The
net result of a rigged system is the vast majority of the gains in
income and wealth flow to the very tippy-top of the wealth/power
pyramid.We
often hear how the system (i.e. our economy) is rigged to benefit the
few at the expense of the many, but exactly how is it rigged? Longtime
correspondent Zeus Y. recently highlighted two specific mechanisms that
favor the top 0.01%: high frequency trading (HFT) and oligarchic
inheritance, the generational transfer of immense wealth and the power
it buys. High frequency trading (HFT) is a mechanism only available to the few at
the top of the wealth/power pyramid to skim money from markets–please
watch the videos below for further explanation of how HFT works. As
for inheritance–we’re not talking about leaving a house or a small
business to one’s offspring, or even a couple million of dollars; we’re
talking about tens of millions or hundreds of millions of dollars. Some
states impose an estate or inheritance tax, but at the federal level,
the exemption of $11 million per person means a married couple can leave
$22 million tax-free. The number of people with more than $11 million to pass on is extremely small: Estate tax in the United StatesIn
2018, the exemption doubled to $11.18 million per taxpayer due to the
Tax Cuts and Jobs Act of 2017. As a result, only approximately 2,000
people (or 0.0006% of the population) in the US are currently liable for
estate tax.The mega-bucks families and billionaires practice the fine art of philanthro-capitalism, leaving their vast fortunes in so-called charitable trusts that enable power and wealth to be transferred generationally. Here are Zeus’s video recommendations and comments:These
two videos, four and two years old, brought something that had escaped
my attention about the fundamental distortion of high frequency trading
(HFT). These consequences have not come due yet, but it is a preview for
how it will happen (flash crash).Michael Lewis: Nobody Understands the Stock Market (13:19) (2014)Brad Katsuyama: The Stock Market had become an Illusion (18:44)Here is another video (Bill Moyers interviewing Paul Krugman) on Thomas Picketty’s book Capital in
which Krugman admits he did not see the most important feature of
systemic inequality– inherited wealth, which combined with the above,
since wealth gives access to asymmetric information that blatantly rigs
the system, generates oligarchy.What the 1% Don’t Want You to Know (24:30)Both
of these points really forecast a financial collapse in which the
separation and concentration of wealth reaches critical levels, and as
Yanis Faroukakis says “idle cash” has no where to go, as all the avenues
of wealth generation are monopolized by predators and regular people
either become moribund or victimized.Progressive International: Yanis Varoufakis (20:28)This goes back to what my book Transforming Economy: From Corrupted Capitalism to Connected Communities forecast that the real change and turn will come when people are “exhausted” in two senses:1)
“used up” as all pension funds become savaged to pay fees and pretend
to be solvent without having backing capital to meet obligations when
people actually start drawing on them (which creates sell orders,
received first by HFT and then amplified as they sell first, leading
into a death spiral), and2)
“being tired” as in fatigued to play and hope to win and stay in a
rigged game, thus bringing down the illusion of a sunny retirement. This
is just a matter of time, which is always the case when fundamentals no
longer exist and are increasingly substituted with opportunistic
illusion. As with all con schemes and pyramid games, they become
unmasked and the illusory wealth evaporates to be replaced by IOUs that
can never be paid.Once that happens, it will be interesting to see how we respond.I
don’t think we have very many years until this reckoning thanks to
Trump’s almost autistic savant abilities to unmask and blow up the
facades surrounding the global elites.This
does not mean I favor him or the inevitable pain that will result from
this unmasking, but I can appreciate anything that casts light on our
currently bankrupt system.The
net result of a rigged system is the vast majority of the gains in
income and wealth flow to the very tippy-top of the wealth/power pyramid where it concentrates ownership of productive assets and political power. Please note that this is an apolitical reality; neither party has made
any serious move to eliminate HFT and similar skimming operations, or
limit philanthro-capitalism or onshore/offshore tax evasion–another mechanism that’s only available to the top .01% and above. The Hidden Wealth of Nations: The Scourge of Tax Havens (book) United States Net Worth Brackets, Percentiles, and Top One Percent in 2017(households) Net Worth Percentile 2016 Dollar Cutoff
90.0% $1,182,390.36
95.0% $2,377,985.22
99.0% $10,374,030.10
99.5% $16,115,373.00
99.9% $43,090,281.00
Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($6.95 ebook, $12 print): Read the first section for free in PDF format.
My new mystery The Adventures of the Consulting Philosopher: The Disappearance of Drake is a ridiculously affordable $1.29 (Kindle) or $8.95 (print); read the first chapters for free (PDF)My book Money and Work Unchained is now $6.95 for the Kindle ebook and $15 for the print edition.Read the first section for free in PDF format.
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