Klepto-Capitalism

By Ed Raymond
Staff Writer
When foreigners come to visit our man in Afghanistan, Hamid Karzai, they bring sacks of money as “gifts.”  Then, when the foreigners are gone, Karzai takes the sacks to Swiss banks and deposits them as part of his retirement plan. Remember: We spend $190 million a day in Afghanistan. When chief financial officers of U.S. corporations leave our shores to go to their banks on little islands in the Atlantic or Pacific, they bring sacks of money to stash in post office boxes, their main “office.” Both Karzai and our CFOs have that fatal disease, Kleptomaniac-Capitalism. This disease can lay dormant in corporate board rooms and congressional offices for nanoseconds, but then like black-winged vultures chomping carrion, can pop out and attempt to eat every dollar in sight. Klepto-capitalism is best described as the obsessive impulse to steal in the absence of economic necessity.

I wonder if our economic cycles might be patterned after cicadas (locusts) that come out of the ground every 17 years and eat everything green. It seems to take about that time for the vulturous klepto-capitalists to drive our economy into a recession or depression. Check it out. We had the gluttonous Gilded Age of the Rockefellers, Vanderbilts, Goulds, and Morgans that essentially turned much of the country into feudal slave estates.  Mark Twain described Jay Gould as “the mightiest disaster which has ever befallen this country. The people had desired money before his day, but he taught them to fall down and worship it.”  Recessions followed. We had the crash of 1929 with klepto-capitalists throwing themselves out of Wall Street windows grasping their worthless stock certificates. Then recessions and the Great Depression.

We are now in another recession. The “public servants” who are running the Washington Buffet for the kleptos keep lying to us about what is really happening. The Bureau of Labor Statistics announced last week our unemployment rate is now 9.8 percent. That’s a lie. That figure only represents those who have not given up trying to get a job! Best estimates indicate that our real rate is well over 15 percent with the possibility that we have over 22 million unemployed and underemployed workers. The feds say we have 14.8 million jobless with only 8.5 million getting unemployment benefits. We need over 11 million new jobs now just to get down to a 5 percent unemployment rate.
Picking up the Porsche at Nieman Marcus
Washington politicians say they are attempting to solve our huge deficit, by arguing over tax cuts for the rich and the extension of unemployment benefits for the unemployed poor and middle class. Meanwhile, the klepto-capitalists from Wall Street and the Chamber of Commerce are busy dragging their sacks of cash to Washington, paying off their cheap labor in the congressional trenches. Greeks forecast the future by analyzing the smelly guts of animals.

The kleptos will win because I forecast through the luxury market stats: BMW sales are up 17 percent from last year, Porsche is up a whopping 61 percent, Lexus sales are up 8 percent, Saks Fifth Avenue sales are up 8.1 percent, and Nieman Marcus sales are up 11.5 percent.

All of this while the bottom 90 percent have not received a salary increase in real terms for three decades. We are now officially the leading “Banana Republic” in the world. Presently 22 percent of our children are in poverty, 48 million people are on food stamps, and over half the 1.5 million U.S. bankruptcies are a result of obscene medical bills.
A Moment of Rational Sobriety
Klepto-capitalism and free markets go hand in hand. Ronald Reagan and Alan Greenspan both preached that “government is the problem.”  Greenspan fought the attempt to regulate junk bonds, derivatives, the mortgage market, and the other financial crap the Wall street kleptos were selling. At one time in 2007, the derivatives market alone represented 12 times the value of the total world economy, making Wall Street the biggest casino in the universe! When the markets crashed in 2007 during the Lurch administration, Ayn Rand devotee Greenspan, in a moment of “rational sobriety,” said he was wrong about the free market. Actually, any kid who has won all the marbles on the playground quickly learns he has no one to play with.
Let’s Examine A Country That Works
In a 2010 Newsweek poll, Finland, with a population of 5.4 million, was ranked the best country in the world based on quality of life, education, political environment, health care system, and “economic dynamism.”  It is the second “most stable” country out of 198. It is the most prosperous according to the 2009 Legatum Prosperity rating. Even if it is a “welfare state” as described by some, The World Economic Forum rated Finland the seventh “Most Competitive” country in the world, way ahead of the U.S. Not only does Finland have the highest graduation rates, it also has the highest number of graduates to population at the typical age of graduation. I won’t give our rankings because they are too embarrassing.

For years Finland has led the world in international comparisons of national performance. Finland’s high-tech economy is ranked the most competitive in the world. As an example, Nokia has over 30 percent of the world cellphone market, employs about 60,000 people (about 25,000 in Finland alone), has factories in ten countries and research and development facilities in 15. The CEO of Nokia makes about $5 million a year and seems satisfied. Evidently he is not a klepto.
Is There a Lesson in a $217,000 Speeding Ticket?
Finns seem to have a unique egalitarian way of punishing malfeasance.  As an example, ordinary fines are based on ability to pay, not set fees. One of the richest men in Finland, an heir to a big sausage business, made the headlines by paying the largest speeding fine in history. Going 80 kilometers an hour in a 40kph zone cost him the equivalent of $217,000 because his annual income approached $9 million. The Finns believe in sending several messages this way: (1) “We don’t give a damn who you are, you broke the law and endangered lives,” (2) ” Perhaps this size fine is enough to inhibit your heavy foot.”

Although we hear a lot about our freedom of the press and speech, the international organization Reporters Without Borders ranks Finland #1 in freedom of the press. The same organization ranks us 22nd.

Finland is second to Sweden in the percentage of Gross Domestic Product invested in research and development (R&D), mostly in the high-tech field to keep Nokia #1 in the world.
Why Finland Works
Finns pay about 45 percent of their personal income in taxes. This is what they get in return:  Education, including university level, is paid for by the state, resulting in the best-educated population of all industrialized countries. So is all health care. Parental family leave up to 11 months for childcare is paid at a 60 percent rate. Eighty percent of day-care costs are paid by the state. If a Finn loses a job, unemployment benefits are paid up to 70 percent of salary for 18 months. At retirement, pensions are paid at 60 percent of last salary.

Finns say it’s impossible to keep a welfare state running unless everyone pitches in. A director for an economic think tank puts it this way: “The Finnish mindset is collectivist, with a strong sense of fairness. We do not regard social spending as a drag on economic growth and job creation.”

Perhaps we could learn something from the Finns. Fifty years ago they sold pulp wood to the world from their huge forests. Then they decided to educate their citizens. Now they have fewer land-line telephones than any other country in the world. Each Finnish home is equipped with a computer & high-speed broadband–and is maintained by the government. This policy assures high educational standards and easy access to the Internet. Finnish teachers are also selected from the top third of university graduates.
 
Chief Justice Oliver Wendell Holmes: “Taxes Are What We Pay for Civilized Society”

The above statement by Chief Justice Holmes seems to fit rather well with how the Finns view payment of taxes -– and they seem to have a very civilized society. But perhaps the English writer G.K. Chesterton best summarized the position of most of the wealthy in the world: “The poor have sometimes objected to being governed badly; the rich have always objected to being governed at all.” Perhaps you remember the memorable words of Leona Helmsley, the hotel owner who married rich, who said before her income tax trial: “Taxes are for little people.” Above every Wall Street bank door writ in invisible ink is the mantra: “Greed is Good –- Taxes Bad.”

Most of the rich seem to believe that they acquired their wealth strictly by themselves through their own indomitable efforts. That’s why they believe they have earned 500 times what their average employee makes. The wealthy need a constant reminder that competent workers were educated by taxpayers in public institutions, products sold by their outlets were distributed on roads, airlines, railroads, and ships often supported or subsidized by taxpayers, and they eat in regulated five-star restaurants where inspectors paid by taxpayers keep the cockroaches and the grease in check.

In a letter to the editor of the New York Times, a Texas taxpayer took an anti-klepto approach: “I have $5,000 this year beyond what I need. Ads suggest I spend this extra money on a diamond-encrusted watch. But I would rather buy better schools, more federal research on health, public roads without tolls, financially sound Social Security, and vehicles for troops with enough armor to resist Afghan explosives.”
A Million For Billionaires, A Penny For The Tomato Pickers
In the TV game “Wheel of Fortune” we often hear participants yell “Big Money! Big Money!” as they spin the wheel. That’s evidently what the Washington politicians are hollering this weekend as they “spin” to handle Bush’s tax cuts. The richest one percent already own 34 percent of the total net worth in the U.S., but like true kleptos, they want more.  The Republicans want to give the richest 0.1 percent of taxpayers a $370,000 check to “create jobs.” What will they buy? Another Lamborghini? A bigger French Benet yacht?

More cashmere sweaters and 300 pairs of handmade Belgian shoes like Bernie Madoff? More snowmobiles, boats, and vacation homes like Denny Hecker?  It’s ironic that 30,000 tomato pickers around Immokalee, Florida, will finally, after a 15-year struggle, get a penny more per pound for picking. This might raise their pay to $17,000, which is still way below the poverty line.

During Bill Clinton’s eight years over 22 million jobs were created. During the eight years of Bush tax cuts for the rich he created the grand net total of 1.08 million jobs. Why didn’t the rich spend all of their big tax cuts creating jobs during the klepto years of Lurch? Now the Republicans want to add another $700 billion to the deficit so our grandchildren can pay China back for the loans to give our millionaires and billionaires tax breaks!

The CEOs of Oracle (software) and Cisco Systems (servers and software) estimate that American corporations have stashed at least $1 trillion in overseas “hidey-holes” to avoid U.S. taxes. Of course, the BEST CONGRESS MONEY CAN BUY is doing absolutely nothing about this kleptomania. It proves that a rich blind hog, when guided by a congressman he has rented for the season, can find acorns when he is in the Washington, D.C. acorn warehouse on Capitol Hill.

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