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Offline steve from virginia

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Harry Potter and the Wizard of Piketty
« on: May 29, 2014, 04:06:22 AM »

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Published on Economic Undertow on May 26, 2013


HarryPotter


Discuss this article at the Economics Table inside the Diner


The decadent, corrupt West and its imitators shiver at the end of the resource gangplank; the sharks are circling, the water is cruel and icy, the wind bitter, both space and time to procrastinate are gone … citizens are desperate to find some way past our self-created problems, we look with fluttering upward-turned hearts towards a savior … someone appropriately stylish … who can figure out how we can keep our resource gobbling pleasures while passing the costs associated with these pleasures onto others.



We expect wizardly economists and politicians to save us, clearly because they have been so incredibly successful at getting us where we are right now, shivering at the end of the gangplank.


Enter an acceptably chic savior-candidate, Thomas Piketty, a heretofore obscure, mild-mannered Parisian economist who has published a new book titled, “Capital in the Twenty-First Century”; an analysis of income- and wealth inequality based on a statistical review of tax and estate records of thirty countries including India, Japan, Malaysia and Uruguay beginning in the 19th century. He also examines changes in inequality over time in the United States from the Gilded Age to the present, asserting that wealth disparity is now as great as it has ever been.


Piketty’s timing could not be better: his concerns have emerged when grievance against inequality has become fabulously modish. Pope and president rail against it, Senator Elizabeth Warren’s anti-banker “Fighting Chance” stands alongside “Capital” on the New York Times best-seller list. Piketty joins a growing list of economists, sociologists, more economists, organizations, yet more economistsand bankers … even tycoons themselves, whining about excesses of tycoons. Meanwhile, wealth interests argue that Piketty’s work is riddled with errors and is not to be taken seriously.


Piketty’s observes; r > g … that money multiplies itself, the return r on money increases faster than does economic growth. Of course it must, by one means or another the rich will become richer, something will always increase faster than growth: (?) > g … in our instance, it is unsecured credit. Here, Piketty stands firmly on the easy side of conventional economic analysis. He paints a malfunctioning equilibrium economy where the chief complaint is decline in consumption efficiency; the increase of tycoon wealth takes place at the expense of workers. Tycoons invest their funds rather than squander them, by so doing they pinch off needed demand; businesses are deprived of customers, inventories build, businesses fail; there is increased unemployment, workers become burdened with debts that they cannot retire or service; the outcome is slow growth or recession.


Piketty’s macro view of tycoonery is remarkably bloodless, the rich are seen as automatons harvesting compound interest while onlooking masses fidget in silence. “Eventually, Piketty says, we could see the reëmergence of a world familiar to nineteenth-century Europeans; he cites the novels of Austen and Balzac. In this “patrimonial society,” a small group of wealthy rentiers lives lavishly on the fruits of its inherited wealth, and the rest struggle to keep up.”


This view understates the degree to which the tycoons actively immerse themselves within the wealth generating process, by promoting their own interests or by way of simple theft. Tycoons- and their wannabes are not bystanders but most rational of self-maximizing agents, unlike the workers they have leverage, they can make use of other peoples money’ which these others are more than eager to offer. Tycoons are parasitic enablers and opportunists; all else being equal, remove them and others will rush forward to take their places. Like Voldemort, tycoons are embodiments, creatures of the desires of their working-class clients.



Piketty is no ordinary academic, nor is he the archetypical ‘cafe communist’ skulking between bistros in St. Germain-des-Pres, chain-smoking foul-smelling cigarettes while muttering Marcuse and Sartre quotes under his hideous breath; he is a component of the French political establishment, a ‘house economist’ of the Parti Socialiste along with ex-IMF boss Dominique Strauss-Kahn, a past economic adviser to Ségolène Royal and current French president François Hollande. “Capital” is a French government policy document tarted up as a pop-culture analog to “Harry Potter and the Deathly Hallows”.


Economists are generally wrong about everything particularly the economy. Piketty grasps the baleful political nature of tycoon predation … that the marginal ‘wealth’ in the West has pretty much become the exclusive property of the rich. There is an obvious fairness argument must be taken seriously; it is socially and politically unacceptable that tycoons live sumptuously while ordinary citizens are deprived. Piketty and friends don’t go far enough. Rampaging tycoonery is only a component of onrushing economic descent which is the consequence of prior economic successes; non-stop consumption of capital by increased numbers of workers over the past 300+ years has finally caught up to us.


Having been given the chance, workers turned out to be as rapacious as their bosses. Economists including Piketty assert that this was for the best; that Americans’ monopoly on the wasting enterprise post-World War Two represented a ‘golden age’. This might be true but is also nonsense; golden ages have mighty consequences. Industrialization is ‘coming up short’ of the necessary cheap energy supplies needed to keep the bulk of the workforce employed at wasting energy. Our marketplaces are re-pricing capital to reflect changes in supply and demand; we dislike the markets’ verdict because the higher real fuel- and other resource prices cause recessions, the high prices are a remorseless tax on output.


Economists such as Piketty insist that capital is symbolic (money) rather than material. Capital is non-renewable resources, all industrial money is debt. Money is infinitely reproducible, material inputs — the actual basis of production — are not. The existence of unlimited money is by itself an incentive to waste capital even as input constraints unravel dependent enterprises such as petroleum, also agriculture, which requires topsoil, water and waste-carrying capacity. Adding more claims or shifting them around from one group or another does not increase capital but rather depletes it more quickly; efficiency does not assist but rebounds against us.


On a cash-flow basis our consumption economy is continually ‘underwater’, the gap between capital cost and system return — zero — is financed with debt. When input prices are low, the amount to be financed is affordable. Scarcity reprices resource capital, it becomes more costly than what can be affordably financed. At some point both capital and necessary credit are priced out of reach. The outcome is credit-driven ‘demand destruction’ which is currently underway around the world.


“Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.”


— John Steinbeck


Modernity cannibalizes itself, it has done so for a very long time, as such our crisis is irreversible. Conventional marketplace remedies such as debt jubilees/write-offs, funds- or earnings redistribution, bailouts, stimulus, austerity policies, monetary easing, etc. have no effect on outcome other than to worsen conditions. These are efforts to reclaim capital that no longer exists. Consequently, remedies accelerate unraveling process by increasing gross debt (claims against capital) while exposing our remaining capital to consumption at higher rates. The capital ‘pie’ cannot be redistributed, only a new and much smaller pie remains to be carefully tended. This diminished pie of non-renewable resources is what we have to make use of, to last us and the rest of the world’s creatures until the end of humanity. Adjusting the waste-based economy to operate at greater efficiency depletes capital more thoroughly at a higher rate. Giving workers access to what remains of our capital resources will not enrich them but will accelerate their ruin.


Growth and capital depletion are the consequence of a culture of excess that refuses to accept limits: there is human overpopulation, a ballooning excess of capital-gobbling machines along with extractive industrial agriculture. Failures in credit- political- and production sector marketplaces are the manifestation of resource/capital depletion. What is underway is Conservation By Other Means™.


That the industrial economy cannot afford itself is self-evident: if the enterprise was productive it would retire its own debts. Industrial productivity is a myth … promoted by industrialists themselves who use credit to effect economies of scale … to continually take on greater amounts of debt.



The Dominion of Debtor-Tycoons



The industrial economy is a system that allows a handful of tycoons to borrow immense fortunes, leaving society as a whole to retire the loans; economic wizardry in action.


Industries’ promise of future returns stands as collateral for loans which are funneled to the owners. Firms borrow their profits as enterprises cannot earn organic, ongoing real returns (they must continually borrow against the accounts of their customers or that of the state). By answering to the transitory demands of fashion and for no other reason, the firm gains access to loans. Sufficient funds are left in firm accounts to maintain the appearance of actual business until it is time to borrow again. Firms by themselves are collateral for nothing, they are abstract containers for ‘potential’; for hoped-for gains in some undetermined future. The promise of increased resource waste-over-time; is collateral for debts, the justification for both the firm’s borrowing as well as for the firm itself … and nothing more. The consequence of this is massive, multiple-hundred-trillion-dollar debts secured with some used cars, lies, potholed infrastructure and toxic gases circling overhead in the atmosphere poised like elder gods to strike us down.


A firm’s ‘secondary good’ is jobs provided for willing workers: however, centralized industry eliminates employment. The labor of entire communities is concentrated into a few firms, this reduction in labor is abstract ‘productivity’, a statistical artifact. The debtonomy evolves toward simple arbitrage: money gains money returns directly without the need for physical output or workers. The process enables tycoons while repressing the rest; r > g.


A reordering of society for good or ill is an absolute certainty. Reordering will occur either as the outcome of rational policy and good management on our part or as the result of national bankruptcies and massive increases in poverty. Piketty along with his cohort offer adjustments to tax policies that would penalize non-productive rentiers while pushing the liberated funds into circulation. This is inadequate, we have reached an impasse where the outcomes of conventional administrative success or failure are indistinguishable from each other. Piketty himself admits that more than an equalizing gesture is unlikely: the public looks toward tycoons as saviors. The effort to tax would likely be ineffectively broad with too many exclusions … reflecting tycoon-dependent politicians whose hearts are not in the project.


Much is made of the marginal income tax rates levied against the wealthiest earners in the US during the period from 1932 to 1964. Leaving out the Depression and war period, this level of taxation — which few actually paid — coincided with that golden age of American business prosperity. The prosperity matters but not as much as the rate; the top levy was 94 percent during 1944-45.


An effective strategy would be to tax the total wealth of the top-ten richest Americans every year at a 99 percent rate with the proceeds distributed directly to the poor. Taxes are generally evaded, there are always some who cannot evade: ten tycoons is a very small number, fewer than would be unable to avoid a more general levy. The number is so modest that the process would become a popular public spectacle which would be a purpose of it; a kind of inverse game show. The ten richest at any given time are not hard to identify or find, in fact there is no place for them to hide. There no cause to feel pity for them, either. Their fortunes are abstract claims gained by way of chicanery and held for competitive purposes; they are beyond what any man or even family can spend over several lifetimes. The wealth of a Michael Bloomberg is such that the reduction of 99% of his fortune would leave him with $310 million, still an enormous sum, certainly sufficient for him to eke out a penurious subsistence in a Manhattan penthouse, or in the Hamptons. Certainly, fixing ten billionaires with certain losses would not be the same as booting them out of the cargo door of an aircraft over a combat zone. The political bosses don’t hesitate to consign thousands of the country’s children to this fate; it is not unreasonable to require a small number of billionaires make a modest sacrifice for national well-being … nobody is going to shoot at them.


The ‘residual’ gained by way of this tax would be removed to the various finance marketplaces and converted from shares or notes into currency within 30 days. Generally the holdings of tycoons is in the form of stock, these would be sold ‘at the market’; the markets would certainly decline as a result of these forced sales. There is a reason for this as well, to demonstrate that markets are two sided, that they sometimes work against the interest of fortune as well as to accommodate it. Resulting funds would be distributed equally to those currently receiving food stamps (SNAP) within 60 days. Using the current group of tycoons as an example, the payments would amount to about $4,000 per recipient (x 50 millions).


The aim is to solve the challenge posed to the democratic process by tycoons and their practically unlimited money: here is a top-ten list that nobody would want to be on. The tax would be hard to evade as assets are readily identifiable and easily frozen. Tycoons fleeing the country would be labeled as tax evaders and hounded. By way of this process both wealth and money would de-sanctified, the state would be seen as even-handed, its efficacy would be increased. A limit would emerge as remaining wealthy would look to restrain themselves voluntarily or risk losing everything … a tycoon’s race to the bottom.


Another strategy is to describe how tycoons gain their fortunes in the first place, to dispel common myths. Tycoons do not ‘earn’ anything, by dint of creativity or managerial expertise, by manufacturing and selling widgets (job creation) or by lending and collecting interest. Instead, they borrow vast amounts — which are theirs to keep — then shift the obligation to service and repay the debts onto others: taxpayers, retirees, children and workers overseas. Put another way: a large percentage (30%) of Fortune 500 companies operating in 1970 were out of business within fifteen years. The lifespan for the ordinary business corporation is 50 years. Against this backdrop of failure, the tycoons proliferate and their fortunes swell. For them to succeed they must be short-sellers, that is, ‘bet’ against their own businesses. They borrow … then sell, they rush in to buy back after the company is dissolved, when shares or other ‘instruments’ are worthless, repayment obligation falls to zero. The tycoon retains 100% of what he has borrowed — meanwhile, the firm’s employees have lost their jobs.


The Walton family and the Kochs, Donald Trump … all of whom inherited great wealth .. these individuals and their firms whether they are decrepit or not are deemed by Wall Street to be credit worthy. Their parents borrowed then sold and became stupendously rich; the heirs now do the same thing.


A more generalized approach is to adapt a vaccination strategy, to adopt a certain degree of voluntary discomfort and inconvenience so as to forestall- or minimize the effects of out-and-out collapse. The economy would be inoculated with an attenuated version of the ‘recession’ virus so as to allow it to escape the most baleful effects of the actual virus itself. The attenuated vaccine would include requirements to cut energy use by a large percentage, to take on little- or no debt, to end bailouts of bankers and tycoons, to regulate interest rates and to vigorously prosecute finance law-breakers. The outcome would be unpleasant but only by a matter of degree, there would be a recession that is permanent but manageable as opposed to an unmanageable and destructive depression that would also be permanent. The recently inconvenienced millionaires (and billionaires) would be unhappy … they would have to give up their pleasures … but they are indeed beggars, they have few choices, this option represents more of a choice than the beggars deserve.


Alternatively, tycoons could make themselves useful … “the reëmergence of a world familiar to nineteenth-century Europeans; referring to the novels of Austen and Balzac. In this ‘patrimonial society,’ a small group of wealthy rentiers lives lavishly on the fruits of its inherited wealth, and the rest struggle to keep up.” In return the rentiers would hold tightly to the world’s resource capital and husband it carefully … until someone can figure out what to do with it besides burn it up in a Chevy. Whatever they might be paid would not be enough.



Offline IkeMix

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Re: Harry Potter and the Wizard of Piketty
« Reply #1 on: July 31, 2014, 11:43:51 PM »
Friend us on Facebook

Published on Economic Undertow on May 26, 2013

HarryPotter

Discuss this article at the Economics Table inside the Diner

The decadent, corrupt West and its imitators shiver at the end of the resource gangplank; the sharks are circling, the water is cruel and icy, the wind bitter, both space and time to procrastinate are gone … citizens are desperate to find some way past our self-created problems, we look with fluttering upward-turned hearts towards a savior … someone appropriately stylish … who can figure out how we can keep our resource gobbling pleasures while passing the costs associated with these pleasures onto others.



We expect wizardly economists and politicians to save us, clearly because they have been so incredibly successful at getting us where we are right now, shivering at the end of the gangplank.

Enter an acceptably chic savior-candidate, Thomas Piketty, a heretofore obscure, mild-mannered Parisian economist who has published a new book titled, “Capital in the Twenty-First Century”; an analysis of income- and wealth inequality based on a statistical review of tax and estate records of thirty countries including India, Japan, Malaysia and Uruguay beginning in the 19th century. He also examines changes in inequality over time in the United States from the Gilded Age to the present, asserting that wealth disparity is now as great as it has ever been.

Piketty’s timing could not be better: his concerns have emerged when grievance against inequality has become fabulously modish. Pope and president rail against it, Senator Elizabeth Warren’s anti-banker “Fighting Chance” stands alongside “Capital” on the New York Times best-seller list. Piketty joins a growing list of economists, sociologists, more economists, organizations, yet more economists … and bankers … even tycoons themselves, whining about excesses of tycoons. Meanwhile, wealth interests argue that Piketty’s work is riddled with errors and is not to be taken seriously.

Piketty’s observes; r > g … that money multiplies itself, the return r on money increases faster than does economic growth. Of course it must, by one means or another the rich will become richer, something will always increase faster than growth: (?) > g … in our instance, it is unsecured credit. Here, Piketty stands firmly on the easy side of conventional economic analysis. He paints a malfunctioning equilibrium economy where the chief complaint is decline in consumption efficiency; the increase of tycoon wealth takes place at the expense of workers. Tycoons invest their funds rather than squander them, by so doing they pinch off needed demand; businesses are deprived of customers, inventories build, businesses fail; there is increased unemployment, workers become burdened with debts that they cannot retire or service; the outcome is slow growth or recession.

Piketty’s macro view of tycoonery is remarkably bloodless, the rich are seen as automatons harvesting compound interest while onlooking masses fidget in silence. “Eventually, Piketty says, we could see the reëmergence of a world familiar to nineteenth-century Europeans; he cites the novels of Austen and Balzac. In this “patrimonial society,” a small group of wealthy rentiers lives lavishly on the fruits of its inherited wealth, and the rest struggle to keep up.”

This view understates the degree to which the tycoons actively immerse themselves within the wealth generating process, by promoting their own interests or by way of simple theft. Tycoons- and their wannabes are not bystanders but most rational of self-maximizing agents, unlike the workers they have leverage, they can make use of other peoples money’ which these others are more than eager to offer. Tycoons are parasitic enablers and opportunists; all else being equal, remove them and others will rush forward to take their places. Like Voldemort, tycoons are embodiments, creatures of the desires of their working-class clients.



Piketty is no ordinary academic, nor is he the archetypical ‘cafe communist’ skulking between bistros in St. Germain-des-Pres, chain-smoking foul-smelling
ecigs while muttering Marcuse and Sartre quotes under his hideous breath; he is a component of the French political establishment, a ‘house economist’ of the Parti Socialiste along with ex-IMF boss Dominique Strauss-Kahn, a past economic adviser to Ségolène Royal and current French president François Hollande. “Capital” is a French government policy document tarted up as a pop-culture analog to “Harry Potter and the Deathly Hallows”.

Economists are generally wrong about everything particularly the economy. Piketty grasps the baleful political nature of tycoon predation … that the marginal ‘wealth’ in the West has pretty much become the exclusive property of the rich. There is an obvious fairness argument must be taken seriously; it is socially and politically unacceptable that tycoons live sumptuously while ordinary citizens are deprived. Piketty and friends don’t go far enough. Rampaging tycoonery is only a component of onrushing economic descent which is the consequence of prior economic successes; non-stop consumption of capital by increased numbers of workers over the past 300 years has finally caught up to us.

Having been given the chance, workers turned out to be as rapacious as their bosses. Economists including Piketty assert that this was for the best; that Americans’ monopoly on the wasting enterprise post-World War Two represented a ‘golden age’. This might be true but is also nonsense; golden ages have mighty consequences. Industrialization is ‘coming up short’ of the necessary cheap energy supplies needed to keep the bulk of the workforce employed at wasting energy. Our marketplaces are re-pricing capital to reflect changes in supply and demand; we dislike the markets’ verdict because the higher real fuel- and other resource prices cause recessions, the high prices are a remorseless tax on output.

Economists such as Piketty insist that capital is symbolic (money) rather than material. Capital is non-renewable resources, all industrial money is debt. Money is infinitely reproducible, material inputs — the actual basis of production — are not. The existence of unlimited money is by itself an incentive to waste capital even as input constraints unravel dependent enterprises such as petroleum, also agriculture, which requires topsoil, water and waste-carrying capacity. Adding more claims or shifting them around from one group or another does not increase capital but rather depletes it more quickly; efficiency does not assist but rebounds against us.

On a cash-flow basis our consumption economy is continually ‘underwater’, the gap between capital cost and system return — zero — is financed with debt. When input prices are low, the amount to be financed is affordable. Scarcity reprices resource capital, it becomes more costly than what can be affordably financed. At some point both capital and necessary credit are priced out of reach. The outcome is credit-driven ‘demand destruction’ which is currently underway around the world.

“Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.”

— John Steinbeck

Modernity cannibalizes itself, it has done so for a very long time, as such our crisis is irreversible. Conventional marketplace remedies such as debt jubilees/write-offs, funds- or earnings redistribution, bailouts, stimulus, austerity policies, monetary easing, etc. have no effect on outcome other than to worsen conditions. These are efforts to reclaim capital that no longer exists. Consequently, remedies accelerate unraveling process by increasing gross debt (claims against capital) while exposing our remaining capital to consumption at higher rates. The capital ‘pie’ cannot be redistributed, only a new and much smaller pie remains to be carefully tended. This diminished pie of non-renewable resources is what we have to make use of, to last us and the rest of the world’s creatures until the end of humanity. Adjusting the waste-based economy to operate at greater efficiency depletes capital more thoroughly at a higher rate. Giving workers access to what remains of our capital resources will not enrich them but will accelerate their ruin.

Growth and capital depletion are the consequence of a culture of excess that refuses to accept limits: there is human overpopulation, a ballooning excess of capital-gobbling machines along with extractive industrial agriculture. Failures in credit- political- and production sector marketplaces are the manifestation of resource/capital depletion. What is underway is Conservation By Other Means™.

That the industrial economy cannot afford itself is self-evident: if the enterprise was productive it would retire its own debts. Industrial productivity is a myth … promoted by industrialists themselves who use credit to effect economies of scale … to continually take on greater amounts of debt.

The Dominion of Debtor-Tycoons
The industrial economy is a system that allows a handful of tycoons to borrow immense fortunes, leaving society as a whole to retire the loans; economic wizardry in action.

Industries’ promise of future returns stands as collateral for loans which are funneled to the owners. Firms borrow their profits as enterprises cannot earn organic, ongoing real returns (they must continually borrow against the accounts of their customers or that of the state). By answering to the transitory demands of fashion and for no other reason, the firm gains access to loans. Sufficient funds are left in firm accounts to maintain the appearance of actual business until it is time to borrow again. Firms by themselves are collateral for nothing, they are abstract containers for ‘potential’; for hoped-for gains in some undetermined future. The promise of increased resource waste-over-time; is collateral for debts, the justification for both the firm’s borrowing as well as for the firm itself … and nothing more. The consequence of this is massive, multiple-hundred-trillion-dollar debts secured with some used cars, lies, potholed infrastructure and toxic gases circling overhead in the atmosphere poised like elder gods to strike us down.

A firm’s ‘secondary good’ is jobs provided for willing workers: however, centralized industry eliminates employment. The labor of entire communities is concentrated into a few firms, this reduction in labor is abstract ‘productivity’, a statistical artifact. The debtonomy evolves toward simple arbitrage: money gains money returns directly without the need for physical output or workers. The process enables tycoons while repressing the rest; r > g.

A reordering of society for good or ill is an absolute certainty. Reordering will occur either as the outcome of rational policy and good management on our part or as the result of national bankruptcies and massive increases in poverty. Piketty along with his cohort offer adjustments to tax policies that would penalize non-productive rentiers while pushing the liberated funds into circulation. This is inadequate, we have reached an impasse where the outcomes of conventional administrative success or failure are indistinguishable from each other. Piketty himself admits that more than an equalizing gesture is unlikely: the public looks toward tycoons as saviors. The effort to tax would likely be ineffectively broad with too many exclusions … reflecting tycoon-dependent politicians whose hearts are not in the project.

Much is made of the marginal income tax rates levied against the wealthiest earners in the US during the period from 1932 to 1964. Leaving out the Depression and war period, this level of taxation — which few actually paid — coincided with that golden age of American business prosperity. The prosperity matters but not as much as the rate; the top levy was 94 percent during 1944-45.

An effective strategy would be to tax the total wealth of the top-ten richest Americans every year at a 99 percent rate with the proceeds distributed directly to the poor. Taxes are generally evaded, there are always some who cannot evade: ten tycoons is a very small number, fewer than would be unable to avoid a more general levy. The number is so modest that the process would become a popular public spectacle which would be a purpose of it; a kind of inverse game show. The ten richest at any given time are not hard to identify or find, in fact there is no place for them to hide. There no cause to feel pity for them, either. Their fortunes are abstract claims gained by way of chicanery and held for competitive purposes; they are beyond what any man or even family can spend over several lifetimes. The wealth of a Michael Bloomberg is such that the reduction of 99% of his fortune would leave him with $310 million, still an enormous sum, certainly sufficient for him to eke out a penurious subsistence in a Manhattan penthouse, or in the Hamptons. Certainly, fixing ten billionaires with certain losses would not be the same as booting them out of the cargo door of an aircraft over a combat zone. The political bosses don’t hesitate to consign thousands of the country’s children to this fate; it is not unreasonable to require a small number of billionaires make a modest sacrifice for national well-being … nobody is going to shoot at them.

The ‘residual’ gained by way of this tax would be removed to the various finance marketplaces and converted from shares or notes into currency within 30 days. Generally the holdings of tycoons is in the form of stock, these would be sold ‘at the market’; the markets would certainly decline as a result of these forced sales. There is a reason for this as well, to demonstrate that markets are two sided, that they sometimes work against the interest of fortune as well as to accommodate it. Resulting funds would be distributed equally to those currently receiving food stamps (SNAP) within 60 days. Using the current group of tycoons as an example, the payments would amount to about $4,000 per recipient (x 50 millions).

The aim is to solve the challenge posed to the democratic process by tycoons and their practically unlimited money: here is a top-ten list that nobody would want to be on. The tax would be hard to evade as assets are readily identifiable and easily frozen. Tycoons fleeing the country would be labeled as tax evaders and hounded. By way of this process both wealth and money would de-sanctified, the state would be seen as even-handed, its efficacy would be increased. A limit would emerge as remaining wealthy would look to restrain themselves voluntarily or risk losing everything … a tycoon’s race to the bottom.

Another strategy is to describe how tycoons gain their fortunes in the first place, to dispel common myths. Tycoons do not ‘earn’ anything, by dint of creativity or managerial expertise, by manufacturing and selling widgets (job creation) or by lending and collecting interest. Instead, they borrow vast amounts — which are theirs to keep — then shift the obligation to service and repay the debts onto others: taxpayers, retirees, children and workers overseas. Put another way: a large percentage (30%) of Fortune 500 companies operating in 1970 were out of business within fifteen years. The lifespan for the ordinary business corporation is 50 years. Against this backdrop of failure, the tycoons proliferate and their fortunes swell. For them to succeed they must be short-sellers, that is, ‘bet’ against their own businesses. They borrow … then sell, they rush in to buy back after the company is dissolved, when shares or other ‘instruments’ are worthless, repayment obligation falls to zero. The tycoon retains 100% of what he has borrowed — meanwhile, the firm’s employees have lost their jobs.

The Walton family and the Kochs, Donald Trump … all of whom inherited great wealth .. these individuals and their firms whether they are decrepit or not are deemed by Wall Street to be credit worthy. Their parents borrowed then sold and became stupendously rich; the heirs now do the same thing.

A more generalized approach is to adapt a vaccination strategy, to adopt a certain degree of voluntary discomfort and inconvenience so as to forestall- or minimize the effects of out-and-out collapse. The economy would be inoculated with an attenuated version of the ‘recession’ virus so as to allow it to escape the most baleful effects of the actual virus itself. The attenuated vaccine would include requirements to cut energy use by a large percentage, to take on little- or no debt, to end bailouts of bankers and tycoons, to regulate interest rates and to vigorously prosecute finance law-breakers. The outcome would be unpleasant but only by a matter of degree, there would be a recession that is permanent but manageable as opposed to an unmanageable and destructive depression that would also be permanent. The recently inconvenienced millionaires (and billionaires) would be unhappy … they would have to give up their pleasures … but they are indeed beggars, they have few choices, this option represents more of a choice than the beggars deserve.

Alternatively, tycoons could make themselves useful … “the reëmergence of a world familiar to nineteenth-century Europeans; referring to the novels of Austen and Balzac. In this ‘patrimonial society,’ a small group of wealthy rentiers lives lavishly on the fruits of its inherited wealth, and the rest struggle to keep up.” In return the rentiers would hold tightly to the world’s resource capital and husband it carefully … until someone can figure out what to do with it besides burn it up in a Chevy. Whatever they might be paid would not be enough.


Surely one of the best movies I have ever seen.. Effects were amazing.. Harry Potter series rocks..
« Last Edit: August 03, 2014, 10:15:36 PM by IkeMix »

Offline Eddie

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Re: Harry Potter and the Wizard of Piketty
« Reply #2 on: August 01, 2014, 07:51:57 AM »
I read all the books. It's a great story. I just thought the author was a little too hard on Harry. The guy never got a break.
What makes the desert beautiful is that somewhere it hides a well.

 

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