If you have it, cough it up
Since 2007, Americans have bought hundreds of millions of overpriced iPhones even if they couldn’t really afford a $700 phone… over and over again. And Apple has about a fifth of a trillion dollars in extra cash because of it.
For the last 25 years, advertising has moved from print, radio, and TV to Google. Google’s wealth can’t be measured by extra cash, since that’s only a few billion. But their stock has created well-deserved profits for many.
For about the last 30 years, Americans have been paying more than the rest of the world for cable TV and phone carrier service because we don’t really have competition or much downward price pressure via regulation. And again, profits have gone to the shrewd investors, but also Americans in general through the big institutional investors that hold pension funds and all manner of investments.
And for the last quarter century hedge funds and automated traders and their financial engineers have profited from an environment where if it makes money, it’s legal… for practical purposes. Leveraged buyouts at workers’ expense? Sure. Derivative trading that causes a global housing collapse? Why not?
And finally, Amazon has revolutionized the retail world and shown us everything that was stupid, slow, and wrong about delivery in the ‘olden days,’ and profited mightily — and deservedly — for its accomplishments.
The financial world is full of winners for all the upheaval that has transpired. Or perhaps I should say half full. We learned during the last government budget shutdown that a huge number of American don’t have one week’s worth of cash reserve. The statistic on median household income doesn’t look horrible, but median net worth for those under 35 is $11,000. You’ve heard over and over the disproportionate weighting of wealth to an increasingly smaller fraction of people. In actuality, there’s been a war going on between the older folks in control (from Congress through to the CEO class through to the baby boomers) and the younger and blue-collar world… for about 30 years now. We are eating our young financially.
Consider examples like this that you might not think are about financial inequality: the wounded military — substantially young people — come back from endless deployments, and need private (!) fund-raising organizations to care for them. Our school teachers need to bring school supplies in from home. We have returned our labor world to the piecework of the gig economy where benefits are a thing of the past… never mind healthcare.
And now, after 30 years of letting the good times roll, the debt comes due. Our entire face-to-face service sector is cut off at the financial knees… from lowly sole-proprietor restaurants to high-flyin’ airlines. And where do we look for our solution? Simple. We’ll print more money.
Is it impossible that all of the extreme, excess wealth that has been harvested from the American public — roughly since hyper-automation and computerization matured — and hoarded by the winners, could actually be the most effective place to find funding to stabilize and save the economy from which they so spectacularly benefitted? During the two world wars, government bonds were sold to raise funds, basically letting the government print money with less risk of inflation. We could promote the same thing now. Or we could simply institute an instantaneous tax on hyper-wealth. Or we could just continue printing money and borrowing from China. What could possibly go wrong with that?
