Massive wealth inequality in today’s America isn’t the result of the free market running its course. It’s about the elites’ rigging of the system for the last 50 years to transfer wealth from American people into their own pockets, not by offering better products and services but by financial and legal trickery.
American Government is a corrupt, puppet government with a singular goal that is to serve the rich. The tug of war between the Republican and the Democratic parties isn’t about who gets to serve the interests of the people of America but about intra-elite competition. The only thing each party cares about is to make its own tribe of elites richer and more powerful.
No politician in both parties cares about the remaining 99% of the population of America. The people of America receive lip service during the election campaign before each election but when the election is over, it’s back to the business of making the rich and powerful even richer and more powerful.
The Devastating Results Of The Elite’s Plunder For The People Of America
50 years of corporate plunder stripped Americans of their health, wealth, and hopes for a better future.
Here’s the state of the people of America as of this writing (July 2020):
- Massively declined standard of living. A 2016 survey found that 7 in 10 Americans have only $1,000 or less in their savings accounts. Also in 2016, the number of near-poor Americans – living below twice the poverty line – was a whopping 95.2 million. Wages of middle-class workers have been stagnating and those of low-wage workers have been declining for the last 50 years
How Did The Elites Game The System?
The destruction of the American people didn’t happen in one day. Ultra-rich elites have been rigging the game in their favor for the last 50 years.
Here is how the skimming machine of the elites works:
Corporate Oligarchs Took Possession Of The American Government
Once priding itself to be “by the people, for the people”, American Government evolved into a shell of its former self to be “by the privileged few, for the privileged few.”
Today’s American Government exists for protecting the privileged few — Wall Street bankers, elite lawyers, corporate oligarchs, and high-level knowledge workers including CEOs, the richest people in America.
The prevalence of political money has been instrumental for corporations in getting their preferred candidates elected and their army of lobbyists in Washington enables them to shape government policy.
Political money allows the corporate oligarchs to put their favored candidates into office. The only difference is which tribe of elites gets to put more of their men in congress. American people choosing to vote Republican or Democrat is akin to choosing between polio and cancer.
Remember that this process has been going on for the last 50 years, which means that no matter whether it’s the Republicans or the Democrats running the government, it’s always the people of America who get the short end of the stick. The real divide in America isn’t between Republicans and Democrats. It’s between the ultra-rich elites at the top and everyone else.
Regardless of if they are Democrats or Republicans, all the presidents of the United States since John F. Kennedy did almost nothing for the American people. In fact, they did harm by letting the elites crush American people with complete impunity provided by the American Government.
Why Did Corporations Take Possession Of The American Government?
Because it’s the easiest and fastest way to wealth.
A corporation, by definition, is only interested in maximizing its profits. In a free-market economy, the job of maximizing profits has to be done by creating superior goods and services.
But this, of course, is not the readiest road to wealth. Getting rich in a free market would require producing better goods and services than your competition but the existence of competition drives down prices and profit margins.
The easier way is to own the government which in turn protects you from competitors so that you don’t even need to bother with the difficult task of producing superior goods and services for more profits. It’s easier to swindle the people of America and siphon off their money via legal and financial engineering.
Legal and financial fraud being illegal could be a problem but not when you own the government. Fraud is illegal for more than 99% of the people of America but not for the ultra-rich elite because they are the ones who get to make the laws.
How The Elites Get Richer By Financial Engineering
Financial engineering is the tool that the elites use for manipulating the financial markets in a way to direct the flow of money into their pockets.
The biggest financial engineering tool of the elite, the stock market, is their primary skimming machine where trillions of wealth transfer from the people of America into the pockets of the rich takes place.
The elites don’t even have to worry if the machine malfunctions every once in a while because in such a case the American Government steps in and bails them out with taxpayer money, as we’ve seen in the financial crisis of 2008 and the covid debacle of 2020. It’s always the people of America who end up footing the bill.
Stock buybacks, which was once illegal, was made legal upon the will of corporations because it allows the CEOs of the corporations to buy the stocks of their own corporation to artificially increase their own stock price so that they can be paid millions for creating profits (which are not real profits, mind you, but they count as profits since they also legally changed the definition of profits to account for the stock price.) Stock buybacks ostensibly increase profits but no value is created in the process whatsoever. It’s just a financial engineering tool to transfer wealth from the people of America into the pockets of the rich elites.
Other tools of financial engineering include the creation of funds, mortgages, bonds, stocks, derivatives, securities, and new ways of trading them, which allow the rich to get richer without even having to bother with the consequences of their mistakes because while their gains are capitalized, their losses are socialized. If the risks they take pay off then they gobble up the profits. If the risks don’t pay off and they lose, they are bailed out by the American Government with the pretense that they are too big to fail.
For example, the mortgage crisis of 2008 was one of the consequences of bankers trying to get rich by high-risk financial engineering which drove the economy to a massive disaster but the elites still got out unscathed thanks to the Government bailing them out with taxpayer money. The rich banker elites were the ones who played with risky financial instruments but it was the innocent people of America who were forced to foot the bill.
For the last 50 years, the elites engineered and perfected a skimming machine that cannot fail. Heads the elites win, tails the people of America lose.
How The Elites Get Richer By Legal Engineering
Legal engineering is the tool that the elites utilize for manipulating the laws to maximize their profits without having to produce superior goods and services. Legal engineering also provides them with legal protection so that they don’t go to jail for their fraudulent activities.
Instruments of legal engineering include engineering corporate mergers and takeovers, creating tax shelters, engineering new regulations (related to consumer products, employment discrimination, worker safety, and the environment), fighting anti-trust laws, and defending antitrust or consumer protection claims.
The biggest benefit of these legal engineering operations is that they allow the corporations to get richer by creating monopolies (which should be illegal in a country with a non-corrupt government). Monopolies are extremely profitable because the lack of competition allows them to charge higher prices for lower-quality goods and services.
We’ve seen in the previous section that the cost of living is astronomical in America. Everything is too expensive. One of the reasons for this is that the American Government is too corrupt to prevent the elites from forming monopolies.
Almost all industries in America are controlled by a few powerful corporations all of which enjoy extremely high profit margins (despite providing inferior and expensive services). The industries of telecommunications, technology, agriculture, aviation, credit cards, banking, food, hospital systems, pharma, media, beer, and many more are all controlled by monopolistic corporations.
Good luck if you want to create a small business and compete with these behemoth corporations that also receive government protection on top of their enormous market share.
The entire system is rigged to transfer an ever-larger share of the national wealth from the people of America into the pockets of the top 1% of the ultra-rich elites of America.
What’s Next?
I’m currently reading an interesting book called The Sovereign Individual which predicts the demise of the nation-state so if the authors are proven to be correct, the welfare state will disappear and everyone will be on their own as there will be no nanny state for some people to rely on.
History tells that the pendulum will eventually swing in favor of the honest and hardworking people but the transformation will be painful.
It’s of utmost importance for you to be in top physical and mental shape as hard times are ahead and the only person that you can reliably count on is yourself.
Be sure to read:
- How to Be a Superior Man, Chapter 3: Gain Direction
- America’s Tailspin: How Meritocracy Killed the American Dream