Third Party & Independents Archives

Economic Armageddon Is Coming

Stop being a compliant consumer. Face the ugly truth. Do not get fooled by the stock market. Accept the need for the mistreated middle class to become the revolutionary class.

The British military establishment's most prestigious think tank sees what too few over-consuming Americans are willing to anticipate. Unjustified and mounting economic inequality is planting the seeds for global economic conflict.

Here is what the new report from the UK Defense Ministry's Development, Concepts and Doctrine Centre warned might happen by 2035. "The middle classes could become a revolutionary class. The growing gap between themselves and a small number of highly visible super-rich individuals might fuel disillusion with meritocracy, while the growing urban under-classes are likely to pose an increasing threat...Faced by these twin challenges, the world's middle-classes might unite, using access to knowledge, resources and skills to shape transnational processes in their own class interest."

Consider the wisdom of economist John Maynard Keynes: The rich are tolerable only so long as their gains appear to bear some relation to roughly what they have contributed to society. Think of it as proportional and justified economic success. This can be tolerated by poor and middle class people if they believe the economic system is fair and properly rewards those who work harder or have better capabilities. But truly obscene economic rewards angers people. When most prosperity and wealth is unfairly channeled to relatively few Upper Class people, it is only a matter of time until fuming, resentful people in the Lower Class decide enough is enough and revolt. Perhaps violently, if the political system remains controlled by the Upper Class.

A ton of data demonstrate how crazy our economic system has become where a relatively few receive astronomical gains that no rational person could see as justified. One study tracked down home ownership data for 488 CEOs in the S&P 500 Index set of companies. The typical home of the CEOs has 12 rooms, sits on 5.37 acres, and carries a $3.1 million price-tag. Companies big enough to rate S&P 500 status hiked their median CEO pay by 23.78 percent in 2006 to $14.8 million. In comparison, U.S. worker weekly wages rose just 3.5 percent in 2006.

Despite what you hear about the sagging housing market and the many people facing foreclosure, business at the top end of the U.S. housing market is booming. Sales of homes in the $5 million-and-up price range rose 11 percent last year, reports the Dallas-based Institute for Luxury Home Marketing. Ten residential properties sold for over $28 million in 2006. The most expensive in New Jersey sold for $58 million; it went to Richard Kurtz, the CEO of Advanced Photonix, a telecom supplier. In the “ultra-luxury market” a set of suites in New York’s fabled Plaza Hotel was converted last year into one-bedroom condos that start at $6.9 million.

From another study we learn that pay for American college presidents over the past decade has jumped seven times faster than pay for college faculty. In 1996, only one college president took home over $500,000. In 2006, 112 college presidents hit that mark. Meanwhile, after inflation, compensation for college professors increased just 5 percent since 1996. And college students have faced rapidly mounting tuition far higher than inflation rates.

CEOs are getting away with economic murder. Bob Nardelli, the CEO who departed Home Depot early this year, had an exit package worth $210 million. IBM CEO Sam Palmisano took home $18.8 million in 2006 and will receive $34.9 million in deferred pay and $33.1 million in retirement benefits when he leaves IBM. Even more extreme is the case of Occidental Petroleum CEO Ray Irani. The interest income alone on the $124 million that ended the year in Irani’s deferred-pay account totaled $679,396. The Los Angeles Times estimated Irani's total payoff for 2006 at $460 million. Leslie Blodgett, the top exec at cosmetics giant Bare Escentuals, collected $118.9 million in 2006, with most of that coming from the $117.7 million she cleared cashing out stock options. She received 4 million additional stock options before 2006 ended.

Economists Emmanuel Saez of the University of California at Berkeley and Thomas Piketty of the Paris School of Economics found that the richest 10 percent of the U.S. population received 44 percent of the pretax income in 2005. This was the highest since the 1920s and 1930s (average: 44 percent) and much higher than from 1945 to 1980 (average: 32 percent). With more than 140 million U.S. workers, that top 10 percent equals 14 million workers. The bottom half of that top 10 percent had incomes of about $110,000. That may not seem all that high, except that the overwhelming majority of Americans can never expect such income. And remember that many of these top 10 percent Americans are married to or living with equally highly paid people.

When it comes to obscene economic inequality, however, you must focus on the huge gains received by the richest 1 percent - some 1.4 million people. Their share of pretax income has gradually climbed from 8 percent in 1980 to 17 percent in 2005. Their average income was $371,000. Who is in the top sliver of richness? Economists Steven Kaplan and Joshua Rauh of the University of Chicago estimate that there were about 18,000 lawyers, 15,000 corporate executives, 33,000 investment bankers (including hedge fund managers, venture capitalists and private-equity investors) and 2,000 athletes who made roughly $500,000 or more in 2004.

Do those at the top pay their fair share of taxes? Middle class Americans, after nearly 30 years of tax-cutting, are now paying about the same share of their incomes in federal taxes that they paid before Ronald Reagan entered politics. In contrast, America's richest have seen the share of their incomes that goes to federal taxes cut by over half. That what happens in a failed democracy and the rich control the political system.

What the future holds for the victimized middle class will not only depend on the uncontrolled greed of the wealthy Upper Class and its control of the political system. It will also be linked to the coming tsunami of global warming impacts on climate, sea level, water supplies, crops and disease. There will be devastating impacts on hundreds of millions and perhaps billions of people worldwide. Lower Class people will be sacrificed – left to suffer the consequences. The rich will retreat to their walled, protected and well stocked havens.

Add to this scenario the inevitable collapse of the entire economic system. At some point it will not be controllable as it is now by those in banking and finance, able to manipulate it to sustain economic injustice. Eventually the inherent fundamental absurdities of the global economic system will prove unsustainable. The wealthy Upper Class will have siphoned off most of the world’s wealth and hoarded resources to maintain a luxury lifestyle.

What the future holds: Lower Class economic slaves fighting to survive in a medieval, ugly and bleak world that so many science fiction stories have portrayed. In that hell their best option will be to rise up and revolt against the rich and powerful Upper Class. With such a prospect, global class war on a sick planet, prevention is a priority. For us, that requires paying much more attention now to economic inequality, economic injustice, economic apartheid and the many attacks on the middle class. If not, we get Economic Armageddon along with environmental disaster.

Posted by Joel S. Hirschhorn at April 23, 2007 4:30 PM
Comments
Comment #218177

You are correct, such a situation does result in revolutionary forces.

Yet, teh super rich upper class has never been so few before.

The amount of wealth horded by the super rich has never been so little.

80% may seem big, but one must consider fuedal Europe, where the super rich Lords and Kingships possessed upwards of 90+% of the wealth and all of the land.

I think it will take some time to find out if this is really going to be a problem, and I don’t for see it happening in the next 20 years.

If it does happen it will probably go down in the SE Asia, where the numbers are more reflective of fuedal times.

Also, here in America the majority of super rich, generally turn into philanthropists, unlike India, Vietnam, Indonesia, or Mexico. Where the super rich just sit on their money and be rich.

The increase in pretax income must be compared to the increase in post tax income and also the the same to percentages of the incomes for the lower and middle class.

Mind you also that the middle class is the 30K - 60K range, not a bad range to be in really.

I do think you are correct that this will be a problem, after all it always is eventually.

I think the time line is a little more longer than is projected.

I beleive the same projection was made in the late seventies about what would happen in the 90s.

Granted we did almost reach that point, but we were able to avert and have been becoming more stable over the last decade or so, despite what media says.

Compare ‘05 to ‘95 and see the difference in poverty, crime, and unemployement. We are doing a lot better, and we are still getting better.

It is just going way slower than it should.

Good post though, really gets one thinking about our financial obligations to ourselves and our offspring.

Posted by: Bryan AJ Kennedy at April 23, 2007 5:00 PM
Comment #218192

So are professional sports players getting away with economic murder too? They get paid in that same range? Or is our capitalistic system working and we just don’t think it is fair.

I don’t seem the middle class victimized here. I would consider myself in that class. I am predicted to live longer, I have had some pretty great vacations by saving my money, my car is doing great with over 100,000 miles on it, my family can reach me on my mobile phone when needed, ;) etc.

I get tired of being called a victim. In my ignorance I must not see the evil the world has brought upon me. I would like to see more evidence of the suffering middle class tied to a happiness index. That would be quality evidence.

Posted by: Honest at April 23, 2007 8:39 PM
Comment #218193

Home ownership, median net worth & median income are at or near all time highs. More than half of American households own stock either directly or through mutual funds.

The poorest 20% of the population get more back in taxes than they pay and work the fewest hours of any of the income groups. The richest 20% puts in the most hours.

This is not France of 1789 or Russia in 1917. The poor would be too unskilled and lazy to pull off a decent revolution these days. If they eliminated the upper 50% of the population, who would do the work?

Posted by: Jack at April 23, 2007 8:44 PM
Comment #218201

The title of this thread made me think of this guy.

But in all seriousness, I fail to see why scenarios twenty years down the road imagined by a “think tank” of the UK Defense Ministry is any more credible than the generations upon generations of Marxist philosophers and economists who have been predicting the very same thing for nearly 150 years now.

It’s hard to believe that the middle class of the West are going to rise up and revolt on the basis of the things you mention. If somebody down the road owns two Italian automobiles and a ten million dollar house, it’s no reason for the guy driving a Japanese-made car who lives in a $250,000 house to rise up and rebel.

The middle class faces problems. If you don’t have ANY financial worries, you’re probably not part of the middle class. But almost all the things you mention have to do with ENVY, not deprivation.

Posted by: Loyal Opposition at April 23, 2007 10:17 PM
Comment #218202

Well said Loyal Opposition. Envy drives the need for equality. I prefer to look at it as an incentive system to drive greater accomplishment, harder work, etc.

Chinese car sales are huge, not entirely because of the need to get to work, but as a status symbol and to impress the girls. The need to impresse, differentiate and succeed is not part of any economy. It is human nature.

Posted by: Honest at April 23, 2007 10:40 PM
Comment #218209

A few of you above haven’t a clue what work is. To say the wealthiest work more hours is ludicrous. Work is a relative term. Does a welder get to charge his lunches at a fancy diner or hotel while conferring with the architect or designer of his welding project? C’mon, an awful lot of what he wealthy call work is really play for them. Many, if not most, are doing what they love to do, and often with other people’s money.

While our welder who puts in 40 years of 40 hours per week of breathing in heavy metals, crouching in odd or painful positions for up to 20 minutes at a time putting huge stresses on his bursa and joints, ends up dying younger, with a whole lot less time for doing what s/he enjoys in life.

It’s relative. Our nation could not prosper without financiers. But, too, our nation could not function without sanitation and janitorial workers. Both contribute about equally to the society in terms of its ability to function and continue. The market of supply and demand is the only mechanism which dictates that the compensation for one should be 100’s of thousand times more than the other.

But, that debate does not address the real issue facing America’s economy and political future. The U.S. is exporting far more wealth than it takes in from other nations. There is a limit to how far and how long such a trend can continue without major economic consequences.

And the economy is growing on the back of disposable commodities instead of real property with any durability. There is a limit to how long and how far that trend can continue as well.

Finally, there is the ever-present and growing national debt, borrowing against the future capacity to tax future citizens. If 10 years from now, our economy takes a big hit, with taxpayers already strapped to the wall by the national debt, our ability to borrow even more may be denied, especially if the world’s economy is also taking a huge hit.

Our past, since the Great Depression, had lying before it, untapped productivity and undeveloped export markets, which gave our economy agility and flexibility to meet future economic challenges like the Oil Embargo of the 1970’s. We are far more limited today in this regard, and will likely be even more limited as baby boom consumers begin to consume far more than they generate.

All the great civilizations enjoyed the status of being the greatest just before their decline into history. Needless to say, if Egypt, Ancient Greece, or Rome been able to see their demise as real, they would have responded very differently. But, that is the irony of history.

Decline is an event which defies common credibility by those in the greatest society, and lacking credibility, the people of those great civilizations refuse to respond appropriately to the changes that spell their decline. The common retort is always, “We have always recovered before”. That refrain precedes the decline of all great nations.

Posted by: David R. Remer at April 23, 2007 11:22 PM
Comment #218214

David, you’re right up to a point. But here’s how you’re wrong, and I know this from experience.

While the manager is taking a long lunch that he charges to a company expense account, the welders (or at least some of them) are putting their kids through college, and those kids will be the managers in the future.

What’s more, some of those welders are also investing, saving, and planning to start their businesses. Look at those individuals 5, 10, 15 years down the road. They’ll be having lunch with their former bosses. What’s more, they’ll be complaining that taxes are too high!

I actually know a person who is a welder at Boeing. She has no children, has no intention of starting a business, and is now near retirement. She owns a house with a swimming pool, drives a nicer car than I do, and is currently trying to decide where where to buy a vacation home.

Only in America.

Posted by: Loyal Opposition at April 23, 2007 11:40 PM
Comment #218224

David

What LO says is true.

A skilled worker is certainly not among the lowest 20% of the population. A skilled worker with good experience is probably making very good money.

Unskilled work has been steadily devalued by automation. When I used to do hard work, I loaded cement bags 12 hours a day. Today NOBODY does that. Big machines load the bags in minutes that a dozen of us took all day to do.

The lowest 20% of the income distribution is largely non-working population. Your paradigm is old. There really is not much of a working class left in the sense that you and I recall from our youth.

I was talking to a couple of loggers a couple days ago. They are hard working guys. They literally work whenever the sun is up, but they own their own equipment and the father and son team does most of the work themselves. They each clear around $80-100,000 a year. They look poor and they drive old trucks, but they are not revolutionary because they have a big stake in the U.S. THIS is the new working class.

Posted by: Jack at April 24, 2007 12:04 AM
Comment #218225
the welders (or at least some of them) are putting their kids through college

Wow! I’m in the wrong business. I’d have thought a software engineer with an advanced degree would make more than a welder, but putting my kids through college is going to be tight. Does this hypothetical welder (who must belong to a good union) have a spouse who also works?

Accept the need for the mistreated middle class to become the revolutionary class.

Solidarity, brother!

Posted by: American Pundit at April 24, 2007 12:06 AM
Comment #218236

Slightly off-topic, but welders actually don’t do that badly, especially if you consider that, like many families, their salaries represent only part of the total family income.

OCO

Posted by: Owl Creek Observer at April 24, 2007 6:37 AM
Comment #218238

Skilled tradespeople will earn their market rate. That’s likely to continue to trend up since our country seems to be obsessed with everyone going to college.

What I don’t understand is why everyone on Wall Street makes millions. Why isn’t there more competition for those dollars?

Posted by: Schwamp at April 24, 2007 8:39 AM
Comment #218241

“A few of you above haven’t a clue what work is. To say the wealthiest work more hours is ludicrous. Work is a relative term.

Yeah, It’s a relative term. Is the welder “working” when he’s going from job to job? Is he “working” when he stops on the way home to get materials for the job? Is the CEO “working” while he flies to Tokyo for the meeting? It is relative. I think on a whole, management does work more hours than craft.

“Does a welder get to charge his lunches at a fancy diner or hotel while conferring with the architect or designer of his welding project?”

It’s a legitimate deduction if he pays for it. In my experience, the architect or designer usually pays at these lunches.

“C’mon, an awful lot of what he wealthy call work is really play for them. Many, if not most, are doing what they love to do, and often with other people’s money.”

Sounds like a good idea if you can. Best advice I’ve ever gotten about work is to find something you love to do and find a way to make it pay.

I like to travel the US. So far I’ve seen 48 of our beautiful 50 states and the company paid every dime of my expenses. I’m doing what I love to do and doing it with other people’s money. By the way, I made 47K last year. Hardly rich.

“While our welder who puts in 40 years of 40 hours per week of breathing in heavy metals, crouching in odd or painful positions for up to 20 minutes at a time putting huge stresses on his bursa and joints, ends up dying younger, with a whole lot less time for doing what s/he enjoys in life.”

Being a tradesperson myself, I talk quite frequently with other trades as well as my own. Most craftsmen, welders, electricians, carpenters, etc. that I know don’t want the responsibility of management. They are happy to put in 40 hours per week with 2 breaks a day.

Posted by: tomd at April 24, 2007 9:15 AM
Comment #218258

It will be interesting to see exactly where the middle class is located. Nobody really seems to know. Democrats seem to think an income of 50,000 a year is middle class. Republicans say around 200,000 a year.
Personally , i cant see either group starting a civil war. Everyone in either class defined above has to realize the outcome will be nothing but bad for them and they stand to lose it all. The middle class of this country is living better than 90 percent of the world and they know it. We travel and we see some of the best places. And they are below our high standards of service and comfort. So i think we can forget a middle class based revolution any time in the near future.
Revolution is much more likely to be inspired by the current divisions being created by the press of this country in thier drive to make the news rather than report it.

Posted by: john at April 24, 2007 12:38 PM
Comment #218262

OCO,

One flaw in that pay scale: solderer & cutter are entry level positions that eventually lead to welder, so a welders pay would actually be higher.

;)

Posted by: Bryan AJ Kennedy at April 24, 2007 1:09 PM
Comment #218290

Amazing that nearly every conservative in this thread missed the entire point being contested. The wealthy DO NOT WORK MORE OR HARDER for their wealth than does a welder. HOPE I MADE IT EMPHATIC enough for you this time.

The wealthy go home and hire people to do their gardening, maintenance, make their beds, and cook their meals, tutor their kids etc. The Welder goes home and does all or most of these things their self. It is pure fabrication that the wealthy work harder or longer for their millions per year.

The wealthy are no more or less important to society than janitors and welders. The importance of their labor to society does not dictate their annual compensation. The day is coming with retired boomers when so much wealth will be held by so few hands, that consumers, out of dire necessity, will dramatically stop consuming. Then, everyone is going to lose, and the non-wealthy will be harmed by it.

And to those who say, “we won’t let that happen”, I say, we have been allowing this to happen for years knowing their is a limited window of opportunity to change course, and so far, we have done nothing to avert the perfect economic storm, emerging dominant foreign economies, the retiring of the baby boomers, and our ever more limited capacity to borrow our way out of the next big economic decline.

Posted by: David R. Remer at April 24, 2007 5:59 PM
Comment #218320

The predatory capitalist laws and policies that allow the economic inequalities that we are seeing today will cause a revolt. Whether that revolution will be bloody and violent or not is anyone’s guess. I believe it will hinge upon the outcome of the fight to restore democracy to this country, if this battle succeeds via the election process the revolt will not be bloody, if the election reforms required to level the playing field do not happen then bloodshed will be what is left. It wont be my generation but it will be my grandsons generation that will feel the brunt of these predators and will react accordingly. Its my hope the revolution will be without bloodshed, its my belief that it will only happen by bloodshed.

Posted by: j2t2 at April 24, 2007 9:37 PM
Comment #218330

It seems inevitable that a subject this large, this all-encompassing has devolved into a two-dimensional discussion of what the working-class has become—complete with swimming pools and vacations to Europe, albeit with older pick-up trucks in tow. And, as usual, the trivializing of such a serious issue is headed by the usual suspects.

It’s not unlike boiling the issue of welfare down to Cadillac-driving welfare queens, or abortion to apocryphal stories of aborting a baby to fit into a homecoming dress.

We are living on a planet with limited resources, a planet that can provide for human need, but not for human greed.

In none of this discussion is the spector of peak-oil discussed. And thusly, this discussion is vague, limited and skewed.

The problems of the middle class and the ongoing and growing gap between the oligarchy and the rest of us pales to insignificance in the enormous shadow of this issue. And it is important to realize that we as a nation only have the dimmest notion of what the end of the oil era means. We have yet to pose questions that go beyond the available answers.

Part and parcel of not asking the real questions, is our hubristic belief that technology will pull our fat out of the fire in time to enable things to soft-land into the next energy source without getting our collective hair mussed.

David’s mentioning of a limited window of opportunity regarding changing course economically, while valid and cogent, goes double for the narrowing window regarding peak oil.
We are already seeing the ramifications of such reality—in Iraq, in Nigeria, in Iran’s insistence in exploring nuclear energy, in the decline of production in the four giant oil fields that are the backbone of this oil era(Ghwar, Saudi Arabia, Daqing, China, Burgan, Kuwait, and Cantarell, Mexico). Interestingly, Cantarell production is declining between 10-15% per year, and Mexico is the number two supplier of foreign oil for the US. A collapse of the oil industry in Mexico will have dire consequences—and guarantee that many of Mexico’s economic refugees will go you-know-where.

Russia is starting to show decline in production, Iran is past peak, Indonesia (that poster child of graft and repression) is a net oil importer, the North Sea site is crashing.

The recent announcement of sixteen-twenty billion barrels of oil in the the deep Gulf of Mexico (and
located in Hurricane Alley) would supply about 10 months of the world’s demand, at the rate it’s being used.

The days of cheap oil are over—say goodbye to just-in-time, eighteen-wheeler-rotating, warehouse-on-wheels Walmart/Chinese capitalism. And without cheap oil to lubricate it’s vital parts, say goodbye to the corporate capitalist’s wet dream, too: globalization.

That the US has 170,000 troops sitting on the second-largest deposits of oil in the world is small comfort, when one considers that production is half what it was under Saddam—after four plus years of occupation by “shock-and-awe.” Somehow, I don’t think the natives are all that awed anymore.

This discussion doesn’t even include the house-of-cards,jive-economy predicated on huge amounts of ponzi-schemed leveraged and massaged securities and other such delusional financial “instruments” that have no connection to any real financial reality. As Jim Kunstler says:

Finance has been trending away from economic reality since the Ronald Reagan era on an accelerating basis. By this I mean the role of finance no longer represents sets of mechanisms and institutions designed to raise legitimate capital for investment in legitimate productive activities. Finance is now an end in itself, essentially a racket. The capital is no longer capital, i.e. genuine wealth accumulated from previous productive activities. Now it is jive-capital: notional “wealth” spun out of activities that are fundamentally not productive — for instance, sub-prime mortgages bundled into tradable securities.

We have no concept of what we are facing—in total keeping with everything else that is delusional about this country and it’s politics. In short, the lack of real assessments about our economic, political and environmental future as a nation and a species, is breathtaking in it’s halucinations.

Posted by: Tim Crow at April 24, 2007 10:20 PM
Comment #218385

David, it is obvious you have never run a business of your own. I have. I worked 70 hour weeks, put up every single dime i owned and in the first couple of years i didnt see much return. I became a people manager, a materiel manager, a clock manager, an estimator, a planner ect. I was the first one on the job and the last one to leave. Not to mention the education and the cost in time and money to get it.
Its time to consider where you might work if there were no “rich” people to employ you.

Posted by: john at April 25, 2007 9:33 AM
Comment #218407

David,

I don’t think that most of the conservatives missed the point. They disagreed with it. Sorry you don’t get to have the final say on whether you are right or wrong here.

So some questions for you. Is it work when the manager is waking up at night worrying about whether he can make “his numbers” or “keep the project on track”, or worse yet, “how he is going to fire a collgue” while the welder sleeps soundly?

Is it work when the manager who has to travel 8 states in 5 days and do 10 business meals and misses talking to his children for the week and is reduced to looking at pictures on the laptop for quality time, while the welder is home by 6 and gets to get a game of catch in before dinner?

There are vastly different lives, with pro’s and con’s. People make those choices in most cases. In the case of the talented and educated, they get more choices. Is that fair? I think so, but it is certainly not equal.

More to the point of the main post, revolutionary conditions are not financially driven. This was a major flaw in Marx’s argument. If you want a more rounded theory check out Theda Skocpol’s “States and Social Revolutions”. The modern theories of revolution usually offer economics only as a component to an overall theory.

Posted by: Rob at April 25, 2007 12:50 PM
Comment #218421

Correction - More to the point of the main post, revolutionary conditions are not financially driven. Should have read, More to the point of the main post, revolutionary conditions are not allfinancially driven.

Posted by: Rob at April 25, 2007 3:22 PM
Comment #218468

Joel:

Your thesis is pretty much right on in the growing inequality. I disagree with the armageddon talk. I do however agree completly that the inequality will be addressed. Economic events tend to move in cycles along a mean. Now that the inequity is near extremes it would be logical to conclude that they will narrow.

I wouldn’t subtract much, but I would add. If you follow the money you will find that corporate profits are near all time highs as a percentage of GDP. US corporations have done very well by investing overseas and helping the rest of the world enjoy those material benefits. Profits are coming home in billions of dollars of revenue growth.

Corporate america has rarely been in a position with so low of debt, so much cash, and so much of a percentage of stock ownership.

This issue should favor the democrats. The one who wins the midddle usually wins.

Craig

Posted by: Craig Holmes at April 25, 2007 10:43 PM
Comment #218829

Rob, your comment defies even Republican knowledge and wisdom. The Middle Class is what educated and scholarly Republicans like Gingrich and even some not so educated like Bush for example, attribute to the stability and absence of revolution in modern democracies.

So, no, you are wrong. I am right, along with Adam Smith, Gingrich, and others, revolutions are generally financially driven. The mini revolution of the 2006 elections was partly driven by financial perceptions of voters, specifically that their children were not going to be better off under Republicans, polls showed.

Speaking of Adam Smith, have you read his Theory of Moral Sentiments? One cannot understand the dynamics and reason for modern democracy conjoined with mixed economies (capitalism and socialism) in the U.S., and Europe, without his wisdom in this precursor to Wealth of Nations.

Posted by: David R. Remer at April 30, 2007 3:37 PM
Comment #218968

David,

Perhaps you missed my immediate clarification that revolutions are not all financially driven, there are other factors. Those other factors are important to whether a revolution will happen.

My “even republican” education on this topic has been informed by my education in sociology which included two classes specifically on revolutions. There are many theories on why revolutions occur. The more modern of these look beyond mere economics to explain why revolutions do not occur in destitute economies but do occur in those where there is an upswing. If you took even a passing glance at the work of Theda Skocpol, then I think that you would have a different thought. She has her critics, mostly over her view of the “state” being an independent actor from the populace. However, I don’t think even her critics would dispute that it is a seminal work on revolutions.

Marxist theory was among the first that took on revolutions. It has some valid observations, but is caught short in the fact that it is a telological theory that has the result of the revolution recieving more focus than the genesis or the process.

I’m not sure what the rest of your post was addressing. I don’t think I referred to Smith at all, you did then asked and answered your own question. As to Smith, I haven’t spent much time with either. My economics training was limited to the 101 variety. My classic basis is instead in Marx, Weber, and Durkhiem. I don’t feel short-sheeted by missing Smith, but I may get back to him at some point.

Right now more current interests lie more with history than with either economics or political philosophy classics, so I doubt I’ll get to it real soon, but I’ll put it on the list, if I decide to back in that direction.

I’m guessing by your tone that you were annoyed by the first 3 paragraphs of my initial response rather than the last one and the subsequent correction. I normally try not to make such personal statements in this forum, but your statement that, “Amazing that nearly every conservative in this thread missed the entire point being contested. The wealthy DO NOT WORK MORE OR HARDER for their wealth than does a welder. HOPE I MADE IT EMPHATIC enough for you this time.” deserved a response.

It is one thing to have an opinion, it is another to deny the opinion of others. I disagree with your opinion. I tried to ask the same kinds of questions that you did to show my disagreement. If this offended you, I apologize. But I have to ask you if that is the case, why do you think it is ok to take the same tactic with those who disagree with you?

Posted by: Rob at May 1, 2007 6:35 PM
Comment #219170

Rob, you can deny reality all you wish. But, the fact is, the wealthy have far more leisure and pleasure time than the non-wealthy. You can deny it all you wish. That is your prerogative. But I have worked all my life as a non-wealthy person and I have worked close with some who were far wealthier. They work no more than non-wealthy workers do. Like I said, the welder’s work doesn’t end when they go home. The wealthy can afford to hire others to insure their work does end when they go home if that is what they wish.

Reality! It is so unreal for some folks they just can’t acknowledge it. It is a cognitive dissonance contest between perceptual choice that gives comfort and reality which doesn’t. A common phenomena throughout all cultures and societies. A key defense and survival mechanism against insanity and neurosis to be sure. But, only at the individual level. At the national level, such denial of reality has all kinds of unintended consequences as Iraq is ample proof of.

Posted by: David R. Remer at May 2, 2007 11:35 PM
Comment #219722

David,

Your reality doesn’t have much meaning without definitions. What is wealthy? Is it an income over 100K, or is it having enough wealth that there are no financial concerns or limits?

The two rest on a long line from the comfortable but hard working life to the true wealthy. Where do you draw the line is where it makes the difference. If you draw it at the near point, then I will continue to disagree with you. If you draw it at the far point, then I will conceed your argument. If somewhere in between, then we will probably start to talk about shades of gray.

I believe those at the near point work harder (or longer if you prefer) than the welder and don’t have the financial freedom in most cases to forgo all of the daily chores of life as you seem to think.

Btw, I still haven’t figured out where you stand on the more general topic of revolution. I offered up quite a bit there for you to respond to, yet you continue to focus on the less interesting piece of the discussion of who has it harder. Where do you fall?

Posted by: Rob at May 7, 2007 1:20 PM
Comment #249616

Don’t believe one optimistic word from any public figure about the economy or humanity in general. They are all part of the problem. Its like a game of Monopoly. In America, the richest 1% now hold 1/2 OF ALL UNITED STATES WEALTH. Unlike ‘lesser’ estimates, this includes all stocks, bonds, cash, and material assets held by America’s richest 1%. Even that filthy pig Oprah acknowledged that it was at about 50% in 2006. Naturally, she put her own ‘humanitarian’ spin on it. Calling attention to her own ‘good will’. WHAT A DISGUSTING HYPOCRITE SLOB. THE RICHEST 1% HAVE LITERALLY MADE WORLD PROSPERITY ABSOLUTELY IMPOSSIBLE. Don’t fall for any of their ‘humanitarian’ CRAP. ITS A SHAM. THESE PEOPLE ARE CAUSING THE SAME PROBLEMS THEY PRETEND TO CARE ABOUT. Ask any professor of economics. Money does not grow on trees. The government can’t just print up more on a whim. At any given time, there is a relative limit to the wealth within ANY economy of ANY size. So when too much wealth accumulates at the top, the middle class slip further into debt and the lower class further into poverty. A similar rule applies worldwide. The world’s richest 1% now own over 40% of ALL WORLD WEALTH. This is EVEN AFTER you account for all of this ‘good will’ ‘humanitarian’ BS from celebrities and executives. ITS A SHAM. As they get richer and richer, less wealth is left circulating beneath them. This is the single greatest underlying cause for the current US recession. The middle class can no longer afford to sustain their share of the economy. Their wealth has been gradually transfered to the richest 1%. One way or another, we suffer because of their incredible greed. We are talking about TRILLIONS of dollars which have been transfered FROM US TO THEM. All over a period of about 27 years. Thats Reaganomics for you. The wealth does not ‘trickle down’ as we were told it would. It just accumulates at the top. Shrinking the middle class and expanding the lower class. Causing a domino effect of socio-economic problems. But the rich will never stop. They just keep getting richer. Leaving even less of the pie for the other 99% of us to share. At the same time, they throw back a few tax deductible crumbs and call themselves ‘humanitarians’. Cashing in on the PR and getting even richer the following year. IT CAN’T WORK THIS WAY. Their bogus efforts to make the world a better place can not possibly succeed. Any ‘humanitarian’ progress made in one area will be lost in another. EVERY SINGLE TIME. IT ABSOLUTELY CAN NOT WORK THIS WAY. This is going to end just like a game of Monopoly. The current US recession will drag on for years and lead into the worst US depression of all time. The richest 1% will live like royalty while the rest of us fight over jobs, food, and gasoline. So don’t fall for any of this PR CRAP from Hollywood, Pro Sports, and Wall Street PIGS. ITS A SHAM. Remember: They are filthy rich EVEN AFTER their tax deductible contributions. Greedy pigs. Now, we are headed for the worst economic and cultural crisis of all time. Crime, poverty, and suicide will skyrocket. SEND A “THANK YOU” NOTE TO YOUR FAVORITE MILLIONAIRE. ITS THEIR FAULT. I’m not discounting other factors like China, sub-prime, or gas prices. But all of those factors combined still pale in comparison to that HUGE transfer of wealth to the rich. Anyway, those other factors are all related and further aggrivated because of GREED. If it weren’t for the OBSCENE distribution of wealth within our country, there never would have been such a market for sub-prime to begin with. Which by the way, was another trick whipped up by greedy bankers and executives. IT MAKES THEM RICHER. The credit industry has been ENDORSED by people like Oprah Winfrey, Ellen DeGenerous, Dr Phil, and many other celebrities. IT MAKES THEM RICHER. Now, there are commercial ties between nearly every industry and every public figure. IT MAKES THEM RICHER. So don’t fall for their ‘good will’ BS. ITS A LIE. If you fall for it, then you’re a fool. If you see any real difference between the moral character of a celebrity, politician, attorney, or executive, then you’re a fool. No offense fellow citizens. But we have been mislead by nearly every public figure. WAKE UP PEOPLE. THEIR GOAL IS TO WIN THE GAME. The 1% club will always say or do whatever it takes to get as rich as possible. Without the slightest regard for anything or anyone but themselves. Reaganomics. Their idea. Loans from China. Their idea. NAFTA. Their idea. Outsourcing. Their idea. Sub-prime. Their idea. High energy prices. Their idea. Obscene health care charges. Their idea. The commercial lobbyist. Their idea. The multi-million dollar lawsuit. Their idea. The multi-million dollar endorsement deal. Their idea. $200 cell phone bills. Their idea. $200 basketball shoes. Their idea. $30 late fees. Their idea. $30 NSF fees. Their idea. $20 DVDs. Their idea. Subliminal advertising. Their idea. Brainwash plots on TV. Their idea. Vioxx, and Celebrex. Their idea. The MASSIVE campaign to turn every American into a brainwashed, credit card, pharmaceutical, love-sick, celebrity junkie. Their idea. All of the above shrink the middle class, concentrate the world’s wealth and resources, create a dominoe effect of socio-economic problems, and wreak havok on society. All of which have been CREATED AND ENDORSED by celebrities, athletes, executives, entrepreneurs, attorneys, and politicians. IT MAKES THEM RICHER. So don’t fall for any of their ‘good will’ ‘humanitarian’ BS. ITS A SHAM. NOTHING BUT TAX DEDUCTIBLE PR CRAP. In many cases, the ‘charitable’ contribution is almost entirely offset. Not to mention the opportunity to plug their name, image, product, and ‘good will’ all at once. IT MAKES THEM RICHER. These filthy pigs even have the nerve to throw a fit and spin up a misleading defense with regard to ‘federal tax revenue’. ITS A SHAM. THEY SCREWED UP THE EQUATION TO BEGIN WITH. If the middle and lower classes had a greater share of the pie, they could easily cover a greater share of the federal tax revenue. They are held down in many ways because of greed. Wages remain stagnant for millions because the executives, celebrities, athletes, attorneys, and entrepreneurs, are paid millions. They over-sell, over-charge, under-pay, outsource, cut jobs, and benefits to increase their bottom line. As their profits rise, so do the stock values. Which are owned primarily by the richest 5%. As more United States wealth rises to the top, the middle and lower classes inevitably suffer. This reduces the potential tax reveue drawn from those brackets. At the same time, it wreaks havok on middle and lower class communities and increases the need for financial aid. Not to mention the spike in crime because of it. There is a dominoe effect to consider. IT CAN’T WORK THIS WAY. But our leaders refuse to acknowledge this. Instead they come up with one trick after another to milk the system and screw the majority. These decisions are heavily influensed by the 1% club. Every year, billions of federal tax dollars are diverted behind the scenes back to the rich and their respective industries. Loans from China have been necessary to compensate in part, for the red ink and multi-trillion dollar transfer of wealth to the rich. At the same time, the feds have been pushing more financial burden onto the states who push them lower onto the cities. Again, the hardship is felt more by the majority and less by the 1% club. The rich prefer to live in exclusive areas or upper class communities. They get the best of everything. Reliable city services, new schools, freshly paved roads, upscale parks, ect. The middle and lower class communities get little or nothing without a local tax increase. Which, they usually can’t afford. So the red ink flows followed by service cuts and lay-offs. All because of the OBSCENE distribution of bottom line wealth in this country. So when people forgive the rich for their incredible greed and then praise them for paying a greater share of the FEDERAL income taxes, its like nails on a chalk board. I can not accept any theory that our economy would suffer in any way with a more reasonable distribution of wealth. Afterall, it was more reasonable 30 years ago. Before Reaganomics came along. Before GREED became such an epidemic. Before we had an army of over-paid executives, bankers, celebrities, athletes, attorneys, doctors, investors, entrepreneurs, developers, and sold-out politicians to kiss their asses. As a nation, we were in much better shape. Strong middle class, free and clear assets, lower crime rate, more widespread prosperity, stable job market, lower deficit, ect. Our economy as a whole was much more stable and prosperous for the majority. WITHOUT LOANS FROM CHINA. Now, we have a more obscene distribution of bottom line wealth than ever before. We have a sold-out government, crumbling infrastructure, energy crisis, home forclosure epidemic, 13 figure national deficit, and 12 figure annual shortfall. The cost of living is higher than ever before. Most people can’t even afford basic health care. ALL BECAUSE OF GREED. I really don’t blame the 2nd -5th percentiles in general. No economy could ever function without some reasonable scale of personal wealth and income. But it can’t be allowed to run wild like a mad dog. ALBERT EINSTEIN TRIED TO MAKE PEOPLE UNDERSTAND. UNBRIDLED CAPITALISM ABSOLUTELY CAN NOT WORK. TOP HEAVY ECONOMIES ALWAYS COLLAPSE. Bottom line: The richest 1% will soon tank the largest economy in the world. It will be like nothing we’ve ever seen before. The American dream will be shattered. and thats just the beginning. Greed will eventually tank every major economy in the world. Causing millions to suffer and die. Oprah, Angelina, Brad, Bono, and Bill are not part of the solution. They are part of the problem. THERE IS NO SUCH THING AS A MULTI-MILLIONAIRE HUMANITARIAN. EXTREME WEALTH MAKES WORLD PROSPERITY ABSOLUTELY IMPOSSIBLE. WITHOUT WORLD PROSPERITY, THERE WILL NEVER BE WORLD PEACE OR ANYTHING EVEN CLOSE. GREED KILLS. IT WILL BE OUR DOWNFALL. Of course, the rich will throw a fit and call me a madman.. Of course, they will jump to small minded conclusions about ‘jealousy’, ‘envy’, or ‘socialism’. Of course, their ignorant fans will do the same. You have to expect that. But I speak the truth. If you don’t believe me, then copy this entry and run it by any professor of economics or socio-economics. Then tell a friend. Call the local radio station. Re-post this entry or put it in your own words. Be one of the first to predict the worst economic and cultural crisis of all time and explain its cause. WE ARE IN BIG TROUBLE.

Posted by: Worried American at March 31, 2008 3:46 PM
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