patrick.net

marcus says

And if he asks why God is crying, another cute thing to tell him is "Probably because of something you did."

I get it.

It is about self-empowerment. If you can make God cry, you can be anything.

More: http://www.angelfire.com/empire/dragonskeep/quote/jh.html

marcus says

you mean boomers not wanting their social security or medicare cut?"

the boomers (with some help from Gen X 1989-2009) completely pre-paid the social security (to the extent the system is not a weird quasi-paygo wealth transfer from young to old) thanks the $2.6T in the SSA "trust fund". This total is about $1.5T in FICA contributions + accrued interest.

Medicare is another story, alas.

http://research.stlouisfed.org/fred2/graph/?g=dC0

blue is medicare outgo, red is payroll x 2.9% (the tax was raised to 2.9% in 1986).

The society needs a universal healthcare system as much as it needs an army. Medicare is just something for the special interests.

Peter P says

Medicare is just something for the special interests.

I hope if dogs ever take over the world and they choose a king, they don't just go by size because I bet there are some Chihuahuas with some good ideas.

Jack Handy

Moderation in all things.

One of the most boring and useful truisms my parents ever taught me.

Here is the problem with extreme wealth of which I believe you are speaking: It buys things that make getting even richer at the expense of the working class too easy.

So the solution is simple: Level the playing field by redistribution through taxation. And guess what? The rich are still rich and the society is more balanced as a whole.

Federal taxes are lower than they have been in a LONG TIME. Why not just try the tax rates of the 90s for 10 years like we tried Bush's "temporary" tax cuts of the last 10? The rich will survive. The economy will survive.

Greed is not good. Moderation in all things.

The sad thing, though, is about $1T of the SSTF is just FICA payments from illegal aliens over the decades.

Our nation's finances are actually pretty parlous from every angle.

Except our ~1% .

Corporations kinda suck though:

pretty debt-ridden since the 1980s.

Peter P says

Medicare is just something for the special interests.

Medicare was a compromise because conservatives successfully fought off universal health care for decades.

http://en.wikipedia.org/wiki/Operation_Coffee_Cup

80% of our problems today stem from conservatives not getting with the program, or worse, being allowed to implement their own programs of mass wealth destruction.

rooemoore says

Greed is not good. Moderation in all things.

Greed is at worst morally neutral. I think Greed is the only source of true progress.

I agree that rent-seeking needs to be looked at. High barrier of entrance (usually in the form of regulatory compliance) is a drag on the entrepreneurial spirit.

The problem with moderation is that it tends to reduce everything to a linear spectrum.

Even though your avatar is not animated, it is still quite something. LOL.

Bellingham Bill says

Medicare was a compromise because conservatives successfully fought off universal health care for decades.

I call on conservatives to fight FOR universal healthcare. Any reliance on employer-provided plans is bad for entrepreneurs.

Besides, health insurance does not make sense. There is too much moral hazards.

Nowadays many "conservatives" are religious fanatics. They are trying to fight economic collectivism with behavioral collectivism. It sucks either way.

Ppl, I'm running a hedge fund and let me tell you ... we mint money and thus, I'm on a train which reads "1% - Here I Come".

Now, as a former engineer (& ITer), I was nowhere near that level of earnings potential and at the same time, my technical work was controlled by MBA types. Do I resent those folks above me? Absolutely, they were living off the fruits of my labor, paying me ordinary wages.

Today, in contrast, I'm living in a world of zero worries about the future. My home was paid off, within 2 years of this HF work, and in a short time, I'll never have to worry about cash again. Do I feel that this work is meaningful and worthy? Absolutely not, it's simply about money now, not on one's contributions to society et al.

With the above stated, do I want to soak the rich? No. And the reason for that is that I intend to become one of them and be able to do my own science/engineering work (plus medical school), unimpeded unlike when I was working under corporate America. However, can I say that the average heir to Kobe Bryant's or Julia Robert's fortune will have the same motivation? Probably not, but whose business is that anyways?

Bellingham Bill says

The asymmetric, multiple, trillion-dollar flows from working class to parasitical wealthy is what the issue is here.

this country needs a revolution.

This thread should be called

"Why pseudo-rationalists hate the POOR"

rather than

"Why pseudo-rationalists hate the rich"

It is very useful for rich people to have people believe that poor people all are poor because they deserve to be poor. It is one of the cornerstones of right-wing theology.

Peter P says

Because they think they are the greatest, yet they are rarely rich. Therefore, they try to invent reasons to explain why wealth beyond a certain point (i.e. a level attainable by their professions) should be re-distributed away.

The consequence of accepting that some people "deserve" their "excess" wealth is too severe for their egos to bear.

People are just begrudging. Pure simple old jealousy.

Bellingham Bill says

The rich -- top 5% -- didn't make their $2.5T in AGI in 2010 from the Mines of Zanzibar or trading among themselves. They get their incomes largely from the 95% below them.

This is incorrect right there. You are implying that the rich are making their money on the backs of the rest of the people. You are implying that they gouge them, steal from them. That's Marxism my friend.

Most rich make their money in honest demand/supply transactions with willing customers. It is employee/employer at will relationship. It is contract between two parties where money for services for goods are exchanged. There is no one pie to divide and share, wealth is creation of separate pies.

Peter P says

No one needs to be in the working class.

Peter, I agree with you but don't use their language. There are no
classes. The term was coined by Karl Marx in 19 century. It is only to imply "social struggle". There is no social struggle right now. Upward mobility is possible in the modern time unless the administration is going to freeze people in their current predicament forever just to get more votes for the future.

Bill, you can torture any data any way you want. These graphs you are showing to prove your point that rich get richer because of the poor, they just acknowledge that we have had dot-com boom and the bust and real estate boom and the bust. Fortunes were made and the bubble popped. End of story.

The FIRE sector is largely responsible for wealth inequality. If you took the salaries and bonuses of NYC banksters, hedge fund managers, speculators and all the other parasitic paper pushing, gambling professions out of the equation then you would find it much less skewed. Having said that, the only thing that allowed this sector to flourish is the US Federal Government vis a vie huge budget deficits, loan guarantees for mortgages and student loans, regulatory capture, allowing the currency to be managed by a the banking cartel, legal tender laws and a currency that is not backed by gold and silver (which is a violation of the Constitution).

The current relationship between Wall Street and Washington DC is parasitic. One cannot survive without the other. Washington with its deficit spending and indirect taxation through money printing and Wall Street with its parasitic tentacles spread out to suck the wealth out of the world economies (every one of the world's central bank's top governors came from Goldman Sachs). This "partnership" has been carefully nurtured through revolving door bureaucrats and the "legalized bribery" emanating from "K" street. The political class is more culpable if you ask me because they are public serpents who turned their backs on the people they had a duty to serve.

If you took deficit spending out of the equation then the FIRE industry would be toast and revert back to its rightful and intended purpose ... to allocate scarce capital to the most profitable ventures instead of hedging massive currency and debt flows needed to feed the government beast. That would require massive layoffs in NYC and Washington DC. It won't happen until there is a financial Armageddon because both know that they are dependent on each other and will protect their power and position at all costs (regardless of how many people they impoverish).

Meanwhile, statist "Progressives" are the useful idiots who, blinded by their own fear, greed and ignorance, back the Chicago gangsters who have recently taken up residency in DC promising to "protect them" -- if they only help them further the shakedown of evil, gasp wealthy! producers. The jig is just about up because the economy has reached its limit in terms of its ability to service the enormous debt pyramid scheme. IMHO, something evil this way comes because people don't get what they want ... they get what they deserve. This is a tragedy of epic, Shakespearean proportions. Enjoy.

btw: There is not one original thought in this story line. It has been played out through the ages. Empires rise and fall the same way. As Mark Twain once said, "History does not repeat itself, but it does rhyme."

JohnLaw, I like your analysis to the point I read it to my hubby. I think you are right on money! Now, we have to get our guns and buy dry food and kerosene or get dual citizenship because we don't know what is going to happen.

marcus says

Does Peter P stand for Peter Plutocrat ?

I thought it stood for Peter Pithy, the master of the pithy oneliners. But Peter Plutocrat is pretty good, too. Peter is sort of the Yogi Berra of the right wing. What he says is amusing but does not necessarily make any sense.

marcus says

Peter P says

Medicare is just something for the special interests.

I hope if dogs ever take over the world and they choose a king, they don't just go by size because I bet there are some Chihuahuas with some good ideas.

Jack Handy

LOL. Jack Handy is the perfect antidote to Peter-isms. Briliiant idea.

Peter P says

No one needs to be in the working class.

Riiight. Everybody can be landlords or go to work for a hedge fund.

Just show up with an MBA and you'll get a big slice of the pie. You'll have your ed debt paid in no time and pay off your house in two years.

Nobody necessary to take out the trash, fill in the potholes, serve coffee, etc. etc. etc.

If everybody was a multi-millionaire, why would anybody get up at 3AM to dump banana peels, used tampons, etc. into the back of a dump truck?

JohnLaw says

The FIRE sector is largely responsible for wealth inequality. If you took the salaries and bonuses of NYC banksters, hedge fund managers, speculators and all the other parasitic paper pushing, gambling professions out of the equation then you would find it much less skewed. Having said that, the only thing that allowed this sector to flourish is the US Federal Government vis a vie loan guarantees for mortgages and student loans, regulatory capture, allowing the currency to be managed by a the banking cartel, legal tender laws and a currency that is not backed by gold and silver (which is a violation of the Constitution).
[...]

That about sums it up - great post. You can pretty much gauge how bad things are for any country/society by looking at banksters (and a large part of the rest of the financial sector who produce nothing) and politicians salaries and their golden parachutes. The more money allocated to them and the bigger their sector is relatively to others, the more the rest of the society have to suffer. We have passed the healthy size for the government and banking cabal sector long, long ago.

GraooGra says

you can torture any data any way you want.

data, who needs it!

GraooGra says

Fortunes were made and the bubble popped. End of story.

"Fortunes were made". From the Mines of Zanzibar?

Where do you think all the great incomes of the 1% are coming from???

http://taxfoundation.org/article/summary-latest-federal-individual-income-tax-data-0

shows the top 5% are collecting 33% of the national income.

One out of twenty households taking one out of three of the dollars.

Plus on top of that we have skyrocketing corporate profits. Here's profits (blue) vs. wages (red) as a % GDP:

http://research.stlouisfed.org/fred2/graph/?g=dE5

"fortunes were made" indeed. And yes, the 1% would like that to be "End of story.".

But it's not.

mell says

You can pretty much gauge how bad things are for any country/society by looking at banksters (and a large part of the rest of the financial sector who produce nothing)

Missing in JohnLaw's analysis is the understanding that the FIRE sector does not deploy its own assets, but the assets of the 10%.

It is the 10% who own 90% of the financial assets of this country:

http://www2.ucsc.edu/whorulesamerica/power/wealth.html

The "banksters" are largely powered by the 1%, who have 40% of the assets and are the ones looking for returns.

I'd rather pay 3.5% interest to Wells Fargo than pay 10% rent-rises to my %&$@*ing landlord, lemme tell you.

thunderlips11 says

Nobody necessary to take out the trash, fill in the potholes, serve coffee, etc. etc. etc.

The minarchist response to that is "Sucks to be You!".

funny how that message sorta flies in our politics, though when the bullshit "We Care" mask comes off long enough people are finally revolted by it.

Bellingham Bill says

I'd rather pay 3.5% interest to Wells Fargo than pay 10% rent-rises to my %&$@*ing landlord, lemme tell you.

Sure, everybody loves to pay close to zero interest, but if we had a free market, interest rates would be close to 10% where they should be. You don't have to rent if you don't like your landlord raising your rent (I have been renting 12 years in 4 different spots in SF and never had a single rent-increase), you can buy your own house, but you should pay the interest rate that truly reflects the current risk of default, which is much higher than 3.5%. Also, the savings rate would go up in lock-step and I wouldn't mind putting some of my money to work (AKA being lent out in a responsible way) for returns in the area of 5-10%.

Bellingham Bill says

Missing in JohnLaw's analysis is the understanding that the FIRE sector does not deploy its own assets, but the assets of the 10%

I think that it implied within the analysis and don't see what difference it makes.

mell says

I have been renting 12 years in 4 different spots in SF and never had a single rent-increase

bully for you, LOL

meanwhile, here in the real world, rent are up 50% since 2000:

http://research.stlouisfed.org/fred2/graph/?g=dEt

mell says

but you should pay the interest rate that truly reflects the current risk of default, which is much higher than 3.5%

When mortgage is defaulted on the house doesn't vanish in a puff of smoke.

Well, it can:

but such events are rare.

mell says

I think that it implied within the analysis and don't see what difference it makes.

The difference is that FIRE is not some exogenous alien force, they are doing the bidding of the wealthy.

e.g. YOU, Mr "Returns in the Area of 5-10%".

Yes, we all want free money. That's our fucking problem. 5-10% returns have to come from people doing the actual work -- real-life goods & services wealth creation -- in this economy.

And the bigger the top 10% make their pile, the bigger these 5-10% returns have to be.

Soon the pile is going to fall over. Too many chiefs and not enough Indians in this economy.

GraooGra says

Peter, I agree with you but don't use their language. There are no
classes.

I think classes do exist, but only in the minds of individuals.

On the other hand, the us-versus-them mentality is very harmful. Individuals must make the best decisions for themselves.

GraooGra says

Upward mobility is possible in the modern time unless the administration is going to freeze people in their current predicament forever just to get more votes for the future.

Well said!

Bellingham Bill says

Where do you think all the great incomes of the 1% are coming from???

They're getting up at 1AM to collect extra trash, and people are so impressed with the early and reliable pickup they're tipping them $100 a month for every house they stop at.

Bellingham Bill says

The minarchist response to that is "Sucks to be You!".

Word. Or, you drink too much beer or get paid too much even at your laborious, shitty job. This asshole thinks so:

The comments were part of a treatise on what she sees as Australia's decline due to high taxes, high wages and over-regulation. Rinehart said taxes should fall, red tape should be cut, environmental rules relaxed and the minimum wage should be lowered. (It's currently AUS $15.06 an hour or $606 a week, about the same in U.S. dollars*).

http://finance.yahoo.com/news/drink-less-more-billionaire-tells-152654355.html

Naturally, she inherited every penny of her mining companies from her dad and has never swung a pick or operated a backhoe for more than 5 minutes. So she's very qualified to talk about how to become a billionaire. Be an egg or sperm cell of rich people, basically.

*CNBC is Clueless, the minimum wage is almost half that in the US. How does the Australian country function with $15/hr minimum wage? The Republicans would piss themselves if a $15/hr min wage bill came to the floor. And yet, OZ is booming.

John Bailo says

What we have now is a rigged lottery system that perpetuates winners, throwing up the occasional "self made" or lucky guy to keep the plebians in check.

Huh? It is convenient to blame the system. People have stopped trying. Or they have been trying the wrong things.

The root evil is that people allow an external value system to be forced upon them.

The rent-seeking 1-5% don't exist in the minarchist world.

They are the wealth-creators, not wealth-confiscators, LOL.

It's the gummint -- Obama -- keeping people down to win their votes.

What a fucked-up ideological attachment to an inverted reality, a belief system 180 degrees out of phase with what's really gone on here.

Rents up 50% since 2000, corporate profits up $1.3T since 2000:

http://research.stlouisfed.org/fred2/series/CP

trillions ripped out of our economy thanks to our trade deficits with China, Japan, Germany, and oil producers, manufacturing jobs back to 1940s levels:

http://research.stlouisfed.org/fred2/series/MANEMP

the bottom 50% actually losing wealth in 2010 vs 2009.

But it's the "administration" keeping people down.

You people are completely disassociated from any reality at all.

Most of the wealth being created today is at the expense of tomorrow. Some of the largest and most profitable investments in history were occurring via real estate based collateralized debt obligation financial instruments entangled with massively over leveraged derivatives.

If you sell the same thing to one hundred people as an investment and more than one of them shows up and asks for physical delivery, you're screwed. It seemed fool proof to chop the real estate into bits that can't actually be collected upon! I'm sorry middle eastern investor, you can't collect the collateral on this defaulted loan, because 99 other people own it with you.

Ah, but what happened when the tide turned in a major way? The super rich called Bernanke and he in turn called congress into secret sessions with a dire warning. "Some of the world's richest people and organizations have been making gigantic gambles and the majority are about to lose everything. We need the little guy American taxpayer to go into debt another 800 Billion dollars by next Wednesday or the financial world is going to come to an end!"

Why? Because the rich can abuse the little guy when their bets go sour.

That's stealing. That is getting and keeping your money at the expense of poorer people - usually future workers. The poor who do nothing and vote for endless subsidies are no different. "Everyone in favor of someone else paying for dinner, say Aye. The aye's have it. Surprise surprise. We love democracy!

Get rid of fiat currency, force the big investors to actually cover their bets with baskets of real commodities, and I won't be as critical of them.

The bill gets passed down and down to the working taxpayer. The treasury issues a trillion in new debt, the Federal Reserve buys up the bad investments from the super rich bet losers, the banks end up with their asses covered by the new worker funded credit line and Joe American Hardworker still has his graveyard shift to cover. What Joe doesn't know, however, is that his children just took out a massive loan to cover some super rich asses.

Everything holding stable for the moment, but eventually you have Bastille Day.

Talk about drive and determination! Joe and his buddies building a guillotine in the city square instead of a new parking garage. I highly recommend not insulting Joe's intelligence. Certainly when you discover he out scored you on his SAT's.

thunderlips11 says

If everybody was a multi-millionaire, why would anybody get up at 3AM to dump banana peels, used tampons, etc. into the back of a dump truck?

Because someone will always happen to do those things.

Peter P says

The root evil is that people allow an external value system to be forced upon them.

The root evil is the acceptance of evil.

You realize you never make any fucking sense, right?

deepcgi says

Everything holding stable for the moment, but eventually you have Bastille Day.

I usually have Country French for dinner on Bastille Day, even though I prefer Provençal food.

Bellingham Bill says

And going into debt at a $500-$800B/yr rate to the rest of the world is also consuming now at the expense of tomorrow, unless we stiff our creditors down the road, which most debtors eventually are forced into doing.

With that debt level the creditor is at best a dominatrix. We can say the safeword at any time.

Bellingham Bill says

The root evil is the acceptance of evil.

There is no evil except the self-limiting thought in people's heads.