Nov
2024
Mr Brightside: “Whoever controls the media, controls the mind”(1)
DIY Investor
5 November 2024
“Cancel my subscription to the resurrection
Send my credentials to the house of detention”
Recently, in “Left Behind, Inequality, and Why it Matters” and the follow-up “Left Behind, Inequality, and Why it Matters II”, we considered inequality in its broadest sense, and, for the first time considered democratic inequality. This refers to the ability of uber rich political donors and media barons ability to influence governments to serve their own ends which, typically, is reduced regulation and low taxes.
The growth of the uber rich in this century has been exponential; as of 2023, there are 735 billionaires in the U.S, and 22m millionaires.
In 1982 the leader was Daniel Ludwig with $2bn, in 1999 it was Bill Gates with $85bn, in 2016 Geoff Bezos with $160bn, now it is Elon Musk with $251bn.
‘due to the economic distortion of zero-interest rates and QE, rather than entrepreneurial genius’
In 2000 the net worth of the top-20 was $450bn, in 2010 it was $400bn, in 2020 it was $1300bn, now it is $1875bn.
What is also very relevant is the data post-2008; then the richest person was Bill Gates with $57bn, 16-yrs on the richest person has $251bn, almost a 5-fold increase. In reality, much of the disproportionate increase is due to the economic distortion of zero-interest rates and QE, rather than entrepreneurial genius
If we isolate the Biden presidency, the US economy has significantly outperformed, with the S&P500 growing significantly more than under Trump, and wages are rising, proving that Biden’s economy was stronger and created more wealth than Trump’s! The problem is much of that wealth has not flowed to main street, Trump’s MAGA supporters, but to the tech billionaires who are now supporting him!
There is a concept, referred to as “elite overproduction”, developed by social scientist Peter Turchin around the turn of this century to describe the phenomena of too many rich people for not enough rich-person jobs. Turchin tested the hypothesis from ancient Rome to 19th-century Britain. The names and nature of the contested jobs and titles changed; the pattern remained. Turchin predicted in 2010 that by the 2020s it would be destabilising US politics.
‘“elite overproduction”…too many rich people for not enough rich-person jobs’
Whilst the theory wasn’t specific on exactly the amount of, it referred primarily to billionaires or the top 1%. With more and more of the media are is owned by billionaires, these outlets cease to offer constructive criticism, and become a source of self-publicity, and forced opinions and editorials.
Elon Musk has inserted himself into the US election by means long term and short, above board and below it. His impact on X (formerly Twitter) since he bought it has, in recent months shown its true purpose, with paid-for verification removing any faith in trusted sources that couldn’t be bought; Republican accounts flourish, Democratic ones languish. Musk himself has amplified lies and conspiracy theories. He has poured $118m into his America PAC (political action committee), which has an X account and peddles xenophobic bilge. Musk opened a $1m Philadelphia voter giveaway that may be illegal earlier in the month.
There is a thin line between cash rewards and the outlawed buying of votes to interfere in an election. Despite this, he used his wealth to have his lawyers prevent him having to attend court this week for a hearing challenging these tactics:.
‘There is a thin line between cash rewards and the outlawed buying of votes to interfere in an election’
Under Musk, who claims to be a “free speech absolutist”, X, the platform has complied with 83% of requests by governments for the censorship or surveillance of accounts. When the Turkish president, Recep Tayyip Erdoğan, demanded the censorship of his opponents before the last general election, the platform obliged. When Indian government officials asked it to remove a hostile BBC documentary, X did as they asked, and later deleted the accounts of many critics of the prime minister, Narendra Modi.
Last month, X blocked links to a dossier about Trump’s running mate, JD Vance, and suspended the account of the journalist who revealed it. Musk has sued organisations that criticise him.
The platform has descended into a home from home for racists, antisemites, misogynists, homophobes, etc., whilst millions of other users have been driven from the platform, their own free speech diminished.
It’s free speech if he approves it!
At the Madison Square Garden rally, he promised: “We’re going to get the government off your back.” At the weekend he explained this, saying ordinary Americans would face “temporary hardship” as welfare programmes are slashed in order to restructure the economy, but they should embrace the pain, as “it will ensure long-term prosperity”.
‘a home from home for racists, antisemites, misogynists, homophobes’
The shock and horror this promise or threat contains may pale against the usual racist language but is equally damaging. Whilst unelected, Musk, as the cost-cutting tsar, a made-up role Trump has promised him, he would exert extraordinary power to cause pain. It would allow him to escape the regulators with which he is often in conflict, instead he will become his own regulator, able to erase the rules that don’t suit him.
Another billionaire donor, John Paulson, has been floated for the treasury secretary job, and Trump has a track record of rewarding big-ticket donors with a seat at the table – the billionaire Stephen Schwarzman boasted in print about his role in the new North America Free Trade Agreement negotiations in 2018, and as part of Trump’s “strategic and policy forum” during the 2017 administration.
Trump isn’t alone, in fact he trails Kamala, who has 21 billionaire donors compared to his 14. As we have seen with Starmer in the UK, this is a problem for mature democracies everywhere. When it comes down to it whether someone is buying your suits or buying you a social media platform, the difference is minimal it only proves two things; the US is exponentially richer than the UK, and Starmer is a cheap date!
‘the difference is minimal it only proves two things; the US is exponentially richer than the UK, and Starmer is a cheap date!’
And then, there are out the billionaires who play both sides, donating to both candidates, why? Because they can, the amounts are lunch money to them.
These wealthy donors have come to see democracy as the problem. A problem that protects worker’s rights and wages; that the planet has some protections.
Since the 1980s centrists have sought to work pact with capita by half-heartedly trying to improve the lives of people at the bottom, whilst, those at the top have been able to do as they pleased. There were times when it worked, E.G., Rupert Murdoch and other plutocrat’s struck an uneasy truce with Tony Blair, Bill Clinton and their ilk. But, as a result the uber rich have become so wealthy that absolute power is almost the logical next step.
That next step is for them to become oligarchs. Neither fascism or neoliberalism, has quite served their purpose, now they can go one step-further. After all, it most instances everyone bows down to them, why let politicians have the power when they can do it themselves.
‘the uber rich have become so wealthy that absolute power is almost the logical next step’
Government have either misunderstood, or turned a blind-eye to this, and were simply being pragmatic in hoping that it didn’t matter how rich some people became, as long as the lot of the poor improved.
This simply hasn’t worked, and, as I have written many times, capitalism no longer serves the majority.
In summary, all billionaires are bad news in politics; all bought influence is undemocratic. This time around, as they line-up behind Trump, it feels different. It isn’t about money, it’s about regulation, or the lack of it, and neutering any influence that may counter it. They are in an open crusade against democracy.
As influence begets money, money begets yet more influence.
The EU is famous, or perhaps, infamous for its generous subsidies to farmers, a fact that hasn’t escaped the notice of billionaires. Between 2018 and 2021, over a dozen companies owned by billionaires, including the former Czech prime minister Andrej Babiš and the British businessman Sir James Dyson, were the “ultimate beneficiaries” linked to €3.3bn (£2.76bn) of EU farming handouts, whilst thousands of small farms were closed down.
The 17 “ultimate beneficiaries” who featured on the 2022 Forbes rich list include Babiš, the former Czech prime minister who was acquitted in February of fraud involving farming subsidies; Dyson, the British vacuum cleaner tycoon who argued that Britain should leave the EU and whose company received payments before Brexit; and Guangchang Guo, a Chinese investor who owns Wolverhampton Wanderers football club.
“It’s madness,” said Benoît Biteau, a French organic farmer and MEP for the Greens in the last European parliament. “The vast majority of farmers are struggling to make a living.”
The EU gives one-third of its entire budget to farmers through its common agricultural policy (Cap), which hands out money based on the area of land a farmer owns rather than whether they need the support.
Scientists have criticised “perverse incentives” in the Cap that push farmers to destroy nature. They estimate that 50%-80% of EU farming subsidies go toward animal agriculture rather than foods that would be better for the health of people and the planet.
“We need a rapid food transition for a healthier future and subsidies are the biggest economic lever for change,” said Paul Behrens, a global change researcher at Leiden University.
‘this work highlights again just how much the richest land-owners continue to get richer from subsidies’
He said: “The inequality in the Cap is extreme and this work highlights again just how much the richest land-owners continue to get richer from subsidies. Although transparency in the Cap has improved over time, the amount of detective work needed to uncover how the public’s tax money is spent is astonishing.”
Talk of influence and having their beaks in every trough wouldn’t be complete without our own royal family. At the weekend it was reported that both King Charles and Prince William’s property empires are taking millions of pounds from cash-strapped charities and public services including the NHS, state schools and prisons.
The Duchies of Lancaster and Cornwall, which are exempt from business taxes and used to fund the royals’ lifestyles and philanthropic work, are set to make at least £50m from leasing land to public services. The two duchies hold a total of more than 5,400 leases.
One 15-year deal will see Guy’s and St Thomas’ NHS hospital trust in London pay £11.4m to store its fleet of electric ambulances in a warehouse owned by the Duchy of Lancaster, the monarch’s 750-year-old estate.
The king will also make at least £28m from windfarms because the Duchy of Lancaster retains a feudal right to charge for cables crossing the foreshore.
William’s Duchy of Cornwall, has signed a £37m deal to lease Dartmoor prison for 25 years to the Ministry of Justice, which is liable for all repairs despite paying £1.5m a head for a jail empty of prisoners because of high levels of radon gas.
Then there is Camelford House, a 1960s tower block on the banks of the Thames, which has brought in at least £22m since 2005 from rents paid by charities and other tenants. Two charities, Marie Curie and Macmillan – of which the king is a longstanding patron – have both recently moved out to smaller premises.
The Duchy of Cornwall has also made more than £600,000 from the construction of a fire station and stands to get nearly £600,000 from rental agreements with six state schools.
‘Democracy has become more and more of a sham, the plaything of a rich elite who use it for their own purposes’
In spite of the king and Prince William’s speeches and interventions on environmental issues, many residential properties let out by the royal estates are in breach of basic government energy efficiency standards. For example, 14% of homes leased by the Duchy of Cornwall and 13% by the Duchy of Lancaster have an energy performance rating of F or G. Since 2020, it has been against the law for landlords to rent out properties that are rated below an E under the Minimum Energy Efficiency Standards regulations.
Democracy has become more and more of a sham, the plaything of a rich elite who use it for their own purposes. Some of the have worked for their money, others just inherited wealth, and live on expectation. The expectation is that we, the public, will fund their unnecessary and extravagant lifestyles, whilst they continue to make merry with all their inherited assets.
That fact that Trump, who champions the very people that his supporters should be railing against, can become president of the richest, most powerful nation on earth mystifies.
I know we are approaching the festive season, but surely, at some point, the turkeys will stop voting for Christmas??
“The end of laughter and soft lies
The end of nights we tried to die
This is the end”
Notes:
- A quote from Jim Morrison, lead singer with The Doors, and poet
As we reach the climax of the US election, we take a look at how the uber rich are now buying politics.
In the UK we have had “cheapskategate”, with Starmer and his free suits, glasses and Taylor Swift tickets. This is actually quite amusing, it puts into perspective just how poor we are.
In the US, where they do it properly, we have Musk giving $118m to his America PAC, and $1m a day Philadelphia voter giveaway.
But it doesn’t stop there. Musk could well become an unelected member of Trumps’ “government, which would give him the freedom to do as he pleases.
Which, take us to the next step, why “buy” someone who is in power when you can do it yourself?
All of this is the result of unconstrained capitalism which has enabled the uber rich to proliferate in the manner of medieval barons, or absolute monarchs.
Ahh yes, the monarchy. No article about power and greed would be complete without them. If it wasn’t so sad, the TV program where the Prince of Wales gets all emotional about homelessness, would be funny. Instead, it’s simply pathetic. Awfully well intentioned? Maybe, but it just misses the point.
Despite all of this inequality, right-wing politicians, who will do more to exacerbate it than anyone else, proliferate by convincing the unequal that they are on their side. It’s just perverse. Or is it? This morning my breakfast was ruined by a right-wing American Christian lady who said,” if you’re a Christian there is only one candidate you can vote for….Trump”. Her husband, sorry her brother, no, actually her husband, oh, whatever, agreed, whilst their 3-eyed child looked on!
Lyrically, it’s all about The Doors. Fifty plus years on and Jim’s quote, which is this article’s title, looks more accurate than ever. We start with “When The Music’s Over”, which could be tomorrow, and finish with the apocalyptic “The End”, which could be the result of tomorrow, too.
Enjoy!
Philip.
@coldwarsteve
Philip Gilbert is a city-based corporate financier, and former investment banker.
Philip is a great believer in meritocracy, and in the belief that if you want something enough you can make it happen. These beliefs were formed in his formative years, of the late 1970s and 80s
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