or the dark side of billions of dollars:
First the Definitions:
noun, plural oligarchies.
1. a form of government in which all power is vested in a few persons or in a
dominant class or clique; government by the few.
1. an economic system in which investment in and ownership of the means of
production, distribution, and exchange of wealth is made and maintained chiefly
by private individuals or corporations, especially as contrasted to cooperatively
or state-owned means of wealth.
When government people abrogate laws, rules or regulations that are basic controls
of capitalist’s failing in their ethical, moral, financial or societal relationships, the rise
of capitalistic oliarchy makes itself a prescient, realitistic entity.
There have been red flags, the first one was Enron, December 1, 2001. The SEC
and Arthur Anderson allowed Enron’s management to switch from regular accouting
methods for natural gas to mark to market accounting, a less reliable standard that
is today’s financial world, The next red flag is tax havens but the outlaying countries are not the only ones doing offshore havens. While US corporations and people are availing themselves of off shore, other countries and people are availing themselves of the US. See the list here: for offshore tax havens.
Now back to accounting methods that are the beginnings capitalistic oligarchy’s:
Mark-to-market or fair value accounting refers to accounting for the “fair value” of an
asset or liability based on the current market price, or for similar assets and liabilities,
or based on another objectively assessed “fair” value. Fair value accounting
has been a part of Generally Accepted Accounting Principles (GAAP) in the United States since
the early 1990s, and is now regarded as the “gold standard” in some circles.
Mark-to-market accounting can change values on the balance sheet as market conditions change
. In contrast, historical cost accounting, based on the past transactions, is simpler, more stable,
and easier to perform, but does not represent current market value. It summarizes past transactions
instead. Mark-to-market accounting can become volatile if market prices fluctuate greatly or change
unpredictably. Buyers and sellers may claim a number of specific instances when this is the case,
including inability to value the future income and expenses both accurately and collectively, often due
to unreliable information, or over-optimistic or over-pessimistic expectations.
Basially, what they are doing is saying that a piece of property is going to go into development or be
sold for double the assessed value, for whatever reason. The bank that sold the
property loan to a trader to be bundled with like mortgages, than sells the bundles to investors, who assume
all the current and future risk that indeed the property won’t be developed and in fact, the value, will decline.
The financial crisis (Wall Street) spread to the real economy (Main Street) in the form of the recession we are currently experiencing. While the recession became noticeable in late 2008, it actually started much earlier.
The National Bureau of Economic Research (NBER), which is the official arbiter of U.S. business cycles, dates
the beginning at December 2007, yet there are signs of an economic slowdown as far back as early 2006.
Who are these individuals that own or manage wide swaths of multinational companies?
While millionaires constitute only a small percentage of the population, they hold substantial control over economic resources with the most powerful and prominent individuals usually ranking among them
Roughly 1.0% of high-net-worth individuals (HNWIs) can also correctly be identified as ultra-high-net-worth individuals (ultra-HNWIs), those who reside in households with a net worth or wealth of $30 million or more
The United states has 7,135,000 millionaire households – 2013
Goldman Sachs trader, David Tepper made $3.5 Billion in 2013
In total, the 25 highest-earning hedge fund managers and traders made $24.3 billion in 2013. The lowest earning hedge fund
managers on our list made $280 million last year.
The list for the top earners are here: The Highest-Earning Hedge Fund Managers and Traders
Most investors are aware that the 4-year cycle peak comes into play this year. What few realize is how both Washington and Wall Street are using this cycle as a fulcrum
for gaining political as well as economic advantage. In this commentary we’ll look at how the hedge fund industry is manipulating certain key markets for political ends as
much as financial gain, and how even the president has been forced to respond. It will quickly become apparent how the puerile and self-serving actions of the top hedge
fund managers serves to create friction for everyone concerned.
By the end of June, corporate contributions to super PACs — that is, contributions directly from corporations and not from
their executives or in-house super PACs — had reached $10.9 million for the entire 2014 election cycle, according to a review of FEC records by The Huffington Post. This remains
just a small percentage of the more than $300 million
contributed to all super PACs over the same period of time. But a number of these groups relied heavily on corporate
contributions, including from the difficult-to-trace LLCs.
Advancing Freedom Action Network is one of the six super PACs receiving more than 90 percent of their funds from
corporations. Five of these back just a single candidate,
while the sixth, Freedom Partners Action Network, is part of the billionaire Koch brothers’ political network.
I would add, Known Corporate Contributions: The people in corporations are deal makers, they know how to do financial sleight of hand, manipulate financial reports and not to the advantage of the one doing business with them.
From corner offices all over town, the members of The Hill’s Top Lobbyists list are the advocates, lobbyists and professional agitators
who shape the policy decisions made in the nation’s capital.
While some fit the mold of a traditional lobbyist, others have made public relations, grassroots advocacy and even data-crunching
the tools of their trade.
The broad sweep of The Hill’s list means that only a portion of the people listed are officially registered to lobby the government,
but that doesn’t diminish their clout.
From “hired guns” who run into battle for clients, to association heads who wield the power of industries, to union leaders who exert
might through membership, the names are all players to know in the competitive world of Washington advocacy”
When you step back and look at the numbers, the billions of dollars or of any other currency, the dark side of capitalism is wearing fancy clothes or perhaps not.
Do keep in mind the story of The Emperor’s New Clothes, published in 1837.
Plot: A vain Emperor who cares about nothing except wearing and displaying clothes hires two swindlers who promise him the finest,
best suit of clothes from a fabric invisible to anyone who is unfit for his position or “hopelessly stupid”. The Emperor’s ministers cannot
see the clothing themselves, but pretend that they can for fear of appearing unfit for their positions and the Emperor does the same.
Finally the swindlers report that the suit is finished, they mime dressing him and the Emperor marches in procession before his subjects.
The townsfolk play along with the pretense, not wanting to appear unfit for their positions or stupid. Then a child in the crowd, too young to u
nderstand the desirability of keeping up the pretense, blurts out that the Emperor is wearing nothing at all and the cry is taken up by others.
The Emperor cringes, suspects the assertion is true, but continues the procession.
Kenneth Lay, He died while vacationing in Snowmass, Colorado, on July 5, 2006, about three and a half months before his scheduled October 23 sentencing.
Jeff Skilling In 2006, he was convicted of federal felony charges relating to Enron’s financial collapse and is currently serving 14 years of a 24-year
Andrew Fastow- After entering into a plea agreement with a maximum penalty of 10 years in prison and the forfeiture of US$23.8 million in family assets, on September 26, 2006, Fastow was sentenced to six years, followed by two years of probation. release on December 16, 2011
And new ‘Emperor’s are already in line to take their place.
When the product of labor is not considered a tangible commodity, rather when making a profit by being the ‘middleman’ for the commodity, protected or valued more by government or has more influence in government than the majority of a society, any society morphs into a Capitalist Oligarchy.
Since the Enron episode and before that the S&L episode, I’ve watched the US Congress and others be more influenced by the capitalists. Our governing leaders, have to be point of ‘forgiving them their sins’ (bailouts, plea deals, fines), to the point of being influenced by their idea or theory of a political agenda, to the point of enacting that political agenda as the political agenda of the US. None of which are in the best interests of governing a society, but in their best business interests.
Yet, their non sequitur is always …blame someone else, focus attention on a social issue while the sleight of hand is, duplicitously, entering in their agenda, their best interest, in legislation.
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It’s a half full/half empty rhetorical argument upon which our politics pivot. The wealth of the few is subsidized by the poverty of the many. If every employer provides health care to and pays a living wage to their workers, then the costs of goods and services increases for the consumers. Workers who earn more can afford to pay more for these. It is the wealthiest members of society whose wealth is diminished by an equitable sharing of society’s rewards. Hence, the compelling need and the enormous effort expended by society’s true freeloaders to convince the workers that they are the unworthy benefactors of their own labors.
”The wealth of the few is subsidized by the poverty of the many”? I’m not understanding that one as relates to Capitalistic Oligarchy.
To me, it’s not a matter of sharing as much as curtail the inherent greed factor that borders on criminal to actual criminal, in capitalism. A good example: Andy Fastow made $65 million dollars for ‘managing fees etc ….on a couple…. of his ‘entity inventions’, yet he was only fined $23.6 million and some jail time.
The same happened with all the foreclosure people on the first levels that changed buyer mortgage financial information so they would qualify for a bank loan, a fine and jail time. And it’s happening with car dealers, now in the subprime auto loans. Some have been caught, others not.
The lack of regulations/legislation or the lack of enforcers/enforcement of same…..the legislated deductions/credits that give more benefit to the wealthy…..is the present problem that gives the loopholes for the capitalistic oligarchy to ..in effect…cheat or gain more than their share.
When the government scales of justice, with a system of capitalism, enables the few to gain more of the financial benefits of production, the government is not a democracy or a Republic.
It’s not that they are freeloaders, it is that they take advantage of the government and system to enrich themselves beyond the level of their actual worth to any gains. Bernie Madoff proved my theory. Though he was ‘caught’, many that also benefitted didn’t, those that lost are still waiting for an equitable recompense for what they lost. The 4,000 tier level employee’s of Enron, well they’re sunk.
And now the US Congress, in their mighty weighed wisdom, have given the banks the green light to bet derivatives….again. Some would say because they got scammed in the effort to keep from a government shutdown, but more like… not many objected. If there is another recession or even depression which would leave the majority in poverty ..again, it can be traced directly back to this.
”Yoder, a second-term congressman whose largest contributors are in the finance industry, introduced the provision last summer. It was literally written by Citigroup executives, but Yoder took their language and rolled it into an amendment to a spending bill in a House subcommittee meeting. It got swept into the year-end spending package because it “was within the scope of negotiations” on it, according to an Appropriations Committee aide.
It happened in the financial services subcommittee of the appropriation committee and went up the line, lobbied for by CITI.
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I am delving more into the financial sector information. The World Economic Forum, ergo, the Capitalistic oligarchy, met in Davos, Switzerland over the weekend.
Blackstone, is the single largest owner of single family homes in the US. They have 620,000 employee’s, worldwide. They are number 13 employer in the world. An Investment group. https://www.youtube.com/watch?v=fhaYEzPg0Ng It’s an interesting video to watch and hear what the CEO Stephen Schwarzman has to say.
They aren’t the only ones.