I explained in Black Hole Inequality that if inequality grows too much, a society will be sucked by it as if by a Black Hole. Such collapses typically conclude with war, invasion, or a natural calamity: Jin, Song, Yuan, Ming dynasties, & the “Fall” of Rome, or the Maya are examples.
The situation we have today possesses unparalleled perils we are not addressing because we are not in democracy, and the ruling elites are doing their best to distract themselves with corruption, in a fit of psychology reminiscent of the Nazi elite stealing treasure and art all over, while the Great Reich was falling. (See below for the Chinese elite’s theft of at least 4 trillion dollars, a pale imitation of what the American elite has been doing since it has been hiding behind the Bushes.)
Inequality is born from the exponential growth of power (in particular capital), that’s a purely mathematical effect. It became possible when capital appeared. That is, when artifacts appeared rendering life comfortable… Two million years ago (first stone tools). In conjunction with a failure of taxing said growth of capital enough, capital will grow exponentially.
In turn, inequality, being widely perceived, experiments show, as insufferable by primates, has to be covered-up under a thick layer of lies and dissemblance, to be entertained further by those who profit from it (Note 2). Even madness is not far, because those who rule have want the rabble believe that white is black, and black is white. Indeed, ethics is absolute, but, in an unjust society, it’s those who rule, who want to be absolute.
Hence the greater the inequality, the worse the emotions, the more satanic the behavior of those at the top. This is why the reign of the rich brings up the Dark Side, Satan, Pluto. That insight was reached by the Greeks at least 26 centuries ago (and later reinforced by the mythical Jesus).
Hence inequality is not just about injustice, and diminished economic opportunity for the average citizen. It’s also about a society increasingly led by fewer and fewer people gathering all the money and power, and ever more so, as long as a strong mechanism to block further inequality is not put in place.
But, even more horrifyingly, a society where inequality grows is a society where the leaders learn to increasingly lie and use the worse methods for their class to keep on ruling.
As inequality grows, so does the Dark Side.
KRUGMAN KEEPS ON DISCOVERING INEQUALITY:
Inequality is the drama of the Obama presidency, his signature achievement, even more than Romneycare. Obama’s is the Inequality presidency. Obama lowered taxes (mostly to the non rich) thus allowing him to leave untouched taxes on the hyper rich that were way too low. (So Obama used the former to hide the latter, a nice magician trick; Note 1.)
Krugman, his lower eye on his rather dim readership, and his upper one on his masters, wrote a less grand, but still educative editorial in the “The Populist Imperative”:
“The outstanding faults of the economic society in which we live are its failure to provide for full employment and its arbitrary and inequitable distribution of wealth and incomes.”
John Maynard Keynes wrote that in 1936, but it applies to our own time, too.
If, as has been widely reported, President Obama devotes much of his State of the Union address to inequality, everyone should be cheering him on.
They won’t, of course. Instead, he will face two kinds of sniping. The usual suspects on the right will, as always when questions of income distribution comes up, shriek “Class warfare!” But there will also be seemingly more sober voices arguing that he has picked the wrong target, that jobs, not inequality, should be at the top of his agenda.
Here’s why they’re wrong.
First of all, jobs and inequality are closely linked if not identical issues. There’s a pretty good although not ironclad case that soaring inequality helped set the stage for our economic crisis
…Yes, we’re a nation that admires rather than resents success, but most people are nonetheless disturbed by the extreme disparities of our Second Gilded Age. A new Pew poll finds an overwhelming majority of Americans — and 45 percent of Republicans! — supporting government action to reduce inequality, with a smaller but still substantial majority favoring taxing the rich to aid the poor. And this is true even though most Americans don’t realize just how unequally wealth really is distributed.
By contrast, it’s very hard to communicate even the most basic truths of macroeconomics, like the need to run deficits to support employment in bad times. You can argue that Mr. Obama should have tried harder to get these ideas across; many economists cringed when he began echoing Republican rhetoric about the need for the federal government to tighten its belt along with America’s families. But, even if he had tried, it’s doubtful that he would have succeeded.”
Krugman is funny: a man can’t teach what he does not understand. There is this famous saying that: give a man a fish, feed him for a day, teach him to fish, feed him for life.
In his unforgettable books, the irreplaceable Obama teaches that life is all about… navigating. I did not see Obama teaching values such as employment, or how to do anything productive, such as fishing and thinking. Obama is not the Old Man and the Sea. It’s the Young Man and the Pot of Gold.
Obama’s confused policy in science and technology is a testimony to that. Obama wasted 150 billions (said his guy in charge) supporting friendly capitalists like the Elon Musk. That augmented inequality: Musk is just a filthy rich South African immigrant, who did not need all those billions from the USA president.
So Obama wasted those 150 billion, while carefully starving the science missions of NASA, including some international collaborations. The science budget at NASA is only 5 billion a year., but that makes work lots of workers and engineers, let alone scientists.
And Krugman to conclude: The point is that of the two great problems facing the U.S. economy, [employment and inequality], inequality is the one on which Mr. Obama is most likely to connect with voters…
So I hope we’ll hear something about jobs Tuesday night, and some pushback against deficit hysteria. But if we mainly hear about inequality and social justice, that’s O.K. “
It never hurts to listen to the birds singing in the trees, either. It’s more troubling when we have been navigated into a disaster by a guy who knew only to navigate to the masters. As I showed, after tax corporate profits have never been higher under Obama. But don’t worry: he will sleep well. He is not Magellan (who died pierced by arrows in the Philippines).
PLUTO HAS BEEN A GOOD MASTER FOR SOME:
So let me repeat slowly: plutocracy central is the USA, As I explained in USA, Den Of Thieves. USA plutocrats have been the world’s mightiest and most durable ever since the Kaiser bit the dust. Kaiser Wilhem II of Germany, that is. USA plutocracy was the indispensable Deus In Machina that has ruled for more than a century, although sometimes through servants and collaborators: Stalin, Hitler, Mussolini, are examples (even Mao was helped by USA plutocracy, not just in the 1940s, but by Nixon).
Obama does not know much, but he knows that the big corporate actors of the USA don’t pay much tax. That’s not a violation of the law, because they are the law (that’s the way he has got to see it, according to his “navigation” morality). At least so he was told, or decided, in 2008.
The way many strategists in the USA (be they in think tanks, the intelligence agencies, the military and rarefied pluto circles, Davos style) figure it out, rogue plutos and their corporations made the empire of the USA, by leveraging the world wars. And the struggle for world domination is not over. Just as they made German plutos an offer they could not refuse, a century ago, they made Russian plutos and Chinese plutos similar offer, that they could not refuse.
We are witnessing an attempt to implement the same trick. (However, that can work, see: Note 4.)
CHINESE PLUTOCRACY, PART OF THE WORLD’S PLUTO MACHINE:
The corrupt, not to say satanic, Chinese leadership has hidden at least 4 trillion dollars in the Caribbean and other balmy places, for more than 22,000 tax havens clients, including 15 of the apex political animals in China.
Those files come from JUST two offshore firms — Singapore-based Portcullis TrustNet and BVI-based Commonwealth Trust Limited — that help clients create offshore companies, trusts and bank accounts.
(That’s part of a cache of 2.5 million leaked files that ICIJ has sifted through with help from more than 50 reporting partners in Europe, North America, Asia and other regions.)
PricewaterhouseCoopers, UBS and other Western banks and accounting firms are middlemen helping Chinese plutos setting up trusts and companies in the British Virgin Islands, Samoa and other tax havens. Example: giant Swiss bank Credit Suisse helped Wen Jiabao’s son create his British Virgin Island company while his daddy was leading China and terrorizing Tibet.
Obama loved to golf with the aptly named Wolf, head of UBS USA. Meanwhile UBS was found by the USA to have engaged in criminal conduct, but strangely enough, no American banker ever goes to jail (though the USA has no apparent problem jailing Swiss bankers, meaning that the USA is after market share, not justice).
A century ago, except for one large republic, France, Europe was dominated by plutocrats who all knew each other very well. War was the answer they found to the questions We The People asked, especially in Germany.
Right now, we have a somewhat similar situation developing: a new plutocratic Internationale has developed, and entangled all the world’s leadership systems. “democracy” is just a word they use to hide corruption. That they all know each other is not reassuring is anymore than in 1914. Just as in 1914, it makes them too confident and tolerant of the Dark Side.
The Prime Minister of Ukraine, an agent of Putin, gives interviews at the plutocratic conference in Davos, implying that he will keep on killing protesters, as needed.
Meanwhile, the Earth’s affairs are not attended by these golden clowns. A major catastrophic development in the CO2 crisis could happen any day, and then what? Everybody is unprepared to take intelligent, drastic countermeasures (remember that fundamental research budgets were actually reduced because of the 2008 plutocratic crisis… which makes sense in plutocratic logic!).
The first counter-measure? Increase educational levels. And that means increase funding for the likes of NASA or the Department of Energy, DOE (because, after all, there would be no CO2 crisis if we had more advanced energy sources). But the rumor is that Obama wants to save on laser fusion research (so he can give more money to his hyper wealthy “friends”?)
By refusing intelligent and soft counter-measures to rising inequality, we are preparing the worst.
Hence inequality is not just about giving in to the Dark Side, it’s about making the bed of war. And no doubt, among those who have nearly all and want to give nothing, war is always better than any alternative they can think of. Thinking is not their forte.
Note 1: Obama, the Changeling, not to be confused to Chinese Princeling, brought us change we can believe: the greatest corporate profits ever, after tax, relative to GDP. To compensate, he talks about inequality more than ever.
This is the State of the Union: schizoid (= a form of schizophrenia, being of two minds on one thing).
Note 2: Chimpanzees or Baboons have a strong sexual dimorphism, and thus a greater tolerance for injustice. Humans are closer in dimorphism to Capuchin Monkeys, who detest injustice.
Note 3. The graph of higher education hides a worse truth: a lot of the public spending helps actually fund the plutocratic (“private”) universities.
Note 4: Repeating exactly the same trick can work: the fascist German army defeated twice the French at Sedan (1870 & 1940). Even better, a more than 10,000 strong Persian army allied to Macedonia held the Thermopylae, just as the Spartans had done before, and, just as before, the Roman army took the same mountain path to crush them from behind.