I usually try to be nice in these situations. The nicest I can be is to call bullshit. But that is a result of, as was said in another response, of missing the current point. Current is an important adjectival addition.

What was once true is not always true. With creation of wealth in an open market the early assumptions (Adam Smith) were that everyone was a player in the market and the creation of capital would flow into the wealth of the market. The modern image of this is the rising tide lifting all boats. That’s also bullshit because capitalist based markets are not oceans. It’s just a bad analogy.

The most recent version of this is trickle down economics. That’s even worse bullshit. To be overly simplistic money isn’t liquid although that term is used in another way. Money doesn’t trickle because the only legitimate virtue in a capitalist economy is greed. So the money gets put where it can make more money without effort. It is not supposed to run away except in the most carefully controlled manner. Costs must be as low as possible to maximize profit.

As capital builds over time it draws more money to it (compound interest) until it is much more profitable to allow it to grow than to risk in ventures. Thomas Piketty figured out why capitalism had gone bad in the 21st century after working pretty well for the previous 300 years and this was the reason.

There are people that build things and that is good. People might be able to work for them if they can get enough of the right education. But there is another structural error. The system is designed for capitalists and workers are not capitalists. When things worked pretty well, America in the 1950s, unionized workers could play the game and begin to acquire a little capital to buy a house. But that required them to have enough mobility and power to play themselves as needed assets.

That was not acceptable to the capitalist class that was consolidating and didn’t really need workers. See Piketty above. So it was good return on capital to loan the money to workers so they could buy the house and the car and truck and education for their kids.

That way the wages paid to workers mostly just flowed back to the capitalist class that was now an oligarchy. The workers were in heavy debt so they couldn’t bargain too much for wages. The oligarchy could afford to buy politicians who changed the laws to encourage workers to borrow even more money. They also then bought all the media to tell the workers that it was best that the oligarchs got all the money and national healthcare and unions were un-American.

And that is where we are today. 2% of the population owns more than the bottom 60%. And the flow to the top continue grow. There is no way to stop this now because the system works too well.

Written by

Educator, CIO, retired entrepreneur, grandfather with occasional fits of humor in the midst of disaster. . .

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