Wednesday, August 17, 2011

Tax the super-rich or riots will rage in 2012 - Paul B. Farrell - MarketWatch

Tax the super-rich or riots will rage in 2012 - Paul B. Farrell - MarketWatch: "SAN LUIS OBISPO, Calif. (MarketWatch) — What a year. Rage in London, Egypt, Athens, Damascus. All real. Just a metaphor in the new “Planet of the Apes” film? No, much more. Warning: More rage is dead ahead. Across our planet a new generation is filled with rage. High unemployment. Raging inflation. Dreams lost. Hope gone. While the super -rich get richer and richer.

Listen to that hissing: The fuse is rapidly burning, warning us. Wake up before the rage explodes in your face. This firestorm is endangering America’s future. From forces outside, yes. But far more deadly, from deep within our collective psyche. We have lost our moral compass. We are self-destructing.

Crackpot warning? No. This warning comes from the elite International Monetary Fund. A recent IMF report looked at 'the causes of the two major U.S. economic crises over the past 100 years, the Great Depression of 1929 and the Great Recession of 2007,' writes Rana Foroohar, an economics editor at Time magazine.

'There are two remarkable similarities in the eras that preceded these crises. Both saw a sharp increase in income inequality and household-debt-to-income ratios.' And in each case, 'as the poor and middle-class were squeezed, they tried to cope by borrowing to maintain their standard of living.'"

Economic History 101, The Distributional Dynamics of Revolutions. A fine rant by Paul Farrell, who has brought views put forth by this blog for years into the mainstream.


  1. Thought you'd like this...

  2. Silicon Valley triple-talk. My working hypothesis is that there's an optimal degree of inequality and that when there's a viable social contract, people don't take disproportionate shares out of income because some ridiculous "capital market" allows them to do so. National growth and prosperity have been greatest with much lower rates of both income and wealth inequality. I also favor a 50% inheritance tax with a generous exclusion of, say, five or ten million dollars.