Offshore banking, Belasting ontduiken en belastingparadijzen

Nou, ik heb gister even een research gedaan naar offshore banking (belastingparadijs etc.) en pak even samen wat ik heb gevonden over dit onderonsje tussen internationale bedrijven, banken & overheid.

Dit is vrij belangrijk ook met de komende TTIP verdragen, die helpen mee dit te gedogen, zo begint het bij mij binnen te komen maar het is een vrij grote ondergrondse wereld waar bijna elke international aan mee doet.

Het idee dat iedereen belasting moet betalen is voor de normale mens vrij normaal maar dit zou ook moeten gelden voor bedrijven waar tig miljarden als niet biljoenen omgaan want ook zij maken gebruik van de voordelen van de belasting die hier betaald word.. en nu komen we al jaren tekort en dat is iets waar de burger voor op moet draaien .. en dat terwijl er door dat bedrijven crimineel bezig zijn we dus miljarden mislopen.

"THE MONEY CLOUD"

om een beetje inzicht te krijgen zet ik eerst even wat docu's op een rij !

>>>>We are not broke!<<<<

America is in the grip of a societal economic panic. Lawmakers cry, "we're broke!" as they slash budgets, lay off schoolteachers, police, and firefighters, crumbling our country's social fabric and leaving many Americans scrambling to survive. Meanwhile, multibillion-dollar American corporations like Exxon, Google and Bank of America are making record profits. And while the deficit climbs and the cuts go deeper, these corporations - with intimate ties to our political leaders - are concealing colossal profits overseas to avoid paying U.S. income tax. WE'RE NOT BROKE is the story of how U.S. corporations have been able to hide over a trillion dollars from Uncle Sam, and how seven fed-up Americans from across the country, take their frustration to the streets?and vow to make the corporations pay their fair share.

Commentaar: er word in de meeste Amerikaanse documentaires alleen gepraat over Amerika maar "het belastingparadijs kan alleen bestaan in een globale setting!

>>>>Tax free Tour.<<<

Tegenlicht neemt u mee op een duizelingwekkende reis langs de belastingparadijzen met als gidsen internationale belastingexperts en data-nauten.

“Waar betalen multinationals belasting en hoeveel?” De vraag lijkt simpel maar wie een antwoord zoekt, komt - met stijgende verbazing - terecht in een ingewikkeld universum. Tegenlicht neemt u mee op een duizelingwekkende reis langs de belastingparadijzen met als gidsen internationale belastingexperts en data-nauten.

We ontmoeten hun bewoners en volgen de routes waarlangs mondiaal belasting ontweken wordt. Routes met suspense klinkende namen als ‘Cayman special’, ‘Killer B’, ‘double Irish’ en ‘Dutch sandwich’. Een economische thriller waarin het systeemrisico voor overheden en burgers, of die zich nu in Nederland of in Afrika bevinden, zo precies mogelijk voor u in kaart gebracht wordt. lees meer op de site!

>>>>Nederland Belastingparadijs<<<<

Linda Hakeboom, Lex Uiting, Ronald Snijders, Niels van der Laan, Jelte Sondij en Lars Gierveld onderzoeken op creatieve wijze of bepaalde zaken wel eerlijk zijn. Als er zaken aan het licht komen die niet in de haak zijn, slaan de makers van Rambam altijd met ongelijke munt terug.

maar belasting ontduiking is "het spel" geworden voor alle grote bedrijven en kan haast niet meer uit het financiële wereldbeeld gedacht worden, en als ik het allemaal goed begrijp zijn we nu zover dat de gene die het ofshorebanking spel beheerde nu ook de mensen zijn die de laatste jaren de regels hebben gecreeren voor deze trend in globale affaires .

-Er staat een nu ongeveer 30 billjoen in offshore banking systemen,.

een aantal artikelen over het fenomeen:

-ING schrijft zelf belastingwet en ... krijgt belastingvoordeel
http://daskapital.nl/…/…/ing_schrijft_zelf_belastingwet.html
-NcR
http://www.nrc.nl/…/ing-schreef-zelf-wet-die-banken-350-mln…

Rothschilds Prove that Elite Bankers Rule the World — Establish Billionaire Tax Haven INSIDE America

http://thefreethoughtproject.com/rothschilds-prove-elite-b…/

BELASTINGPARADIJS NEDERLAND MAAKT VELE SLACHTOFFERS

http://www.ftm.nl/…/belastingparadijs-nederland-maakt-vele…/

5 Emerging Offshore Banking Jurisdictions in 2016.

http://www.icoservices.com/blog-5-emerging-offshore-banking…

Richest 62 people as wealthy as half of world's population, says Oxfam

http://www.theguardian.com/business/2016/jan/18/richest-62-billionaires-wealthy-half-world-population-combined

een een interview met James S. Henry.(een onderzoekende journalist over de zaak)

>>>>en een initiatief dat op is gezet tegen <<<<

Belastingvrije winsten.
Welkom in de wereld van belastingontwijking!

Internationale geldstromen vinden opvallend vaak hun weg naar een aantal relatief kleine landen, zoals Nederland en Luxemburg. Waarom is dit? Welkom in de wereld van belastingontwijking.

Brievenbusmaatschappijen, we hebben er allemaal wel eens van gehoord. En we weten dat grote bedrijven ingewikkelde constructies gebruiken om belasting te ontwijken. Deze website visualiseert hoeveel geld daarmee is gemoeid, door welke landen dit geld stroomt en wie de rekening betaalt.

Om welke landen gaat het?

Onderstaande grafiek toont de hoeveelheid directe buitenlandse investeringen (FDI- Foreign Direct Investment) in tien landen in verschillende delen van de wereld.[1] FDI zijn investeringen gedaan door een bedrijf of entiteit gevestigd in een ander land. Men zou denken dat zulke investeringen overeenkomen met de grootte van de economie van de betreffende landen. En dat de VS of China bovenaan de mondiale investeringstabellen zouden prijken. lees meer...

http://read.somo.nl/story/tax-free-profits/?lang=nl
+ burgerinitiaf

>>>Overheids verhoor van 3 grote bedrijven in Engeland<<<

Amazon & Starbucks
-https://www.youtube.com/watch?v=21Xf8ADFvdc

Google

-https://www.youtube.com/watch?v=B9-BZ4TeAg0

Commentaar: vorig jaar moest starbucks op de vloer komen van het kabinet hier om de mis gelopen belasting terug te betalen, dit was natuurlijk niet meer als correct maar wat bewust werd weg gelaten is het feit dat er meer dan 12.000 van dit soort contracten zijn gemaakt waarvan de meeste ook nog in overleg met de overheid !!! de overheid met zijn Neo-liberalen zitten dus in het complot.

Wij lopen hier in als vrij welvarend land een heleboel in mis maar wat word vergeten is dat we "in de wereld" zitten tegenwoordig en die grensen die op de map staan bestaan niet meer, het is dus zo dat door deze corrupte handelingen het dus net zo (als niet) nog moeilijker word gemaakt voor derde wereld landen die op de zelfde manier worden berooft van belasting waar het volk en de regering recht op heeft.

Dit is een schande, en de mensen (accountants , Advocaten , bankiers en bedrijvenhouders) moet hiervoor verantwoordelijk worden gesteld.. en niet een per jaar of keer .. maar allemaal globaal en zorgen dat er regels worden gemaakt dat dit niet meer kan gebeuren !

Check de somo link:nogmaals

http://read.somo.nl/story/tax-free-profits/?lang=nl

Uroko

Uroko is the Japanese word for 'scale', as in the scale of a fish or serpent. The Japanese expression "uroko ga me kara ochiru", or, "scales fall from one's eyes" is the English equivalent of "waking up to the truth". Uroko is an attempt to strip away the fairy tales we have been told since birth, exposing the true nature of the world we live in.

1:00 In part 1: 'Bank Wars', Uroko begins to unravel the history of the establishment of the Federal Reserve system, starting with the American Revolution, the war of 1812 and the rise of the Rothschild banking dynasty.

9:30 In part 2, 'Bank Wars' continues as we learn about stockholders of the 2nd National Bank of the US such as John Jacob Astor, how Andrew Jackson killed the bank, the rise of National City Bank and the power of the bankers culminating in the assassination of Lincoln. The story continues with 'The Robber Barons', touching on the roots of the Morgan banking dynasty.

17:44 Part 3 delves into alliances between European bankers and the American industrialists they supported such as J.D. Rockefeller and E. H. Harriman, ending with a brief history of the Spanish American war.

25:00 Part 4 deals with the events leading up to passage of the Federal Reserve Act in 1913 including Roosevelt's trust-busting, the panic of 1907 and the meeting of banking house representatives at Jeckyll Island.

31:55 Part 5 looks at WWI and its true causes.

38:02 Part 6 presents excerpts from G. Edward Griffin's interview with Norman Dodd, where Dodd reveals the true nature of the tax-exempt foundations.

47:48 Part 7 deals firstly with the Council on Foreign Relations and its part in the forming of the Central Intelligence Agency, and secondly with the money trust's role in the Bolshevik Revolution and the militarization of Japan.

58:09 In Part 8 the story of the Bolsheviks concludes with the fall of Czarist Russia, followed by a foray into the true roots of the ruling elite. Topics addressed include the Dutch and British East India Companies, Freemasonry and the Templar Knights.

1:08:07 Part 9 continues to explore the significance of the Templar Knights and their relationship to the modern ruling elite, as well as the partnership between the hiers and descendants of the Templars and Jewish financiers in Spain and Portugal up until the Spanish Inquisition and a mirror of that relationship in Holland and England beginning in the 17th century.

1:13:01 Part 10 briefly addresses the Khazarian roots which connect the Jewish financiers of Europe to various ruling houses, including the Stewarts, the Hohens and the Drummond clan of Scotland. This section ends by tying the Templars to the Russells and the Skull and Bones fraternity at Yale University.

1:19:14 Part 11 picks up with the Skull and Bones fraternity, the Bush-Harriman-Rockefeller connection and the Brown Brothers Harriman merger. From there Brown Brothers Harriman and the Dulles Brothers' involvement in Nazi funding is touched on and the 3rd architect of the Defense Act of 1947 is named. Finally, the CIA's true reason d'etre is explained and a brief history of its involvement in coups and interventions around the world is told.

http://www.youtube.com/user/urokomovie
http://www.urokomovie.com

The Rothschilds exposed.

This video shows the history of the family and how they have accumulated their vast wealth, and I hope this will give you an insight into their plan to dominate the world through central banking

Planning Chaos in the Middle East: Destruction of Societies for Foreign Money Control

Scott Scottdale interviews Prof. John McMurtry for Canadian Challenger

John McMurtry is a Fellow of the Royal Society of Canada and his work is published and translated from Latin America to Japan. He is the author and editor of the three-volume Philosophy and World Problems published by UNESCO’s Encyclopedia of Life Support Systems (EOLSS), and his latest book is The Cancer Stage of Capitalism/from Crisis to Cure.

SS/CC: You have said that “the trick of the endless US-led wars in the Middle East is to control both sides so as to ensure against sovereign states able to defend the common interests of their peoples”. Please explain.

JM: Whenever any nation has an independent government with fossil fuel, financial, agricultural or strategic resources not yet subjugated to transnational corporate control, there is a US-led campaign to destroy it. Iran, Iraq, Afghanistan, Palestine, Egypt, Libya, Syria have all experienced this over many decades dating from the overthrow of the social-democratic president Mossadegh of Iran in 1953 to Syria’s still mildly independent social state being destroyed to the roots today. Lebanon was a civilized center of the Middle East before warred upon by Israel in 1982 and has been civil-war divided ever since. Iraq’s region-leading social state with universal health-care, free higher education, public water and electricity, local agricultural and food subsidies has been subjected to genocidal destruction and civil war imposition from 1990 to now, with Syria being destroyed by foreign-supported civil war from 2011. Once CIA-agent and coup leader Saddam Hussein could not destroy Iraq’s oil-worker-led society from within after his US-supplied war against Iran was over, Iraq was attacked on contrived pretexts – the constant excuse for non-stop war crimes in the Middle-East – and the state was irreversibly destroyed “because it was floating on a sea of oil” (Wolfowitz’s phrase).

Iraq is a model example of controlling both sides of the ever-shifting Middle-East wars to seize the assets of all, and so too the NATO bombing and jihadi overthrow of Gadhafi in Libya whose socialized oil state was even more developed than Iraq’s with public programs and infrastructures, including quasi-free homes for young couples. Libya’s long-time leader was first welcomed into the
Western fold after 2000 and his opponents deported and reditioned by British M-15, then jihadis were joined by massive NATO ‘humanitarian bombing’ in 2011 to overthrow his social state, and Libya too is now in civil war chaos. Induced civil wars are the divide-and-rule policy across borders, and especially successful social states like Afghanistan, Iraq, Syria and Libya where their people are clearly better off than neighbouring peoples under US diktat. A better example of society is always prohibited even by war criminal attacks – as in Yugoslavia and Nicaragua in the 1980’s, and Ukraine today. All are orchestrated into sectarian insanity and internecine wars. At the same time vast new profits, resources, lands, price climbs, markets, agribusiness and – most of all – looting of public resources and finances by private foreign financiers and corporations proceeds more freely with stable social fabrics destroyed, not only in the victim societies but at home.

SS/CC: How does ISIL connect to all this?

JM: The historical background is that US-financed Islamic fundamentalism coupled with royal absolutism has come to rule inside and outside governments – Saudi Arabia being the prime example. When I travelled overland through the Middle East including North Africa decades ago, secular ‘Arab socialism’ was the rule led by Nasser and Egypt, and Islam was the background mass religion.

Then a great US-led policy turn occurred in which fanatic jihadists were financed and armed across the region to ensure against “communism”, the Great Satan of the US. The massive funding and arming of jihadis as a war machine began with the US-orchestrated civil war in the then quasi-socialist secular state of Afghanistan to bleed the Soviet Union dry. Since the 9-11 construction, the US with local allies has increasingly sponsored jihadists of every kind to take down any remaining social state while also justifying their oil-for-weapons empires producing no life good but only death and destitution. Observe the connections today. Private armaments and military servicing corporations drain the public treasuries of the US and allied royal states trading oil for arms in the trillions, while financed jihadis provide justification for all the death machines and attack target states at the same time.

The civil war model of long-term society destruction to feely loot its resources has continued to the present day in a strategic arc of devastating civil wars from Pakistan to Iraq to Muslim Africa – not to mention now in Europe itself in Ukraine after the Chechnya civil war in Russia was ended. ISIL is a supremely atavistic instrument of the civil-war strategy. The US-Israel sponsored split of the originally secular-socialist PLO (Palestine Liberation Army) into warring factions, where the demonized Hamas was itself sponsored by Israel to divide it, is another example of the society-wrecking pattern at the sub-state level. ISIL today continues it at a more diabolical extreme – originally funded and armed by the very US-led forces now dropping bombs on it in Syria. Israel even gives ISIL terrorists hospital service on the Syrian border after Mossad and the CIA trained them as a largely ex-Saddam jihad army. All of this seems quite insanely contradictory. But all promotes civil wars and they render peoples helpless against foreign money control.

If one wonders how a desert-crawling line of Japanese open-back trucks gifted by the US filled with countless irregular fighters in plain view could ever have ever made it overnight to the point where
Western military and political leaders are saying “the war against ISIL may be interminable”, one begins to see through the game. ISIL is a construction financed and trained by covert US and oil-king allies that ruins every place it enters, like Syria once the regime began to win the civil war. Al-Nusra/Al Qaeda was not enough. ISIL is a step up in the US-led control of the Middle East by terror, chaos and social devastation. “The Salvador option” was the first name for the post-war death squads in Iraq, but “Islamic State” stirs much more apocalyptic passions pro and con. Best of all, the ruling foreign war machines of the US, Israel, Saudi Arabia and NATO are now far better justified to “fight the barbaric terrorists”. Saudi Arabia with US support is now even projecting the “terrorist” and sectarian “Shiite” labels on the popular uprising of the poor in Yemen against a corrupt US-Saudi puppet government. One object alone is achieved. Peoples and resources of the region can be predated without sovereign social defences or unity of collective life purpose, the ultimate target of every US-led aggression. As long as all evils can be blamed on an ever-shifting Enemy, there is no overcoming recognition.

SS/CC: If someone were to say, this is “another conspiracy theory,” how would you reply?

JM: It is the very opposite of a conspiracy theory. Civil war chaos has been instituted across agents, places and times. The underlying pattern of destroying evolved societies and their collective control of life resources is far deeper. The only diagnostic model that fits all the hallmark characteristics is a runaway cancer system at the macro level with no social immune recognition. It is unflagged even as it keeps hollowing out more societies towards social collapse. Look for disconfirming evidence of the objective pattern – for example, a society made better rather than worse anywhere in the Middle East since 1991. The divide and rule reign of civil destruction is now deep into the US and Israel themselves, with civil war or its repression now pervasive in the Arab world. This was not originally gamed as the outcome. US geostrategic planners are social morons by the nature of their game model, as I have explained in my The Moral Decoding of 9-11: Beyond the US Criminal State. But the invariable result of the civil wars they foment and manipulate still forces other societies’ resources open to private corporate control and exploitation without limit until they move onto the next. You do not even need corporate trade agreements to do it. Even if the US people themselves keep being bled dry with their common life bases and interests stripped out by military and financial claws in the trillions every year, not to mention agro-industry, the same private transnational corporations producing no life goods but destroying them keep money-profiting more. Plundering public purses and resources across continents is the unseen means.

As transnational private money sequences alone multiply, everything connects in social and environmental life depredation out of control. There are myriad masks of the disorder, but always the evolved collective life capital bases of societies and their ecological life hosts are devoured and torn apart. Now Kenya and Nigeria too join the jihadi-split nations to open a state of permanent war, looting and profit with no social organization to stop it. In Venezuela and Ukraine peoples fight back, but the same civil war method unfolds across continents with few connecting the dots. Twenty-five years after the dismantling of Yugoslavia into atavistic nationalisms steeped in the Nazi past, the same happens again in Ukraine. One outcome has become predictable across borders. Socially organized development is reversed for a private transnational feeding frenzy on collective financial, agricultural, natural and strategic resources of the victim societies. Only the rule of life-protective law with the force of law works across peoples. But Palestine even seeking protection of international law is openly threatened and its taxes seized by Israel with US support. When Palestine joins UNESCO by invitation, the US defunds UNESCO. This is not a conspiracy. It is a lawless rule of normalized terror, life destruction and tyrannical oppression.

SS/CC: How does Harper Canada fit into all this?


Canada is very privileged with vast natural resources. It is not historically soaked in blood, and has evolved a civil culture without fanatic ‘isms’. Yet after Alberta Reform swallowed the Progressive Conservative Party with money from Big Oil and the retailer Eaton’s, PM Harper incarnates the divide-and-rule war method. His CEO rule strips Canada of its social life infrastructures and public tax funds in the name of the nation, while serving only private market powers to multiply and pillage across borders. This is his program, and there is no exception to it. Now Canada is aerial bombing in Arab lands from Libya to Syria – also funded by public money –even though the target ISIL beheaders now have been trained and financed by the allied states bombing them. Up North his regime now trains and supplies a violent-coup US-installed regime whose one-way aerial bombing of East-Ukraine civilians and infrastructures has driven two million people from their homes.

Whatever one’s own preferences, the morality in charge means only what serves the transnational corporate system. This is the market God which now dwarfs all world religions in power to dictate and destroy and capture imagination. Its cornerstone of defence for war crimes is to blame another enemy– as with the Nazis “terrorists” are those who block or resist its rule. The differences between
Canada and Palestine or Syria are obvious at the level of conventionalized horror and life deprivation. But the underlying value system is the same in principle. The master driver is the solely ruling compulsion to turn private money demand into maximally more private money demand without limit, border or higher purpose at all. This is called “freedom”. No life coordinates ever enter the sequences and equations in this system in its deregulated mutations. Not even eco-genocide can be seen through its prism. Yet few dare recognize the blind war against life itself which spreads the more its fatal disorder is denied and rationalized away.

SS/CC: How does Islam fit into this destruction of societies by corporate globalization?

JM: The Prophet’s abomination of idolatry above all fits very well to the disorder. Turning money into more money for money controllers is the greatest idol worship of history, and no stationary idol of the past remotely approaches its direct ruin of one society after another – a consequence Mohammed chorally emphasizes in the Koran. No idol can make or breathe life, and here the idolatry goes far beyond anything ever before. It seeks to reduce all that exists into private money value, and devours ever more life and life means to multiply its global demand. Its world-consuming, flesh-eating code is even more deeply at work behind the Middle East holocaust of nations than the US which has become its creature.

Civilizing Islam long ago worked – as, for example, in architecture-rich Moorish Spain from the eighth century to 1492 when a rising European imperialism launched its genocidal seizures and destructions of other people’s life bases across continents. Degenerate versions of ‘Islam’ from absolutist oil-kings to jihadist death squads have followed, and whatever their pretences, they serve only the underlying agenda of corporate money-sequence globalization. They keep peoples superstitiously suggestible, and force obedience by violence and threats without understanding. Collective life-serving programs for all – as found in Iraq and Libya before the saturation bombings – have disappeared into the Arab past almost altogether. The corporate state now rules as pseudo-Muslim and suffocating. Even ‘austerity programs’ have been instituted across the Middle East, with life-serving social organization – public health and free higher education, social security of the person, ecological regulation – not funded or stripped out.

Islam confined to ritual repetitions and prohibitions without social life standards does not confront the corporate money-sequence idolatry. It allows submission to life-blind rules of oppression as ‘submission to God’s will’. Thus the transnational lootings of the people’s common wealth by oil dealing, weapons, finance, GMO agribusiness, and money-trough military services and reconstruction multiply to more corrupt and private oligarchical control and demand. Mass submission, resignation, obedience, faith without organization beyond faction parallels the dispossessed mass anomie of the West. The ‘Arab Spring’ itself – which never pronounced one public policy – seems to have been a construction without common life-ground dividing the people into even more helpless impotence of collective self-determination. People think “well at least they got rid of Mubarak.” Down the memory hole goes the fact that Mubarak was a marked man after he refused to commit Egypt to the US-led invasions of Afghanistan and Iraq which he prophetically declared “would open the gates of Hell”.

SS/CC: You emphasize the ‘ad adversarium fallacy’ as the dominant “track-switch of people’s thought” which always diverts their attention away from humanity’s underlying real problems.

JM: A simple example would be accusing me of being “a communist” or “an unbeliever” or “a conspiracy theorist” for what I say above. The topic is diverted to a familiar hate-object of the audience. Corporate mass media and politicians do this as their stock in trade. It gets attention and usually sells. This blame-the-enemy diversion dominates across cultures, but is almost never named. It runs so deep into the group psyche that not even logicians, psychologists and cognitive scientists define it.

Once diverted to the hate-object of the group – say “Saddam” or “Putin” or “state socialist” or “terrorist” – most people block out disproving facts so as to remain acceptable to the surrounding group. Challenge by evidence or reason is derailed onto blaming a known enemy of the audience. This is the underlying track-switch of thought upon which all mass-murderous wars and system oppressions depend, as well as most propaganda of daily life. It is the cornerstone of American ideology which has no common ground but animosity to the latest designated enemy. Yet not even academics will stand up to the accusation of “Putin-lover”, “9-11 conspiracy theorist”, “communist”, or whoever the shifting enemy may be. US Republicans and branch-plant Harperism now rely on this enemy-hate for every attack ad and proclamation.

This is why evidence, public statistics, knowledge of anything outside the game, is not now safe in corporate states. Public knowledge itself is the ultimate enemy of the whole game. That which sees, documents, shares, certifies, distributes, or organizes to prove and act for the public good is forbidden in a thousand ways even in Canada – the secret behind the Harper agenda of information control – from defunding and de-listing progressive NGO’s, to gags on government ministries and scientists, to allowing only his photographer’s pictures into the mass media.

In the Middle East, silencing is by drones, secret police, bombing, special forces, mind-stopping lies, and unending murder, mayhem and terror in imposed civil wars. Always the ultimate operation is to blame the enemy for all that goes wrong – - even if the enemy is the endless victim, as in Palestine. In the case of Israel, the imperialist nation with its boot in the face of the people is for the first time in history proclaimed as the victim, as bravely observed by Gideon Levy. “Who is denying whose right to exist?” is not a question asked. “Who is throwing stones at Goliath in Israel today?” is an unspeakable thought. Total reversal, blaming the oppressed for what you doing, endless diversions to the designated enemy is the ultimate lie of today’s human condition. But it today rules the Middle East by a more complex process of shifting wars and hates than ever before. /30 JM

http://www.globalresearch.ca/planning-chaos-in-the-middle-east-destruction-of-societies-for-foreign-money-control/5445509

Corporate Oligarchy or People’s Democracy: Countering the Elite Agenda

Even the tepid and formulaic kind of democracy previously permitted in the United States is too constraining for the Lords of Capital. “In its arrogance, the oligarchy is exposing the class character of the state and providing left forces a potent weapon for building oppositional consciousness.” For the Left, “it is absolutely necessary to maintain whatever democratic space still exists while struggling to expand those spaces and rights.“

For more than a decade, radical analysis has provided reams of studies revealing the political and economic dominance of an increasingly narrow sector of the U.S. and European corporate and financial elite. However, the warnings and political implications of this domination have received little attention beyond radical and left circles. It took a study by Martin Gilens of Princeton University and Benjamin Page of Northwestern University – and the current best-selling book by Thomas Piketty, Capital in the Twenty-first Century – both emanating from liberal academia – for the warnings and some of the political questions associated with the consequences of this domination to finally penetrate mainstream discourse.

The Gilens and Page study focused on the question of democracy in the U.S. and provided data demonstrating that ordinary people have little influence over a democratic process in the U.S. that has been captured by the corporate and financial elite. And while they did not use the term “oligarchy,” it could be reasonably concluded from their data and arguments that the system they described had all of the characteristics of an oligarchy. Complementing this study is Piketty’s more than 600-page analysis of the evolution of capitalism over the last 200 years. He concluded that the capitalist tendency towards concentration of wealth had resulted in the disproportionate holding of the world’s wealth in the hands of a tiny minority of the capitalist class.

Unfortunately, the current popularity of the analyses offered by Gilens, Page and Piketty has not translated into a deeper understanding of the nature of the political challenge posed by the dominance of capital – at least not yet. Instead, comments from liberals indicate that many are still desperately holding on to the belief that the worst excesses of capitalist practices can be modified to ultimately serve the public good. For example, after demonstrating the looting by the capitalist class taking place under the current global neoliberal regime, Piketty cannot bring himself to call for even fairly modest reforms, such as the exercise of public power to rein in and control capital. Instead, he offers the tepid recommendation of a global progressive tax on capital.

But while liberals are engaged in conversation, the oligarchy has been moving to reinforce its dominance by pre-empting any attempts to exercise democratic control over their corporate and financial power. Elite opinion and state policies over the last decade in particular suggest that the Western capitalist/imperialist oligarchy has concluded that democracy and the rule of law have now become unbearable constraints for the rule of capital. Even more threatening for the world’s people is that the policies being pursued under the leadership of the U.S. show that in the midst of an irrecoverable global capitalist crisis, the U.S. is willing to turn to unregulated violence and the subversion of states – both democratic and non-democratic – in its pursuit of full-spectrum military and economic dominance.

The evisceration of democracy in the U.S., represented by decisions like the Supreme Court’s in the McCutcheon case, ruling that federal caps on combined donations to candidates, parties and political action committees constituted an unconstitutional infringement on the right to free speech, is no more than the inevitable domestic expression of capital’s global strategy. It reflects the position that continued capitalist hegemony requires removing all barriers preventing the complete dominance of political life by the corporate and financial oligarchy.

Supporting the coup in Honduras; subverting the democratically-elected governments in Venezuela, Bolivia, Ecuador and Ukraine; backing terrorist jihadist forces in Syria and Libya; militarizing Africa; and negotiating “free trade” agreements that remove from democratic accountability transnational corporations, banks and international financial institutions – these are just some of the expressions of this global, anti-democratic, anti-people strategy.

The domestic expressions of the move towards the open dictatorship of capital are not just reflected in the McCutcheon and Citizens United cases, but also last year’s Shelby v. Holder case, which gutted the Voting Rights Act’s protection against efforts to undermine black political participation.

Along with the attacks on the structures and practices of formal democracy, the efforts on the part of the national security state to monitor, limit and disrupt lawful political opposition also have to be seen as a fundamental component of this anti-democratic strategy. The National Defense Authorization Act, which arguably gave the state the right to indefinitely detain U.S. citizens; the unrestrained police assaults on working class black and Latinos across the country; the increased collaboration between private security entities and the Department of Homeland Security, FBI and fusion centers – these are all part of the move toward neo-fascist capitalist rule.

James Petras captures the essence of the ruling class strategy and dilemmas related to democracy and international law:

“The empire-building offensive of the 21st century differs from that of the previous decade in several crucial ways: neo-liberal economic doctrines are discredited and electorates are not so easily convinced of the beneficence of falling under U.S. hegemony. In other words, empire-builders cannot rely on diplomacy, elections and free market propaganda to expand their imperial reach as they did in the 1990s. To reverse the retreat and advance 21st century empire-building, Washington realized it had to rely on force and violence.”

The current task: Defending bourgeois democracy while transcending it

The call that many liberals are making to overturn the Citizens United and McCutcheon rulings and overhaul campaign financing are misguided. Campaign finance reform as part of a broader set of transitional demands for democratic reform is a legitimate issue to highlight, but it is not enough.

The issue is not campaign finance reform, but democracy.

It would be a historic mistake on the part of the left to believe that it can ignore the systematic undermining of bourgeois democracy and democratic rights. On a daily basis we see the abrogation or erosion of the rights to peaceful assembly and association (organize and protest), information and free speech, legal due process, and freedom from arbitrary arrest and confinement, not to mention the right to participate in government and elections and to be free from government invasions of privacy.

The idea embraced by the oligarchy that the continued rule of capital globally and in the U.S. can no longer be reconciled with the shell of democratic processes and rights, even as weak and narrow as those processes are, represents an existential threat to radical politics as the state increasingly moves toward subversion and repression.

To counter this increasing authoritarianism and attacks on democratic rights, progressive politics in the U.S. require that popular forces somehow maneuver between the contradictory positions of having to defend traditional bourgeois democracy and democratic rights while simultaneously advocating and organizing to go beyond its limitations and structures. Why? Because it is absolutely necessary to maintain whatever democratic space still exists while struggling to expand those spaces and rights.

Countering the anti-democratic elite agenda requires the building of broad-based alternative social blocs representing and grounded in labor, women’s groups, environmental organizations, radical hip-hop, immigrant rights, LGBTQ communities, black liberation tendencies, indigenous sovereignty movements and other historically marginalized communities, on the basis of people(s)-centered human rights, social solidarity and justice and participatory democracy in all aspects of life, including economic.

The struggle for democracy and democratic rights is becoming increasingly difficult with decisions like McCutcheon that have politically solidified the open collaboration between big capital and the State and narrowed the options for “normal” democratic oppositional forms of struggle. That collaboration reveals in graphic terms – more so today than before Citizens United, McCutcheon and all of the attacks on democracy – the true nature of what passes for democracy in the U.S. and the interests aligned to subvert it. In its arrogance, the oligarchy is exposing the class character of the state and providing left forces a potent weapon for building oppositional consciousness.

Building on those contradictions, the fight for democratic reforms and demands for authentic democracy with mass participation and popular sovereignty in all areas of life could potentially serve as one aspect of a basic left program that provides strategic points of unity for concentrating areas of left oppositional politics.

Democracy and democratic rights, even in its bourgeois form, was never a gift from the rulers. It was expanded through struggle, and it will only be through struggle that we are able to protect those hard won advances while we simultaneously build structures of popular power to transcend its limitations. These are the concrete, objective circumstances that history has given us.

Ajamu Baraka is a human rights activist and organizer. Baraka is an Associate Fellow at the Institute for Policy Studies (IPS) in Washington, D.C. and editor and contributing columnist for the Black Agenda Report. His latest publications include contributions to two recently published books “Imagine: Living in a Socialist USA” and “Claim No Easy Victories: The Legacy of Amilcar Cabral.”

Ajamu can be reached at www.AjamuBaraka.com

Source: http://www.globalresearch.ca/corporate-oligarchy-or-peoples-democracy-countering-the-elite-agenda/5379847

The Biggest Secret About Banking Has Just Gone Mainstream

Posted on April 28, 2014 by WashingtonsBlog

Banks Create Money Out of Thin Air … Conferring Enormous Windfall Profits At the Expense of the People

We’ve pointed out for 4 1/2 years that banks create money out of thin air.

Specifically, it has now been conclusively proven that loans come first … and then deposits FOLLOW.

This is the most important secret about modern banking … because it debunks one of the biggest myths preventing a strong economy, challenges one of the main pork barrel profit centers for big banks … andopens up incredible opportunities for a prosperous economy.

This odd and counter-intuitive – but crucially important – truth has now gone mainstream …

Specifically, the Financial Times’ Martin Wolf – one of the world’s most influential mainstream financial writers -  says that, since banks create money out of thin air, they should be stripped of this power, and limited to normal depository functions. Wolf indicates the centrality and importance of the issue with his subtitle:

The giant hole at the heart of our market economies needs to be plugged.

And Business Insider – the world’s most popular financial news blog – is currently running this as its top two front page stories:

(Read the Business Insider stories here and here.)

If we reclaimed the power to create credit from the too big to fail banks, we would all be much wealthier

http://www.washingtonsblog.com/2014/04/truth-banks-goes-mainstream.html

Why Inequality Started Soaring in 1971

Why Inequality Started Soaring in 1971

Posted on April 28, 2014 by WashingtonsBlog

Going Off the Gold Standard Encouraged a Financialized Economy … Which Caused Inequality to Soar

The New York Sun notes that inequality started soaring in 1971 … the same year that Nixon took the U.S. off of the gold standard.  The Sun shows the following chart from Thomas Piketty’s new book,Capital:

Zero Hedge emphasises the inflection point:

Why would going off the gold standard increase inequality?

Financialization of the economy is one of the main causes of inequality.  And going off the gold standard greatly increased financialization.

Forbes’ Brian Domitrovic explains:

The big switch to the foundation of the American financial structure at the advent of this period was the U.S. decision in 1971 to go off the gold standard. Before that time, it was basically clear that outside of wartime (when gold-standard conventions were often suspended), you could basically count on the dollar holding its value against major things like the consumer price level, foreign currencies, and commodities such as gold itself.

After 1971, in contrast, it became basically clear that you could count on no such thing. The CPI might go up 125% in one decade (as it did 1971-1981), the dollar could permanently lose 66% against major currencies (as it did against the yen in this period), and commodities could shoot up ten-to twenty-five fold (as was the case with oil and gold).

Therefore a new day in financial planning also arrived. Suddenly the importance of simply saving money diminished. Money that was saved also had to be hedged. If you simply saved money after 1971, you stood to get killed as the dollar lost value against things it was supposed to be able to procure in the future.

This is where the financial services industry began its long march upward in the share of U.S. economic output it gobbled up. People who had significant money—the rich—threw their money into the products offered by the financial sector, in that the worst thing to happen to a fortune diligently built up over the years would be to see it frittered away on account of currency depreciation.

But can the same be said for the working class and the poor? People of this station by definition have less experience, expertise, and access to financial services. Therefore, people of the lower classes are apt merely to save, as opposed to save and hedge, as has been necessary in the post-1971 world. The inevitable result is what we have seen: the stabilization and growth of the rich’s wealth stash, the diminution of that of the lower classes, and the aggrandizement of the financial sector. We can debate the statistics of the relative wealth of rich and poor—but the real zinger is the stubborn fact that finance’s share of GDP has gone up one and a half times since we went off gold.

This is not the only example of government policy causing inequality.  Unfortunately, there are many more.

Posted in Business / Economics, Politics / World News | 2 Comments

Piketty Is Rickety On Government Complicity

Posted on April 27, 2014 by WashingtonsBlog

Bad Government and Central Bank Policy Are the MAIN CAUSE of Runaway Inequality

French economist Thomas Piketty’s book on inequality – Capital in the Twenty-First Century – has gonecompletely viral.

Mainstream economists like Paul Krugman and Joseph Stiglitz endorse it.   So does Economist magazine.  The Financial Times and New York magazine both call him a ”rock star economist”.

Slate notes:

While recently passing through D.C., he took a little time to meet with Treasury Secretary Jack Lew, the Council of Economic Advisers, and the IMF. Even Morning Joe, never exactly on the leading edge of ideas journalism, ran a segment about CapitalTuesday morning.

Is Piketty right or wrong about inequality, its causes and the prescription for addressing inequality?

Piketty Is Right about Inequality

We noted in 2010 that extreme inequality helped cause the Great Depression … and the 2008 financial crisis.  We noted in 2011 that inequality helped cause the fall of the Roman Empire.

In a few short years, mainstream economists have gone from assuming that inequality doesn’t matter, to realizing that runaway inequality cripples the economy.

Pikettey correctly notes that inequality is now the worst in world history … and will only get worse.

Asset Prices Rise Faster than Wages

Piketty argues that the main cause for inequality is that the rate of return on capital – land, natural resources, stocks, bonds and other assets – is far higher than the growth rate of the economy:

Because the growth rate is much slower than the rate of profit from holding capital assets, the asset-holders’ wealth increases much faster than the wealth of workers. In other words, working stiffs can’t keep up with those who make their money from investing in (and seeking rent from) land, stocks, bonds and other assets.

Piketty – a rigorous data researcher – is probably right that this is one of the main causes of inequality.

Government and Central Bank Policy Is What Is Making Assets Soar and the Economy Sink

But Piketty underplays the fact that bad government and central bank policy have greatly widened the gap between growth rate. After all, Fed chairman Bernanke, Treasury Secretary Geithner and chief economist Summer’s entire strategy was to artificially prop up asset prices – including the stock market– and see this, this, this and this.

At the same time, government policy has harmed the general economy, caused unemployment and hurt the average American.

Indeed, real wages have actually plummeted since 1969, and most of the new jobs that have been created are part times jobs with no benefit.

In other words, bad government and central bank policy have made the rate of return on capital much higher … but lowered wages.  As such, bad policy is the core cause of the recent increase in inequality.

Nobel economist Joseph Stiglitz said in 2009 that the government’s toxic asset plan – a scheme to inflate the value of assets held by banks – “amounts to robbery of the American people”.

Bailouts Feather the Nests of the Fatcats, While Doing Nothing for the Average American

The American government’s top official in charge of the bank bailouts writes:

Americans should lose faith in their government. They should deplore the captured politicians and regulators who distributed tax dollars to the banks without insisting that they be accountable. The American people should be revolted by a financial system that rewards failure and protects those who drove it to the point of collapse and will undoubtedly do so again.

Only with this appropriate and justified rage can we hope for the type of reform that will one day break our system free from the corrupting grasp of the megabanks.

What’s he talking about?

Well, the Fed threw money at “several billionaires and tens of multi-millionaires”, including billionaire businessman H. Wayne Huizenga, billionaire Michael Dell of Dell computer, billionaire hedge fund manager John Paulson, billionaire private equity honcho J. Christopher Flowers, and the wife of Morgan Stanley CEO John Mack

And the bank bailouts weren’t a one-time thing in 2008.  The government has been – continuously and massively – been bailout out the big banks for the last 6 years.

Indeed, virtually all of the banks profits comes from government bailouts.  A top banking analyst estimates that subsidies to the giant banks exceeds $780 billion dollars each year.

A study of 124 banking crises by the International Monetary Fund found that bailing out banks which are only pretending to be solvent  – like most of the big American banks – harms the economy.  So growth is slowed, while the richest fatcat bankers rake in the dough.

Indeed, the bailout money is just going to line the pockets of the wealthy, instead of helping to stabilize the economy or even the companies receiving the bailouts:

• Bailout money is being used to subsidize companies run by horrible business men, allowing the bankers to receive fat bonuses, to redecorate their offices, and to buy gold toilets and prostitutes

• A lot of the bailout money is going to the failing companies’ shareholders

• Indeed, a leading progressive economist says that the true purpose of the bank rescue plans is “a massive redistribution of wealth to the bank shareholders and their top executives”

(Top economists, financial experts and bankers say that the big banks are too large … and their very size is threatening the economy. They say we need to break up the big banks to stabilize the economy.

If we stop bailing out the Wall Street welfare queens, the big banks would focus more on traditional lending and less on speculative casino gambling. Indeed, if we break up the big banks, it will increase the ability of smaller banks to make loans to Main Street, which will level the playing field.

We’re all for forcibly breaking them up. But we don’t even have to use government power to break up the banks … the big banks would fail on their own if the government just stopped bailing them out.)

QE: the Greatest Wealth Transfer in History

It’s been known for some time that quantitative easing (QE) increases inequality (and see this and this.)  Many economists have said that QE quantitative easing benefits the rich, and hurts the little guy.   3 academic studies – and the architect of Japan’s quantitative easing program – all say that QE isn’t helping the American economy.

The Federal Reserve official responsible for implementing $1.25 trillion of quantitative easing has confirmed that QE is just a massive bailout for the rich:

I can only say: I’m sorry, America. As a former Federal Reserve official, I was responsible for executing the centerpiece program of the Fed’s first plunge into the bond-buying experiment known as quantitative easing. The central bank continues to spin QE as a tool for helping Main Street. But I’ve come to recognize the program for what it really is: the greatest backdoor Wall Street bailout of all time.

***

Trading for the first round of QE ended on March 31, 2010. The final results confirmed that, while there had been only trivial relief for Main Street, the U.S. central bank’s bond purchases had been an absolute coup for Wall Street. The banks hadn’t just benefited from the lower cost of making loans. They’d also enjoyed huge capital gains on the rising values of their securities holdings and fat commissions from brokering most of the Fed’s QE transactions. Wall Street had experienced its most profitable year ever in 2009, and 2010 was starting off in much the same way.

You’d think the Fed would have finally stopped to question the wisdom of QE. Think again. Only a few months later—after a 14% drop in the U.S. stock market and renewed weakening in the banking sector—the Fed announced a new round of bond buying: QE2. Germany’s finance minister, Wolfgang Schäuble, immediately called the decision “clueless.”

That was when I realized the Fed had lost any remaining ability to think independently from Wall Street.

Even the president of the Federal Reserve Bank of Dallas said that Fed’s Fisher said that “QE was a massive gift intended to boost wealth.”

Billionaires have admitted that they are the beneficiaries of QE. For example, billionaire hedge fund manager Stanley Druckenmiller said the following about QE:

“This is fantastic for every rich person,” he said Thursday, a day after the Fed’s stunning decision to delay tightening its monetary policy. “This is the biggest redistribution of wealth from the middle class and the poor to the rich ever.”

“Who owns assets—the rich, the billionaires. You think Warren Buffett hates this stuff? You think I hate this stuff? I had a very good day yesterday.”

Druckenmiller, whose net worth is estimated at more than $2 billion, said that the implication of the Fed’s policy is that the rich will spend their wealth and create jobs—essentially betting on “trickle-down economics.”

“I mean, maybe this trickle-down monetary policy that gives money to billionaires and hopefully we go spend it is going to work,” he said. “But it hasn’t worked for five years.”

And Donald Trump said:

“People like me will benefit from this.”

Economics professor Randall Wray writes:

Thieves … took over the whole economy and the political system lock, stock, and barrel. They didn’t just blow up finance, they oversaw the swiftest transfer of wealth to the very top the world has ever seen.

Economics professor Michael Hudson says that the big banks are trying to make us all serfs.

Economics professor Steve Keen says:

“This is the biggest transfer of wealth in history”, as the giant banks have handed their toxic debts from fraudulent activities to the countries and their people.

Money “Creation” Stuffs Bankers’ Pockets with Money

The advent of central banks hasn’t changed this formula. Specifically, the big banks (“primary dealers”) loan money to the Fed, and charge interest for the loan.

the banking system is founded upon the counter-intuitive but indisputable fact that banks create loansfirst, and then create deposits later.

In other words, virtually all money is actually created as debt. For example, in a hearing held on September 30, 1941 in the House Committee on Banking and Currency, the Chairman of the Federal Reserve (Mariner S. Eccles) said:

That is what our money system is. If there were no debts in our money system, there wouldn’t be any money.

And Robert H. Hemphill, Credit Manager of the Federal Reserve Bank of Atlanta, said:

If all the bank loans were paid, no one could have a bank deposit, and there would not be a dollar of coin or currency in circulation. This is a staggering thought. We are completely dependent on the commercial Banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the Banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless position is almost incredible, but there it is. It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon.

Debt (from the borrower’s perspective) owed to banks is profit and income from the bank’s perspective. In other words, banks are in the business of creating more debt … i.e. finding more people who want to borrow larger sums.

Debt is central to our banking system. Indeed, Federal Reserve chairman Greenspan was so worriedthat the U.S. would pay off it’s debt, that he suggested tax cuts for the wealthy to increase the debt.

The big banks (“primary dealers”) loan money to the Fed, and charge interest for the loan. This is in contrast to what the Founding Fathers intended, and a massive redistribution of wealth … unnecessarily transferring extra money on every loan to the big primary dealers.

Lawlessness Is a Core Cause of Inequality

Joe Stiglitz said:

Inequality is not inevitable. It is not … like the weather, something that just happens to us. It is not the result of the laws of nature or the laws of economics. Rather, it is something that we create, by our policies, by what we do.

We created this inequality—chose it, really—with [bad] laws …

Conservative Ron Paul points out that the system is rigged for the rich and against the poor and the middle class:

We asked the top regulator and prosecutor during the S&L crisis, who obtained over 1,000 felony convictions for major white collar fraud – professor of law and economics, Bill Black – what are the core causes of inequality. Professor Black told Washington’s Blog:

The industry that is the largest single driver of surging income inequality is finance. Finance dramatically increases inequality through three primary means. The obvious means is the massive flow of profits out of the productive sector and into finance, particularly compensation for finance elites. We know that a very large amount of that compensation is the product of the “sure thing” of accounting control fraud. They have been able to lead the fraud epidemics with absolute impunity. No Wall Street elite officer who led the frauds that caused the crisis has ever been prosecuted. [Background.] There are virtually no cases of “claw backs” from the C-suite perpetrators’ compensation even when it is now inescapable that the “income” they reported to “earn” their bonuses were lies and they were actually creating horrific losses.

The second means is that the three most destructive epidemics of financial fraud in history caused our financial crisis and hyper-inflated the bubble. This too was a “sure thing” because of the fraud “recipe.” The household sector’s wealth loss was over $11 trillion. Over 10 million Americans lost their jobs. The productivity loss is estimated at over $21 trillion. Each of these actions caused a vast loss of wealth suffered disproportionately by the 99%.

Third, finance, even absent fraud, is a major cause of increasing inequality. It is the means of tax evasion, which is (in $ terms) a crime that is all about the 1%, hedge funds, and large corporations. It is also the means, and the excuse, for outsourcing American jobs in the productive sector and extorting domestic tax giveaways by putting U.S. states and cities in competition to induce them to locate in a particular city.

In the savings and loan debacle we sought to remove all the proceeds of fraud from the guilty elites.

Indeed, the big banks continue to manipulate every market and commit crime after crime and … andprofit handsomely from it, while law-abiding citizens slide further and further behind.

Yet Obama is prosecuting fewer financial crimes than Bush, or his father, or Ronald Reagan.  Indeed, the government has actively covered up for – and encouraged – criminal fraud.

Indeed, there are two systems of justice in America … one for the big banks and other fatcats, and one for everyone else.

Holding the little guy to the letter of the law – while letting the fatcats run around immune to the law - is making inequality much worse.

Black points out that we should claw back ill-gotten gains from criminals under well-established fraud principles.  Specifically, the government could use existing laws to force ill-gotten gains to be disgorged(see this and this) and fraudulent transfers to be voided.

Economist Michael Hudson also criticizes Piketty for failing to address crime and fraud as core causes of inequality:

The other thing that is left out of the income tax statistics is of course how fortunes are really made, and that’s crime and fraud. The good thing about Piketty is he points out, why is it that French novelists and English novelists tell you much more about wealth than economics? And he points out that in the 19th century novels by Jane Austen and Balzac, the way to make a fortune is to marry into it. That’s true, but what Balzac also said is that behind every fortune is a great theft.

Government Subsidies to the Biggest Fatcats

The government shovels mass quantities of money to giant corporations through direct and indirect subsidies.

This includes subsidies to:

• The giant banks

• Defense contractors

• Participants in the failed drug war

• The nuclear industry

• And other already-wealthy recipients

Why You’re Paying Too Much In Taxes Today: Because the Ultra-Rich Pay Nothing … Or Get Tax Refunds

The big boys use loopholes – including claiming their profits in foreign countries – to pay little or no taxes .. or to get tax refunds.

The middle class gets saddled with a heavier tax burden because the richest avoid taxes.

Government Creation of Monopolies

Wikipedia notes:

A better explainer of growing inequality, according to Stiglitz, is the use of political power generated by wealth by certain groups to shape government policies financially beneficial to them. This process, known to economists as rent-seeking, brings income not from creation of wealth but from “grabbing a larger share of the wealth that would otherwise have been produced without their effort”

Rent seeking is often thought to be the province of societies with weak institutions and weak rule of law, but Stiglitz believes there is no shortage of it in developed societies such as the United States. Examples of rent seeking leading to inequality include

• the obtaining of public resources by “rent-collectors” at below market prices (such asgranting public land to railroads, or selling mineral resources for a nominal price in the US),
• selling services and products to the public at above market prices (medicare drug benefit in the US that prohibits government from negotiating prices of drugs with the drug companies, costing the US government an estimated $50 billion or more per year),
• securing government tolerance of monopoly power (The richest person in the world in 2011, Carlos Slim, controlled Mexico’s newly privatized telecommunication industry).

(Background here, here and here.)

Stiglitz says:

One big part of the reason we have so much inequality is that the top 1 percent want it that way. The most obvious example involves tax policy …. Monopolies and near monopolies have always been a source of economic power—from John D. Rockefeller at the beginning of the last century to Bill Gates at the end.

Government creates monopolies even in the U.S. (and see below regarding government creation of the too big to fail banks.)

War Makes Us Poor … But Makes Fatcats Richer Quicker

War makes the bankers and executives in defense companies rich.

But – contrary to a long-standing myth – it makes the rest of us poor.

As such, war is a major cause of inequality.

Over-Financialization

When a country’s finance sector becomes too large finance, inequality rises. As Wikipedia notes:

[Economics professor] Jamie Galbraith argues that countries with larger financial sectors have greater inequality, and the link is not an accident.

Government policy has been encouraging the growth of the financial sector for decades:

And see this.

Economist Steve Keen has also shown that “a sustainable level of bank profits appears to be about 1% of GDP”, and that higher bank profits leads to a ponzi economy and a depression.

The government is largely responsible for this over-financialization. For example, MIT economics professor and former IMF chief economist Simon Johnson points out that the government created the giant banks, and they were not the product of free market competition.

Inequality Started Soaring When Nixon Took Us Off the Gold Standard

The New York Sun notes that inequality started soaring in 1971 … the same year that Nixon took the U.S. off of the gold standard. The Sun shows the following chart from Piketty’s book:

Zero Hedge emphasizes the inflection point:

Money Being Sucked Out of the U.S. Economy … But Big Bucks Are Being Made Abroad

Part of the widening gap is due to the fact that most American companies’ profits are driven by foreign sales and foreign workers. As AP noted in 2010:

Corporate profits are up. Stock prices are up. So why isn’t anyone hiring?

Actually, many American companies are — just maybe not in your town. They’re hiring overseas, where sales are surging and the pipeline of orders is fat.

***

The trend helps explain why unemployment remains high in the United States, edging up to 9.8% last month, even though companies are performing well: All but 4% of the top 500 U.S. corporations reported profits this year, and the stock market is close to its highest point since the 2008 financial meltdown.

But the jobs are going elsewhere. The Economic Policy Institute, a Washington think tank, says American companies have created 1.4 million jobs overseas this year, compared with less than 1 million in the U.S. The additional 1.4 million jobs would have lowered the U.S. unemployment rate to 8.9%, says Robert Scott, the institute’s senior international economist.

“There’s a huge difference between what is good for American companies versus what is good for the American economy,” says Scott.

***

Many of the products being made overseas aren’t coming back to the United States. Demand has grown dramatically this year in emerging markets like India, China and Brazil.

Government policy has accelerated the growing inequality. It has encouraged American companies to move their facilities, resources and paychecks abroad. And some of the biggest companies in America have a negative tax rate … that is, not only do they pay no taxes, but they actually get tax refunds.

(And a large percentage of the bailouts actually went to foreign banks (and see this). And so did a huge portion of the money from quantitative easing. More here and here.)

Conclusion: Piketty Is Rickety On Government Complicity

The bottom line is that Piketty has done a great job of documenting the extent of inequality, and some of its causes.  But he misses the degree to which bad government and central bank policy is responsible.

Source: http://www.washingtonsblog.com/2014/04/inequality-started-soaring-1971.html