Inequality

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For generations, Americans, who rejected liberalism, were trained to screech and run out of the room whenever the topic of inequality was raised. After all, anything other than a natural distribution of wealth was socialism and if nothing else, conservative means not being a socialist. It’s fundamentally the problem with all reactionary ideology and why Buckley Conservatism has degraded into a shabby libertarianism, lacking anything resembling a coherent worldview.

The issue of inequality is a perfect example. That French economist wrote a big book on the topic and the response from the Right was to dismiss it without having read it. The libertarian wing thumbed through some reviews so they could pretend to have read it, before dismissing it in a shower of platitudes. They have to pretend inequality is not a real issue because to do otherwise means confronting the contradictions in their ideological safe space.

The fact is, having a small number of people or corporations controlling the nation’s wealth ends in tyranny. This is the lesson of history. If one man owns everything then you have Africa. If a cabal of men control everything through a bureaucracy you have China. The West figured out that a broad distribution of ownership cultivates human capital and maximizes individual liberty. It’s not perfect, but there is a reason we never speak of the African Renaissance.

Part of why both parties are being swamped by what they like to call the fringe is stories like this one I saw on Vox Day’s blog.

The rising cash holdings of U.S. corporations are increasingly in the hands of a few U.S. companies, with just five tech firms having grabbed a third of it. And nearly three-quarters of cash held by non-financial U.S. companies is stashed overseas, outside the long arm of Uncle Sam.

Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL), Cisco Systems (CSCO)and Oracle (ORCL) are sitting on $504 billion, or 30%, of the $1.7 trillion in cash and cash equivalents held by U.S. non-financial companies in 2015, according to an analysis released Friday by ratings agency Moody’s Investors Service.  That’s even more cash concentration than in previous years, as these five companies held 27% of cash in 2014 and 25% in 2013. Apple alone is holding more cash and investments than eight of the 10 entire industry sectors.

Corporate America’s rising pile of cash is becoming increasingly important to investors as profit growth and the stock market stalls. The amount of cash held by U.S. companies rose 1.8% in 2015. Unfortunately for U.S. investors, 72% of total cash held by all non-financial U.S. companies is stockpiled outside the U.S., up from 64% in 2014 and 58% in 2013, as companies try to avoid paying U.S. tax rates.

There was a time when Democrats would make an issue of this based on old school appeals to class. “Look at these fat cats robbing the working man!” The Right was not mute on this stuff either. Wholesale tax avoidance was not always a conservative principle. Conservatives would also note that these firms are run by progressive, nation wrecking wackos. But, that was when conservatives still thought countries were real things.

The reason Faceberg gets to summon media whores like Glenn Beck to his lair and demand they stop talking about his censoring of opinion is because he has 40 billion dollars. He is also allowed to have free access to the internet by the state. The reason for the gross corruption of the popular media is that those concentrated billions can be funneled into operations that buy news reporters and outlets, in addition to politicians.

It’s something I’ve been repeating for a while now, but I enjoy repeating it. Buckley Conservatism was always about anti-communism first and foremost. The whole point of their ideology was to shape the defense of the West against Soviet communism. Reagan is a perfect example. He was willing to concede domestic policy to the Democrats in order to have a free hand on foreign policy. The result was a continuation of the welfare state in exchange for a military buildup.

The problem for the Buckley types is the Cold War ended. Generations of conservative “intellectuals” have been trained to cede cultural issues to the Left. Their default response on domestic issues is to surrender so they can get back to talking foreign policy. It’s made them incapable of fighting a culture war. Those principled conservatives are too busy planning the sack of Carthage to be bothered by the Left’s assault on decency.

It’s why they are being swamped by what we’re calling the alt-right. Talking about special treatment of carried interest to a guy who is watching his town be overrun by foreigners is insulting. That’s why Trump was able to shove everyone aside and win the nomination. Watching those debates, I was reminded of the movie Pleasantville. In this case, Trump was the only guy in color and the rest were in black and white.

Conservatism used to focus itself on maintaining and defending the culture and traditions of the country. Allowing a handful of financial buccaneers, who got rich plundering the economy while riding a sea of credit money created by the state, is the antithesis of conservatism. It conserves nothing. Dealing with these extremes is something the Right cannot cede to the Left or you end up like Venezuela.

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26 Comments on "Inequality"

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james wilson
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Z-classic.

Member

Agreed! Who is our Zman, anyway? How’d he get so smart — he thinks just like I do 😉 — but truly, he does.

Lorenzo
Guest

A lot of the overseas cash owned by US corporations is stuck there because of the high US tax penalty for repatriating it. There is no way to bring home the proceeds from foreign profits without incurring more US tax, even after having already paid foreign taxes.

It is more the American government’s insatiable lust for tax money than corporate greed that keeps the money offshore.

That said, Zman is absolutely correct about the corrupting effects on governance inherent in wealth concentration.

CaptDMO
Guest

Let’s see…
It’s cheaper to borrow money, and pay interest, that to repatriate it, and pay the tax.
What to do….what to do…..

Doug
Guest
Just follow the money…it is always where the current tyrants behind it all lurk. That is the seat of tyranny. The human extinction movement is comprised of these components: Liberalism is a philosophy of consolation for Western Civilization as it commits suicide. Under Capitalism, the rich become powerful. Under Socialism, the powerful become rich. Under Socialism, government employees become powerful. Under the State there lies the free shit army and useful dupes, who are the little totalitarians among us. Under these systems, the dirt people eventually revolt, because they are the dirt people, and are the only people who have… Read more »
Anon.
Guest

So you’re saying Trump is a tyrant lurking behind his money? Odd thing to say.

Christopher S. Johns
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B. Harrison (a forgotten but interesting president) and the first Roosevelt ushered in the era of “progressive” Republicanism when it became widely perceived that immense concentrations of private wealth had become a threat to constitutional liberties. Note that the GOP of that era understood its first duty as protecting the Constitution and the liberties enshrined there, and not to a set of abstract principles. Today, we seem to have inherited the worst of all possible worlds: the second Roosevelt (the Soviet-inspired “New Deal”), Truman (the “Warfare State”) and Johnson (the “Welfare State”) created a monstrosity that knows no constitutional limits.… Read more »
Member
“Wholesale tax avoidance was not always a conservative principle.” Yes, it was, and it still is. Perhaps you mistake tax avoidance with tax evasion. If you report your actual income then rely on and accept all of your genuine personal expenses and deductions you are avoiding tax. If you lie about them you are evading tax. Tax avoidance is adherence to the law. Tax evasion is breaking the law. The cash that these corporations have “stashed overseas” is tax paid money earned outside the USA on which the corporations do not wish to pay truly absurd US tax rates, as… Read more »
Andy Texan
Guest

Very good post. I’ve been calling this new Globalist Reich, neo-feudalism. All the world’s power and money is being re-concentrated into the hands of a small elite. Corporate America has become an enemy of the common good. Remember when the old line Marxists would rail against big business? Well to some degree they were right. This is something to which ‘Conservative, Inc.’ has been blind.

James LePore
Guest

The dirt people, what james Wilson calls joe public conservatives, have been insulted for too long. You have articulated something they have felt in their gut for a long time. I don’t think they envy the rich so much as they’re tired of getting bled from above and below. Their culture and traditions are ridiculed every day. They believe Donald Trump speaks for them. I’m starting to think he does, literally, e.g. Crooked Hilary, lying Ted, Bill the rapest and much more.

HEATHER MCFARLANE
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Americans are different from other groups: they do not suffer from envy. Which is why American socialism is so weak among the 99%. However, the 1% in DC are, I think, awash with envious folk. Trump is popular with the 99% because they are not envious of his wealth. Europeans cannot understand this. Neither can George Will.

Anon.
Guest

And yet the topic of “income inequality” is essentially nothing but a thinly veiled call for communism. As they see it, any degree of “inequality” is unjust. Therefore, the only just solution is some kind of complete equality, i.e communism (these days the politically correct term is socialism).

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[…] Now do go and read it all at the Z Blog. […]

Member
“While paupers change possessions Each one wishing for what the other has got” Bob Dylan, Gates of Eden, borrowed from T.S. Elliot. What is wealth? In a free market society it is deferred consumption, capital. The goal of wealth, a fiduciary responsibility, is to grow. How does it grow? By investing in productive enterprises. It grows by producing goods and services that attract consumers. Its success is measured by “return on capital”. Those who invest wisely win while others who are not as productive lose. Thus capital, wealth, flows to those who make people happy. The question then becomes who’s… Read more »
Swami
Guest

This post is an intellectual mess.

The title is inequality.
It references a book by Pikety which suggests an implausible wealth concentration formula almost universally dismissed by all economists.
It warns that concentrated wealth leads inevitably to tyranny and hopes the readers just nod along.
Then it pivots to cash holdings of the some of the most highly esteemed companies of the past decade.
Huh?

jdm
Guest

I don’t – can’t actually – disagree with any of this, because I simply don’t know enough yet to draw any firm conclusions. It seems to me, however, that this post points without actually pointing towards an advocacy of the policies of “distributism” which I just learned about. This doesn’t seem like a very good option either – it kind of smells like the plan to make millions by the Underpants Gnomes.

Nonetheless, an interesting post that makes things more complicated not less.

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