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.
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