Wednesday, January 28, 2015

That giant sucking sound? The wealthy fleeing from pitchforks in jets

The wealthy need an escape plan? Economist Robert Reich brought this to my attention on his Facebook Page. Apparently, at a meeting in Davos, Switzerland, people are taking note that at least some hedge fund managers are making plans to get away from civil unrest around the world due to rising inequality. Have they lost their minds?

Or maybe they didn't notice that through scams like the LIBOR scandal, the housing bubble of 2006 or the low interest loans banks got at the Federal Reserve Discount Window shortly after the 2008 crisis, and other government bailouts, the 1% have amassed more wealth at the expense of others. After everyone else discovered what happened, they were might unhappy. These events brought about the Tea Party and the Occupy Movement.

Perhaps the 1% are unwilling to admit that through their lobbying, they have created an economy almost completely tilted towards the side of business rather than the consumer. This is, I believe the core of the problem with inequality.

If the wealthy among us are planning to flee, then they know that by their own hand, they have destroyed a democracy here and an economy worldwide. But maybe, they don't know how to stop and reverse without a reversal of fortunes.

For more than 30 years, we've trusted our governments, letting them deliver tax breaks and subsidies to business in the hopes that business would in turn create jobs. What did we get in return? A massive shift of income from labor to capital. Gigantic pools of cash hoarded offshore in the hopes that one day, the money can be repatriated as dividends and bonuses for C-class executives. We have done so much to get businesses to create jobs by giving them breaks and subsidies, and yet, they still leave us mired in recession levels of unemployment and wage stagnation. What we have now can best be described as The Conservative Nanny State. A state that takes care of business, not the consumer.

30 years is apparently not enough time to prove that neoliberal economics works, that's Trickle Down Economics to people who have been around long enough to see President Ronald Reagan in action. Supply side economics (another name for the same thing) doesn't work and never will because businesses will always seek to replace labor expenses with capital. That means cutting jobs or freezing wages for profit.

In that 30 years, so little has been done for the working class that they don't have the money to buy the goods and services that grow the economy. They have seen access to education, health care and economic mobility decline as wages stagnated. To add insult to injury, they have seen access to the polling place decline as well through laws intended to disenfranchise as many people as possible.

So, having made a mess of the United States economy, and other economies around the world, hedge fund mangers, billionaires and multi-millionaires are preparing to flee in the event of civil unrest? Not so fast. Do you really think you're going to get to your plane fast enough to escape the pitchforks if they come?

Considering the speed of social networks, it's not going to happen like they're planning. Even billionaire and early Amazon investor, Nick Hanauer agrees on this point. Besides, if even 300 million people get determined to find a fleeing billionaire, through social networking and sharing of information, they're going to find him. Information cuts both ways.

Why not figure out a solution that works for everyone? For example, there is a very close correlation between inequality and voter turnout. Why not make election day a national holiday so that everyone can participate? Another way to increase voter turnout is to get rid of the money primary, a system of selecting candidates described in Larry Lessig's book, The USA is Lesterland. In a nutshell, the largest donors to political campaigns get to decide who gets to run and win in the primaries. They determine the field of candidates the rest of us vote on. That is not a democracy. That is oligarchy. If people know they're voting for fellow citizens they can relate to, they're more likely to vote.

I know, finding solutions is difficult when you're the one who created them. Einstein figured this out long ago. This is not a problem that can only be solved by the 1%. This is a problem that everyone must participate in the solution to solve it.
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