Revisiting Plutonomy: The Rich Getting Richer

from Citigroup via Bill Moyers' program from PBS (4-30-10)  (Updated)

I found an especially interesting mini-segment of Bill Moyers' final program when he, after the interview with Jim Hightower, briefly referred to this Citigroup document of 2006. In the interview it can be found at 37:13m. After some searching, I found the document on line. The conclusion at the end of the article is sufficient to get the main points:

The latest Survey of Consumer Finances for 2004 from the Fed, just released, shows that the richest 20% of Americans have gotten even wealthier since the last survey was conducted in 2001, and continue to enjoy a disproportionately large share of both income (58%) and wealth (68%). We should make clear that we have no normative view on whether plutonomies are good or bad. Our analysis is based on the facts, not what the society should look like.

This lies at the heart of our plutonomy thesis: that the rich are the dominant source of income, wealth and demand in plutonomy countries such as the UK, US, Canada and Australia, countries that have an economically liberal approach to wealth creation. We believe that the actions of the rich and the proportion of rich people in an economy helps explain many of the nasty conundrums and fears that have vexed our equity clients recently, such as global imbalances or why high oil prices haven’t destroyed consumer demand. Plutonomy, we think explains these problems away, and tells us not to worry about them. If we shouldn’t worry, the risk premia on equity markets may be too high.

Secondly,we believe that the rich are going to keep getting richer in coming years, as capitalists (the rich) get an even bigger share of GDP as a result, principally, of globalization. We expect the global pool of labor in developing economies to keep wage inflation in check, and profit margins rising–good for the wealth of capitalists, relatively bad for developed market unskilled/outsource-able labor. This bodes well for companies selling to or servicing the rich. We expect our Plutonomy basket of stocks–which has performed well relative to the S&P 500 index over the last 20 years–to continue performing well in future. [my emphasis]

As you can see, the Citigroup document starts off with a disclaimer at having any moral values with regard to the increasing disparity between the rich and poor. That is because one can only function well at the top of the capitalist world if one is a sociopath, that is, one who doesn't have any regard for the morality or ethics, especially in regard to the widespread effects of social inequality and injustice that it causes.

Then you can see why the ruling classes so vigorously pursued globalization: greater profits by employing working people in 3rd world countries while firing relatively unskilled working people in the US and other Western countries. You see, dictators and ruling classes in third world countries are easy to bribe to keep wages low by preventing working people from organizing into labor unions and ignoring any environmental laws they may have. Increasingly of late, more skilled workers in the US are finding their jobs outsourced to developing countries. This, combined with the rich making the rest of us pay for their gambling debts, has resulted in devastated communities, foreclosures on homes, poor health care, cuts in public services, etc. But that doesn't bother the rich and powerful--they avoid taking any "normative" stand on these issues.

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The End of the Long Summer

from Yes! Magazine. Somehow I missed this article earlier in the month. It is a review of a book by Dianne Dumanoski entitled, "The End of the Long Summer".  Based on the review, it appears that the author (of the book) makes a good case for system change if we as a human species are going to prevent climatic and environmental catastrophe, but in the review there is never any mention of the system that needs changing. You see, in the US it is a real career killer if one, in any way, criticizes the capitalist system.

Lungs of the world are choking

from Al Jazeera. This is an eye-witness report of the dramatic environmental damage caused in Borneo by the operations of large Indonesian corporations.

The lungs of the world are suffering from serious breathing problems. It struck me again when we drove for ten hours on a dirt road on the Indonesian island of Borneo without seeing... trees. I mean real firm standing trees with leaves. The once stunning rain forest has been replaced by a scenery that mostly resembles a graveyard. Undefinable bush on both sides of the road where blackened burned remains of trees are the only evidence that this used to be a forest. Borneo-romantically described as the lungs of the world-is not the most cheerful place on this planet. 

Banks Pressured Credit Agencies, Then Blamed Them

from ProPublica. The title quite says it all, but read the article for more details.

Whistleblower: BP Risks More Massive Catastrophes in Gulf

from Truthout. 

British Petroleum (BP) has broken federal laws and violated its own internal procedures by failing to maintain crucial safety and engineering documents related to one of the firms other deepwater production projects in the Gulf of Mexico, a former contractor who worked for the oil behemoth claimed in internal emails and other documents obtained by Truthout.

Obama’s blueprint for austerity

from World Socialist Web Site. What capitalists euphemistically call "structural adjustment", which has slashed social, educational, and welfare programs in so many developing countries, is now headed for the US. These are the results of late capitalism under globalization--every country becomes a colony of the international capitalist class and available for exploitation.

The National Commission on Fiscal Responsibility held its inaugural hearing on Tuesday, launching the process through which the Obama administration plans to introduce drastic attacks on social spending and living standards to make the working class pay for the crisis of American capitalism.

Gulf oil spill threatens economic, environmental catastrophe

from World Socialist Web Site. 

The Obama administration claims BP will be responsible for the full cost of the cleanup. However, given the enormous power exerted by big oil over Washington, this is unlikely. In the case of the Exxon Valdez oil spill in Alaska, up to that point the worst environmental disaster in US history, the oil giant successfully appealed damage awards to the Supreme Court. Ultimately it was ruled liable for the derisory sum of $507 million, equivalent to a few days’ profit for Exxon. As for the clean-up costs, the company recovered a significant portion through insurance claims.

US military enforces attacks on Haitian unions Pt2 (8:18m video)

from Real News Network. This is continuation of the interview with Didier Dominique who claims that there is a deliberate US policy to weaken Haitian farming to create a pool of cheap textile labor.

Time out

The Lunatics Who Made a Religion Out of Greed and Wrecked the Economy

by Matt Taibbi from AlterNet. 

Even if he stands to make a buck at it, even your average used-car salesman won't sell some working father a car with wobbly brakes, then buy life insurance policies on that customer and his kids. But this is done almost as a matter of routine in the financial services industry, where the attitude after the inevitable pileup would be that that family was dumb for getting into the car in the first place. Caveat emptor, dude!

Revolving Door From Capitol Hill to Big Banks

from Sunlight Foundation. 

Concerned about seeing their huge profits cut, six big banks are leading the charge to weaken or block new financial regulations being considered in the United States Senate. To push their cause these banks have hired 145 former government officials–congressmen, staffers and executive branch officials–to lobby on Capitol Hill and in the executive branch.

Fix the economy, not Wall Street

by David Korten from Yes! Magazine. 

Korten has been a popular critic of corporations in the US for quite some time. However his insights and solutions to corporate control of US society has been, in my opinion, very limited and short sighted. He appears to be a classic libertarian--an advocate of reforms to the advanced financial form of capitalism that exists today. The reforms take the form of turning back the clock on capitalist development to a 19th century economy when small capitalism is seen as beautiful. 

But this is like complaining about an adult person who has turned out to be a criminal, and wishing that he could return to his childhood when he was such a cute, well-behaved little guy. This kind of thinking has infected so much of "progressive" thinking in the US and threatens to derail any real solutions to the various crises of capitalism.

Biofooled again: BBC on the impact of biofuels on Paraguay’s ecology and farmers

by Tom Philpott from Grist. The author discusses the implications of a BBC report on the production of bio-fuels.

...government-mandated biofuel programs, both in Europe and here, are distractions from the necessary task of reducing fossil energy consumption. They will inevitably cause the destruction of climate-stabilizing ecosystems like rain forests and seperate small-scale farmers from their land. Indeed, both are lready happening.

How the SEC and Congress Can Bring Down Goldman Sachs and Expose the Financial Coup

by David DeGraw from Amped Status. Unlike mainstream reporters, this insightful investigative journalist links Goldman Sachs' shenanigans to Hank Paulson, the ex-Goldman Sachs executive and former Treasury Secretary. But he doesn't hold much hope that any thorough investigation is in the offing.

So unless this is just the first of many moves on the part of the SEC, this whole case amounts to a psychological operation designed to once again quell popular outrage. These indications lead me to believe that this is a classic “limited hang-out.” As Wikipedia explains it:

    “A limited hangout is a form of deception, misdirection, or coverup often associated with intelligence agencies involving a release or ‘mea culpa’ type of confession of only part of a set of previously hidden sensitive information, that establishes credibility for the one releasing the information who by the very act of confession appears to be ‘coming clean’ and acting with integrity; but in actuality by withholding key facts is protecting a deeper crime and those who could be exposed if the whole truth came out. In effect, if an array of offenses or misdeeds is suspected, this confession admits to a lesser offense while covering up the greater ones.”

War with China? The Dangers of a Global Conflagration

by James Petras from Global Research. The subtitle, "Rising and Declining Economic Powers: The Sino-US Conflict Deepens" much more accurately describes the contents of this article. 

The author presents a very large conceptual framework that requires a good knowledge of history, especially of the capitalist period, to fully appreciate. Within this context, his framework is a kind of theory of empire development and decay. He uses historical examples to illustrate how empires have pursued different strategies when they decline and the effects of such strategies. He argues that the US, which he sees in decline, is pursuing a very self-destructive strategy of military aggression, use of client states, subversion, and propaganda to maintain its empire.

I think that it needs to be stated clearly that he is addressing modern empires driven by the dynamics of capitalism. These include those ruled over by the Soviet Union as well as Great Britain, France, Germany, Japan, the US, and the emerging power of China. Capitalism at its core is designed to promote the hoarding of wealth and power by a few at the expense of the many. Thus, to be conceptually clear, it is necessary to see the Soviet Union as a bureaucratic, state form of capitalism. 

Except for China, the others are modeled after the British that were led by competing capitalists. China is more like a hybrid of the Soviet type and the classic Western type in that it is a state supervised economy of capitalists. Hence, it is clear to me that we would always be plagued by wars between nations and between classes of people as long as this destructive system lasts even if the threats of climate change and resource depletion were not entering the scene.

Although I believe that his analysis offers some excellent insights that go a long way toward explaining current events and I highly recommend the article, his conclusions are weakened by the fact that environmental factors of climate change and resource depletion are missing from his analysis. Such factors will impinge powerfully upon the continued economic growth of all capitalist countries and will have catastrophic effects upon many life forms on the earth if the capitalist system is allowed to continue.

Finally, his essay is a bit marred by typographical and other errors. The one that caused me the most confusion was his inconsistent use of the abbreviation, "EIP"--established imperial powers, which morphed for a while into "EIS"--apparently referring to established imperial states, and then back to EIP.

How the Western Media Promotes a Mistaken View of the World

by Ramzy Baroud from his blog via Global Research. The author addresses the issue of the narrow and biased focus of Western news agencies which is a never ending challenge for those of us who try to understand the world we live in. He also offers a solution to this problem.

 


Media channels – especially those dispatching their news from various Western capitals - focus not simply on sensational news, but they also intentionally sensationalize news, and purposely relay the news so as to be understood within Western contexts. Thus ‘democracy’, ‘elections’, ‘government restrictions’ and ‘terrorism’ are the usual buzzwords.
                  *******************************
The western media will continue to reduce [coverage on] non-Westerners, for they have a vested interest in doing so, and it has become habitual. A first step in overcoming this would be to empower our own local and regional media, and to create rapports amongst them.  We can only challenge the abhorrent narratives about us when we start to present our own truth and experience, and support others to do the same.

US military enforces attacks on Haitian unions--part 1 (10:99m video)

from Real News Network. Paul Jay interviews Didier Dominique who is a trade unionist and a prominent spokesperson for Batay Ouvriye. BATAY OUVRIYE  is an organization that regroups factory unions and committees, workers’ associations and militants, all struggling in Haiti for the construction of an independent, combative and democratic union movement, and to organize wage-workers, self-employed workers as well as the unemployed for the defense of their rights.

The Surprising Reason Why Americans Are So Lonely, and Why Future Prosperity Means Socializing with Your Neighbors

by Bill McKibben from Alter Net. This is an excerpt from his book, " EAARTH: Making a Life on a Tough New Plane". The author discusses the practical problems and benefits of localizing production [in a capitalist economy] mostly in relation to food. 

Updated: Facebook Further Reduces Your Control Over Personal Information

from Electronic Frontier Foundation. 

Once upon a time, Facebook could be used simply to share your interests and information with a select small community of your own choosing. As Facebook's privacy policy once promised, "No personal information that you submit to Facebook will be available to any user of the Web Site who does not belong to at least one of the groups specified by you in your privacy settings."

How times have changed.

Israeli Bulldozers Destroy Palestinian Children’s Playground

from After Downing Street. 

Soldiers present used violent force to remove Palestinian, Israeli and international activists who attempted to prevent the destruction.