Wealth Is Inequality

Over the long range of earnings some truths become evident.  If one starts a vastly expanded earning capability they will likely continue on that trend simply because money attracts money.  After a certain point in obtaining wealth, the value of the wealth is far greater than the value of the person attracting that wealth, particularly when that wealth becomes a generational inheritance.

Yes, there are people who fail to maintain the same earning curve, therefore perhaps only being rich or even end up as a government pensioner, but once a certain level of wealth is achieved, just having the money in the bank is like having money in the bank.

The extremes of our society are self-continuing, the poor maintaining a pretty much accepted equal level of being poor (how can you tell just HOW poor a person is?), whilst the wealthiest of our countrymen really cannot be stupid enough to actually lose their wealth.

And yes, there are certainly individuals that break the mold, but the numbers of those doing so in either direction are so few that the concept itself is almost an abomination.  New money only means new rich people, but they aren't let into the same clubs as the wealthy.  And the people who have lost their riches are people that were not generally looked upon as individuals worthy of gaining wealth.

So while government isn't supposed to pick winners and losers in business, capitalists do it all the time.  Unfortunately the wealthy also pick winners and losers in government by their vast support of particular candidates, and this is where the dividing line lies. 

This ability to have all the cards in one's hands is the basis of capitalism.  The wealthy cannot become wealthy if there are no poor, because that means that there is not as much money in the system for them to draw from.

This is the reason that Republicans do not like social programs that give money to people whom are needy, or why they don't want Medicare or Medicaid when their own supporters cannot garner more dollars to supply those same services.

Sort of a reverse Google Test, as Tim Pawlenty suggested, in that the people doing the searches aren't ones that will ever be using the services they are looking up.  They don't need social engineering because they are the ones doing the social engineering.

And this is one of the reasons I spoke about "new" money riches, and the inability to necessarily become a part of the wealthy.

In today's environment, if Warren Buffett were to be just starting in accumulating his money, he would be viewed as an outsider, and his options would certainly be limited.

I recall a documentary where Jamie Johnson's (of Johnson and Johnson wealth) film (The One Percent/HBO 2006) where the wealthy simply don't want to discuss the ramifications of their tremendous wealth.  As I've said in previous articles, they don't drive in the same neighborhoods as we do and, in fact, they don't drive at all, so they are insulated from the views of the poor and the downtrodden.

To them, if they capture a glimpse of such people, it is those people's fault that they lie at the bottom of the totem pole, and they have no idea that their vast wealth and holdings are actually keeping money out of these people's pockets.

The concept of wealth doesn't mean a thing to them because they not only have it, but because they have always had it.  To them the fault lies with others who obviously don't want to work for their chance, when, in fact, these people didn't work for their chance.

We're talking about such disconnect that most people don't understand.  The wealthy simply do not live in the same world in which the rest of us exist, and they do not understand the concept of existence as we do.  They assume that they are the ones that will exist regardless of circumstances and predictions, and with their money, they can and will survive most of civilization's calamities.  But they won't survive the financial failure of the country when the money they have on paper goes up in smoke.

Remember, there is not enough cash to pay every American citizen $500 on demand, and also remember that cash doesn't make any difference in the collapse of society.  That will require items of real value, and that value will be defined by the type of collapse.

Canned food and fresh water won't be bought with money, although a lot of ignorant people will think that money still means something.  And the likelihood is that they will be people with weapons or a cadre of like-minded people.  Force would prevail in that circumstance, not wealth.

The point being that if the wealthy can be wrong about how they can survive most any type of failure of the American system, they can be wrong about many more avenues of thought they bring to the party.  After all, the top 1% of our people don't necessarily represent the best thinkers of our citizenship.  They just represent the wealthiest.

But it brings to mind the concept that the Republicans have been talking about in terms of "means testing" which is another way to cut Social Security benefits to the middle wage earners.  I don't mind means testing, but the testing needs to be applied to the rich, who don't need social security, and they don't pay more than anyone else making less than $120,000 per year.  However, they would like to see Social Security go away so they don't pay even the small 6.2% that Social Security requires from payroll taxes (4.2% for self-employed and employees in 2011).  And the point is that they don't get paid, they get returns on investment, so they don't pay Social Security taxes anyway. 

The Republicans continue to muddy the waters by introducing facts not in evidence. And why not, one might ask?  Many of them are worth well more than $100 million and don't earn money the way the people make a living.

So why should the rich bemoan a social service for the middle wage earners and the poor?  Because such programs, in the end, actually stop these wealthy people from bringing more money to the top of the totem pole. 

Every dollar spent on Medicare is collected from the people for the benefit of the people, but it represents a HUGE sum of money that capitalism says should be spent on the open market. 

The sum is on the order of about $2.7 Trillion in Social Security right now, but I believe there is about $1.3 Trillion in congressional IOUs.  Four Trillion dollars is a lot of money.

Had we actually taken George W. Bush up on his concept to privatize Social Security, everyone would have lost his or her money.  Any level of privatization of Medicare will equally lead to the loss of quality health care and infuse the Health Care industry with vast new sums of money.

Paul Ryan's budget plan, passed by the House Republicans not long ago, would fully make the Trillions involved with Medicare available to the marketplace by 2020 because it wouldn't be Medicare anymore.  It would be a voucher system for seniors to buy Health Care insurance.  In other words, the government would subsidize the Health Care industry to the tune of $8,000 per qualifying individual.  In terms of the 33 million new people who would get Health Care under the Affordable Health Care Act, this translates into $264 Billion per year.  Just for the new people.

Without having a payroll tax for Medicare, which wouldn't exist, this would equate to a $2.7 Trillion deficit over every 10 years.  Where are the savings?

Since the Paul Ryan budget doesn't address savings in health care costs, it moves those increases in expenses to the seniors we are supposed to be protecting.

Of course, if the mechanism under the Ryan budget plan is to continue to use Medicare taxes to pay these subsidies, then it is obvious that money from the middle goes directly into the coffers of the rich via their taxes, and via the out of pocket expense they will ultimately be required to pay.
 
And these, the wealthiest of the country, want those dollars back into the marketplace so that they might draw some of it their way.

Of course this says nothing to the problem that privatization has no real mechanism to guarantee cost containment other than the old worn saw about the marketplace spurring efficiencies, which, as we've seen in the last decade, doesn't hold water.  The argument is specious, the history says unfettered capitalism does not promote the growth of the middle wage earner, and it says that with 30 full years of such policies, has seen most American's dreams dashed by the ever assaulting waves of tax cuts moving money to the rich.

We have to be very careful.  With our ability to look at documents we'll need to spend more time doing our own assessments of what is being presented to us by our politicians.  They do not seem to have our best interests at heart.

And I think it is, by any means of judgement, obvious to most that this manipulation of vast sums of money to the wealthy is not healthy for our country, our democracy, nor our citizens.

Comments

[Vinton E. Heuck]

Hat's off for a very useful comment-essay in response to Nocera's Blue Dog column of September 6. It was a good learning experience for me as well.

Always thought of Blue Dogs as Republicans in sheep's clothing but knew nothing about their history.

Wouldn't it be nice if a new national party could arise from the decimated, piece-meal ranks of the Democrats? It would have to survive the American curse on third parties but something like it is needed given the vast corruption that exists within the current Democratic Party. The country was able to do it successfully once before when the Whigs were replaced by the Republican Party (which has almost no resemblance to the current party).

Ah, well; as Cooper said to Nocera as he was just leaving, "there is always hope", but I guess I don't think so anymore.

Do you ever feel like a prophet crying in the wilderness?