases their living selling and buying in the domestic market.
The US is not an export based country and will probably never be.
All this means is the factions of ‘domestic capital’ are getting squeezed and that there will be political consequences which probably involve hard-right elements.
One can also place wikileaks in this context (but from left-libertarian view) as the State is losing its ability to attract smart people into its technical positions, due to is discredited position.
Basically, the current situation can go on for a short time, but not long.
Never any Marxists around when you need them….
They don’t believe their own bullshit anymore either. The only people who still spew ism bullshit are the libertarians (who are generally too introverted/autistic to comprehend what the smart amoral scumbags are doing, and SHOULD be doing).
The fascists don’t need to spew bullshit because they got the only reality based “ism” that exists; which is why the US is fascist. What else would the most powerful country in the entire whole-wide-universe be?
In 1995 the historian Christopher Lasch wrote an insightful little book entitled “The Revolt of the Elites and the Betrayal of Democracy.”
Lasch state that “once it was the revolt of the masses” that was held to threaten social order and the civilizing traditions of Western culture. In our time, however the chief threat seems to come from those at the top of the social hierarchy, not the masses. This remarkable turn of events confounds our expectations about the course of history and calls long established assumptions into question. When Jose Ortega y Gasset published “The Revolt of the Masses, first translated into English in 1932, he could not have forseen a time when it would be more appropriate to speak of a revolt of the elites.
Lasch goes on to state that Ortega was writing in the era of the Bolshevik revolution and of the rise of fascism in the aftermath of World War I. Ortega attributed the crisis of Western culture to the “political domination of the masses.” But Lasch goes on to state that “today it is the elites–those who control the international flow of money and information, preside over our philanthropic foundations and institutions of higher learning, manage the instruments of cultural production and thus set the terms of public debate–that have lost faith in the values, or what remains of them, of the West.”
What is fascination about Lash is that his influences and inclinations were a combination of agrarian,progressive, Marxist, Puritan,republican and Tory–perhaps just the kind of mixture that might offer us a way out of our current mess.
Isn’t Ayn Rand’s ‘Atlas Shrugged’ a revolt by the elite “producers” against the “looters”?
While I doubt many of the current elites have read Christopher Lasch, many have read ‘Atlas Shrugged’ and acted upon it. The disdain, if not outright contempt, for democratic institutions is also quite evident as well both in ‘Atlas Shrugged’ and among these elites. Witness Alan Greenspan… a self-proclaimed acolyte of Ayn Rand.
“Look, the people you are after are the people you depend on. We cook your meals, we haul your trash, we connect your calls, we drive your ambulances. We guard you while you sleep. Do not fuck with us.”
— Fight Club
The corporate stimulus, phase II, is now going into replacing the technology they can’t fix, with the same technology. Meanwhile, they continue to habituate their minions to the technology. It will end badly, but there is still plenty of hoarded goods in the communities.
The assumption of the empire is that it can out-wait the individual, which is a pretty good assumption, in most cases, and why most tend to bet with the empire, liking it or not.
With each bet, however, the empire gets fatter, dumber, and slower. If an automobile factory is automated and capitalized over 30 years, what is the financial and human consequence when the automobile is no longer viable?
The law is like freeway, which was once an animal trail, an indian trail, a wagon road, and a highway. What happens when the destination is no longer viable, and the population “knows” no other path?
When I get done coding an AI app, I have absolutely no idea how it works …because the energy required to swim in and out of a particular black hole changes; it’s the traveling salesman problem all over again. The same vortex does not appear at the same place at the same time, despite appearances.
“When Computers Replace Troubleshooters, Look Out
you can never be sure if they can accommodate every kind of genuine stupidity as well as Artificial Stupidity. (That is the kind that is made up especially to prove that Artificial Intelligence works just great.) … if computers do all the routine work [mine – occupy the stack from the bottom up], soon there will be nobody left to do the thinking when the computer gives up and admits it is stumped. I sure hope we don’t let the computers leave the smart troubleshooting people without jobs, whether the object is circuits or people…
Troubleshooting is still an art, and it is important to encourage those artists …
Murphy’s law implies that if you are not prepared for trouble, you will get a lot of it. Conversely, if you have done all your homework, you may avoid most of the possible trouble.”
certification systems, designed by the body politic, naturally weed out intelligence. their whole point is reliable replication.
I generated a random paper in your honor kevinearick.
Go have a look:
will look some more.
scimakelatex, but no 9 series. didn’t pry further
Leon Trotsky wrote for Novy Mir in New York in Nov/Dec 1916, having been expelled from virtually all of Europe. He spent much of his days in the New York Public Library scanning the business sections of the newspapers. He determined two things: (1) that the United States would enter the War on the side of the Entente within 6 months to preserve its markets, and (2) that “America is ruled by the moral philosophy of the dollar.”
He was being watched by the Okhrana in New York, a valid measure of the size and capabilities of the Russian police state then in existence, perhaps the best in the world at the time. Sound familiar?
The collapse of the Russian state, despite its efficient system for infiltrating and atomizing domestic resistance groups, was catalysed from without, namely its colossal blunder in mobilizing against Austria Hungary and then Germany in 1914. But its inability to continue its economic expansion, or even maintain the logistics of supplying its urban populations – i.e. the factory workers who made much of Russia’s war materiel – directly caused the collapse to snowball very quickly out of control. It literally began with a small riot by some women standing in a breadline in Petrograd in February, 1917 to which the police state responded by sending Cossack cavalry. When the cavalry arrived and the officer ordered his men to shoot into the crowd of women, his men shot him instead.
Dollars and Bread.
That is why I am going to re-register as Republican. Without them, the reorganization of power and the chaos that is required for a rearrangement of wealth distribution, will take a lot longer.
Unemployed vs. Dis- abled.
Default vs. Hyper Inflation?
see UK ‘re classified c 1999 1 mil unemployed as
dis – abled to lower unemployment rate before
an election.’ nice work if u can get it.
. . see ‘ its the (too big) debt stupid,’
and Niel son “default of hyper in. flation’ logical
outcome of present policies.
If you’re rich enough, no. The United States is just a host, filled with useful idiots, sometimes known as congressmen. Their services are surprisingly affordable.
The USA’s non-governing, non-wealthy population is so hypnotized by television that no significant change is possible. TV has become more important than real life, more believable that what they see around them.
Class warfare is alive and well, and for now, the rich have won.
“The power of propaganda and consciousness control is more powerful than any lead bullet.”
As long as this statement remains true, the decline in the standard of living will be occurring with least and fruitless protests from the minority of informed citizens. Rest will remain with ‘kool-aid doled out by the elites in power!
This is a silly, self-serving article from the WSJ. Most of the increase in wealth of the upper 1% and 10% in the last 30 years has been as the result of a massive transfer of wealth from the lower and middle classes to them. It was not because of sophisticated international investments that took the US out of the loop. Indeed most of this money didn’t go into productive investments in real economies here or abroad. It went into the construction of the paper economy, a vast bubble blowing machine. And as Yves points out, these rich would have gone down with the rest of us in 2007-2008 if the paper economy had not been preferentially bailed out over the real economy to the tune of trillions. This amounted to yet another wealth transfer from us to them. Again this had nothing to do with their investing acumen abroad. It had to do with their ownership/bribery of our completely corrupt political system.
OK, in retrospect the article is not silly. Mindlessly stupid and dishonest would be better. When the next crash comes, and it is coming, these wealthy “uncoupled” investors will confront the same reality they did the last time. If the US economy goes down, so does that of the rest of the world, and that includes them, unless they can bribe the government into yet more bailouts for them.
Oh yeah?… Fortunately, there is still the guilotine.
Let them eat dirt.
I want to begin to challenge some of the traditional assumptions made by those bloggers on Naked Capitalism from both the left and right.
First I want to address those who seem partial to the more traditional class-conflict model of politics and consequently have a largely benign view of the State.
It is true that the state in U.S. history has sometimes functioned on the basis of trying to regulate the otherwise
devastating capitalist crises (as only occassionally now, and more often during the Great Depression)in an attempt to reintroduce a modicum of social justice in a society threatened by severe economic inequalities.
But it also seems true that over the past 70 years many intellectuals of both the left, right and liberal communities have managed to legitimate themselves on the pretense of defending underdogs(of various sorts) against those very same big capitalist interests.
By standing between opppressors (the rich) and oppressed (the rest of us) exploiters (Big Capital) and exploited (labor, small business, privileged (the big city cosmopolitans) and underprivileged(local urban and rural poor) a veritable army of professionals, experts and public and private bureaucratic administrators have come to exercise power in the name of those who allegedly cannot take care of themselves.
In doing so not only does this group siphon off a substantial share of GDP, but worse, their ideologies (i.e.,for example, evil market vs progressive state)tend to freeze social relations into unchangeable social categories–thus legitimating the necessity of their role into perpetuity.
To see our current situation as simply a conflict between the rich and the rest of us seems a simplification which ends up misdiagnosing the current structure of power.
With all due respect, your view is dated. You are reciting talking points circa 1983. The welfare state has been gutted over the last two decades. Tell me exactly who “a veritable army of professionals, experts and public and private bureaucratic administrators” is and exactly how they “have come to exercise power in the name of those who allegedly cannot take care of themselves.” Let’s see, there has been a huge rise in public school adminsitrators, corporate lobbyists, and think tanks (another arm of the lobbying effort)….that hardly fills your bill.
Read James Galbraith’s The Predator State. It’s a vastly more current and accurate reading of who has power now and why.
I tend to cringe just a little every time that book is brought up. I bought it when it first came out, though I was somewhat unimpressed with where it led the viewer. It’s funny that I learned to be more aggressive from reading his book than any other book in expressing my thoughts without any worry of being criticized, but I generally don’t like how he wanted to establish an alternative ideology when bringing up Veblen. In other words, rather than simply stating the truth he wanted to create another camp. Certain things just strike me the wrong way, and that was one itch that I had to scratch.
Fits perfectly well with the most read article on FT’s website today about rich Americans giving up their passports – simply genius of a coincidence…
Below a few lines from the article, rest on FT website or Yves can provide a link on this:
Americans who swap passports
By Ellen Kelleher
Published: August 2 2010 19:42 | Last updated: August 2 2010 19:42
At the US Embassy in London, there is a waiting list that none of the officials likes to discuss. On the list are Americans hoping to give up their citizenship, as they seek shelter from the Internal Revenue Service.
One lawyer fighting for her clients’ right to do so is Suzanne Reisman, a former civil rights lawyer, who is now a private-client lawyer in Mayfair, central London.
“You make a lot of sacrifices when you have to pay US taxes and live outside the country for a long time. But you also make a lot of sacrifices when you give up your passport,” she says.
Having lived in London since 1998, Ms Reisman herself has considered giving up her US passport. But she probably won’t. “I don’t think I want to die in the UK,” she says.
With many executives living away from their countries of origin, the reasons to change citizenship range from clarifying tax status, making it easier to cross borders, particularly in the case of passport holders from emerging markets who find themselves working in countries such as the US for a prolonged period of time, or discovering that over time their allegiances have changed.
While any individual will need to weigh the pros and cons of any change in status, both in terms of the hassle it can entail but also the long-term consequences, it also poses challenges for employers.
The backlog at the US Embassy, where no appointments are available until February, stems from a rise in the number of American expatriates living in the UK who have been seeking to escape paying US tax on their worldwide income and capital gains since the simplification of US tax laws in 2008.
I am always surprised when having made their fortune in the U.S., rich people don’t all emigrate to tax havens in the Mediteranean, Carribean or South Pacific to spend the rest of their lives with their money.
I guess they have a certain sentimentality in remaining a U.S. citizen.
The WSJ article is either completely stupid or deliberate misinformation. I suppose Americans’ corporate overlords would like them to believe they are no longer needed since such a belief is likely to instill even more fear, compliance and gratitude for the few little meager crumbs they still cling to.
Nothing could be further from the truth. Asking if the rich no longer need the rest of America is like asking do ticks need dogs? Do tapeworms really need human stomachs? Of course they do, don’t be ridiculous. Parasites can never live without a host.
The American uber rich pay nowhere near their fair of tax thanks to a highly regressive tax code chock full of loopholes and dodges for the wealthy who benefit disproportionately from the state’s generous hand-outs, subsidies, bailouts, and corporate friendly policies which are funded by the largess of the middle-class tax payer who also generously fund the ridiculously expensive military AND the welfare state for the underclass who get a free pass on everything but sales tax. Besides bankrolling the programs and policies the top top 1% need to to stick it to the rest of the world let’s not forget who actually does things in the real world. Are the rich and their wastrel spawn suddenly going to start providing the soldiers for all of American’s imperial misadventures? Are they going to become the cops and domestic spys increasingly needed to protect them and keep the herd in line? Cook their own meals? Fly their own planes? etc. etc? No, of course not.
The rich may be just naive and insulated enough to buy into this ego-stroking garbage themselves but for the rest of us who enable their pampered lifestyles, we know better. Just because a parasite population is thriving while a host is becoming sicker from an infestation does not mean the host is no longer needed. When the ailing host finally dies the party is over for the parasites and they will die quickly as well unless a new host can be found. Drivel.
There’s an interesting PR angle here. The rich may not need the rest of us, but they’d like very much for us to support the “de-coupling” as a new normal. One of the ways is dismissing concerns over unemployment while hyping the importance of deficit reduction.
For years on end, concerns over deficits were dismissed as unimportant (Dick Cheney: “Deficits don’t matter”) or irrelevant and now — in the depths of a recession– we’re told deficit reduction is top priority.
It’s Orwellian. (“War is peace!” “Ignorance is Strength!”)
I’ve been listening to this rot for months now, thinking it all sounds strikingly familiar. But why? Then it dawned on me: late 2002/early 2003 and the “rollout” of the Iraq war to the American public. For years, Saddam Hussein was a well known but well-contained bad guy, until all of a sudden he was an imminent threat to our security. We all know what happened next: an absurd proposition with illogical justification captured our national attention, became policy, and produced a predictable disaster.
Now it appears to be happening again. As with Iraq, I’m willing to bet it’s the result of a specific agenda with a wide array of interests behind it. The interests behind the Iraq war included military/industrial interests looking for a proving ground for new weapons & strategies, Christian activists looking to affirm their notions of biblical prophesy (and a small subset hoping to hasten on onset of “End Times”), free market ideologues looking for a pure laissez faire economic showplace, and variety of politicians eager to exploit or too intimidated to dissent.
Who’s behind the new definition of normal? I don’t know. But there are cultural as well as policy implications. The cultural implications include a repudiation of the notion that a wealthy society should take care of its less fortunate members. Replacing it is a kind of New Feudalism in which the poor and destitute are part of the natural order; worth an occasional shrug and sigh, an occasional coin in charity coffers, but no lasting concern.