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5 The Wall Street Inequality Machine

Collins, Chuck Berrett-Koehler Publishers ePub

The priority of the money system shifted from funding real investment for building community wealth to funding financial games designed solely to enrich Wall Street without the burden of producing anything of value.
—David Korten

When we talk about the 1 percent, it is tempting to personalize it, envisioning individual millionaires and specific people in the bottom 99 percent. This is reinforced by the photographs that thousands of people have posted on websites with their “I am the 99 percent” stories.

But, as we’ve discussed, a key explanation for the lopsided distribution of wealth is how the 1 percent teams up with leaders of large transnational corporations in the United States and the rest of the world. In fact, many of the leaders of large transnational corporations are members of the predatory, rule-rigging 1 percent. This corporate 1 percent owns a gigantic percentage of the globe’s private assets and transmits it though ownership flows to shareholders, most of whom are in the top 1 percent of individuals.

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6 How Inequality Wrecks Everything We Care About

Collins, Chuck Berrett-Koehler Publishers ePub

The reality is that U.S. society is polarizing and its social arteries are hardening. The sumptuousness and bleakness of the respective lifestyles of rich and poor represents a scale of difference in opportunity and wealth that is almost medieval—and a standing offense to the American expectation that everyone has the opportunity for life, liberty and happiness.
—Will Hutton (b. 1951)

Inequality is wrecking the world. Not just poverty, which is destroying the lives of billions of people around the planet, but also inequality—the accelerating gap between the 99 percent and the 1 percent.

According to research in dozens of disciplines, the extreme disparities of wealth and power corrode our democratic system and public trust. They lead to a breakdown in civic cohesion and social solidarity, which in turn leads to worsened health outcomes.

Inequality undercuts social mobility and has disastrous effects on economic stability and growth. The notion of a “death spiral” may sound dramatic, but it captures the dynamic and reinforcing aspects of inequality. And these inequalities were a major contributing factor to the 1929 and 2008 economic downturns. What follows is the case against inequality.

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8 The Sleeping 99 Percent Giant Wakes Up

Collins, Chuck Berrett-Koehler Publishers ePub

A true revolution of values will soon cause us to question the fairness and justice of many of our past and present policies… . A true revolution of values will soon look uneasily on the glaring contrast of poverty and wealth.
—Martin Luther King Jr. (1929–1968)

A sleeping giant has awoken. After being told that there is nothing we can do to stop the greed, looting, and growing inequalities, the 99 percent now knows the world doesn’t have to be this way.

The global 1 percent has recovered; their wealth is largely intact and they are back at the speculative gaming table. Meanwhile, the rest of the world is reeling from deep unemployment, anxious employment, diminished wealth, and insecurity.1

In January 2012, Time magazine named the protester as its Person of the Year. All around us are signs of emerging social movements, pointing the way toward a new economy. After seeing their dreams shattered, the 99 percent got organized.

Now the streets are filled with chants and signs: WALL STREET GOT BAILED OUT, WE GOT FORECLOSED. Vast numbers of Americans identify with the rallying cry “We are the 99 percent.”

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10 Bold Rule Changes to Break Up Concentrated Wealth

Collins, Chuck Berrett-Koehler Publishers ePub

In a world of increasing inequality, the legitimacy of institutions that give precedence to the property rights of “the Haves” over the human rights of “the Have Nots” is inevitably called into serious question.
—David Korten (1937)

We must change the rules of the economy so that they serve and lift up the 100 percent, not just the 1 percent. Starting in the mid-1970s, the rules were changed to reorient the economy toward the short-term interests of the 1 percent. We can shift and reverse the rules to work for everyone.

There are three categories of policy changes that we need: rules and policies that raise the floor, those that level the playing field, and those that break up overconcentrations of wealth and corporate power. These are not hard-and-fast categories, but a useful framework for grouping different rule changes.

1.Rule changes that raise the floor

• Ensure the minimum wage is a living wage

• Provide universal health care

• Enforce basic labor standards and protections

2. Rule changes that level the playing field

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3 How the 1 Percent Rigs the Rules of the Economy

Collins, Chuck Berrett-Koehler Publishers ePub

A State divided into a small number of rich and a large number of poor will always develop a government manipulated by the rich to protect the amenities represented by their property.
—Harold Laski (1893–1950)

How does the 1 percent use its power?

Within the 1 percent, there are people who use their economic and political power differently. In one respect, the 1 percent is not much different from the population at large in that only a small segment is engaged in politics and actively advocating on policy matters. Some in the 1 percent care about the 100 percent and work for a fair and sustainable economy. Others are rule fixers, focused on rigging government policies in their favor to get more wealth and power. But the majority are unengaged and happy to watch their wealth accumulate without weighing in one way or another.

The game fixers maintain a worldview that justifies using every tool at their disposal to perpetuate and expand their wealth. Most believe they are the engines of the economic train, creating enterprises and wealth that pull everyone else along. This worldview is well captured in the introduction to the 2010 Forbes 400 survey.

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