Survival__ Structuring Prosperity for Yourself and the Nation - Charles George Smith [139]
As described above, this true prosperity faded in the stagflation and ennui of the 1970s and was replaced with a credit/debt bubble-based simulacrum of prosperity which masked the diversion of national wealth and income to Elites-- a pseudo-prosperity which is now imploding.
Mass industrial/technical production owned and distributed by global corporations arose from the great efficiencies and profits created by concentrating capital, materials, transport, expertise and labor into monopolies/cartels. Fighting and winning a global war (World War II) greatly expanded the U.S. government's reach and size. These concentrations of capital, expertise, logistics, labor and control created fiefdoms of the State and a private-sector Plutocracy which partnered to extend a mutually beneficial global empire of so-called "soft power" influence and "hard power" military dominance.
Wealth and thus power is now extremely concentrated; at least 2/3 of the productive (income-producing) wealth and 60% of the income-generated wealth of the U.S. is held by 1% of the populace. (According to an analysis by the New York Times and Simon Cay Johnson, the top 400 taxpayers' tax rate was 17%--and that, recall, is on taxable income of $250 million each on average, a sum which is only a percentage of their total income, much of which is sheltered.)
From the long view, the cycle of wealth concentration has again reached an apex similar to that of 1929. The primary difference between 1929 and the present some 80 years hence is that the State has greatly concentrated its power and share of the national income.
Perhaps coincidentally but perhaps not, this cycle of extreme inequality aligns extremely well with the 80-year generational cycle mentioned earlier.
The Grand Failure of Government to Limit Concentration of Power
While much is made of the "balance of powers" in the U.S. and other democracies--the power of the executive branch being offset by the legislative and judicial branches--this "balance" completely failed to hinder the credit/housing bubble and the structural fraud and embezzlement at its heart. No branch of the "balanced powers of the State" saw any reason to interfere with the systemic looting and debauchery of credit and currency.
We should also note that in previous periods of extreme concentrations of wealth and high inequality, the "balanced powers" of the U.S. government did not reverse or even seriously challenge these long periods of high inequality. In this sense we should be careful not to overestimate the State's control over wealth concentration and rising inequality.
Despite the supposedly "leveling influence" of income taxes, wealth has become ever more concentrated in the past 40 years, paralleling the high inequality between the Civil War and the Great Depression. Neither the "trust-busting" actions of the Federal government in the early 1900s nor the rise of industrial unions reversed or disrupted the 1860-1930 period of high wealth concentration/high inequality.
This, then, is the grand failure of government: due to the concentrations of power accumulated by those with asymmetric stakes in the game, any attempt to limit a concentration of power is thwarted by the status quo. All the issues which so worried Madison in The Federalist Papers have come to full flower: the power of the State has been legally channeled into Elites which have nothing to fear from any branch of the State because they are the State.
Despite decades of attempted electoral "reform," elections in the U.S. grow ever more prohibitively expensive, and it is still legal to contribute large sums of money to politicians. The cliche has it that "money is the mothers' milk of politics" and as has been noted above, it is far cheaper to buy a legislative loophole than it is to pay taxes, build treatment plants, relinquish monopoly, etc.
These concentrations of