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May 13, 2015


Joseph Stiglitz in a now year-old piece for Vanity Fair wrote that the upper 1 percent of Americans are taking in nearly a quarter of the nation’s income every year and that in terms of wealth rather than income the top 1 percent control 40 percent, noting further that the corresponding figures twenty-five years ago were 12 percent and 33 percent. The bad news is that it has become worse during this intervening year since his report.

He wrote further that the top 1 percent have seen their incomes rise 18 percent over the past 10 years, those in the middle with only high-school degrees have actually seen their incomes fall – by 12 percent over the last 25 years. All the growth in recent decades including the greatly increased marginal productivity of the economy’s workers – and more – has gone to the top, and it, too, is getting worse, and unless somehow contained, will at the present rate sooner rather than later trigger Piketty’s  r > g formula and the likely end of capitalism as we know it.

No economy is invincible, and there are limits to how much abuse a system can withstand. Many of us have borne witness to the abuses and ultimate implosion and failure of communism as an economic system in Russia in the late 1980s, and many of us may still be on the scene when plutocratic greed and toadie political fiat has created abuses leading to such a lopsided economy that (per Piketty “unless attended to”) our economic system of capitalism will implode and fail as well. We will have found that deep and chronic wage and wealth inequality had its limits in abusing our economy, and that since we did nothing about it, the economy will have ceased to function in sustainable fashion. You can only drive a car with a dashboard signal of “near empty” for so long; eventually “empty” is shown and your car will function no more. We would be well advised to fill up the tank via a fair sharing of the fruits of our economy so that we have a functioning car and can proceed to wherever our national destiny takes us.

We had better do something soon to correct this lopsided imbalance before it is too late (and in the process do our best to save capitalism from and for the capitalists – and that is not a typo). Let’s look at just a few of the many roadblocks to correction set up by the people we elect to office, whose votes have been purchased by the upper 1 percent as those we elect consign their “campaign promises” notes along with fast food wrappers to their round files and vote for the one percenters who, after all, will come up with Citizens United and other dark money to return them to office as such politicians retrieve their campaign promises from their round files for editing and repeating to constituents on the campaign trail every few years. Is this a great country or what?  Money from the rich and propaganda and higher prices for the rest of us (along with gerrymandering to maintain political control)? It works! But works for whom?

Some examples: Political giveaways of monopoly power and preferential tax treatment to the oligarchy undermine the efficiency of the economy. There is no reason to be efficient when you have little or no competition, and with monopoly power comes monopoly pricing. Think of the continuing billions and billions of dollars gift to the pharmaceutical industry engineered by George Bush the Younger. The law itself says that the biggest customer the industry has (the government) cannot bargain for lower prices with the drug industry, which is unknown among developed countries, where drugs are much cheaper than here. The law also proscribes importation of drugs from Canada, and this from a Republican Congress that preaches the virtues of free market competition? The law is plainly non-competitive by its own terms.

The law legalizes monopolistic and predatory pricing. That payoff to the industry will cost us taxpayers billions and billions of dollars over time in cost savings we could have otherwise bargained for, and as the industry’s biggest customer, our bargaining position could not have been better. Since we cannot dicker on price or otherwise import the same drugs at lower prices, we are at the mercy of the monopolist drug-makers who can charge what they get away with (and with their campaign contribution-prone Republican majority in Congress, that’s a lot).

It is disgusting to me to think of how some of the proceeds from such a continuing rip-off of people in dire need of such drugs are helping to pay for campaigns of those they have elected to office, people who were ostensibly elected  to represent the best interests of the people who elected them, not to mention the negative fiscal effect such giveaways have on our deficit.

The end result is free money for the one percenter drug monopolists from which they can distribute a share to their congressional toadies to keep the trough running and free money for their congressional toadies and higher costs and increases in the deficit for the rest of us. You and I as taxpayers and consumers of medical compounds are thus paying to further enrich the already rich while simultaneously funding the campaigns of those who like this cozy situation  where the rest of us pay the bills while they harangue the lazy 47 percenters on Fox News and in the corporate-controlled print media. We are insulted while overcharged and underpaid.

(Aside to George the Younger): Thanks, George, but please – let’s not hear any more from you about balancing budgets, fiscal austerity etc., since it is clear that you (with your massive war-time tax cuts for the rich – a first in history – along with such giveaways of huge tax monies to Big Pharma) don’t have and never had a clue about budgeting and the public purse. Perhaps being born rich didn’t prepare you for dealing with spending other peoples’ money, whether by gifts to monopolists or tax giveaways or bailouts of Wall Street banks. In any event, thank you for your multi-trillion dollar addition to our deficit and our daily and continuing drug rip-offs above discussed to help fund campaigns of your Republican legislators – just  what we needed!

Can capitalism survive greed of capitalists and political designs of their congressional vassals who value short-terms profits and lust for power over long-term performance of our country’s economy and the prosperity of its people? Piketty thinks not, but you be the judge.   GERALD   E


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