This zero hedge obsession with the gold standard and simplistic view that if it were reinstated the problems listed would be largely eliminated makes it hard to take them seriously. You know who also is not on the gold standard? Every other country where a large range of conditions exist.
> This zero hedge obsession with the gold standard and simplistic view that if it were reinstated the problems listed would be largely eliminated makes it hard to take them seriously. You know who also is not on the gold standard? Every other country where a large range of conditions exist.
I'm unfamiliar with zerohedge beyond this article, but I can empathise with any fond remembrance of a fiscal system that wasn't (intentionally or otherwise) designed to provide a perpetual and ineluctable boom-bust cycle.
I wasn't alive at the time, though I was present for Australia's following of the crowd (the global peer pressure was enormous by then) as we floated our AUD. The reason, comically stated at the time, was that 'it hasn't worked anywhere else, so maybe it will work here'. We adopted the same mantra for the introduction of GST (a la UK's VAT).
Anyway, I'll often recommend John Ralston-Saul whenever the subject of Bretton Woods comes up - he had this to say, tritely, in his Doubter's Companion (1994):
"A system for international financial management and stability which was put in place by the Allies, minus the Soviets, in 1944 and destroyed in 1973 by President Richard Nixon without consideration being given to a replacement.
"Nixon hoped in this way to solve some short-term American economic problems by re-creating the sort of financial disorder in which the largest power would be best placed to benefit. It could be said that this was the single most evil act undertaken by an elected leader in the postwar period. Other leaders should not be discouraged, however. The opportunity to do worse is perpetual."
His concern (fleshed out much more seriously in his other works) is not so much that the gold standard was by any measure The Best System, but rather that replacing it with a demonstrably even worse system was a horrendously woeful decision.
An addenda for anyone whose interest was piqued by that quote -- the book is a truly delightful anthology of pithy/laconic/dire observations, conveniently sorted into alphabetical order -- and related to the above (filed under Bretton Woods) was this gem, under the heading HOLY TRINITY - LATE TWENTIETH CENTURY:
"The main tenet of faith in the last quarter of the twentieth century has been the promise of a rational paradise reached through devotion to competition, efficiency and the market-place. In this fashionable and remarkably intolerant Holy Trinity, the role of the Father is taken by competition, of the Son by efficiency and of the Holy Ghost by the market-place.
"If these three mechanisms could be presented with both their strengths and their flaws, they would be valuable tools in a stable society. Treated as absolutes they quickly drag society into a confused and dangerous state where conventional wisdom is reliant on our denial of what we know to be wrong.As with our earlier worship of saints and facts, there is something silly about grown men and women striving to reduce their vision of themselves and of civilization to bean counting. The message of the competition/efficiency/marketplace Trinity seems to be that we should drop the idea of ourselves developed over two and a half millennia. We are no longer beings distinguished by our ability to think and to act consciously in order to affect our circumstances. Instead we should passively submit ourselves and our whole civilization—our public structures, social forms and cultural creativity—to the abstract forces of unregulated commerce. It may be that most citizens have difficulty with the argument and would prefer to continue working on the idea of dignified human intelligence. If they must drop something, they would probably prefer to drop the economists."
That faith also come with the tendency to see companies as timeless entities which are to be served by people (i.e. gods), instead of being just a mean an end of providing wealth to society (i.e. tools).
The boom bust cycle was much worse on the gold standard because when it busted, there was no way to stop it, and it could be manipulated by anyone with enough gold.
We had the gold standard during the Roaring 20s, and we had the gold standard during the Great Depression in 1929.
But it would appear that the way they are stopping the boom-bust cycle is by steadily giving ownership of everything to the 1%. I'd rather own more wealth that busts occasionally than the 1%'s wealth stays stable and high and I can't own a house.
The wealthy under the gold standard during the Gilded Era was DRAMATICALLY more wealthy and powerful than today. The Carnegies and Rockefellers, who owned American society during the gold standard in the 1800s, would be about 5X-10X more wealthy than our Musk and Bezos.
The idea that you would own more wealth under that standard is laughable. We are far more equitable today than we were in that era. Our concept of the middle class largely didn't even exist in their era. They paid everyone poorly and kept them under control.
What's good for the goose is good for the gander. I'll reply to people doing that by using their own arguments.
Based on the replies to me, the gold standard is the panacea for every ill in society. We'll all be rich, the wealthy will be torn down, we'll all be home owners, there will never be another bust, etc etc
It probably won't do any of that. But it does make it a lot harder to print money and hand it over to the wealthy without people figuring out who is paying the bill.
i have the impression, that abandondonment of the gold standard did create a kind of corrupting mindset, that goes as follows "if we can manipulate he CPI, so that it appears that there is no inflation, if we can create money out of nothing with tricks like quantitave easing, then we can do anything". This mindsets creates a kind of collusion between the establishment and the media. This collusion protects the consensus from further questioning - a kind of feeback loop sets in. (but that may not be true either, there was plenty of hypocrisy when the gold standard was in effect)
I'm not sure how much of what you're describing was limited to the USA for the span of 42 years, and how far it can be extended to the rest of the world, and a longer time frame?
Ralston-Saul's book 'The End of Globalism' is a heavy read, but does dive into this with a significantly more serious tone. There's doubtless many other works on the subject, from myriad angles.
Certainly it's difficult to argue that since 1973 everywhere that's abandoned the gold standard, toeing the line as it were, has not suffered a sinusoidal cycle.
EDIT: Apologies, I failed to properly respond to your assertion:
> The boom bust cycle was much worse on the gold standard because when it busted, there was no way to stop it, and it could be manipulated by anyone with enough gold.
Is there a way to stop a bust in the a post-Bretton Woods? Are there some examples that you could cite where this has been done? (Australia's relative success through- and post-GFC I think is often held up as an example of something -- however it was, as is often the case, some accounting shenanigans whereby the selling of assets was shuffled into the revenue column.)
Follow-up -- do you consider the point of TFA to be that anyone with 'enough money (gold)' can manipulate the system to ensure legislative, and therefore legally binding, retention of that wealth (gold) is better, worse, or much the same?
> Certainly it's difficult to argue that since 1973 everywhere that's abandoned the gold standard, toeing the line as it were, has not suffered a sinusoidal cycle.
The same ups and downs existed on the gold standard, but much worse. From June 1919 to March 1933, when the US was on it, headline inflation started off at >15%, dropped to -15%, gyrated between 4% and 0%, was negative for a while in the 1920s, and dropped to -10% once the Great Depression started.
As a comparison, during the post-2008 period, it dipped to for a short period to -1% and then stayed positive but below 4%. 23 times less variance.
> Is there a way to stop a bust in the a post-Bretton Woods?
The busts in the post-BW era are a lot less worse than the busts under the gold standard AFAICT. And as we saw in 2020, large busts can be buffered by dropping rates and increases liquidity on the monetary side, and stimulus spending on the fiscal side.
This is standard Keynes:
> I would summarize the Keynesian view in terms of four points:
> 1. Economies sometimes produce much less than they could, and employ many fewer workers than they should, because there just isn’t enough spending. Such episodes can happen for a variety of reasons; the question is how to respond.
> 2. There are normally forces that tend to push the economy back toward full employment. But they work slowly; a hands-off policy toward depressed economies means accepting a long, unnecessary period of pain.
> 3. It is often possible to drastically shorten this period of pain and greatly reduce the human and financial losses by “printing money”, using the central bank’s power of currency creation to push interest rates down.
> 4. Sometimes, however, monetary policy loses its effectiveness, especially when rates are close to zero. In that case temporary deficit spending can provide a useful boost. And conversely, fiscal austerity in a depressed economy imposes large economic losses.
Your argument feels compelling, but I'm hesitant to embrace it fully given we're talking about ~50 years (post-BW) and a single country as an example (most western, and many other, countries embraced a floating currency as a response to this Nixon-change).
Depending how you measure it, the gold standard existed for a half century - so about as long as it's been gone, now - or perhaps much longer, at least de jure if not de facto.
(Economics still feels to be a lot of bluthering about in the dark.)
I'm wary about ascribing too much weight to the (exclusively) US experience since the 1970's, as the culture there skews both assessments and comparisons - which is basically what TFA is all about.
Comparisons to early 20th century elite are doubtless valid from a purely quantitative perspective, but perhaps less convincing in the abstract (coming back to TFA) of gross inequality (income & wealth).
For economic cycles, see point 5: Gold recessions could last for years.
The gold standard made the Great Depression worse; see Bernanke† and James (1991):
> However, Temin (1989) argues that, once these destabilizing policy measures had been taken, little could be done to avert deflation and depression, given the commitment of central banks to maintenance of the gold standard. Once the deflationary process had begun, central banks engaged in competitive deflation and a scramble for gold, hoping by raising cover ratios to protect their currencies against speculative attack. Attempts by any individual central bank to reflate were met by immediate gold outflows, which forced the central bank to raise its discount rate and deflate once again. According to Temin, even the United States, with its large gold reserves, faced this constraint. Thus Temin disagrees with the suggestion of Friedman and Schwartz (1963) that the Federal Reserve's failure to protect the U.S. money supply was due to misunderstanding of the problem or a lack of leadership; instead, he claims, given the commitment to the gold standard (and, presumably, the absence of effective central bank cooperation), the Fed had little choice but to let the banks fail and the money supply fall.
> For our purposes here it does not matter much to what extent central bank choices could have been other than what they were. For the positive question of what caused the Depression, we need only note that a monetary contraction began in the United States and France, and was propagated throughout the world by the international monetary standard.
I recommend Money: The True Story of a Made-Up Thing by Jacob Goldstein, which goes over some situations where various countries have switched to and from 'fiat regimes' over the course of history before the modern age.
As for economic cycles, in the GS/pre-BW regime US economic growth was 2.81% with a variation of 4.46%, while in the non-GS/post-BW world the numbers are 2.75 ±2.06%:
And the later years are also including inflation from the Vietnam War and the oil shock: hardly regular events. Take those out and the variation would probably be even lower. Once Volcker tamed the oil shock, the Fed has managed to run a pretty tight ship when it comes to inflation:
> I'm unfamiliar with zerohedge beyond this article, but I can empathise with any fond remembrance of a fiscal system that wasn't (intentionally or otherwise) designed to provide a perpetual and ineluctable boom-bust cycle.
Look at the boom-bust cycle in the second half of the 1800s. We were on the gold standard. We still had horrific crashes in a perpetual boom-bust cycle. To think the gold standard wasn't giving regular crashes requires ignoring all economic history before World War II.
They may have a fondness for conditions as they exist in their imagination, but the reality of life on the gold standard was much less rosy...
It's really weird watching people declare the gold standard to be the way to prevent a boom-and-bust cycle. It's hard to imagine a way for history to more directly prove somebody categorically wrong.
Usually there's at least some question of viewpoint, or value judgment, or some other way where two people can reach different conclusions from the same facts, especially in economics. But there's simply no way to know anything about American history and believe that the gold standard solidified its economy.
It's like flat-earthing for economics. I'd have thought that impossible for such a vague and poorly-defined field.
> It's really weird watching people declare the gold standard to be the way to prevent a boom-and-bust cycle.
Au contraire.
I don't think a gold standard prevented such a thing.
I do think that it was irresponsible to lurch into the current (post 1970s) arrangement without more thoughtful preparation, or at the least, higher expectations than 'more of the same, slightly ameliorated'.
Claims regarding previous boom-bust cycles (under vastly different socio-economic structures) and wealth inequality (Rockefellers, Carnegies, etc) to my mind fall under the category of whataboutism.
If we've just risen above the worst possible scenarios, it's only due to a poverty of expectations.
Yeah using the gold standard limits the pace of progress of society to the pace of which gold can be mined, which is a completely arbitrary unnecessary limit ever since printed money was invented.
The problem is using an inherently inflationary currency that is tied to usury. Now, every single person is affected by interest whether they deal with it or not. This is immoral.
Any rate over 0% is immoral. This is how we have it in Islam. Loans are strictly an act of charity. Otherwise, there are moral and ethical ways to invest your money that are not predatory.
The modern economic concept of tying wealth directly to economic output was a huge step.
What it stepped towards can be considered anything from utopia to irrecoverable disaster. Some people closer to the latter end of the scale consider economic limiters like deflationary currency (bitcoin et. al) and gold/silver standards as a good thing.
Who is right? I don't know if any individual human can, in the space of a single lifetime, really have the breadth of experience and insight to choose the right option.
The dollar was pegged at $35 from 1933 to... was it 1973? In what sense had the US abandoned the gold standard in the 1930s? What is your definition of the gold standard, where the dollar pegged to gold isn't enough to mean you're on the gold standard?
It's funny how the time of the gold standard was the other time in US history where it was a banana republic but I'm sure that's a coincidence and not a collary.
>This zero hedge obsession with the gold standard and simplistic view that if it were reinstated the problems listed would be largely eliminated makes it hard to take them seriously. You know who also is not on the gold standard? Every other country where a large range of conditions exist.
When the developed world went off the gold standard it flipped how taxation works. Without a gold standard, the fiat money + government no longer can tax.
Mind you, the 'gold' factor doesnt matter. Maybe it's a crypto standard or oil or something. It doesnt matter but right now it's broken. If the USD and all these other currencies dont go back on a standard, it effectively means a caste system will form.
Instead, you have the endless pressure to drop taxation, but the government can only pretend to drop taxation. If you look at the USA, every single tax break has been entirely fake with no actual or real net change in taxation. Fully intentional because nobody can touch that.
> You know who also is not on the gold standard? Every other country where a large range of conditions exist.
Every other country follows usa. After the second world war finished europe was reconstructing and depleted of any financial power
so america set the tone in finance since it was the biggest winner. That s how we got the removal of the gold standard and dollar as the reserve currency for every other country.You make it seem as if every country reached the conclusion that gold standard must go by itself.
I disagree, and that is fundamental point. It is not just one view, you can pretty much check the different authors or find the original sources and they are not in agreement.
Propaganda is useless, but calling bullshit on another certain countrys propaganda, that is refreshing.
The first plot is especially troubling. The last time the top 1% had as much as the bottom 90% was right on the eve of WWII.
Now, an exclusively economic interpretation of history is certainly wrong, but one cannot refrain from thinking that this much inequality won't lead to social unrest at best, flat out war at worst
Only in part. A lot of loan and mortgage contracts (at least in the EU) have provisions built in that allow banks to reject down payments over a specific limit, usually 5-10%. If push comes to shove, the state might even force you to mortage your home to finance itself after crisis [0]. It surely helps debtors a bit, but you can't just go to your bank with a single note and be done.
> That would mean instead of paying them a lump sum of equivalent-to-$100 to pay off your mortgage you end up paying an equivalent of, say $2 per month?
This is in addition to monthly payments. So if you take a loan for 480$ at 0% total interest (just for nicer numbers) for 48 months, you'd pay 10$ per month, but you'd only be able to pay an extra 24$ per year to get rid of the loan sooner. So if the currency hyper-inflates in year two, you'd still own ~206$ [0] once the state revalues the debt. Of course, the bank is still free to accept higher payments (sometimes for a fee) if it thinks it's the better option.
The German word for this is Sondertilgung. You can find it explained here [0], for example. I'm not too familiar with the US system, so I can't say how common these clauses are over there, but I'd be surprised if banks didn't cover themselves , too.
[0] A bit less if you start paying sooner or agree to pay fees.
Hyperinflation is usually a forex problem: the country needs to buy imports in hard currency, especially oil and food, but the export industry has collapsed, so it can't find dollars to pay for it.
Which is why I find Americans worrying about hyperinflation in the present day very odd: you have oil AND food AND dollars all domestically produced in adequate quantities, what are you expecting to happen?
The latter is why people sometimes claim manufacturing is disappearing from the US. Its not, but employment levels are down as productivity goes up, and as labor intensive but low value industries move elsewhere (like clothing manufacturing).
But in that 20 years, the population has grown, and per-capita consumption has grown. So flat manufacturing output means that domestic manufacturing serves less of our consumption.
Keep in mind that hyperinflation only works to reduce inequality when coupled with financial repression. The rich are already keeping most of their wealth in assets that keep up with inflation, or even outpace it, which exacerbates the inequality issue even more. The only thing that inflation is good at is reducing debt levels, both for individuals and organisations.
>Keep in mind that hyperinflation only works to reduce inequality when coupled with financial repression.
Not really. If I owe some money, every increase in prices (and wages) make it easier for me to reimburse my loan. The rich lending money will be losing, big time.
Now, do rich people lend their money? I'm sure they do. They may own stocks, real estate and commodities in addition to currencies and obligations but their value will drop hard if they stop lending money.
The rich, as a class, can't protect themselves from inflation even if they start buying stuff that appreciate by selling the rest.
A few may find a hedge against this, but the exception proves the rule.
If the value of assets drops you get a deflation and central banks hate that, so in practice what happens is that asset values get propped up on an ongoing basis. This is the situation we are finding ourselves now.
Hyperinflation events basically don’t happen in a healthy economy, so it’s hard to say whether they’re just a waypoint on the road to unrest or the cause. (I tend to think they’re the former, that they’re the agonal breathing of a society: often associated with imminent death but not the cause of it.)
It seems crucially important to ask this of people who lived through them (or from reading their first person accounts) rather than asking people who read about them in history books or watched them on TV.
What’s going on in the Gaza Strip for example does not evoke a sense of “wow, that doesn’t look bad at all” in me.
" Are mass violence and catastrophes the only forces that can seriously decrease economic inequality? To judge by thousands of years of history, the answer is yes. "
António de Oliveira Salazar, the dictator of Portugal had a similar take on it. The triple Fs of Fado (music), Futbol (sports) and Fiesta (entertainment:
The third F is for "Fátima" (Our Lady of Fátima).
And besides the Football, it has nothing to do with Bread and Circus, as every people should cling to their Faith and customs.
Edit: This is present in your own links you didn't bother reading, and you'd see those "Three Fs" wasn't any Regime motto, but post 25 April propaganda, the official one was "Deus, Pátria e Família" (God, Fatherland, Family).
...but its them immigrants stealing our jobs,and illuminati criminal cabal that keeps us honest working people from having normal lives.
This would be funny if I didn't actual hear those statements at family gatherings. and worse facebook spammers are teaching people how to dismiss intellectual discourse with statements like 'I am not saying i believe it, i am just asking', 'I dont know how it works but I heard it somewhere', 'i have my sources and you have yours, how can i tell who is telling the truth'.
Its terrifying what will happen in the future as social media is the the greatest populous pacifier ever invented
I don't think that's completely true. Generally, housing and SNAP have work requirements for most people. Medicaid generally does not. There's a recent waiver process that allows states to implement a work requirement, but most states have not taken advantage of that.
I have a relative that lived in free public housing, recieved SNAP, and is on Medicaid. I know they still get food from the food bank, but I'm not sure if they still get SNAP. They moved out of the free housing into an apartment (inheritance). They refuse to get a job.
Food banks aren't means tested. I've seen plenty of BMWs pull up to one during the pandemic.
Medicaid is extremely means tested. You can't own assets >$3000. Chances are your relative that inherited an apartment is no longer receiving Medicaid.
And SNAP not only has a work requirement but there is retraining requirement as well. So somehow your relative managed to not get caught by 3 different gov't agencies?
Yeah, but it looks like we will be out of "bread" soon (or "bread" too expensive to buy, which is the same). Netflix won't be enough without access to food.
With no enforced minimum wage in America, and with planned "Company Towns" where employers like Amazon have employees rent company-owned houses, it's almost like America is On The Road To Serfdom.
more ilke a return to the gilded age.
The question is if the violence of the last half of the 19th and first half of the 20th century will return aswell.
Really? The guy just tried to equate particular wealth in the USA with Hitler's desire to establish the 3rd Reich. It's not on the same planet, let alone on base
I think you'll find more than one thing happened. As it happens the Nazis rise to power is just about the most studied period of human history.
Trying to generate some level of John Nash type synchronicity going from an invalid inference of similarity between wealth inequality in two separate periods of history to ww2 to impeding doom is absurd. Even more foolish to assert the great depression was so simply explained by inequality. That's obviously not the case.
Never once I said it's the _only_ reason this happened (obviously). But between "it's the only reason" and "it has nothing to do with it" there's a lot of ground to cover, don't ya think?
I don't think it's far fetched to assert that the US and Germany in the 20s were extremely connected, financially speaking. How much this impacted the subsequent events can be debated.
But believing in no impact at all is just intellectually dishonest. It's a plain fact that '29 and investment dry-up in Europe caused incredible hardship on Germans (and their voting preferences in the '33 elections).
There's no peaceful way out of this dilemma - the ultra-rich have the money to corrupt the politicians. They get to write the rules that make them even richer. Meanwhile, democracy's mechanisms are no longer working.
It is depressing to see how cheap it is to corrupt the politicians. A few thousand here and a few thousand there - thats all it takes. Maybe we should crowd source funds to counteract the bribes from the rich!
Yes, effectively turn it into a plutocracy, where laws are decided by how much you can pay for them. I'm sure this is the type of fight the poor want to get into.
We were joking here in the balkans, that Trump was a really good corruption fighter, because he has so much money, a few thousands here and there mean literally nothing to him. The bribes.. i mean the donations for trump would be a lot higher than those for Hillary.
You are probably in the global 1%. What is your solution? You speak of violence. Will you give away all your savings and possessions to an impoverished Chinese or Indian peasant?
This isn't a fair or useful way to see things. Just because "American minimum wage is a fortune in India" or something doesn't mean someone making minimum wage in America isn't dirt poor.
We all have our costs of living, and how "rich" we are is relative to where we live.
no wonder. those nice 1% distracted americans into a war of races (while we all agreed long that there is only one race it isn't the case anymore looking at fox, cnn, biden, paski, white and black racial movments,...).
they did that right after occupy wall street. they understood that this movement was dangerous for them because targerting the right people responsible for the racism, inequalities and theft in western societies. and instead of fighting against us they just poured money into minority-based marketing so that now the goldman sachs of the world sponsor the gay pride and other minority movements to push the narrative that racism is because of the "way society is" hell they even call it "systemic racism" so that way it is something dumb that you name and never understand, hiding away the fact that those 1% are the one creating this system and profiting off it from every poor person and middle class in america. whatever their color.
There doesn't even have to be a conspiracy for this to occur.
Companies always want to seem like the good guys, so they'll jump on any trend that doesn't hurt them. BLM, LGBTQ+ (), etc. are issues that companies don't have to lose anything to take part in. Advocating for (e.g.) unions is something the Amazons of the world don't want to promote. This creates bias on every level which suppresses topics that are inconvenient for the powers-at-be.
People fighting over race is very convenient for the 0.01%, so no effort will be made to end that fight.
( Not that these aren't important, just that there are important issues that are not discussed on the same level.)
There is no direct link between civil-rights awareness increases and Occupy ending. Occupy simply ended like most cultural movements end: organizers were slowly coopted by the system, one way or the other, because people get old and settle down. In my 40+ years of life, I've seen multiple movements with similar themes emerge and subsume, they are like tidal waves. In many ways, they are just a path for certain personality types to carve their role in society.
On the other hand, civil-rights advancements are a slow but well-rooted change in social attitudes. Because these ideas are not conflictual with capitalism (in fact they complement it, by expanding the market for goods and services to under-represented groups), they get swallowed and repackaged by the system, becoming mainstream.
I suspect we will see something that aims to reduce the influence of machines over humans, particularly in the workplace and/or around AI, because that balance is getting out of whack in ways that are becoming more and more difficult to ignore. It will be mixed with some anti-capitalist content; the system will discard the latter and coopt the former, somehow, in the same way it did with the sexual revolution and civil rights.
I applaud for having the balls to post zerohedge here. I only skim the headlines most of the time but now and again, they post a really good article with in-depth information if you have the patience to see past the heavily opinionated commentary. If you're into finance and can handle it, it should be on your reading list. Variety is the spice of life.
I disagree with the premise of the article. If someone has negative assets, they are poorer than people with zero assets. The article paints access to credit as a form of wealth, which it is, but in the end wealth is measured by accumulated assets, as a proxy indicator for earning potential.
If you use credit to acquire assets, real estate for example, you won't move the needle on your total net worth. So, the overindebted in the US are those who used credit for expenses or for failed investments. They are poorer than those with zero debt.
The only exception that I can see, and which the article does not mention, is the use of credit for acquiring untangible assets, such as education. The correction would be to measure earning potential per individual, instead of net-assets, but that is basically impossible at large scale. We are stuck using net assets as a proxy for earning potential. Sum of wealth is an acceptable measure of income inequality.
It's worth noting that Eike Batista, whom the article mentions as an example for someone "anybody trying to get by on less than a dollar a day" would "happily change places with" had most of his assets seized a year after the article was written and was recently sentenced to 30 years in prison.
Additionally Jérôme Kerviel's €4.9 billion fine was reduced to $1 million two years after the article came out but he served five months in prison the same year the article was written.
The article's framing implies that these "debt billionaires" significantly impact these statistics but doesn't demonstrate whether this is the case by contrasting them with other measures, only making vague comparisons between American and Chinese "savings relative to household income".
But arguably a debt-free Chinese person with modest savings is less poor than a working class American with debts they can barely afford paying the interest on because the latter is practically living under indentured servitude.
> So, the overindebted in the US are those who used credit for expenses or for failed investments. They are poorer than those with zero debt.
Someone who owns a $200,000 house (and a mortgage of $210,000) is poorer than someone who has no house?
Someone who took a $50,000 loan for a new car and drove it for one day, technically lowering its price to $45,000, is poorer than someone who has no car?
This is a fair criticism but the numbers still work out similarly if you look at disposable income.
The question isn't how much wealth the bottom 50% or 80% or 90% of a given country has, the question is if we should want society to be structured in such a way that one person can command upwards of $100bn and what having one or more persons with this much financial power does to the democratic system they are supposed to be a part of.
If capitalism means voting with your dollar, and democracy means every vote counts the same, how can the two systems coexist if the dollar amounts are so unevenly distributed.
The point doesn't hinge on specific numbers, those just define the exact magnitude of the problem. You can say you prefer capitalism, where power flows into the hands of a few from "the market", or you can say you prefer democracy, where power remains in the hands of the people (or in representative democracies temporarily flows from the electorate into the hands of a few elected until the next election). But you can't say you prefer both.
The way the economic system is in the US and many other countries each year the ratio will keep getting worse till the system breaks. If the economy grows 2-3% and 80-90% of the growth is captured by 1-2% of the population each year more and more wealth moves to the rich.
Taxing the rich is just 1st part of the solution the 2nd part is getting that money into the hands of the actual poor where as currently larger part of government taxes go back into the pockets of the rich. Food stamps subsidised health care etc are the bogey man created to hype up the right and the left but majority of that money also goes back to the rich.
These data points often just omit the opposite happening during down cycles of the economy. In 2008, the richest 1% lost, by far, the most money, even measured as a percentage.
The reason these trends seem perpetually unsustainable is because the authors of these articles are always switching metrics and altering class definitions in order to make dramatic titles that folks will click on.
These exact same titles have been present for as long as I can remember reading newspapers - since the 1970s.
Wonder how many HN readers are part of the 1% income earners ... but 0.1% is another thing of course.
How is it going with Wealth Tax proposal from the Democrats? It sounds reasonable: "2% annual tax on wealth over $50 million, rising to 3% for wealth over $1 billion."
I wonder how much wealth the 0.1% has compared to the rest of the 1%, because I'm sure the problem is about that 0.1% or 0.01%. Very rich people must have a lot of influence.
The post is flagged and the comments greatly seem to support the 1% rhetoric (its not us its the .01%!,taxes don't work(because the rich dont pay them), wealth distribution is evil (as long as its not the rich who get the funds distributed to them of course, thry have no problem sucking money/value like a vacuum).
On the contrary, many more people think they are in the top 1% than actually are. A survey [1] done about 20 years ago showed that a full 19% of Americans thought they were currently among the top 1% and a further 20 percent expect to be someday. So that’s 39% of people who expect to be hurt when anyone proposes taxing the ultra rich.
I’m sure it’s the upper 1%, especially. Still, what’s different about life when you move from the 2% to the 1%?
I would hypothesize an experience where you realize that your money can work harder than you can. Also, this whole intergenerational wealth vision. What’s that like?
Honestly, I doubt that. Some part of your brain must realize the suffering that enables your cushy lifestyle; some shred of remaining conscience must look at yourself with pity.
There are endless rationalisations to choose from, endless distractions to buy - but actual contentment will only grow further away. All of history's wisest people agree on this; many quotes from Buddha and Jesus relate to exactly this point.
Maybe you've already sold your conscience when becoming part of the 1%, so you don't need more/difference excuses when reaching the next levels.
Most people in my country's 1% have already made the choices that allow them to accumulate with no end. They're already placed in a strong enough bubble that they don't see the results of their actions, e.g if their investments/lobbying hurts the poor (e.g all law makers are from the same class, media sources are so personalized so you don't share the same experience with the rest of society, they starts presenting the poor as "lazy, dumb, evil zombies", your Uber won't let you cross anyone from below levels or make sure you avoid certain districts, etc).
There's a French word for that: l'entre-soi -- people choosing to live in their microcosm (social, political, etc.) avoiding contact with those who are not part of it.
There's very little that scares people more than losing what they have. That fear rationalize many things. "I deserve my wealth" "other people are lazy" "I could save some kids somewhere but what difference would it makes". That is true for every level of wealth, it's the same if you are bezos or if you are a moderately successful in a poor village. But inequalities only get worse with time and it seems that this fear makes the trend impossible to stop. What happens next?
This kind of hyperbole is just virtue signalling. You want to tell us what a great person you are because clearly you think about all this and you've fixed it by not exploiting anyone else.
In your rush to excoriate someone for being a part of the 1%, you've forgotten that you're easily in the 1% of people living on earth and we're all connected thanks to global trade. All the things you've said apply equally to you. You can't tell us with certainty about the living conditions of everyone who made your shoes, your phone or your means of transport.
Were Buddha and Jesus virtue signalling too, or is there a chance that they were actually on to something? A concept worth repeating for thousands of years, an idea that points to a deep and non-obvious and hugely important truth.
I'm not excoriating anyone. Pointing out that the generationally rich need to ignore a vast amount of inequality to feel good about fucking around in their megayachts shouldn't be this controversial.
As for the wild assumptions about my shoes, and my transport; did I touch a nerve? What a bizarre line of attack. Why would owning a phone disqualify me from having an opinion on the absurd levels of inequality which support the lifestyles of the generationally .1%?
They weren't virtue signalling. But to the best of my knowledge, Buddha and Jesus didn't use smartphones made in China, shoes from Vietnam, shirts from Bangladesh or cars from Mexico. Which you do.
> Why would owning a phone disqualify me from having an opinion on the absurd levels of inequality which support the lifestyles of the generationally .1%?
Lmao, you are the generationally wealthy global 1%. That's my point! You just don't realise it because you only compare yourself to the people around you and tell yourself "well, I'm doing ok, better than some, not as good as others" without realising how privileged you are. Everything you were saying about the other commenter from your high horse applies equally to you, it's just that you don't realise it.
And any talk of "well, let's keep the discussion to my country alone" only works in a fantasy land where global trade doesn't exist. You enjoy your high standard of living thanks to the labourers working in sweat shops making your inexpensive clothes.
By all means talk about the plight of workers. Just mind your pronouns though. Talk about us and what we need to do instead of villainizing some other group, like we have no culpability in this.
> did I touch a nerve?
Not really, I'm lucky to be top 10% of the country I live in. But the world as a whole? Easily 1%. The difference between us is that I don't blind myself to the rest of the world, and condescend to others on how they should comport themselves.
> Buddha and Jesus didn't use smartphones made in China, shoes from Vietnam, shirts from Bangladesh or cars from Mexico. Which you do.
The semi-ironic thing about this is that it's actually more expensive (in the vast majority of cases) to get shoes or shirts made in the US or a Western European country than in Bangladesh or Vietnam.
In fact, amongst some of the more well off members of my society, the fashionable thing to do is get locally made shirts which cost easily 3-10X what cheaper shirts made by exploited foreign workers cost.
> Buddha and Jesus didn't use smartphones made in China, shoes from Vietnam, shirts from Bangladesh or cars from Mexico. Which you do.
> Lmao, you are the generationally wealthy global 1%.
> you only compare yourself to the people around you
> Everything you were saying about the other commenter from your high horse applies equally to you
You keep making these assumptions about me. Could you stop? It's extremely disingenuous.
Nothing I have said denies global trade, or exploitation in the supply chain of consumer goods.
> mind your pronouns though. Talk about us and what we need to do instead of villainizing some other group, like we have no culpability in this.
Friendo, the .1% are fucking us, in myriad ways. One of their most effective strategies is getting people to victim blame themselves; and I think you've taken the bait.
> Some part of your brain must realize the suffering that enables your cushy lifestyle; some shred of remaining conscience must look at yourself with pity.
You're in the 1% globally. Did any part of your brain realise anything? What did he shreds of your remaining conscience tell you?
Again with the wild assumptions about my economic status, as if that discounts anything I might say.
Really, you don't get to discount people's views on inequality and the hoarding of wealth by ranking them globally.
'Specially when you just make up the rank without knowing the first thing about someone.
Even so - why would you think there isn't a huge difference in psychology between someone earning whatever you're assuming I earn, and someone with vast generational wealth? The science is pretty clear on that one.
“When I was poor and complained about inequality they said I was bitter; now that I'm rich and I complain about inequality they say I'm a hypocrite. I'm beginning to think they just don't want to talk about inequality.” ― Russell Brand
should they pay more than 40%? i do not know the answer to this question. a lot of people say yes because even if they pay the majority of taxes, they pay less in percentage points off their income. others say that they're paying more than their fair share (60% of taxes for just 5% of earners).
The biggest mistake that people make is thinking that taxing the rich will actually fix anything.
These people are very rich because they control stuff. They control the services, everything you NEED to pay for. The more you tax them, the more they will charge YOU for these services.
It’s about the fact that it’s ok for people to be very rich, as long as they pay their fair share.
If they don’t pay their fair share then there’s good reason to argue there shouldn’t be ultra wealthy people. Then they’re just exploitative leeches on society.
I find it really hard to understand why the rich don’t make it easier on themselves by being responsible members of society instead of relentlessly focusing on keeping poor people poor.
Pay some taxes, contribute to roads and schools and hospitals.
> I find it really hard to understand why the rich don’t make it easier on themselves by being responsible members of society instead of relentlessly focusing on keeping poor people poor.
Seconding this. The idea that rich people have a target (after-tax) income and will charge whatever it takes to hit that income is absurd. The target is infinite, and they are already doing everything in their power to make their income as large as possible under current conditions. The fact that their income ever got so large is an indication that they already have too much power to increase their income at the expense of others (not least by convincing a share of the population that their wealth/income is inevitable and/or a necessary condition for the prosperity of others).
So if tax avoidance schemes were focused on and they were taxed appropriately then tax burden could be reduced on wage earners and the likes. People like you....Which in turn makes it so they have to charge their employers less for their labour according to this zero sum economy you envision.
Which then of course would impact consumer prices.
That's untrue. At some point, the richer you get, the less tax you pay for every additional $ you earn (because capital gains are usually less taxed than wages).
Also, past a certain level of income, 100% of the extra revenues is invested (not spent) so there's no VAT. The rich borrow against their wealth, too.
I'm in Europe so I can't speak of the US but the more rich I get, the less I pay tax compared to my coworkers relative to my situation (I'll be earning more from stock on which I'm paying far less tax than an extra income from work).
Also, every €10K of annual gift I get from my (living) parents are not taxed at all (idem for the first €100K from any living parent). Whereas any poor child who expect €10K at their parent's death would have to pay 5% of tax (and more for each upper tier).
I'm getting hundreds of €K year over years and not paying 1€ of tax. Most of these gift are in stocks and neither me or my parent pay any tax on the realized gains (since it's gifted, they're no realization...). Also, my parents can lend me €500K at 0% (which they themselves borrow from banks at negligible rate).
It is legal but so corrupt, I don't see how the rich can't further distancing themselves from the rest of society.
Which country is that? Because as a German, I can't follow entirely.
Capital gains: 25 %, less than wages, check.
Extra revenue invested (in stocks), hence no VAT: doesn't matter if you invest or keep the cash. You pay only VAT if you buy stuff.
> The rich borrow against their wealth, too.
Well, if they invest the money they borrow, they make more money and pay less tax, ok.
> Also, every €10K of annual gift I get from my (living) parents are not taxed at all (idem for the first €100K from any living parent). Whereas any poor child who expect €10K at their parent's death would have to pay 5% of tax (and more for each upper tier).
Not sure what you mean by that. The first €400K of an inheritance is tax free for children.
> I'm getting hundreds of €K year over years and not paying 1€ of tax. Most of these gift are in stocks and neither me or my parent pay any tax on the realized gains (since it's gifted, they're no realization...)
I don't follow. If you are gifted stocks directly and you sell them, you gotta pay tax on the gains. If you don't sell, you don't realize gains, but you also can't use the money. If you receive dividends, you have to pay tax on capital gains.
> Also, my parents can lend me €500K at 0% (which they themselves borrow from banks at negligible rate).
But how do your parents get a loan from a bank at negligible rates if it isn't for buying a house or so? Fees for buying stocks on margin are usually higher (and then you could borrow them yourself).
>Not sure what you mean by that. The first €400K of an inheritance is tax free for children.
I'm in France, the tax allowance is €100K per parent. But since a rich parent can give €100K before their death every 15 years, tax free (that was €160K a few years ago, which I benefited of), the 100K allowance is still available at death. Rich parents can give dozens of €K as gifts in addition to that as explained above, so this all adds up for me while others can only expect €100K tax free at most, and once.
>I don't follow. If you are gifted stocks directly and you sell them, you gotta pay tax on the gains. If you don't sell, you don't realize gains, but you also can't use the money. If you receive dividends, you have to pay tax on capital gains.
My parents made 10x on a few stocks, over a few years. When they gift the stock, they don't realize any gain since they never sold. I must declare their cost as their price on the day of gift. If I sell the stocks the day after and the stock stay flat, I pocket the whole x10 but neither me nor my parent paid any tax on the 10x gains.
>But how do your parents get a loan from a bank at negligible rates if it isn't for buying a house or so? Fees for buying stocks on margin are usually higher (and then you could borrow them yourself).
There is a gift tax exemption of $15k/yr, but with a lifetime cap and the total counts towards your estate taxes, so it ends up being paid in the end (assuming you die, and assuming your estate is rich enough to hit the limit, which is a fair assumption for this discussion).
In your other comment you mention how stock can be transferred "tax-free" in your jurisdiction. From your description I don't think it is actually tax-free, just tax-deferred. You still pay capital gains when you sell, no? But regardless this isn't true in the USA either. If I give appreciated stock to my kids, it is taxable by them as income at the current price.
There are trust funds and such that can be setup to gift the stock early before it appreciates and then pay it out later, but this is still a tax deferral scheme. The now-grown child still pays taxes when the fund matures and they access it.
Mitt Romney pointed out that he paid a lower tax rate than his secretary. Ultra high income individuals may pay more In dollars, but since much of their income is passive, they pay at a lower rate.
Tax deferral is not tax avoidance. If Elon Musk gets a loan backed by his Tesla shares to diversify his holdings, that isn't actually a "tax free" cash out. The tax is just deferred to if/when the bank margin calls the loan, or he dies, etc. But the taxes do get paid, eventually.
These Forbes articles and such conflate different issues and really confuse this point.
"According to the Tax Foundation's review of 2018 tax returns, the latest year for which data is available, the top 1% paid an average income tax rate of about 25.4%."
To pay an average income tax rate of 25.4% in 2018 would require an income of $165,000/yr. That would put you in the top 2%. And this is completely ignoring deductions, credits, etc. which proportionally help lower income tax brackets more due to cutoffs and phase outs.
98% of Americans have a lower average income tax rate than the top 1%, even under conservative assumptions.
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I suggest looking up facts and doing some fermi calculations yourself instead of blindly believing what you read in the news.
"Banana republic" implies more than what the dictionary definition is. If you look at the wealth distribution in any example "banana republic", you'll find a few very wealthy people/warlords and many dirt poor with close to nothing in between
There’s already a well-established word for a country run by rich elite.
Calling the US a “banana republic” is a shocking headline, which I think is the real point. The US economy is not very similar to actual banana republics though. There are some aspects which are becoming similar, yes, but also many in which they’re not.
My pet peeve is 'third world' (in lower case), originally intended as Third World (in upper case). An alternative presented by certain countries as the Cold War heated up. Binding together to resist ceding functional sovereignty to either the First World (US and its allies) or Second World (the USSR and its allies).
It is today usually employed neutered of its casing and tossed around by First World citizens as a general unfalsifiable pejorative towards places that are less politically or economically stable. In many cases because of First World decisions such as Bretton Woods 1973.
Yes words can change meaning, but this is a particularly devious evolution.
That might be the way one dictionary choose to define the term. But the term as I've known it for decades refers to any entity that has the distinguishing property of the small Central American Republics which exported fruit to the United States: A very small wealthy minority preceding over the much larger mass of poor.
The definition of "banana republic" being used here is
> a country with an economy of state capitalism, whereby the country is operated as a private commercial enterprise for the exclusive profit of the ruling class.
It seems you're trying to imply that anyone talking about the .1% owning as much as the 90% has "an agenda", and that's bad for some reason.
And no, it's not a misuse of the word.
> Over the past century, “banana republic” has evolved to mean any country (with or without bananas) that has a ruthless, corrupt, or just plain loopy leader who relies on the military and destroys state institutions in an egomaniacal quest for prolonged power.
> The banana republic term is a derogatory term often used to describe countries plagued with a variety of problems, including a tyrannical or otherwise problematic government or government officials
Given that only the laws that are accepted by financial elite are passed and preference of poor people doesn't matter you'd have to influence (scare?) only the rich people to achieve some change.
You can completely skip making the public aware or trying to get politicians onboard.
If you made as much as a nurse makes per year, but per day instead, then after a full career you would still not have as much as one of Norway's richest men.
Kjell Inge Røkke didn't have much when he started out, now he has close to 20 billion Norwegian kroner. Roughly 2.3 billion USD.
A nurse starts out at a bit above 400 000 kr (48 000 USD). If they paid you a years salary every day for a regular 5-day workweek, 46 weeks a year (to account for holidays) and you worked from when you were 20 and retired at 70. You would still only make 4.8 billion kr, roughly 1/4 of what Røkke has made so far.
414000 * 5 days * 46 weeks * 50 years = 4 761 000 000
I wish Brazil, which is really a Banana Republic, had the same wealth and quality of life of US. The article doesn't know what a Banana Republic really is, and is downsizing how awful is live in a real Banana Republic.
Its not a D measuring contest. The fact is lot of poor/lower middle class people in the US are not doing good. Saying that things are better compared to Brazil and other countries helps no one.
Much as I hesitate to show any support for a Zerohedge article - this is probably linked to all the money creation and the lack of inflation. It is becoming more obvious what happened to the money.
Sure this is a problem but if the American people had the reasonable expectation of being cared for, with respect to healthcare and end-of-life care, a lot of this 1% wealth chasing would not be occurring.
If you want a good read about how the *****y the US healthcare system is, this is a very worthwhile read. Ironically the author is the screenwriter of “Girl, Interrupted” and the story she writes is about how her son got screwed by the US healthcare system and is titled “Boy, Interrupted”. It also shows you how desperate people get for specialized care, and will shell out unfathomable amounts of money for “treatment” at sketchy places: https://www.madinamerica.com/2021/06/boy-interrupted-a-story...
Ironically, the last straw for me, when it came to living in America was my diagnosis of akathisia (just like the linked story), which is 1000x worse than it sounds. I have severe depression and I had been taking my medications as prescribed. Because of my taking these medications, I developed severe akathisia.
Literally, before all hell broke loose from the severe akathisia (of which I likely had to varying degrees for years) my highly respected neurologist in movement disorders immediately wrote a scathing report of my situation with the diagnosis. He also gave a ton of recommendations. He also wrote letters to all of my doctors. He did this all within an hour and took the situation extremely seriously.
Unfortunately, even though he is technically a high powered doctor, the US healthcare system has taken a tremendous amount of power away from doctors in general. So a scathing write up in my medical record plus letters to all of my doctors (with recommendations) was all he could really do for me.
I literally ended up in the ER 6 times in a week, with improper help. I kept on being discharged over and over again without any further help and even got in to trouble with the law multiple times.
One time, after being drugged with Ativan (a benzodiazepine) and Ketamine (a general anesthetic) in the ER, from which I had been discharged. I had called my mother and she was going to pick me up from the hospital. She was well on her way for picking me up.
Honestly, I thought I was just waiting outside on the sidewalk right next to the ER, for my mother, but something very wrong had happened. All of the sudden I see a cop car pull up about 30-40 feet away from me and they were headed my way to talk to me.
Obviously the number one rule is to never talk to the police under any conditions. Traffic stops are a good time to practice that, by the way. The best thing you can do is say “no comment, I need to talk to my lawyer first.” Anyways I was drugged up to the extreme so it was not like I was not talking and running my mouth to both of the cops observing the situation.
Obviously I had caused some sort of public disturbance and somebody had called the cops on me and clearly I should have never been discharged from the hospital. Honestly, I have no idea how, when, or even where the public disturbance occurred (obviously this is public record but it is not healthy for me to investigate the situation further).
Anyways, after the cops talked to me, they said that an “emergency detention order” was being issued and that I was going to be forced to get treatment at the ****hole hospital which had improperly discharged me after being hella ativaned and ketamined up.
Long story short, I had 3 interactions with the cops in 1 week. Prior to that I had only had 2 interactions with the police in my adult life (+14 years). Both were traffic stops, but neither were for moving traffic violations (burnt out headlight and expired registration during COVID-19). I was tremendously lucky that I was never charged with anything over that week from hell, and the cops managed to see that something was “off”.
Anyways, like in the above link (excellent storytelling by the way so it is a worthwhile read), there are common denominators that I share with the writer’s son.
I am a dual US|European Union (Croatian) citizen and I fled the US after the final hospital trip (from hell actually...it was the worst hospital trip of all time and I am hardcore chronically ill just in general) for Croatia exactly 21 days later (I had to obtain legal documents).
Because of my training in electrical engineering, which I am profoundly fortunate to have, I do LORETA (technically sLORETA) neurofeedback training completely on my own to help heal my brain, just like the person in that story.
Anyways, there is much more to the story that is better not put in writing. Just know that there is nothing that will bring me back to the USA.
From my pov, seems like the top 1% has wealth in stock, company valuation, which is only done by the middle class and lower class, buying stock. So everything they have is handed to them by the ones who buy the stock.
Quit doing it.
Why do people buy so much stock, is that because they want to invest in companies? sure there are cases of that, but most importantly they don't want to see their money devalue with the inflation caused by gov policies.
Correlation != Causation. There are many reasons for this that have very little to do with the Gold Standard. I would suggest that technology itself has caused much if not most of this, as has the destruction of Unions, deregulation, and yes government corruption. But I've yet to hear a plausible explanation for how the Gold Standard somehow maintained wages in line with GDP. The only somewhat plausible reason I see here is that a free currency encouraged a move to assets, which protected the rich against inflation somewhat better than the rest.
ZeroHedge is a pretty nasty propaganda outlet to find it's way to this website. You should read the comments, it's mostly Q-ANON and radical far-right trolls, and their batting average on their economic predictions nears 0%. It's doomer media and totally unfit for this community IMO.
You tend to get this effect when there's a boom on and photo sharing websites, crypto nonsense and such like get valued at hundreds of billions. It doesn't necessarily hurt the poor and often doesn't last forever.
So... where is the tie-in to being a banana republic?
Usually it's defined as a small country supported predominately by a single export, or by foreign companies doing business there. Sometimes ruled a dictatorship.
This fact isn't surprising. The US has always had a culture where individualism and libertarianism combine in ways that make it almost impossible to flatten wealth distribution to any significant extent. Countries where wealth is more evenly distributed have cultures with a more socialist bent. 'Socialism' is a dirty word in US culture, more so than in any other country that I know of.
Thus, I doubt very much that this imbalance can be addressed anytime soon as individualism in US culture is so ingrained that conditions for change just aren't there.
Yeah and this inequality also comes with a lot of benefits, who knows how much of that wealth would even exist in the first place if you didn't have that motivation. I mean we've seen what happens in more equal socialist countries, I think these comparisons are pretty childish actually and seems to serve mostly to agitate. You'd have to consider many different aspect of this to create a good understanding to what this is good for vs bad. And you can easily spin this around to say something like: the ultra rich is now only 0.1% of the population, compared to 5% of the population before, the rich are getting fewer, great! The big question is, if the middle, and lower class have also gotten more, in absolute terms. If everyone wins, who cares if a couple of individuals somewhere have an underground garage with 12 sports car, I couldn't care less.
"If everyone wins, who cares if a couple of individuals somewhere have an underground garage with 12 sports car, I couldn't care less."
The point the article was making was the enormous size of the ratio/disparity (which is more than just a couple). Whether one agrees with the situation or not depends on one's political compass - and I've no comment on that.
I’d argue that geopolitics have much more to do with the prosperity in the US than the economic system. It helps to be the largest English speaking nation and separated by two large bodies of water from any possible threat.
Probably not. To me, this is the expected and inevitable final form of American style neoliberal capitalism. I don't believe guillotines or hard communism are necessary as a solution (although the former would certainly be cathartic) but all possible solutions must be socialist to some degree.
At the very least, the US needs to reassess its belief that free markets are a moral good, and effective government is a moral evil.
I can imagine a grim socialist future where everyone is finally given everything basic (healthcare, schools, food) for free and no money beyond necessary to pay their rent (just to keep them busy), all actual money is owned by the ultra-wealthy class and they never meet...
Why is it that when Americans want to criticize Americans for doing bad things they compare themselves to non-Americans? Is the society really that xenophobic?
The term Banana Republic comes from the idea that a south/central American country is a dictatorship run by a small oligarchy and a powerful foreign company. The classic example is Guatemala or Cuba under the United Fruit Company.
The US exported murder to central America to ensure that the UFC didn't have to deal with unions and violently molded these Banana Republics. Now, completely unironically, this article uses the term to compare wealth inequality in America to America's imperial projects. It's gross.
Rhetorically, it's as if the article is saying, "We're supposed to be the exploiters, not the exploited." And it's not as if America's imperial projects have slowed down. These monsters are still regularly overthrowing governments in central and south America. See recent attempts in Bolivia and Nicaragua.
I don't understand American culture. The people there don't give a shit about what their government does in other countries, but then when they're subjected to the same inhumanity, suddenly they're comparing themselves to what they created elsewhere as a means to object to their local circumstance. The writer of this article expects their audience to know what a Banana Republic is, hence the title. So it's not like Americans are ignorant of the term or its history. They just don't give a shit until it happens to them.
I don't necessarily disagree with you, but I'm not sure what this article has to do with "American culture". ZeroHedge is a fringe website—hardly representative of the average American.
Either way, I don't think it's a problem to compare aspects of one's state to more regressive ones. It is useful to point out that China under Xi looks a lot more like North Korea and that fundamentalist Christians hold views similar to Islamist extremists. In this case, the average, uneducated citizen might not be aware that their great America resembles "shithole countries" (their words) in many ways, and if a rude comparison is what's needed, so be it.
Saw this story go the number one spot to the third page in a few minutes.
Unfortunately, it's now on page 5. No, 6. No wait, it's page 12 now, at position 357; between a 16 hour old story with 3 points and a 15 hour old story with 8 points.
Saw this drop over mere minutes. Seems pretty unusual, and worth pointing out for the record.
