Late-stage capitalism is best described as an economy that systematically funnels all wealth into the hands of a few ultra-rich hands. Such an economy — or nation — can be identified as one with a high "Gini coefficient", which is a measure of income disparity or inequality. A nation with a rising Gini coefficient is trending toward an oligarchy, where all wealth is controlled by a small group. The United States is such a nation. Measurably.
The United States has a Gini coefficient (measured by the World Bank) of 41.3, and it is rising. In 2015, the top 1% of earners in the United States averaged 40 times more income than the bottom 90%. In the US, currently, an estimated 12.3-17.8 percent live below the poverty level. Many of these work for a living, low-wage workers who live paycheck-to-paycheck and have no sick days, pensions, parental leave or health insurance.
The GDP is a poor measure of the economic health of any nation because the economic models used by capitalist societies cannot explain why wages are not increasing even as workers become more productive. The models would suggest that wages will rise roughly along with increases in GDP. That has not happened.
But here's the kick in the ass: Marxism does explain what is happening in late-stage capitalism. And it is all related to worker exploitation in an economy that favours the rich at the expense of the poor.
The three pillars of American-style (late-stage) corporatism are: 1) privatization, the transfer of public assets into private hands, 2) deregulation, the elimination of regulations on corporate activities, and 3) deep cuts to social spending.
Clearly, trickle down economics has been a monumental failure. But why did that core element of "Reaganomics" fail? The theory, I thought, was sound ... instead of giving more money to consumers; who will essentially just spend it on junk and entertainment, isn't it better to funnel more of the country's wealth to those who will "invest" it in the means of production, stimulating the creation of new manufacturing and production facilities and creating jobs for those who work in them, and supply them? Where are those jobs now? China? India? Mexico? They sure weren't created at home.
In theory, Reaganomics sounded good; in reality, it has been an economic disaster and a fiscal policy failure. Why? Well, first of all, it ignored the fact that two-thirds of the U.S. economy is based on consumer spending ... not capital "investment", certainly not on speculative investment in stocks (the price of which no longer bears any relation to a company's earnings potential), or derivatives based on debt instruments such as mortgages. The wealth, quite simply, wasn't invested in production. It's not quite fair to say none of it was invested in production, but what was invested, was largely invested overseas.
In short, "trickle down" failed because, instead of putting more money into the hands of those who would invest it in the means of production (according to the theory), creating jobs and opportunities for others, all that money that was handed to the capitalists in tax cuts ended up in the pockets of speculators and brokers, both examples of two types of vulgar human beings: gamblers and con artists, neither of whom produce a goddamn thing.
That's what I believe,
___
Charles
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