…while stimulus may have helped avert crisis, the process made clear that crony capitalism is alive and well.
…more stratified, more complex societies are in essence Kleptocracies, where those in power re-distribute societal wealth to themselves. Those at the bottom of the society’s pyramid accept this unequal, non-egalitarian state of affairs because they too benefit from their society’s relative advancement.
…The key is to…gain popular support in order to re-distribute as much wealth to the ruling class as the populace will support.
…as the stability of the economic status quo disintegrates into instability via economic depression, you should expect the ruling elite to step up uses of these methods of retaining power…
…[Jared] Diamond says the Kleptocrats maintain power using 4 different methods:
“1. Disarm the populace, and arm the elite.” [GH: Financially]
“2. Make the masses happy by redistributing much of the tribute received, in popular ways.” [GH: Medicare Part D, Social Security, Health Care “Reform”, Cash for Clunkers, Tax Cuts, Stimulus Legislation etc…]
“3. Use the monopoly of force to promote happiness, by maintaining public order and curbing violence.” [GH: Bailouts, unemployment benefit extensions and foreclosure assistance has limited crime]
“4. The remaining way for kleptocrats to gain public support is to construct an ideology or religion justifying kleptocracy.” [GH: Propaganda saturated mass media information dissemination]
…over time the natural tendency of any ruling elite is to deploy the state’s coercive power for greater and greater self-benefit…
…If the ruling class takes too much, it will be overthrown and replaced by a new ruling class (which in turn will re-distribute wealth to itself using the same four methods)…
…The question is whether this should be tolerated, mitigated or eliminated.
…My understanding is that scientific studies have convincingly demonstrated that human beings will actually consciously disadvantage themselves to seek revenge as a means of restoring justice and fairness.
…in the real world, fairness and justice are important…And when an economic system is deemed unfair, people will go so far as to hurt themselves economically in order to level the playing field.
…Overreach has been the order of the day and will ultimately invite an opposing response.
Credit Writedowns, December 23, 2009