Stupid Rich

“They were careless people, Tom and Daisy—they smashed up things and creatures and then retreated back into their money or their vast carelessness, or whatever it was that kept them together, and let other people clean up the mess they had made.”

F. Scott Fitzgerald wrote the Great Gatsby, in 1925, describing in lurid detail the tail end of America’s first Gilded Age. It was a cautionary tale of vast wealth, and the excess and decadence that came with it. Set in the 1920’s before the stock market crash, the story, for me, has always been a warning of what happens when a society hands the keys over to the stupid rich, who promptly drive it straight into the ditch.

It’s not a good thing when the stupid rich manage a countries affairs. Examining past empires bears this out. Not all rich people are stupid, of course, but when you pursue short term policies that benefit the wealthy above all else, like cutting taxes, public investment and much-needed services, all in accordance with conservative economic dogma, you get ruinous results for everyone else.

It has become common wisdom since Reagan that cutting the taxes of our heroic job creators will bring about a plethora of jobs for the rest of us lucky duckies. The evidence is in and the avalanche of jobs has failed to materialize. It turns out that cutting taxes on the rich only allows them to buy up our political system, ensuring more of the same policies. In fact, maybe the whole purpose of this decades long economic con was simply to cut taxes on the wealthy, full stop.

Mission accomplished, as they say.

The relentless crusade against taxes paid by the rich has led directly to the policies of austerity, including cuts to government programs that benefit the poor and the middle class, leaving them faced with decreased services and more expenses.

Want an example of stupid rich policies? Take a look at Kansas, the wholly owned subsidiary of the Koch brothers. Governor Sam Brownback followed the conservative, trickle down economic playbook to the letter, in slashing state income taxes on the wealthiest state citizens–a move supported by supply-side icon Arthur Laffer. What were the results?

“Justly dubbed a “failed experiment” for the massive deficits it has generated, the experiment also produced only lackluster job growth.”

Meanwhile, Brownback is attempting to balance his state’s budget by slashing programs that benefit the most needy residents. Salon writer Brittney Cooper, absolutely kills it in describing the results of these punitive state policies.

“Conservative disdain for the poor has reached new heights with the recent passage of the HOPE Act in Kansas earlier this month. This bill, signed into law by Governor Sam Brownback, prohibits those who receive TANF (Temporary Assistance for Needy Families) from using funds to go to movies, to go swimming, to go to theme parks, to gamble, to visit strip clubs or bars.”

Sometimes I have to stop and admire the sheer evil genius of America’s divide and rule overlords, utilizing class and race, when it come time to gin up the stereotyping and hatred of the other in their pursuit of austerity.

Years of media saturation in victim blaming has only conditioned Americans to see themselves as responsible for their lack of economic success in America. But, this blame is always shifted on to someone less powerful. Not only is there a hatred of the poor in America, but there is a sort of quiet desperation among the middle class to keep up appearances. Here, Miss Cooper touches on the details of this insidious pressure.

“Those of us solidly situated in the middle class work harder and harder with less to show for it.  That can only be justified at a psychological level if there are clear demarcations of value. So when we look at the poor, their lives need to look appreciably more difficult than ours, in order for our lives to look like middle-class lives.”

It’s a beautiful, thing for the owners. We’re so busy fighting each other, while they’re making out like bandits. Like I said, pure genius. There was a class war but it’s all over now, and the owners are finishing off the wounded workers.

You lost.

Now might be a good time to learn about the enemy, you know, Sun Tzu and all.

Here’s Yves Smith, at Naked Capitalism doling out more Oriental wisdom about America’s 1%.

“Confucius said that the beginning of wisdom was learning to call things by their proper names. The time is long past to kid ourselves about the nature of the ruling class in America and start describing it accurately, as an oligarchy.”

Much of this new oligarchy involves what economist Simon Johnston calls the “capture” of the state by the wealthy and the corporations they control. Johnson wrote the definitive article on the capture of the US by this home grown oligarchy, called The Quiet Coup.

“Every crisis is different, of course….But I must tell you, to IMF officials, all of these crises looked depressingly similar….Typically, these countries are in a desperate economic situation for one simple reason—the powerful elites within them overreached in good times and took too many risks. Emerging-market governments and their private-sector allies commonly form a tight-knit—and, most of the time, genteel—oligarchy, running the country rather like a profit-seeking company in which they are the controlling shareholders. When a country like Indonesia or South Korea or Russia grows, so do the ambitions of its captains of industry. As masters of their mini-universe, these people make some investments that clearly benefit the broader economy, but they also start making bigger and riskier bets. They reckon—correctly, in most cases—that their political connections will allow them to push onto the government any substantial problems that arise…

In its depth and suddenness, the U.S. economic and financial crisis is shockingly reminiscent of moments we have recently seen in emerging markets (and only in emerging markets): South Korea (1997), Malaysia (1998), Russia and Argentina (time and again)….But there’s a deeper and more disturbing similarity: elite business interests—financiers, in the case of the U.S.—played a central role in creating the crisis, making ever-larger gambles, with the implicit backing of the government, until the inevitable collapse. More alarming, they are now using their influence to prevent precisely the sorts of reforms that are needed, and fast, to pull the economy out of its nosedive. The government seems helpless, or unwilling, to act against them.”

Just saying.

Update: Here’s Michael Lind with a wee suggestion–

How to demolish the oligarchy in 3 easy steps



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