“Land Of Opportunity?” Super-Rich Getting Richer!
Good news … for the richest 10%. Bad news for everybody else. The Wall Street Journal reports “the top 3% of families saw their share of total income rise to 30.5% in 2013 from 27.7% in 2010, while the bottom 90% saw their share fall.” Yes, folks, the inequality gap just keeps getting wider and wider. And today 62 billionaires now “own the same as half the world,” according to the 2017 Oxfam-Davos report. And during the 2020 pandemic, the added $8 trillion to their wealth.
Yes, the rich just keep getting richer. The rest just keep getting shafted, regardless of the long-term consequences to the American economy. The rich don’t care. And based on how brazen the new GOP budget is about widening the inequality gap, you can bet they’ll just keep thumbing their noses at the rest of America, as they did even after Pope Francis’s historic speech before the U.S. Congress.
The inequality gap is now at 1929 levels, in fact, the widest it has been in a couple centuries, which makes the GOP gamble with the future of America a real “assault on the middle class,” says CNN, as the GOP keeps adding more and more benefits for the wealthy, while cutting incentives for the 90% who are actually building the economy of America’s future.
A couple years ago a Credit Suisse Global Wealth Report gave us a snapshot of just where this explosive inequality bubble is headed, reminding us of something far worse than the 1929 Crash, rather of the 1790s when inequality suddenly triggered the French Revolution, and 17,000 lost their heads under the guillotine.
The Credit Suisse data reveals that just 1% own 46% of the world, while two-thirds of the world’s people have less than $10,000. Forbes also reported that just 67 billionaires already own half of Planet Earth’s assets. Credit Suisse predicts our world will have eleven trillionaires families in two generations, as the rich get richer and the gap widens.
Inequality Gap: The Ticking Time-Bomb
Can this trend continue? Or will it trigger a revolutionary economic guillotine? Nobel economist Joseph Stiglitz, author of The Price of Inequality, is not as optimistic as Credit Suisse: “America likes to think of itself as a land of opportunity.” But today the “numbers show that the American Dream is a myth … the gap’s widening … the clear trend is one of concentration of income and wealth at the top, the hollowing out of the middle, and increasing poverty at the bottom.”
History is warning us: Inequality is a recipe for disaster, rebellions, revolutions and wars. Not in two generations. Much, much sooner, a reminder of the Pentagon’s famous 2003 prediction: “As the planet’s carrying capacity shrinks, an ancient pattern of desperate, all-out wars over food, water, and energy supplies will emerge … warfare will define human life on the planet by 2020.” Yes, much sooner than two generations.
Early warnings of a crash are dismissed over and over (“a temporary correction”). They gradually numb us about the big one. Time after time we forget history’s lessons. Until finally a big surprise catches us totally off-guard. Financial historian Niall Ferguson put it this way: Before the crash, our world seems almost stationary, deceptively so, balanced, at a set point. So that when the crash finally hits, as inevitably it will, everyone seems surprised. And our brains keep telling us it’s not time for a crash.
Till then, life just goes along quietly, hypnotizing us, making us vulnerable, till shockers like Bear Stearns or Lehman Brothers upset the balance. Then, says Ferguson, the crash is “accelerating suddenly, like a sports car … like a thief in the night.” It hits, shocks us wide-awake. In our denial, we may keep telling ourselves it’s just another short-term correction in a hot bull market. Until suddenly, it’s accelerating, a Mack truck hits.
French Revolution: History Lesson Lost on Super-Rich
Angry masses, let resentment build, fuming inside. Their Treasury was bankrupt. High interest on national debt consumed half their tax revenues. Why? Earlier wars, a decedent aristocracy, an incompetent King Louis XVI. The anger so intense that during the 1792-93 “Reign of Terror” even the King was guillotined, along with 17,000, many who were innocent, as inequality ripped apart the France nation.
Why? The aristocracy, intellectuals and the rich were oblivious of the needs of the masses, much like our leaders today. As Adbusters magazine put it: “Even in the seconds before their heads were about to roll away from their bodies underneath the blade of the guillotine, it still puzzled the opulent Paris elite how this could be happening.” Yes, they were clueless till the end, in denial, not listening to the masses for many years. Like today across America.
The truth is, revolutions catch nations by surprise: “Just months before the storming of the Bastille in 1789, everything was peachy. The social order ran smooth. The poor paid their dues. The middle class kept their mouths shut. The aristocracy partied … next day they were being dragged through the streets by their frilly collars like common thieves.”
14 Inequality Triggers That Ignite Revolutions
How close are we to a new “Bastille Day?” Barry Ritholtz’s The Big Picture website posted “The Stunning Truth About Inequality In America,” a list of 14 triggers from “WashingtonsBlog,” warning us the inequality gap is accelerating so rapidly, widening so fast that America may soon be at what we call Bastille Day levels, an inequality gap so great it is the fuel and trigger that can ignite an angry people into revolution.
These 14 triggers are reinforced by the statistics in all the reports from the latest Federal Reserve study, Credit Suisse Reports, the Pentagon’s 2020 prediction, Pope Francis’ “Apostolic Exhortation,” and similar ones from Naomi Klein, Chris Hedge, Niall Ferguson and others leaders. Here’s an edited must-read summary of the “Stunning Truth About Inequality:”
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Inequality gap’s worse than you imagine. “Americans consistently underestimate the amount of inequality in our country … would be shocked to learn the truth…
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Gap’s worse than history’s worst. “Twice as bad as in ancient Rome, worse than in tsarist Russia, worse than in America’s Guilded Age.”
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America’s falling behind other developed nations. “Worse in America than any other developed nation.” Could ignite a 1790’s style revolution.
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Inequality permanent. “Staggering inequality in America has become permanent.”
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America’s two economies. “There are two economies: one for the rich, and the other for everyone else.” Thomas Piketty’s “Capital in the Twentieth Century,” confirms it.
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Top 1% in a bull rally, while the 99% in recession. “Economy’s recovered for the richest 1% … the rest of the country is more or less stuck in a depression.”
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Rich keep getting richer. “The super rich are raking in more than ever before.”
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Poor getting poorer. “While more and more people are sliding into poverty.”
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Middle class now dead. “One of every five households in the America is on food stamps. The middle class has more or less been destroyed.”
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Inequalities, bubbles, signal crashes. “Who’s who of prominent economists and investors say that inequality causes crashes and hurts the economy.” Start preparing now.
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Great Depression. “Extreme inequality helped cause the Great Depression … the current financial crisis … and the fall of the Roman Empire.”
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Bad politicians and policies. “Inequality isn’t happening for mysterious or uncontrollable reasons. Bad government policy is responsible for runaway inequality.”
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Leadership. “Bush was horrible, but income inequality has increased even more under Obama than under Bush.” Worse under Trump.
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Conservatives. “It’s a myth that conservatives accept runaway inequality. Conservatives are as concerned as liberals regarding the stunning collapse of upward mobility, the ending of the American Dream.”
In Wealth, War and Wisdom, Barton Biggs, long-time Morgan Stanley global strategist warns of the “possibility of a breakdown of the civilized infrastructure.” He advised his super-rich clients to get prepared for a post-apocalypse era: Buy a farm up in the mountains: “Your safe haven must be self-sufficient and capable of growing some kind of food … well-stocked with seed, fertilizer, canned food, wine, medicine, clothes, etc. Think Swiss Family Robinson.”
Astrophysicists warns that the “future of our civilization is in space.” So ask yourself: Will there be any “safe havens” on Planet-Earth after the next Bastille Day revolution? Maybe a bunk on the New Mars Colony?
