"Moral capitalism" and the rise of the "overclass"
ciaoant1 | 06.02.2012 13:49 | Analysis
There has been much talk about "reforming the system", and "doing something" about "the excesses" of the "golden boys" that led us where we are today. For the time being of course, all this talk is...just talk.
But, as history has proven, capitalism CAN make some "adjustments" - indeed, capitalism made some important reforms during the 1929 Great Crash (for example by breaking up the big banks, etc.).
But those reforms can only happen if the capitalists are pressured by the people. During the 1929 crisis, the worker's movement was much stronger than it is today, and communism was not a failed idea of the past. So, there was a lot more pressure by the people, and the capitalists had to make some concessions. And so they did.
What about today? Well, the capitalists don't really seem to be too bothered by the protests so far. But as the people become more and more aware of how their masters are bailing themselves out and leave nothing but scraps for the rest of us, they get more and more angry. So, the politicians of the ruling class start making promises to "do something" about the bonuses of the "golden boys" (who would have gone bankrupt if it wasn't for them). Of course, the only thing that the governments would have to do in order to punish the "golden boys" would be to stop the bailouts. But that's obviously “out of the question”, as the banks would all go bankrupt in an instant if that were to happen.
So, the theatrics begin in order to convince the masses that they are “doing something” to “fix the problem”:
-The politicians make speeches about "moral capitalism", and the "excesses" of the banks that led us here (when in fact those "excesses" (the huge loans that were handed out by the banks) were the substitute that the capitalists used in order to "mask" the industrial capital's flight to Asia for over 20 years now - the true "root cause" of the crisis, is capitalism's endless thirst for more and more profits at the expense of the workers).
-The “fat cats” promise to "behave themselves" from now on, and some of them actually do. But that doesn't last long, as history shows - for example, the big banks that were broken up during the 1929 crisis have now become bigger than ever. That’s what happens if your are successful at achieving your goal (more profits). You become bigger and bigger.
-Some bankers, financial speculators, politicians and industrial capitalists may even go to jail, or at least pay a big fine for breaking a few laws here and there, in order to maximize their profits. They will be used as a sacrificial lamb to appease an offended populace, while the system that produced them remains relatively intact.
And this vicious cycle will go on and on...Unless the working class realizes that the world would be a much better place without those who exploit us. But in order to overthrow them, we, the workers, must have the ability to rule the world for ourselves, instead of being dependant on out masters. Are we ready to do that? Because if we are not, then our masters are quite content to keep doing what they do best: Being rich (and getting richer) at our expense.
The rise of the overclass
We’ve all heard of the 'underclass’: now its mirror image – a super-rich elite that is equally cut off from the rest of us – is defining the political debate. (
http://www.telegraph.co.uk/finance/financialcrisis/9027846/The-rise-of-the-overclass.html)
" When Labour leader Ed Miliband used his conference speech last September to call for a fairer and more humane type of capitalism, he was greeted with widespread derision and mockery. But four months on, every leading politician in Britain is desperately trying to follow Miliband’s lead. What constitutes a fair society is no longer just a matter for academic theorists. Suddenly it’s the hottest subject in politics.
The reason is simple: growing public revulsion at a new class of super-rich who seem to be immune from the restraints that govern the lives of ordinary people. Senior bankers, private equity moguls and hedge fund managers appear cut off from the rest of us. They often pay little or no tax, increasingly live in heavily guarded enclaves, and some have little or no real allegiance to Britain. The sources of their wealth are often mysterious, and appear unrelated to merit. These feral rich pose, in their way, every bit as much of a danger to society as the rioters who stole and pillaged London streets last August.
Taxpayers spent £60 billion bailing out City bankers to save them from bankruptcy. Yet, rather than displaying contrition or gratitude, these bankers continue to pay themselves multi-million pound salaries, unimaginable sums of money to most of us.
The injustice is glaring – all the more so in a time of grinding national austerity, when living standards are falling and unemployment is rising. No wonder that, this week, David Cameron – who loves to claim that “we’re all in this together” – entered the fray with a speech trying to define what he called “responsible capitalism”. He senses that this is an issue where the Right is hugely vulnerable"
---
The New American Divide ( http://online.wsj.com/article/SB10001424052970204301404577170733817181646.html?mod=WSJ_hp_us_mostpop_read)
"America is coming apart. For most of our nation's history, whatever the inequality in wealth between the richest and poorest citizens, we maintained a cultural equality known nowhere else in the world—for whites, anyway. "The more opulent citizens take great care not to stand aloof from the people," wrote Alexis de Tocqueville, the great chronicler of American democracy, in the 1830s. "On the contrary, they constantly keep on easy terms with the lower classes: They listen to them, they speak to them every day."
Americans love to see themselves this way. But there's a problem: It's not true anymore, and it has been progressively less true since the 1960s.
[...]
Over the past 50 years, that common civic culture has unraveled. We have developed a new upper class with advanced educations, often obtained at elite schools, sharing tastes and preferences that set them apart from mainstream America. At the same time, we have developed a new lower class, characterized not by poverty but by withdrawal from America's core cultural institutions.
[..]
The primary indicator of the erosion of industriousness in the working class is the increase of prime-age males with no more than a high school education who say they are not available for work—they are "out of the labor force." That percentage went from a low of 3% in 1968 to 12% in 2008. Twelve percent may not sound like much until you think about the men we're talking about: in the prime of their working lives, their 30s and 40s, when, according to hallowed American tradition, every American man is working or looking for work. Almost one out of eight now aren't. Meanwhile, not much has changed among males with college educations. Only 3% were out of the labor force in 2008. "
---
The Remarkable Political Stupidity of the Street ( http://robertreich.org/post/13983287902)
" The Street’s biggest lobbying groups have just filed a lawsuit against the Commodities Futures Trading Commission, seeking to overturn its new rule limiting speculative trading.
For years Wall Street has speculated like mad in futures markets – food, oil, other commodities – causing prices to fluctuate wildly. The Street makes bundles from these gyrations, but they have raised costs for consumers.
In other words, a small portion of what you and I pay for food and energy has been going into the pockets of Wall Street. It’s just another hidden redistribution from the middle class and poor to the rich.
The new Dodd-Frank law authorizes the Commodity Futures Trading Commission to limit such speculative trading. The commission considered 15,000 comments, largely from the Street. It did numerous economic and policy analyses, carefully weighing the benefits to the public of the new regulation against its costs to the Street. It even agreed to delay enforcement of the new rule for at least a year.
But this wasn’t enough for the Street. The new regulation would still put a crimp in Wall Street’s profits.
So the Street is going to court. What’s its argument? The commission’s cost-benefit analysis wasn’t adequate. "
---
Revealed: bankers' secret meetings with ministers ( http://www.independent.co.uk/news/uk/politics/revealed-bankers-secret-meetings-with-ministers-6277778.html)
"The full scale of big banks' lobbying of the Chancellor, George Osborne, to get him to water down banking reforms can be revealed today. Senior bank executives met or called Treasury ministers nine times in the weeks after Sir John Vickers published his landmark proposals on how to prevent another banking crisis, The Independent can reveal.
Bank bosses are fighting furiously behind the scenes to limit any changes to the way they do business. Fears are growing – articulated by Sir John himself – that the banks are successfully thwarting the Government's plans to overhaul the British banking system and the Treasury is weakening some of the key reforms as a result of intense lobbying."
---
Revolving Door: From Top Futures Regulator to Top Futures Lobbyist ( http://www.rollingstone.com/politics/blogs/taibblog/revolving-door-from-top-futures-regulator-to-top-futures-lobbyist-20120111)
"While America focused on New Hampshire, a classic example of revolving-door politics took place in Washington, going almost completely unnoticed. It’s a move that ranks up there with the hire of Louisiana congressman Billy Tauzin to head the pharmaceutical lobbying conglomerate PhRMA -- at a salary of over $2 million a year -- immediately after Tauzin helped ram through the Medicare Prescription Drug Bill, a huge handout to the pharmaceutical industry.
In this case, the hire involves Walter Lukken, who toward the end of the Bush years was the acting head of the Commodity Futures Trading Commission. As the chief regulator of the commodities markets, it was Lukken’s job to spot and combat speculative abuses and manipulations that might have led to artificial price hikes and other disruptions. "
---
HUSSMAN: 'Wall Street Is Little More Than A Glorified Crack House' ( http://www.businessinsider.com/hussman-wall-street-is-little-more-than-a-glorified-crack-house-2011-12)
"Frankly, I am concerned that Wall Street is becoming little more than a glorified crack house. Day after day, the sole focus of Wall Street is on more sugar, stronger sugar, Big Bazookas of sugar, unlimited sugar, and anything that will get somebody to deliver the sugar faster. This is like offering a lollipop to quiet down a 2-year old throwing a tantrum, and expecting that the result will be fewer tantrums.
What we have increasingly observed over the past decade is nothing but the gradual destruction of the ability of the financial markets to allocate capital for the benefit of future growth.
Nietzsche famously said "What does not kill me makes me stronger." The corollary is "What constantly rescues me makes me weaker." The world will only stop looking for bailouts when policy makers stop handing them out."
---
“And the great owners, who must lose their land in an upheaval, the great owners with access to history, with eyes to read history and to know the great fact: when property accumulates in too few hands it is taken away. And that companion fact: when a majority of the people are hungry and cold they will take by force what they need. And the little screaming fact that sounds through all history: repression works only to strengthen and knit the repressed.”
-John Steinbeck
But, as history has proven, capitalism CAN make some "adjustments" - indeed, capitalism made some important reforms during the 1929 Great Crash (for example by breaking up the big banks, etc.).
But those reforms can only happen if the capitalists are pressured by the people. During the 1929 crisis, the worker's movement was much stronger than it is today, and communism was not a failed idea of the past. So, there was a lot more pressure by the people, and the capitalists had to make some concessions. And so they did.
What about today? Well, the capitalists don't really seem to be too bothered by the protests so far. But as the people become more and more aware of how their masters are bailing themselves out and leave nothing but scraps for the rest of us, they get more and more angry. So, the politicians of the ruling class start making promises to "do something" about the bonuses of the "golden boys" (who would have gone bankrupt if it wasn't for them). Of course, the only thing that the governments would have to do in order to punish the "golden boys" would be to stop the bailouts. But that's obviously “out of the question”, as the banks would all go bankrupt in an instant if that were to happen.
So, the theatrics begin in order to convince the masses that they are “doing something” to “fix the problem”:
-The politicians make speeches about "moral capitalism", and the "excesses" of the banks that led us here (when in fact those "excesses" (the huge loans that were handed out by the banks) were the substitute that the capitalists used in order to "mask" the industrial capital's flight to Asia for over 20 years now - the true "root cause" of the crisis, is capitalism's endless thirst for more and more profits at the expense of the workers).
-The “fat cats” promise to "behave themselves" from now on, and some of them actually do. But that doesn't last long, as history shows - for example, the big banks that were broken up during the 1929 crisis have now become bigger than ever. That’s what happens if your are successful at achieving your goal (more profits). You become bigger and bigger.
-Some bankers, financial speculators, politicians and industrial capitalists may even go to jail, or at least pay a big fine for breaking a few laws here and there, in order to maximize their profits. They will be used as a sacrificial lamb to appease an offended populace, while the system that produced them remains relatively intact.
And this vicious cycle will go on and on...Unless the working class realizes that the world would be a much better place without those who exploit us. But in order to overthrow them, we, the workers, must have the ability to rule the world for ourselves, instead of being dependant on out masters. Are we ready to do that? Because if we are not, then our masters are quite content to keep doing what they do best: Being rich (and getting richer) at our expense.
The rise of the overclass
We’ve all heard of the 'underclass’: now its mirror image – a super-rich elite that is equally cut off from the rest of us – is defining the political debate. (
http://www.telegraph.co.uk/finance/financialcrisis/9027846/The-rise-of-the-overclass.html) " When Labour leader Ed Miliband used his conference speech last September to call for a fairer and more humane type of capitalism, he was greeted with widespread derision and mockery. But four months on, every leading politician in Britain is desperately trying to follow Miliband’s lead. What constitutes a fair society is no longer just a matter for academic theorists. Suddenly it’s the hottest subject in politics.
The reason is simple: growing public revulsion at a new class of super-rich who seem to be immune from the restraints that govern the lives of ordinary people. Senior bankers, private equity moguls and hedge fund managers appear cut off from the rest of us. They often pay little or no tax, increasingly live in heavily guarded enclaves, and some have little or no real allegiance to Britain. The sources of their wealth are often mysterious, and appear unrelated to merit. These feral rich pose, in their way, every bit as much of a danger to society as the rioters who stole and pillaged London streets last August.
Taxpayers spent £60 billion bailing out City bankers to save them from bankruptcy. Yet, rather than displaying contrition or gratitude, these bankers continue to pay themselves multi-million pound salaries, unimaginable sums of money to most of us.
The injustice is glaring – all the more so in a time of grinding national austerity, when living standards are falling and unemployment is rising. No wonder that, this week, David Cameron – who loves to claim that “we’re all in this together” – entered the fray with a speech trying to define what he called “responsible capitalism”. He senses that this is an issue where the Right is hugely vulnerable"
---
The New American Divide (
http://online.wsj.com/article/SB10001424052970204301404577170733817181646.html?mod=WSJ_hp_us_mostpop_read) "America is coming apart. For most of our nation's history, whatever the inequality in wealth between the richest and poorest citizens, we maintained a cultural equality known nowhere else in the world—for whites, anyway. "The more opulent citizens take great care not to stand aloof from the people," wrote Alexis de Tocqueville, the great chronicler of American democracy, in the 1830s. "On the contrary, they constantly keep on easy terms with the lower classes: They listen to them, they speak to them every day."
Americans love to see themselves this way. But there's a problem: It's not true anymore, and it has been progressively less true since the 1960s.
[...]
Over the past 50 years, that common civic culture has unraveled. We have developed a new upper class with advanced educations, often obtained at elite schools, sharing tastes and preferences that set them apart from mainstream America. At the same time, we have developed a new lower class, characterized not by poverty but by withdrawal from America's core cultural institutions.
[..]
The primary indicator of the erosion of industriousness in the working class is the increase of prime-age males with no more than a high school education who say they are not available for work—they are "out of the labor force." That percentage went from a low of 3% in 1968 to 12% in 2008. Twelve percent may not sound like much until you think about the men we're talking about: in the prime of their working lives, their 30s and 40s, when, according to hallowed American tradition, every American man is working or looking for work. Almost one out of eight now aren't. Meanwhile, not much has changed among males with college educations. Only 3% were out of the labor force in 2008. "
---
The Remarkable Political Stupidity of the Street (
http://robertreich.org/post/13983287902) " The Street’s biggest lobbying groups have just filed a lawsuit against the Commodities Futures Trading Commission, seeking to overturn its new rule limiting speculative trading.
For years Wall Street has speculated like mad in futures markets – food, oil, other commodities – causing prices to fluctuate wildly. The Street makes bundles from these gyrations, but they have raised costs for consumers.
In other words, a small portion of what you and I pay for food and energy has been going into the pockets of Wall Street. It’s just another hidden redistribution from the middle class and poor to the rich.
The new Dodd-Frank law authorizes the Commodity Futures Trading Commission to limit such speculative trading. The commission considered 15,000 comments, largely from the Street. It did numerous economic and policy analyses, carefully weighing the benefits to the public of the new regulation against its costs to the Street. It even agreed to delay enforcement of the new rule for at least a year.
But this wasn’t enough for the Street. The new regulation would still put a crimp in Wall Street’s profits.
So the Street is going to court. What’s its argument? The commission’s cost-benefit analysis wasn’t adequate. "
---
Revealed: bankers' secret meetings with ministers (
http://www.independent.co.uk/news/uk/politics/revealed-bankers-secret-meetings-with-ministers-6277778.html) "The full scale of big banks' lobbying of the Chancellor, George Osborne, to get him to water down banking reforms can be revealed today. Senior bank executives met or called Treasury ministers nine times in the weeks after Sir John Vickers published his landmark proposals on how to prevent another banking crisis, The Independent can reveal.
Bank bosses are fighting furiously behind the scenes to limit any changes to the way they do business. Fears are growing – articulated by Sir John himself – that the banks are successfully thwarting the Government's plans to overhaul the British banking system and the Treasury is weakening some of the key reforms as a result of intense lobbying."
---
Revolving Door: From Top Futures Regulator to Top Futures Lobbyist (
http://www.rollingstone.com/politics/blogs/taibblog/revolving-door-from-top-futures-regulator-to-top-futures-lobbyist-20120111) "While America focused on New Hampshire, a classic example of revolving-door politics took place in Washington, going almost completely unnoticed. It’s a move that ranks up there with the hire of Louisiana congressman Billy Tauzin to head the pharmaceutical lobbying conglomerate PhRMA -- at a salary of over $2 million a year -- immediately after Tauzin helped ram through the Medicare Prescription Drug Bill, a huge handout to the pharmaceutical industry.
In this case, the hire involves Walter Lukken, who toward the end of the Bush years was the acting head of the Commodity Futures Trading Commission. As the chief regulator of the commodities markets, it was Lukken’s job to spot and combat speculative abuses and manipulations that might have led to artificial price hikes and other disruptions. "
---
HUSSMAN: 'Wall Street Is Little More Than A Glorified Crack House' (
http://www.businessinsider.com/hussman-wall-street-is-little-more-than-a-glorified-crack-house-2011-12) "Frankly, I am concerned that Wall Street is becoming little more than a glorified crack house. Day after day, the sole focus of Wall Street is on more sugar, stronger sugar, Big Bazookas of sugar, unlimited sugar, and anything that will get somebody to deliver the sugar faster. This is like offering a lollipop to quiet down a 2-year old throwing a tantrum, and expecting that the result will be fewer tantrums.
What we have increasingly observed over the past decade is nothing but the gradual destruction of the ability of the financial markets to allocate capital for the benefit of future growth.
Nietzsche famously said "What does not kill me makes me stronger." The corollary is "What constantly rescues me makes me weaker." The world will only stop looking for bailouts when policy makers stop handing them out."
---
“And the great owners, who must lose their land in an upheaval, the great owners with access to history, with eyes to read history and to know the great fact: when property accumulates in too few hands it is taken away. And that companion fact: when a majority of the people are hungry and cold they will take by force what they need. And the little screaming fact that sounds through all history: repression works only to strengthen and knit the repressed.”
-John Steinbeck
ciaoant1
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