Bloomberg has posted an editorial, "Why Are We So Obsessed With Everyone Else's Wealth?" This caught my eye because the editorial mentioned that the Financial Times has just named Thomas PIketty's difficult text, Capitalism in the 21st Century, the "business book of the year."
The Bloomberg editorial proposes that Piketty's book won in part because of the current obsession with "income inequality." But we don't learn WHY this obsession has permeated culture today.
I think I have an idea. First, here's an excerpt:
The alpha generators and rainmakers can keep their hundreds of millions of dollars, guilt free. Some –think Steve Jobs and Bill Gross and Larry Page and Jim Simons — have earned their obscene wealth. Not so for many others.
Perhaps this explains the sudden national focus on wealth inequality. Rising stock markets, increasing concentrations of wealth, and relatively low tax rates (look at historic tax rates before e-mailing me) have made this a red-hot issue. The Financial Times just named Thomas Piketty's tome on economic inequality, "Capital in the Twenty-First Century," the Business Book of the Year.
Regardless, most of the country retains an unhealthy fixation on OPM. I have a sneaking suspicion it is only going to get worse.
This is as near as the editorial gets to answering the WHY. Assets are swelling and resentment is rising. Piketty captured the sentiment of the times and FT captured Piketty's book for its annual "best of" prize.
Even though the Bloomberg article doesn't answer the "why" it does make some good points. The main point is that we should be interested in OUR wealth, not in other people's. Envy especially is a non-starter.
Another post mentioning FT's coronation of Piketty's tome is entitled "Top FT Editor Lambasts Piketty's Book Just Before FT Names It Book Of The Year." This can be found at Huffington Post.
HuffPo doesn't do much better than Bloomberg at identifying the WHY of the current era of Income Envy but it does provide a retrospective of the controversy surrounding Piketty.
The controversy has to do with various declarations (including by FT) that the book is "riddled with errors." Here's more:
In fact, the FT editor who criticized the French economist's blockbuster, 700-page tome on inequality is sticking by his critique, even after his newspaper on Tuesday named Capital the winner of the 2014 Financial Times and McKinsey Business Book of the Year Award.
Capital, for the uninitiated, warns that unfettered capitalism tends to widen the gulf between the haves and the have-nots, and that the major economies of the world could be doomed to Gilded Age-style inequality if they don't take steps to stop it. It was, unexpectedly, a red-hot bestseller, exposing broad public anxiety about the fairness of the global economy.
It was not universally praised. Back in May, FT economics editor Chris Giles started a weeks-long brawl with Piketty by saying the book was "undercut by errors" and that "the rock-star French economist appears to have got his sums wrong."
After a lot of back-and-forth between Giles and Piketty on the Internet, several economists came to Piketty's defense, saying Giles' critique had not landed any real blows on the work.
Now the FT itself seems to have come down on Piketty's side, too.
As the post points out, this is certainly a strange state of affairs. The article encapsulates this strangeness by observing that FT manages to support and dismiss its prize-winning subject matter at the same time.
Why should this be? Maybe we had the answer long ago when we published one of the first alternative media critiques of Piketty, entitled, "Corporatism Finds Its Pied Piper?" early in May.
Here's an excerpt.
Those at the "top" of society are obviously growing more uncomfortable with the increasingly evident frustration closer to the "bottom." Piketty surely expresses fears of the power elite that the fury of the disposed will be aimed directly at the rich if evasive steps are not taken. Here's how the article puts it:
… HIS epiphany, we are supposed to believe, has to do with the discovery that wealthy people don't adequately distribute their funds to poorer folk. Hell, we could have told Piketty this and saved him a lot of research.
… Interestingly, Piketty's "research" does not seem to extend to proposing solutions, though the Reuters article makes it clear that it is governmental action – and regulations no doubt – that will have to provide the antidote. Nothing else will do.
Many of our readers would probably have trouble with this viewpoint, believing that government solutions will only make what is already execrable even worse. We wrote: "The system can only be improved by removing governmental oversight not expanding it."
Then we mentioned our portfolio of solutions as well, writing that people can try to "drop out" of the system "or make counter-cyclical investments including gold and silver." We also mentioned leveraging the ongoing "Wall Street Party" … as that doesn't seem to be ending just yet.
We wrote: "Above all, people generally should beware of research and solutions that call for even MORE government involvement to combat the immense problems that the bureaucracy has already created."
I haven't seen any reason to change my mind in the intervening months. In fact, the stir created by Piketty's book strikes me as mainly an artificial one. The mainstream media is not interested in the book because it's any good but because the solution it provides revolves around government programs.
This is the reason FT is willing to give the book a prize even though it is obviously flawed. The advertisers and readers of The Financial Times are invested in the current mercantilist system. Piketty's book makes an argument for it – and even uses statistics to do so.
If one agrees with this perception, the next one is even more discouraging. Those orchestrating this latest meme are obviously not content simply to present it: They are actively seeking to implant it deep in the social psyche and then advance its consequences.
The answer to inequality is … more wealth redistribution. Once one has answered the question, the only other puzzle remaining is how to generate the wealth redistribution.
Historically, one of the main solutions that occurs to people is violence. In this case, we've been writing for several years now that popular movements such as the Occupy Movement are deliberate incitements to violence. That's a very dangerous match to light. Yet the Piketty drama certainly plays into this analysis.
This is yet another reason why I so strongly advocate informed asset protection. Black Swan events can occur infrequently but when they happen, they can be devastating. What's more disturbing is when society's controllers seem to be actively seeking a Black Swan of sorts.
The ramifications are something we all need to think about.