Robert Reich
The Coffee Klatch with Robert Reich
America's growing zero-sum economy
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America's growing zero-sum economy

It's also where you find many of the nation's ultra-rich

Friends,

That Donald Trump is now hawking digital trading cards featuring images of himself as a superhero for $99 each tells you all you need to know about Trump and about NFTs.

The recent implosion of Samuel Bankman-Fried’s FTX crypto market offers another case in point. Months ago, FTX was huge. Now it’s a hole in the pockets of countless people who had put their money into it. (Until a few week ago, Bankman-Fried was one of the world’s richest people.)

Crypto as a whole is proving to be little more than a giant zero-sum game. Like NFTs, crypto’s current value depends on whether buyers believe future buyers will be even bigger suckers.

A large and growing sector of the U.S. economy produces nothing of value. Nada. Zilch. Every winner comes at the expense of a current or future loser. The only things this “zero-sum” sector produces are many of the nation’s ultra-wealthy. Money moves from one set of pockets into another — mostly upward, into the pockets of the ultra-wealthy.

Much of Wall Street is expanding this zero-sum economy. Derivatives, private equity, hedge funds, and funds of funds, are creating a few fabulously wealthy people who could vanish tomorrow and be barely missed for all the net value they produce.

Corporate law is another part. High-paid lawyers representing one corporation battle high-paid lawyers representing another. Huge sums of money are spent on these escapades. But there are no societal gains unless you equate one corporation’s victory over another with justice.

Management consulting? Advising corporations how to make more money by cutting payrolls, abandoning communities, busting unions, outsourcing abroad, and pushing more jobs into contract work doesn’t add value. Some economists dub these “efficiencies” but if the social costs inflicted on everyone else are included, it’s zero-sum.

Public relations? How much value is created by convincing the public that a particular corporation or wealthy individual is nicer or worthier than we otherwise believe?

Then there’s the so-called “wealth management” industry — advising rich people where to park their money and how to avoid paying taxes. More zero-sum games.

In reality, the vast and growing zero-sum economy costs us dearly. It uses the time and energies of some of the nation’s best-educated people. They do it because zero-sum work pays so much compared to, say, teaching or social work or healthcare or journalism or art or science or many other things that improve peoples’ lives.

You might think a rational society would heavily tax zero-sum work while subsidizing work that generate lots of social good.

But you’d be wrong because the political power of the zero-sum economy generates an even bigger zero-sum game.

At this moment, for example, lobbyists for big corporations and private equity are pushing Congress for a retroactive tax break that would repeal limits on how much corporations can deduct in interest payments on their debts. (The limits went into effect this year as part of the compromise that gave us Trump’s big 2017 giveaway to the rich.) If the lobbyists get their way, the revenue loss could be about $20 billion per year, or around $200 billion over 10 years.

A big portion of that windfall will wind up in the pockets of private equity mavens who take over companies using piles of debt they then deduct from the companies’ income in order to minimize tax payments. These individuals already get special treatment in the tax code because they’re allowed to treat their incomes as capital gains subject to a lower tax.

I just got off the phone with a staffer for the House Ways and Means Committee who told me she thought it likely that this tax break will be attached to the omnibus funding bill now working its way through the last days of this Congress. She admitted there was “no justification” for it but sighed “that’s how the game is played.”

And who do you suppose pays more in taxes to make up for what these corpulent felines don’t pay? The rest of us.

Zero-sum.

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Discussion about this episode

The rot in America began four decades ago, when the mildly demented Ronald Reagan became president. Tax breaks for the wealthy! Bust the unions! Government is always the problem!

But twenty decades of well-supported economic theory (i.e., not Friedmanomics) teaches that progressive taxation is a GOOD thing because a) it redistributes wealth in a way that improves the welfare of society (cf Denmark), and b) prevents anyone from getting too rich and therefore too powerful, for they will collude against society (i.e., those wealthy enough to pay for government lobbyists).

So, the experiment with trickledown is over. Friedman was a fraud.

There is only one way to reverse the rot: a sweeping Democratic victory in 2024 and a return to progressive taxation. Hopefully, the Trump-Desantis battle will help.

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Hear, hear! Reagan was indeed the beginning if the end. He seduced all those pension-earning blue collar workers into believing that they should stop investing in our society and simply withhold more of their own money from Uncle Sam. He didn't tell them that privatization would destroy their country in the long run. He sold them the lie about welfare queens. So their grandchildren now live in a pensionless gig labor world, paying huge costs of education and healthcare, while the infrastructure is neglected and a desperation plague of addiction and overdose has overtaken the country.

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Kerry, you are so right about Reagan. I do not understand how politicians even Democrats put Reagan in the same company as Lincoln and T. Roosevelt. Reagan did enormous damage to our nation in the ways described here but also in the cheating and cover-up related to Iran-Contra which told the military-industrial complex they can do whatever they want and get as many administration and military folks involved as you want and nothing will be done about it, even if it is illegal. Reagan was a Teflon guy too. None of the stuff he did ever stuck to him and his acting training let people think he was a decent guy. He wasn't. I want to shout that from the heights! Reagan was an awful president and at least as bad a human being. Just because most of the other Republicans in power are worse does not make Reagan good.

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We tend to be so charitable in our sentiments about the personally charming presidents who have brought immense disaster and suffering not just to Americans but around the world. Bush 43 is another example. But a guy who stood for peace and human rights as much as possible...Jimmy the peanut farmer? Despised, defamed, forgotten. Another American character flaw in the Hollywoodization of our political life. You think a bald Trump would have gotten elected?

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Jimmy Carter gave us Habitat for Humanity and it's global now.What an incredible gift to society!

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"Hollywoodization of our political life." What a perfect description. I remember reading that Abraham Lincoln would never have been elected President if TV had been around in those days.

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Well said, Kerry. Celebrity wins every time in America over intelligence and honesty.

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Hair. I think hair is really important in selecting our leadership. 😂😂😂

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Funny -- but do you know the story behind donald's "hair"? He asked Ivanka (while still married) whether her plastic surgeon did hair implants. Apparently the guy did. So off goes the orange sadist for his implants. He comes home, ENRAGED, finds Ivanka, and begins to beat her screaming, "YOU DIDN'T TELL ME IT WOULD HURT!!!" Terrified, she ran upstairs, cowering in a closet. She stayed there all night. This is from one of the incidents reported by her in their -- very sealed -- divorce papers. This one got leaked. Who knows what's in the rest of those papers. he is, indeed, a SADIST.

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kdsherpa, even though it was leaked, I had never heard that story before but have no doubt it is true. The man is crazy, always has been, but puts on a "good face." That along with his supposed huge amount of money lets him get away with really bad behavior: lying, cheating, abuse, and so much more. His cult, however cares nothing for any of that because they just love the image he shows them. They no longer even seem to pay attention to him as much as hold him as a treasure they don't examine too carefully because it might prove to be fake.

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His cult doesn't believe it. And he is able to fool the gullible as all Sociopaths do: a charming "front"; but only grift behind that mask.

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kdsherpa, I am pretty sure only some people see the "charm" Trump supposedly exudes. I have never experienced it in the very many interviews I have seen done with him, through his ridiculous campaign and other speeches, or through his TV appearances like "The Apprentice" which I saw twice and was disgusted both times. Perhaps, because he talks like a little kid, he tugs on the mommy heartstrings and lets them get pulled into his orbit. Maybe it's something about the way he looks that cons people too. Since my vision has never been good, I missed that. I do think most of his cult could not even tell you why they love him so. They really don't know as can be seen in the many many Trumpers and Trumpettes interviewed during campaigns to show some kind of "balance" in the media. They say things like "he believes what I believe" (with no follow-up questions who knows what that is). A variant of that is "He stands for what I stand for." They can't name one thing he has done that they like except perhaps, build the wall (which he didn't). Truly sad!

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Kerry, I believe the media have a lot to do with how we perceive and remember our presidents. I am always surprised to hear Carter so badly defamed when he actually did try to make things better, to broker peace, to include more diversity in his administration, and help the country recover from Nixon's and Ford's bad behavior (Ford let Nixon get away with cheating and lying and more claiming it was to "heal" the nation. It was really to get people to forget what Nixon had done). Biden has been working hard to clean up after Trump's disastrous administration, but as time passes, since Trump didn't bring our whole government down as he and his crew intended, Trump is going to be seen as less and less of a problem as time goes by. That is nuts, but the media will work that around unless we constantly call them out on it.

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I couldn't agree with you more. Carter was THE greatest President in my lifetime (and the first President for whom I was allowed to vote :-) He was not appreciated during his tenure -- was made fun of, in fact. It was downright nasty -- evil, even.

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It baffles (and angers) me, too. All I can figure is that they don't know their history and/or the fell for the B-rated actor's schmaltzy role as "President". He gave me the willies.

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Can we also point out the fact that Reagan, so-called conservatives and every heir to The Gipper's economic philosophies, enact policy decisions diametrically opposed to their stated platforms? They preach fiscal conservatism, while reducing tax revenues to explode deficits with runaway corporate giveaways and spending. They want individuals to pull themselves up by their bootstraps, denied social spending they call "government handouts", but lavishly dole out government money to help profitable corporations and industries, many of which outsource employment abroad. They love the troops but don't want to raise taxes to pay for them after injuries from the wars Republicans can't wait to deploy our troops to. Individuals, after many years of stagnant wages, have few interest expenses they can deduct but Professor Reich has alerted us to willingness to allow corporate interest deductions to increase, while keeping their lowered tax rates. They supposedly love families and children but are against policies that help young families exist. They want affordable pharmaceuticals for everyone but don't want any laws enacted that actually lower the cost because it's "hostile to businesses." For a party that claims to be for the middle-class, none of the things they champion are beneficial to me or my middle-class friends and neighbors.

As for the topic the good professor started off with, he's right. I often say that America used to manufacture quality goods for export that created a thriving middle-class that could save and acquire goods made here and abroad. Now we only have stores selling items made abroad, which most can only afford to purchase on credit, while this country creates little, if anything, with added value to export overseas. Hopefully the IRA that passed will rejuvenate new industries that make and export value added products that rebuild the middle class. The only things we export in great amounts now are suspect financial products. (CDOs, CDSs, NFTs, BTC etc.)

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C. Jacobs, you have nailed it. I call the Republican party the Hypocricans because of the behaviors you described. Whatever they claim to stand for, they completely ignore and alas, their followers either don't notice or are so bubbled up they can't see it while they blame Democrats for their middle-class, working-class woes. Republicans are really good at conning a whole lot of people who seem to be on board with it.

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All good points. And seemingly, we are in a country where half the people can't understand or accept the truth of them.

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The only time I ever argued with my dad, a Great Depression era guy was when riding in his pickup truck in MS and he was yammering on about how great Ron Reagan was. Actually it wasn't an argument, I only yelled (I don't even know if it was a word) and we both continued in silence.

He was a blue collar, union electrician all his work life. WTF I never understood why he would support the union busting president?

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Rob, I agree. In my case it was my grandfather who said how great Reagan was. That same grandfather, who raised his family during the depression, worshiped FDR and told me repeatedly how the New Deal and FDR had saved the country and later the world.

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Arthur and Rob, I know exactly how you feel. I grew up in a FDR worshipping family, too. But my grandfather and father were very very left of center. I simply could never understand the selfishness that descended upon that generation, the self-satisfied sense that drive them to continually vote down school taxes or to swallow the nonsense about welfare cheats stealing their money. They empowered the real crooks who proceeded to offshore all the jobs, destroy the unions, and shelter all their income from taxation. They were the same people who bought the domino theory and sent their kin off to a slaughterhouse in Southeast Asia, for nothing.

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Yeah, Kerry, what was that about? They were supposed to be "the Greatest Generation." I was very lucky because my parents stayed pro-union all their lives and were easily persuaded that the Vietnam War was just plain wrong. My parents were for the Civil Rights Movement too. They had their "faults" but they were pretty amazing.

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Wow! Did you ever hit the nail on the head! I started out as a young college grad and had almost joined the John Birch society back in the early sixties. Was infatuated with their philosophy at the time. I did vote for Kennedy but after that a string of Republicans ending after Reagans first run for office. At that time, the early 80's, we were in a tough economic trench with interest rates around 20%. IO had just joined the carpenters union and saw my wages and benefits stagnate over the next several years. And that is when I started to see all the lies coming down from the top of the economic pyramid.....from Reagan's acting right up to Trumps outright lies. The rest is history!As a member of a union I eventually became a business rep and had to deal with union members who probably make up members of the Proud boys and Oath Keepers. The union is what caused them to get great wages and benefits and protection from harassement from owners.

Today I deal with friends who worked for GM and they are devout Republicans. My own personal observation is they are homophobes, racists and antiabortion. They really haven't grown beyond those issues. Sad!

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Jim, how union folks can stand so squarely against so many people while not even beginning to recognize that the reason their wages stagnated was due to the very rich who wanted them kept down as low as possible to keep the money and power flowing to the top is beyond comprehension. I guess some people would rather cling to their hate rather than learn the truth.

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Don't blame your dad too much, Mr. Boyte. A proper education was nearly impossible and unnecessary for your father's generation! He, and the overwhelming majority of his genration, was never taught critical thinking, so he hitched on with a conman with a smooth sales pitch! Hell! My dad DID get more critical thinking training and STILL doesn't realize that Regean killed America!

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Good point about education! But how does that explain all the college educated people who still buy into the Republican lies? Money?

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Jim, I do believe it is money and the promise of power that keeps people supporting issues and people who care nothing for this nation. They probably want to be one of those doing the robbing, cheating, and more. How very sad to know that college is not necessarily a cure for ignorance and close-mindedness as well as greed.

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Good point Jim. MONEY and greed.

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Daniel, that's not the whole problem though. I was born in 1933. I dropped out of high school in Canada after the 11th grade. But I always questioned everything and read everything from the philosophers of antiquity to the daily newspapers. When I emigrated to the United States and eventually to California I was able to finally go to college. I received an AA (pre-Law) BA (biology and chemistry) MA (physiology). The opportunities in most of the liberal/progressive States were fantastic. I'm writing all this because it is our general environment that seems to have more influence, than the opportunities that existed. I was fortunate to have a father who thought I could do and be whatever I wanted, so I did. My mother on the other hand couldn't understand how I could prefer Jimmy Carter over (sigh) Ronnie baby Reagan. Carter wore blue jeans in the White House (this in her opinion was inexcusable) and Mr Reagan was sooo handsome. My response that Reagan didn't have a brain in his head didn't phase her a bit. Thank goodness my mother never became a citizen and couldn't vote. Believe me I never encouraged her (:-)

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Fay, you're a decade older than me. Hope your health is still good. As Lily Tomlin bragged as Ernestine the operator "You can't fool me, I am a high school graduate." That was my education, a 1963 diploma in a St. Louis public school. Working with collegiate co-workers I estimate it is equivalent to a Bachelor degree in some parts. (When my wife was going for an AA degree to get her RN certification, I did her humanities for her and got good grades)

BTW, to tell how bad the schools are in the South, my mom completed the 8th grade in St. Louis, married my dad & went to MS. My uncles were still in HS and she was helping them with their school work.

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It is very sad that the "better off" white people see it as their job to oppress the working class in order to keep both them and persons of color and 'others' (meaning anyone who isn't White, preferably AngloSaxon, and Protestant) in their subjugated place. Hence the low quality of the public schools. The only area in which they allow the slightest upward mobility is entertainment and football - ok also basketball. PS, I am white (not proudly) and I love football - just not the insane money connected with it.

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Some of it had to do with racism and the zero-sum perspective that has been used to divide the electorate for too long. Your father/family benefited from a lot of post Depression and Post WWII, government support (now called welfare) that very few black ppl got access to (unemployment insurance, assistance for home ownership, education, and business creation. Greater access to the jobs created by the resulting booms and good wages created by unions (the power-of-the-people). Creation of the suburbs, where covenants prevented black ppl from owning homes there. Redlining that determined that areas with black populations were of the lowest value and did not warrant investment for homes, or businesses- these locations are still considered low value and unworthy of investment- causing low tax bases that create limited funding for the schools in those areas; causing food deserts because businesses won't invest there; and limiting the wealth (hm equity) of the few blacks that actually own homes there, while other black ppl rent from slumlords who won't invest in the homes they rent in those areas). However, following the Civil Rights movement and legislation to help limit discrimination against black ppl. Republicans were able to utilize the Southern Strategy- by convincing white American's, who's families had benefited from government programs, that they should now be against government programs that could help undeserving ppl (black ppl). Reagan also used the "Southern Strategy" (see link below). I often wondered why these ppl voted against their own self interest. Turns out, they think they are voting against the interest of others, but don't realize that they are hurting themselves, future generations and ALL Americans in the process. [Lee Atwater, while working for Reagan's White House, explains how the "Southern Strategy (to attract racist voters, without sounding racist) had changed over the years. Black ppl say this is how racism changed over the years, from overt to covert- https://www.youtube.com/watch?v=X_8E3ENrKrQ] [also consider Heather McGhee's book- The Sum of Us, which demonstrates how voting against others (black ppl) getting government support has had consequences for us all- https://www.c-span.org/video/?516936-3/washington-journal-heather-mcghee-discusses-book-the-sum-us

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Yes, this. All of this! People would only willingly vote against themselves if they believed they were actually voting much more against those they believe are unworthy and undeserving. Many of the policies you succinctly listed continue to perpetuate downward pressure on POC, preventing many from realizing their own American Dream. Those who doubt this is a major cause, point out that lots of these policies aren't in place anymore. The fact is that they don't need to be. The length of time that policies like redlining did exist was enough to set the framework for the results to continue long after the policies ended. For the majority of the descendants of POC, iced out of the generational wealth that real estate provides, it leaves them at the starting block. Many of those whose families weren't restricted, are at the 200 meter mark, or farther, in the race to build wealth.

An Africana Studies professor of mine said something once about apartheid ending in SA. He was born and raised there under apartheid, before coming to America and eventually becoming a professor. As we celebrated in class about apartheid's fall, he said that apartheid was no longer needed. It was essentially the scaffolding to build the system of oppression. Those in power then could comfortably tear it down because the system is complete. As all of us are part of a country with unparalleled prosperity, we shouldn't allow ourselves to be pit against one another, attempting to hold people of different backgrounds than ours down, in order to allow ourselves to get ahead. This lie is told by those vacuuming up wealth for themselves, keeping the rest of us distracted and deployed by their lies to do their bidding. If the majority of us realize and convey to the robber barons that they can survive on a few billion dollars less, many more of our fellow citizens will wake up from their fog and vote for policies that help the most of us. There is enough to go around for most of us to be comfortable while some of us get rich.

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Thank you C. Jacobs for you well thought response. I am in total agreement and empathy with your entire post.

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You're welcome and thank you for giving my lengthy text wall(s) your consideration. I'm grateful to you, fyiurban, Ruth, Kerry, Rob Boyte and so many others on this platform providing and considering the contributions of others. I'm not on social media generally and much of what I saw there seemed toxic and ugly. I was introduced to Substack by thoughtful friends sharing Heather Cox Richardson's Substack with me. This platform, her posts, those of Professor Reich and Popular Information have opened up a whole new world for me.

I have shared my points of view in conversations before. Almost always, I would be looked at like a disheveled man screaming that the end was nigh in front of your local bodega. It's nice to find a community of thoughtful people, providing reasoned arguments and respectful discourse. May our practices here filter out into the world at large, and bring more of this respectful exchange of ideas back to in person conversations.

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Absolutely, racial division is just one of the many divisions that keep us fighting over 'tricle down' instead of having more for all. The division is a distraction and does exactly what you point out... it has some voting for policy that further empowers and enriches the wealthy few, at the top, who endeavor to keep us divided and thus powerless to prevent them from gaining more wealth/power, at the majority's expense. A house divided can not stand. Exactly right, the effects of those discrimative policies continues today, and the powers that be don't want white ppl to have this knowledge because they wouldn't be able to use the disparities as a wedge issue and because if they knew this history it would be harder for the power that be to repeat their tactics which now hinder and harm us all.

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Thank you and Amen.

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Great Post, fyiurban, Persons of color, other language, ethnicities, have never been given a level playing field. That some people (Colin Powell, Andrew Yang, for example) pulled themselves up it was against the odds.

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Rob, you are lucky to have had only one argument with your dad. I know quite a few union folks who loved Ronnie. When I asked them why, they said something like that he was "good for America." When I mentioned his union-busting before and after he got into office, they told me I got it wrong that he was a union man. Reagan had a way of lying believably. I know that is a result of his acting even though he was not a very good screen actor. I guess he had the look which covered for a mediocre talent and a pretty poor president.

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Ronald Reagan, the Acting President.

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We should all remember that Reagan was little more than another Republican puppet. A face and voice to the power and money brokers who controlled him. The sad and funny thing is that they definitely bit off more than they could chew with the ex-Pres, though, lol.

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So true. Imagine what went through Rex Tillerson’s corporate brain when he finally realized he was working for a lunatic.

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Ironically, USELESS BILLIONAIRES are the "wellfare queens." The average destitute red-stater still pays more taxes than any of them. (Remember: Bunkerboy, the "bigly wealthiest man ever believe me" only paid $750 in taxes one year.)

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Thank you, Daniel, thank you. I have been saying this for years. We spend way more on Corporate handouts each and every year than all the "welfare" programs put together. Also Social Security is not welfare, it has been paid for since 1935 with wage deductions from working people. If it weren't for the damned legislature dipping into it it would still be solvent. (SSI for example should have come form the Health Department - not Social Security, widows and children was another big dip.)

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The thing that hurts the most is that we pay our fair share of taxes while these thieves don't.

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It's a program of government welfare for the uber rich, so the wealthy are now Welfare Queens. Or look at it another way, it's the new Socialism.

"Steal a little, they put you in jail. Steal a lot they make you a king."

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Michael, how is it we can't get the message out there that the ultra-rich are the actual welfare queens. We need a big campaign with that as the theme. Ask people "why are you OK with the corporate welfare queens taking your money to pay for their yachts, mansions, and taking over your business so you will lose your job?" "You need to stand up and demand your senators and representative stop the steal of your tax money for the ultra-rich welfare queens?"

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Agree, but we remain unable to get folks to understand the welfare to even the gas and oil industry. Even the high prices for gasoline recently blamed Biden, not Russia or excess profits.

I wish there was way for the 99 percent to understand that we are all in this together.

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Ruth, the main reason we can't get this out there is Corporate Media. Most people in the United States watch TV for their news. Very few read newspapers any more. The last thing Corporate Media wants is to kill their goose laying the golden eggs by telling ordinary people that their sponsors and themselves are really the gluttonous greedy sucking up their tax dollars. I know younger people get their news from internet and smart phones but with the exception of Inequality Media most of the "news" I see is about some stupid celebrity so I don't read it.

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Most folks are really surprised when I tell them we don't have TV. My wife has never been a TV fan and when we moved to the mountains in retirement we just never got it. We installed internet, slow at first and now at a fair speed with a microwave point of sight system from a mountain across the way. Still would like fiber but have to fight with the local utility to get that because they bypassed us. When we travel we will turn on the TV for about 10 minutes but that about all both us can stand. We get movies on DVD from Netflix, (which may close DVD by mail next year). One of my frustrations is the pushing of everything video - I can read at least 5 times faster than I can watch.

Best news coverage is the BBC even for US news and it just fine in print on line.

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Agree. I do have TV, but right now it is covered with reindeer, I use it so little that it's turned on maybe once or twice a month, mostly to watch my DVDs. Now my computer is another matter, I'm on it 5 to 10 hours a day, which is not good for me either, but what can I say, I'm addicted,

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Ruth, I like it!

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They win through "gamesmanship." This is the kind of stuff taught in graduate tax programs and business schools. The key pioneers of game theory were mathematician John von Neumann and economist Oskar Morgenstern in the 1940s.

Mathematician John Nash is regarded by many as providing the first significant extension of the von Neumann and Morgenstern work.

https://www.pbs.org/wgbh/americanexperience/features/nash-game/

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Daniel, I particularly appreciated your reply, because, for layperson’s like myself, Ron Howard’s film A Beautiful Mind introduced us to Nash’s Equilibrium, whose tenets, over 20 years later, remain at the heart of how we approach conflict resolution.

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Great quote Michael

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Daniel, I agree. It seems a lot of Americans do want those ultras to pay their fair share of taxes, even more than that, but the message never seems to get through to their elected representatives who just keep on voting for more and more benefits for those guys, constantly telling us it is to protect jobs. Rubbish! as Dr. Reich would say. It is to get those donations that pay for their campaigns.

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You are so right! The Powell conspiracy produced Citizens United, and all the corruption that preceded it. The history of the US is a story of one country with shining ideals and a regressive elite constantly seeking to renounce them.

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Kerry, you pointed out something I had not considered in that way, a nation with ideals and a rich elite with none and a desire to undermine those ideas so they can benefit at everyone else's expense. It works well when the electorate is kept ignorant of what is happening until it is too late. I am thinking that's where we are now if we the people don't use our ideals to stop the runaway elite money/power-grab.

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I fear that 40 years of systematic and careful organizing by the ruling class has created a monolith that can't be toppled. We wallow in greedy, narcissistic materialism while bemoaning the zero sum game that Dr. Reich describes, while secretly wishing that we were at the top with the rich. It is evil incarnate. Evil has won. I wish I believed otherwise. Also, it's a worldwide game; the rich only have allegiance to their money, certainly not to each other. No ideology except what will distract the masses. oh well.

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It'll be difficult, I know, to reverse this, and America may be at the same point as Rome in the 5th century, when two Roman senators owned Africa and there was massive corruption.

On the other hand, I'm an optimist. I still see value in the fact that 70% of Americans have quite liberal views, such as universal healthcare, abortion rights for women, higher taxes on the wealthy, LGTBQ rights, etc.

The problem we face is that Trump and Desantis are vying for the dumbest 30% of the electorate. They simply adore Trump, so DeSantis will have his hands full. You only need another 15% of the electorate to become a Republican president. This 15% comes from the so-called independents, who basically have just about enough money to vote for their 401Ks.

If the stock market is rising in 2024, and if Desantis and Trump are eat each other's throats, then I think there is a real possibility of liberal reform.

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DeSantis/Trump will have been resolved long before the elections. I'm sure a lot of blood will have been spilled before then, and I am betting that DeSantis will sally forth with the blessing of the orange Sauron. I'm also betting on a VP nominee who is either Noem, Hailey, Stefanik, or even possibly Stinkeye Sarah from Arkansas. There will be a unified GOP on the field.

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1. IMHO Republicans will unite. Birds of a feather.....

2 ."It's a worldwide game;" Many shareholders of US companies are foreigners. Do not live here. Many do business, earn from the US market. Most avoid paying taxes.

3. Too many pikers. A Treasury Department watchdog report found that the IRS failed to collect over $2.4 billion in back taxes from those making more than $1 million a year. https://thehill.com/policy/finance/543679-irs-failed-to-collect-more-than-24-billion-in-taxes-from-millionaires-watchdog/

IMHO this is the tip of the iceberg. Millions of US residents work "under the table."

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True, and noticed the 87000 auditors Biden added to the IRS had the Republicans gnashing their teeth. The best they could come up in response was the lie that the IRS, obviously, would attack lower and middle income people and add to their tax burden. Thankfully the news papers corrected this to state NO, it's for people earning in excess of $400,000 per year

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I agree, Paul. But right now I see a glimmer of a silver lining; Elon Musk was booed off the stage in San Fransisco and crypto currency is tanking. The end may be in sight - far sight, but still there.

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Michael, I agree that a huge Democratic win in 2024 could cause this nation to change direction. I am not sure how to get that going. We do have the good people to do it but how do we convince enough people in "middle and southern" America to stop looking for the "R" and start looking for the person who actually cares about their situation and will help them do better, that they don't need a Trump or any of his kind to help them because those guys won't. We need to get started now!

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Ruth, see my comments below.

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Boy oh boy, I couldn't agree more.

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Dec 16, 2022
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Crisis after crisis...the trillions found for wars while our schools and communities crumbled, the trillions found to bailout corporations responsible for the real estate crash, the trillions found for shareholders during COVID while the people worried about heat, food and rent, and of course, the trillions going to a small section of the population for decades while worker productivity skyrocketed and their purchasing power stagnated or dropped....it has all pointed to the same lesson...

From the very start of our nation right through today, the story of America is one of exploitation dressed up as innovation. We steal, suppress, enslave, siphon...and then a compliant media and purchased elected officials and carefully crafted textbooks and executives who already made it or dream of doing so paint a completely farcical picture of a country filled with brilliant ideas dreamed up by god-like titans who must be praised and followed and heard on every single topic. In truth, we are a country with some decent ideas and creators and millions of overworked, fearful, brainwashed, paycheck-to-paycheck wage slaves unable to speak up, change jobs, or sufficiently mobilize for the rights and pay and treatment they deserve thanks to regulatory capture and the destruction of every meaningful effort to provide healthcare, affordable housing, economic mobility, a fair tax system, childcare and support for worker organizing.

This will very likely end in the streets. The only real question is how much of the US will still be standing by the time that happens.

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Ian, I know America is more than just exploitation. If that were the case, people would not have flocked here. You are right though that a few men got ideas that made serious changes in our society and that there were always men there to take advantage, but as bad as things are now, poverty is less than in the past. Women are not worked to death trying to care for bunches of kids and a child-husband. Women have more options and if the ERA were certified, we would have even more. There are schools to provide education for all of our kids, not just the children of the rich. The schools are not necessarily great, but that is primarily due to those elites trying to undermine them because they do produce educated people who, if permitted, can think and make decisions for themselves. If we can get just a few more people in Congress and a bunch in state legislatures who decide they are going to stop bowing and scraping to the rich, some serious changes will happen. Then, there's global warming which is going to turn everything on its head if not properly addressed and the fossil fuelers are not silenced. We can do that if we have the will.

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Those and other improvements are absolutely real, but the larger questions are, at what cost and do the circumstances that allowed them to be created still exist? Often these things occurred by massive, sustained movements that forced such relative breadcrumbs of societal benefits away from the wealthy. More importantly, the policy changes and rampant corruption of the last four decades has specifically targeted the government institutions, the schools, the communication systems, the electoral processes, the freedom to organize, and the belief systems that made those things you cite possible. Doing so had the dual benefit of limiting popular movements and political power while simultaneously exploiting the population to work more and give up more of their time, energy, attention, disposable income, and their hope. This is what we must acknowledge and address if we would like to not only maintain the things you mention, but to keep them from completely reversing course (see the current direction of women's rights, quality of education, ability of people to afford food and a home, etc.).

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Ian, you have presented a lot of food for thought here. These issues will have to be addressed by the people as well as by our agencies, education entities, and the rest. I am hopeful we can do it without excessive violence because it won't be the guys at the top who will be hurt. It is rare even in revolutions that they are harmed.

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So what to do? How and when will we be able to vote-in politicians sufficient in numbers who care enough for the country as a whole so laws, regulations, social values and safety nets, voting rights (get rid of electoral college ), across-the-board fair taxation, infrastructure, national industry, education, sensible economic policies à la R. Reich, etc. can be agreed and legislated upon? Who, what, how can explain it better than in tonight’s blog, but how long will it take for enough people to get it and elect majorities great enough to make the difference and effect the commensurate changes? Will Mr. Reich, will WE still be here to see this happen? Who, how, when will teach the public en masse what the few are reading here? How slow, how slow the progress..... what dreadful situations will we have to experience as a country, as a world, before it is too late? Ok, chin up! Thank you again Mr. Reich. Would that there were such a position as Educator in Chief with regular national addresses.

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Oh Sonia, I like the idea of an "educator in chief" who would have weekly talks explaining current issues. Networks could be shamed into covering those talks. Dr. Reich would be really good at it. He could also appoint other educators to present issues they are experts in and know how to get information to people who are not experts in that area. As a retired teacher, I like it!

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THIS corruption is the core of our problem. It's what drives the political culture wars. If it's how the game is played, we need to identify whose influence was bought to attach that tax break for the ultra-rich to the omnibus bill. Those corrupt politicians need to be voted out. But we can't blame the others who pass the omnibus bill because it must be passed while they hold their noses. To blame the entire political class would be like calling every good apple in a basket a bad apple because one is starting to contaminate the bunch.

The New York Times has a series of articles about how legal but awful money business is costing lives by destroying hospitals. https://www.nytimes.com/2022/12/15/business/hospital-staffing-ascension.html

My friend and colleague, Alan Unell, has worked as a healthcare system analyst. He advocates universal healthcare in the U.S. and just started a Substack blog where he is detailing our dysfunctional healthcare "industry." This link leads to his post where he sums up how much we are getting short-changed and underserved. https://substack.com/inbox/post/90946759

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Gary, and in addition to the corruption in the medical industry, there is the problem of private insurance corporations trying to take over Medicare so they can provide the same crappy care to retired people as they do to younger people. That needs to be stopped before it goes any further, then universal healthcare needs to be put into place. I know the rich CEOs of the insurance industry will scream and work to find other ways to steal money and healthcare from the people, but we could force them out so they can live on the money they have already accumulated. We could treat them for their addiction to money and power too.

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I can identify them. The electorate electric is complacent. And not paying attention, they keep voting in corrupt people. 

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COPORATE WELFARE !

Why does a lawyer get to deduct the cost of leasing a giant suv and it gasoline cost . While a working poor can’t deduct the cost of a car mostly used for work.?

The poor are carrying the rich on there backs. If a corporation makes money it’s barely taxed, if a corporation looses money it’s tax deductible . Then we get to carry the debt. Corporate Welfare.

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Citizen, you have asked some good questions that should have good answers but don't. Corporations are supposed to be persons, according to the Supreme Court conservatives. If that is true, they should have to follow the same laws as individual persons. All the perks corporations have been given by our tax code need to be dropped or individual persons should participate in them too. The SC made their ridiculous ruling but they only wanted it to relate to campaign donations. Well, it's time it is expanded as it should be to include looking at corporate person loopholes that other persons don't get.

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I like the way you think!!!

For example how do you put a Corporation in Jail.

Steal a car go to Jail; steal a couple million you get a slap on the Wrist.

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Hey, Citizen, I am not sure how one could put a corporation in jail, but I sure would like to see some entity try it. Maybe it would involve breaking the corporation up into manageable size companies and putting the CEOs and the other C-suite guys in jail for a time then forbid them from being in charge of anything larger than a small business. Something should be done to punish those corporate "persons" for their crimes and general bad behavior.

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BS. Lawyers can't get company cars. Can get mileage to and from court or to another work site.

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He means the deduction for purchasing your own "small business" equipment (e.g. as a sole proprietor)...

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Not for law firms. Have to actually use equipment/cars for work to get a deduction. Only one "Lincoln lawyer."

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Not saying the argument is perfectly well-formed - just that the point is the same if one refers instead to office buildings, etc. (and probably temporally salient in light of the rise in interest rates & the skepticism due to private equity vis-à-vis its use of asset values which are not "mark-to-market", i.e. due to its orientation towards tax code arbitrage)...

PS. The point is the same even given the suggestion of "asset-lite" business primacy - which is what the 'Lincoln Lawyer' addresses, to a certain extent (though I don't recall if we ever hear about his taxes)...

= )

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Lawyer bashing bullshit -- not a scintilla (less than a gnat's eyelash} worth of relevance.

There are plenty of injustices but you and he are full of it.

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That's twice (you'd now be absent a paralegal too); please note for yourself that 'csh' was the default shell.

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"What's The Matter With Kansas" by Thomas Frank, 2004. How ..."the culture wars allowed the GOP to capture the populist language of social class and present themselves as the embodiment of working-class anti-elitism." And thus we have a large segment of the electorate that will continually vote against its own self-interest resulting in the outcomes discussed in Reich's piece.

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Another zero-sum "industry" with which I am professionally aware is the health insurance industry.

Companies vie to offer plans which they tout to big corporations and little people as meeting their needs and giving them "health" for their workers or themselves, respectively.

The last time I checked, insurance has done NOTHING to improve the health status of actual people. They just hoover up an increasing percentage of our inflated health care costs to fund more PR, more executive salaries and perquisites while finding ever-increasing ways to deny or delay claims such as prior authorization, limited providers, out-of-network charges and the like.

We have just ended the annual cycle of Medicare enrollment and the tsunami of Medicare "Advantage" plans has thankfully ebbed. They specialize in claiming how well their patients would become while simultaneously telling the gubmint how very sick their subscribers are (to get higher reimbursements).

Plus ca change, plus ca meme chose.

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Medicare Advantage is not Medicare and the advantage goes to the insurance industry.

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What would we propose as an alternative...?

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Yes. Doug the facts you've laid out are well presented in great detail in Wendell Potter's book DEADLY SPIN.

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I knew of Wendell Potter but had not known of his book. Thank you for the citation.

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Doug, lying clearly works well for the insurance business and our government seems to do as little as it can to actually investigate the things they are doing to harm the American people.

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Manufacturing is not glamorous. It requires sustained effort and real investment of time and money. But it adds value. The games Robert Reich refers to are glamorous and sexy. But they add no value. The money goes round and round while the manipulators siphon off their cut. So less money makes it around. And so on until many have nothing and the few siphoning off their cuts have everything. Manufacturing causes money to create more every spin.

Think of sand, cheap sand. Reduce it to silicon and add controlled impurities in a very controlled manner and you get a chip that may be more valuable than gold, ounce for ounce. Or rusty rock. Reduce it and add carbon. You get steel. Add copper, rubber, polymers, and other things and you get automobiles from rust and latex sap. We are evolving from supplying valuable manufactured goods to supplying raw materials.

We value glamor. We value wealth. We value manipulation over production. We value talkers over doers.

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Gordon, you stated this so well. The average person inn Kansas has no idea of what is being done to them. It is not that they can't understand, but they have been "programmed" to go about their busy lives, doing what they have to do to get by. They become angry about it, but find that Fox Not Really News is a great conduit for their anger and will tell them just what and whom to be angry toward. Fox Not Really News is run by some of those 0 Sum guys who want the viewers to be distracted from what is being done to them. If there were some way to get them to turn off that pathetic programming, they might look elsewhere and see how they are being screwed by the people they have chosen to represent them and the corporations who benefit from hurting the "ordinary Americans." How can we get through to them while we work to stop corporate corruption?

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Actually, it's the nitrogen life cycle.

2 basic theories of investment. Growth and value.

In manufacturing the relationship between sales and cost of goods sold should yield profit.

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The reply is too curt: the commenter has been subtly rebuked for agreeing with the original idea expressed by Professor Reich - but without pointing out the flaw in the reasoning which makes the original sentiment more like blowing off steam than a criticism which holds its own water.

In short Daniel: trading is not investing - and the fact of something being abstract doesn't mean that value was not created/destroyed in its processing (note the calls for software - now that it is far from a passing phenomena - to be counted towards GDP).

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You're right to add art to the list of more "pragmatic" material objects that add value to our lives and our society. The great Irish labor leader, James Larkin, once said, "If you have but two pennies, spend one on a loaf of bread and the other on a lily. You need food for you spirit as well as food for your body."

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Maureen ; Ah, the Irish! It's not really all luck, is it?

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For much of history, if it weren't for bad luck, the Irish wouldn't have had any luck at all.

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Maureen ; The Irish know a few things about survival; and pretty much how to tell friends from foes.

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Much better than relying on luck

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Sometimes one can get lucky, though...

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Maureen, we do need bread and roses as the feminists have said too. Unfortunately, when poor people, you know, the ones who need public assistance of some kind try to buy the lily, they are called all sorts of ridiculous things like "welfare queen, welfare cheater, thief," and more. In our country, perhaps beyond, poor people are considered worse than thieves and blamed for everything. They are told they deserve nothing but the very lowest level of support in food as well as health care and housing. A whole lot of mostly men, but some women too like to point out that they started out poor, but made it because of their hard work. They forget the 4-letter word that actually helped them, LUCK.

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All the more reason they need food for their spirits.

For all the claims of the "self-made" men and women's claims, no-one makes it on heir own; besides luck, someone, somewhere along the line, believed in them, supported them, even if only emotionally, helped them to believe in themselves. Then institutions such as the state, the school system, their church, and, in many cases, their families, friends, and neighbors, provided the physical infrastructure--and, often, some form of economic support--that allowed them to realize their dreams.

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Maureen, isn't it interesting just how much help "self-made" people get from all of those folks who are not the "self?" Those others were helping to "make" them when they were thinking they had done it by themselves.

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Totally agree.

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Let's connect the dots from the earth we're destroying to the marketocracy to cryptocurrency to social injustice to mass migrations to why aren't the entire GOP in prison.

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Well... already done: cryptocurrencies which utilize so-called "proof-of-work" algorithms allow for "mining" of cryptocurrency - which, in practice, amounts to arbitrage of electricity prices using computer hardware that (although partially recyclable) is largely toxic & consumes a limited supply of rare-earth minerals; much of the "mining" (no differently that real-world mining) takes place in regions with poor governance and a lack of capacity for environmental preservation... so the effort winds up distracting (or even detracting) with respect to long-standing (long-suffering) efforts at social justice in such places. If there is a factor of migration it is that of a moth to a flame - which, in the case of a democracy which works best when the people are not divided or otherwise distracted, works just fine for a party made of criminals & election deniers.

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Martha, Yes, I want to know why the GOP members are not in prison too.

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Thank you! Every word is truth! Our best and brightest stopped going into science and instead went into careers in FINANCIAL MANAGEMENT! Instead of producing something of value, the real money is is made by inventing some algorithm for information and then figuring out a way to charge everyone in the world a tiny amount. It's like licking your finger and sticking your hand up into the wind to get whatever will stick to it. And then you accumulate so much money you can buy all the Manchins and Sinemas you need to lower your taxes.

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Kerry, the problem is that we assume those guys are our brightest and best. They are not and never were. They did have every advantage that white boys and a very few girls could have and were coddled until they could not imagine themselves doing anything that would not make them rich and have even more power than their privilege and whiteness didn't already give them. Because they were presented as "brightest and best," no one questioned their prowess or paid enough attention to what they were actually doing with their coddled brains. We are now paying for that neglect. We could stop this with some really strong tax laws and some prison time and serious supervised community service for their bad behavior. I want to see if anyone in Congress has the courage to do this.

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It's cheaper to teach students that don't need laboratories.

See what I said about game theory.

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You mean to say computer science is just as useless as political science - or more so...?

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Thanks for another eye-opening wake up with my coffee. Heck I barely needed my coffee after reading this piece! Well… very barely…

Recommended reading: THE SCHEME: How the Right Wing Used Dark Money to Capture the Supreme Court by Senator Sheldon Whitehouse.

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Thanks for this, Anne!

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Absolutely, Laurie! Keep warm and safe… ⛄️💙🌞

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Anne ; you too! Enjoy your holidays!

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How about we work at changing the definition of profit? Instead of thing that profit only accrues to the owners of capital, shareholders and the like, it includes wages. A better paid worker is counted as value, not an expense. It means that a dollar going to productive labor is counted the same, in terms of a companies worth, as a dollar going into the hands of an investor. Paying labor would not detract from the observed worth of a company, it would add to it. This is a tough sell because our mindset rests on the false notion that money determines worth. But money is a medium of exchange, its value is given to it by a societies granting it trade value status. Its value is gone if the grower of a head of broccoli trades it directly for a half dozen eggs. No money is exchanged, but both parties in the barter obtained value. So why should the value of money given to labor be less than the value of the money given to capital? Here I am talking about social value, status if you will, not simply exchange. With the perspective, which is a total fantasy I admit, the market "value" of a company would go up when they paid better wages (and treated workers well) and go down when it did otherwise. Ponzi schemes would never go anywhere because money would not have any value in itself.

Fantasy aside, when money becomes the end itself, it becomes "a root of all evil", and this has been recognized for millennia. Whether it be Bankman-Freid, Musk or the grifters in the Pentagon's accounting office, we have a significant problem with the honor money accrues to its holders, and they only understand the ethics of Scrooge McDuck.

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The tax code of 1952 has all of this covered.

"In kind" income.

John Stuart Mill and Jeremy Bentham covered utilitarianism. How many utils does it cost to do your tax return?

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I just don't understand how we the people allowed the nearly complete corruption of our economy that Dr. Reich describes. I suspect it was because it happened a little at a time, first ignoring anti-trust laws, then union-busting, but each of these happening around the edges and with excuses that worked to mostly silence protests. Then jobs just disappeared overseas and tax breaks were given for the transfers. Then private corporations began taking over our prison system, abusing and neglecting prisoners for profit. This was a good group to move in on because most people care nothing for prisoners as long as they are prisoners. I have even heard people say "well, prisoners deserve what they get." Then hedge funds crept in, scooping up billions they could use to take over, dismantle, and steal from smaller companies. That was hardly covered by media until people who had lost their jobs from such takeovers started complaining and challenging the actions of the hedgers. Nothing changed, but at least some of us began hearing about it. Then, there was the tech industry, run by a bunch of wunderkind who had some good ideas, but got huge businesses started "in the garage" so missed a lot of the necessary regulation that could have helped stop the 0 sum gains we now face. Now they are so big and diverse they, like banks are considered "too big to fail." Those wunderkind left college before they actually learned about people and being positive managers, so often treat and treated their employees like dirt or tools to be used and discarded. After the 2008 crash, our government should have bailed out the mortgage-holders who could have paid the banks and ended up owning their homes at the same time, a win-win. Because banks were/are allowed to pass mortgages on to investors who have no connection with the homeowners, it would have been really hard to rescue the homeowners and no one wanted to take that on. That practice continues. I can't help but wonder whose idea that was. Now, private insurance corporations who are doing a rather crappy job taking care of regular folks being insured through their companies, are moving in to take over Medicare and the American people don't even know it is happening until a treatment is refused and they find out it is refused by a huge insurance corporation. It is a 0 some gain here, but in reality, the ultra rich individuals and corporations are doing all the gaining and we the people are doing nothing to stop them. We keep electing people who are in bed with those corporations and are totally willing to give them whatever they want no matter who it hurts. Not smart!

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Ruth, alas, it began with Reagan, was promulgated by Clinton, accelerated by W and by Trump. Obama is a very charming and thoughtful man, but alas not a great president - he too yielded to the corporations.

Uncle Joe is a step in the correct direction, for the first time in 40 years. Who knows what a Democratic sweep, on a liberal platform, would make possible?

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Is it possible to get those who know how the game is played (that would include you, right?) to turn the tables? This seems far beyond the reach of ordinary citizens. Your anecdote about the staffer for the Ways and Means Committee indicates that the system is thoroughly corrupt. Yes, I see what you're pointing out. Do you see any way to correct this?

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Easy. Make sure both Trump and Desantis run in 2024, then elect a Democratic president, Senate and House with sweeping majorities, then enact progressive taxation, closing of loopholes, campaign finance reform, and the repeal of Citizens United.

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Michael Hutchinson ; And while at it, end the Electoral College and all gerrymandering along with the filibuster.

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Judy Bertelsen ; Wouldn't that be having to be a whistleblower? It's a great idea to get the word out, but where would such a staffer get another job? Corruption everywhere!

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Seems like a dead end no win situation unless democrats get a set. This is not a way to defeat a mortal enemy. Aggression begets aggression. Overturn Citizens United, arrest and imprisonment for traitors, protect voters rights and most importantly expand the Supreme Court. We are always on our heels. It’s all about freedom. Fight like hell. Biden is a very effective wonderful president for getting things done in a democracy. It’s too bad that’s not the priority.

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Good Morning Linda. Just a quick quip from the past : From the ferengi Rules of aquisition , If enough is good, more MUST be better!? Their are several hundreds others to which capitalism as currently practiced has become their gospel .

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That’s the rot in America. Why some say there’s no difference between dems and hrepugs . It started with the smiling actor in 1980 who began giving tax money to his cronies. And

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Maggie mac ; and then he taxed Social Security!

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Excellent article.

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It saddens me that so many of our brightest young minds go into these high paying zero sum jobs instead of engineering where they could be designing better public transportation, cleaner energy, cleaner environment, and so many other endeavors that can help society.

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Even education can be thought an "industry"; it's not necessarily fair to lump all such efforts together (e.g. is helping consumers save money - or avoid being victims of fraud - tragic simply because its done under the auspices of a bank?)...

PS: In the eyes of plenty so-called "civil engineers" there is nothing short of a civility being extended in suggesting that anything processed by a semiconductor isn't real (neither is structural racism - who knew?)...

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The single most important thing that we could do to improve the situation is to eliminate preferential treatment of capital gains from our income tax system. This preferential treatment is a big part of what creates oligarchs like Jeff Bezos and Elon Musk. I’ve written about how this works at https://www.winwindemocracy.org/p/2022-04-growing-oligarchs. I’ve written about ways this could be fixed at https://www.winwindemocracy.org/p/2022-07-taxing-capital-gains-as-ordinary-income.

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Being reminded of this makes me feel hopeless. How do we change it? It’s so deeply entrenched in the way business is done right now. Everyone in power is paid off, one way or another, by everyone else in power, with our money, and after working for forty years, I just had to move in with my daughter or I would be living in the streets, a disabled senior. How do we change this?

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The corpulent felines will find themselves up a tree they cannot get down from. They need more and more wealth to feel safe and secure in a world that is getting more and more unlivable ; environmentally and socially. When they look in the mirror, they can't help but know that they are part of the problem. Their children will have a huge challenge finding a way to continue their increasingly unsustainable lifestyle. Who can rescue them? Bankruptcy may be a blessing in disguise. Or, unlikely jail. Hahaha ; If only!

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Yup. If enough is good then more MUST be better!!

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Rebekha Simms ; 'Poor' things! ; Nobody told them that "too much of a good thing could be bad".

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Please pardon my ignorance, but what the hell is an NFT? I've googled it several times and get different answers every time -- specifically, what does N-F-T stand for?

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NFT: non-fungible-token.

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Thank you, but what does that mean? It's bogus? Why not say, "usless valueless nonsense." Or something that means something to some of us who are not up on all the latest acronyms. There was never any reference to NFTs in my economics textbooks or money and banking textbooks 55 years ago. (Yes, I have degree in economics and journalism, and an NASD license.) I submit that if the media would have called these kinds of useless valueless tokens by their "real" names, a lot of people would still be holding their money. In my journalism classes of a half-century ago, we were always required to explain acronyms as part of the story -- as a courtesy to clueless people like me.

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I propose we talk about "bubble up economics" as an antidote to "trickle down economics". I'm not an economist, but for someone like me it makes a lot of sense to think that if more money is put in the hands of the lower demographic segment, ie, the workers, they will spend it and increase the GDP and value of stocks and make the top segment, the investor class, better off in the end. So it will make everyone happy. I realize that bubbles sound effervescent and fizzy, with the connotation of champagne, but I still like the sound of it and the image works for me.

So how do we make it clear that money to the 99% will make the 1% even better off. That is what is necessary to get those in power to go along...their bottom line needs to improve or they won't do it.

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Did the 1% ruin cannabis? (Did they improve it?)

PS: The thing that needs to percolate is education; the finance industry's orientation towards usury & regressive exploitation (e.g. check cashing & auto title/tire loans) ensconces poverty and reinforces inequality.

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Back a few years, when I was a child, I remember a Secondary School lesson which taught that the only REAL and justified ways to make money were by labor, resource extraction, and the invention of new ideas and products. All other profit was merely derived from those realities.

Now, however, our economy has been restructured under a false religion based on the inviolable holy grail idea of "free market capitalism" (which is, it turns out, whatever the "capitalists" say it is) to reward those who play games with money far and above those who do any actual productive work.

Wall Street, now the financial "Vatican City" which determines the value of any and all things, seems convinced that the perfect business enterprise is one with very highly paid executives and no other employees. If there are employees, they should be kept at slave wages. Robots are preferable to humans.

There is almost nothing REAL left in our economic system. It's all smoke and mirrors. In fact, it's really not a system. It's currently run by those who are motivated to use massive wealth as a way to make up for the internal deficits caused by their psychological dysfunctions trying to discover how to extract as much wealth as possible from their fellow humans with no regard for how that effects those humans or the planet. The only moral/ethical code seems to be that if you can get massively rich doing it, then it's perfectly acceptable.

It's impossible to put in the place the protections and barriers needed to prevent the entire system from collapsing because those profiting handsomely from the way things are (who are very busily trying to kill the goose that has laid their golden eggs, though they don't comprehend that they're doing so), now have a firm grip on the levers of civic power and will not allow such limitations to be created.

In the movie "Day After Tomorrow" Vice President Thacker comments, "Our economy is every bit as fragile as the environment," though he's making that claim for very different reasons. I fear that statement may be prescient, because we're currently so focused on the possible collapse of our climatic ecosystems when we reach some unpredictable "tipping point," that we're missing the point that we may face equal danger from an economy which is also likely to reach some similarly unpredictable "tipping point" and start to tumble uncontrollably as reality starts to exert its ugly head.

Indeed, it's all too likely that one collapse will trigger the other and right now, when we should be acting to protect the people of our nation and world, most of us are as oblivious as the people in Hiroshima were 80 year ago on that beautiful morning, right before all hell quite literally broke loose.

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We can’t forget the insanity that turned nuclear power into a weapon in the first place and also the insanity of the Emperor that led the Japanese people to bomb Pearl Harbor. Oh, and then there’s the insanity that led the German people to allowing the lunatic Hitler to come into power and then the insanity of following him down that barb/wire path to destruction.

If we continue down this same path of reasoning I could write page after page of the modern insanity like the one currently being fought by the Chinese people against their non-reasoning government concerning lock-downs month after month just to protect them from being human and getting sick. Or the Ukrainian invasion by another power crazy ass h—.

Then there’s the matter if pollution for profit, and oh, I forgot overpopulation that has caused si much mass extinction of wild life…I could go in and on.

My point being that until humanity wakes up and stops pigeon holing insanity and believing that everyone else is the bad guy we will neglect to see how we all in some way contribute to the get rich quick before we are enslaved by some mindless, low paying job and led around by power crazy politicians to fighting some meaningless war for profit and land grab. We study the history but can’t seem to put 2+2 together. We ARE the problem. Until we wake up to the fact that we are going nowhere, we will no doubt end up blowing ourselves and all of life up.

How much longer before our luck runs out as a species?

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High school English teachers need to dust off George Orwell's "Politics of the English Language" and have kids look into and through titles like Citizens United and the National Policy Institute.

In a recent conversation with a friend living in West Philadelphia, we mourned the loss of vibrant neighborhood as beautiful old homes have been bought by the ultra wealthy and left unoccupied. Blocks of these homes are dark at night.

Along with progressive taxation, we need to work to pass laws that protect our communities - in this case, for example, a law that would require owner-occupancy.

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I immediately go to: why isn’t this illegal?! (Like producers forcing the few ‘pro-sumers’ to recycle). Aren’t laws supposed to help? Then…I remember…the ‘supreme’ court and how they don’t care about 99% of the people.

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“Insider” reporting and limning of The Big Picture is why I subscribe to this forum. Way to go, Dr. Reich!

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As a former assistant to a philanthropist I can confirm every word you said. And I am not former because I was fired. He passed away.

For the rest us stuck here in the quagmire It's like I always say, "Thank G-d life doesn't last forever.

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The rich need to pay substantially more in taxes just to keep them from causing so much trouble with their excessive bundles of cash. (Shenanigans, in other words) The more money they have the more trouble they cause. Add that to being a tRumpleado... and you have not "good trouble" but true "bad trouble."

Such as January 6, 2021

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Ooohmmm......

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Will the voting rights act legislation be done before Republicans take the house? I am optimistic about the 2024 elections, however, voting rights legislation is critical.

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“And who do you suppose pays more in taxes to make up for what these corpulent felines don’t pay? The rest of us. Zero-sum.” The power of corporate money and lobbying! Control and change seem to be at the mercy of one party over another. With TFG, in broad daylight, we all watched the insanity of tax breaks for the wealthy while my own middle class bonus was about $20. Plus social safety nets were and are the first cuts for the repubs. In the Biden presidency we have more social programs but also more vetoes and concerns about losing them. And that is historic. TFG might never see the inside of the White House again but the repubs as a voting block are just waiting to dump every safety net possible. And as the electoral vote and the election and court corruption continue, changing that depressing fact takes a miracle. We need permanent change.

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They do not worry, the beneficiaries of their schemes ; They know the 'little people' will bail them out if they are big enough, won't they? Oh ; they are not 'legitimate' like the banks that were 'too big to fail' though. One would think that there would be some regulation after '08. Buyers beware! Without real enduring regulations this will happen again.

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Economics may not be the subtle and nuanced subject that, say, cancer is, but it is VERY complex, it seems to me. I think that, to correctly resolve an issue of the USA economy, one must be able to hold all the relevant considerations in one's dynamic memory while attempting the resolution. I CAN"T DO THAT! If no one can, is Artificial Intelligence and/or augmented memory to be our path to resolving these critical issues?

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Political power seems to be a game for rich people and rich corporations. I will continue to vote but that is as far as I am going. I am not giving money to these people since my tiny donations are totally swept aside by the millions and billions corporations give to our congressmen and senators.

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The rest of us pay more taxes to make for what large corporations and fat cats don't pay! There is a layer of business in the middle between the mostly zero sum financial services industry and the small business back bone of America. These firms do real work and provide real value. They also pay real taxes! Our company, from founding to sale operated 37 years. Our 149 stockholders invested money, time and effort, and we created a success. The company is still running under the new ownership, still providing good jobs and still delivering valuable services to clients. When we sold our stake the top 15 investors, who were all founders or front line producers, made some good money. But not one of us qualified for any of the tricky loopholes in the tax code! Not one darn deduction or tax credit!! We all paid our taxes! I can tell you that it makes you bitter when you pay more in taxes because the fat cats in the news everyday don't pay their fair share!

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It makes no difference what you call it, intangibility will not support an economy. After the iron and steel industry was too cheap to modernize and went overseas to where labor was supposed to be dirt cheap, the American economy took a nosedive. Billy Joel wrote “Allentown” in response to this, but America had become comatose and didn’t notice anything unusual. Then someone decided we needed an information economy. While it’s nice to know something others don’t, they can always acquire it, one way or another.

Then came the service economy, which wasn’t any better than the information one. This was when the phrase “would you like fries with that?” became popular with standup comics. I remember economists proclaiming we had a strong economy at the same time a lot of men were standing on street corners holding signs “will work for food!” What we have now is largely a global weapons economy. The problem the aerospace industry is having is there are so many conditions placed as to who can have what, some less developed nations are producing their own aircraft and doing a pretty good job of taking away American business.

Now we have crypto currency, something I view as spending a day at the unicorn races. The problem with unicorns is they are very shy and don’t come out when anybody is watching. They don’t leave tracks, which make them difficult to follow. It’s off to go bet on the unicorns!

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Pretty daunting and depressing and sad and angering and Issness as Usual. Homo sapiens - definitely a work in progress. In balance, our assertive inclinations and compassion for each other can work well, at least a times, for a time. Out of balance times produce enough unrest to self correct with violent revolution if the greedy inclinations prevail, or complacency, if the generous inclinations prevail, mulching the ground for greedy inclinations to be sown and grown until it turns into "Over Groan" again. Such a deal.

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While I agree with most of your comments, let me suggest some other "alternative facts.

Rice University History Professor Brinkley just came out with a book on Rachel Carson's influence on Presidents Kennedy, Johnson, and yes the N word, Nixon, Unlike banks I will give credit when it is due, President Nixon created the Environmental Protection Agency, signed the Clean Water Act, and celebrated the First Earth Day. It is less well known he destroyed Chemical and Biological agents, See Seymour Hersh's autobiography.

The real agent of influence is US Supreme Court Lewis Powell whose memo to the U.S.Chamber of commerce began the push back against Ralph Nader and the movement he represented.

I note Uncle Milton Friedman proposed his theories after he had tenure secured by the union of university professors. President Reagan spoke of the horrors of "Socialism" otherwise undefined. When he was hit by dementia, the horrible US Government saw to it he was taken care of. Reagan hd one other distinction. He was the first President of the US who had been a president of a labor union,. the Screen actors Guild, which, full disclosure, I am a member of,.

There is much more to it. I suggest your readers go the the classics, and read Charles MacCay's Extraordinary Popular Delusins and the Madness of Crowds, (1830), Financie Bernard Baruch said the book was worth a billion dollars to show him what to avoid..

Then there is the classic The American Confidence Man by Dr. David Mauer, if you wonder where the plot of the film the Sting came from read this book,

A Boston Newspaper, I can't recall which won one of the first Pulitzer Prizes for reporting on Charles Ponzi of Boston.

There is a famous misquotation. People think Santayana said 'those who don't remember the past are condemned to repeat it". He actually said "Those who CANNOT remember the past are condemned to repeat it," there is a distinction.

I would only add you cannot remember of forget that which you never knew,

For more information read the journalism of Barlett and Steele, David Cay Johnson, and Robert Reich

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Hey Ruth I might be a shock to you as it was to me when I found out in economics class the the formal definition of a small business was anything less than 1 Billion Dollars.

To me in the 1970 a billion was a pretty large amount of money. Just show how much we are like ants at the picnic

J.

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Industries that produce nothing of value like management consulting & public relations, could also include the many occupations that revolve around politics. Lobbyists, political consultants, etc. are like voracious monsters gobbling up ever more dollars as they grow larger and larger and spin off more baby industries like online political merch similar to Trump’s pathetic digital trading cards.

As time marches on America becomes increasingly a more service oriented economy than a manufacturing/product oriented economy. I’m not sure if that’s good or bad, but I do believe a service economy lends itself to money hoarding and money-hoarding widens the gap between the ultra-wealthy and large corporations, compared with the multitudes that can barely hang on financially from paycheck to paycheck. And it has been established that the larger the gap, the more unstable society becomes.

The question is, what do we do about it? The issue of what to do about it feels sort of like closing the barn door after the horses already got out, because our financial stability as a nation is already at risk from the enormous gap between the rich & the poor. So the gap affects our national security. They go hand in hand. I’ve often read that you can’t legislate morality but I’m afraid if we don’t have some sort of reckoning between the haves and the have-nots we can all live with, we’ll keep shooting ourselves in the foot. Similar to climate change analysis that predicts there will be more frequent weather disasters with increasing intensity, we’ll have more frequent shenanigans by the financial sector--facilitated by republicans--that leads to more frequent financial crises that have increasing intensity.

There’s one thing for sure, once republicans take control of the House and its agenda, any effort to do something to narrow the gap between the rich and the poor will be stifled. But, it’s not just republicans in Congress who are responsible for the gap, it’s also republicans on the the FEC. The FEC hasn’t been doing its job. It’s essentially a regulatory agency that makes sure candidates running for office are in compliance with campaign finance laws.

But the FEC recently let a US company being quietly bank-rolled by Russian oligarchs off with a slap on the wrist despite finding out it had illegally funneled Russian money to US candidates in the 2018 midterm elections. This was reported by two Democrat FEC commissioners in a scathing statement. Anyone who follows campaign finance knows the FEC has been ineffectual for yrs due to GOP commissioners’ opposition to any enforcement of laws designed to oversee money in politics.

But recently the agency hit a new low by letting a US firm, American Ethane, off with a deal in which it agreed to pay only a small civil fine. Based in Houston, TX and run by American CEO John Houghtaling, 88 % of American Ethane was owned by 3 Russian nationals—Konstantin Nikolaev, Mikhail Yuriev & Andrey Kunatbav The FEC report said that Nikolaev, an oligarch and Russian billionaire with close ties to Russian Pres. Putin, is the controlling shareholder.

FEDERAL lAW BANS FOREIGN MONEY IN US ELECTIONS. During its 4 yr investigation the FEC found that funds initially put up by Abromovich & other Russian nationals were then funneled to Republicans in Louisiana: Senators John Kennedy & Bill Cassidy. More specifically to a “Leadership” PAC run by Kennedy, and a “leadership fund” run by House Majority Whip Scalise. Two democrat commissioners, Weintraub & Broussard wrote, “The foreign-influence problem” has not gone away…to put it mildly.” “In this case, it’s beyond unfortunate that for 3 of our (FEC)colleagues, it was a ‘bridge too far’ to penalize the use of Russian oligarchs’ money to influence U.S.elections.”

At this point, it seems like wherever republicans are located in our government we can’t trust them to do their jobs honestly, or even semi-honestly for that matter. We’re dealing with ethical breakdowns

at the FEC, in Congress, in the Secret Service, the Supreme Court, the DOD & the DOJ to name just a few and so far, they all appear to be ethically challenged republicans. In fact, I would call it a

government crisis. We have two political parties--

one of them is thoroughly corrupt. I think we have to address that in order to address the gap between the rich and the poor.

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I pray not...

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This is right on! But you left out the health care insurance industry. These companies suck up about 20% of every health care dollar that we spend, and they add absolutely no value to anything. A single payer national health program would be MUCH less expensive and would cover everyone, cradle to grave. The government is more than capable of something like this. Medicare, Medicaid, and the VA system work beautifully.

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No social good from zero-sum economy? How about $800 billion for our bloated war economy? Talk about a less than negative sum? Not only is it pure waste, it destroys lives and property. The whole economy is a runaway train, based on debt and speculation. The problem arose when money became a marketable commodity unto itself, able to be amassed into the hands of the greediest. We might be better off with a non-circulating means of obtaining goods and services.

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MM, I really like your idea of getting Michael Moore's films out there to voters, particularly on college campuses with discussion groups and tons of publicity. I also would like Al Gore's films and those of others who actually care about our planet and nation made available too. Podcasts like Rachel Maddow's "Ultra" would also be an asset to the process. We need to inform people using public settings where they can respond to and talk about what they are seeing/hearing and feeling.

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I so agree. I’ve been saying for 40 years our country is in decline and I got into arguments about my perception. As the world levels out economically, we are not as preeminent as we once were. The most troubling aspect is the de-moralizing of our society. We no longer lead by exemplary example. Losing our moral power is the most damaging for the world. Indeed, it’s the most damaging for our nation. What makes countries and companies great is a magic elixir that I call serving. Serving the interests of all parties.

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I agree about the de-moralization. What we are witnessing is a decline in civility, in people taking responsibility for the way their actions affect others. A very dangerous trend IMO.

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"I just got off the phone with a staffer for the House Ways and Means Committee who told me she thought it likely that this tax break will be attached to the omnibus funding bill now working its way through the last days of this Congress. She admitted there was “no justification” for it but sighed “that’s how the game is played.”

Maybe just elect people who don't think that it is a game!

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I suppose all cultures have their cheats and grifters, but in the good ol’ U.S. of A. we have enshrined this as the exemplary model for life — i.e. the “smart” people are those who can “get the most” while “giving the least” in return.

I largely blame capitalism - at least as practiced here. Every person is essentially a lone agent, competing against others for gain. The goal is to “get ahead”, which of course means leaving others behind. Over the years, that can’t help but instill a chronic sense of isolation, mistrust, comparison, envy, and some amount of schadenfreude (satisfaction when others fail).

The worst aspect of the zero-sum mentality is the mistaken belief that others *must* fail in order for me to maximally succeed. That’s what largely drives today’s GOP and conservatism in general. And that is what drives this perennial “debt ceiling” nonsense. It’s a total non-issue, but it is a great way to castrate any social progress.

Zero-sum-ism itself is based on the perception that there is only ‘X’ amount of wealth in the world, and for you to get *any*, I must have less. It's as though we dig dollars up in a dollar mine, and there are only so many to be found.

The fact is, we CREATE wealth — even monetary wealth. The debt-based currency system we now utilize allows money to be created in any amount necessary to fund vital economic activity. So long as it is applied toward actual productive activity, there is no problem. However, when the zero-sum-ers hoard up the wealth in the non-productive activities that Robert catalogs above, that is when the the inflation/ recession/ austerity/ depression sets in.

It really doesn’t need to be that way.

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Something egregious that I never see talked about is class action lawsuits, where, even if you can qualify yourself by producing records you very likely don't have, you get something but usually not much. Who gets richly rewarded are the lawyers on both sides.

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I’m buying everything you say, Robert, with exception of wealth management consultants. There are a great many of us who have amassed a few million which is enough to retire BUT ONLY IF you don’t make any mistakes. Ergo, we rely on wealth management consultants—fiduciaries.

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Admittedly, this may be "sour grapes" (I'm not wealthy - at least by Western standards) but I quip that "If wealth managers really knew what they were talking about, wouldn't they already be independently wealthy and not need to work as wealth managers"? :-)

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How about a new Federal tax policy with a few simple rules.

1. All income above a living wage, no matter the source is, taxable.

2. Federal income tax starts at 1% per additional $10,000 above the living wage, then another 1% for the next $10,000 and so on UNTIL

3. The Federal budget is balanced.

Apply a similar set of rules for corporations, if necessary, although I think corporations should only pay taxes on their "surplus" cash..........surplus to be defined.

Think of the benefits with respect to tax law employment and so on.

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To Whom it may Concern: I need a way to contact your business office. I’ve looked all over and do not see Customer Service. In the past, I have paid $10 per month, seemingly having two subscriptions. That has just happened again, Dr. Reich. I had to sign up again today to get this comment on your site. However, $5 was removed from my account yesterday for this month. Now, it has been taken again today. Please contact me so I can stop overpaying for your site. I do value it. Terry Barber. Starheart43@hotmail.com

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Thank you so much for sharing this topic. I first became aware of this gullibility in Americans in the 90's when people were rushing to put money into the .com industry. These start-ups had no resources, no viable business plan, no reliable assurance of future gain, yet they managed to get on the stock market. In the early 2000's it was the mortgage scam - mortgage your home at ridiculous interest rate and pay only the interest rate for 15 years and then with the money you saved pay off your home. My youngest brother tried to convince me this was a good idea. What really happened was most of the .com's folded and the investors were left with empty bags, in the mortgaged homes, when the 15 years were up, the owner lost the house because they couldn't pay off the increased value of the home and the mortgage companies ended up with a $500,000 home free of charge. These is the sort of fraudulent schemes you would expect our government to both expose and regulate. But reality set in 2007 to 2008. The mythical bubble burst and ordinary middle class people lost everything they once owned, while the wealthy perpetrators of this fraud came out with tax paid bailouts (some of which they used to further entertain or enrich themselves. This is difficult for lesser educated to people to understand so grifters like Gingrich, McConnell, Trump, et al, could take advantage with pie in the sky promises, well laced with bigotry, homophobia, misogyny, racism. The answer should be to get rid of the greedy scammers in Congress, but that would take a better informed electorate (good luck with that) or an honest, surplus of politicians, dedicated to the good of all (good luck with that too.) Most of all we need to get rid of all lobbyists, and get money out of politics.

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Yes, cryptocurrencies do not meet the standard definition of a currency (store of value, medium of exchange, & method of account) - but in stating "Like NFTs, crypto’s current value depends on whether buyers believe future buyers will be even bigger suckers." cryptocurrency is criticized as would be collectibles or art... but no one would argue that such things are exactly an example of the "zero-sum" (really, zero value) economy that is being criticized; indeed, Professor Reich goes on to list examples of service employment that are also a part of similarly questionable economies but nevertheless are thought acceptable in his eyes ("They do it because zero-sum work pays so much compared to, say, teaching or social work or healthcare or journalism or art or science or many other things that improve peoples’ lives.").

On the LSAT the argument proffered would need to be thought to "make appeal to false authority" for proper credit; one could hardly be criticized as such when posting to their own Substack (arguments regarding the mental health of the public aside)... but if anyone wants to be strict about it they would be best served by noting that the fact of something being abstract does not *necessarily* mean that value cannot be created/destroyed in its processing (i.e. even if the ultimate arbiter of what belongs in the "real economy" is a subjective question one must ask of one's self).

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About financial management: I was a university professor. Beginning in the 1990s our professional manager consolidated retirement funds in ways I could never have done on my own. After retirement in 2003, the managing of the investments gave us the income we needed to buy a retirement house and to live. Plus, there will be something to leave our daughter. We could have never done this without help. I don’t mind paying a yearly fee for this advice and oversight. There are many different zeros in the idea of “zero-sum”. Some are better than others.

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I use a book by Robert Townsend called Up the Organization as a guide to ferret out bogus companies and claims by companies. In this book he contends that Advertising, Public Relations and Attorneys are needed only if you are doing something wrong. As it has been a number of decades since I read the book I am not sure of the three items that aren't needed. But I think I am right on the first two.

But over the past ten or so years, I've labeled advertising lievertising as it is really non productive if you have a good product to sell. Especially true in the services area, such as accountants, lawyers and medical field.

Keep up the good articles Mr. Reich!

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unfair , and as Christmas approaches, I wonder what would Christ do or say?

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Infinite Power

is not a zero sum game but a journey

a stone thrown in a lake

circular ripples emanating outward

parallel phylogenesis toward the shore

and we are droplets

splashing into other droplets

falling and rising with the breeze

immersing into the universal body of water

and ascending towards the sun

we laugh, we sing, we sink, we swim

all the rest is construct.

Infinite Power, Janet Vickers, Ekstasis Editions, 2016

http://www.ekstasiseditions.com/

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We can only hope that at some point people wake up to the realities of this game and decide that we want something different.

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I hope that more members of Congress will not shrug, "That's how the game is played." Breaks for the rich and big corporations must end, ASAP. Fight the rot whenever you see it.

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Once again Robert Reich has 'hit the nail on the head' !

'Wealth management ' was what a former landlord of mine (caused me and roomies to relocate so he could - redevelop - the property/single family house into 3 townhouses) = voice mail m. o. and I had lived in that house 14 years - sigh and sadness = haven't found an 'affordable' rental since ~ but current landlord has been and is - AWESOME !

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I posted this link on my blog. Thank you Robert.

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Robert's correct but he's still not calling it what it really is IMHO.

Predatory Capitalism full stop!

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I agree. Does the zero-sum economy lead young people to believe they can make a zillion dollars without doing anything resembling work? Where does that sucker mentality come from? Humans need satisfaction in love and work. By work, I do not mean inventing the next swindle.

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Why then the repeated use of 'zero-sum' game??? The problem is that journalists/social media bloggers continue the misinformation. There is no zero in this game. The past 50 years of GOP/trickle down economics has cost the middle class $Trillions$ while transferring that wealth to BigCorp & the wealthy who control them. The middle class - the largest demographic, the economic engine of the country has been destroyed and yet it is described as 'zero-sum'.

It needs to be called out for what it truly is, "Theft, fraud & corruption".

When the vast majority of people realize how much they have lost in the process of transferring more & more wealth to the already morbidly wealthy, only then will they act. But it requires honesty from those who are currently placating the public.

My suggestion, Robert is that you stop calling it 'zero-sum' & start being much more aggressive in how you describe what has happened.

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... because calling it "zero utility" wouldn't be precisely correct - as there is plenty of utility derived (though in the worst way - and not for the benefit of the individuals involved). Even "zero value" would be problematic - as most such enterprises (DLA Piper, McKinsey Consulting, etc.) are private - such that the market cannot afford a valuation (and no consensus can be reached regarding their actual monetary worth).

Maybe "zero merit" is the turn of phrase that should be fixed upon?

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Prof. Reich, I believe this is one of your most important posts to date. In one place it shines a light on many of the worst aspects of our current society. Now we need to spread the word and have people across the country call their representatives to counter the work of the lobbyists trying to push this through when no one is looking.

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We REALLY need a new American Economics for the 21st century. Productivity comes from the use of labor in production. “Supply side labor “ not products is an untried idea. Our monetary system is fiat capital and WILL END.

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I'm going to write about fresh ideas and new viewpoints to most readers that are outside the macroeconomic box most of us live in, so, if you would, bear with me please:

Dr. Reich's essay merely pours gasoline on our class war, i.e., enhances our hatred for the very rich. If we taxed all billionaires out of existence, it wouldn't solve our big problems. Doing so would, by analogy, be like adding a couple drops of water when trying to fill a huge bucket.

The federal government does not need their money to do what needs doing, such as, creating full employment, fund Medicare For All forever, give credit or cash to help former students pay off onerous tuition debt, provide affordable child care, offer child tax credits, in short, all the many things that we liberals argue for. All the above would make American more, not less, prosperous. A healthy, vibrant work force and general population would save money and make us more productive in every way; we wouldn't be supermen and women, but we'd be markedly healthier, richer, and better off.

Corporations won't, or can't, do all those things. Only government can. FDR knew that and did that; he saved capitalism from its own innate shortcomings. His government fought our most expensive war -- on two fronts! -- and never insinuated that we couldn't afford it. Of course, we could and did. Affordability is not an issue for necessary and effective activities; yes, you can go overboard, like with defense spending, but that's because the spending goes beyond what's really needed. We could build bridges to nowhere, too, and that would also be ineffective, foolish, and wasteful, and stupid moves like that would sink our ship of state.

We can afford to improve our nation and its people. But too many of us believe that the federal government is like our household budget, i.e., we must have the money first before we spend. Our country is off the gold standard (thanks to one of Richard M. Nixon's few good acts). We nowadays enjoy the benefits of a fiat or sovereign currency, allowing us to grow even faster, because there's more money to fund businesses' need for it. Without our fiat currency, we'd have a much smaller economy. Britain, Japan, and Germany know this, too.

Federal debt is but a record of money spent on our country, which, ideally, was spent wisely; it's an investment; for instance, improved highways enhance commerce that benefits us all. Think of the national debt as the national savings. As macroeconomist Stephanie Kelton points out: "Their red ink is our black ink." (I know that requires a paradigm shift in the minds of most people.) If the government weren't stepping up big-time, we'd be in deep financial and social trouble; our country would be in a permanent depression. FDR's, LBJ's, and Biden's big spending prevented hurricanes of hurt.

My screed here is too short to change any minds, but maybe it'll spark some questions or interest. To better understand some of these points, cf. Stephanie Kelton's "The Deficit Myth." She also has free YouTube videos of her college lectures discussing Modern Monetary Theory.

To make real progress, we need a better understanding of where we are and how federal budgets really work. Keynes did not know everything, but he had the best answers for his era. We need to avail ourselves of our newfound macroeconomic tools to make America all it can and should be.

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Can billionaires and a healthy democracy co-exist? For how long?

It's not wrong to suggest that inequality is a symptom of a corrupt political system - but one must note that the relationship could be either unidirectional or bi-directional (and that, indeed, the arrow of causality could point in the other direction): Henry J. Kaiser may have been such a symptom in his day - but that doesn't mean the public can get along (let alone would be better off) without Kaiser Permanente as part of the healthcare system.

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Just think about the zero sum contributions we will be expected to provide to minimize any discomfort the well-to-do might experience due to global warming. Certainly significant security forces to hold back and control the rabble will be a top priority. Maybe help them acquire far flung estates in the global pleasant weather archipelago. Won't be cheap.

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so....how do we change this? Is there a way, Robert?

How do we get bought and paid for elected officials to collect these taxes? Vote them out.

More concerned to hear yesterday about Biden White House sanctioning the Manchin dirty deal...

WTF????????

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Is government agile enough to tax (let alone regulate) cryptocurrencies? How would an investment in government agility result in anything other than more innocent people being killed?

Dare one say man must change his thinking about his fellow man: the state's monopoly on violence proved too great a responsibility to be anything other than mismanaged when our country *almost* unequivocally voted to invade Afghanistan (Representative Barbara Lee - Professor Reich's congressional representative - was the sole "no" vote & three people were graceful enough to not show up). Assuring inequality tends in the other direction would be a start, yeah?

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Good observations. From wasting bright talent propping up these scams, to providing little or nothing for people this "industry" is a sham.

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... but it's finance, broadly speaking?

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When Donald Trump was running for office he bragged that he doesn't pay taxes because he's "smart". That speaks volumes about his ethics and about ours for voting him in.

Is "zero-sum" the end result of capitalism? Why do so many Americans think Socialism is a bad thing?

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The most accessible socialist institution that Americans have access to kills people (it's called the United States Armed Forces)...

= /

(We could always use more education; there's no other sustainment of progress.)

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Free markets, free enterprise, free speech, free will. It’s like a get out of jail free card for people not doing the right thing.

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The Nobles continue to rule. The peasants pay them taxes and get little in return. Everyone wants to be at court. Those who challenge the system are ostracized or worse. No real change in centuries.

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You forgot to tell us what 'NFT' stands for.

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Aaaarrrrgggghhhh!

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How can a non-billionaire respond to such an article? It makes me feel angry, of course, but also totally helpless. If Congress continues to indulge what is essentially a corporate trust fund baby economy and just shrugs its shoulders ( referring to the response of your contact in Congress) what recourse do we have?

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"That’s how the game is played.” Was the staffer laughing when she said that? Why do these people think this is all a game? Funny thing....I don't look at it as a game. I look at it as criminal activity!

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I love how you keep educating me on things that are mostly smoke and mirrors that haven't been on my radar in all of the 78 years I've been on the planet. Thank you for the enlightenment.

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Bullshit Jobs covers this malaise very nicely, by David Graeber. We have an ethical problem. How much is enough, and what do you really need? If those with more than enough were less anxious maybe they could satisfy themselves with fewer material possessions. Not enough is very damaging and limits human potential. Just enough is very anxiety provoking and limits human potential. Satisfaction and comfort and ac sense of safety free up human potential. Making lots of money is a pyrrhic victory for society, if not the individual.

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Anyone who believes in a huge Democratic win has a huge Democratic bong.

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I have often suspected, the sum total of wealth Amazon, Walmart and other big box retail has produced to a elite few, in no way offsets the erosion of wealth and way of life, extinction smaller businesses have faced. The shift of wealth also goes with a loss civility, culture and community values.

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As the screw continues to turn and Capitalism fails the world, I think of our founders and the questions they asked themselves. The questions they asked were not about this guy or that guy but about themselves, about human behavior. Our "celebrity society" loves to create villains and heroes. It is a great way of denying the real problems that come with being human. I bet our founders had read Dante and what he had to say about gluttony. Dante had to use metaphor; there was no dictionary. We are all gluttons given the tools. Denying that fact has destroyed us many times throughout history. The natural order will save us when we cannot save ourselves. Yes, we will suffer in the process.

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Our money system is NEGATIVE sum. Interest created when money is created as debt. This drives an imperative to turn materials and energy (unsustainably at the moment) into stuff that can be sold and consumed to drive GDP. To say crypto currency is bad is a diversion from how the other implied ‘legitimate’ currencies are somehow okay? Not true. The point of alternative currencies is to decentralize control - get the Fed out of the power seat of doing things like controlling interest rates (which you complain about often lately, and accurately). Crypto is ultimately tied to other currencies and is, therefore, just an extension of the true problem, that is the musical chairs game of what is ultimately a debt creation system. Moving to a decrementing monetary instrument which more closely models the way goods amortize over time would completely change the entire game toward something more equitable.

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To be perfectly fair though: Bitcoin is still proof-of-work - and Ether wasn't on a proof-of-stake chain until earlier this year... so a cryptocurrency which would lead to a better world could very well be a cryptocurrency created by a central bank (similar to the U.N.'s Special Drawing Rights (SDRs)...

PS: Our financial system presently sustains both individuals who live debt-free as well as software companies (the greater bulk of which carry no debt as they grow and a minimal amount of debt for ongoing cross-border activities) - so the issue could be one of how the monetary system is used (and uses us, in turn) than one of its being "NEGATIVE sum" (which the economies it facilitates are assuredly not).

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Money, the artificial value of paper, may be our ultimate demise.

We, the world, have the knowledge, resources and ability to do great things. Such as conquer climate change. But, we won’t. Simply due to the greed of the barons that control the world through their artificial importance of money.

What an epitaph.

…rather than fix what is broken, this planet lay to waste and destruction due to the greed of people for flimsy pieces of paper that bore absolutely no tangible value.

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Right on. Follow the money! It never seems to stop going to the Uber wealthy—as if they don’t already have enough. https://open.spotify.com/track/0UpbidaScDRovrMqHSLdS5

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It is wealth without labor, an imaginary concept.

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It is a failure to properly quantify labor - and to tax it. (Government cannot use software & blockchains to discourage such "zero sum" hoarding of wealth by thinking everything abstract as imaginary; to do so would be as dishonest at it would be wifully ignorant.)

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I think you should take sometime to show how the are successful people making it despite these problems now we all are aware of and would like to change structural inequities. But there are people out there Black Asian Hispanic White etc. Who are struggling to make a difference and are being successful I need to find a good jobs or starting businesses that are working. We need more stories in this blog that address those stories they give him a shout outs. Turn this country around do you need to be knows Town and county Chambers of commerce. That's where you'll get Real support when you show them the problems but then you're supportive of the successes. My wife's of business school dean had a public college in New Jersey public college which is very open to diversity but these young people not only need to hear the structural problems but need to hear that there's hope for success. A lot of them are not politically aware they don't really read they don't have the depth of knowledge their kids but if they only hear negativity Fox and CNN etc.. You get the idea they have to feel hopeful in the hopeful comes from hearing positive stories thank you

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It’s the little businesses that an owner starts with sweat equity and gets sucked dry by rent and loans. If that’s hope for the future, where’s the American dream?

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Dec 16, 2022
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Does Twitter add something to society...?

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Dec 16, 2022
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Only kidding (I would say "bird shit")...

= )

... but - if there is some defense of it (and one would venture to say there isn't) - the fact of a great many people having been employed in middle-class jobs for almost two decades now does suggest there is more to it (the "zero sum") than simply dismissing everything which is intangible (or otherwise abstract) as being some sort of charlatanism; definitely takes more than salt & bootstraps (we are in agreement thereabouts)... but Professor Reich's post lumped cryptocurrencies in with NFTs (art) & later disclaimed art as no less productive than teaching or healthcare... hence the lengthy post.

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