sachs political power concentrated wealth profits

An IMF Economist Says Share the Rents As ...
classes billionaires trillion plutocrat

Four Business Gangs Run the USA

Who are the 1%? How rich are they? Is there a problem with that, and a solution to it? We excerpt four 2011/12/13 articles from: (1) Sydney Morning Herald, '12 Dec 31, by R. Gittins; (2) Bloomberg News, Jan 3, on billionaires; (3) The Tyee, Jan, on plutocracy, by Crawford Kilian; and (4) YouTube, '11 Nov 4, on income inequalities by the IMFs M. Kumhof.

by Ross Gittins, by Bloomberg News, by Crawford Kilian, and by Michael Kumhof.

Jeffrey Sachs, In his Price of Civilization, says, ''Corporate wealth translates into political power through campaign financing, corporate lobbying and the revolving door of jobs between government and industry; and political power translates into further wealth through tax cuts, deregulation and sweetheart contracts between government and industry. Wealth begets power, and power begets wealth.''

Sachs says four key sectors of US business exemplify this feedback loop and the takeover of political power in America by the ''corporatocracy''.

''Consider the pulse of the corporate sector as opposed to the pulse of the employees working in it: corporate profits in 2010 were at an all-time high, chief executive salaries in 2010 rebounded strongly from the financial crisis, no senior banker faced any criminal charges.

And there were no adverse measures that would lead to a loss of profits in: military supplies, finance, energy, and health care."

The 30-year achievement of the corporatocracy has been the creation of America's rich and super-rich classes. Chief executives helped themselves to outlandish awards of stock options by friendly and often handpicked compensation committees, while the Securities and Exchange Commission looked the other way.

To read more

JJS: Being already rich really pays off big.

Their aggregate net worth climbs to $1.9 trillion, according to the Bloomberg Billionaires Index, a daily ranking of the world's 100 wealthiest individuals. The middle class languishes as the super-rich thrive. World's richest woman says poor should have less fun, work harder.

European stocks surged in the second half of the year. The Stoxx Europe 600 index is up 19.6% since June 4, advancing as the European Central Bank introduced bond-buying programs, S&P upgraded Greece's debt and German business confidence rose more than forecast. The benchmark gauge's 14.4% advance for the year was the best annual return since 2009.

To read more

JJS: For a deeper look at the ruling rich, check out “The Higher World of the Plutocrats by Derryl Hermanutz in OpEdNews this year on Jan 7; to read more and, of course, the next excerpt.

Chrystia Freeland's book is full of surprises and insights.

It's the plutocracy's world; we just live in it. It funds our politics, shapes our societies, owns our universities, and outsources our jobs. Their offspring may do well, but most will regress to the mean, becoming merely rich mediocrities.

Perhaps the Chinese have the only way to limit the plutocracy. As Freeland says, "China's plutocrats don't fight the state because they are the state -- and when any of them forget that, they are treated with summary brutality: between 2003 and 2011, at least 14 Chinese billionaires were executed."

To read more

JJS: Capital punishment for even rich criminals might be a bit over the top. What does an IMF economist suggest?

In this interview, the IMFs Michael Kumhof calmly lays out the logic of public recovery of natural rents coupled with the disbursement of such revenue back to the people as a dividend. To read more

JJS: A deeper reform is for the public to recover all the socially-generated rents that are now captured by the insiders. Perhaps even better than toppling the elite is making enough revenue available to pay citizens a dividend. None of the revenue is needed to replace taxes because once people get a share of the rents they no longer need so much in the way of “social services”, making it possible to shrink government drastically. And a little government, no longer permitted to either tax whatever it likes or subsidize whoever it likes, will be too feeble to grant favors to cronies. And as the power of the state and the elite falls, the power of society, of all its members, rises.


Editor Jeffery J. Smith runs the Forum on Geonomics and helped prepare a course for the UN on geonomics. To take the “Land Rights” course, click here .

Also see:

What a 19th-Century Economist Can Teach Us

The Rich Get More From Government Than Anyone

Bankers Gone Global -- Should Others Catch Up?

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