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Forum Post: ''What the 1% Don't Want You to Know'', by Bill Moyers [A 'Must Watch' Video + Excerpted Article]

Posted 11 months ago on April 20, 2014, 11:38 a.m. EST by shadz66 (19985)
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''What the 1% Don't Want You to Know''

by Bill Moyers

In conversation with Bill Moyers, economist Paul Krugman explains just how the United States is now becoming an oligarchy ... the very system the founders revolted against !!!

The median pay for the top 100 highest-paid CEOs at America’s publicly traded companies was a huge $13.9 million in 2013. That is a huge 9 percent increase from the previous year, according to a new Equilar pay study for The NYT [see : http://www.equilar.com/nytimes ].

''These types of jumps in executive compensation may have much more of an effect on the widening income inequality than previously thought. A new book that’s the talk of academia and the media ... ''Capital in the Twenty-First Century'', by Thomas Piketty - a 42-year-old who teaches at the Paris School of Economics, shows that two-thirds of America’s increase in income inequality over the past four decades - is the result of steep raises given to the country’s highest earners.''

True Champion of The 99%, Bill Moyers talks with Nobel Prize-winning economist and New York Times columnist Paul Krugman, about Piketty’s “magnificent” new book.

“What Piketty’s really done now is he said, ‘Even those of you who talk about the 1 percent, you don’t really get what’s going on.’ He’s telling us that we are on the road not just to a highly unequal society, but to a society of an oligarchy. A society of inherited wealth.”

Krugman adds : “We’re seeing inequalities that will be transferred across generations. We are becoming very much the kind of society we imagined we’re nothing like.”

As an accompanying piece to this excellent video, please also consider the following :

Thomas Piketty's 700-page book, ''Capital in the Twenty-First Century'', has stunned both the economic profession and most political observers. But the economic mainstream is not truly dealing with its most serious implications even as they widely praise his work.

Here in a nutshell is what he argues : Current rates of inequality are closer to historical norms than aberrations. Inequality is likely to stay high and perhaps increase. The normal workings of the free market won't change this. The only way to rectify the imbalance is more aggressive taxes on property and high incomes to reduce inequality.

All this from an economist with strong mainstream credentials, and whose work in tandem with Emanuel Saez, Tony Atkinson and a few others has profoundly changed how we think about inequality. It was Piketty et al, who showed that a huge amount of income goes to the top 1 percent, and most of that to the top 0.1 percent. We don't really have an inequality problem. We have stagnating incomes for the bottom 90 percent and a runaway of incomes at the very top.

Mainstream economics generally concedes the levels of inequality but for a very long time has said much the opposite of what Piketty has found. Current inequality is an aberration in the long march of capitalism, according to mainstreamers, due to educational inadequacies or globalization. Free-market competition should reduce excesses of capital accumulation and a balance will be struck with wages as productive investment creates more companies and more demands. Some higher taxes may be necessary, argues some mainstreamers, but excessive capital accumulation eventually has to fall as competition drives down the return.

Piketty's book is an empirical tour de force. Close analysis of data in rich nations of several hundreds of years shows that the amount of capital compared to income in economies has always been high, even pretty constant. Capital includes stocks bonds, land, housing, business and on. It just keeps growing because it has generated persistently big returns, returns that make it grow faster than GDP or national income.

The only time capital as a percent of GDP came down was with the two World Wars of the twentieth century and some thirty "glorious" years of the Second World War's aftermath. Capital stock itself was devastated by war, but GDP also grew rapidly in this period. The ratio of capital to GDP fell, and rich nations became more equal.

The only time capital as a percent of GDP came down was with the two World Wars of the twentieth century and some thirty "glorious" years of the Second World War's aftermath. Capital stock itself was devastated by war, but GDP also grew rapidly in this period. The ratio of capital to GDP fell, and rich nations became more equal.

Now, that's changed again. Capital is rising to its old levels, what Piketty calls the patrimonial state, epitomized by Britain in the first two thirds of the 19th century. As capital rises, the rich simply get richer, and inequality soars. They own the capital, after all, and reap its rewards. And in America, this has mostly been a function, Piketty calculates, of outsize remuneration for CEOs and other managers, who get huge stock options. Their compensation has risen with the stock market.

What's by and large been lost in the discussion as America's most prominent economists try to contend with Piketty's empirical findings is that they don't seem constitutionally able to do so. In fact, the financial markets have failed to fully utilize capital, or worse, used it in perverse ways to make bankers rich while not dispersing capital effectively. Capital basically just sits there, enabling fat cats to get fatter. Not entirely, of course. Some of this capital has been put to good use, but as it grows so much faster than the economy, it seems more than obvious that it is the result of monopoly, rents that are not related to real returns of investment, manipulation of markets and regulations, political influence, and so on. Free market competition has not worked.

Piketty's book is an indictment of laissez-faire market theory. One sign of how ineffectual the economics community has become is that it is unable to see the true fruits of the work, even as it praises Piketty's extraordinary empirical contributions.

radix omnium malorum est cupiditas ...

~

EDIT : This Forum-Post Shadow Has Been Banned ! Many replies ''Removed'' as well !! WTF ?!!! Please no one reply here ... just watch the video & consider the link above and the following link : http://truth-out.org/opinion/item/23205-economic-policy-in-a-post-piketty-world . Solidarity @ The 99% !!!!

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