When will the wealthy get their wake-up call?

In an NY Times Op-Ed, Paul Krugman describes the political struggles in Hong Kong and discovers--surprise!--the wealthy of Hong Kong are trying to suppress the votes of the bottom 50%. Sounds a lot like what's going on in America, right? Krugman's conclusion: "The truth is that a lot of what’s going on in American politics is, at root, a fight between democracy and plutocracy. And it’s by no means clear which side will win."

You don't have to be a genius to see the vast wealth of CEOs and Hedge Fund Managers. Wherever you live, you can find enclaves of beautiful homes for the wealthy and vast stretches of mediocre homes for everyone else. The best property in any town is captured by the wealthy: The wealthy have the property next to the parks, the homes with views, the huge lots. The wealthy live in the nice neighborhoods with trees and garbage collectors and little boutique shops full of stuff that only they can afford to buy.

The wealthy really can't hide what's going on. They tell their supporters that all this can be theirs, too, if they just work hard enough and long enough and vote Republican. But even the dullest resident of the poorer districts can see those houses on the hill and those penthouse apartments and understand that he or she will never be living there. 

No amount of money spent on fancy propaganda is going to keep the 99% from the realization that they don't live in a mansion and don't own several houses and don't earn enough to buy those things. The 1% will never be able to convince the immigrants who do many of the menial jobs in this country that their lives will be better if they don't get the right to vote.

So I don't think there is a question about which side will win in the end. Eventually the non-wealthy among us will realize that immigrants are likely to vote with us and against the wealthy. That is precisely why the wealthy don't want to give citizenship to immigrants, even though it is the wealthy who benefit most from the maids, cooks, janitors, dishwashers, waiters, gardeners, security guards, night watchmen, and nannies who have come to this country to work. The 1% enjoy the unjust and unfair economic system just the way it is and they are fighting like Hell to keep it that way. The wealthy call this selfish attitude, "Conservatism," when it is really just "Greed."

The wealthy will lose because the non-wealthy are not nearly as stupid as they think we are.

Cantor's Defeat: Chalk one up for the 99 percent

Paul Krugman writes that Eric Cantor's defeat in his Republican primary signals the end of the Republican party as we know it. For decades, the Republican party has been selling itself to voters as far more radical than it actually is.

For example, Republicans preached against abortion rights since before Goldwater ran for president in 1964. The Moral Majority, founded in the 1970s, supported Republican presidential candidates like Reagan, Bush, and Dole. The Moral Majority campaigned for a ban on abortions and prayers in the schools.

Republican candidates gave lip service to social issues but ignored them once they got into office. This was an entirely practical thing to do, since there was little chance of convincing less fervent believers that these programs should be imposed on the entire population. Instead, the Republicans took the Moral Majority votes and used them to promote their own agenda, which included wars around the world to protect their financial interests and weakened regulations to protect their business interests.

The Tea Party first came to national prominence with the 2008 Presidential election. There was no clear idea of what the Tea Party stood for, primarily because Republican traditionalists quickly tried to grab its leadership. These included the corporatists, people who wanted to give more power to the corporations, and the libertarians, people who wanted to give more power to individuals as opposed to the state.

These two forces are diametrically opposed to each other. corporatists insist on corporations having more power over individuals, through laws that discourage lawsuits against them and Supreme Court rulings that give corporations more influence over elections than individuals. Libertarians want to preserve individual rights, not just from government control, but from corporate domination as well.

These two disparate factions continued to pour money into Republican coffers during 2010 and 2012, resulting in victories for Republicans in congress and in statehouses. But rank and file Republicans saw the results of these elections as reaffirming their worst fears, namely that the Republican establishment in Washington was continuing to buy their votes with empty promises.

Cantor was one of those politicians who pretended to be populist while getting cozy with financial interests. In the area of home mortgages and financial shenanigans, the tea party and the liberal left agree. They hate the one percent. People in rural Virginia, naturally conservative but very definitely not of the one percent, see Cantor as the enemy. That's the main reason he lost his primary.

Chalk up a victory for the 99 percent of us who find ourselves struggling in difficult economic times.

Piketty and the one per cent solution

Thomas Piketty, a French economist, has written a new book on the ills of Capitalism, Capital in the Twenty-First Century. Alone among 700-page works on economics, it rose to the top of the New York Times best seller list. The terms used by Piketty to describe inequality of wealth—one per cent and ten per cent—have come into common usage.

Piketty views the concentration of wealth with alarm. Such concentration is hardly a new story, but prevailing belief has held that a concentration of wealth, like the one we are currently experiencing in the U.S., is a temporary condition to be rectified shortly by increases in productivity. Piketty says it ain't so. Wealth inequality, he says, will increase as long as the money earned on capital (interest rates) is higher than the growth rate of the economy in general (GDP).

Piketty points out the obvious. Inequality began to increase when Ronald Reagan began lowering taxes on the wealthy. Conservative dogma preaches that low tax rates on the wealthy will bring prosperity to all of us, saying, a rising tide lifts all the boats.

Guess what? It hasn't happened that way. The top ten per cent of Americans now own 70% of the wealth. Piketty says they will soon have more.

Americans seem willing to tolerate the wealth of entrepreneurs like Bill Gates and Warren Buffett. They should not be so tolerant. Bill and Warren were clever handicappers. They were able to pick the companies and ideas that would be successful in the late 20^th Century. But they did it through luck and clever ruse, not hard work, unless you count the work of thousands of engineers at Microsoft who contributed to Gates' windfall.

Americans seem willing, for the most part, to tolerate the inherited wealth of folks like the Rockefellers and the Kennedys. We can only hope they feel less generous toward Paris Hilton and the Kardashian sisters. Let us not forget the Koch Brothers, who inherited their wealth as well. 

What a crew!

Picketty suggests imposing a tax on wealth, a proposal which has the one percent protesting against the unfairness of it all. I think we should have a tax on wealth for that very reason, and the following taxes:

• A confiscatory inheritance tax for the wealthy. Their heirs did nothing to earn that money.
• A law that forbids companies from paying their employees with stock options instead of cash.
• A steeply progressive income tax.
• Higher property taxes on luxury homes and second homes, including yachts.

There are plenty of ways to narrow the gap between the one per cent and the rest of us. We should make this a high priority, starting now.