Global Elites really enjoying their domination

[stand@desk]

http://www.zerohedge.com/news/2014-01-2 ... ite-it-way

After reading the article and then the first comment..it makes for a great debate..Will the Global Elites keep enjoying how they like things and continue to enjoy their ways for some time to come or will there be a "wake-up" ?

I kind of like "kevinduhand"s comment that he sees this continuing and a "great awakening" will never come. You rarely hear comments like that..it's always about how some justice is going to prevail in the future..it's interesting to see and hear that comment that it is never going to come..maybe it will in fact be that way..maybe the elites will rule indefinitely..

Does anyone have any foresight or thoughts on the potential future outcomes of this topic of "elite wealth sustainability"? How long can the elites continue to enjoy and accelerate their trillions upon trillions of wealth?

[jacob]

http://earlyretirementextreme.com/how-d ... works.html

[tylerrr]

Jesus said: "You will always have the poor among you, and you can help them whenever you want to. But you will not always have me." Mark 14:7

The same as it ever was.....and always will be.....But things like ERE teach me I have more control than once thought over my own circumstances.

[jacob]

My cynical self believes that anyone (myself included) that believes that "a great awakening is coming" has spent less than 10 years trying to "wake people up" on a given particular subject matter.

[Chad]

If there is a "great awakening", it would be after a lot more suffering and negative events. Which would mean, it will probably look more like Egypt and Syria than a get out to vote campaign.

[GandK]

My cynical self believes that anyone (myself included) that believes that "a great awakening is coming" has spent less than 10 years trying to "wake people up" on a given particular subject matter.

But American Idol is on!

[JohnnyH]

@firefighterjeff: I agree standard of living is great, sure. No problems there!... But the "elite" domination of the tax code, political system, media, etc is disconcerting.

[George the original one]

"Off with their heads!" Oh, wait, that was already tried by the French. Only took'em another 150 years to get rid of the subsequent power squabbles.

[JohnnyH]

@jeff: Agree... I just wish I could completely ignore all things I consider political BS without them coming to knock on my door. Doesn't seem feasible today.

[Chris]

Because I was curious, I decided to cross reference the top 85 names on the Fortune Billionaires List with the Giving Pledge list. How many of the uber-rich are willing to publicly state that they are giving most of their wealth to philanthropic activity?

Here is the list I ended up with:

• 2. Bill Gates 67B
• 4. Warren Buffet 54B
• 5. Larry Ellison 43B
• 13. Michael Bloomberg 27B
• 26. Carl Icahn 20B
• 53. Paul Allen 15B
• 66. Mark Zuckerberg 13B
• 76. Ray Dalio 13B
• 79. Ronald Perelman 12B

So that's about 11% in people terms, or about 15% of the wealth of that group of 85.

[vivacious]

@Chris that's good. It should be even higher of course. No one earned a billion dollars on their own. It's because of all the factors already mentioned like a tax code, political system, media, etc in their favor. Maybe you hustled to earn the first million or 2 but after that a lot of it works in their favor.

Plus no person really has any practical use beyond a few million or even less. The excess should be used to help parts of society that aren't working well. Even disease research and things that are non political. Not everyone is so lucky. Simply being born in the wrong area is a huge determinant of success and lack of in life.

[Seneca]

"Does anyone have any foresight or thoughts on the potential future outcomes of this topic of "elite wealth sustainability"? How long can the elites continue to enjoy and accelerate their trillions upon trillions of wealth?"

I give this about as much thought as what Kim Kardashian is doing today. And I rarely read anything that promotes the title "global elites". It just advocates victimhood when those terms are used.

For those of us living in the United States our standard of living and quality of life has very little to do with what Sam Waltons kids are doing with their undeserved wealth and very much to do with our personal choices. It is just so easy to throw those numbers out there without any context or perspective. It's tabloid in nature and is designed to get your attention without thought.

Great post!

"Does anyone have any foresight or thoughts on the potential future outcomes of this topic of "elite wealth sustainability"?"

Capital growing faster than labor appears more sustainable than a large, labor-income based middle class. (I actually think this should be intuitive for an ERE'er)

Henrik posted this in another recent thread- http://www.economist.com/news/finance-a ... re-created

[Felix]

The article henrik linked to comments on a book written by Thomas Piketty, who also wrote this article:
http://www.theguardian.com/commentisfre ... -80percent



Interesting reinterpretation of Piketty's view.

Capital being distributed less and less equally is not sustainable, especially not when the labor option of making an income becomes less available.

[Seneca]

The article henrik linked to comments on a book written by Thomas Piketty, who also wrote this article:
http://www.theguardian.com/commentisfre ... -80percent



Interesting reinterpretation of Piketty's view.

Using people's data and drawing alternate conclusions is not necessarily wrong.

Capital being distributed less and less equally is not sustainable, especially not when the labor option of making an income becomes less available.

Why not? "Off with their heads"? If machines are doing the labor, why does capital care if labor walks away?

Historically wealth has been very unevenly distributed. I don't understand how that can be argued as unsustainable...the gyrations we go through to try and keep a majority middle class, and it's sensitivity to the political spectrum, show just how unsustainable a middle class is.

EDIT- I am not arguing for this as the ideal, just as the reality.

[Felix]

"Off with their heads"?

That would be the response to "if they don't have bread why don't they eat cake."

Repurposing data is one thing but to take a book that says this:

Piketty shows that modern economic growth and the diffusion of knowledge have allowed us to avoid inequalities on the apocalyptic scale predicted by Karl Marx. But we have not modified the deep structures of capital and inequality as much as we thought in the optimistic decades following World War II. The main driver of inequality—the tendency of returns on capital to exceed the rate of economic growth—today threatens to generate extreme inequalities that stir discontent and undermine democratic values. But economic trends are not acts of God. Political action has curbed dangerous inequalities in the past, Piketty says, and may do so again.

A work of extraordinary ambition, originality, and rigor, Capital in the Twenty-First Century reorients our understanding of economic history and confronts us with sobering lessons for today.

http://www.hup.harvard.edu/catalog.php? ... 0674430006

and take it to defend income inequality as natural -the diametrical opposite of the book's message- is rather ridiculous.

[henrik]

I haven't read the book. However, from the stuff linked here it seems it is precisely because he has determined income inequality to be the natural state that he argues for it to be balanced by high tax rates? Those are not at all conflicting positions.

Edit: This is a little like the climate change conversation. It is one thing to determine what is happening (easy) and quite another to agree on what, if anything, should be done about it and who should be doing it. Jennypenny had a good analogy with the flu vaccine. Science vs policy.

[tylerrr]

@vivacious,

who are you to say what others should be allowed to keep? It is your dependent, victimized mentality that prevents so many people from achieving greatness in life.

It's outrageous that people like you advocate stealing other people's money because in your mind "they don't deserve it".

Many of the people listed donate millions to good causes every year and they would never be able to do that if control freaks like you stole their money away because you know "a better way" of distributing that money.

It's the mentality of a killer, a thief, wrapped into one, that would enact this kind of economic violence upon others they deem "unworthy of their own success".

What a disgusting, abusive mentality. If you want to post this stuff, then expect to get rebuttals like this every time.

After all, do you believe in "free speech" or just "free speech" for "certain viewpoints" ?

[oldbeyond]

There's a difference between "what should be done" and "what can be done". If we believe The Economist, labour's gains in the 20th century were due to 1) massive growth and 2) wars. Both seem far less likely in aging, technologically advanced societies. In this perspective, labour didn't gain because "they", after having a informed discussion on the topic, settled on a certain tax rate or changed labour laws in a certain way, but rather because external circumstances changed the balance of power. Capital now needs less and less Labour. Is violence the solution? Only even warfare isn't about manpower anymore, but all about technology and resources. Even if "we" settle on a policy of 80% marginal tax rates for the 1 %, is it even possible to make it a reality?

[Felix]

Here's a more thorough review than the one in the Economist:
http://mpra.ub.uni-muenchen.de/52384/1/ ... _52384.pdf

Essentially Piketty argues in the book that capitalism is historically a rather aristrocratic system where inherited wealth (and the rent commanded with it) plays much more of a role than anything meritocratic (work or individual productivity) and increasingly so due to a higher growth rate of the capital share vs. economic growth as a whole leading to a stronger distribution of wealth towards the capital side and a concentration of capital on top of that.

The relation was reversed during the time after WWII based on a physical destruction of capital in two world wars, inflation, high population growth and changes in taxation making them highly progressive and generally a political stance more favourable towards labor. He proposes in the book to keep up the tax changes and political changes (which have been reversed since the 70s) to prevent capitalism from turning back into the more aristocratic system is was historically.

To quote from the review:

Piketty explains the rise [of the share of income flowing towards capital since 1700 till WW I], rather uncontroversially,as the outcome of a continued high return on capital acting upon a steadily accumulating capital in an environment that was institutionally favorable to capitalists rather than to workers.

Piketty’s theory of income concentration can be called a “political theory” because the main forces that shape concentration of incomes are political: wars, high taxation, and inflation.

As Piketty writes himself in the guardian article:

... while standard economic models assume that pay reflects productivity, there are strong reasons to be sceptical, especially at the top of the income distribution where the actual economic contribution of managers working in complex organisations is particularly difficult to measure. Here, top earners might be able to partly set their own pay by bargaining harder or influencing compensation committees.

Naturally, the incentives for such "rent-seeking" are much stronger when top tax rates are low. In this scenario, cuts in top tax rates can still increase top income shares, but the increases in top 1% incomes now come at the expense of the remaining 99%. In other words, top rate cuts stimulate rent-seeking at the top but not overall economic growth – the key difference with the first, supply-side, scenario.

...

Until the 1970s, policy-makers and public opinion probably considered – rightly or wrongly – that at the very top of the income ladder, pay increases reflected mostly greed rather than productive work effort. This is why governments were able to set marginal tax rates as high as 80% in the US and the UK. The Reagan/Thatcher revolution has succeeded in making such top tax rate levels "unthinkable" since then.

Now, however, we have seen decades of increasing income concentration that have brought about mediocre growth since the 1970s. And with the Great Recession that was triggered by financial sector excesses, a rethink of the Reagan and Thatcher revolutions is underway.

(Another interesting point is his use of fiscal data vs. household data, as being more clearly able to show differences in the higher part of the income spectrum.)

Setting the tax rate is certainly possible in a democracy (would be a nice test of whether the hypothesis still holds).

It was possible in the past.

[BecaS]

@Chris that's good. It should be even higher of course. No one earned a billion dollars on their own. It's because of all the factors already mentioned like a tax code, political system, media, etc in their favor. Maybe you hustled to earn the first million or 2 but after that a lot of it works in their favor.

Plus no person really has any practical use beyond a few million or even less. The excess should be used to help parts of society that aren't working well. Even disease research and things that are non political. Not everyone is so lucky. Simply being born in the wrong area is a huge determinant of success and lack of in life.

“Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience." C.S. Lewis

Beware of the loose and free wielding of the "should" weapon; one never knows when the "shoulds" may be aimed back at oneself.