01 May 2016

Land of the Cake Eaters, Home of the Wretched

"Let them eat cake."
-- Marie-Antoinette

As presaged in these essays over the last few years, we live at the beginning of the Revenge of the 1%'s War On The Others. Economic and political democracy is just social tribalism codified. It worked because most of a society bought the notion "We're all in this together", notably in the USofA post World War II. The political and economic leaders still remembered the shared burden of world war, and carried the spirit of the whole tribe in their actions. Over the intervening decades, these leaders faded from the stage, replaced by Roark wannabes. We get The Great Recession as our reward.

These musings have, on occasion, asserted that the lurking problem with rising income concentration is that this alone will spell the end of the 47%, and in due time, the 99%. Now, we have concrete reporting that the lurking is over, and the Huns have declared the war. What is now happening is the 1% are actively refusing to pay taxes, since, of course, they don't need public services. Only the lazy and shiftless do.

Along with Citizens United and voter suppression, the Rabid Right has left stealth mode. You can't have an economic and political democracy if only the 1% get to participate in both venues. You get autocracy. Trump likes Putin. Now you know why.

Robert Frank, of "What's the Matter With Kansas" (and last Friday's Maher show):
Our top-heavy economy has come to this: One man can move out of New Jersey and put the entire state budget at risk. Other states are facing similar situations as a greater share of income -- and tax revenue -- becomes concentrated in the hands of a few.

In the thrilling days of yesteryear, when the middle classes really, really had most of the GDP, progressive tax rates produced relatively level tax revenues; a nickel from everybody added up and everybody had the nickel to give. Now
With the top tenth of 1 percent of the population reaping the largest income gains, states with the highest tax rates on the rich are growing increasingly dependent on a smaller group of superearners for tax revenue.
not so much.

Not surprisingly, the coasts are the places where this has happened. Finance in the east, web/tech in the west.

The 1% have started the snowball rolling down the hill to The Final Depression, wherein they reap the "reward" of deflation on their accumulated moolah. Since they, as a class, can't figure out how to make real investment, they hoard cash and blame The Fed, ECB, and BoJ for keeping low interest rates. Bullshit. The likes of Tepper have been stampeding into Treasuries, demanding high returns on the public's money that they can't get in commerce. All that tsunami of moolah does is bid up bond prices and the interest rate down. Some folks are just plain stupid; well and demanding money for nothing. Their revenge is to implement a global crash, thus raising the "value" of their cash hoard. You watch.

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