By William K. Black
October 20, 2016 Kansas City, MO
The New Democrats and their Republican counterparts’ economic policies have created a rigged system of crony capitalism. Crony capitalism produces devastating epidemics of elite fraud that have shrunk the overall economic “pie” and distributed the “pie” overwhelmingly in favor of corrupt corporate elites like Donald Trump and their political cronies like the Clintons. Wall Street has been open about being ecstatic about the rise of what Citigroup infamously labelled and celebrated — a “plutonomy.”
In a plutonomy there … are rich consumers, few in number, but disproportionate in the gigantic slice of income and consumption they take. There are the rest, the “non-rich”, the multitudinous many, but only accounting for surprisingly small bites of the national pie.
Citigroup, in 2005, years before Occupy Wall Street, identified the tiny slice of Americans receiving this “gigantic slice of income and consumption.”
In early September  we … introduced the idea that the U.S.is a Plutonomy – a concept that generated great interest from our clients.
[T]he top 1% of households account for 40% of financial net worth, more than the bottom 95% of households put together.
[These inequalities are] almost entirely driven by the fortunes of the top 0.1% (roughly 100,000 households).
Citigroup sounded a note of caution about the rise of the Imperial CEO, which it termed the new “Managerial Aristocracy.” Their depredations could only continue as long as shareholders and voters failed to reclaim control of their corporations and nations.
[This top group represents a] Managerial Aristocracy indulged by their shareholders.
Society and governments need to be amenable to disproportionately allow/encourage the few to retain that fatter profit share. The Managerial Aristocracy, like in the Gilded Age, the Roaring Twenties, and the thriving nineties, needs to commandeer a vast chunk of that rising profit share, either through capital income, or simply paying itself a lot.
Citigroup made clear that the New Democrat’s and their Republican counterparts’ embrace of policies that enhanced crony capitalism would cause the already obscene inequality to increase.
We project that the plutonomies … will likely see even more income inequality, disproportionately feeding off a further rise in the profit share in their economies, capitalist-friendly governments, more technology-driven productivity, and globalization.
Lest there be any doubt where Citigroup was coming from, they evoked Ayn Rand’s fantasy in Atlas Shrugged that the Managerial Aristocracy was akin to the stud on the cover of cheesy romance novels – “the muscular arms of … entrepreneur-plutocrats.”
The earth is being held up by the muscular arms of its entrepreneur-plutocrats, like it, or not.
Really? The data Citigroup cited said nothing about the plutocrats helping the overall economy much less the earth. The story that Atlas held up the earth was a myth. There is no “up” when it comes to earth and gravity is quite reliable in holding earth to paths that we can predict. The plutocrats despoil the earth and are the gravest threat to life on earth. Picturing the Managerial Aristocracy as muscular unpaid laborers selflessly protecting the earth is a farcical lie – but Citigroup was writing for the Managerial Aristocrats it hoped to attract to its “wealth” divisions and knew that the Trumps of the world demand abject sycophancy.
Citigroup was honest about three key facts.
- Extreme inequality is fundamental to plutonomy
At the heart of plutonomy, is income inequality.
- Citigroup showed that it favored plutonomy
[A]n examination of what might disrupt Plutonomy – or worse, reverse it – falls to societal analysis….
- The key to whether plutonomy persists is not economics, but whether the public will summon the will to rise up to recover its Nation.
Societies that are willing to tolerate/endorse income inequality, are willing to tolerate/endorse plutonomy.
Citigroup also correctly framed the fundamental question that voters should have demanded each candidate answer with a resounding “No.”
[W]ill electorates continue to endorse [massive inequality], or will they end it, and why?
Citigroup warned the Managerial Aristocrats that the great risk to their rigging of the system was that workers might vote the Aristocrats’ political cronies out of office.
Citigroup Plutonomy Report Part 2
Mar 5 2006
RISKS — WHAT COULD GO WRONG?
Our whole plutonomy thesis is based on the idea that the rich will keep getting richer. This thesis is not without its risks. For example, a policy error leading to asset deflation, would likely damage plutonomy. Furthermore, the rising wealth gap between the rich and poor will probably at some point lead to a political backlash. Whilst the rich are getting a greater share of the wealth, and the poor a lesser share, political enfrachisement remains as was — one person, one vote (in the plutonomies). At some point it is likely that labor will fight back against the rising profit share of the rich and there will be a political backlash against the rising wealth of the rich. This could be felt through higher taxation on the rich (or indirectly through higher corporate taxes/regulation) or through trying to protect indigenous [home-grown] laborers, in a push-back on globalization — either anti-immigration, or protectionism. We don’t see this happening yet, though there are signs of rising political tensions. However we are keeping a close eye on developments.
Note how blatant Citigroup’s leaders were – restoring democracy and ending the obscenity of plutonomy in America was “wrong.” Citigroup volunteered to keep a “close eye” on any such effort so that the “Managerial Aristocracy” could continue to “commandeer a vast chunk of that rising profit share, either through capital income, or simply paying itself a lot.”
Let’s Do What Citigroup Said We Could Do to Take Back our Nation
The most critical votes are in the primaries and caucuses. Unless we turn out in huge numbers and ensure that candidates dedicated to taking our Nation back from the “Managerial Aristocracy” win the nomination we will end up with nominees for both major parties who are Managerial Aristocrats or their servants. Remember that Citigroup’s official position is that maintaining America as a plutonomy is the bank’s goal. Citigroup’s official position is that it would be “wrong” to restore democracy to America by voting the Managerial Aristocrats’ cronies out of office. Regardless of political affiliation, we owe it to Citigroup’s leaders to work together to nominate and elect candidates that will make the Managerial Aristocracy howl as they lose their ability to rig the economic and political systems.
Speaking of taking back our Nation, why is that only depository institutions, a.k.a. banks, may use our Nation’s fiat and the citizens may not except in the form of unsafe, inconvenient physical fiat, a.k.a coins and bills? Also, cui bono from such an arrangement if not the banks themselves and by extension the rich, the most so-called creditworthy?
There is another, and simpler , solution. The French used it in their revolution; the Guillotine.
Silly goose, we don’t “nominate” candidates, the political insiders give us a list to pick from based on which candidates are made viable by donors. The only exception being that someone such the Trumpl-down-trick-onomics candidate might slip through the gauntlet by having some money of his own, and some notoriety from being a celebrity of some sort.
Otherwise, we might have a choice of someone who doesn’t know where Aleppo might be. Or, of someone who seems to believe that the bailout total is $16 trillion. Or… there was Bernie who doesn’t realize that the NAFTA/CAFTADR and the WTO each have ISDS provisions, and that accordingly, ISDS provisions are here to stay whether the TPP passes or not. And this apparently applies to all of the candidates although HRC probably knows this but chooses not to seem too positive on the TPP. All things considered though, we have a choice now of someone uninformed, misinformed, lying about most everything, or just stupid. But the people have little if any say in the nominations in the first place.
They win when we, the American people, fail to take up arms to hold them accountable for their treason and crimes.
An American citizen, not US subject.
When I talk to a good number of Hillary Clinton supporters in the way Mr. Black did in his article, I get an eye roll, and sometimes the comment: “Another one of those Rothschild/Illuminati conspiracy kooks”. Then in the next breathe they sigh, “President Obama could have done more if it weren’t for the Republicans and their corporate backers blocking him”. Obviously, there is a blind spot in their rear view mirror while driving 100MPH in a heavy fog. Facts will not change their minds. They are just like the Trump supporters they are so fond of demeaning. Actually, on a gut level Trumpers get it on the economics, it’s just the other emotions released aren’t always pretty, and the solutions proposed downright terrifying. Neocons (Republicans) fight social change. Neolibs (New Democrats) are led by it. On everything else the difference is in the wording of their presentations. I’m starting to believe the Democratic Party is more dangerous as their presentation is so seductive to the Commoners. In the end who benefits from New Democrat/Republican policies – the very wealthy.
Maybe the reason Trump was allowed to win Republican ticket was the elite thought it would be easier to trash him verses Kaesich or Rubio or Christie.
(Let’s see if I get censored again) Bill Black is wrong, he is repeating a canard. Please do consider facts. Consider what actually happens when a larger number of people refuse to participate.
In our hemisphere, on yet another finance destroyed island (literally and figuratively), our rulers used the military to put down an outbreak of Democracy, which was a refusal to vote.
Who might these “candidates dedicated to taking our Nation back” be? I’m not sure what drives this delusion that there is a good guy, a maverick, or a rebel that is allowed anywhere near the actual decision making process.
I think the first step to this breakdown in common sense is to have a populace that is effectively stifled from creating dissent that actually questions the decayed process of Government, including electoral politics. To achieve this, the media effort must be relentless, inculcating every citizen to make sure they don’t know or understand how our shared experiences in America actually work. Story telling, invoking the Constitution, equating a blurred definition of capitalism of a blurred definition of Democracy, and most important of all – glorifying referendums. A republic of mind-control is necessary.
To question the narrative of elections is a type of dissent isn’t tolerated, most of the media is dedicated to purveying affirmation that permits a very narrow spectrum of agitation to begin with. Sure – we know some of the banks are the bad guys – but who else did we leave out?
Plutocrats Brag: We Win Because You Fail to Vote…..
Let’s rephrase this view: We, the majority of citizens, loose because we fail to run for office. We are obsessed admiring or evaluating the least harmful of the plutocrats’ representatives, instead of running for direct democracy by referendum. The plutocrats will not have direct democracy by referendum on their platform. We need to advocate and run with it.