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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsThe Meritocracy Myth: How the Super-Rich Really Make Their Money
http://www.nationofchange.org/meritocracy-myth-how-super-rich-really-make-their-money-1398088864
Warren Buffett once claimed that the "genius of the American economy, our emphasis on a meritocracy and a market system and a rule of law has enabled generation after generation to live better than their parents did." The Economist suggested that "people succeed through brains and hard work." Economist Tyler Cowen believes in a "hyper-meritocracy" in which wealth is created by the most intelligent and motivated people.
That all sounds very inspirational. But the super-rich tend to make their money in less meritorious ways.
1. Betting on Food Prices to Rise
Chris Hedges noted that Goldman Sachs commodities index "is the most heavily traded in the world. The company hoards rice, wheat, corn, sugar and livestock and jacks up commodity prices around the globe so that poor families can no longer afford basic staples and literally starve." Numerous sources agree that speculation drives up commodity prices. Wheat, for example, rose in price from $105 to $481 in just eight years.
2. Betting on Mortgages to Fail
In 2007 hedge fund manager John Paulson conspired with Goldman Sachs to create packages of risky subprime mortgages, so that in anticipation of a housing crash he could use other people's money to bet against his personally designed sure-to-fail financial instruments. His successful bet against American households paid him $3.7 billion.
OLDMDDEM
(1,553 posts)I remember seeing the chart on the "Ed Show" showing vultures on a graph showing growth of income for the wealthy versus the rest of us. This is exactly what I though back in 2008. We were all set up for this. Unfortunately, money talks and there will be little, if any, prosecution of the people involved. Too bad. We all need to see perp walks for the likes of Bank of America, Merrill Lynch, JP Morgan Chase CEOs and their ilk. I remember there was a period where we were all supposed to join a credit union. Too bad more of us didn't take the suggestion and run with it. There would be less money available for these vultures to play with.
Starry Messenger
(32,342 posts)They all call on each other for favors and alliances. Merit has nothing to do with it, they are a superstitious lot who don't trust outsiders.
dotymed
(5,610 posts)are thieves on a grand scale.
While "they" may have deregulated their financial schemes, stealing is still illegal and should be prosecuted
commensurate with the theft.
Instead "we?" (not me) celebrate and idolize these thieves, allow them to live in unimaginable luxury and make us feel incompetent.
OTOH, if a member of the working class were to commit these hugely profitable crimes they would spend most of their lives
in for-profit prisons and forfeit all of the proceeds from their felony plus fines that they would never be able to pay.
For "commoners" bank robbery is punished as harshly as murder. For "elites," IF their actions are investigated and deemed illegal, they are "fined" a small percentage of their "loot" and set free on society to perpetrate more crimes against those least able to
afford it.
In many states there is a "3 strike" rule. If you commit 3 felonies (there is a huge difference between what is considered a
felony, depending on what class you are born into) you are considered a habitual criminal and imprisoned for life. For the elite, the more financial felonies that you commit, the more you are compensated and "respected" as an
astute business person.
No wonder the g.o.p. wants to disenfranchise voters. They are afraid that people may realize this and vote against those who support
such disgusting inequality between the classes.
laundry_queen
(8,646 posts)That's pretty much all they do is help each other out. They serve on each other's board of directors, they give each other loans, they give each other insider info, they hire each other's kids, they create cushy jobs for each other...and so on.
That's why the "I worked hard to get rich" is such bullshit. You can't work hard enough to get into their little gangs.