Five Dots from Cabbie to Billionaire
Monday, March 5, 2012 at 6:14PM Sometimes the lines connecting dots are so overwhelmingly bold and darkly obvious that, despite knowing better, I find myself concentrating too much on the dots and not the lines. At any rate, I did a segment for the Alonya Show on RtTV this afternoon that covered four dots of financial dislocation. As I left the studio in a cab, a fifth dot appeared:
In Los Angeles, traveling eastward on Santa Monica Boulevard, you pass the mansion-laden enclave of Beverly Hills on your left, and a less ornate stretch of police and office buildings on your right. While we were driving, the driver revealed a mark of inequality, seemingly secret and trivial, and yet so significant.
“See that,” he gestured to a sprawling, perfectly manicured estate. “People that order a taxi from there to the airport, pay a flat rate of $30. But over there,” he points to my right, “you’re on the meter. Forty-five bucks.”
He shook his head, “They make 100 times more in those homes than what other people make. You tell me why the people with all the money get the cheaper fare.”
The answer was the line connecting the dots of the show I’d just taped. They reap the benefits, because they make, or buy, the rules. A half an hour earlier, Alonya and I had discussed four other dots.
The first was an FT piece that noted there had been no new bank applications in the United States in 2011, after only 3 in 2010. What does this mean? It means that it’s cheaper to acquire a bank with FDIC and Fed assistance, than to start a small one. Not only that, smaller banks can’t even raise the capital required to stake out a physical location. This, while mega-banks sprout like weeds on the corner of every block, capturing spacious street-front property, rolling out expensive signage, and able to negotiate better rents for their bulk presence. It is a sign of the small being crushed by the large; a situation whose side-effects include removing choice from citizens, who are left paying collusively high fees for ATM and banking services, at omnipresent, federally subsidized institutions.
The second dot was the excellent video, accompanying a petition, that Public Citizen just released called Breaking up is Hard to Do – aimed at Bank of America (but that could equally have been addressing any member of the too-big-to-fail contingent.) Alonya asked me what I thought of the video. I replied, “It’s not going to happen.” (These goliaths will remain joined at the commercial and speculative hip.) Not because it shouldn't, but because...
Our regulatory and legislative systems have been supremely indulgent of these behemoths. Here and there, the big banks emerge from settlements with fines for fraudulent practices, but it doesn’t make a dent in the risk they can manufacture, or the size to which they can grow. The Federal Reserve has ultimate regulatory authority over the big banks, and under Chairman Ben Bernanke, used that authority to approve, not reject mergers, to facilitate a cheap money party to fuel, what would otherwise have been insolvent financial giants, and to allow those same giants to re-funnel their subsidies back to the books of the Federal Reserve as excess reserves that gross .25% interest per year. Separately, the tepid Dodd-Frank Act gets watered down more each day. But even at its ‘strongest’ inception state, it didn’t break up the banks, nor reduce the risk they pose our global economy. Bank of America holds 35% MORE derivatives today than before the fall of 2008.
The third dot had to do with a billionaire index that Bloomberg created. It provides a closer to daily tracking of the wealth of the world’s 20 most ostentatiously wealthy. I don’t really know what to say about that. But, whoever gave the internal go-ahead to that monstrous showcase of inequality should have perhaps included a location-tracker, so people could send their daily heart-felt awe and congratulations.
The fourth dot was the income gain of the top 1% vs. the 99% over the past year. The fact that the top 1% captured 93% (basically almost all) of the growth demonstrates that the inequality gap isn’t just widening; it’s accelerating. The more one has, the greater the cushion to soften economic Depressions. It was no different going into the 1930s Great Depression as illustrated in my novel, Black Tuesday. If you’re living paycheck to paycheck, you feel each oppressive drop of an increase in health care, education, childcare, food, energy and utilities costs. If your income isn’t growing in tandem, you are comparatively falling further down an economic hole. This accelerated income-rise-to-the-top is one more sign that when the media and Washington say we’re in an economic recovery, they have an ultra-myopic definition of who constitutes ‘we’, and it’s not the majority of the population.
That’s why there’s an Occupy Movement. As I wrote on behalf of the compelling book, "The economic elite vs. the People," “Occupy Wall Street has coalesced across towns, cities, and countries. It represents people of every race, age, and disposition as the only meaningful opposition to a winner-take-all financial system that extracted untold wealth from the global population to puff up the personal portfolios of elite executives with impunity. And until a more equitable society and system prevail, the Occupy movement is not going anywhere.” (See the rest on www.ampedstatus.com)
All these dots and lines project a gamed world, where it is not sweat or merit that propels people forward, but connections and power and pedigree. Which brings me back to my cabbie friend. As he dropped me off, he offered this morsel of wisdom, “Things won’t change until we’re all paying the same fares. At least, that’s a start.”
Reader Comments (13)
The "dot" concerning the cabbie was interesting. It had me wondering whether or not the rich people spend so much more on cabs that they are essentially getting a volume discount. If, for example, they call a cab to take them to or from the airport on a weekly basis, that would involve many more cab rides each year than the people who only use a cab 1-2 times a year. Many businesses accept lower payment per purchase in order to gain a higher volume of purchases. Could this be one of those cases? Hard to say without cab company data on the subject but some investigation could prove illuminating.
Should this really be a surprise? Can capitalism and society co-exist? It seems like the logical conclusion rather than an accidental byproduct. Labor is another commodity. Consumption by the poor is an inefficient use of resources. Birkenau was a glimpse of the future.
Ed - good point - but basically, Beverly Hills keeps itself separated from LA in many ways - they have their own police force, fire department, etc. In fact, when I took a CERT training course last year, the Fire Chief that was teaching us said that if anything major happened in Beverly Hills, the area called for reinforcements that 'knew what they were doing', but otherwise kept things insular. I imagine, they negotiated with the cab company and said - if you want to pick people up from our area at all, these are the rules, and those rules included a flat fare to the airport, to which the cab company agreed, so it was less about frequency and more about access.
David - no, not a surprise, just more evidence of an eroding economy for the majority of the population, whether most realize this or not.
Outstanding blog post, Ms. Prins.
Regarding Dodd-Frank, and too much leglslation over the preceding twenty to thirty years, two serious and fundamental points.
Predatory jurisprudence turning into predatory legislation, or why Jon Corzine won't be going to jail.
In 1994, the Supreme Court rule, in Central Bank of Denver v. First Interstate Bank of Denver, that plaintiffs could not sue investment firms, attorneys or accountants involved with aiding and abetting securities fraud.
In 1995, congress unanimously passed the Private Securities Litigation Reform Act, thusly turning that predatory jurisprudence into the law of the land, or predatory legislation.
Every piece of legislation which has anything which might benefit the citizenry in general, or redress specific wrongs against particular groups, along with passages benefitting Wall Street, corporate interests and/or the oil companies, has those sections benefitting the people structured as flimsy as possible, thereby open to legal challenge and easily overturned in the courts.
Whereas those sections and verbiage benefitting Wall Street, corporate interests and/or the oil companies, is written and structured in such an ironclad fashion as to be impervious to any and all legal challenges. (This has been going on since at least 1970 or thereabouts.)
And sad to say, too many of us still don't understand this, quite possibly one of the truly giant dots out there?
“We’ve slipped away from a true republic. Now we’re slipping into a fascist system where it’s a combination of government, big business and authoritarian rule, and the suppression of the individual rights of each and every American citizen.”
- Ron Paul
Once the so called "financial crisis" occurred in 2008 it allowed the Corporatist State to be put firmly in place. When our government transferred all of the losses (bailout) incurred by the private central bankers to the tax paying public's balance sheet the coup was accomplished.
Now that the Corporatist State is in place the table has been set for a Fascist State to be put into place.
The reason we wil never hear this from Santobamneyrich is because they are all shine boys for the power elite.
Americanselect.org folks ! It's our only chance.
Oh great, LarryP, spokesbot for the hedge fundsters and private equity LBO types (private banksters) --- you betcha, Larry, those fraudersters, highway robbery types will really save us.
Among all the banksters involved with that Tea Party, Version 2.0, is one Lynn de Rothschild (of the Rothschild banking family, by way of marriage). She met the Rothschild man she would soon marry at the 1998 Bilderberg Group Forum, introduced to him by probably your best buddy, Henry Kissinger.
Sorry to douse the LarryP spokesbot with a little reality.
While the remarks below may appear off-topic, I think there is a concrete tie-in with Ms. Prins' blog post.
LulzSec Takedown, The Real Deal
Sometime during the year, 2003, data mining achieved critical mass status, all that was required to pull up background information on anyone was their age and zip code. Alternatively, the target’s name and telephone number would also suffice.
Combining the N.O.R.A. algorithm (Non-Obvious Relationship Awareness) with ClearForest text analytics software yields increasingly superior results. ClearForest’s development was financed by an Israeli private equity firm, Walden, also responsible for Narus, with a sizable chunk of money coming from the DoD, and flowing through Walden. This software can be found at US intelligence agencies, NASDAQ, and a variety of banks and financial services firms.
The recently reported FBI bus of LulzSec had really nothing to do with the FBI, but was the result of these super-sized databases compiled to track everyone; at the consumer level, at the social media level, at the medical/insurance level, at the education level, etc., with that particular NYC arrest of Sabu deriving from triangulating such seemingly disparate data sources, then running Wi-fi direction finding teams in the predicted geotagged location --- this is what occurred, please ignore all cover stories to the contrary.
Prior to World War II, the government of the Netherlands created a national citizen registry (name, birth date, religion, address, etc.) for positive public welfare purposes, but then the Nazis invaded and acquired access to this registry, and subsequently 75% of the Dutch Jewish population died. (My people, the Roma or Gypsy population, was completely annihilated, with but a few escaping, my ancestor among them.)
Compare with Belgium and France, where 40% and 25% of the Jewish populations were murdered, respectively. A portion of that 25% in France was tracked back to bank records, kept by the Rockefeller bank, Chase, which remained opened after the Nazi invasion as they had replaced the French bank manager with a Swiss neutral, who then handed over the accounts to the Nazis.
Absolute control, whether pursued by the Third Reich, or the present day Financial-Intelligence-Complex which effectively rules America and controls the media and manages public information content, offshores jobs, technology and investments (which once would have gone to local jobs’ creation and innovation), will only destroy progress and freedom and liberty.
http://paranoia.dubfire.net/2011/12/commerce-dept-export-licenses-for.html
Earlier this year, the Commerce Department's Bureau of Industry and Security held a two-day Conference on Export Controls and Policy. It included a workshop specifically focused on the rules governing the export of encryption technologies (which include intercept equipment). The full transcript can be found here: part 1 (pdf), part 2 (pdf). [See below links]
As a non-lawyer, and non-expert in export control regulations, I was pretty surprised to learn that the government already strictly regulates the export of covert communications surveillance technology. What this means, of course, is that the Commerce Department already has a list of every foreign buyer of US made covert surveillance technology. Unfortunately, they won't provide this information to the public, and as far as I know, they won't provide it in response to FOIA requests.
http://htc-01.media.globix.net/COMP008760MOD1/BIS_Web/Transcripts/072111_Encryption_Workshop_2011_part1.pdf
http://htc-01.media.globix.net/COMP008760MOD1/BIS_Web/Transcripts/072111_Encryption_Workshop_2011_part2.pdf
Not meaning to overdue my amount of comments here, but referencing my first remarks regarding predatory legislation, and how it's constructed, there's a wonderful article and series of articles on Dodd-Frank at the link below, which truly deconstructs it most excellently.
http://econintersect.com/wordpress/?p=19634
“In 1995, congress unanimously passed the Private Securities Litigation Reform Act, thusly turning that predatory jurisprudence into the law of the land, or predatory legislation”. I have assumed for years they made it impossible to prove “intent” and hence why there will be no prosecutions. On the other hand when “people could send their daily heart-felt awe and congratulations” through the barrel of a gun….now there’s some real justice. I see no evidence from our “leaders” that will prevent this from coming to pass. I am so embarrassed by our main stream media’s utter capitulation to universal dissemblance, I just recently started watching RT. In fact that is all I watch. I can’t stand the all too familiar faces populating the MSM….as Alyona often says….existing almost solely to massage their gargantuan egos. The news is about them after all so, to augment their massive salaries, they deserve an occasional pat on the back. Interrupting and jaw-boning can be such grueling work I’m sure 99% of the population couldn’t handle it.
Nomi,
I have a complaint. You don't post often enough, although this might be a ploy on your part of either a) retaining quality over quantity or b) keeping your readers hungry for more!
Either way, another great piece. Your comment about the Bloomberg billionaire's index was spot-on, I felt a 'head in the hands' moment of disbelief when I saw that bit in your interview with Alonya.
Thanks again,
DavidC
Thanks David - I don't post enough, you're right - I struggle with that knowledge regularly :) .... that said, I'm embarking on a new book, non-fiction. It's an alternative (as in less mainstream) perspective of the select group of men and their banks, that over the past century - decade by decade - acted as our shadow government, shaping economic through foreign policy, So, I'm going to be spending ALOT of time in the past, traveling through archives around the country to examine source material. Preparation for the book (and its 95 page proposal), has limited my blog posts recently, and I'm afraid, further research will put on a lid on them for the near future. I hope the results will be amazing though!
Nomi
"Oh great, LarryP, spokesbot for the hedge fundsters and private equity LBO types (private banksters) --- you betcha, Larry, those fraudersters, highway robbery types will really save us."
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Sgt. Doom, I have no idea what you're talking about?
How did you get that from my post?
LarryP
@LarryP --- I was speaking to your comment, regarding "AmericansElect"
If you are completely ignorant of them, then reread my comment and do some due diligence, otherwise quit posting about them.
Hey Sarge,
You need to lighten up.
Did it occur to you that I had no idea who has provided funding for Amercicanselect.org ?
You appear to be overly impressed with yourself.
Take a chill pill and get back to me later.