Dredd Blog: Feudalism Is The Mother Of Plutocracy

Monday, February 9, 2015

Feudalism Is The Mother Of Plutocracy

A common myth is that progress is fundamentally composed of time, because time only goes in one direction.

Therefore, time is God's or Evolution's way of keeping everything from happening all at once.

The post-mortem conducted on what was once the American economy has determined that inequality metastasised within our economy.

The post-mortem conducted by dreaming politicians came up with a different conclusion ("the American economy is not dead") compared to those done by others whose eyes are open to what the phrase "the American economy" means.

Typical for aliens (Economists - Aliens From Cygnus?).

It does help to know what species of economy is being autopsied, I suppose, because different forms of government have different types of economy (Who Are The Job Creators?).

"The American economy" was the one that functioned to maximize or enhance "the common good" (The Common Good, 2, 3, 4, 5, 6, 7, 8, 9, 10).

The way to measure the common good was to measure the degree of equality within the system.

Yes, the lifeblood of that extinct American economy was the equality that produced the common good.

The current economy, which has increasingly become active beginning about forty years ago (following the Vietnam war), is not "the American economy."

Anyway, not realizing what species they were doing an autopsy on, some advocated for techniques of resurrection that do not apply to the current species of economy on the coroner's table:

In a new paper for the Institute For New Economic Thinking’s Working Group on the Political Economy of Distribution, economist Lance Taylor and his colleagues examine income inequality using new tools and models that give us a more nuanced — and frightening —picture than we’ve had before. Their simulation models show how so-called “reasonable” modifications like modest tax increases on the wealthy and boosting low wages are not going to be enough to stem the disproportionate tide of income rushing toward the rich. Taylor’s research challenges the approaches of American policy makers, the assumptions of traditional economists, and some of the

Where the money gets lost (the waste portal)

conclusions drawn by Thomas Piketty and Larry Summers. Bottom line: We’re not yet talking about the kinds of major changes needed to keep us from becoming a Downton Abbey society. [nor have we been since endless war became our foreign policy]
...
I think we need some detail to really understand what’s going on. So I look at inequality across low, middle and top groups. How does the share of income of the richest group compare to the others? Where do these groups get their income and what do they do with it? Is the middle getting squeezed? What’s driving income towards the rich?

In the U.S., if you are in the bottom 50-60 percent group of households, your main sources of income are wages and, especially for the very bottom, government transfers like Medicaid and Social Security. In the reported data, this group has a negative savings rate, meaning that people spend more than they receive. Their average wealth is close to zero.

If you’re in the “middle class” — households between the 61st and 99th percentiles — wages are your main income source, though you may get some capital income from interest and dividends. In recent decades, people in this group have been getting squeezed as income flows shift toward profits for business owners rather than wages for employees. The variation in wages has been increasing among this group as well. The middle class has positive saving rates and visible net worth, largely concentrated in housing. [Whoopie we're all gonna die]

If you’re in the top one percent group, you get income from wages, with a lot of variability among individuals. But bigger chunks come from interest and dividends along with proprietors' incomes, like lawyers’ fees and big farmers’ subsidies and sales. These people have high saving rates and substantial wealth, including equity. The top group holds one-third of total equity in the U.S. and receives large capital gains. Their share of total disposable income (not including capital gains) has jumped by around ten percentage points since the mid-1980s. This is an enormous change in shares, very unusual in historical terms. The top group’s income now exceeds three trillion dollars, one-fifth of the total.

The picture we get from making these comparisons can be captured in a ratio named for Gabriel Palma of the University of Cambridge, the “Palma ratio” which draws a contrast between the rich and poor. It tells us that in the U.S., the income per household of the top one percent compared to the bottom 40 percent has more than doubled since the 1980s, while incomes at the bottom were virtually flat. Compared to other rich countries, the ratio here is very high.

(What Piketty & Summers Don’t Tell You - INET, emphasis added). The "American economy" is dead and stinking, so, what is this remaining thing we still call an economy (More Evidence That 'Centrist' Solutions Can't Save Us - Economic Inequality)?

Regular readers know that Dredd Blog calls it a feudalistic plutonomy, overseen by an epigovernment which is a plutocracy (The Homeland: Big Brother Plutonomy, 2, 3, 4, 5, 6, 7, 8, 9; American Feudalism, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11; Epigovernment: The New Model, 2, 3, 4, 5, 6, 7, 8, 9, 10).

The coroner's report basically concludes that the cause of death was: "the military went into business for itself" (American Feudalism - 6, The Greatest Source Of Power Toxins?).