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posted on 04 January 2018

How The Rich Make Themselves Richer

Written by , The Somist Institute

With passage of the GOP Tax Plan, we have witnessed one of the most disgraceful performances in the history of mankind: Rather than taking care of those who go hungry to bed at night and have no shelter over their head in a bitter winter night, through manipulation of the Tax Code members of Congress have voted for the forcible transfer to the 1% of the population of wealth that has been created by others and morally belongs to others. Make no mistake, this is the eventual result of current decisions. If wealthy people pay less in taxes, other people will have to pay more. For confirmation, see Stephanie Leiser.

concordian.economics.caption


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The Congressional frenzy occurred during the high holydays of Hanukkah and Christmas.

This was a period in which the religions were so enfeebled and partisanship so rampant that absurd blasphemy was proclaimed in defense of an accused child molester. A Google search confirms that not a pip was heard from the pulpit of the major religions in revulsion against the implication that St. Joseph was a child molester. How could the religions find the moral fortitude to defend the poor and the hpmeless?


what immoral power does: It benefits itself and its friends.


The passage of the GOP Tax Plan was a manifestation of sheer evil. There is no other characterization of this charade-like abuse of the "fiscal policy" of our nation.

Yet, the shame in this action of the United States Congress lies not in the naked exercise of power; that is what immoral power does: It benefits itself and its friends.

It is the intellectual source of this shameless manifestation of sheer evil that is truly worrisome; the assault on the public trough was justified with a lie.

The lie is that "the rich make us rich"; or that the rich create jobs; or that the rich create wealth. If confirmation is needed, see a previous essay by this writer or see Elliott Morss.

No. The rich make themselves rich.


Production of wealth without consumption is unsustainable.


The rich do not invest - they especially do not invest in risky ventures. On the contrary, being afraid of losing their money, they generally tend to hoard their wealth at home and abroad. I have in the past had occasion to remark what is the truth in these matters: It is the poor, who, by their sheer power of consumption of wealth, make us rich. Production of wealth without consumption is unsustainable.

But more must be said in the present context. One thing is moral acquisition of wealth by the rich, and another completely different is the forced transfer of wealth from the poor and the middle class to the rich.

There is much to be said on the latter form of capital accumulation. I will confine myself to the most important one. For a complex number of reasons, this is a vain type of action that in due time turns to the disadvantage of everyone.


One thing is moral acquisition of wealth by the rich ...


Syncretically, the Good Book writes that God punishes evil people by letting them fall into the "snares" they have created. What an elegant solution. See, Psalm 9:16.


... another completely different is the forced transfer of wealth from the poor and the middle class to the rich.


How will the debacle occur, technically?

We shall soon see that the accelerating power of greed will raise values on the Stock Market a little higher. The rich people, being relatively few in number, will make those values unsustainable. The majority of the people, with their incomes shrinking because of the forced transfer of wealth from the middle class to the rich thanks to the latest version of the GOP Tax Plan, will no longer be able to participate in Wall Street games. (Their tax deductions might at best take care of the cost of inflation). The collapse will inevitably come.

And it will come sooner than it would have without the transfer of wealth from the 99% to the 1% of the population.

Let me make a foolish prediction. The collapse of the Stock Market will occur before Easter.

Whatever this final outcome, there is something to be said about fiscal policy in general. Fiscal policy is involved in a dangerous zero-sum game of Robbing Peter to Pay Paul (RPPP). Our best hope for prosperity is to "Mend the Fed," as I have advocated in many papers.

If the Fed implements the monetary policy that I have long recommended, if the channels of public credit will be transferred from Wall Street to Main Street, if this transfer occurs immediately after - if not before - the crash, not too much damage will be done to the real economy.


Fiscal policy is involved in a dangerous zero-sum game of Robbing Peter to Pay Paul


Let the behemoths of international finance fall, the real economy will not be affected. A few financiers will lose their jobs. Yet, being highly skilled people, they can soon find employment elsewhere. Indeed, some of them will create their own jobs, perhaps the jobs they have secretly wished to create all their lives. And a few people might learn how to enjoy premature retirement.

If the Fed shifts credit from Wall Street to Main Street, it will become clear that the inflation of the values of financial assets, as well as their deflation following a crash, cover not much more than a manipulation of zeros. I have advocated for this policy many times in many venues, the most recent of which is a “Madison Document".


The lie is that "the rich make us rich"


This document opens the road to Peace and Prosperity. Peace and Prosperity will arrive on our shores, not because a few people want them, but if We The People want them. Do participate in the conversation.

The original purpose of financial activity was to aggregate small amounts of "savings" into large chunks to invest in the real economy.

For a number of years now financiers have discovered that they and their friends and relatives can become richer, faster, if they invest other people's savings in financial activities. To repeat, they thus invest savings in the creation and manipulation of zeros.

Good riddance to this type of "fake" activity. Good riddance to the lie that the rich make us rich.

We might soon be able to awake ourselves from the stupor into which the world of lies has thrust us. We might abruptly be able to distance ourselves from those who have fed us the lies of corruption - in words and actions. Do you remember? “Greed is good."

We might abruptly distance ourselves from those who propagate the lie that unrestrained, ruthless competition will make us rich.

With our minds free of the cobweb of lies, we might finally immerse ourselves in the truths of Concordian economics: the economy of concord; the economy of interdependence.

We might finally realize the economy of mutual respect of our human dignity.

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