Plutocracy

Update January 2017 the initials "MM" stand for Michael Moore.

California Bob writes:

We went to see MM's "Capitalism: A Love Story." Like all MM's movies, excellent. I don't think I got as many robust guffaws out of this one, but it may have been that there were only 3 other people in the theatre: a crowd seems to stimulate the laugh factor.

One of the segments is about Citigroup's "Plutonomy" letter, written by Citigroup analysts, describing a bifurcated world run by plutocrats. MM casts this as praise for the plutonomy, suggesting it supports the plutonomy and offers advice on how to perpetutate and strengthen it, and warns of dangers to the rule of the wealthy.

I found and read the letter (see link). It does contain a lot of surprising statements, astonishing facts delivered in blase tones. But basically its real purpose is to advise clients to buy shares in companies that cater to the wealthy, be(cause) the super-rich are here to stay.

Skip over the turgid data and read some of the commentary.

http://www.scribd.com/doc/6674234/Citigroup-Oct-16-2005-Plutonomy-Report-Part-1

The letter is dated October 2005, before Obama's election, before the crash, etc., and many of their statements have been disproven. Excerpts (paraphrased):

"The world is dividing into two blocs -- the plutonomies, where economic growth is [controlled] by the wealthy few, and the rest."

"There is no such animal as "the US consumer"...there are rich consumers, few in number, but disproportionate in their gigantic slice of income and consumption..."

"The plutonomy is here, and is going to get stronger, its membership swelling from globalized enclaves in the emerging world..."

"The top 1% of US households account for 33% of net worth, greater than the bottom 90% of households combined. It gets better (or worse, depending on your political stripe) -- the top 1% of households account for 40% of financial net worth, more then the bottom 95% of households put together."

(On how plutonomies became so:) "(Author) Phillips argues that certain factors seem to support "wealth waves" -- a fascination with technology, a cooperative government, an international dimension of overseas conquests and immigrants invigorating wealth creation, rule of law, patents...these transformations can be considered as surges of complexity -- waves of economic, political and commercial change -- that break down old relationships, greatly favoring persons with position, capital, skills, and education."

[Consider this when you ask yourself, "why are so many elements of modern life so needlessly COMPLEX?" -cb]

"One hypothesis suggests dopamine differentials can explain differences in risk-taking between societies. Dopamine is linked with curiosity, adventure, entrepreneurship...immigrant nations have high dopamine-intensity populations..."

"Perhaps one reason societies allow plutonomy, is because enough of the electorate believe they have a chance of becoming a pluto-participant. But if voters feel they cannot participate, they are more likely to divide up the wealth pie, rather than aspire to be rich...."

"...A backlash against plutonomy is not imminent....so long as electorates feel they are getting rich in absolute terms, even if they are less well off in relative terms, there is little threat..."

Gave me a new perspective on how the world really works.