The pitchforks are coming for us plutocrats

[Tracy Riddle]

http://www.politico.com/magazine/story/2...7AnOkBQD0Y

You probably don't know me, but like you I am one of those .01%ers, a proud and unapologetic capitalist. I have founded, co-founded and funded more than 30 companies across a range of industriesfrom itsy-bitsy ones like the night club I started in my 20s to giant ones like Amazon.com, for which I was the first nonfamily investor. Then I founded aQuantive, an Internet advertising company that was sold to Microsoft in 2007 for $6.4 billion. In cash. My friends and I own a bank. I tell you all this to demonstrate that in many ways I'm no different from you. Like you, I have a broad perspective on business and capitalism. And also like you, I have been rewarded obscenely for my success, with a life that the other 99.99 percent of Americans can't even imagine.

...

Many of us think we're special because "this is America." We think we're immune to the same forces that started the Arab Springor the French and Russian revolutions, for that matter. I know you fellow .01%ers tend to dismiss this kind of argument; I've had many of you tell me to my face I'm completely bonkers. And yes, I know there are many of you who are convinced that because you saw a poor kid with an iPhone that one time, inequality is a fiction.


Here's what I say to you: You're living in a dream world. What everyone wants to believe is that when things reach a tipping point and go from being merely crappy for the masses to dangerous and socially destabilizing, that we're somehow going to know about that shift ahead of time. Any student of history knows that's not the way it happens. Revolutions, like bankruptcies, come gradually, and then suddenly. One day, somebody sets himself on fire, then thousands of people are in the streets, and before you know it, the country is burning. And then there's no time for us to get to the airport and jump on our Gulfstream Vs and fly to New Zealand. That's the way it always happens. If inequality keeps rising as it has been, eventually it will happen. We will not be able to predict when, and it will be terriblefor everybody. But especially for us.

[Lauren Johnson]

there isn't going to be a revolution.

A stagnant economy has undoubtedly put a lot of financial stress on the middle class. And that is bumming out America's 1 percenters. "Our country is rapidly becoming less a capitalist society and more a feudal society," entrepreneur Nick Hanauer wrote recently in Politico, in an open letter to "my fellow zillionaires."

Hanauer an early investor in Amazon (AMZN) who says he has been involved with more than 30 startups cites the well-documented rise in income inequality during the past 30 years as the ultimate cause of a Mad Maxian dystopia he envisions. "If we don't do something to fix the glaring inequities in this economy, the pitchforks are going to come for us," he writes. "One day, somebody sets himself on fire, then thousands of people are in the streets, and before you know it, the country is burning. And then there's no time for us to get to the airport and jump on our Gulfstream Vs and fly to New Zealand."

He's not the only wealthy worrier. Venture capitalist Tom Perkins complained earlier this year about the "persecution" of the rich through high taxes, while magnates such as Sam Zell, Wilbur Ross and John Mack have griped of late about the unschooled masses scapegoating America's moneyed elite.

Chill out, rich folks

The rich ought to chill out. While the masses may envy their wealth, there's no evidence of a revolution brewing, or even a well-behaved civil disturbance. Americans are clearly dismayed at the direction the country seems to be heading, but they are also docile in the face of decline and confused about possible solutions. Hanauer fears mobs heading for the castles of Greenwich and Palo Alto, but America's disaffected these days are more likely to vent their rage behind closed doors as they shake their fists at Fox News or MSNBC and leave cranky comments on websites such as this one. If there's a populist threat to the plutocrats, it's years or even decades away.

Here's the proof: Before the pitchforks, there will be higher taxes on the wealthy yet there's meager support for more redistribution of wealth. Polls show that slightly more than half of Americans favor raising taxes on the wealthy for specific causes such as helping reduce poverty, which makes it sound like tax hikes have widespread support and are inevitable. But here's the catch: An even higher portion of Americans are disgusted with the government, with little trust that it spends tax money wisely. That's why Republicans can consistently block tax hikes on the wealthy with little payback at the voting booth.

If there's simmering outrage at this state of affairs, it's not evident in the public square. The "Occupy" movement against the financial elite enjoyed a moment in 2011 but has largely fizzled. Hanauer argues that the occupiers helped sharpen the focus on income inequality, but The Tea Party is probably a more lasting phenomenon. And the Tea Party's gripes about the wealthy are limited to corporate welfare and crony capitalism that puts government bureaucracy at the service of the rich. As for wealth and income inequality, the Tea Party generally takes a laissez-faire, free-market view: Those who can get rich, should.

Labor unions have represented the workingman's concerns for a century, but they're on the wane, too. Union membership has been in steady decline for at least 30 years, with no rebound on the horizon. The United Auto Workers couldn't unionize a Volkswagen plant in Tennessee earlier this year, even with the tacit support of the company itself. Michigan became a "right to work" state in 2013, diminishing the power of unions in their own backyard.

More power for the wealthy

The Supreme Court, meanwhile, has enhanced the power of the rich through two decisions during the past several years that have eviscerated limits on campaign donations to political causes and candidates, which favors those with millions to spend to influence election outcomes. Two well-regarded academics, Martin Gilens of Princeton University and Benjamin I. Page of Northwestern University, argued in a recent paper that economic elites have gained so much power that "America's claims to being a democratic society are seriously threatened."

Hanauer sounds more like President Obama than a self-important plutocrat when he suggests ways to even out the wealth and income gaps. He favors a minimum wage of $15 per hour and chides wealthy business owners who feel they, rather than their customers, make the economy hum. "We rich people ... have convinced ourselves that we are the main job creators," he writes. "It's simply not true. There can never be enough superrich Americans to power a great economy."

Most economists would agree with that, but Hanauer risks hyping the consequences of a growing wealth gap when he warns that "revolutions, like bankruptcies, come gradually, and then suddenly." That may be true in repressed states that don't allow ordinary people to express their frustrations. But in functioning democracies (and even in the United States), there's plenty of warning when social unrest is percolating. These days, all you have to do is read the blogs and follow the right Twitter (TWTR) accounts. If you do, you'll encounter plenty of angst but not much revolutionary zeal.

The economic trends Hanauer identifies are, in fact, real problems. America as a whole will suffer if the fortunes of the middle class don't improve. There are solutions, however, and they'll probably materialize in the usual American way right before disaster strikes. It's nearly inevitable there will be government spending cuts and, yes, tax hikes, when the government's finances become unsustainable, which could take a decade or more. When it happens, the politicians in Washington will find ways to spread the pain around and America will muddle through. The rich will have to pay more, but they'll still be rich. And they still won't have to worry about pitchforks.

Rick Newman's latest book is Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.

[David Guyatt]

I think I am inclined to take the weight of opinion from Nick Hanauer - an insider looking out, than those of a financial scribbler, Rick Newman - and outsider trying to look inside.

For me Hanaurer talks a lot of sense. Sooner or later, probably later, the Empire will crumble to dust.

The US no longer is democratic, but a plutocracy acting behind what is a de facto security/police state.

Btw I stumbled over a blog called "constitutionally.blogspot.co.uk" that argues that doubts exist that COG has been suspended? I don't know if the blog is now out of date or not, but I wonder if what the blogger says might be true? The blogger agued that the state of emergency order after 9/11 also remains in force and that the US armed forces were placed on DefCon 3 for the first time in history - including the Cuban missile crisis?

All very alarming if true.

The blog says the following:

In addition, one of the top investigative journalists in the country, Larisa Alexandrovna (the lead journalist at Raw Story), writing about the 2001 Department of Justice memorandum that found that the Fourth Amendment had no application to domestic military operations, wrote:


"it seems to me that this administration has justified its crimes by NOT suspending the state of emergency that went up on September 11, 2001. They are using emergency powers if you look at the whole of the spying, military actions inside the US, etc. I would wager that if asked, this administration will admit that we have been in a state of emergency for their tenure in office."


Alexandrovna not only believes that we have been in a state of emergency since 2001 (which the White House itself has verified, see above), but that the government has been using its emergency powers -- i.e. powers justified by a state of emergency -- in spying, carrying out military actions inside the U.S. (see this), and taking other extra-Constitutional actions.


Is that why the government:
Suspended habeas corpus?
Has been spying on Americans?
Won't enforce the laws?
Is basically "deputizing" corporations to act as sheriffs in the event of martial law?
Is training pastors to preach obedience to martial law?


Are all of these actions based upon a COG form of government?

[Lauren Johnson]

We certainly are in a state of emergency on this side of the pond. Here is the declaration from "Hopey Changey" Obama:

"The terrorist threat that led to the declaration on September 14, 2001, of a national emergency continues," wrote President Obama. "For this reason, I have determined that it is necessary to continue in effect after September 14, 2013, the national emergency with respect to the terrorist threat."

Peter Dale Scott certainly has written about the COG and I presume he still believes it is in effect.

[Albert Doyle]

If this is true then why hasn't it happened in England?