On Park Avenue and Income Inequality

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My progressive friend and previous business collaborator Dennis Shipman asked me to look at a popular video on the election buzzword issue “income inequality,” entitled 740 Park Avenue. The film begins by chronicling the amazing economic disparity between Manhattan’s fabled avenue of billionaires, versus the poor version of the same named avenue on the Bronx side of the Harlem River, and from there makes for a compelling expose of how the super rich (the 1%, or the top 1% of that 1%) have disproportionate influence and control over the political and economic order. The full video can be viewed here:

Below are my comments on the claims made in the video (you’ll have to view it to follow many of my responses). In general, I think the elite’s negative influence is bipartisan and systemic to the entire establishment. The 1% and mega corporations use free market concepts, Ayn Rand, and opportunity rhetoric to promote their corporate welfare, cartel capitalist, and big government/big business collusion operations—so the former then get scapegoated for the ultra rich’s sins. Since I think the video makes its main point well, my comments focus on the non-liberty aspects of it, to wit:

1) The Good–Exploration of the influence of the super wealthy on the political order. The Bad–Its breakdown of the discussion along mainstream partisan lines (‘white hat’ party here, ‘black hat’ party there) which often turns the film into a bunch of cliched Democratic talking points. The documentary makes token reference to the influence of the elite on Democratic leaders like Sen. Charles Schumer, or the inaction of Democrats when they had total power in DC, but otherwise does not draw the obvious conclusion that both major parties are owned by the elite interests. Eg, the top five corporate donors to the two major presidential contenders were the SAME people—Goldman Sachs, Morgan Stanley, JP Morgan, etc. The documentary is silent on this.

The Ugly–It’s also silent on the ‘deep politics’ aspects of how the rich donate—etc, many environmentalist organizations are actually funded by the Koch or Big Oil set, since the protests against new drilling keeps more crude from being available, thus the false scarcity keeps the cost of oil up, and their profits high. The candidate that got the MOST 1% money (Wall St., top corps, etc) was Obama in 2008 and 20012, not his GOP opponents. A billion dollars in campaign donor money is already lined up for Jeb Bush, and two billion already lined up for Hillary Clinton–that is, they are both in the pocket of the rich. Hillary has made millions from hedge fund investments for a decade, and pays her female staff 70% of what she paid her male staff–so how is she going to pontificate on income inequality? Even the phrase implies some class of ‘managers’ must devise ways to ‘make things right’ for the rest of us. And who exactly will be in the overwhelmingly best position to appoint such overlords, to impose those egalitarian outcomes on the population? You guessed it, the 1% ultra rich influencers! That’s why some of us find it problematic to seek centralized solutions.

2) The role of the Kochs et al in influencing mainstream policy is duly noted, especially from dropping tons of cash around through their PACs and other front organizations, but the documentary overreaches in asserting they created grassroots movements (the Libertarian Party, the Tea Party). After Koch ran on the LP line in 1980, the brothers tried to take over the party in order to co-opt its message, so as to promote their big business agenda. THE PARTY KICKED THEM OUT instead. The tea party began in 2007 as an independent, non-partisan, ANTI-rich elite group with Ron Paul and the grassroots (who took no Koch money), and by 2009 was kicking out mainly REPUBLICAN incumbents from office.

THAT’s when the Kochs and neocons jumped in to co-opt the movement, and steer it into being another GOP group. The establishment tried to do the same to Occupy, on the Democratic side, but it pushed back against this, which is why they then sought to crush it. What the rich do is seek to dominate a ‘mainstream’ they control, and either absorb alternatives into it, or push them to the sidelines. The elite either try to co-opt independent movements (left friendly or right friendly) back into the two-party puppet show, or else marginalize them, but they do not invent the grassroots movements.

3) The video relentlessly knocks the “tax cutters,” arguing taxes are essential for paying the country’s bills, and asserts “tax cuts for the rich” is a main reason why income inequality exists. In fact, the current tax system is just 100 years old, and the country got the bills paid, the roads built, etc through tariffs and fees, without taxes for most of its history. Income taxes were pushed into being by the bankers, mainly as a means of paying the interest on the debt created when the country switched to the Federal Reserve central bank system 100 years ago. There was NO welfare state (corporate or individual) when both the Fed and the tax started in 1913.

The point of the new regime was to suck money out of the middle class through monetary inflation, mountains of public debt and taxation, into the bankers and 1%’s hands. Inflated dollars, equals less consumer spending power and diminished savings. So, why doesn’t mainstream discussion about income inequality ever talk about the role of the Fed, and central banksters in devaluing the dollar? This has been a far, far more efficient (and massive) way to generate income inequality, as noted by James Bovard: “The real 1% issue is how the Federal Reserve has rigged the economic game to crucify the middle class with zero interest rates. Folks who relied on their savings have been devastated at the same time the Federal Reserve artificially inflates stock values to benefit the richest Americans.” The elite has distracted the public about this by emphasizing left-right rhetorical battles over ‘the safety net,’ or baiting the rich ever since.

4) The video interchangeably treats the GOP, LP and various fiscal restraint movements as complementary lapdogs of the elite. Despite the occasional confluence on issues, the LP was founded in 1971 IN OPPOSITION TO Republican policy, and maintains the GOP only ‘talks the talk‘ on freedom or small government, using the rhetoric to push the agenda of the rich-backed, big government interests. That elite puts up this show of opposition parties who are divided by rhetoric only, with the exception of raising wedge topics at election time (dividing and distracting the electorate on moral issues, or race). The elite want most of the WHITE and conservative¬† population impoverished and middle class decimated, not just the blacks, or the working poor.

The documentary also castigates Gov. Scott Waker’s battle against “collective bargaining” and public unions in Wisconsin, by lumping opposition to the union demands with catering to the elite, while dismissing liberty arguments as ‘simplistic.’ The Libertarian principle is indeed simple–i.e., there should be no introduction of force or fraud to solve problems–and believes the more effective approach, that protects rights all around, involves upholding voluntary human action. “Collective” bargaining means compulsory involvement in union bargaining, or forcing some workers who do not consent to participate into funding its activity, thus depriving them of their liberty right not to associate. That is why it is opposed by liberty advocates, irrespective of the benefits of voluntary union organizing and bargaining.

5) The documentary exposes the super rich’s existence, and their tilting of the playing field, but spends 90% of the time playing along with the partisan games by attacking the GOP. That is what I found most disappointing. The real class war is between those elite interests who benefit from a massive state to further a corporate-fascist system that only serves the big guys, versus those who only want a state big enough to protect basic rights, but otherwise leaves the playing field level to let people get things done. In the meanwhile, if the playing field is tilted, play a different game than the one the rich have rigged. Opportunity should still be pursued, but on an informed basis that avoids the crooked game the elite has set up.

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