Michael Lind: Private sector parasites

[Winehole23]

You don’t have to be a Tea Party conservative to believe that the economy is threatened when there are too many “takers” and not enough “makers.” The “takers” who threaten the dynamism and fairness of industrial capitalism the most in the 21st century are not the welfare-dependent poor — the villains of Tea Party propaganda — but the rent-extracting, unproductive rich.


The term “rent” in this context refers to more than payments to your landlords. As Mike Konczal and many others have argued, profits should be distinguished from rents. (http://rortybomb.wordpress.com/2011/07/07/rents-versus-profits-in-the-financial-reform-battle-and-post-industrial-economy/) “Profits” from the sale of goods or services in a free market are different from “rents” extracted from the public by monopolists in various kinds. Unlike profits, rents tend to be based on recurrent fees rather than sales to ever-changing consumers. While productive capitalists — “industrialists,” to use the old-fashioned term — need to be active and entrepreneurial in order to keep ahead of the competition, “rentiers” (the term for people whose income comes from rents, rather than profits) can enjoy a perpetual stream of income even if they are completely passive.


Rents come in as many kinds as there are rentier interests. Land or apartment or rental-house rents flow to landlords. Royalty payments for energy or mineral extraction flow to landowners. Interest payments on loans flow to bankers and other lenders. Royalty payments on patents and copyrights flow to inventors. Professions and guilds and unions can also extract rents from the rest of society, by creating artificial labor cartels to raise wages or professional fees. Tolls are rents paid to the owners of necessary transportation and communications infrastructure. Last but not least, taxes are rents paid to territorial governments for essential public services, including military and police protection.


All of these goods or services are necessary to make or distribute the goods and services generated by productive industry (which can be government-owned or nonprofit, as well as for-profit). If one or more of the sectors providing inputs or infrastructure to productive industry charges excessive rents, then industry can be strangled. Industry cannot flourish if too much rent is paid to landlords, if credit is too expensive, if excessive copyright protections stifle the diffusion of technology. Even progressives must concede that guilds or unions or professions can use the power of labor monopolies to demand excessive incomes for their members and that at some point high taxes really do strangle the economy. (The evidence of successful high-tax-big government countries like those of Scandinavia suggests that you can go safely up to about 40-50 percent of GDP going to government, assuming the taxes are well spent and raised largely by less-distortionary taxes including consumption, property and wealth taxes).


All of this suggests that, if we want a technology-driven, highly productive economy, we should encourage profit-making productive enterprises while cracking down on rent-extracting monopolies, whether they are natural products of geography and geology (real estate and energy and energy and mineral deposits) or artificial (chartered banks, professional licensing associations, labor unions, patents and copyrights). This is a valid distinction between “makers” and “takers.”http://www.salon.com/2013/03/21/private_sector_parasites/

[Winehole23]

That’s the Rentier Agenda, then — low tax rates on unearned income flowing to passive investors, replacing public utilities with private toll-charging monopolies, and pursuing policies that deter inflation, even at the risk of prolonged, mass unemployment and idle factories. It is no exaggeration to say that the private sector rentiers are not only the real “moochers” and the real “takers” but also are the greatest threat to productive industrial capitalism, in the United States and the world.


What we need is an Anti-Rentier alliance. Such a coalition would scramble the usual patterns of politics. Progressives and conservatives alike would have to distinguish between productive businesses, which we should encourage, and rent-extracting parasites that need to be dealt with. Pro-manufacturing liberals and Main Street conservative populists should unite against what the progressive economist Michael Hudson calls “the tollbooth economy” (http://www.nakedcapitalism.com/2013/01/michael-hudson-americas-deceptive-2012-fiscal-cliff-part-iv-why-financial-and-tax-reform-should-go-together.html) in alliance with what James K. Galbraith calls “the predator state.” (http://www.amazon.com/The-Predator-State-Conservatives-Abandoned/dp/B003E7EUS4)http://www.salon.com/2013/03/22/how_rich_moochers_ruin_america/

[Winehole23]

In two previous (http://www.salon.com/2013/03/21/private_sector_parasites/) columns (http://www.salon.com/2013/03/22/how_rich_moochers_ruin_america/), I argued that left and right alike are confused by a failure to distinguish productive businesses that sell innovative goods and services from “rentier” interests — landlords, lenders, copyright holders and others — which use their natural or artificial monopoly power to extract excessive tolls, fees and other recurrent payments from the rest of society, including productive businesses. The fees or rents extracted by these interests constitute a kind of “private taxation” which — rather than public taxation — is the greatest threat facing America’s productive economy.


Today America’s powerful rentier interests, particularly those in the FIRE (finance, insurance and real estate) sector, are mobilizing campaign contributions and paid propaganda to promote what I called the Rentier Agenda: low taxes on those whose income is derived from capital gains; the privatization of public infrastructure and the deregulation of regulated private utilities, to generate windfall profits for investors in privatized or deregulated agencies; and a macroeconomic policy that serves the interests of creditors, at the expense of slow growth and mass unemployment, rather than productive businesses and workers. Similar observations have been made by many on the left and some mavericks on the right.


To counter the domination of America’s rentier oligarchs, we need an Anti-Rentier campaign that would unite unlikely groups: owners of productive businesses as well as workers, populist conservatives and liberal reformers. An Anti-Rentier movement would distinguish businesses that make profits by providing worthwhile goods or services in innovative ways from rentier interests that passively extract exorbitant tolls and fees from the economy without adding any value.


An Anti-Rentier movement would oppose unproductive, ill-begotten wealth, not the rich in general. Wealthy individuals who get richer by investing in start-up companies or funding long-lived, creative blue-chip firms provide a valuable benefit to society, even as they risk losing their own money. Such risk-taking investors are the opposites of financial sector rentiers who seek to bribe policymakers into letting them privatize their gains while socializing their losses.http://www.salon.com/2013/03/25/defeating_useless_rich_people/

[symple19]

Good read

[boutons_deux]

When will national (DEM) politicians make these same points?

[boutons_deux]

Repugs/VRWC, esp Pete "obsessed" Peterson have totally screwed up the national attention on the debt/SS/medicare as the prime risk, when the financial sector is the much bigger risk and absolutely invetible certain catastrophe.

[ElNono]

thanks for posting

[FuzzyLumpkins]

Why do you envy the rich?

[Winehole23]

If you think that's Lind's deal, you didn't read very carefully.

[Winehole23]

When will national (DEM) politicians make these same points?Don't hold your breath and, Republicans might beat them to it.

[spursncowboys]

The premise that the Tea Party's villains are the welfare community is wrong.

[boutons_deux]

The premise that the Tea Party's villains are the welfare community is wrong.

Randian sociopathy to criminalize the poor

[Th'Pusher]

The premise that the Tea Party's villains are the welfare community is wrong.
He said the welfare dependent poor are the villains of tea party propaganda, which is absolutely accurate.

[FuzzyLumpkins]

If you think that's Lind's deal, you didn't read very carefully.

:lol It was a joke man. Sorry should have used blue font but I was trying to channel team read.

[spursncowboys]

He said the welfare dependent poor are the villains of tea party propaganda, which is absolutely accurate.
propoganda huh...any amount of proof I would appreciate. when smearing a group you don't agree with, it's probably safer to just play strawman I guess.

[Th'Pusher]

propoganda huh...any amount of proof I would appreciate. when smearing a group you don't agree with, it's probably safer to just play strawman I guess.

Seriously? Obama phones, 48% of Americans dependent on government. The tea party has been demonizing the takers and the welfare state since its inception.

[ElNono]

http://thenewbostonteaparty.com/2013/01/26/obamas-takers-sucking-us-dry.aspx

http://teapartyorg.ning.com/forum/topics/charting-the-producers-vs-the-takers-not-the-welfare-moochers-it

http://crooksandliars.com/john-amato/dallas-tea-party-dennis-phillips-calls-

http://www.teapartytribune.com/2013/01/11/the-food-stamp-economy/

http://beforeitsnews.com/tea-party/2013/01/the-shocking-cost-and-failure-of-the-welfare-state-2475658.html

http://www.teaparty.org/over-60000-in-welfare-spent-per-household-in-poverty-14864/

http://washingtonexaminer.com/tea-party-are-welfare-free-phones-slavery/article/2510750

[Th'Pusher]

^ straight to the punch...

[Wild Cobra]

http://www.teaparty.org/over-60000-in-welfare-spent-per-household-in-poverty-14864/

This ones could be used to make a good argument for The Fair Tax. Take out the bulk of the bureaucracy, and send all adults a monthly check.

[Capt Bringdown]

With regard to rentiers, Lind channeling the spirit of America's greatest economist, Michael Hudson (http://michael-hudson.com/):


The landowning and financial classes fought back, seeking to expunge the central policy conclusion of classical economics: the doctrine that free-lunch economic rent should serve as the tax base for economies seeking to be most efficient and fair. Imbued with academic legitimacy by the University of Chicago (which Upton Sinclair aptly named the University of Standard Oil) the new post-classical economics has adopted Milton Friedman’s motto: “There Is No Such Thing As A Free Lunch” (TINSTAAFL). If it is not seen, it has less likelihood of being taxed.

The political problem faced by rentiers – the “idle rich” siphoning off most of the economy’s gains for themselves – is to convince voters to agree that labor and consumers should be taxed rather than the financial gains of the wealthiest 1%. How long can they defer people from seeing that making interest tax-exempt pushes the government’s budget further into deficit? To free financial wealth and asset-price gains from taxes – while blocking the government from financing its deficits by its own public option for money creation – the academics sponsored by financial lobbyists hijacked monetary theory, fiscal policy and economic theory in general. On seeming grounds of efficiency they claimed that government no longer should regulate Wall Street and its corporate clients. Instead of criticizing rent seeking as in earlier centuries, they depicted government as an oppressive Leviathan for using its power to protect markets from monopolies, crooked drug companies, health insurance companies and predatory finance.

This idea that a “free market” is one free for Wall Street to act without regulation can be popularized only by censoring the history of economic thought. It would not do for people to read what Adam Smith and subsequent economists actually taught about rent, taxes and the need for regulation or public ownership. Academic economics is turned into an Orwellian exercise in doublethink, designed to convince the population that the bottom 99% should pay taxes rather than the 1% that obtain most interest, dividends and capital gains. By denying that a free lunch exists, and by confusing the relationship between money and taxes, they have turned the economics discipline and much political discourse into a lobbying effort for the 1%.

So we are experiencing the end of a myth, or at least the end of an Orwellian rhetorical patter talk about what free markets really are. They are not free if they are to pay rent-extractors rather than producers to cover the actual costs of production. Financial markets are not free if fraudsters are not punished for writing fictitious junk mortgages and paying ratings agencies to sell “opinions” that their clients’ predatory finance is sound wealth creation. A free market needs to be regulated from fraud and from rent seeking.

America’s Deceptive 2012 Fiscal Cliff – Part 4 >>> (http://neweconomicperspectives.org/2013/01/americas-deceptive-2012-fiscal-cliff-part-4.html)

[spursncowboys]

Seriously? Obama phones, 48% of Americans dependent on government. The tea party has been demonizing the takers and the welfare state since its inception.
Being against the program is not the same as being against the person. As a Tea Party person I think it makes sense for someone to take advantage of things he/she is able to. People aren't stupid. ElNono: thanks for the links to help with my point.

Verdict: Strawman

[spursncowboys]

http://www.teapartytribune.com/2013/...stamp-economy/ (http://www.teapartytribune.com/2013/01/11/the-food-stamp-economy/)

Case in point. Welfare money being used for strip clubs

[Th'Pusher]

http://www.teapartytribune.com/2013/...stamp-economy/ (http://www.teapartytribune.com/2013/01/11/the-food-stamp-economy/)

Case in point. Welfare money being used for strip clubs

I think you need to look up the definition of the words strawman and propaganda. The op stated that the tea party vilifies the welfare class through propaganda, which you objected to, and now you're posting links to propaganda of the tea party vilifying the welfare class. What's the strawman here and what is your argument?

[spursncowboys]

I think you need to look up the definition of the words strawman and propaganda. The op stated that the tea party vilifies the welfare class through propaganda, which you objected to, and now you're posting links to propaganda of the tea party vilifying the welfare class. What's the strawman here and what is your argument?
The OP stated that the welfaret dependent poor are the villians of the TP, which you pointed out (:toast). That is incorrect. They are not against the recepients of welfare but the programs. Some might be against it altogether. Some might be against the longevity of it. Most are against the state it is in now, and want it fixed.

The strawman is against you. Reiterating that the TP are against people and using propaganda.

[Th'Pusher]

The OP stated that the welfaret dependent poor are the villians of the TP

No. It did not. It said that the welfare dependent poor are the villains of tea party propaganda, which both you and El have provided links to verify, is in fact true.

[RandomGuy]

http://thenewbostonteaparty.com/2013/01/26/obamas-takers-sucking-us-dry.aspx

http://teapartyorg.ning.com/forum/topics/charting-the-producers-vs-the-takers-not-the-welfare-moochers-it

http://crooksandliars.com/john-amato/dallas-tea-party-dennis-phillips-calls-

http://www.teapartytribune.com/2013/01/11/the-food-stamp-economy/

http://beforeitsnews.com/tea-party/2013/01/the-shocking-cost-and-failure-of-the-welfare-state-2475658.html

http://www.teaparty.org/over-60000-in-welfare-spent-per-household-in-poverty-14864/

http://washingtonexaminer.com/tea-party-are-welfare-free-phones-slavery/article/2510750

Pretty much lays it out.

Poor people = villians. Probably didn't take long to put together.

WHile the tea party is not by any means a pure monolith, to claim that the general theme of " poor people are mooching off rich people " is not a commonly held belief on the part of the tea party is simply not credible.

We have instituted, at the behest of wealthy people, a system of poor to rich transfers that is quite the opposite of what the tea party likes to think is happening.

The wealthy in this country can, and DO, pay for the media, think tanks, and outright propaganda, to shape the narrative and take advantage of the self-styled conservatives in this country. Most Republican voters have beceome "useful idiots" to this.

The wealthy can pay for the consultants and media firms to get out the messages in a way that pushes the emotional hot-buttons of these useful idiots.

Rich people aren't rich, they are "job creators", is the most recent example. Do you think that new narrative was just a spontaneously thought up term? or was it created by a well-paid K streeter? Figure the odds.

This is just ONE example, of well paid GOP strategists shaping the narrative to play into the myth of the "American Dream". It is so emotionally appealing that even when we have very solid evidence that being poor in this country at birth will most probably mean you will die just as poor, if not poorer. Work as hard as you like, but you will be just as poor 10 years from now, due to these poor to rich transfers.

That is simply how our economy is set up. The wart on the backside of capitalism, and the oligarchy that the wealthy in this country are striving, consciously or unconsciously , to acheive.




Oligarchy (from Greek ὀλιγαρχία (oligarkhía); from ὀλίγος (olígos), meaning "few", and ἄρχω (arkho), meaning "to rule or to command")[1][2][3] is a form of power structure in which power effectively rests with a small number of people. These people could be distinguished by royalty, wealth, family ties, education, corporate, or military control. Such states are often controlled by a few prominent families who pass their influence from one generation to the next.[citation needed] In his 2011 book Oligarchy, Jeffrey A. Winters defines oligarchy as "the politics of wealth defense by materially endowed actors". In Winters' definition, massive wealth is the key factor in identifying oligarchs.

Throughout history, oligarchies have been tyrannical (relying on public obedience and/or oppression to exist) or relatively benign. Aristotle pioneered the use of the term as a synonym for rule by the rich,[4] for which the exact term is plutocracy, but oligarchy is not always a rule by wealth, as oligarchs can simply be a privileged group, and do not have to be connected by bloodlines as in a monarchy.

[boutons_deux]

http://www.teapartytribune.com/2013/...stamp-economy/ (http://www.teapartytribune.com/2013/01/11/the-food-stamp-economy/)

Case in point. Welfare money being used for strip clubs

No doubt, there's fraud everywhere. can NY Post and tea baggers come up with %age of public assistance spent on strip club, etc? How big is the problem?

why aren't tea baggers going after hospitals, docs, clinics, etc that defraud Medicare and Medicare out of $10Bs/year?

tea baggers are old, white racist assholes, white supremacists agitating against the poor blacks and browns. Whom the tea baggers target blatantly exposes their bogus "patriostism".

[RandomGuy]

Examples of poor to rich transfers:

Home mortgage interest deduction.
Concentration of stock ownership of stocks and bonds.

[RandomGuy]

http://www.teapartytribune.com/2013/...stamp-economy/ (http://www.teapartytribune.com/2013/01/11/the-food-stamp-economy/)

Case in point. Welfare money being used for strip clubs

Trial by anecdote. A favorite tactic of those seeking to manufacture outrage.

As boutons rightly pointed out, you will always have fraud in any system, private or public.

I will never claim that no public funds go to such purposes. That would be dishonest and misleading.

The important question is what percentage of such funds do awry?

The real question we should be asking ourselves, if we are to be honest:

what percentage of assistance are we willing to tolerate being misused?
Is the current percentage of misuse higher, or lower than the general consensus as to what the percentage should be?


If, for example, public assistance keeps 19 children fed and out of homeless shelters for every one jackass who spends it on cigarettes, I find that a fair trade off. I also think that such jackasses should be punished, and that good oversight to find and prosecute those jackasses shoudl be a part of the program.

The exact percentage would have to be soemwhat based on the amount of benefit to the wider economy such programs have, in terms of keeping children and vulnerable poor in more financially/physically secure situtations.

[DarrinS]

Examples of poor to rich transfers:

Home mortgage interest deduction.
Concentration of stock ownership of stocks and bonds.


???

[RandomGuy]

???

Well meant:

Look it up. I have to get going, but if you are really curious as to why these are poor to rich transfers, you will have to brush up on economics a bit, and do some reading.

The concepts aren't too hard, but I can fill in the blanks later, if you would like. My claim, my burden of proof.

I would hope though, that you might leave your information bubble a bit, and find it on your own. Much more rewarding than being spoon fed. :)

[ElNono]

The OP stated that the welfaret dependent poor are the villians of the TP, which you pointed out (:toast). That is incorrect. They are not against the recepients of welfare but the programs. Some might be against it altogether. Some might be against the longevity of it. Most are against the state it is in now, and want it fixed.

The strawman is against you. Reiterating that the TP are against people and using propaganda.

Come on, this is disingenuous at best. They certainly vilify certain people on welfare to rile against the overall program (the article you linked is further proof of that).

It's no different than "Trump buys new luxury boat with his corporate tax savings" or "CEO granted golden parachute after personnel layoffs"...

[Wild Cobra]

I would like to see all parasites evolve into productive citizens. The problem is, how do we get there. I will contend that part of the process means making the subsidies less, and making the poor more willing to work hard low paying jobs.

[boutons_deux]

I would like to see all parasites evolve into productive citizens. The problem is, how do we get there. I will contend that part of the process means making the subsidies less, and making the poor more willing to work hard low paying jobs.

the poor aren't the problem

THE PROBLEM : the wealthy 1%'s parasites, wealth extractors, game riggers, rentier capitalists seeking more wealth and power no matter who or what gets screwed, killed, diseased, polluted.

[TeyshaBlue]

lol...WC misses the point of the OP...again.

[Wild Cobra]

lol...WC misses the point of the OP...again.
I wasn't responding to the OP. Welfare was brought up.

[ElNono]

lol...WC misses the point of the OP...again.

Not to mention the fact that hard low paying jobs is what drive more people to welfare, not less.

Welfare doesn't only kick in when you don't have a job, programs like food stamps are there to complement earnings of producing citizens that just can't make ends meet.

[Winehole23]

Eat shit and die, it's the eternal libertarian way.

early adopters chop off other people's heads, in the big libertarian family goatfuck.