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September 16, 2015


We are constantly reminded by the corporate press that we are the richest country in the world. I disagree with the tool the press has selected for such measurement, i.e., gross wealth. I also disagree with who “we” are. Given their measuring stick, then medieval feudal kingdoms would have been “the richest in the world” in their day and age even while their serfs lived in frigid huts outside the castle in abject poverty in which their lives and the lives of man in general as described by Thomas Hobbes (long before the Industrial Revolution made their lives worse) were “solitary, poor, nasty, brutish, and short.”

As now, there was no trickle down in such dictatorial societies where those who either seized or were born into the royal power structure held forth by divine order, only trickle up – then by royal edict and now by legislative edict purchased one layer removed by the new royalty, the royalty of wealth and not blood (both of which are or should be in any event illegitimate criteria for rule in a democracy – if we have one at this late date of state socialism for the rich).

What good was it for such peasants to live in a “rich kingdom” if their king or other members of the “nobility” and their “courts” lived in luxury off the efforts of the serfs who provided grain and meat for the nobility with barely enough left to feed their own families and, as I have blogged before in what I have called “the new feudalism,” what good does it do the great majority of us who are modern-day serfs to live in “the richest country in the world” if the fruits of our efforts are skimmed off and pocketed by the rich and corporate class a la the old European feudalistic practices?

So how can we fairly measure the “wealth” of our country on a per capita basis? The “gross wealth” measure tells us nothing about how such wealth is distributed. Income averaging won’t work, as that of those such as Warren Buffett, Bill Gates, corporate executives and Wall Street moguls would skew the result. The correct statistical device to be employed is that of the mean, and by that standard we are far from the richest country in the world. Our economy has apparently mastered the ways and means of making profits (some real and some currently overpriced paper) but our politicians have been guilty of near criminal neglect in setting the legislative stage for their distribution since the middle 1970s (resulting in both wage and wealth inequality for forty years and continuing) which hearkens back to an earlier day of fiefdoms, moats, drawbridges, and captive serfs who (in more recent times and after Bush’s Great Recession and the millions of foreclosures), own nothing but their labor.

So what good is it to live in what the Wall Street Journal tells us is “the richest country in the world” if one’s working life is spent in a serf-like minimum wage dead-end job? What’s in it for you (besides having the fruits of your “marginal productivity of labor” skimmed off the top and into the pockets of the rich and corporate class, and just who is it that is the “we” when describing how rich “we” are? It is certainly not the means-tested ordinary American. It is “they,” not “we.” Why?

Here’s why. Unlike several European countries that, presumably, are not “the richest in the world” per the Wall Street measure, we do not have single payer health care at little or no cost like every other advanced country in the world; we do not have higher education at little or no cost; we do not have worker representation on corporate boards as in Germany; we do not have legislative controls on CEO and other executive compensation and bonuses; and we do not have effective regulatory controls on our banking sector both within this country and internationally.

I could go and on but I hope the reader will get the idea, which is that the old time idealized view of capitalism by classical economists Adam Smith and David Ricardo has morphed into a form of state socialism in which the rich and corporate class has become the favored class and the rest of us are largely left to our own devices while supporting the rich and corporate class with bailouts, tax breaks and Chapter 11 redos in bankruptcy court, even while such beneficiaries of our congressionally-imposed largesse are simultaneously instructing their congressional toadies to continue denying bankruptcy for student loans, tax breaks for individuals and in a new low in impoverishing the needy, have succeeded in having social security checks subjected to garnishment for repayment of student loans. (!)

While students and former students are denied bankruptcy protection for loans they took out to go to school, corporations under Chapter 11 can not only stiff creditors but also are allowed by the statute to void labor contracts, retirement programs etc. – and remain in business either free of debt or at a level which will insure continuation of their businesses. The big and insolvent Wall Street banks during our recent brush with international depression didn’t need to file a petition in Chapter 11; we rushed in and bailed them out with hundreds of billions of dollars. However, we had no money to bail out the victims of these banks with millions of home foreclosures and families living in shelters and under bridges; they instead were given lectures on how they were at fault along with an austerity menu. We had instant billions for the victimizers but little to nothing for their victims, which is the equivalent of blaming a raped woman for the crime while rewarding the rapist. Aside from moral considerations, where is the logic in rewarding wrong-doers and chastising those dispossessed by such tortuous/criminal conduct?

The Wall Street banks have succeeded to date in thwarting the reinstatement of the Glass-Steagall Act (which separated commercial banking and investment banking and had it not been repealed would have prevented both millions of mortgage foreclosures and Bush’s Great Recession). They have also succeeded (via a Republican amendment to the Dodd-Frank Act hooked on to a must-pass spending bill as the first act of the current Congress after the election of 2014) in having once again your and my federally-insured banking funds available to themselves with which to roam the globe looking for trade deals and trading in derivatives and other such esoteric instruments.

We are therefore once again both funding the banks’ investments in part and are back in bailout territory as well, both of which the Dodd-Frank Act (among other such remedial language) was designed to prevent but which the Republican amendment removed from the Act. We are once again at the mercy of big Wall Street banks. It’s back to the heads I win, tails you lose game. If the big banks make money, they keep it. If they lose money, we bail them out, and we have nothing to say about their decisions to invest; we are stuck with the result. That, readers, is state socialism (aka corporate welfare).

While all this is going on, our domestic economy is starved for demand due to wage/wealth inequality and the Fed’s historically low interest rates ostensibly designed to “fight” unemployment and inflation but which have instead propped up the stock market with virtually free money. WE invest in Wall Street, not our people, and as a result WE are not the world’s richest country. It’s not even close.    GERALD    E

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