The richest humans on the planet no longer bother masking their control over nations and individuals. In England, employment is falling, wages are falling, and people are falling into poverty. The rich are doing quite well during austerity, though, thanks to Quantitative Easing:
But Spencer Dale, the Bank of England economist, said that for pensioners the negative impact of QE [because it depresses interest rates on savings] was offset by the rise in asset prices. He said that without the central bank creating money and using it to buy bonds, the stock market would have collapsed and property prices fallen through the floor. Pension funds are heavily invested in shares, bonds and property, which means they might not be getting a good interest rate, but the value of their assets has largely been maintained.
Dale doesn’t say it, but it’s obviously true that this is huge benefit to the richest Britons, who own most of the stocks and real property. Dale also avoids another piece of reality, the richest Britons joined the richest Americans in wrecking the lives of millions of their fellow citizens, and now insist that those citizens protect them from loss, and accept poverty as their lot in life. Screw those 3.5 million British kids in poverty, and especially the 1.6 million kids in extreme poverty.
China is facing huge problems. There are riots at factories, as workers begin to refuse to submit to the militaristic enforcement they suffer on monstrous assembly lines. It is becoming clear that China’s export machine is sputtering, and that structural changes are needed as the government is in transition to new leadership. The richest Chinese aren’t going to allow that.
Similarly, many analysts question whether the incoming leadership has the political will to overcome the resistance of the so-called princelings and other well-connected families that have prospered under the current system.
One of our own oligarchs, the gambling mogul Sheldon Adelson, explained why he wants to run the political show to Mike Allen at Politico. At the top of the list is his desire to stop the investigations into his gambling empire. These appear to center around the Foreign Corrupt Practices Act, and allegations of bribery in connection with gambling in China, specifically Macau. Asia is now the source of 90% of Adelson’s revenues. He wants more support for Israel, as if the Congress weren’t already in Netanyahu’s pocket. I can just see both parties leaping to their feet to cheer on the bomb chart Bibi bought from Acme Corporation. And, of course, Adelson hates unions and the people they represent. He runs the only non-union shop on the Las Vegas Strip.
And for good measure, we have the solipsistic monarchs of the NFL, a crowd so in love with their own power they wrecked the game and arguably were forced to relent on their lockout. Dave Zirin calls it a win for the refs, though it’s hard to feel good about watching another group of new employees robbed of the security of a safe pension. But maybe the next time one of these greedheads demands that taxpayers build them a new arena, the fans will remember that they have the power.
In fact, the biggest fear of the oligarchy is that people will decide to strip them of their obscene wealth. Forbes columnist Kenneth Rapoza says that what the rich fear most is that their lapdog congressionals will suddenly start carrying out the demands of the electorate, not that Rapoza thinks that could ever happen. Robert Frank from the Wall Street Journal’s Wealth Report says that the rich are afraid of violence in the streets.
Granted, America isn’t a country conducive to class wars in the streets (even a mention by the President of rolling back the private-jet tax breaks sparked denunciations of class warfare). But at a time when most of the country is mired in unemployment, weak housing prices and a stack of bills from the bailouts, the rich have reason to fear public resentment. And some fear even worse.
Where is this power of democracy that the rich fear? Look at Greece, Spain, and Portugal, where the government uses its monopoly on violence to assault its citizens for complaining about their miserable futures. Spanish Prime Minister Rajoy assures his bond market masters* that the beatings will continue until the masses pay every penny of debt. It reminds me of the Whiskey Rebellion in this country. The government imposed a tax that affected primarily Western farmers to pay off the government bonds owned by the rich, a tax that took all the profit from a crucial cash crop. This was the equivalent of an income tax that was not imposed on the rich in the eastern states, but was used to pay debts to those same wealthy people. The effective tax rate was lower for large distillers, mostly in the East, than for the farmers in the West. When the farmers rebelled, George Washington sent the militia to insure payment.
The future of US workers is starting to become clear, and it isn’t much better that the outcome for the farmers, who wound up paying the tax. There is an excellent article in the Toronto Star (yes, Gene Elk is Mike Elk’s dad) showing how companies like Caterpillar and GE are able to screw workers into pay cuts that will keep them out of the middle class. Here’s the conclusion:
Chris Townsend, who refers to himself as the Washington guy for the [United Electrical, Radio and Machine Workers of America said] … “What we’re facing down here is public policy that goes right to the White House that now sanctions what has been increasingly at the private board room the mantra that wages have to be reduced. All the euphemisms — we’re not competitive, we have to have a competitive wage.”
Townsend speaks quickly, and in long sentences, and he has more to say about this current political moment. “All these companies surely have come to a consensus that $13 an hour more or less, or somewhere in there, that that’s the rate of pay that the tycoon chairs have sort of said, yeah, we will continue to do some manufacturing in the United States if that’s where we can slot it.”
That’s the future: jobs at about $13-18 an hour are competitive with Chinese labor, considering other costs, so that’s what we get. The oligarchy is certain state and federal government will enforce that policy, just like the Greek and Spanish police, and George Washington’s militia.
I guess that will continue to work. Until it doesn’t.
*By bond market masters, I mean the scum on Wall Street and their counterparts in the European Union, Japan, Taiwan, Hong Kong and other money centers who enforce the demands of their masters the oligarchs.