Greetings and Salutations….

Michael Moore posted another blog entry here, discussing his appearance at the Wisconsin protests, his speech there, and, the reaction to it by various parts of society. He makes some very good points, and while I do not totally agree with everything he says, or how he portrays it, I am pretty much with him on his remarks about wealth distribution in the USA and the attitude of the hyper-rich towards the rest of the world..

The unfortunate thing is that the current situation, with such huge amounts of cash being under the control of just a few, is in direct conflict with the "American Dream" of working hard, and getting that big chunk of the pie and, being free to get as much money as one can out of the economy without limits. It is, though, a good example of how having too many resources/cash concentrated in too few hands can and does cause a lot of economic problems. On a larger scale, it is the same situation as we had in America with the robber barons at the end of the 1800s. As is happening now, a huge amount of wealth was controlled by a small number of people, putting a large percentage of the American working class into, essentially, serfdom. What was done to redress this situation? Well, several actions were taken. Income tax rates on the hyper-rich of the time were raised. Anti-monopoly laws were passed to break up or slow the accumulation of industry under one person’s control. Perhaps most importantly, many of the hyper-rich of the time realized that excessive greed would be their downfall, so they took steps to spread their wealth around in ways that would get them good press and benefit the country as a whole. As an example, look at Andrew Carnegie. He turned his attentions

towards throwing money at institutes that would promote the general learning of the population. These ranged from the large colleges to small libraries scattered through rural areas of the USA. Many of these legacy buildings are still in place and providing those wellsprings of knowledge that Carnegie intended, well over 100 years later.

Observing the situation, the problem that jumps out at me is not so much the accumulation of wealth by a small number of people, but, rather the hoarding of that wealth by those people. The theory of trickle-down economics only works if the folks above are willing to trickle on the folks below, and, right now, there is no shower of gold from above to bless the increasingly large, poverty stricken masses in the USA. That hoarding of money, much like Gollum’s obsession with The Ring, will be likely to push American society towards the sort of revolution that Moore is talking about. The danger there is that the representatives will over-react, and pass draconian legislation that will attempt to force the hyper-rich to divest themselves of much of their wealth. This, rather than having the desired effect of spreading the wealth around and helping out the masses in America, will likely cause even more of that money to be hidden away in secure, offshore locations, where it will do no one any good. This re-distribution of wealth, like democracy in government, has to come up FROM a population. It cannot be imposed from above and expect any success.

Another facet of the situation, which simply exacerbates the situation, is the attitude of contempt for the less rich that Moore says the hyper-rich have. While I have to say that I have never hung out with Bill Gates, Warren Buffet, or any of that level of wealth long enough to be able to verify the truth of the statement, I have to say that I have seen it in person at lower levels. For example, I provided consulting services for a company where the upper level management (President, CFO, etc) looked upon everyone else at the company as the enemy. These executives firmly believed that they were the only ones working for the good of the company, and that everyone else was always trying to steal from the company by either taking product, or sloughing off instead of doing the job they were being paid for. They where not shy about telling folks in the company this, usually when chewing them a new one over some minor issue, so, pretty soon it became common knowledge throughout the company. What has been the result of this foolish and negative attitude? Well, a few years ago, the company was in quite a positive growth pattern. They were expanding their reach to become a truly international company and there was a good chance that it could have really become the leader in their industry that their advertising claimed. It looked like those years of sacrifice were finally going to be rewarded. However, since then, it has really crashed and is just barely holding on to "life". The production floor, which used to be a beehive of activity, is mostly silent these days, with almost nothing being produced and only a skeleton crew on duty. Jobs that do come in are slow to get done because there are no rewards for fast and efficient work, and there are always criticisms and unhappiness over the job that has been done, or the time it takes. Shipments from their Chinese suppliers have dwindled, both because they have so few orders, and because even the Chinese factories have them on a Cash In Advance basis. The sales people are disheartened by the lack of support from management, the lack of resources, and the insane pricing policies that have been put in place, so they have little motivation to call customers. Between the pricing issues, the lack of support from management, and the minimal stock on hand if a prospective sale asks about details on the deal, the sales folk are forced to say that it will probably take 120 days to get the parts in that the customer needs, and, that the price will be retail. Many times the sales folk have heard the customer say "If I can go across the street and buy the parts for that and get them today, why should I order them through you?", and, after a while that really makes it hard to make that next phone call. Yet, in spite of these problems, upper level management always gets that large check on Friday and it never bounces for them. While not hyper-rich, the fact of the matter is that there is at least a 10x to 15x range between the lowest paid employee at the company and the highest – and I am sure it would be much greater if there was more cash coming in.

So…what do I think is likely to happen? While I would like to say that I thought that the hyper-rich would come to their senses and get that money they have tied up flowing through society again, I fear that the more likely scenario is that they will succumb to greed. This will be exacerbated by an increasingly large contempt for the less fortunate and a growing attitude that the poorer folks in America are the enemy who are trying to steal their hard-earned wealth. They will suck more and more money out of the economy and hide it away, adding to the economic stress, until things reach a breaking point, and the mindless mob starts marching about, looking for victims to devour. When the dust settles and the blood lust is burnt out, this society may be burdened with laws that really DO mitigate against innovation and the collection of ANY amount of personal wealth – and that will go a long way towards accelerating the rot that will leave America fallen from its position as a world leader, and will put it into the role of a small, backwater that everyone has a sort of condescendingly polite attitude towards. It could even get so bad that a real Socialist government could be elected. There is an excellent book by Sinclair Lewis, titled "It can’t happen here", that details how, in a fearfully short time, America falls into a Socialist/Totalitarian state that rivals the worst recorded in History. Here is a link to a short description of the book, although I strongly recommend that everyone read it. Another factor that could push us to this sort of society is the extremest language that is being used throughout the broadcast commentaries. Back in World War 2, we had Father Coughlin on the radio, acting as the Rush Limbaugh of his day. He was a terribly negative force as he was one of the first extremest commentators to use broadcast media to reach a wider audience and spread his lies. However, he was only one person, and had limited exposure. Now, though, the right-wing media is reaching millions of people every day, because it not only has multiple outlets, but, it also has dozens of people who spout opinion as if it were fact constantly filling the airwaves with falsehood and incitement. While this may be a feel-good thing to much of the hyper-rich, because these commentators tend to push the idea that greed is good and it is God’s will that they are blessed with huge amounts of cash, they may not like the results when the mindless mob, incited by hate speech, comes after them. At best, this will be in the form of draconian legislation, aimed at stripping them of a huge percentage of their wealth. At worst, it will be with torches and pitchforks.

pleasant dreams

Bee Man Dave.