Presentation on theme: "Dissecting the Economic 1% Jason Makansi. 1% is only part of the story… To fully appreciate the master-slave (figurative) relationship between the 99%"— Presentation transcript:
1% is only part of the story… To fully appreciate the master-slave (figurative) relationship between the 99% and the 1%, you have to understand the component parts of the 1% The critical distinction is that the U.S. financial system is a global financial system. The cream of the financial elite sets monetary policy, the parameters for how the U.S. economy will function. Although large corporations can influence the financial system, they are also victims of monetary policy. Monetary policy is distinct from fiscal policy but both drive the general economy
Class warfare is beside the point… It isnt about who has money and who doesnt Its not about banks and non-banks Its not about large corporations and small business Its about who has power and who doesnt Its about who sets the rules of the game and who dont Its about the elite club which sets the rules and operates outside of the political parties. Its about a financial system specifically constructed to vacuum money upwards from the general economy and the government
Financial Engineering Banks, lenders, hedge and equity funds, insurance companies, government entities, etc, serve a useful function in the economy. They aggregate money and lend it to others so businesses can grow more quickly. Financial engineers inside banks, insurance companies, hedge and private equity funds, and some government agencies are agents of speculation and complicated investment vehicles
Financial engineering is corrupt and immoral Principally, financial engineers make their egregious profits in three ways: – By increasing volatility in the marketplace – By confusing the buyers and sellers in the deals they are facilitating – By working with government officials, often undetected, to change legislation and standards so that they can (1) achieve a protected position with little or no competition, such as setting accounting standards, (2) increase volatility, and/or (3) confuse buyers and sellers.
Component parts of the 1%... The Federal Reserve –sets monetary policy (a handful of elite) Those who influence and implement monetary policy (0.001%) and regulate the financial system Those who set and implement fiscal policy (0.01%) Those who work (and those who fund them) the halls of government to obtain tax relief, incentives, subsidies, government contracts, and other pieces of government largesse (0.1%) Those with enough money or earning power to be mostly unaffected by all of the above (1.0%)
Monetary policy – the 0.0001% (~300 elites total?) The Federal Reserve sets interest rates and makes sure they are aligned with our stated policy of maintaining the dollar as the worlds reserve currency. It isnt just about Americans. The Federal Reserve has only one point of oversight in our government – the Secretary of the Treasury who reports to the President The Federal Reserve does not need Congressional approval to do anything but is required to report to Congress and appear at their request.
Monetary policy (2) – the 0.001% (3000 individuals) The system of elites around monetary policy – The President, the Secretary of the Treasury, and the Presidents Council of Economic Advisors – Global banking entities, e.g., the International Monetary Fund, the World Bank, the European Central Bank, etc. – The Federal Reserve Board and the regional Federal Reserve bank directors – Heads of regulatory agencies – Securities and Exchange Commission, Federal Deposit Insurance Corp, Financial Accounting Standards Board, Commodities Futures Trading Commission, Office of the Comptroller of the Currency, – Elite academics who specialize in, and analyze, monetary policy and are confidants of the Fed. They mostly originate from the most elite of universities, especially Harvard – Influencing bodies in Washington, especially the Council on Foreign Relations, Institute for International Economics, and several others – Executives of the very largest Wall Street banks which buy and sell financial instruments issued by the Fed. Post-2008 financial crisis, the banking system is no longer a free market. They are too big to fail. They are the government!
Fiscal Policy –the 0.01% (30,000 individuals?) Fiscal policy has to do with the governments budget (and the deficit) – spending (appropriations for each branch of the government) and revenue (taxation)– and is as affected by monetary policy as the rest of us. – Pertinent Congressional committees, e.g., House Ways & Means Committee, Senate Appropriations, Senate Banking, Housing, and Urban Affairs, Budget, Foreign Affairs, House Committee on Financial Services, and others – Presidents Council of Economic Advisors and others in the Administrative Branch – Commensurate state government elected officials and legislative and administrative committees – Lobbying organizations which advocate on behalf of their clients for funding programs – Policy organizations (federal and state) which seek to influence government budgetary outcomes, e.g., US Chamber of Commerce – Academic, partisan, non-partisan, bi-partisan organizations and people who seek to influence the budgeting process – Executives of the largest U.S. corporations (or foreign entities with a large American footprint or presence)
Fiscal policy – the 0.1% (300,000 individuals?) There are those who set fiscal policy and then those who carry out fiscal policy – i.e., spend the governments money (our money!) – or are the beneficiaries of fiscal policy Included here are all those firms, corporations, interest groups, etc, which seek direct tax relief, subsidies, incentives, and appropriations that enhance their abilities to make money or stay funded – Government agencies which are appropriated money and disburse it to contractors (directors, managers, etc; not everyone, in other words) – Lobbying, policy, and interest groups – Management of Fortune 500 companies – Academic institutions (who do the research) – Non-profit and NGO organizations
The rest of the 1% (3-million Americans)... Doctors and other professionals Financial services professionals Lawyers, many of which facilitate the functions listed on previous slides Media executives, entertainers, sports stars, and artists Elite university chancellors and professors Small and mid-size business executives Tech and other entrepreneurs Anyone else who makes over $300K annually These people are included for their ability to contribute to campaigns, propagate information, buy access to government networks, or because they are courted by the elite to intermediate messaging to, and regional and local influence of, the 99%.