no bankers jailed

Earlier today, I published a post titled Americans Have Been Turned Into Peasants – It’s Time to Fight Back. In the hours since, I came across an article in the Washington Post which offers some additional details and graphics on the subject.

Here are a few excerpts from the piece titled, 2015 Was a Terrible Year for the Common Working Man:

By at least one measure, inequality among working men has grown for decades. But, in 2015, it accelerated: The wage gap among men saw its largest single-year increase on record.

Top earners — men who made more than 95 percent of their peers — saw wages last year rise by 9.9 percent, according to an analysis of federal data. Men in the middle — with earnings higher than half their peers — saw a much-smaller 2.6 percent increase.

Now here’s a graphic of the trend:

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America used to be the land of opportunity and optimism. Now opportunity is seen as the preserve of the elite: two-thirds of Americans believe the economy is rigged in favour of vested interests. And optimism has turned to anger. Voters’ fury fuels the insurgencies of Donald Trump and Bernie Sanders and weakens insiders like Hillary Clinton.

The campaigns have found plenty of things to blame, from free-trade deals to the recklessness of Wall Street. But one problem with American capitalism has been overlooked: a corrosive lack of competition. The naughty secret of American firms is that life at home is much easier: their returns on equity are 40% higher in the United States than they are abroad. Aggregate domestic profits are at near-record levels relative to GDP. America is meant to be a temple of free enterprise. It isn’t.

– From the recent Economist article: The Problem with Profits

In the 1970’s, Goldman Sachs CEO Gus Levy famously encouraged his employees to be “long-term greedy.” In order to understand how far we have fallen as an economy and culture, it’s important to understand the meaning of the phrase and reflect upon it.

“Long-term greedy” implies two very important principles that define a well functioning and ethical free market economy. First, is the unrepentant belief that earning a good profit and striving for financial success is a reasonable and admirable goal for both individuals and corporations. Second, is the understanding that such financial success should be earned, not stolen. If one’s focus is the long-term, the implication is that you’re committing yourself to building something real, and that the marketplace will ultimately reward you handsomely for your product or service.

Throughout my childhood, and much of my adult life, I naively assumed this was the way the U.S. economy functioned. This was partly a result of propaganda, and partly a result of it still being somewhat true. What’s become abundantly clear; however, is that from my birth in 1978 to the present day, the U.S. economy has been, gradually at first, and then rapidly transformed into a rigged, oligarch-dominated, crony Banana Republic system.

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