monitoring the abyss

Tinkering at the edges will not solve the fundamental problem -- we have a worldwide wealth system that requires most people to work for a comparatively small handful of people, to their own detriment.

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As I've noted before, people with very large paychecks cannot possibly produce "value" sufficient to justify the transfer of work from others to them -- represented by the very large paychecks.

Most financial players do not understand the moral bankruptcy under which the function. They are just "clever with money" without connecting what their accumulation of vast wealth means in terms of allocation of human productivity. (All for them, nothing for anyone else.)

Talking Points Memo provides this important graph that makes it easy to visualize precisely what has happened. Following 1980, the point at which policies were adjusted to favor concentration of wealth in ever fewer hands, more than half of the the U.S. GDP shifted to the "financial" sector. Specifically what this means is that over half of the productivity of the economy was placed in the hands of people who do not produce anything whatsoever.

In real terms, that means that actual productive workers were left to survive on 1/2 of their own productivity. This was offset, of course, by shifting the burden to foreign countries such as China. Although most Americans received only a small part of the pie, we were effectively also "part of the financial elite" -- in the sense that Chinese workers were receiving only a very tiny portion of their own productivity and the rest was making its way to the U.S.

To some degree, technology transfer made this possible. The Chinese workers were receiving a small portion of their own productivity, but it was nevertheless greater in total value than they were receiving previously at a higher percentage of their work. This is due to the substantial increase in their personal productivity occasioned by new technologies imported to China. (Or, to some degree, developed there as well.)

But, overall, the inequity is not sustainable. The net effect of a global policy that favors wealth accumulation in tiny percentage of the population is to drive the balance of all populations into the same relative poverty. For US workers, that means substantial downward mobility, since the baseline is the subsistence level of the Chinese, Indian and other world populations.

The "New Deal" policies resulted in a significant adjustment of wealth accumulation that reduced the relative inequity in the U.S. to a much lower level than its earlier peak near the turn of the century.

The present policies, while insane in sheer monetary numbers, ignore the underlying "real" problem. The reality is that too much human productivity is being allocated to to small a number of mega-wealthy individuals. Until that inequity is addressed, the world economy will remain in abysmal state.

Those in power persist in the belief that there is some sort of solution that can be achieved by tinkering with accounting ledger entries -- while continuing to maintain the social policies that fed the concentration of wealth in the first place.

The fallacy is the meme that government has somehow been "neutral" in all this; or that it has in fact, merely "deregulated" and allowed market forces to rule.

Nothing could be further from the truth. The concentration of wealth is created by and sustained by extreme wealth-transfer governmental policies, the foundation of which is imposition of rule through violence. That can be seen in the massive US prison system and in its constant perpetual wars. The public does not, in general, support the violence of wars (absent constant propaganda and nationalistic chest-pounding) -- and as a result both the Democratic congress (in 2006) and the Obama presidency (in 2008) were the expression of the public intent that war should be ended.

Notably, both the Democratic congress and the Obama administration persist diligently in support of the violent state, over the substantial voter protest represented by the two elections. For instance, with respect to the police state, the top question for Obama in his recent online "town hall meeting" addressed legalization of marijuana.

Obama merely dismissed the question out of hand.

Secondly, Obama continues to escalate the US occupation of Afghanistan and assaults on Pakistan, without any rational basis for doing so. The wars are contrary to the morality of the vast majority of the US population (as expressed by recent voting) and contrary to US national interests.

Obama and his chief of staff recognize this and, consistent with Rahm Emmanuel's prior writings, are moving forward incrementally toward compulsory national service. Along with being slavery -- and thereby coercing vast numbers of workers to work at incomes well below the reasonable market rate for such services -- the purpose of national service is generally to create an ongoing propaganda machine to maintain "nationalistic" fervor. Naturally, some portion of the compulsory national service will be channeled into providing cannon fodder for the insane military adventures, as reasonable people do not willingly put themselves in harm's way for a small wage and for no discernible purpose.

Obama supporters are churning out endless propaganda denying that the "national service" bill working its way through congress has anything to do with "compulsory" national service -- insisting on casting the new law as a way of both alleviating unemployment and local infrastructure problems. If the law is viewed in a vacuum, one can agree that THIS law may well serve that purpose.

But, given that Democrats have been talking about a compulsory draft for several years now and also given the explicit writings of Emmanuel call for compulsory nation service, it's ridiculous to try isolate the present bill from a much more ambitious overall plan. One portion of that plan is something like 50 hours annual compulsory community service for high school and college age people. Such an approach inures the next generation to a social convention that involuntary servitude to the state is socially acceptable. It also provides an opportunity to propagandize young minds at their most impressionable time with severe "Nationalism" which will in turn foster broad public support for the continued ongoing use of violence to maintain the concentration of wealth in a small number of hands.

Anyone who still thinks capitalism and "free marketplace" have anything to do with US governmental policy are obviously incapable of paying minimal attention to national events. The government concedes that without unprecedented government intervention, the entire edifice of the financial sector would come tumbling down. Yet they persist in convoluted and nonsensical arguments such as "too big to fail" to justify astronomical wealth transfers to the wealthy elite.

If the problem is "banks won't lend" and the government is going to waive around trillions of dollars of lending facility, the obvious solution is to cut out the middlemen altogether and simply lend directly from the government to the businesses we [allegedly] are so desperate to assist. So far, trillions of dollars have simply evaporated into the pockets of the ponzinators who destroyed their golden goose in the first place.

They know that the "fix" won't work -- but that has never been the point anyway. Big money is always engaged in delaying the day of reckoning, while avoiding being the victim of the reckoning.

Nevertheless, the US has great areas of inefficiencies. Some of the stimulus aimed toward "greener" technologies has the potential of increasing energy efficiencies and the like. The benefits of that increased productivity can then accrue to the benefit of the wealthy elite, perhaps delaying the point in time where the concentration of wealth must be addressed to avoid massive public unrest. However, since greed knows no bounds, it will be interesting to see whether increased efficiencies and productivities can outstrip the continued concentration of wealth.

This article highlights just how warped the thinking of people in the financial sector really is.

The saddest part of greed is that since wealth accumulation takes place in a manner completely divorced from actual productive resources, the greedy come to control assets far beyond what they can ever conceivably utilize. The result is to withdraw those assets from the use of the broader public, without ANY BENEFIT WHATSOEVER to the person who is putatively holding those assets.

We could draw this analogy. If "the king" owned all of the wheat and had it in a warehouse, so long as he could think of things he "wanted" he could dole the wheat out to the populace in return for their work. They could build, oh, I don't know, a "pyramid."

But, when the king cannot think of anything more that he wants or needs -- but still demands to control all wheat, then the wheat sits in the warehouse while the public starves. And -- they are starving even though they would be perfectly willing to do any sort of demeaning subservient work in order to obtain a sufficient amount of the wheat for their own sustenance.

Any kind of social contract that allocates resources in such a way is obviously insane. But, even worse, it is a system that will grind to a halt and cause enormous pain and suffering. The reason is that the productivity of the unemployed workers is lost, which means the overall productivity heads downward. So, where we were, as a society "massively over-productive" -- as I have argued in early posts -- it does not take too long to devolve to the point where we are not only no "over-productive," but where production falls to the point of being unable to sustain the existing population.

Thank you for visiting and have a pleasant tomorrow.