Weekend Thoughts: "We are the 99.9%"

Though this is a Weekend Thoughts piece, it starts with the headline quote, taken from a recent Paul Krugman column.

The quote is exactly right. It's Paul Krugman's writing, but it could have been authored by any number of people (for example, the guy who wrote Who Rules America). Krugman:

“We are the 99 percent” is a great slogan. It correctly defines the issue as being the middle class versus the elite (as opposed to the middle class versus the poor). And it also gets past the common but wrong establishment notion that rising inequality is mainly about the well educated doing better than the less educated; the big winners in this new Gilded Age have been a handful of very wealthy people, not college graduates in general.

I agree completely — "We are the 99%" is a great slogan. And it avoids that problem people on the left have with giving exact (easily forgotten) numbers. (The difference between left and right re numbers, in my view, goes something like this. "It cost $417,000" vs "It cost almost a half billion dollars.") "We are the bottom 99.5% just wouldn't cut it."

But in this case, the best slogan obscures a powerful fact:

If anything, however, the 99 percent slogan aims too low. A large fraction of the top 1 percent’s gains have actually gone to an even smaller group, the top 0.1 percent — the richest one-thousandth of the population.

And while Democrats, by and large, want that super-elite to make at least some contribution to long-term deficit reduction, Republicans want to cut the super-elite’s taxes even as they slash Social Security, Medicare and Medicaid in the name of fiscal discipline.

Krugman's right that it's a war between the Top 0.1% and the rest of us. (You have to get to the top 0.5% just to stop working for a living. At the lower half of the top 1%, you're just a wealthy enabler, one of the well-paid who oversee the running of the gears and wheels of empire, for example, an upper-end doctor, lawyer, or corporate manager.)

"Who are the 0.1 percent?" Krugman asks.

Very few of them are Steve Jobs-type innovators; most of them are corporate bigwigs and financial wheeler-dealers. One recent analysis found that 43 percent of the super-elite are executives at nonfinancial companies, 18 percent are in finance and another 12 percent are lawyers or in real estate. And these are not, to put it mildly, professions in which there is a clear relationship between someone’s income and his economic contribution.

Now before you go thinking of CEOs as "working for a living," give thought to what they actually do. The function of a corporation is to operate as efficiently as possible and pass all new wealth into the CEO-level mahogany suites. That's not working for a living, that's owning a gold mine and cashing its checks. The top accounting people, they works for a living, and the CEO pays them. The CEO, however, works for himself, and collects the corporate skim, which in this case is as much of the profits as he can pocket.

(Think I'm kidding? Corporations are controlled by their Boards of Directors. In Dino Days (before the 1970s), boards were controlled by shareholders; thus shareholders could be said to own corporations. Today, boards are controlled by the CEO class operating as a group, sitting on each other's boards, and especially each other's compensation committees. That makes them owners in fact.

It's the perfect scam, collecting the wealth of all of the engines of commerce. Near the bottom of his article, Krugman makes the same point.)

I'm not going to be as prescriptive as the Professor. He says, simply enough, that the Top 0.1% should pay more in taxes. Yes, as far as it goes, but the system is rotten from the core — that they don't pay their share is the effect, not the cause. What's the cause? The mega-wealthy (and the mega-mega-wealthy at their heart) have power surpassing their dreams, and with that power, they have taken us beyond the rule of law.

Click here, and look at the chart. The last two dots are the income of the top 0.5% and 0.1% of taxpayers. Can you imagine where the dots for 0.01% and 0.001% would be? (Hint: Near your ceiling.) It's power that gives them that wealth.

So yes, Krugman is right; it's the 99.9% against the rest, the Top 0.1%. Believe me, many in the lower half of the top 1% are very sympathetic to the Occupy Movement; Krugman, who still works for a living, is one.

But let's not take our eyes off the real ball. This is what an investment advisor to the super-rich has to say about the Top 0.1%:

[E]ntry into the top 0.5% and, particularly, the top 0.1% is usually the result of some association with the financial industry and its creations. I find it questionable as to whether the majority in this group actually adds value or simply diverts value from the US economy and business into its pockets and the pockets of the uber-wealthy who hire them. They are, of course, doing nothing illegal.

It's all about the skim. You can't get at it from just the 1% level; it has to be given to you by the real thieves above.

Yes, we should stay with the "99%" slogan — it has great power and pull. But the real theft (perfectly legal as always) starts at 0.1%. These are the top predators, the only group for whom everyone else is prey.

You have to take away their power to take away their money. Mostly this happens in a messy, uncontrolled revolution.

Better the controlled one that the Occupy Movement has started. If I were Occupy, I'd start thinking about next stages. (I hear Jamie Dimon has a New York address. Wonder what imperial storm troopers round that joint would look like.) And next stages after that.

The only power we have is to clog the wheels. But if we do, and persist in doing, the machine will certainly stop.

Or morph into something even the willfully blind can't ignore.

Take away their power and their money will soon follow.

GP