Class Warfare Blog

May 26, 2020

Who Suffers?

We all tend to think of what is normal for us economically is the way it has always been, but today the economic deck is stacked, possibly more so than in any previous time. And it is not stacked in your favor. It is stacked in favor of those who lend capital.

For someone to lend you money, there has to be an almost iron clad guarantee that the lender will be paid back. You almost always have to put up collateral for your loan. Fail to pay the loan back and the lender takes the collateral. So, if you buy a house, the house becomes the collateral. If you fail to pay the mortgage payment for a few months and Wham! The lender forecloses on the loan and repossesses the collateral, aka your house. All of the payments you made now count as nothing. It does not have to be this way. The “collateral” could be held by a court and put up for sale and the proceeds of the sale be split  between the two actors: the lender and buyer with the split determined by how much money had been put up so far.

But that is not the way it is. In our culture, the lender has all of the cards with almost no risk.

Consider the “Great Recession” ca. 2008. The housing market collapsed due to bad behavior on the part of realtors and lenders and suddenly mortgages that could not be paid resulted in repossessions of collateral worth far, far less that the amounts owed. So lenders bore some risk, then . . . except they used a powerful Washington, D.C. lobby to get bailed out so that they did not lose any money (or at least not so much). Were the people buying the homes also bailed out? Silly person, of course, they were not.

Lenders are so used to not having any risk associated with lending that corporations are currently awash in bad debt. They know they are okay because if anything goes wrong their “friends” in Congress and the White House, Democrat or Republican, will bail them out again. This is why economists invented the term “moral hazard,” but they do not apply it to those who line their pockets.

I have been slowly working my way through Michael Hudson’s book on how debt was handled in days long gone. I will give a larger book review (I have offered tidbits before) when I finish it.

To hold you over, here are some tidbits of Michael Hudson’s research and thinking:

“The pedigree for “act-of-God” rules specifying what obligations need not be paid when serious disruptions occur goes back to the laws of Hammurabi c. 1750 BC. Their aim was to restore economic normalcy after major disruptions. §48 of Hammurabi’s laws proclaim a debt and tax amnesty for cultivators if Adad the Storm God has flooded their fields, or if their crops fail as a result of pests or drought. Crops owed as rent or fiscal payments were freed from having to be paid. So were consumer debts run up during the crop year, including tabs at the local ale house and advances or loans from individual creditors. The ale woman likewise was freed from having to pay for the ale she had received from palace or temples for sale during the crop year.

“Whoever leased an animal that died by an act of God was freed from liability to its owner (§266). A typical such amnesty occurred if the lamb, ox or ass was eaten by a lion, or if an epidemic broke out. Likewise, traveling merchants who were robbed while on commercial business were cleared of liability if they swore an oath that they were not responsible for the loss (§103).

“It was realized that hardship was so inevitable that debts tended to accrue even under normal conditions. Every ruler of Hammurabi’s dynasty proclaimed a Clean Slate cancelling personal agrarian debts (but not normal commercial business loans) upon taking the throne, and when military or other disruptions occurred during their reign. Hammurabi did this on four occasions.

“In an epoch when labor was the scarcest resource, a precondition for survival was to prevent rising indebtedness from enabling creditors to use debt leverage to obtain the labor of debtors and appropriate their land. Early communities could not afford to let bondage become chronic, or creditors to become a wealthy class rivaling the power of palace rulers and seeking gains by impoverishing their debtors.

“Yet that is precisely what is occurring as today’s economy polarizes between creditors and debtors.”

I think you will find that some of this applies to our current situation, no?

September 11, 2019

Socialism Bad, Capitalism Good

I am not going to state anything novel here but will reinforce things already said. Currently there is an aspect of our political discourse that is summed up by the title of this post. It is, of course, false. What the “defenders of capitalism” are arguing for is the status quo in which we have a quasi-capitalist system, but one that protects the rich and screws the poor.

Think back on the Great Recession of 2008. If you are a pure capitalist, then a great many financiers, bankers, investors, and brokers should have lost all their money (everything but the bare minimums allowed in bankruptcy proceedings). Through greed they backed the wrong horses.

But the word “bailout” then comes to mind. To coin a phrase “there are no bailouts in capitalism” just as “there is no crying in baseball.” If you have taken college-level courses in capitalism, nowhere will you find governmental bailouts as a structural part of capitalism. These sweet deals are brokered by rich people with the people who serve them to protect their wealth.

It was argued that “we couldn’t let such-and-such a bank or insurance company fail.” Wha? Failures is what capitalists brag about. It is what keeps them sharp. It is the leading edge of “competition.” Without failure, just what is capitalism? All of those people should have failed and learned from the experience . . . or not. So, what did they learn instead? A sucker is born every minute?

So, when you hear anti-socialist rhetoric realize that it is from the wealthy, or paid for by the wealthy, to protect the good deal they have going, nothing more and nothing less. And this is actually rebounding upon the rich. Younger Americans hear the anti-socialism rhetoric and they think “Ah, this is what we need to counter those greedy ass hats.” The young are embracing socialism more and more as the rhetoric against it is ramped up. And the harder the rich squeeze the poor and middle class, the more these younger Americans are embracing some form of democratic socialism.

They also aren’t stupid. They see countries like Sweden which are capitalist, just not capitalist as we are. They have a form of democratic socialism, in which the inherent negatives associated with capitalism are suppressed. The government acts on behalf of the people and offers basic services that seem to be the norm in civilized countries. They recognize, as do all thinking people except captured economists and bought politicians, that capitalism is self-destructive unless it is controlled significantly. In this country, the wealthy have turned phrases such as “government regulation” and “unearned income” into either non-terms or epithets. Why would they want there to be no controls on capitalism? Because in this country, when things go well, they profit enormously, and when the crashes inevitably happen, their paid-for politicians step in and the “public” bails them out. This heads I win, tails you lose system benefits only the wealthy, so their support of it is no surprise. The actual surprise is the support existing in the general population for this robber baron mentality.

July 13, 2019

Does This Blog Need a Different Title?

When I began this blog, mainstream opinions regarding there being a class war in the U.S. were little better than scoffing at the idea. It seems now that most people accept this class war as a fact. I began this blog with the intent of just establishing the war is real, but I could continue, focusing on the conduct and disposition of the class war.  Of late, I have been writing more frequently about religion (specifically Christianity as that is the religion I know most about) in that I believe the religion plays a role in the class war.

Religion, specifically Christianity in the U.S., plays a role in our current class war because mainstream religions have always worked hand in hand with secular state power for their own benefit. Religions that do not accrue state power have a hard time surviving. And a religion acquires state power is by exhibiting practices of which the secular powers approve. The example I use often is that Christianity supported the institution of slavery (scripture still does!). Had it not, it never would have been adopted as the state religion of Rome and would not have had Rome’s power to expand the church’s power for over a century. (Does no one else find the name of the Roman Catholic Church ironic? The Messiah (Jesus?) was supposedly coming to remove Rome’s boot heel from the necks of the Jews, then under occupation by Rome. Some actually called them the enemy! Apparently the enemy won.)

Some may argue that the history of the United States belies my conclusion. That in the U.S. state power is forbidden to be used to support or oppose any church. Ah, that explains the tax free status of churches and all of the other laws exempting churches and church leaders from having to comply with state or federal laws. Discriminate against women in your hiring practices? This is fine if you are a church. Discriminate against people of other faiths or—gasp—no faith at all, in your hiring practices? This is fine . . . if you are a church. Discriminate against gays and lesbians in your hiring? This is fine if you are a church. A governmental position of neutrality with regard to churches would mean they would all be taxed the same, not “not taxed at all.” There are many other laws that churches violate with impunity just because they can.

So, I still hold that churches support the status quo when it comes to the secular leaders as they have accrued some political power and they do not want to lose it. And, in reality, some of these churches have gone on the offensive, wanting more power than they have now, trying to make the case that we are a Christian nation, a ludicrous claim. (The Bible does not support any kind of democracy in any way, shape, or form. Nor does it support the forbidding of cruel and unusual punishments or any other of the cornerstone concepts of the Constitution. Sheesh.) They have also arranged to have legislation introduced exempting churches from more and more of our laws.

So, if you have an opinion, does this blog need a new title? (And if you say “yes” do you have any suggestions? I suspect JB would call it “Steve’s Snark” or “Steve’s Ignorance.”)

June 9, 2019

I Have Said It Before . . .

. . . and I will say it again. Say what?

The Guardian ran a story today “Can Trump win in 2020? This Pennsylvania county may be an indicator.” The subtitle for which was “Northampton county, Pennsylvania voted twice for Barack Obama before flipping for Trump – and could decide whether Trump gets a second term” What? A county in Pennsylvania voted for Barack Obama for president . . . twice . . . and then voted for Trump? What Red-Blue scenario, what White-Black scenario, what Rural-Urban scenario makes sense of that?

I’ve said it before . . .

The voters in this country were so fed up with the status quo (the rich get richer, the middle class and the poor get ground under their boot heels) that they voted in our first Black president. That should change things, no? Apparently not enough as Republican-Democrat infighting made sure “Hope” and “Change” were both little and infrequent. So, if that message didn’t get through, maybe the message of Donald Trump would.

Why don’t we try offering what the voters want? Candidates who aren’t bought and paid for by Wall Street and the major corporations and who will identify the will of the people and act upon that.

Novel idea, eh?

June 3, 2019

Why Are There So Many Signs of Distress in a Supposedly Robust Economy?

Over at the Naked Capitalism website there is a post focused on the St. Louis area but I think has application all over this country—St. Louis Fed Study Shows Rising Level of Financial Desperation Among the Poor, Hidden by Aggregates by Yves Smith.

I have blogged recently on economic indicators, basically claiming that if you use indicators of economic health that basically measure the fact the “the rich are getting richer,” you aren’t looking at the right indicators. For example, using the health of the stock market as an indicator of how ell the economy is doing is ludicrous at best.

This post by the wonderful Yves Smith addresses a ZIP code by ZIP code analysis of economic measures of economic distress and wealth accumulation or the lack of it, etc. The basic point is using “aggregate” economic measures (aka averages) masks the real situation.

Also, the “traditional” (aka what has always been recommended) strategy to “get ahead” no longer works. As a youth I was told that if I worked hard, saved some money, and was careful I could achieve the American dream. Because of wage suppression, run away health care costs, and near zero interest rates on savings, this strategy is broke, busted, and we are disgusted.

People work hard, often with more than one job, but sky high rents and health care costs, suck up the majority of what is made and no savings accrue. Actually debt is increasing in the bottom rungs of the economic ladder.

My first full time job made me the grand sum of $9000 per year. Today, health insurance for a family of four is around $16,000 per year. Granted that there has been a considerable amount of inflation since then, but. . . . As another comparison, if one were to work a job, full-time: 8-hours per day, 5 days per week, with 11 unpaid holidays and no vacation, you would gross around $14,400. That’s gross, not net, so taxes (little in the form of income taxes, but payroll taxes) and whatnot have to be taken out to get at the actual amount of income this job would provide. If a household had two such jobs, the total net income might reach $26,000 or about $2170 per month. If this family is four in number (kind of an average) there will be no health insurance in that budget. Even subsidized health insurance would eat up quite a bit of that. In many areas of this country, that would barely cover rent and food, with transportation in the form of a family car (insurance, gas, maintenance) being out of the question.

It seems that the majority in this country now lives pay check to paycheck (I do) and that had been the case for most of the history of this country, but we were starting to get away from that after WW2. Now we are backsliding, with the skids being greased by the greedy rich who have bought Congress and much of the judiciary.

This is an interesting post and I recommend it to any interested in our current economic system.

Postscript Any politician who runs around claiming that the economy is robust or strong and beats their chest about it will be crushed at the polls in the next election. People are hurting and having smug elites tell them they are wrong to hurt will just increase the disaffection with the status quo that got us first Barack Obama and then Donald Trump. The GOP is likely to put up Donald Trump again and if the Dems decide on an avatar of the status quo (like Joe Biden) expect the repercussions to be severe.

 

 

May 19, 2019

We Are Using the Wrong Economic Indicators

Filed under: Economics,Politics — Steve Ruis @ 12:08 pm
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Currently our “news media” (whatever the heck that is now) are trumpeting things like the US GDP (Gross Domestic Product), unemployment statistics, average wages, and Dow Jones stock index levels as indicators of the “health” of the economy. And, boy is the economy strong!

Wrong, wrong, wrong, wrong.

These indicators were chosen by the elites to serve the elites.

Consider the Gross Domestic Product, a measure of how much we produce in goods and services. How does that reflect on the welfare of the nation’s citizens? It doesn’t. It indicates how “productive” the economy was . . . but in service to whom? If all of the nation’s output was shipped overseas, the GDP wouldn’t change, but the indicator would indicate how well we were serving overseas customers, not Americans. Shouldn’t economic indicators indicate how well our economy is serving our citizens? (We the people, etc.)

Maybe a Gross Consumption Index would be a better measure. No matter how much we are producing, Americans won’t buy things when they are feeling economically insecure. So, it is more important how much Americans are consuming than they are producing. Is there such an index? If so, you couldn’t tell from the news organizations.

And don’t get me started about unemployment statistics. The number of full-time jobs with benefits is still shrinking, only to be replaced by part-time jobs with no benefits and shit wages. But unemployment is at a record low! Oh, and we don’t count people who have officially stopped looking for a job.

Average wages? Give me a break! Median wages, the wage at the exact middle of the wage spectrum has been decreasing! This means that there are more people making less and just a few making much, much more than that number.

The whole purpose of these misleading “economic indicators” is to convince us that the politicians are doing their jobs. Unfortunately, they are doing it for only the wealthiest among us.

January 10, 2019

They Want It Both Ways

A common trope among the vocal rich is that handing out money to the “poor” will make them lazy. “Handing out” and “handouts” refer to welfare, food stamps, a higher minimum wage, you name it. On the flip side, they also claim that “redistributing” money from the rich to other where through higher progressive taxation will remove all of the incentive to invest and innovate.

So, at one end of the spectrum, allowing the poor to keep more of what they make or bumping their wages up to a bare subsistence level will result in them opting out of their jobs (more money = laziness) but allowing the rich to keep more of their income will encourage them to work harder, innovate more (more money = initiative).

Obviously this is merely a reflection of the class disdain the rich have for the poor. The poor are poor because of character flaws, moral weakness, lack of intelligence. The rich are rich because of their sterling character, moral strength, and brilliance. (Donald Trump … uh, is the exception that proves the rule?)

Also, is there any indication either of these “narratives” has any merit?

There is a well known phenomenon in business that as businesses grow and become larger, they tend to grow stagnant. They innovate less and their managers become more interested in milking the cow they have rather than finding new cows. In the recent tax giveaway to businesses, were the billions saved in taxes used to innovate, used to upgrade production, used to compensate workers, any of the things it was claimed it would do? Apparently, the funds were mostly used to buy back stock, which drives up the price of the stock, enriching shareholders and executives with stock options (you do get what you pay for).

Another economic “natural experiment” was the 1950’s and 1960’s economies. Marginal tax rates were sky high from the necessity to acquire funds to pursue World War 2. President Eisenhower refused to lower them, even in the peacetime following. Unions were empowered and laws were passed to provide some leveling of the playing field between labor and capital. So, were people enjoying the good times on welfare? Was there any laziness to be observed? Was innovation stifled because the rich were starved of the funds they needed to fuel the innovations? I think you know the answers to all of these (no, no, no).

So, what is with these narratives?

They aren’t new, they have been around for a century or more. They are, like religious apologies, arguments that sound reasonable but have no basis in reality. They have become memes among the rich folks, repeated often enough to be transferred from generation to generation. They are even sold to ordinary working people because they do sound reasonable and are repeated over and over. The rich are the job creators! Bah, customers create demand, demand creates jobs, and demand in our economy is mostly domestic demand which is stifled due to wage suppression activities on behalf of the rich.

The code word in use is “redistribution,” by which they mean that the rich are taxed and that money is “given” to the poor. The fact that much of the wealth the rich have accumulated is due to “redistribution” through other means is never mentioned. (Look up the history of the oil depletion allowance to see where the majority of the oil barons in this country came from.) The rich are in the business of bribing their politicians (not ours, we can’t afford them) to pass laws that benefit them. Our “representatives” do favors for the rich and nothing for the poor. For example, President Trump’s lackeys rolled back Obama-era regulations that prohibited coal companies from dumping toxic waste into the streams and rivers we draw our drinking water from, redistributing the consequences from the coal company executives to ordinary people. (1. Don’t get sick. 2. Die quickly.)

December 25, 2018

Plutocrats! You Have to be Really Dense to Not Understand This!

Filed under: Culture,Economics,Politics — Steve Ruis @ 12:35 pm
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Happy holidays, y’all! This is my gift to you on this Christmas day!

I have lauded Sam Pizzagati’s book “The Rich Don’t Always Win” already and have a fuller comment to make based upon things found in that book (highly recommended by me!).

Basically, what needs to be done is rather simple, but the plutocrats don’t see it this way. Here are a couple of quotes to get the ball rolling: “The outstanding faults of the economic society in which we live are its failure to provide for full employment and its arbitrary and inequitable distribution of wealth and income.”

I am sure the plutocrats would label this speaker as a communist if not a socialist. I am willing to bet that all of the plutocrats think that capitalism is the best economic system known/available/possible and are committed to it 100%. I also believe that almost all of these people believe in a “pay as you go” society. People should work, earn money, and pay for all that they need or want that way. Period.

Given those two beliefs allow me to state my second quote “Let us suppose that 1 percent of the population were to receive 95% of our entire national income, with the remaining 5 percent spread among the rest of us. Could our system—any system—work on that basis? One percent of the people couldn’t possible consume 95 percent of all of the goods and services which the rest of us could produce.” And failing to consume all of that output “they would have no reason to use their savings to produce more and more goods that they couldn’t consume either.” In such an unequal, unbalanced economy we would never see enough jobs for people to pay as they go, a consequence that “demonstrates the nonsense of the contention that the way our national income is divided among us has nothing to do with how much we produce or how many of us have jobs.”

Not to keep you on pins and needles, the first quote is from John Maynard Keynes, a mainstream economist … in 1936 … and the second was from Chester Bowles, a wealthy business man … in 1946.

Now, the plutocrats will counter argue that people paid “too much” according to their lights will become shiftless and lazy. Let’s see if that happened. After World War II, the American middle class burgeoned. More people had more disposable income than ever before. More owned houses, etc. Did you notice anyone buying hammocks for the long haul? Was there a run on foot stools for people to put their feet up? I was alive then and I didn’t see any of that. It always shocks me that plutocrats assume that when “ordinary people” get enough to live on they will become lazy and stop working. Of course, this is coming from a class of people who thought when they made their first million dollars, “How am I going to make the second?” This disdain for the motivations of ordinary people is larded throughout their positions.

Plutocrats also argue against equal distribution of wealth and income, saying that do not have enough wealth to make everyone rich. This is being willfully obtuse. The word “equal” should only be used with opportunity. In the 1950’s did you see people rioting or striking because they were not getting “equal” incomes to those of rich people? The idea is ludicrous. What is wanted is a fair distribution of the wealth created. Nobody is advocating equal distribution of wealth or income, so this is a straw dog argument.

The so-called “Great Compression” occurred after WW2 due to high marginal tax rates on the most wealthy and union power, and governmental power improving the lot of those at the bottom (hence the compression—economic forces applied downward from on top, upward from the bottom). This was fought tooth and nail by the rich and, after WW1, the plutocrats managed to reverse all of the “similar corrections” made to the system during that war. But after WW2 the plutocrats didn’t succeed in rolling back all of the New Deal and other wealth redistribution mechanisms (they do, however and after all of these years, still speak scornfully of the New Deal as a marker of their social class). Why was that? Simply put, the plutocrats were scared stiff with regards to the communistic “workers’ revolts” in Russia and elsewhere. If keeping an underclass under their thumbs could lead to that kind of revolt, well…. So, they were inclined to live with high marginal income tax rates and with unions. (But not the U.S. Socialist and Communist political parties. After WW1 they were decimated over and over and then obliterated after WW2 by using Red Scare tactics.)

That was then, this is now. The problem is endemic as we are back where we started  at the beginning of the twentieth century (Thanks capitalism!) and we may have to find another way to deal with plutocrats. They get Donald Trump in the White House and the biggest item on their agenda is a huge tax cut, that they claimed would help ordinary people but by and large went into the pockets of the plutocrats. (I’m shocked, shocked I tell you! Have I mentioned that their tax cuts are permanent and our, much smaller, ones are temporary?)

This is so incredibly stupid that I am flabbergasted. These people are making so much money that they are giving it away or promising to give it away when they die. So, why do they so desperately need it while they are alive? They can’t spend but a fraction of it on themselves or their families. Were they to increase the wages of the workers they employ they would reap many benefits, help create a world they feel is the best (a “pay as you go” capitalistic society), and be appreciated far more than they are now. Why do they continuously rig the rules of the game to favor themselves and make sure that the bulk of new wealth flows into their pockets? The only answer that comes to mind involves dogs and mangers.

 

 

August 20, 2018

CEO Pay Growing Faster than Yours … Still

Filed under: Business,Economics,Politics — Steve Ruis @ 12:14 pm
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A recent report of CEO pay shows that the gulf between CEO pay and the pay of average workers in their companies has grown wider. I am shocked, shocked I tell you!

Articles are asking “How could this have happened?” As I have said over and over, this did not “just happen,” it was managed by the CEO’s. These people sit on each others boards of trustees to make sure that their pay increases will never be threatened. They have lobbied Congress and state houses to get tax cuts and tax provisions that favor them. We call such tax regulations “loopholes,” but loopholes are laws meant for one purpose that are used for another. These laws were passed for the purpose of increasing CEO power and wealth, period.

Take for example, Bill Clinton’s legislation to rein in the growth of “executive pay.” The situation was CEOs, through “golden parachutes” and other nonsense, were getting extravagant compensation for lackluster, even terrible, performances. So, the Clinton administration decided that CEO pay should be tied to CEO performance, an idea not so bad. But instead of tying CEO pay to some standard measure of business performance (income, profit, 5-year profit average, average wages in the company, customer satisfaction, etc.), they tied it to the value of the company’s stock, and therefore to the stock market. CEO’s rapidly took advantage of this and began getting more and more of their compensation in the form of stock options. They also started manipulating their own company’s stock price for their own gain. (I’m shocked, shocked I tell you!)

The most recent iteration of this practice is having the company borrowing money to “buy back” stock in the company. This has the effect of raising the price of the stock that remains and burdening the company with debt. The only people who benefit are stockholders and, oh, CEOs and other execs. This practice (stock buy backs) used to be illegal but as part of the package deal, it was made legal in the same era that started this binge of stock manipulation.

Who in a company is better positioned to manipulate the price of the company’s stock? Gosh, I believe it would be the CEO.

Can you spell insider trading, boys and girls? And it is legal. And it is making CEOs rich beyond their wildest dreams. And that wealth is being applied to our legislative and court processes to make them even wealthier and more powerful.

And, it all “just happened.” If you believe that, I have some lovely prime building land in Florida you may be interested in … but you might have to drain the swamp first.

July 11, 2018

It Figures

When the Trump tax cuts were imposed (you remember don’t you: the small temporary tax cuts for us and the large permanent tax cuts for corporations and the wealthy) it was claimed by the Repubs that the money saved by the corporations would end up spurring growth, even result in raises for workers. (Right, those results were to be delivered via unicorn, I believe.)

It was pointed out that the last time such a tax cut was implemented, corporations spent the bulk of the savings in buying back shares of their own companies. Well, surprise, surprise, the same thing happened this time. (Who’d have known it could be this complicated?) In a post on the Naked Capitalism web site (Michael Olenick: Update Confirms That Share Buybacks Are Still Corporate Suicide) extensive studies on the effects of such buybacks show that “not only do buybacks not lead to growth in a company’s market value, they are strongly correlated to a declining market value.”

In other words, the effect of their behaviors is not to “grow” the companies but actually to “shrink” them! To quote from the piece:

Corporate executives and directors are apparently bereft of ideas and the confidence to make long-term investments. Rather than using record profits, and record amounts of borrowed money, to invest in new plants and equipment, develop new products, improve service, lower prices or raise the wages and skills of their employees, they are “returning” that money to shareholders. Corporate America, in effect, has transformed itself into one giant leveraged buyout….

And since “everyone” is doing it …

The most significant and troubling aspect of this buyback boom, however, is that despite record corporate profits and cash flow, at least a third of the shares are being repurchased with borrowed money, bringing the corporate debt to an all-time high, not only in an absolute sense but also in relation to profits, assets and the overall size of the economy.

This not only burdens those corporations, but also drags down the entire economy.

So, if these buybacks are not what anyone might call the best use of those tax savings, why are they being done?

Okay, boys and girls, whenever anything political happens what are we supposed to do? (Follow the money!) That’s right! So, who benefits from these buybacks the most? It turns out that … wait for it … it is the corporation executives who actually benefit the most. You see the buybacks inflate the prices for the corporation’s stock. CEO’s and their ilk are now being remunerated largely via stock options. And, corporation executives constitute the largest segment of the 0.1% of “earners.” And that class of “earners” is the one making the bulk of political contributions currently. Does the picture now come together for you?

Think of the corporation executives as sort of modern pirates. (Can you see the eye patches and hear the “aaaarghs”?) These executives started out as treasure ship captains but, well the temptation was too great, and they stole their own ships. Well what is the government’s politicians to do? When they sailed into action to recapture the ill gotten gains, they received handsome “gifts” from the pirates to the extent that they have become dependent upon those “gifts” and now seek to facilitate the pirate’s behaviors. The government stopped pursuing the pirates for taxes and actually invited them to submit their ideas on how the government could be run better.

And all of the rich assholes lived happily ever after.

When are we going to wake up? Stock buybacks should be illegal or strictly regulated (as they used to be). They are tools to manipulate the stock market by insiders, for Pete’s sake! But when we ask our politicians what the intend to do all we get is “Arrgh!” and a wink from under an uplifted eye patch.

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