Tuesday, July 21, 2020

Inequality Is America's Monster Id

What they don't understand is inequality is America's Monster Id: the more you try to suppress it, the more powerful it becomes.
The word privilege is much bandied about now. I've been writing about privilege for many years, and ended up writing a book about the source (and thus the end) of privilege: Inequality and the Collapse of Privilege.
Privilege and inequality are two sides of the same coin. Those with privilege get more than everyone else without actually creating more value, which is the definition of inequality.
What few seem to grasp is the absolute source of inequality / privilege is our financial system, specifically the way we create and distribute money.
Few people connect the dots between a central bank (the Federal Reserve) creating money out of thin air and giving the super-wealthy first dibs on this new money, and the vast inequalities of wealth and power that are widening to the point of social disorder on a grand scale.
While the majority may not fully understand the source of inequality, they do intuit that billionaires got the mine and the rest of us got the shaft. Since humans are social apes and social apes have a sense of fairness, even within pecking orders with a few at the top, the inherent unfairness of our financial system generates resentment and indignation, while the lack of understanding generates frustration.
My colleague Mark Jeftovic penned a post explaining how those closest to the Fed's money spigot get wealthier for doing absolutely nothing but being close to the spigot. This is the most basic structure of our financial system and economy. Everything else flows from this simple mechanism. On Cantillionaires, Sycophants and Losers.
Put another way: while the rest of us earn money by creating goods and services, those close to the Fed's money spigot create absolutely nothing but they get billions of dollars at rates of interest that are essentially zero, or adjusted for inflation, less than zero.
As a result, they can outbid the rest of us for all the assets that generate income.
The only possible result of this system is that the wealth of the nation is increasingly concentrated in the hands of the few with access to the Fed's nearly free money, and so the unearned income (interest, dividends, rents, etc.) all flow to them--not because they created value or goods and services, but because they were closest to the Fed's money spigot.
The political game is to obscure this source of inequality and distract the unprivileged many with bread and circuses: an extra $600 tossed to the restive crowd of unemployed, $1,200 to the fitful audience, and eventually, some monthly amount of Universal Basic Income (UBI) calibrated to be just enough to get by but not enough to ever own any productive assets.
As I often point out, the real goal of UBI is to ensure debtors can make their credit card / student loan / auto loan payments, as these monthly payments by the masses are the interest income of the super-wealthy with the privileged position by the Fed's money spigot.
The privileged super-wealthy also own the media, of course, and so they're delighted to virtue-signal their support of purely symbolic actions such as toppling statues and occupying worthless chunks of cities. None of these symbolic actions threaten their privileged position by the Fed's money spigot, and even better, they distract and divide the exploited populace.
For if the people never catch on to the source of inequality, that ignorance is all the protection the privileged super-wealthy need.
The privileged super-wealthy are feeling very confident in their control of the financial system, the source of inequality. They own the wealth, the income streams, the media, Big Tech, and the machinery of political power.
What they don't understand is inequality is America's Monster Id: the more you try to suppress it, the more powerful it becomes. The Monster Id of inequality is already rampaging through the social and political orders, and eventually it will burn through the Fed's free-money vault with a white-hot intensity that will surprise the privileged super-wealthy and their armies of self-serving toadies, lackeys, apparatchiks and technocrat flunkies.
Recent Podcasts:
Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).


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