[rammossyAcron]

Very good piece by the author who gives valuable insight into the minds of the global plutocrats/oligarchs that are growing in their ranks and increasing their power thanks to the largesse of central planners at the Fed/central banks, enablers at Treasury and the supine/bought off corporate congress and corrupted governments the world over.

In reading this it is clear they they have no loyalty other than to their elite fraternity and money. Sovereign nations and peoples are increasingly becoming exploited, marginalized and completely irrelevant ...the stuff of banana republics and the stuff of Galt ideologues and apologists who believe austerity creates prosperity despite evidence to the contrary in Greece, Ireland, Britain and a host of other nations preparing for economic suicide....


F. Scott Fitzgerald was right when he declared the rich different from you and me. But today’s super-rich are also different from yesterday’s: more hardworking and meritocratic, but less connected to the nations that granted them opportunity—and the countrymen they are leaving ever further behind.


By Chrystia Freeland

January 04, 2010 "The Atlantic" -- IF YOU HAPPENED to be watching NBC on the first Sunday morning in August last summer, you would have seen something curious. There, on the set of Meet the Press, the host, David Gregory, was interviewing a guest who made a forceful case that the U.S. economy had become “very distorted.” In the wake of the recession, this guest explained, high-income individuals, large banks, and major corporations had experienced a “significant recovery”; the rest of the economy, by contrast—including small businesses and “a very significant amount of the labor force”—was stuck and still struggling. What we were seeing, he argued, was not a single economy at all, but rather “fundamentally two separate types of economy,” increasingly distinct and divergent.

This diagnosis, though alarming, was hardly unique: drawing attention to the divide between the wealthy and everyone else has long been standard fare on the left. (The idea of “two Americas” was a central theme of John Edwards’s 2004 and 2008 presidential runs.) What made the argument striking in this instance was that it was being offered by none other than the former five-term Federal Reserve Chairman Alan Greenspan: iconic libertarian, preeminent defender of the free market, and (at least until recently) the nation’s foremost devotee of Ayn Rand. When the high priest of capitalism himself is declaring the growth in economic inequality a national crisis, something has gone very, very wrong.

This widening gap between the rich and non-rich has been evident for years. In a 2005 report to investors, for instance, three analysts at Citigroup advised that “the World is dividing into two blocs—the Plutonomy and the rest”:

In a plutonomy there is no such animal as “the U.S. consumer” or “the UK consumer”, or indeed the “Russian consumer”. There are rich consumers, few in number, but disproportionate in the gigantic slice of income and consumption they take. There are the rest, the “non-rich”, the multitudinous many, but only accounting for surprisingly small bites of the national pie.

Before the recession, it was relatively easy to ignore this concentration of wealth among an elite few. The wondrous inventions of the modern economy—Google, Amazon, the iPhone—broadly improved the lives of middle-class consumers, even as they made a tiny subset of entrepreneurs hugely wealthy. And the less-wondrous inventions—particularly the explosion of subprime credit—helped mask the rise of income inequality for many of those whose earnings were stagnant.

But the financial crisis and its long, dismal aftermath have changed all that. A multibillion-dollar bailout and Wall Street’s swift, subsequent reinstatement of gargantuan bonuses have inspired a narrative of parasitic bankers and other elites rigging the game for their own benefit. And this, in turn, has led to wider—and not unreasonable—fears that we are living in not merely a plutonomy, but a plutocracy, in which the rich display outsize political influence, narrowly self-interested motives, and a casual indifference to anyone outside their own rarefied economic bubble.

Through my work as a business journalist, I’ve spent the better part of the past decade shadowing the new super-rich: attending the same exclusive conferences in Europe; conducting interviews over cappuccinos on Martha’s Vineyard or in Silicon Valley meeting rooms; observing high-powered dinner parties in Manhattan. Some of what I’ve learned is entirely predictable: the rich are, as F. Scott Fitzgerald famously noted, different from you and me .

What is more relevant to our times, though, is that the rich of today are also different from the rich of yesterday. Our light-speed, globally connected economy has led to the rise of a new super-elite that consists, to a notable degree, of first- and second-generation wealth. Its members are hardworking, highly educated, jet-setting meritocrats who feel they are the deserving winners of a tough, worldwide economic competition—and many of them, as a result, have an ambivalent attitude toward those of us who didn’t succeed so spectacularly. Perhaps most noteworthy, they are becoming a transglobal community of peers who have more in common with one another than with their countrymen back home. Whether they maintain primary residences in New York or Hong Kong, Moscow or Mumbai, today’s super-rich are increasingly a nation unto themselves. The good news—and the bad news—for America is that the nation’s own super-elite is rapidly adjusting to this more global perspective. The U.S.-based CEO of one of the world’s largest hedge funds told me that his firm’s investment committee often discusses the question of who wins and who loses in today’s economy. In a recent internal debate, he said, one of his senior colleagues had argued that the hollowing-out of the American middle class didn’t really matter. “His point was that if the transformation of the world economy lifts four people in China and India out of poverty and into the middle class, and meanwhile means one American drops out of the middle class, that’s not such a bad trade,” the CEO recalled.

I heard a similar sentiment from the Taiwanese-born, 30-something CFO of a U.S. Internet company. A gentle, unpretentious man who went from public school to Harvard, he’s nonetheless not terribly sympathetic to the complaints of the American middle class. “We demand a higher paycheck than the rest of the world,” he told me. “So if you’re going to demand 10 times the paycheck, you need to deliver 10 times the value. It sounds harsh, but maybe people in the middle class need to decide to take a pay cut.”

At last summer’s Aspen Ideas Festival, Michael Splinter, CEO of the Silicon Valley green-tech firm Applied Materials, said that if he were starting from scratch, only 20 percent of his workforce would be domestic. “This year, almost 90 percent of our sales will be outside the U.S.,” he explained. “The pull to be close to the customers—most of them in Asia—is enormous.” Speaking at the same conference, Thomas Wilson, CEO of Allstate, also lamented this global reality: “I can get [workers] anywhere in the world. It is a problem for America, but it is not necessarily a problem for American business … American businesses will adapt.” You might say that the American plutocracy is experiencing its John Galt moment. Libertarians (and run-of-the-mill high-school nerds) will recall that Galt is the plutocratic hero of Ayn Rand’s 1957 novel, Atlas Shrugged. Tired of being dragged down by the parasitic, envious, and less talented lower classes, Galt and his fellow capitalists revolted, retreating to “Galt’s Gulch,” a refuge in the Rocky Mountains. There, they passed their days in secluded natural splendor, while the rest of the world, bereft of their genius and hard work, collapsed. (G. K. Chesterton suggested a similar idea, though more gently, in his novel The Man Who Was Thursday: “The poor man really has a stake in the country. The rich man hasn’t; he can go away to New Guinea in a yacht.”)

This plutocratic fantasy is, of course, just that: no matter how smart and innovative and industrious the super-elite may be, they can’t exist without the wider community. Even setting aside the financial bailouts recently supplied by the governments of the world, the rich need the rest of us as workers, clients, and consumers. Yet, as a metaphor, Galt’s Gulch has an ominous ring at a time when the business elite view themselves increasingly as a global community, distinguished by their unique talents and above such parochial concerns as national identity, or devoting “their” taxes to paying down “our” budget deficit. They may not be isolating themselves geographically, as Rand fantasized. But they appear to be isolating themselves ideologically, which in the end may be of greater consequence. The lesson of history is that, in the long run, super-elites have two ways to survive: by suppressing dissent or by sharing their wealth. It is obvious which of these would be the better outcome for America, and the world. Let us hope the plutocrats aren’t already too isolated to recognize this. Because, in the end, there can never be a place like Galt’s Gulch. FULL ARTICLE: The Rise of the New Global Elite - Magazine - The Atlantic

[DoroKickcrofe]

stratification of global society (afterall, the world is now one global village) is something that's been noticed and talked about by other commentators over the past decade and more; guys like Tom Friendman of NYT and Richard Florida of the "Rise of the Creative Class" fame. In my own life, I have some friends I went to college with who spend half their time in India and a quarter each in the U.S. and Europe drumming up business. Their businesses aren't billion dollar concerns either. This type of increased interaction among global businessmen has essentially led to that new layer of a "global citizen" whose ideals are all about chasing material riches across borders and continents...although at least one of my friends only started off on his business after college based on the belief that 21st century will see India's reprise in the world and felt that opportunity and optimism about the future lay in Asia, India in particular. A lot of the middle class and the elite of India (and China and other rising world nations) haven't felt more optimistic about the future...their future.

So where does America stand? Not just American middle class... every frickin politician in America speaks to the "middle class" even if its just empty rhetoric.

[cargo_brad]

I just love these American companies who blather that 90% of our sales are outside the US so 90% of our workforce is outside the US. Ya think the Chinese, German and Japanese companies who rely on the US market are moving their employment base to the US? I doubt it.

[scemHeish]

I just love these American companies who blather that 90% of our sales are outside the US so 90% of our workforce is outside the US. Ya think the Chinese, German and Japanese companies who rely on the US market are moving their employment base to the US? I doubt it.

That's why the quote that essentially said "For every one person that falls out of the middle class in the US, four people in China rise out of poverty" sort of struck a chord with me. Essentially, he's right. In their world they're not just US citizens anymore. They are global citizens. From that particular perspective, what they are doing is just. It's the end result of a globalized economy.

If I want to speak candidly, I probably fall on the border of upper class (the working rich as my coworker likes to say), at least for now. I'm in the tech sector, and I work hard and I innovate and I try to develop technology that will make life better for everyone. I will be the first to admit that I say to myself "if I could do this anyone could." My family wasn't hugely wealthy, and even now my parents struggle to pay their bills. I made the choices and worked hard to get where I am now. It's not like I just inherited everything. When I see guys like Bill Gates or Eric Schmidt or Steve Jobs I say "I know people think it's unfair that people are so rich, but don't these guys deserve it? They all work hard and have created amazing technologies and innovations that help everyone. Why begrudge them that?" At the same time, the economy is totally broken and needs to be fixed, so I want to say tax them a lot more, at least until things are fixed. My sympathies don't extend to Goldman Sachs CEOs and the financial industry who helped create the current mess, but at the same time I'm sure there are innovators in those industries who work very hard and probably deserve the money.

Still, it's interesting to see how the global class of citizens acts. I almost have to ask myself, if I ever run a huge corporation, is laying off half of my work force in the US in order to bring 10 times that many people out of poverty in Cambodia really a bad thing? It could be a move that makes sense financially for the company, and morally. I think the issue is that vast majority of the time that this happens the companies involved aren't actually trying to bring people out of poverty, just to increase their profit margins. But I think that's another thing that's changing with the new global elites. Microsoft has more H1-B visa requests than any other company, and they pay all of their workers a fair wage. By doing it they may be lifting entire families out of poverty. It's an interesting moral quandary.