We Is All One Nation - Not!

[erranta]

The moral bankruptcy of our ruling classes

Alan Kohler

Published 7:18 AM, 13 Aug 2012

The word of this year's ADC Leadership Retreat at Hayman Island was "oligarchy". It means government by and for the few, where all power is vested in a small elite.

There was, as always, plenty of fascinating discussion about the issues of the day, such as Europe's debt crisis, America's fiscal cliff, the Chinese economy and the regulation of banking. And, as usual, everyone takes something different out of the weekend.

But for me, if there was one dominant, overriding theme over the conference it was that most of the world, if not all of it, is now governed by rich elites who are just out to look after themselves - oligarchies.

And the key problem of Planet Earth these days is that this is no longer confined to the non-democracies: the nations that are nominally democratic (United States, Europe, UK, Japan, India) as well as those that are fundamentally undemocratic (Russia, China) are all now ruled by wealthy oligarchies.

Capitalism has failed to deliver for the poor and the middle classes.

Following the triumph of democracy over socialism with the fall of the Soviet Union in 1991, western free market economies have merely seen their elites become very rich, and since in politics "money doesn't talk, it screams", these elites have also become very powerful.

By coincidence, while the conference was taking place, a letter to the Sunday Times from British MP Michael Meacher went viral on Facebook and Twitter.

Meacher wrote that the annual Sunday Times Rich List shows that the richest 1000 Britons increased their wealth by 155 billion pounds in the past three years, which is enough for them to pay off the British deficit and leave them with 30 billion. "Despite the biggest slump for more than a century, these 1000 richest are now sitting on wealth greater even than before the slump; their wealth now amounts to 414 billion pounds, more than a third of Britain's entire GDP."

"The Left and the Right have both failed to create mass prosperity", declared one speaker at Hayman on Saturday (it was Chatham House Rule so they can't be quoted). "State redistribution has not done it, and nor has free market capitalism."

Another: "In the west we now have an oligarchy that's fantastically rich that doesn't carry its share of the freight; they can't look the rest in the eye and say 'I pay my share.' Not only that, they are putting at risk the pension assets of those at the bottom."

And another: "Most leaders believe in nothing. We used to have self-sacrificing elites, now we have self-serving elites."

Australia, meanwhile, is only the lucky country because of reforms that came out of an earlier consensus that has now been forgotten and abandoned.

Everywhere, including Australia, politics has trumped economics, and the market has lost faith in political decision-making because it has been captured by vested interests.

The great danger facing the world is that both collectivism and individualism, democracy and one-party rule, have produced the same outcome: oligarchy. "And if you have a society in which only a few win, the rest get together."

In China, demand for democracy is only going to increase, according to speakers from there. It will have "Chinese characteristics" (not clearly defined) but the Communist Party needs to move towards greater democracy, at the local and province level at least.

Perhaps surprisingly, after all that, the tone of the conference was basically optimistic, not just because of a growing sense that Europe will not collapse or that, eventually, a new polity in America will replace the current dysfunctional one, but more broadly that "human history tells us that in the end the romantics win".

It's also because 21st century technology is pro-social. In China there are 100 million micro-bloggers. The era of big data has produced a challenge to privacy, but the information is also shifting economic power to the many.

Moreover, the new economy is one that includes the ability to market reputation as an economic good, for example with eBay.

Banks and markets, meanwhile, are being regulated. Although the attempt via the Volcker Rule to reintroduce a form of the Glass-Steagall Act to separate investment banking from commercial banking has failed, the Dodd Frank Act, with 5320 pages of rules, will make a big difference to the way all firms behave (one person at the conference had read every word).

But pessimists and optimists alike seemed to agree that the big problem is that the world is run by oligarchies that have lost legitimacy. The optimists cling to a belief that it can't get any worse.

http://www.businesss...ocument&src=rss

Sniping at the rich is futile and damaging

Both David Cameron and George Osborne yesterday ruled out the idea of a new tax on high-value properties. Mr Osborne went further and said he did not like the idea of any kind of annual levy on wealth because it would drive enterprise and investment abroad.

http://www.telegraph...l#disqus_thread

Telegraph regurgitated Propaganda

[Game_Over]

Fortunately most people here understand the difference between the deficit and the national debt.

If the state stole all these peoples wealth, it would not have to add to the national debt for approximately ONE YEAR

Then what??????????????????????

[200p]

I have posted this elsewhere before.

See chart 2 (bottom left). The richer have NEVER BEEN RICHER, on paper.

^ Chart 2 What the top 200 richest people in the UK are worth (in total). Data source - Times Rich List 2012

Edited October 8, 2012 by MrTReturns

[erranta]

Fortunately most people here understand the difference between the deficit and the national debt.

If the state stole all these peoples wealth, it would not have to add to the national debt for approximately ONE YEAR

Then what??????????????????????

You miss the whole 'point'

How can these individuals siphon so much wealth out of our country in a recession unless mass fraud and collusion with our governing plonkers is going on whilst they spin a load of crap in their media to us.

Note what it also says 'they' are able to do with pensions of the poorer workers

(another setup we all just got forced into)

[crashmonitor]

Note what it also says 'they' are able to do with pensions of the poorer workers

(another setup we all just got forced into)

Shouldn't lose too much sleep over 6 million of the current 9 million pension schemes. The former are public sector schemes underwritten by the tax payer who are currently on the huck for 86% of GDP to cover the shortfall of employer and employee contributions. As previously alluded if you confiscate the wealth of the super rich you wont get close to 86% of GDP (over a trillion pounds).

[erranta]

No, I think you missed the point, Erranta.

So we could appropriate the extra wealth accumulated by the richest 1000 Britons over THREE YEARS to pay off JUST THIS YEAR'S difference between tax-take and spending.

This would not be 'paying off' anything, only reducing the difference between tax and spend. FOR ONE YEAR.

Once you have removed the riches ability to create wealth i.e. their assets, and capital is no longer willing to take a risk to make money, then what?...

Just because some people have done well recently, why attack them?

The government simply must reduce spending on bull*rap to reduce the structural deficit.

Then, MAYBE we could attack the national debt.

The whole point is this wealth is not distributed back across the Nation thus keeping other people in jobs, tax receipts etc

Instead it is all off-shored by a few

We do not need these multi-billionaire rich. Kick the super-parasites out. They outsource tens of thousands UK jobs at flick of a switch. Most don't give a toss about their workforces

UK will go down for a bit then properly regulated 'others' will easily take their place.

Just like the myth that all rich crunts will leave the UK if taxes go over 50%

They were 90% in the 60-70's and the need for exploitation and feed their inate greed for cash kept them all here

Dont be brainwashed or Conned by the 'Cons'

France just stuck top rates up to 75% - you can see the tears oozing from their eyes as they sum up if it's worth giving up their 'precious' sources of cash and moving out.

No stampedes yet - huh plenty of gobshite threats though.

The other myth you have been brainwashed with is their present style of capitalism is "Fair"

Edited October 8, 2012 by erranta

[oracle]

The whole point is this wealth is not distributed back across the Nation thus keeping other people in jobs, tax receipts etc

Instead it is all off-shored by a few

We do not need these multi-billionaire rich. Kick the super-parasites out. UK will go down for a bit then properly regulated 'others' will easily take their place.

Just like the myth that all rich crunts will leave the UK if taxes go over 50%

They were 90% in the 60-70's and the need for exploitation and feed their inate greed for cash kept them all here

Dont be brainwashed or Conned by the 'Cons'

The other myth you have been brainwashed with is their present style of capitalism is "Fair"

capitalism IS fair,if it is done with honest toil.

corporatism,where the rules of commerce are drawn up and administered by a small clique of in-breds(much the same as landed gentry) has the capacity to become monopolised.

...and monopolies are not efficient business models...they get complacent and stale......and from time to time need a severe kick up the @rse from a younger,more virile model....if they choose not to adapt they die.

end of story.

we are at a turning point right now.

there has been too much centralisation of power,it is only a matter of time before a more hungry competitor to central planning comes up with a much more robust alternative.

...actually the PTB throwing yet more regulation against the little people is actually adding yet more wood to their own funeral pyre.

we already have a model....it is called quaker capitalism.

it is not totally individualistic,and it is certainly not meant to be oligarchical,and it is not completely egalitarian tractor-production style communism....there is enough incentive and reward for hard work.....but not profiteering.

Edited October 8, 2012 by oracle

[Liquid Goldfish]

If it is the case, as some studies claim to show, that more equal societies are richer, happier, healthier, wth less crime, less drug use and fewer social problems, then taking some of the wealth from the richest would be good for the country even if it only paid off, say a quarter of the national debt - at least it would be a start..

[erranta]

capitalism IS fair,if it is done with honest toil.

corporatism,where the rules of commerce are drawn up and administered by a small clique of in-breds(much the same as landed gentry) has the capacity to become monopolised.

...and monopolies are not efficient business models...they get complacent and stale......and from time to time need a severe kick up the @rse from a younger,more virile model....if they choose not to adapt they die.

end of story.

we are at a turning point right now.

there has been too much centralisation of power,it is only a matter of time before a more hungry competitor to central planning comes up with a much more robust alternative.

...actually the PTB throwing yet more regulation against the little people is actually adding yet more wood to their own funeral pyre.

we already have a model....it is called quaker capitalism.

it is not totally individualistic,and it is certainly not meant to be oligarchical,and it is not completely egalitarian tractor-production style communism....there is enough incentive and reward for hard work.....but not profiteering.

We had the "Brain-Drain" during Thatcher oppression int' 80's with same doom-mongering waffle.

Within a few years we had massive science parks all over the UK with start-ups like A.R.M. appearing!

[Guest TheBlueCat]

One more idiot blogger who doesn't know the difference between a deficit and a debt quoting that old champagne socialist Michael Meacher - http://www.guardian.co.uk/uk/2001/jan/20/politics.labour

[Game_Over]

We had the "Brain-Drain" during Thatcher oppression int' 80's with same doom-mongering waffle.

Within a few years we had massive science parks all over the UK with start-ups like A.R.M. appearing!

What you and the multitude of 'loony lefties' here seem to forget is that this has been tried many, many, many times before

and the consequences have always been the same.

Inequality is reduced by simply making everyone poorer

[Liquid Goldfish]

What you and the multitude of 'loony lefties' here seem to forget is that this has been tried many, many, many times before

and the consequences have always been the same.

Inequality is reduced by simply making everyone poorer

There's no evidence for that at all. Inequality was lower in the 1960s and 1970s when the taxes on the rich were much higher. The economy grew just as fast (or slowly!) in those days as it has done since trickle down economics started in the early 1980s. The pie hasn't got any bigger in the last 30 years, it's just been split more unequally.

[Executive Sadman]

heh, i posted some comments on 7-homes meacher's (or was it 9 or 11?) blog a couple of months ago when that post first appeared.

Needless to say they were never 'approved'

The man is an ignoramous who doesnt even know what wealth is. Is he going to give all the weathly a tax refund when the stock market falls next tuesday?

We dont need wealth taxes, we need proper enforcement of the current taxes.

[Executive Sadman]

You miss the whole 'point'

How can these individuals siphon so much wealth out of our country in a recession unless mass fraud and collusion with our governing plonkers is going on whilst they spin a load of crap in their media to us.

Note what it also says 'they' are able to do with pensions of the poorer workers

(another setup we all just got forced into)

Because its not real wealth. Its an assumed value based on a thin volume of transactions at a second in time.

What do you think would happen to the paper value of all that 'wealth' if govt seized it and sold it on (to whom exactly I dont know, given govt would now be in the business of seizing assets i doubt theyd have much value) to finance the deficit?

[Executive Sadman]

One more idiot blogger who doesn't know the difference between a deficit and a debt quoting that old champagne socialist Michael Meacher - http://www.guardian.co.uk/uk/2001/jan/20/politics.labour

Yes...the 'pay down' wording does seem to suggest Meacher isnt actually conscious as to the difference between 'debt' and 'deficit'

Another unreformed leftist, Ken Loach (director who makes depressing films about miners etc) called for pretty much the same thing about 3 years back.

My comment...

He says a tax of 5% should be levied on the top ten percents wealth to wipe out the deficit. One big problem with that; wealth only yields about 3% at the current price levels used for his calculations. So it would cost more to hold 'wealth' than it yield's -it ceases to be wealth and becomes a liability. So the price of wealth must decrease until the yield rises compensate for the tax. At which point the tax must increase to yield the same revenue. Repeat til you have 100% wealth tax & 0 wealth.

Most countries that have wealth taxes have them levied at tenths or even hundreths of a percent (ie nowhere near enough to make a dent in the deficit) I think France runs up to 1.8% on the highest 'valuations', but 1) i doubt anyone actually pays it and 2) they probably dont have CGT, stamp duty or perhaps dividend taxes.

[Democorruptcy]

You might also find this video insightful:

It shows how little we gain by soaking the rich.

Admittedly, it's based on the USA but there, i believe, the discrepancy between rich and poor is higher than the UK.

On the CIA site they have the Gini Index which measures the degree of inequality in the distribution of family income in a country.

It's a bit out of date with the UK 91st of 136th (dated 2005) and the USA less equal at 42nd in 2007.

(Scandinavian countries are most equal)

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2172rank.html?countryName=United%20Kingdom&countryCode=uk&regionCode=eur&rank=91#uk

On the percentage each country takes in tax the UK is 46th highest takers out of 213. The USA is 193th.

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2221rank.html?countryName=United%20Kingdom&countryCode=uk&regionCode=eur&rank=46#uk

UK is 187th worst out of 212 for deficit

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2222rank.html?countryName=United%20Kingdom&countryCode=uk&regionCode=eur&rank=187#uk

UK is 17th out of 145 for highest Public Debt.

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html?countryName=United%20Kingdom&countryCode=uk&regionCode=eur&rank=17#uk

To summarise we are heavily in debt, our debt is growing but our taxes are already too high so we don't have much scope to raise them to pay for the debt. I suspect since 2005 our inequality has grown.

Edited October 8, 2012 by Democorruptcy

[Game_Over]

There's no evidence for that at all. Inequality was lower in the 1960s and 1970s when the taxes on the rich were much higher. The economy grew just as fast (or slowly!) in those days as it has done since trickle down economics started in the early 1980s. The pie hasn't got any bigger in the last 30 years, it's just been split more unequally.

That has nothing to do with what I said.

Anyway, inequality may have increased but the average person is still better off than they were in the 1960's

And a report a while ago stated that inequality had actually fallen under the current government because the better off had got worse off.

No country anywhere in history ever made the poor richer by making the rich poorer

[Game_Over]

Because its not real wealth. Its an assumed value based on a thin volume of transactions at a second in time.

What do you think would happen to the paper value of all that 'wealth' if govt seized it and sold it on (to whom exactly I dont know, given govt would now be in the business of seizing assets i doubt theyd have much value) to finance the deficit?

Well this is completely bleeding obvious isn't it

So why do some people just not get it?

Personally I have come to the conclusion that Socialism is driven by greed, envy and spite

[Executive Sadman]

To summarise we are heavily in debt, our debt is growing but our taxes are already too high so we don't have much scope to raise them to pay for the debt. I suspect since 2005 our inequality has grown.

Two observations.:

1)The leftists want to increase spending because of some kind of stimulus effect (which will ultimately result in inflation/hyperinflation as they spend it on ensuring vested interests - union represented groups in order to stay unproductive, or they buy votes through welfare spending - the ultimate in unproductive spending) The problem is the ONLY way you can add GDP at a faster rate than you add debt is through exporting more or importing less. This is problematic as the government exports practically nothing. The only sector that can logically get us to sustainable, non debt based growth (as was the case before about 1970) is the exporting sector, the private sector.

2) More spending/More government DOES NOT MEAN MORE EQUALITY. When they compare the "top 10%" to the "bottom 10% my guess is that most of the top 10% (given that means anyone earning over £50k a year) are actually civil servants, whereas the bottom 10%, those working at least, do menial jobs in the private sector. Fat cats and the old boys network are just as prevalent in the public sector than the private, maybe more so. Of course, the leftists know this, they are part of it.

Growth in govt as a % of the economy.

http://globaleconomicanalysis.blogspot.co.uk/2012/08/government-spending-as-percentage-of-gdp.html

Inequality growing as govt grows.

[Executive Sadman]

Well this is completely bleeding obvious isn't it

So why do some people just not get it?

Personally I have come to the conclusion that Socialism is driven by greed, envy and spite

Because its nice to believe fairytales of the type snake oilers like meacher spin. That and common sense is most uncommon. Its a lot easier to rip people off by telling them you want to help them/are a socialist than it is to offer unpalatable, but ultimately realistic solutions.

Jimmy Carter told the american public a few truths in his malaise speech. Look where that got him. People get the politicians they deserve, and mostly they deserve lying cretins like Meacher.

[Travisher]

So top 10% of wage earners earn over £50K... this is clearly misleading statistic. Most of the rich people in this country do not get paid a wage. Their income is vastly more than £50k.

I am always annoyed when rot about the top 10% is trotted out. I earn more than that yet my car is 10 years old, at 54 I've only just scraped enough to buy a house(a repo).

Lets be clear, £50k wage gets you a mediocre house built by cowboys. Top 10% my rear end.

[blackgoose]

One of the reasons that the top 100 richest in the UK are getting richer is just that more foreign billionaires and hundred millionaires are buying properties in London and becoming non dom here. If you look at the list of the richest in the UK, the foreign outnumber the British by some margin, especially at the top.

[DarkHorseWaits-NoMore]

...But pessimists and optimists alike seemed to agree that the big problem is that the world is run by oligarchies that have lost legitimacy. The optimists cling to a belief that it can't get any worse.

+1 agree. Ah wouldn’t it be tragic to see the richest have their asset price gains taxed away. Meanwhile, no one gives a toss about the 15% drop in my income in recent years, not to mention inflation losses on savings, pensions crushed, cut backs on services and benefits for the citizen whilst disproportionate taxes continue to increase (NI, VAT etc.). Oh and still priced out of basic shelter for raising a family. Hooray for those wealthy fellows! FFS.

[Game_Over]

One of the reasons that the top 100 richest in the UK are getting richer is just that more foreign billionaires and hundred millionaires are buying properties in London and becoming non dom here. If you look at the list of the richest in the UK, the foreign outnumber the British by some margin, especially at the top.

Not unexpected given that Nu Labour turned London into a haven for the World's biggest criminals.

[Game_Over]

+1 agree. Ah wouldn’t it be tragic to see the richest have their asset price gains taxed away. Meanwhile, no one gives a toss about the 15% drop in my income in recent years, not to mention inflation losses on savings, pensions crushed, cut backs on services and benefits for the citizen whilst disproportionate taxes continue to increase (NI, VAT etc.). Oh and still priced out of basic shelter for raising a family. Hooray for those wealthy fellows! FFS.

The point is, stealing peoples wealth would not make you any better off

because the act of stealing it destroys it.

You might feel a short lived sense of satisfaction, but ultimately you would be poorer.

The reason we are all going to be worse off for the next 20 years is because the whole country lived way beyond its means for the previous 15 years

Simple as that