Thursday, January 29, 2015

Watching the End of Capitalism? Yes, If We Don't Address the Stupid

Oracle chairman Larry Ellison's 2004 yacht. David Geffen bought half of
it in 2006 and has owned it all since 2010. 11th largest in the world.
Rich people need shit like this to feel good.

When we talk about the end of capitalism (won't be that easy, but can you say "let them eat cake"?), we're wildly speculating. I don't know what oligarchies do to prevent the end of days, but I imagine those with scads of cash can buy armies. It won't be the first time.

The difference would be that America is heavily armed, and if the working stiffs figure out that the rich are keeping all the productivity gains of the past thirty years for themselves, someone might come gunning. So far, the working stiffs think raising taxes on the rich -- back to 1980 levels! -- is somehow an attack on their well-being. Oh well.

A good case in point is Yahoo Finance's article this morning entitled "Five years into recovery, Dow companies squeeze workers as investors thrive." Key chart:

The chart essentially says that corporations give their profits to investors, not workers. It wasn't always so, but with the near-death of unionism and the general idea that a rising tide (should) lift all boats. No, let them eat cake. We want all the boats, at least the gargantuan ones.

What are our policy choices? For the Democrats, it's nibble around the edges to get some relief for the poor, working class, and middle class. That's the gist of Barack Obama's new tax-and-redistribute plan. Not a bad plan, but a relatively feeble start. Here's Vox's take on what it is and its chances of enactment. (Hint: none.)

For the Republicans, whose likely presidential candidates have taken to running around yelling "Save the poor!", their policies remain unformed. They haven't figured out how to make their tax-cuts-for-the-rich mantra sound like "Yeah, but we're also saving the poor!" There's a huge conflict there.

We'll probably begin to hear the GOP spout some form of Paul Ryan's give-the-poor-money-but-make-them-report-in-every-other-day, which of course won't waste time and money on the incredible bureaucracy needed to verify that the poor aren't spending their food stamps on Cadillacs and cell phones. Didn't think it out, did you, Paul?
Ryan’s anti-poverty proposals share many of the assumptions and attitudes of  [Bush's "compassionate conservatism"] agenda from 15 years ago. They start from an assumption that poverty is an unusual and marginal issue in U.S. society. That idea is not articulated, but it is revealed by Ryan’s most attention-grabbing proposal: his “opportunity contract.” Ryan suggests that states experiment with a new approach to means-tested programs. Beneficiaries of those programs would be assigned a social-service provider. That provider—which might be a government agency, a nonprofit private-sector organization, or a for-profit business—would guide the recipient through the welter of government programs available. It would also set goals for the beneficiary, such as attending school or completing a drug-treatment program. The provider would reward good behavior and impose sanctions on bad behavior.
Guess you didn't, Paul. Yes, let's solve the poverty problem by appointing a life coach for each and every poor person. Makes sense to me! Of course, we'll have to end Social Security and Medicare as we know it to do it, but... At least corporate profits would be secure.

We'll see if a Ted Cruz or a Scott Walker or even a John Kasich can produce a better scheme to not appear to be looking cross-eyed at the unfortunate. Since the unfortunate appear to be the 99%, that's a tall order.

Scott Walker, 2016 hopeful. Yeah, destroying public-sector unions
is just the ticket to move money where it's needed.

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