This
half a billion dollar monstrosity is being built for Amazon tycoon Jeff Bezos.
Ostentatious
displays of wealth have always been a way for the rich and wannabe rich to
show off. But recently it has gotten way uglier as millions suffer
from a global economy suffocating pandemic while ole Jeff shows
off the killing he made off of a literal killing. His wealth has
gone up something like $57B since Covid19 hit as many people are stuck at
home being forced to use his services.
Vast
wealth concentrated in the coffers of a few Scrooge McDucks who
figure out how to game the system has existed since the early days of
capitalism. Their monopolistic ascent is usually accomplished by
cornering a market for some essential commodity more recently PC
operating systems, social media and in Bezos' case online retail. In Econ 101 we learn that such market dominance is called a monopoly
and is considered a market deformity. And as such is illegal being deemed unfair even by the harsh standards of capitalism.
Monopolies are seen as the very antithesis to our economy's primary engine - market
competition. So way back in 1890 the Sherman Anti-Trust Law was enacted
with others such legislation to follow (enforcement on the other hand has been
another matter).
Beyond
the known problem of greedy opportunists cornering markets, French economist Thomas Piketty in his landmark
Capital
in the Twenty-First Century
(2013)
has painstakingly laid out another even deeper problem. Piketty shows mathematically how something else has gone wrong
over the last 250 years. The returns
on investment
have gone well beyond the
opportunities
for investment.
Thus massive amounts of money (AKA capital) has a perverse tendency to accumulate uselessly, sitting
idly in the hands of individuals, families, financial institutions or
whatever with nowhere to go in terms of productive investment
opportunities. So it ends up backed up and churning around
uselessly (and often dangerously) in speculation,
or
simply pissed away in wasteful show-off purchases known as
'conspicuous consumption'. See Thorstien Veblen's Theory
of the Leisure Class (1899).
The
obvious solution which Piketty advocates is to hoover it all up or part of it in taxes
and use it for the public good, which as we all know there is an
overflowing immediate need for in every direction. But retrieving
such accumulated wealth especially in the USA is not easy. In fact an
entire political party has based anti-taxation as their one and only
public policy position. And it's a popular one. People have always
hated taxes. It has been historically a form of oppression especially by monarchies and other autocracies. However in
recent times in the USA especially we have overdone it. We have embarrassingly
let our entire physical infrastructure rot right out from under us. Anyone who has
been to another developed country recently, even ones known to have
suffered greatly after the 2008 recession, knows the shock upon
returning and seeing the shabby conditions we now take for granted .
We have been left behind in the dust still bumper to bumper,
stranded in our no-exit traffic hell on our so-called “free”ways.
Our
politicians on the left of the political spectrum like Bernie Sanders
or Elizabeth Warren and now (surprisingly) “moderate” Joe Biden
realize that some of this accumulated sterile wealth must freed up
for the greater good. The manifold disparate and desperate needs that
surround us on every side need attention. But the Bidens of the world
must walk on eggshells regarding the T-word lest they attract
dangerous incoming artillery from the right. Yet only by restoring
corporate and individual tax rates back to 1950's levels (the same
50s' that MAGA types so nostalgically long for) can we afford all
that needs to be done. Furthermore, the obscenely huge fortunes that
have grown like tumors all over the world need to be shrunken back
through taxation.
But
besides suggesting an increase in taxes
(the dreaded T-word), but for only top
tiers of income, the Biden administration is also vulnerable to
attack due on the other right wing shibboleth, the dreaded I-word:
Inflation.
Growth in the past was usually bought at the expense of some degree
of rising prices. It was an acceptable trade-off. High levels of
employment equals some inflation. In fact the relationship is
schematically depicted by the Phillips Curve which shows the
relationship between growth and inflation. This acceptable trade-off
broke down in the 1970s when inflation and
high unemployment occurred
simultaneously: It was called “stagflation”. It was primarily due
to an inordinate rise in oil prices thanks to the formation of, yes,
an oil quasi-monopoly – an oil cartel: OPEC. And it in a way it
ended bipartisan support Keynesian government spending based fiscal
policy and paved the myth of “supply side” Reagonomics.
Now
fast forward to 2021 and Biden's progressive agenda. Already it has
headwinds. The stock market is reacting negatively to minor inflation
probably due to pandemic induced global supply chain disruptions and
a hacker attack on an East Coast oil pipeline. It is not clear
whether the massive Covid19 relief and vaccine distribution spending
has led ot any inflation yet.. Most economists believe the very low
interest rates on government bonds make it a good time to go deeper
into debt since the needs are so great. But debt should not pay for
all of it. Also increasing taxes on the Bezos types and corporations
is way overdue. Both have been skating for
too long. The Biden Administrations proposed massive expenditures,
trillions!,
only shows their recognition of the gravity of what we. It's a Triple
Whammy: 1) a Covid19 induced economic crash; 2) a crumbling
infrastructure; 3) a world historic ecological crisis requiring a
never before done,a
forced transition
to another source of energy.
Yet
dark clouds hover. If the Trump-deranged GOP has its way and jiggers
enough State vote counting apparatuses and undermines enough ballot
box access as they are attempting of do (to “correct” something
even the Federalist Society member Trump-appointed judiciary was not
able determine was a problem) and they
return to power in 2024, we are indeed headed for a descent into a
dystopian nightmare.
Politicians, also known as our leaders (and all we have presently) are exactly the wrong ones to lead in such a crisis. Politicians, democratic or autocratic, are temporal actors who must survive in whatever political arena in which they exist. The system culls for ego-driven, alpha types. The ones at the top have managed through a mix of tenacity, verbal skills, charm, guile and often sheer ruthlessness to get to the top of of their particular dung heap of a political hierarchy.
