Neoclassical economics and the trickle down policy framework that we have derived from it argues that there is a trade-off between fairness and growth. The general idea of trickle down economics is that the richer the rich get and the less constrained they are, less burdened in regulations, the more jobs they create, the better off everyone will be. It’s the concentrated accumulation of capital which is the principal driver of market capitalism.. So, rising economic inequality isn’t a bug, it’s a feature of the trickle down economics. It’s how you know things are getting better, right? Because the richer the rich get, the more jobs they create. This is a general principle of the thing.
– From Salon’s recent interview of Nick Hanauer: The 1 Percent Rigged Everything: Why No One Can End Ronald Reagan’s “Dead Wrong” Voodoo Economics
Just to give you a little sense of how all this wealth has been “trickling down” see…
More developers and investors are racing to build increasingly lavish homes on spec. Built on prime lots with master suites larger than most homes and spas and entertainment spaces comparable with those in hotels, many of these homes are also attempting to break new price records.
Real-estate agents say the surge reflects an ultraluxury housing market that is at an all-time high, fed in part by overseas buyers and house hunters looking to invest in trophy properties.
“These are people who are going to buy these homes to park money,” says Jeff Hyland, of Beverly Hills-based Hilton & Hyland.
Mr. Hadid declines to say what he’s spending on the home, but says the listing price will likely be in the $200 million range when the house is completed next year.
– From the Wall Street Journal article: The Race to the $100 Million Spec House
Before I get into the meat of this post, I want to highlight a recent insightful interview Nick Hanauer gave to Salon. In case you forgot, Mr. Hanauer is the billionaire who came out and publicly warned of pitchforks unless our corrupt economic system is reformed. I highlighted his article and provided my own thoughts in the piece: The Pitchforks are Coming…– A Dire Warning from a Member of the 0.01%. If you never read that, I suggest taking a look now.
A very poignant point made by Hanauer in his latest interview, concerns how fake liberals like Barack Obama will pay lip service to income inequality as if it is simply some unexpected moral tragedy which happened accidentally within a well functioning economic system. Hanauer correctly points out that the economic system itself is corrupted. That all wealth is being funneled to a tiny oligarchy isn’t a a flaw within this system, it’s a deliberate part of the design itself replete with its own elitist hedging mechanism.
For example, whenever oligarch wealth is threatened, such as in the 2008/09 time period, all resources are immediately mobilized to bail them out. The interests of all other segments of society are consistently thrown to the wayside, with the exception of welfare merely meant to just lessen the probability of civil unrest, as opposed to actually lifting people into the middle or upper classes.
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