Ferreting Out the Last of the Hidden US Wealth
Americans, no matter how broke they might be, often fail to realize that years of steady saving have accumulated into huge tranches of money. When the over used phrase, always satisfyingly oblique, describing the US as "the richest nation in the world" is cast about, even casually, the words should be taken more seriously.
The reserve of US wealth held in various funds, trusts. federal banks and even more or less permanent policies by themselves is so great that it seems to be enough to literally inundate the world. For oligarchs and their political mechanisms, it presents an unrelenting obsession. Even in their sleepy fantasies their little oligarch minds are filled with dreams about absconding with every penny of these last reservoirs of such admirably responsible American saving and planning.
These embarrassing temptations for the "wraiths woven of sheer avarice" in their nightly apparitions drive them to sobbing episodes of teary eyed wet dreams.
During the autocracy of the unelected George W. II the Congress was able to make significant progress in the transfer of wealth to the moneyed class. In a typical Republican demographic scenario, the wealthy got wealthier, and the poor got poorer.
Now that the sheer panic of 2008 has turned into the melancholy toothache of 2014, we can look back at the "origins of our angst."
The first target selected by the oligarchs and their Congress for "redistribution" upward in the 2000's was the least protected and, hence, the most easily looted of the various, gigantic pools of US domestic wealth. The scheme to prepare the huge reservoir of domestic investment in residential real estate for "extraction" had taken months or years to put in place.
With the full -- and glaring -- complicity of the Republican Administration and the Republican Congress, the massive Federal mortgage institutions such as Freddy Mac and Freddy Mae obediently "loosened" loan qualification requirements to rapidly and recklessly expand home ownership and mortgage debt. "Private" banks and mortgage companies were shortly also caught in the net -- compelled by the Federal lending largess to compete with this new flood of debt and debtors by "adjusting" their own loan policies.
All this remained artificially "palatable" for the conveniently distracted securities traders. The mortgage paper was flowing into their grip at an alarming, astronomical rate, but this was seen as nothing less than a wonderfully serendipitous opportunity by those in the back office. US residential mortgages had a fantastic global reputation for dependable repayment and, hence, offering "sweet takings" in the interest ledgers.
By this time some really exceptional real estate price manipulation had gradually boosted the "market price" of much of these properties at an equally alarming rate. Home owners holding the equity of years of payments on their mortgages suddenly found their house values rocketing skyward. Second mortgages became extremely attractive, modestly priced and incredibly easy to negotiate.
None of this was coincidental. Absolutely none of it.
The paper holders immediately began to "blend" the mortgage securities enjoying legitimate good reputations with those which were barely worth the paper holding the signatures. The global market missed the warning from this ominous shift. World securities markets lurched uncontrollably into the promise of the outrageously leveraged potential for "interest profits." When the balloon burst, the "pop" not only flattened the US economy but also dragged international investors down the rabbit hole with it.
By this time it was 2008.
However, while this economic implosion was a crushing, crippling encounter for middle class people all around the world, the oligarchs were simply sitting back, preparing to issue the command to initiate "phase two" of their massive real estate "wealth extraction" scheme. "Phase two" was executed crudely -- but effectively -- by the likes of Treasury Secretary Paulson, Federal Reserve Chairman Greenspan, making whole with tax money all the bankers and securities traders who were the worst, most irresponsible players in "phase one."
Even those of us with "shaky memories" can remember this part of the history -- but even now, the pain continues.
These embarrassing temptations for the "wraiths woven of sheer avarice" in their nightly apparitions drive them to sobbing episodes of teary eyed wet dreams.
During the autocracy of the unelected George W. II the Congress was able to make significant progress in the transfer of wealth to the moneyed class. In a typical Republican demographic scenario, the wealthy got wealthier, and the poor got poorer.
Now that the sheer panic of 2008 has turned into the melancholy toothache of 2014, we can look back at the "origins of our angst."
Low Hanging Fruit First
Looting the equity out of real estate
The first target selected by the oligarchs and their Congress for "redistribution" upward in the 2000's was the least protected and, hence, the most easily looted of the various, gigantic pools of US domestic wealth. The scheme to prepare the huge reservoir of domestic investment in residential real estate for "extraction" had taken months or years to put in place.
With the full -- and glaring -- complicity of the Republican Administration and the Republican Congress, the massive Federal mortgage institutions such as Freddy Mac and Freddy Mae obediently "loosened" loan qualification requirements to rapidly and recklessly expand home ownership and mortgage debt. "Private" banks and mortgage companies were shortly also caught in the net -- compelled by the Federal lending largess to compete with this new flood of debt and debtors by "adjusting" their own loan policies.
All this remained artificially "palatable" for the conveniently distracted securities traders. The mortgage paper was flowing into their grip at an alarming, astronomical rate, but this was seen as nothing less than a wonderfully serendipitous opportunity by those in the back office. US residential mortgages had a fantastic global reputation for dependable repayment and, hence, offering "sweet takings" in the interest ledgers.
By this time some really exceptional real estate price manipulation had gradually boosted the "market price" of much of these properties at an equally alarming rate. Home owners holding the equity of years of payments on their mortgages suddenly found their house values rocketing skyward. Second mortgages became extremely attractive, modestly priced and incredibly easy to negotiate.
None of this was coincidental. Absolutely none of it.
The paper holders immediately began to "blend" the mortgage securities enjoying legitimate good reputations with those which were barely worth the paper holding the signatures. The global market missed the warning from this ominous shift. World securities markets lurched uncontrollably into the promise of the outrageously leveraged potential for "interest profits." When the balloon burst, the "pop" not only flattened the US economy but also dragged international investors down the rabbit hole with it.
By this time it was 2008.
However, while this economic implosion was a crushing, crippling encounter for middle class people all around the world, the oligarchs were simply sitting back, preparing to issue the command to initiate "phase two" of their massive real estate "wealth extraction" scheme. "Phase two" was executed crudely -- but effectively -- by the likes of Treasury Secretary Paulson, Federal Reserve Chairman Greenspan, making whole with tax money all the bankers and securities traders who were the worst, most irresponsible players in "phase one."
Even those of us with "shaky memories" can remember this part of the history -- but even now, the pain continues.
Next, The Casual Vivisection of the 401k's
...and everything else that wasn't "bolted down"
The second, largely unprotected target for the oligarchs' "looting festival" was all the "direct savings" invested in the stock market. Americans had been very determinedly plunking down a few dollars from each pay check for decades, and the accumulated wealth, largely destined to be retirement income, was simply left "laid out on the table," unattended in the rapidly deregulated brokerage houses of Wall Street.
Naturally, the attention of those in the "post labor" moneyed class was immediately attracted to such a "business opportunity" for simply further hollowing out the economy and pocketing the goods. Thanks to horrendous deregulation legislation from a historically suspicious, obedient Congress, no "Keystone Kops" style bank robbers were required.
Literally within a few months, the average wealth of Americans plummeted 40%. Part of this wealth consuming vacuum was provided by vaporizing house prices, but an also significant portion of "wealth reduction" was imposed by the "follow up" devaluation of the stock market.
Again, in 2014 this is history.
However, one side of that history is seldom explored. When all these assets suddenly "fluidized" and then "vanished," where did they go? Also interesting, where are they now?
When we look at the chart [above], we can see the "upward" flow of these mountains of redistributed cash. This "glorious prosperity" was not the result of good business practices -- the US and world economies were in a brutal nose dive. Further, note that this chart expresses change in share of total income, not total personal wealth. If we were to express how much everyone wound up owning after this "redistribution" scheme [2013], that chart would look like this.
When the dust cloud of all the 2008 economic violence settled, the top 10% of the wealth holders were doing great -- and getting richer faster than even before the catastrophe. When we ask "where the money went," this is where the money went.
It's still there.
The fact is that all this money which was "removed" from the personal wealth of Americans remains in the "not particularly visible" money bins of the top 10%. This explains why the US economy doesn't seem interested in recovering. This economy depends on consumer demand. The money consumers would have normally been spending to satisfy their demand is currently buried in the off shored asset columns of the oligarchs.
So, where they would be, according to the graphic, is somewhere near Seattle.
Granted, although Democratic Presidential candidate Gore was ridiculed in 2000 when he proposed that, for example, the US Social Security Trust Fund should be placed in a "lock box" to prevent Congressional "pilfering," his admonition has now become depressingly relevant, immediate and material. It turns out that the same folks who have been so anxious to proclaim the SSA bankrupt on every cracker jack microphone are precisely the ones who have, in fact, done all the "pilfering."
While the SS Trust Fund is not bankrupt, it IS carrying a huge amount of paper which was generated in the borrow and spend Bush W. autocracy. Unable to govern, the autocracy borrowed every dime that anyone would lend to it and still fell far short with a humongous string of annual federal deficits. Predictably, that string of annual deficits piled up into a whopping national debt over the years.
If you noticed a trend, you're not alone. The interest is in the range of $300 Bn annually. Still unable to govern, the Congressional "conservatives" [the same ones who parroted the "jobs, jobs, jobs" screams in 2010] see the "conversion" of the Trust's $2-3 Tn cash reserves as a last, desperate possibility for demonstrating "expertise" at managing the economy.
Of course, they have no idea of what "managing the economy" might possibly be, they don't particularly care what their reputation is and they have no particular appetite to "manage" anything anyway. They are maniacal wealth redistribution experts, and the owners of the Republican Party have long ago issued their marching orders.
Naturally, the attention of those in the "post labor" moneyed class was immediately attracted to such a "business opportunity" for simply further hollowing out the economy and pocketing the goods. Thanks to horrendous deregulation legislation from a historically suspicious, obedient Congress, no "Keystone Kops" style bank robbers were required.
Literally within a few months, the average wealth of Americans plummeted 40%. Part of this wealth consuming vacuum was provided by vaporizing house prices, but an also significant portion of "wealth reduction" was imposed by the "follow up" devaluation of the stock market.
Again, in 2014 this is history.
However, one side of that history is seldom explored. When all these assets suddenly "fluidized" and then "vanished," where did they go? Also interesting, where are they now?
 |
| Where, oh, where did the money go? (Mother Jones) |
 |
| Let's guess where the oligarchs are. [source] |
It's still there.
The fact is that all this money which was "removed" from the personal wealth of Americans remains in the "not particularly visible" money bins of the top 10%. This explains why the US economy doesn't seem interested in recovering. This economy depends on consumer demand. The money consumers would have normally been spending to satisfy their demand is currently buried in the off shored asset columns of the oligarchs.
So, where they would be, according to the graphic, is somewhere near Seattle.
Next, "Divvy-ing Up" What's Left
Where else have these "little people" been stashing their savings?
Handing the Social Security Trust Fund to Wall Street:
The Ayn Rand crowd's "favorite thing."
Granted, although Democratic Presidential candidate Gore was ridiculed in 2000 when he proposed that, for example, the US Social Security Trust Fund should be placed in a "lock box" to prevent Congressional "pilfering," his admonition has now become depressingly relevant, immediate and material. It turns out that the same folks who have been so anxious to proclaim the SSA bankrupt on every cracker jack microphone are precisely the ones who have, in fact, done all the "pilfering."
While the SS Trust Fund is not bankrupt, it IS carrying a huge amount of paper which was generated in the borrow and spend Bush W. autocracy. Unable to govern, the autocracy borrowed every dime that anyone would lend to it and still fell far short with a humongous string of annual federal deficits. Predictably, that string of annual deficits piled up into a whopping national debt over the years.
Of course, they have no idea of what "managing the economy" might possibly be, they don't particularly care what their reputation is and they have no particular appetite to "manage" anything anyway. They are maniacal wealth redistribution experts, and the owners of the Republican Party have long ago issued their marching orders.
Further, although this may be history, we're not just talking about the same Party. We're talking about the same people, the same faces.
This rowdy stuff hardly represents the exclusive opinion of MeanMesa. Read more from both ends of the ladder:
Daily KOS: We DID Need a Lock Box
TownHall: Social Security Bankruptcy Coming Faster Than Expected
PoliticusUSA: Death of Repbublican Social Security Talking Point
A Glimpse at the America Oligarchy
So, when we speculate about what a US oligarchy might look like, we are neither speaking of some ghostly issue in the far distant future event nor of impenetrable, mysterious things which might, in the end, show up unexpectedly once we "arrive" at that foreboding destination. The country is well over half way there already, and abundant evidence of what "there" will be like is already well at hand.
Although our imagination might "script a movie" filled with violence and torment, punctuated by tumultuous conspiracies and even "official" coup d'etats, none of that awaits us. For the oligarchs planning their future as our new nobility, none of that will be necessary at all.
We are just completing what we can call the first act at the time of this post. The final act which will follow will be just as monotonous. None of the moments or scenes in the story line will leave any of us on the edge of our seats, either. In this story the oligarchs win, and everyone else loses. The onslaught will continue in its accustomed, tedious, tortured tempo -- quiet, complicated and relentless. Along the way down, any sudden injection of anything surprising will be unlikely indeed.
The think tanks have divided us into halves and set the halves at each other's throats. We progressives have very few champions. Those on the other side have none. They are cannon fodder -- driven by the terror of their medieval fears. They have volunteered for self-immolation.
Sen. Bernie Sanders: No to Oligarchy
By Nicole Belle - July 2010[Excerpt. Read the entire article here.]
But, not everybody is hurting. While the middle class disappears and
poverty increases the wealthiest people in our country are not only
doing extremely well, they are using their wealth and political power to
protect and expand their very privileged status at the expense of
everyone else. This upper-crust of extremely wealthy families are
hell-bent on destroying the democratic vision of a strong middle-class
which has made the United States the envy of the world. In its place
they are determined to create an oligarchy in which a small number of
families control the economic and political life of our country.
The 400 richest families in America, who saw their wealth increase by
some $400 billion during the Bush years, have now accumulated $1.27
trillion in wealth. Four hundred families! During the last fifteen
years, while these enormously rich people became much richer their
effective tax rates were slashed almost in half. While the highest-paid
400 Americans had an average income of $345 million in 2007, as a
result of Bush tax policy they now pay an effective tax rate of 16.6
percent, the lowest on record.
Yes, $400 Bn was only the "starter kit" for these oligarchs. Through all the "hard work" and "courageous risk taking" it took for them to "get ahead" [that is, "to claw their way to the top after they've paid off the Congress to fix the game..."] in a "capitalist" economy such as ours, these few hundred folks have now managed to turn this meagre investment of $400 Bn into more than $1.25 Tn.
We've been listening to the output of the oligarchs' think tanks and super PACs in a daily stream of rancid talking points for years now -- the same ones which mysteriously appear as "clone like identical copies" on every corporate media network across the country in a matter of a few hours. These might begin their "voyage" on some hare brained FOX hate chat show, but they inevitably emerge in the "news" coverage of the "alphabet networks" before the sun sets.
What have we heard? Does this stuff provide a clue as to what the oligarchs want us to think?
No.
If all this babble actually represented things which were, in fact, important to the oligarchs, we would conclude that they loved lots of guns, no health care, wide spread, confounding mistrust of the government, union busting, voter suppression, lots of permanently "illegal aliens," blown up abortion clinics, race war and so forth. Actually, oligarchs don't care even a whit about such things.
Oligarchs only care about money. That is always their first priority. Their second priority is to make their wealth permanent. All the crap their think tanks and media keep piping down our throats is designed to provide them with opportunities to further hollow out the country and keep the proceeds.
The three decades since the Reagan years have seen the US sink into alarmingly high levels of poverty -- one in six children in the US live in households below the poverty level. All that has been accomplished is a perilously unstable redistribution of wealth, a massive consumer debt, continuously descending wages and a looming shortfall in maintenance of the infrastructure.
We've been listening to the output of the oligarchs' think tanks and super PACs in a daily stream of rancid talking points for years now -- the same ones which mysteriously appear as "clone like identical copies" on every corporate media network across the country in a matter of a few hours. These might begin their "voyage" on some hare brained FOX hate chat show, but they inevitably emerge in the "news" coverage of the "alphabet networks" before the sun sets.
What have we heard? Does this stuff provide a clue as to what the oligarchs want us to think?
No.
If all this babble actually represented things which were, in fact, important to the oligarchs, we would conclude that they loved lots of guns, no health care, wide spread, confounding mistrust of the government, union busting, voter suppression, lots of permanently "illegal aliens," blown up abortion clinics, race war and so forth. Actually, oligarchs don't care even a whit about such things.
The three decades since the Reagan years have seen the US sink into alarmingly high levels of poverty -- one in six children in the US live in households below the poverty level. All that has been accomplished is a perilously unstable redistribution of wealth, a massive consumer debt, continuously descending wages and a looming shortfall in maintenance of the infrastructure.
![[image source]](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgmWl-C26oz7GblWzgSKKfGhZHI-6mueGbtF2zdHoCo1iy83OadE6ovlOKcLpDMNlpQtpq-Kz4EigjitliKg0ouVpCvyf-VGfqxYFepowropz4W-Q5IPf8UeaKfYcxlAbloDMRqvDt9zQI/s1600/New+York_oligarchs.jpg){kind=link}
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