If you haven’t already read it, you might want to celebrate this Labor Day by reading Citigroup’s infamous 2005 Plutonomy memos, in which they advise investors that America is no longer a democracy as much as it is a plutonomy in which “economic growth is powered by and largely consumed by the wealthy few.”
At the heart of plutonomy, is income inequality. Societies that are willing to tolerate/endorse income inequality, are willing to tolerate/endorse plutonomy.
That pretty much describes the United States in the 21st century. The rich continue to get richer, consuming a larger and larger chunk of the GDP, as wages for working and middle class families continue to stagnate or drop, largely due to the global labor pool keeping wage inflation in check, and profits rising. And according to Citi, it’s only getting worse (or in their eyes, better).
But it’s not inevitable.
RISKS — WHAT COULD GO WRONG?
Our whole plutonomy thesis is based on the idea that the rich will keep getting richer. This thesis is not without its risks. For example, a policy error leading to asset deflation, would likely damage plutonomy. Furthermore, the rising wealth gap between the rich and poor will probably at some point lead to a political backlash. Whilst the rich are getting a greater share of the wealth, and the poor a lesser share, political enfranchisement remains as was – one person, one vote (in the plutonomies). At some point it is likely that labor will fight back against the rising profit share of the rich and there will be a political backlash against the rising wealth of the rich. This could be felt through higher taxation (on the rich or indirectly though higher corporate taxes/regulation) or through trying to protect indigenous laborers, in a push-back on globalization – either anti-immigration, or protectionism. We don’t see this happening yet, though there are signs of rising political tensions. However we are keeping a close eye on developments.
“One person, one vote.” That’s what the very wealthy fear most… that one day “labor will fight back” against the growing economic imbalance that is destroying our nation for the other 99% of us. Chew on that as you’re enjoying your Labor Day BBQ.
Music to the ears of “lostinhisownasshole” and “thejesusownbutthole…mr. cynical”…
Plutopia. Brought to you by “The REAL Jesus, Inc.”
Yay.
We – the non-rich – need your help – the rich – in helping to restart our American consumer economy. What could be more patriotic than that?
This great country, the land of the free and home of the brave, has enabled folks from all walks of life to improve themselves and the lucky few to become fabulously rich.
Why do the rich hate America so much?
Just want to remind you guys…November is coming.
Barack Hussein Obama is the best thing to happen to Conservatism since Jimmy Carter. You guys will be out of power for the next 50 years.
THIS is what needs to happen…
From Digby…http://digbysblog.blogspot.com.....d-you.html
http://onenationworkingtogether.org/index.php
Let’s watch the cheap labor anti-Americans conservative pricks get all apoplectic over this…
I like Michael Moore’s take on these memos in Capitalism: A Love Story, well worth checking out, he comes to a similar conclusion.
RISKS — WHAT COULD GO WRONG?
1) Dollar could crash: Done.
2) Global labor costs could rise: Done.
3) Large Corporations lose profitable business to smaller and more nimble businesses: Happening while I type.
Basically these folks are on their last legs, relying on what little monopoly power they can grab to make a buck. With a little push back from us, their safe little world will crumble.
@3
Odd that you feel need to remind us; your confidence is underwhelming.
Hey Goldy–
How about some Labor Day predictions for the November Elections?
This is one man’s opinion who knows more than all you KLOWNS rolled into one Mega-KLOWN.
Chew on this–
http://www.rasmussenreports.co.....redictions
And Happy Labor Day to the few of you KLOWNS who have an actual job.
Goddamn!
That is precisely what my douchenozzle brother-in-law declared back in 2000 after the Supremes broke the tie.
Two stunningly costly and useless military adventures, several major indictments, a flooded U.S. metropolis, a handful of hookers, torture camps, an airport bathroom stall and a major economic collapse later he finally quieted down. But he’s been perking up again lately.
Is that you Brucie? I’ve got something for you to stuff into your mouth to hold you over until your Randian supermen fuck things up again.
The douchenozzle @8 hears the dog whistle and obediently performs his duty spouting the sayings he’s memorized. Good doggie…here’s your treat.
Ironic that the big complaint of the Right this season is the D’s bailed out big banks (which didn’t happen, of course). But would they question why big finance and Wall Street are pouring money into the R’s coffers?
I know, I know….that would require a functioning empirical thought process.
Related to growing disparities:
http://www.huffingtonpost.com/.....06258.html
Cheap oil is one of the main problems. When transporting slave labor goods from the Orient to the US, the cost advantage of the slave labor becomes moot as the price of oil rises.
Maybe we could interest savvy investors like Cynical in some refitted Clipper ships.
@3 Dream on, rube.
Now you know why the rich spend billions on propaganda aimed at getting the ignorant among us to vote against their own self-interest.
globull worming! spittle froth….bush lied! froth spittle….globull worming! spittle spittle….the evul rich! froth froth….globull worming! spittle froth froth.
..and so it goes.
One of the meme of the conservatives is that the poor are lazy and it’s easy being poor. That the poor can upgrade to middle class or rich if just put their minds to it. The fact that they are still poor means they are just lazy.
I thought we did a good job of debunking that.
Here’s another meme I’d like to explore. Why is it important to have a large stable middle class? I did some quick searching and a rough consensus is middle class is $40,000 and $95,000, but obviously location is a factor. 95K in Fargo ND has more spending power than New York City. Middle class also means job security.
Why is it important to have a large stable middle class?
What are pros and cons of having a big middle class?
Of course, the ever-increasing gap between the ultra-rich and the rest of us was pretty easily forecast in the 1980’s, when the GOP was pushing for tax cuts based on the “trickle-down” theory of economics.
Funny how it works. The middle-class (and the working poor) want jobs in order to earn a living by their hard work and skills. The wealthy want tax cuts, stock options, and bonuses as an “incentive” before they may – or may not – give the rest of us the priviledge of scrounging a living working for them.
It’s funny how cyn keeps pushing rasmoosen, as if we didn’t know that they’re polls by conservatives, designed to tell conservatives what they want to hear.
The poor spend most everything they have on bills, they don’t have much discretionary spending left over. They don’t help the economy much.
Middle class people can cover bills, savings and still have discretionary spending left over to buy consumer goods and luxuries.
The rich have enough for bills, savings, and all the discretionary spending they can do. They help the economy in pockets but they cannot be everywhere
From a purely economic standpoint, this is why we need a huge bell curve of a middle class
The poor person doesn’t have the disposable income to buy a boat.
A middle class person making 75 k goes and buys a boat or go to Disneyland one year
The rich person, making 2 mill, is going to buy 26 boats or go to Disneyland 26 times?
The ultra rich person, making 100 mill, is going to buy 1333 boats or go to Disneyland 1333 times in that year?
You get the most money spread around, from the middle class.
re 15:
I think the closest thing we have had to that sort of manipulation of the public was the ORANGE ALERTS around election times.
Let’s see. Who was president then?
..and so it goes………………….=:}
Democrats: Bringing a book to a knife fight.
Here we go!!!
http://www.dailykos.com/storyo.....-Labor-Day!
Here is website that breaks down the wealth (financial, land, investment) and debt ratios in the U.S.: http://sociology.ucsc.edu/whor.....ealth.html and this research done by a major public university in California was updated as of August, 2010. Over 84% of the financial wealth in the U.S. is controlled by the top 20% with over 82% of the debt carried by the lower 80%. As you get into the report, the numbers just get more terrifying. And, as we all know, money is power! Look at what the Koch brothers (of Koch Industries) have almost single-handedly done by funding and bringing to life (in all their ugliness) the Tea Party groups (their dad was the mastermind of the John Birch Society so guess the apples did not fall far from that tree.) Read the New Yorker magazine article about the Koch brothers and then weep some more: http://www.newyorker.com/repor.....fact_mayer
They are undermining our democracy simply for their own profit and laughing all the way to the bank (and with the bankers/investment brokers/insurance companies/oil & energy companies, etc) all the while taking advantage of TARP funds, Obama Health Care, etc.
SCUM!