You would be hard pressed to avoid a headline implying the 1% are getting richer by the day. Everyday the “markets” bounce higher – the headlines are more frequent.
However, another headline has suddenly been making its way around the social circles and that is “The Rich ain’t paying their fair-share!”
In days of yore (circa 2007) the latter was barely even a whisper. Why? Because during the subsequent build up everyone (a relative term) seemed to be getting “rich” at the same time. The Dot-com bubble had come and gone basically squashing most early start-ups and techno instant millionaires.
Yet, for those that did not partake in that tech-bubble (which was the vast majority) they were mightily rewarded with their own millionaire-making, cash dispensing ATM called: a house. This led to what we now refer to as “The Real Estate Boom.” You know, the one that also resulted in the bust of 2008/09, but that’s for another article.
As the Dot-Com debacle imploded, what it showed writ large, was that the only reason why many of these once “brainchild of business ideas” were allowed to ascend to the once coveted arena known as “going public” was for their ability to obfuscate rather than prove they had a business model that worked, producing products or ideas that others would pay for to begin with. And, were producing net, repeat, net profits that paid the bills. The public markets (aka “Capital Markets”) were merely the next and necessary step to add true scale.
That’s what transpired then, and particularly, today.
What we are now experiencing has been the idea manifested during the Dot-Com crisis on steroids, where “businesses” (yes, quotes required) have been nothing more than a idea to hype, backed by accounting, lending, regulatory and reporting standards so blatantly reduced the term “lax” would imply burdensome.
Then, these same “businesses” would access the public markets and swindle as much ill-gotten loot before the authorities figured it all out. That is – if they would/could at all. Emphasis on the latter, if what we’re watching currently holds.
The difference today from the prior, is that we had that “Boom” in the middle of what is known as the “Home-ATM.”
This, in-part, reduced the glaring stares usually associated with stock market booms and busts. The reason? Everyone was looking in their own mirrors knowing (though many didn’t want to admit it) that they pretty much did the same thing in-kind. i.e., They could be held to the same rank and rancor as those on Wall Street. Remember, NINJA Loans?
But a funny thing happened on the way to “clearing market pricing and overvaluations” in 2009. That “thing” was called “quantitative easing” (QE) aka money printing, where suddenly the “Rich” were not only made whole, but ascended to their highly coveted realm of “Dirty Stinkin’ Rich!”
This was not lost on many. Again, emphasis on, many.
Not only has the vast majority of those that never partook in any of these “minting millionaires” excursions noticed. So too has that other “majority” that lost their houses and more during the early days of what we now call “The Great Financial Crisis” (GFC). The issue?
Many of these same banks, bankers and Wall Street tycoons have now become not just insanely rich, but some were not afraid to tell you so. e.g., Jamie Dimon’s ” That’s why I’m richer than you” comment in 2013 as just one example.
People notice things like this, but that’s not all who notice: politicians do also.
This is where things are beginning to really heat up. Why? Because many of these most recent “eat the rich” stylized chanting are coming from the very same party or politicians many of these now “insanely rich club” have supported, whether implicitly or explicitly.
Remember when “Ol’ Uncle Warren” (Warren Buffett) used to be on CNBC™ seemingly daily and profess just how little he paid in taxes? Remember how he used to proclaim the reference that his secretary paid more?
Remember when he would explain why Berkshire Hathaway™ was simultaneously not paying $1 Billion in back taxes? OK that was a trick question, but the IRS was not joking and I believe is still an ongoing dispute. But again, have you noticed he hasn’t been doing that anymore? Why?
Hint: Bernie Sanders, Elizabeth Warren and whole host of participating “comrades” just itching to make their vision come true. i.e., Don’t worry, we’ll make the idea of not paying enough just that, a wonderful long past idea. Because you’ll pay and pay dearly. Trust them, for if elected, they”ll “help you” in not only getting your mind right, but your bank balances also. Voluntarily or not.
Ray Dalio has been on what I deem a non-stop media blitz, plowing over people in ways that would make Jerome Bettis envious to get in front of any microphone, camera or keyboard to profess how “the system” or capitalism is broken, not working or the world has “gone mad.” Hint: Look in a mirror Ray. Just sayin’.
You even had the holder of one of the most coveted office positions known to Wall Street, Lloyd Blankfein former CEO of Goldman Sachs™ sheepishly admit in an interview with Poppy Harlow that he doesn’t want to pay more taxes, but (and it’s a very big but) would – if – the trade off was that people would spare his gates from the presence of “torches and rakes.”
The unmistakable undertone of all this and more? Their once “dogs in the fight” are now beginning to turn and are looking to bite not just the hands, but a whole lot more of those that used to feed them. The reasoning is simple:
There are now far more (and growing) onlookers watching piles and piles of “steaks” being amassed behind those once seemingly un-penetrable gates, while they’re constantly being told the ever rising, increasing crumbs chaffed off the “markets” into their 401K’s or IRA’s should be looked upon as manna from heaven. i.e., A few Grand for you, a few BILLION for them. And if you have savings or bonds? Be happy it’s not negative, yet.
As much as the above begins to illustrate just how things are beginning to morph to the displeasure of many in the “richer than you club.” Nowhere was it more evident than that which was addressed to another of this once: Look I’m with you ‘comrades,’ just don’t come after me, remember I’m actively paying my fair share of insurance premiums: Bill Gates.
(Note: I know I’m being harsh here, and I believe Gates deserves every penny of his wealth. What I’m speaking to is his over-the-top obsession to show “Hey I’m more charitable than anyone! So you need to be more like me!!” stance across the public stages and airways.)
It would appear Mr. Gates and his all too public gifting away his $Billions, along with another all too public (all my opinion) convincing and elaborating Mr. Buffett to do the same, seems to not quite be enough for the current front-runners in the presidential election.
It appears that Mr. Gates is more than happy to pay $20 Billion in taxes, but $100 Billion as proposed via Ms. Warren? That’s an amount even a willing Billionaire finds a bit too much.
But that’s when the interesting point to all this truly becomes fascinating. Why?
Because just like all communistic or socialistic ideas become once they seem to be on the upswing, the once gently proposing or insinuating of such ideas no longer seems so gentle in that proposing or insinuating – they’ve now become fashionable and down right practical (i.e., meaning they may have the backing via votes to just do it.) by those once doing the proposing and insinuating.
Don’t think so? Fair enough, then may I turn your attention to the reply given to Mr. Gates via Ms. Warren that should run chills down the spine of every person that still believes in the Constitution and the type of government it is suppose to uphold. Ready? To wit:
I’m always happy to meet with people, even if we have different views. @BillGates, if we get the chance, I’d love to explain exactly how much you’d pay under my wealth tax. (I promise it’s not $100 billion.)Twitter™ statement by Elisabeth Warren
All you need to do is reread the above and replace “@ Bill Gates” with “comrade” and not only does the implied price that’s it’s going to be much more than $20, but the last line in parenthesis takes on a whole new meaning. Why?
Because over the last decade many of the richest among us have openly prostrated themselves across the media stating how and why if only they were forced to pay more, they would.
This was once the wink-and-nod (as in demanded) insurance premium dolled out to help ensure protection from any civil unrest. That has all now changed as made evident to Mr. Gates via Ms. Warren.
However, this is not an isolated insinuation, in my humble opinion. For it would appear the entirety of her party (at least those of front runner status) have not only echoed those words, but are now echoing one who said it best years ago. To wit:
“I am altering the deal. Pray I don’t alter it any further.”~Darth Vader
Looks like those once affordable premiums have definitely moved into premium inflation mode, yes?
© 2019 Mark St.Cyr