Rob Johnson on the Uber Rich: Top 400 US Billionaires’ Wealth Equals Brazil’s GDP

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Yves here. Real News Network features a vivid discussion between Rob Johnson, Director of the Economic Policy Initiative at the Franklin and Eleanor Roosevelt Institute and a member of the UN Commission of Experts on Finance and International Monetary Reform, and Paul Jay on the short-sightedness of the uber-rich.

Although many of the themes of this talk will be familiar to Naked Capitalism readers, Johnson, who is also a long-standing political insider, is blunt. For instance:

JAY: So this is a tremendous concentration of wealth…These guys are making a killing. What possible motivation would they have for any change?

JOHNSON: Well, there’s an old story about a guy that jumps out of the Empire State building. And when you get the 19th floor, you open the window and say, how you doing? And he says, fine so far. I think increasingly those billionaires and other wealthy people know that we’re on an unstable trajectory, that the system is dysfunctional, the system’s broken, and we are heading towards social conflict. Social conflict can take the form of more repression, military equipment, intimidation, incarceration. As you know, the prison population, particularly black male population, is exploding, and America has a tremendous eyesore associated with the incarceration of black males. But there is a sense in which if you have wealth or if you have the knowledge to create wealth, say, like an engineer at Apple Computer, you’ve got to be scared that it isn’t going to go on, you’re not going to be able to reap the fruits of your talents and your wealth unless we adjust course. I think wealthy people have to change course now. It’s not sustainable.

But Johnson’s sense of urgency in large measure reflects his frustration with inertia among the elites, the fact that even the ones who recognize the seriousness of these looming problems are taking an “every man for himself” posture:

JOHNSON: I’m hearing back that we are on an unsustainable financial trajectory, the financial system has been unmasked as unstable and unfair, and that that contributes to inequality. Inequality, part of which comes from the operation of the financial center, is a formidable, formidable cause of sociali instability in the medium-term. Whether you’re talking to intellectuals like George Stiglitz or Tom Piketty, or whether you’re talking to donors, environmental concerns, financial system coherence, and governance coherence, the international system doesn’t function. Multinational corporations are so large in relation to people that they can arbitrage and protect themselves across different segments of society, meaning China or Iowa versus Michigan or what have you. They can unseat the power of local governments by threatening to leave or for rich subsidies being drawn it.
But all these tensions that have to do with governments also leaves these elites talking as though, I know how to protect myself, I have enough money, I have enough lobbying power, I have enough to protect myself from being who pays the bill, who bears the burden. But they don’t have any believe that they individually have the power to impart a new design that’s healthy for everybody.

I’ve talked to many, many people–’cause I use to work in Washington–who say, I have to go compete, I have to be part of the lobbying system; God I wish somebody like President Obama could stop us all and put it back to what you might call a fair game. But as long as I don’t believe that that fair game exists, I have to stay in there and keep pushing.

Please watch this video and circulate it widely. The transcript is here.

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  1. john

    The USA is such a divided country only a handful over of other countries compare to its dogged biases and bigotry. Only honest folks will acknowledge it. When it comes to wealth Americans have a very distinct caste system where lines are drawn — and especially along race. Pulling oneself up by their bootsrap dogma is a convient deflection away from reality — the system is heavily rigged against such planning.

    When the world saw those MRAPs, assault rifles, gas grenades, etc appear on their screen via Ferguson, it exposed what the elites have been up to for years. They’ve armed the police forces across the country for the very purpose to aggressively put down any insurrection that would dare challenge the system of taking away from the poor and giving to the rich.

    Ferguson was just a taste of what to expect when billionaires feel threatened. It won’t be easy to bring about a more equal society.

    Unfortunately Rob Johnson does not speak for all billionaires. The Koch’s and Walton’s like things the way they are and pay handsomely for it with campaign contributions.

    1. Peppsi

      Remember that big study that showed the ratio of security personnel, both standard police and private guards, as a correlate of income inequality?

  2. abynormal

    ‘they’ control mediocre wealth and ever reaching poverty levels that shelter individual indifference…allowing the ubers to continue ‘falling from the highest buildings’.

    Wealthy nations preserve bribery loophole
    The USA permits facilitation payments the under Foreign Corrupt Practices Act, despite recent cases brought by the Securities and Exchange Commission (SEC) that found illegal bribes had been wrongly recorded as facilitation payments. In 2012, the SEC censured the Saudi subsidiary of an American pharmaceutical company for paying a customs official to release products from a port without permission.

    1. TheCatSaid

      So a “facilitation payment” is legal & OK, but “bribery” isn’t?
      What is the difference between the two?

  3. Clive

    Two quotes have come up on NC about this dynamic in the past few days. I hope I’m quoting correctly but the gist was “don’t step off the curb” and “you mustn’t get out the boat”. In other words, we all (excluding the realms of the mega wealthy) are confined to a very narrow strip of the sidewalk or a small vulnerable vessel in choppy waters. And outside of those confines, it’s pretty perilous.

    So even if for some of us the cage isn’t that unpleasant, it’s still a cage. And we can’t leave it safely.

    That isn’t how I thought I’d end up.

  4. Jim Shannon

    Again and again – over and over – ALL the smart guys refuse to discuss the historical impact of the TAX CODE and property laws which have determined the distribution of wealth for the benefit of the CentaMillionaire$ and Billiuonaire$ who throughout ALL history have used that endowed wealth to corrupt governments and finance and economies and beliefs!
    Thinking about everything except the cause, the effect of which has always led to civil unrest and war!

  5. Benedict@Large

    I’ve seen this linked now from 5 different sites (including conservative), and I’ve just now watched it. A waste of time.

    The rich know, but can’t do anything about it. The poor should go into the streets, and the academics should too. And? Like this hasn’t been done? Anyone been out there lately? The cops will crush your skull, and the judges don’t care. The Fed will co-ordinate the beatings if they cross state lines.

    Here’s a better idea. Tell your kids to live fast. This thing’s just about over.

    1. Lambert Strether

      I hate that “into the streets” trope. Taken literally, it has a rotten track record, and taken metaphorically, it doesn’t give any real guidance.

      Personally, would prefer a more “People who aren’t running the country should prepare themselves for that, to save both themselves and the planet,” but that doesn’t really boil down to a talking point.

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