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The very rich versus the uber rich

DCblogger's picture

A Venture Capitalist

We are in cash, real estate, venture capital, and private investments centered around our neighborhood and city (retail, restaurants, etc). Other than cash, we are invested in things we can touch and/or impact and understand.

As Ron talks about at the start of his piece, the never ending blowups on wall street are eroding confidence in that system. It certainly has eroded our confidence in that system. So we are staying out of it for the most part.

Fred Wilson has worked out that the system is rigged and has simply gotten out. If you have been reading his blog you know that that he was very anti-Bush and later pro-Obama. He also was curious about Occupy Wall Street in a friendly way. But he was worried that Occupy was pro-union, so I suppose he is anti-Union. The important thing is that he has worked out that something is seriously amiss.

Revolutions are made by elites. It is sort of like a crab shedding a shell that has gotten too small and growing a larger one. Popular uprisings play a critical role in revolutions, but what separates a revolution from a mere rebellion is the role of the emerging elite. The revolutionary moment comes when the near elite decides they no longer want to join the elite, but regard the very top elite of their society as a barrier to advancement rather than a goal to advancement. This happened when the merchant class of seventeenth century England decided that Charles I and his court were an impediment rather than their legitimate ruler. Similarly when the elite of colonial America decided that they would be better off without the British elite, and so on with every revolution.

I mean something more serious than merely being regarded as an economic impediment, but rather losing all moral authority. And however much the TARP babies can rig the political and legal systems there is no getting around the fact that they are regarded as the Vampire Squid on the Face of Humanity. They are hated.

Now I doubt very much that Fred Wilson is ready for a revolution. For him it is June 1775 not July 14, 1789. Moreover his views on unions shows that he is not ready for solidarity. He does not understand that a strong independent labor movement is a key guarantor of the rule of law. He does not understand that he needs unions, even less does he understand that he needs unions more than they need him.

My point is that America has somehow lost its capacity for self correction. Instead of electing an Abe Lincoln or FDR to deal with out crisis we have elected a shallow man who utterly fails to comprehend the seriousness of the situation and even less how to respond. So we are headed to a worse crisis than 1932. That Wilson pulling his money out of the stock market is just one tiny indication of the coming storm.

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Submitted by lambert on

Thinking back to the Roman empire, there was one revolution when the Emperors gelded the Republic.

But there wasn't a second when the Empire collapsed. Was there?

Or does this schema apply to the "modern" era only?

DCblogger's picture
Submitted by DCblogger on

but I am pretty sure that the fall for the Roman Empire had to do with assorted war lords at the edges of the empire pushing back, a little like the fall of European Imperial empires after WWII. So you could say it was a question of emerging elites pushing the Romans out.

Or you could say that the Romany empire rebranded itself as the Catholic Church, depending upon your point of view.

chicago dyke's picture
Submitted by chicago dyke on

surprise you is that there are a lot of similarities between the "fall of rome" and the decline of amurka.

lead is, sort of shockingly, a similar problem. i was just reading about this yesterday, but a horrible percentage of our potable water still crosses thru lead pipes. don't discount that, as a cause of our decline. lead poison is truly more than just deadly. it makes whole civilizations literally more stupid.

similarly, two major factors had to do with the decline of the roman empire (and i'm not even speaking about the republic, its fall being a different story)- as you note, military forces at the boundaries of the empire taking things into their own hands (see KBR in the middle east, running drugs and human trafficking). and religious movements, sweeping through both urban and rural areas of the empire, replacing old forms and redefining what "everyone knew" about divinity/godhood/etc. right now is the death struggle in the modern West, between "young earth" style fundies and modern science. i am not sure who will win.

economic instablility also played a huge role, as did technology- then and now. what i've always found most fascinating about empires like rome, egypt, china, mesopotamia... so many times (and many of those regions did this more than once) they fell at the greatest moments of technological superiority. egypt and china in particular kept doing this. all those "intermediate" periods? each happened when those empires had just begun to experiement with a world changing degree of technological sophistication. sure, those advances were brought back and redefined. but it took some crashes before that happened.

i can see that happening here, today, for the "global" civilization that has no base nation, no political dynasty other than that of the 1%. they think they're going to get away with returning the whole globe to a feudal situation,and little will change that will upset them in their gated communities, etc. but i'm pretty sure they will fail. i worry so much more about a right wing populist takeover. but the current 1% are both lazy and ignorant, and i'm not sure they understand the fire they play with, right now. it will burn them, and likely most of us, i have little doubt.

okanogen's picture
Submitted by okanogen on

Blood lead levels in adults and children have been very closely monitored for decades and have declined dramatically since the 1970's when lead paint was outlawed. An increased decline occured when leaded gasoline was outlawed. There are two reason lead soldered, lead jointed, and the extremely rare lead-lined piping are not a major or even minor health concern. First is that lead's solubility (in anything other than very acidic water) is so low that the amount that could concievably be present is extremely low. The second reason is that the only volume of water that could leach the lead is the water that is sitting directly exposed to the lead, if that is solder or jointing, that volume is negligible, if it is lead-lined, that is more of a concern, but there just isn't that much lead-lined pipe anymore, it would be over fifty years old by now so the lead is then further diluted. The third reason is modern lead is not the lead used in Roman times, which was actually a host of other toxic metals, including tin, was poorly refined, and was deliberately used as a "sweetener".

If you live in old housing, keep your house well-vacuumed and you can't go wrong with a HEPA vacuum, this will eliminate the lead paint dust issue that is the primary source of lead ingestion. Getting an annual blood lead level check is cheap if you live in an older house with lead paint issues and you are concerned about it.

Lots of info at the CDC website.

okanogen's picture
Submitted by okanogen on

This is an ongoing trend, and even more understandable when you consider that the very rich who invest in this way have significantly more control over their potential losses, including attaching all sorts of oher assets, legal and political leverage, as well as an investment where the tail doesn't wag the dog (i.e. it is the investor in the driver seat).

Due to the complete abdication by the big and medium banks in providing reasonable small business loans*, there is a huge, captive market available to these investors, who I see more and more forming smallish, small business oriented banks. What is more is that all they need to do is hire a good SBA loan qualified banker and they can start writing loans that are 100% guaranteed by the federal government. THe underwriting is extremely conservative for these loans, so unless they change the SBA law, there is low probability of an SBA bubble, but hey, where there is a blood pool, there is a giant proboscis ready to jab.

*This has been accentuated by changes in underwriting requirements regarding risk pools which have especially screwed startups and small businesses with uneven boom-bust cycles like construction, etc..

Submitted by chadwick newsome on

...check out the title song of his new album. Tempest. It's about the sinking of the Titanic. I think it's some kinda potent symbol couched in (sometimes) mind blowing poetry. From there, go to 'Pay in Blood', Dylan's take on O. I've never heard anyone roar quite so compellingly about this monster.