The Reign of the One Percenters: Income inequality and the death of culture in New York City

[highplainsdem]

http://www.orionmagazine.org/index.php/articles/article/6470/

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Talk is cheap, anger without action is a turnoff, and even at fifteen my daughter sensed that her father’s rage was born of impotence. I thought of Mark Twain’s line, “The human race is a race of cowards; and I am not only marching in that procession but carrying a banner.” A few weeks later, Léa was gone, back to France, where she lives with her mother. I had new material to chew into bitter cud. It was a report titled “Grow Together or Pull Further Apart?: Income Concentration Trends in New York,” issued in December 2010 by a Manhattan-based nonprofit called the Fiscal Policy Institute (FPI). The twenty-five-page report only quantified in hard data what most New Yorkers—the ones struggling to survive (most of us)—understood instinctively as they watched their opportunities diminish over the past three decades.

New York, the FPI informs us, is now at the forefront of the maldistribution of wealth into the hands of the few that has been ongoing in America since 1980, which marked the beginning of a new Gilded Age. Out of the twenty-five largest cities, it is the most unequal city in the United States for income distribution. If it were a nation, it would come in as the fifteenth worst among 134 countries ranked by extremes of wealth and poverty—a banana republic without the death squads. It is the showcase for the top 1 percent of households, which in New York have an average annual income of $3.7 million. These top wealth recipients—let’s call them the One Percenters—took for themselves close to 44 percent of all income in New York during 2007 (the last year for which data is available). That’s a high bar for wealth concentration; it’s almost twice the record-high levels among the top 1 percent nationwide, who claimed 23.5 percent of all national income in 2007, a number not seen since the eve of the Great Depression. During the vaunted 2002–07 economic expansion—the housing-boom bubble that ended in our current calamity, this Great Recession—average income for the One Percenters in New York went up 119 percent. Meanwhile, the number of homeless in the city rose to an all-time high last year—higher even than during the Great Depression—with a record 113,000 men, women, and children, many of them comprising whole families, retreating night after night to municipal shelters.

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And what do the suit people do to earn such heaping returns? At one time, the financial sector could be relied upon to allocate capital for the building of things that society needed—projects that also invariably created jobs. But productivity is no longer its purview. Lord Adair Turner, a financial watchdog and former banker in the city of London—the other world capital of finance—recently denounced his class as practitioners and beneficiaries of a “socially useless activity.” Paul Woolley, who runs a think tank in London called the Centre for the Study of Capital Market Dysfunctionality, observed that the “presumption that financial innovation is socially valuable” was a kind of metaphysics. “It wasn’t backed by any empirical evidence,” Woolley told John Cassidy, a staff writer for The New Yorker. Structured investment vehicles, credit default swaps, futures exchanges, hedge funds, complex securitization and derivative pools, the tranching of mortgages—these were shown to have “little or no long-term value,” according to Cassidy. The purpose was to “merely shift money around” without designing, building, or selling “a single tangible thing.” The One Percenter seeks only exchange value, as opposed to real value. Thus foreign exchange currency gambling has skyrocketed to seventy-three times the actual goods and services of the planet, up from eleven times in 1980. Thus the “value” of oil futures has risen from 20 percent of actual physical production in 1980 to 1,000 percent today. Thus interest rate derivatives have gone from nil in 1980 to $390 trillion in 2009. The trading schemes float disembodied above the real economy, related to it only because without the real economy there would be nothing to exploit.

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Finance as practiced on Wall Street, says Paul Woolley, is “like a cancer.” There is only maximization of short-term profit in these “financial services”—they are services only in the sense of the vampire at a vein. There is no vision for allocating capital for the building of infrastructure that will serve society in the future; no vision, say, for a post-carbon civilization; no vision for surviving the shocks of coming resource scarcity. The finance nihilist doesn’t look to a viable future; he is interested only in the immediate return.

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Emphasis added.

This op-ed is a stunning critique of the One Percenters by Christopher Ketcham, who points out this is not just affecting New York but is "a global threat" with the One Percenters threatening "not merely the well-being of peoples but the very future of Earth." He says what is needed is "a new paradigm of disrespect for the banker, the financier, the One Percenter... What is needed is a revival of the language of vigorous old progressivism, wherein the parasite class was denounced as such. What is needed is a new Resistance."

[highplainsdem]

1. kick

[alcibiades_mystery]

2. Capitalism is the cancer

All this talk about "real economy" (presumably the horrendous exploitation of the industrial period) and speculation is nifty scapegoatism.

The capitalist worldview sees all previous forms of social organization as "primitive" because they didn't have unchecked capital accumulation. What it fails to see is that these societies were precisely organized to disrupt and ward off capitalism. That doesn't mean they were good ways - many were equally brutal, a kind of auto-immune disorder. But it's quite likely that one of the primary purposes of society in general is to ward off the impulse toward unchecked accumulation, accumulation for its own sake. We see such protections in nearly every society that predates the emergence of capitalist society proper. The point, of course, is to come up with better ways to ward off capitalism. If it's not too late, that is.

[tama]

3. Well said nt