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Tuesday, February 25, 2014

Government Power is an Economic Inequality

The liberal defenders of government power attack concentrations of wealth, but in the true concentration of wealth is not found in the hands of a few billionaires, but in the hands of the government.

The editorialists talk about income inequality and the 1 percent, but they focus on individuals rather than institutions,  and it is the concentration of wealth and power in institutions that threaten civil liberties.

The top 10 wealthiest men and women in America barely have 250 billion dollars between them. Federal budgets run into the trillions of dollars, and the national debt approaches 15 trillion dollars. And that's not taking into account state budgets. Even Rhode Island, the smallest state in the union, with a population of barely a million, has a multi-billion dollar budget.

As the 10th richest man in America, Michael Bloomberg wields a personal fortune of a mere 18 billion dollars, but as the Mayor of the City of New York, he disposed of an annual budget of 63 billion dollars that was three times his own net worth. Spending so much money would wipe out the net worth of any billionaire in America.

That is the difference between the wealth wielded by the 10th wealthiest man in America, and the mayor of a single city. And that is the real concentration of wealth. Not in the hands of individuals, but at every level of government, from the municipal to the state houses to the White House.

Monopolistic power in 20th century America lies not in the hands of a few industrialists, but in the massive monopolistic trust of government, and its network of unions, non-profits, lobbyists and SuperPAC's. The railroads are broken up, offshore drilling is banned, coal mining is in trouble and Ma Bell has a thousand quarreling stepchildren-- now government is the real big business.

The 2008 presidential campaign cost 5.3 billion dollars. Another 1.5 billion for the House and the Senate. And that's not counting another half a billion from the 527's and even shadier fundraising by shadowy political organizations. In 2012, the price tag went up to 6.3 billion with 1.7 billion for the House and Senate.

But that's a small investment considering that the political players and their union and corporate allies were spending billions to get their hands on trillions.

Do you know of any company in America where for a few billion, you could become the CEO, run up trillion dollar deficits and parcel out billions to your friends who will then pay the money back to you so you can take over the company again four years later without the shareholders being able to force you out or have you arrested?

This company will allow you to indulge yourself, travel anywhere at company expense, live the good life, and only work when you feel like it. It will legally indemnify you against all shareholder lawsuits, while allowing you to dispose not only of their investments, but of their personal property and that of their children while obligating them to a debt slavery that will run for generations?

There is only one such corporation. It's the United States Government.

Under an ideological cloak of darkness, politicians act as if they can do anything they want. Public outrage is met with alarmist news stories about the dangers of violence, as if this were the reign of the Bourbon kings,  not a democratic republic whose right of protest is as sacrosanct as its flag and its seal. Instead the republic is dominated by political trusts, party machines, media cartels, public sector unions and a million vermin who have sucked the cow dry and are starting in on its tender meat.

Consider that in 2008, Obama pulled in 20 million from the health care industry. (McCain took in 7 million). Afterward, he conspired to pass a law which mandated that every American be forced to buy health insurance from the industry. There is no definite figure for how much money the industry will make from this, but it will be a whole lot more than the mere 20 million they invested in him. During the days of the robber barons, the government never mandated that everyone must buy a product from them. Private companies might have contrived such control over the marketplace, but the IRS was never enlisted to collect their bills for them.


How much money has flowed from the Obama Administration to its friends in the private sector in just the last year alone and how much of it was used to secure jobs for its allied unions, which they then kicked back to liberal politicians running for office.

Entire states are going bankrupt because of political trusts formed by politicians and public sector unions which pass money back and forth to each other in the plain sight of the taxpayers they are robbing blind.

This is not merely a concentration of wealth, but a ruthless concentration of power. The real money isn't coming from that top 1 percent, it's coming from unions, lobbies and companies which use political power to extract public money.

And that money goes to the party which is so determined to keep on extracting that money no matter what it takes.

The big government left keeps playing the class warfare card, but even the worst company in the world isn't as larcenously extortionate as the worst politician. Some of the greediest and abusive companies were either created by the government or operate in close partnership with it.

HMO's were created by the government. Banks fed off Fannie Mae and Freddie Mac's subsidized mortgages like vultures. Do we really need to go into insurance companies, defense contractors or Sallie Mae. AT&T is considered one of the worst companies in America, and it's also one of the biggest political donors. Is there a connection there? Only that companies close to the government don't need to worry as much about what the public thinks of them.

Hate the airlines? They've both been overregulated and subsidized into incompetence. Airlines have been bailed out and protected from competition too many ways to count, because of the unions riding on their coattails.

And those unions are destroying airline after airline, while the non-union airlines prosper.

American business is looking a lot like Soviet business did, full of companies with contempt for their customers, and an unctuous smile for the government. They know where the money is coming from. And in an era of cut throat price competition, and high labor and regulation costs, it's just easier for them to extract the public's money by going over their heads to the politicians. Don't feel like paying for any of it? It's no longer a free market in which individuals make economic choices, but a collective economy with government fixing prices and then turning around and taking more of your money to pay back the companies to cover the difference. That's how ObamaCare works.

The new trusts operate out of Washington D.C. for the benefit of the public. Much like the food markets of Venezuela or the hospitals of Cuba. The money goes back and forth, lobbyists, unions, politicians, consultants, contractors, activists and lunatics huddling together and passing bills that no one has read. And still the defenders of big government treat any calls for reform as a conspiracy of the rich. Yet the two richest men in America, Bill Gates and Warren Buffett, were holding fundraisers for Obama. And the tenth richest man in America runs one of the biggest bastions of liberalism. And number 14 on the list, George Soros, is the left's sugar daddy.

This isn't a battle of billionaires. Mere money no longer means what it once did. The billionaire is a dinosaur. The wealthiest men in America can't wait to get rid of their holdings. In the free market, money made you king. But under socialism, money just buys you access and leverage. The leverage to force every man, woman and child to buy your product.

The real concentration of wealth is no longer among men, but among institutions. Like electricity passing along copper wire, it jumps among unions, political machines, companies, non-profits and back again. Its function is to provide the motive power for the great beast of government to grind on. And the American taxpayer is left lying flat in the street.

16 comments:

Anonymous said...

The ability to levy a hidden wealth tax by way of hyperinflating the currency // officially sanctioned counterfeiting // mega-deficit spending operates as a narcotic on the political and crony classes.

Because the US Dollar is International Money -- Mega-Washington is actually able to -- stepwise -- export its taxes.

This is why the collapse is happening elsewhere, first.

It's NOT a coincidence that nations that super-abuse their own currencies discover that International Money sweeps in.

This is famously evident in the latest travail in Argentina. (An ironical name: the land of silver/ money / silver money!) Buenos Aires has hit the panic buttons. All serious transactions were being Dollarized. This essentially frustrates officialdom's ability to impose a wealth tax on liquidity.

THIS is the reason that the central government is imploding. The citizens, in a round-about-way, had cut its ability to raise revenue -- real world revenue. This flowed back as a concentrated debasement of the official currency -- as towards the end, only the dull and the poor were left to absorb the wealth losses.

&&&

Hyperinflation, as defined here, is NOT a flight from the national fiat currency. It's when ANY central government issues fiat currency/ digital currency to backstop its deficit spending.

Hyperinflation of the national currency ALWAYS starts out modest -- and typically in an era of either outright deflation or wartime. It gets its name for historical reasons: politicians become addicted to it and take it to the limit. That limit is only reached when everyone in sight is rejecting the currency and nominal prices are moving faster than the speed of light.

So, it's the End Stage drama that's fixed in the public mind. Between the first and the last, the government was sustaining the EXACT SAME ECONOMIC POLICIES.

By this standard, most of the planet is hyper-inflating their currencies.

Red China is the exception. She's merely inflating her currency. That inflation is ramping higher and quicker than America's hyperinflation.

Inflation is triggered by money creation within the commercial banking system. Because credit based money is destroyed by default and pay-downs, TPTB often push bankers into easy credit to stimulate macro-economic statistics.

This is but a part of the phenomena described by Daniel.

Both Inflation and Hyperinflation can range between nill and infinity. The former is dominated by credit created money -- in the private market. The latter is solely due to (government) credit and (government) currency being spewed out through a Spigot.

It's this Spigot effect that's causing wealth concentration to take-off like a rocket. Whereas commercial banks issue loans broadly through the entire nation -- spewing money out everywhere as a result.... The central government issues its credits/ debt to a select few (primary dealers) and spews the results upon favored players. (See Daniel, above)

This destruction of the currency has game ending impacts. Every Chinese dynasty since the creation of paper -- and paper money -- ended by savaging the currency. (Exceptions: Mongol invasions, etc.) Such debasements are the cause and consequence of massive cronyism, corruption, and show piece architecture. (The edifice complex is apparently a universal trait of the vainglorious. I give you the immense estate of Ukraine's ex-president.)

Congress is in narcosis -- a financial narcosis.

At the present, the prognosis is for a Philip Seymour Hoffman ending.

As Argentina shows, some societies never learn. Do NOT expect the dependency classes to figure any of the above out.

Concentrate on family.

blert

Louis Foxwell said...

There are times reading Daniel leaves me limp with anxiety. This is one such read. With power so concentrated and so uncontrolled by government can there be any hope of anything.

My only solution is to get off the grid or at least to have little more than a nodding acquaintence. The reality is they will get you if they want you. We are far beyond any hope.

Daniel, I will have nightmares tonight.

Daniel Greenfield @ the Sultan Knish blog said...

Louis, there's always hope and remember that unwieldy interconnected systems are the most likely to collapse. The American left hasn't constructed anything on the level of the USSR and that fell apart of its own accord.

Anonymous said...

Louis, Yes, it is bad, but sooner or later the power brokers will awake to the fact that they have been behaving like dogs who chase cars, what will they do with us when they catch us ? Tyrants and control freaks are not known for taking the long view of things, are they ?
sophie.

Anonymous said...

http://www.politico.com/story/2014/02/ralph-nader-book-103908.html?hp=r17

It seems Ralph Nader is thinking about the corporate state too.

Dennis Latham said...

Great article, and I feel it explains what is happening in a way anyone can understand. Our future seems to be the one that is happening in Venezuela.

Robin said...

Amen. I want to add the institution of school districts which live off of property taxes that must be paid or you lose the real estate you own. In place after place the accreditors are telling the school boards that they have no jurisdiction beyond hiring and firing the superintendent. We have EdLeader 21 where the large rich suburban districts are being shifted without the knowledge of taxpayers to the same Marxist theory of the mind developmental model that destroyed urban education.

And all the administrators know the next lucrative promotion that ensures the gold-plated taxpayer funded pension goes to who pushes this toxic model most aggressively. And the post-retirement work with foundations or tech companies wanting to do public-private partnerships.

And the politicians lust after the idea of making education about workforce development to meet the needs of their Big Business campaign contributors and combining it with economic development where they get to plan and reward with taxpayer dollars. And people wonder why their concerns over the Common Core get no traction in legislatures or Governor's offices.

And Daniel, there is a tremendous body of documentable evidence as I explained in my book Credentialed to Destroy that the USSR dissolved knowing that its premier Cold War weapon of using education in the West would be even easier to abuse in its absence. Using its psychological research on subverting the individual to the collective and its pedagogical techniques. I just explained the other day how the Common Core central push around deeper learning ties to Piotr Galperin's work.

We are getting the socialism and it is coming in most effectively and lastingly in invisible ways.

Anonymous said...

Most of us did not grow up in towns that resembled a Norman Rockwell painting. I did, in upstate NY..There were nice homes and really nice homes, a small variety of places of worship, and that was about it. There was the public school and the Catholic school, and they followed much the same curriculum. So in a certain sense, it could be assumed that most of the residents of my town held similar views..The answer to that particular scenario is almost always 'yes and no'. Even in that small piece of real estate, there were some fairly big disagreements. I recently read that a traffic calming circle was constructed, having been proposed over 30 years ago.

Now here we are with an enormous country increasingly filled with people who have next to nothing in common with even near neighbors, in terms of values, habits, or even language.
We are almost at the point that the only thing binding us together is anger, and there is not even enough of that as yet.. So many are still in thrall to the status quo, why should they be angry enough to risk their civil service job or their public pension?
Ridding ourselves of the corporatist politicians and their ruthless habits will only begin after many more oxen are gored. Americans in general, have learned far too well the habit of going along to get along.

Dan Kurt said...

Don't worry about eduction (primary and secondary). The home school movement is gaining year by year.The internet and computers permit children in increasing numbers to be educated cheaply and well.

For those that doubt Google: the Robinson curriculum.

Dan Kurt

K said...

"Ridding ourselves of the corporatist politicians and their ruthless habits will only begin after many more oxen are gored. Americans in general, have learned far too well the habit of going along to get along"

Having just re-read Thomas Paine's Common Sense I can't help but conclude that, in many ways, we have seen all this before. Most people still feel as if they have too much to lose. On our current path that will soon change.

meema said...

Dan Kurt,
Do not think for a minute that the agenda doesn't include going after home school once the Common Core, or name du jour, is firmly in place. The German family who fled to the US because home schooling is illegal are on very thin ice. The admin can't rule that they can stay because of persecution (which threatening to remove your children is persecution) because that would establish a precedent of siding with the freedom and right to home school.

Coming to a country near you. I recommend watching a PBS documentary The Greeks, Crucible of Civilization, if you want to see the script that is now unfolding. I always thought we were following in Rome's footsteps. Eye-opening.

mushroom said...

Powerful truths. Great comment by Blert as well.

Thank you.

Georgi Y. Dimitrov said...

So why there is no resistance in US to this form of slavery? Why slaves (the middle class) never stop giving their money to the government?

Anonymous said...

Georgi- why don't we just stop paying our taxes to the government? (1) Many, if not most, tax payments are automatically deducted from an employee's paycheck, and good luck getting a major corporation to participate in willful tax disobedience. (2) If everyone did it we'd create a movement and generate safety in numbers, but everyone won't do it ... and who wants to be the first and only protester with his neck sticking out to be chopped off? (3) Don't pay your tax? No problem, the IRS seizes and sells your assets. I currently have a tax lien on my house, and have been pulled for audits four years in a row, for basically no reason. It ain't fun.

Everybody's all big 'n brave on the Internet. In real life, not so much.

ELC said...

Official federal debt (Total Public Debt Outstanding) as of Feb. 27th is $17,426,891,428,702.45.

sonko nin said...

So good site.
economy

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