Ice on the Moon

For thirty years there was hope. This should be watched by everyone on Earth because it affects every single human being on this planet. Obscene wealth is an obesity and cancer that destroys society. The wealthy spend millions, pennies to them, convincing us the opposite is true.

Transcript: Why do the wealthy always get richer?

That’s the evidence that we can see all around us at present,  and the fact is, that is true.  Whatever you are told about the fact that hard work supposedly creates prosperity, the evidence is otherwise.

Those who now own wealth are seeing their wealth grow faster than wages are rising. That’s the way the world is now, and this is the result of deliberate economic design, and it’s not an inevitable truth.

There’s a simple formula that explains this. It was created by a man called Thomas Piketty in an extraordinarily fat book called Capital in the Twenty-First Century. Published in French in 2013 and in English in 2014. The whole basis of this tome is to be found in a simple formula, which  is R is greater than G (R > G), and we need to explain what that means to understand why it is that the wealthy really do always get richer.

In Piketty’s work,  R is the rate of return on capital. In other words, it’s profits, it’s rents, it’s dividends, and the gains made from speculation in financial markets. They represent the rate of return on capital.

G is the growth of national income, and most of that goes to labour. So it follows that if R, the rate of return on capital, is greater than G, the growth in the national income, much of which comes down to labour, then wealth is growing faster than is the rate of return to labour, otherwise called wages.  And so inequality is not a side effect of this system. It is a built-in outcome within it. The rich don’t need to work to get richer. They just need to own wealth.

Wealth compounds over time. But what we know is that wages do not. That simple fact creates increasing inequality, and we know that inherited advantage, whether that is wealth or having parents who are able to provide you with opportunities that others are denied, creates situations where opportunity leading to wealth grows more than income does for everyone else, and it does so right across generations.

Access to assets becomes the dividing line in society. And more and more of what we produce flows to those who do actually own wealth now, and power follows the money, including, of course, political power.

But for one rare moment, this was not true. That rare moment, as Piketty showed in all the data that he produced to underpin this book, was from 1945 to 1975.

In the aftermath of the Second World War, we had something which was entirely different from everything that had been seen before or since.  We had full employment. We had rising real wages. We had high levels of public ownership. We had strong trade unions to keep the returns to labour high. And we had high taxes on wealth, which cut down rentier power so that those with wealth could not exercise extraordinary influence over the way in which society was operated.

During that period, something that has not been seen before or since happened:  the rate of growth in the economy grew faster than the rate of return to capital. In other words, people got a greater share of the return from growth than did the owners of wealth. Society shared the gains of that period of quite extraordinary political change. But what we now know is that that was a historical anomaly.

Margaret Thatcher in the UK and Ronald Reagan in the USA, basing their ideas on the work of Milton Friedman and Friedrich Hayek, ensured that the march towards inequality resumed, and it did.  From the 1980s onwards, governments cut taxes for the wealthy. They liberalised  the world’s market system so that money could flow into tax havens. And money flowed out of productive investment and into stock markets, and the financiers gained.  Finance was deregulated to ensure that asset prices were inflated. And central banks prioritised the interests of asset owners over workers, and we saw the consequence in terms of high mortgage rates and high rents.

The consequence was that the gains in the extraordinary period from 1945 to 1975 were reversed.  Once again, R, the rate of return to capital, rose above G, the rate of return to the economy as a whole, and of course, as a consequence, because G reflects, by and large, the return to labour, inequality returned.

Real economic growth in advanced economies is now barely 1% to 2%; sometimes it’s less than that. In the UK, we’ve got used to seeing very little real growth. But at the same time,  we’re seeing the rate of return to capital grow by 4% or more in many years. What is clear is that in that case, the wealthy must be getting wealthier, and that is the case. Even government bonds now pay rates of interest that guarantee real returns to their owners above the rate of growth.

It’s as if everything is structured to make sure that the wealthy get wealthier and everybody else pays the price. The top are taking more every year while public services are collapsing. We have stagnation for the many and acceleration for the few,  and all of that is explained by this simple formula: R is greater than G.

But there’s not an inevitability to this. It’s happened because governments have chosen to privilege wealth over wages.  The tax system rewards capital and punishes labour, and we can see that through things like the national insurance system in the UK, which punishes labour hard, but leaves wealth entirely alone. And the obsession with balanced budgets makes sure that private fortunes soar whilst public investment declines. Market power is tolerated even when it starves society of essentials, which is now why so many people are living in intolerable housing conditions and in poverty.

There’s nothing inevitable about R – the rate of return to capital being greater than growth, the rate of return to everything else; it is policy that’s been engineered, but it is happening. And that means we have to rewrite the rules of the economy because this cannot be maintained. It’s like a cancer growing within our society.  This wealth is not being productive; it’s destructive. It’s actually squeezing out everything of value in our economy.

When the private sector talks about ‘squeezing out’, they pretend that the state is denying the private sector the opportunity to grow. But in fact, the exact opposite is true. The private sector is growing inordinately.

And if we look at the parallels inside human existence, there’s only two occasions when we see unlimited unfettered growth of the sort that wealth is now seeing. And  one is when cancer cells invade our bodies, and the other is obesity, and we know that both of these are deeply harmful. And that’s the case of wealth as well, when it grows in the way that it now is in our society.

The way in which wealth is accumulating, in shares, in speculative land, is all deeply toxic. And a bubble is going to be inevitable, as I have said many times before.

So what do we need?  We need, of course, to direct investment into care, into climate and communities, to raise G, the real rate of growth in the economy.

We need to strengthen workers’ bargaining power, so wages rise to match the growth in productivity, which they haven’t for decades. We don’t have a problem with productivity gains in the UK or anywhere much else in the Western world at present. We have a problem with the growth from productivity going to the owners of capital and not to wages.

And so we need trade union powers reinforced and not weakened yet again.

And we need to stop rent extraction in housing, in monopolies and in finance.

We need, in other words, to bring the economy back under democratic control.

This is the challenge. We need to have G greater than R. We need that for a very long time to come to address the imbalance that has been created by 45 years of it being the other way round, with wealth growing faster than wages.

And markets won’t fix this. They’re designed to cause it. Only political courage can reverse the flow of power and wealth to a few at cost to the many.

We are heading for a new form of feudalism, which will be backed up by the new forms of fascism that we are now seeing, where wealth can buy everything. And what we need instead is a society that serves us, and not the rentier class.

It’s possible, we could do this, but we have to understand one simple formula;  G, the rate of return to work, has to be greater than R, the rate of return to capital. Then we will have a more equal, fairer, just society where everybody can prosper, including the wealthy, because let’s be clear, they’ll still be wealthy, but they just won’t be growing disproportionately to the rest of us, and that’s fundamental to the future well-being of our societies, our countries, and our democracies.

We have to reclaim wealth for the benefit of everyone.

The labor of the smartest, most driven, most honest person on Earth may be worth a hundred times more than mine per hour as a reward IF they improve society for everyone, but there has to be a ceiling to each person’s income and accumulated wealth. Most people deserve a wage and property commiserate with their abilities but when that becomes more than a person can earn in a lifetime in a single hour it spells doom for society and likely for our species.

Religion damns humanism as the great evil when it is money, the demon Mammon, that is the god of this world. While religion can make tolerate humanism it cannot do the same with idolatry.

Tax Justice in my view is the idea that the tax rate is an inverse percentage applied to a progressive taxation. That is, there is no 100 percent tax rate on the highest earner because that would leave that person with no income. The example of this is the 34.3 billion a year Elon Musk has earned per year on average over the last decade. Taxed at 99 percent that would give Elon a yearly income of 343 million dollars. That is a two-week paycheck of over 14 million dollars, over those ten work days of 1.4 million dollars a day that would be 87,500 dollars an hour. That is a very good “living wage” of over 80 dollars an hour for over a thousand people if my arithmetic is correct. The idea of a 99 percent tax rate on the highest earner is that progressively scheduled, if a person makes what 50 percent of the entire population averages, they pay 50 percent income tax. Even the lowest earners at 1 percent pay their taxes. As simple as it gets.

The Magic Number

By going with this “100 percent thing”, this orders of magnitude applied to everything, which Elon, by the way, likes to use to express his grandiose plans, let us say that nobody is worth a hundred times more than anybody else. Cap that as the maximum individual hourly earnings and everything else gets taxed and redistributed to infrastructure and safety nets. No business owner should pay themself over 100 times what is paid to their lowest paid employee. Or We the People can vote to adjust that number based on the standard of living of the lowest earners. You get the idea. This is the “magic number” a democracy would use to prevent wealth from inevitably concentrating in a capitalist system to fewer and fewer till only a very few own everything and everyone.

Regarding property and asset personal wealth taxes…this might be set at 10 percent for the highest earners and be progressively lowered to zero at a certain amount of basic property and savings considered reasonable for retirement. Progressive tax rates on earnings and assets are the key to safeguarding democracy. The question of individual freedom, of the right of the individual to choose how to spend their wealth then comes up. This is essentially what gives the individual ownership of their own money and property. Again, using Elon Musk as an example, as the rocket genius entrepreneur who could never have made space launch so economical with limits placed on him, this question of “freedom” becomes key. The answer is that allowing entrepreneurs to invest their earnings or other’s earnings in what projects they choose to pursue can be regulated and enabled to a high degree. In fact, this has been successfully done since the beginning of the industrial age. It has also been unsuccessful in that when such “freedom” translates to absolute greed in the marketplace it leads to attacks on democracy that have finally succeeded in ending America. A “New America” is coming…whether it will be fascist kleptocracy or a better day remains to be seen.

Intentionally cutting off food for 42 million people so democrats will abandon the 51,000 people who will die without health insurance every year. So that billionaires can pay even less taxes and become even more fantastically rich.

I think the citizenry need to rise up and demand certain basic truths be codified into law and better yet into the constitution itself. The first big lie is that somehow “liberty” equates to letting centi-billionaires takeover the universe. The MUST be a wealth cap put on these super wealthy creatures that have ended America. A “New America” MUST recognize one of the functions of democracy is to limit personal wealth to something at least approaching reason. The second big lie is that somehow for-profit private companies are cheaper and better than non-profit governmental entities. Health, education, infrastructure, environmental regulation….all of these MUST be governmental functions providing for all citizens. And finally, the role of democracy must be understood as one of limiting individual power while maximizing collective wellbeing. If we cannot enlighten our citizens so that they take charge then we are doomed to be a fascist kleptocracy and our children and their children have no future.

We would like to think our military will not go along with a dictator and death camps but…

Trumpism has ended America. We will never be seen by the rest of the world as what we were. Unforgivable. And unless we end this fascist destruction of democracy in the next couple months we never will. We will have death camps in a few years. Guaranteed. Free speech in the media is almost over and YouTube, Blue Sky, anywhere people speak out will be gone soon.

Without the media this guy never would have been released the next day.

Little known fact: the Russian Revolution started with a woman’s march for food for their hungry children. This supposedly so shamed men that they finally rose up. Or those women were just the signal that enough was enough. That was the end of the Russian aristocracy who were mostly executed. The New Deal came about because FDR told his rich friends they were going to go the way of the Russians if they did not pay a 90 percent income tax to pay for safety nets.

If you taxed Elon Musk at a 99 percent income tax rate he would have put around 2 billion dollars in the bank this year and paid close to 200 billion. Think about that. If you taxed his net worth at 1 percent that would be 5 billion dollars he would have to pay so his combined tax would be around 200 billion dollars. He will pay between 2 and 7 billion. Billionaires ended America on election night.

Income tax, state tax, sales tax, other taxes, medical insurance, mortgage, car insurance, school loan debt, inflation……we are being farmed by the rich like animals. This is no longer a democracy…if it ever really was.

I worked a 52 hour week of four 13 hour shifts but I was called in at least once a month on my days off, often twice a month, and several times a year I was called in three times in one month. That made for many 65 hour weeks. No meal, two 15 minute breaks, no holidays. I finally had enough after it destroyed my feet and the workers comp claim was such a nightmare I finally gave up. That is life in America now.

The president is not even in the country with the government shut down and the nation about to melt down into chaos. Trumpism must end within the next couple months or people are going suffer what they know happens in other places but never imagined could happen here.

Less than 30 percent of the U.S. population are white males and about half of them voted for Trump. Factoring in those who have lost their jobs or had their eyes opened in some way that indicates about one out of ten people are supporting authoritarian rule.

They are outnumbered. But one person with a gun against nine without one is an active shooter scenario. One person with a military weapon can kill and wound hundreds. In the 2017 Las Vegas mass shooting 60 people were killed and over 400 wounded.

Claiming white supremacy is collapsing dangerously underestimates the danger they represent.