One of the long term themes of my writing is that the rich have engineered a system in the West which insures they will continue to get richer, generally in a way which simultaneously impoverishes everyone else.
Buy, borrow, die is another example. The idea is simple enough: rich people
- Buy or otherwise obtain assets. Ideally these are assets which produce income or capital gains, but if you have a millions of dollars of stocks that works. This is one main reason for stock and option grants: they don’t register as income per se, and thus aren’t taxed as income but as capital, which means they aren’t taxed until you sell them, no matter how much they appreciate.
- Borrow is the next step: use your assets as collateral. Loan rates for the rich are usually 1.5 to 2% higher than short term treasury rates (which means that from 2008 to 2020 they were rarely more than 3%, they’re higher now, especially due to Trump’s insane war with Iran and its consequences for treasury rates. This rate of interest is far lower than you would pay for capital gains taxes, let alone income
- Die. When you die the price of your assets for estate tax purposes are reset to how much you bought them for. So your heirs pay taxes as if there had been no appreciation in asset prices.
This has been going on for a long time, but only become the default for “high net worth individuals” after 2008. It’s viable somewhere between ten and 30 million dollars of wealth.
In order for this to work, of course, you need to know that asset prices and returns on income producing assets will be higher than borrowing costs. Fortunately ever since Greenspan and his infamous Greenspan’s Put, the Federal Reserve has always insured that the stock market and asset prices in general, always rise fast. This has broken down a bit with real estate assets since 2020, but the stock market is reaching unseen highs regularly, and unlike in the pre-Reagan era, there are no sustained bear markets.
This is, again, a policy choice. It doesn’t have to be this way. Doing this in China would not work even if the law allowed it, because the stock market isn’t juiced and doesn’t provide essentially automatic increases. It does work in most, perhaps all Western nations, though in general other countries aren’t quite so permissive. The “die” part also required some significant changes to estate taxes for it to be viable for the merely rich (tens of millions) as opposed to the really rich with hundreds of millions or more.
As a result of this the rich often pay far less in taxes, as a percentage, than the upper middle class, especially highly paid professionals who still mostly get their money from wages.
I’m going to return to this later, but for now the important thing is simply to understand that the economy, which includes the tax system, is set up structurally to favor the rich. Yes, they still wind up paying a lot of taxes in absolute terms, but in proportional terms they often pay less than ordinary citizens. Warren Buffet famously noted that he paid a lower percentage of his income than his secretary did.
This is also organized to keep wealth together over generations, creating an oligarchic aristocracy, which is something America’s founders were very much opposed to. Along with permission for oligopoly, monopoly, price fixing and the structure of monetary production (many rich people are connected to banks and other financial firms which are allowed to create money out of thin air), plus law changes like Citizen’s United (money is speech so restrictions on election spending are illegal) this is a structural preference for oligarchy.
The only way to end this requires significant legislative changes, along with changes to the Supreme Court makeup, since as it stands right now the Supremes would strike down any laws intended to challenge oligarchy.
Since oligarchs own the politicians and the supreme court, this won’t happen unless the rich lose their power in a Great Crash that even the Fed and Treasury can’t bail them out from, and since they can print as much money as they want, that means it isn’t going to happen short of some sort of revolution. The money as speech decision makes it unlikely this will be an electoral revolution (though not entirely impossible), so it will likely require a full revolution.
If that doesn’t happen America’s decline will continue until it is just a larger version of Brazil or India: lots of poor people, a small but prosperous upper middle class who are direct retainers of the rich and a mass of poor people.
It’s quite clever really, the only downside is that this sort of financialization and rentierism weakens America as a whole since returns on manufacturing can’t match financial returns under this sort of economic engineering, and industrial power is effectively military power in the post-industrial revolution world.
America’s oligarchs have thus chosen American decline in exchange for what they hope is permanent oligarch status.
What I write here is for the benefit of everyone, but alas, I live in capitalism and I, and the site, take money to keep running. If you value the writing here and can, please subscribe or donate.
cc
These Johnny Harris youtube videos are good accompanying, illustrative pieces for this article.
What Being a BILLIONAIRE Really Looks Like – 3.8M views
https://www.youtube.com/watch?v=PpyPB3BF-hQ
Oligarchy is worse than you think – 4M views
https://www.youtube.com/watch?v=4S25FfbFw4M
The West is essentially indebted and bankrupt, so inflation is needed to keep the scam going and protect the 0.1%. That, of course, comes at the expense of the 99.9% – from which affordability of life is being stolen.
So, as Ian points out, it’s really hard to see how this can change short of revolution. The plutocracy on its own will not let this golden goose system come to an end. A golden goose system, that is, for the 1%, not the 99%.
To keep it going, they’ll back and fund wars to rape, plunder, and loot the world. Natural gas off the coast of Gaza, Venezuela’s precious resources, Iran’s precious resources, Russia’s precious resources – all coveted targets to be seized and “unlocked” for private profit.
If enough other countries are now able to defend themselves, the West is essentially in a zombie economy, one that’s already indebted and bankrupt, but pretends it can just keep going by creating more money and debt, and inflating the debt away. It’s like Wile E. Coyote, already over the cliff edge, but denying gravity for longer than anyone would think possible, with undying faith and optimism in the latest and greatest from ACME Inc. (the US dollar, US Treasuries, US bonds, US stock market.)
mago
It’s short term thinking. Grab it while you can and screw the rest except your scions, and the wealthy leave their brats in the hand of nannies and boarding schools.
And so it goes until doesn’t anymore. Sooner or later a sudden crash will happen.
It’s amazing that people keep on like they’re immortal and immune to consequences. Ha ha. You can’t plug the holes no matter how much dough you got or how many cops you pay in the doughnut shops.
Meanwhile there are bridges and rest stops for the rest.
It’s all phantasy land. Not fantasy, but a phantasy shit show. Gotta love those homonyms.
spud
i have always said the rich are in fact, penny less, they are leveraged to the hilt, and need to keep stealing from others, to pay their bills.
the rich have gutted what made them rich, and our government powerful in the first place, and now field a military with weapons from WWII era, vs. the jetsons.
its like a wooden pirate ship going against a modern battle ship, totally outclassed. north korea now has a hypersonic missile that radar looses track of.
so in the end, the rich will think they are keeping their wealth, but the paper they own won’t be worth much outside of what the oligarch empire can hold onto. which of course it will slip out of their hands. as technology expands, and you get leadership that is willing to go to the mat to screw them over and gain freedom.
meanwhile i agree with Ian, the die was cast in 1993, and there is no way out till the police and military, are no longer willing to shot their fellow citizens.
the rich can wrap themselves in paper, a lot of good it will do them in the end.
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Bill Clinton’s capital gains tax cut primarily benefited the wealthy, as it provided significant tax breaks that disproportionately favored high-income earners, while offering less relief to middle and lower-income families. This trend of capital gains tax cuts has historically resulted in a windfall for the rich, exacerbating income inequality.
Brookings cbpp.org
Bill Clinton’s capital gains tax cut was designed to stimulate investment but ended up disproportionately benefiting wealthy individuals. This policy shift provided significant tax breaks primarily to high-income earners, while middle and lower-income families received minimal relief.
Disproportionate Benefits: The capital gains tax cut favored the wealthy, leading to a significant windfall for high-income earners.
Income Inequality: This trend exacerbated income inequality, as the benefits were not equitably distributed across different income levels.
Tax Breaks for the Rich: The capital gains tax cut allowed wealthy individuals to retain more of their investment income, which contributed to widening the wealth gap.
Limited Relief for Lower-Income Families: Middle and lower-income families saw little to no benefit from these tax cuts, highlighting the regressive nature of such policies.
In summary, while the intention behind the capital gains tax cut was to encourage investment, its execution primarily favored the rich, further entrenching economic disparities.
Brookings cbpp.org
Bill Clinton’s capital gains tax cut reduced the rate from 28% to 20%, benefiting wealthy individuals by allowing them to pay less tax on profits from investments. This change aimed to stimulate investment and economic growth while also providing tax relief to high-income earners.
Wikipedia cbpp.org
Bill Clinton’s capital gains tax cut contributed to a rise in income inequality, as it primarily benefited high-income earners, while the overall tax system became less progressive during his presidency. Despite some economic growth, income inequality increased by 12 percent between 1993 and 2000, largely due to changes in capital gains and dividend income.
taxfoundation.org cbpp.org
————
really the only way to tax the rich, is capital gains, estate taxes, and tariffs. but tariffs alone will not work properly.
i agree, but its to late now,
https://www.youtube.com/watch?v=CpRl1ajsj-k
Is France signalling the end of neoliberalism?
Oct 8, 2026 #Neoliberalism #France #FrenchPolitics
Is neoliberalism beginning to collapse under the weight of its own failures? In this video, I argue that the unrest we are seeing in France, alongside growing political tensions elsewhere in Europe, raises that possibility.
France is experiencing widespread protests involving students, teachers, workers and parents. I argue that their anger reflects something much broader: deteriorating public services, economic insecurity and growing resistance to demands for yet more austerity.
Neoliberalism promised that markets, competition and economic reform would deliver growth, prosperity and greater freedom. Instead, I argue that many people have experienced insecurity while governments continue to prioritise fiscal rules, competitiveness and the demands of financial markets.
The contradiction is becoming increasingly difficult to sustain. Policies that have failed to deliver are being followed by demands for more restraint, more austerity and still greater deference to financial markets.
France’s experience in May 1968 offers an interesting comparison. The government survived those protests, but French society changed. Political systems can therefore be transformed even when the governments confronting protests remain in office.
Today’s conflict is also about democracy. Who should ultimately determine how society’s resources are used: elected governments and their citizens, European institutions, or financial markets?
I argue that neither continued neoliberalism nor the politics of the far right provides an adequate answer to the underlying problems of housing, healthcare, education, investment and economic insecurity.
France may simply be confronting these contradictions before other countries. If people withdraw their consent from an economic system they believe is repeatedly failing them, the neoliberal era could be approaching its end.
Take a look at the poll below: • Post
00:00 Is Neoliberalism Beginning to Collapse?
00:57 Why France Could Be the Warning Sign
01:54 Neoliberalism Has Stopped Delivering
02:54 Can More Neoliberalism Fix Its Failures?
03:55 Why France Is Being Pushed Towards Austerity
04:56 War, AI and Financial Instability
05:54 What France in 1968 Can Teach Us
06:57 When Political Orders Begin to Break Down
07:57 Can the Far Right Provide an Alternative?
08:57 Who Really Controls Economic Policy?
09:47 Is This a Crisis of Democracy?
10:15 Could the Neoliberal Era Be Ending?
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the man that pushed it onto the world.
Bill Clinton’s economic policies, often associated with neoliberalism, contributed to significant issues in the economy, including the rise of financialization and the hollowing out of manufacturing industries. These factors have been linked to the economic challenges faced in the years following his presidency.
democracyjournal.org inthesetimes.com
Bill Clinton’s presidency is often associated with neoliberal economic policies, which emphasized free markets and government austerity. These policies aimed to stimulate economic growth but have also been linked to significant long-term issues in the economy.
Rise of Financialization: Clinton’s policies contributed to the increasing dominance of financial markets over the economy. This shift has led to a focus on short-term profits rather than long-term stability.
Hollowing Out of Manufacturing: The emphasis on free trade and deregulation resulted in the decline of manufacturing industries in the U.S., leading to job losses and economic instability in many regions.
Economic Inequality: The neoliberal approach has been criticized for exacerbating income inequality, as the benefits of economic growth were not evenly distributed.
Debt and Consumption: During Clinton’s administration, household debt increased significantly, as families relied on credit to maintain their consumption levels amid stagnant wages.
The legacy of Clinton’s economic policies is evident today, as many of the structural issues they created continue to affect the economy. The focus on deregulation and financialization has contributed to ongoing economic challenges, including instability in financial markets and a lack of robust manufacturing jobs.
inthesetimes.com democracyjournal.org
Bill Clinton’s policies, including financial deregulation and free trade agreements, are often criticized for contributing to economic instability, particularly leading up to the 2007-2008 financial crisis. Critics argue that these decisions failed to adequately protect the economy from systemic risks.
americanyawp.com UC Santa Barbara
Bill Clinton’s presidency was marked by significant economic policies, including financial deregulation and free trade agreements. While these policies aimed to stimulate growth, they have faced criticism for contributing to economic instability, particularly leading up to the 2007-2008 financial crisis.
Key Policies and Their Impacts
Policy Description Criticism
Financial Deregulation Repealed the Glass-Steagall Act, allowing commercial banks to engage in investment activities. Critics argue this deregulation failed to protect the economy from systemic risks.
Free Trade Agreements (NAFTA) Promoted free trade between the U.S., Canada, and Mexico. Critics claim it led to job losses in certain sectors and did not adequately address economic disparities.
Clinton’s administration often expressed confidence in market mechanisms to drive economic recovery and growth. However, the reliance on markets to self-regulate has been criticized as a failure, particularly when the financial crisis exposed vulnerabilities in the system. Critics argue that the belief that markets would deliver stability overlooked the need for robust regulatory frameworks to mitigate risks.
In summary, while Clinton’s policies aimed to foster economic growth, they are often viewed as having contributed to the conditions that led to significant economic instability.
americanyawp.com
Bill Clinton promoted free trade agreements like NAFTA and deregulation such as repealing Glass-Steagall, policies often associated with neoliberalism.
americanyawp.com Marxists Internet Archive
Clinton’s embrace of neoliberalism through free trade and deregulation reshaped the economic landscape of the United States and had lasting effects on both domestic and global economies. His policies aimed to foster economic growth but also sparked significant debate regarding their social and economic consequences.
americanyawp.com
Bill Clinton’s policies, particularly his embrace of free markets and globalization, significantly advanced neoliberalism on a global scale. His administration’s focus on deregulation and market-oriented reforms helped shape the Democratic Party’s centrist approach, which became a model for other countries, notably through initiatives like NAFTA.
Oxford University Press inthesetimes.com
Bob
To get rid of the rich will take nothing less than a catastrophic collapse of everything.
And what will prevent the surviving humans from starting the whole miserable cycle up again?
Carborundum
I think this is not quite clear – as I understand it, the re-basing of asset value affects income tax for the heirs, not estate tax. *If* the asset has been taxed (particularly at the generally significantly higher estate tax rate), then it’s entirely appropriate that the heirs only be taxed on the capital gains they’ve realized (i.e., since the basing adjustment).
The objectionable thing in the system isn’t so much the re-basing – it’s that there’s a very generous $15 million exemption to the estate tax (per partner in the case of a married couple and, since 2025, indexed to inflation). I much prefer our deemed disposition system.
StewartM
I don’t see how this looting can be stopped, democratically anymore. Obama had best chance, and despite Spud lambasting Clinton and Nat trashing Biden (often unfairly), it was Obama among Democrats who had the greatest opportunity (and maybe the last) to democratically turn the US around. (Like, he could have raised taxes on the rich by SIMPLY DOING NOTHING and letting the Bush tax cuts expire, but no, “doing nothing” was apparently part of the “change is hard” shtick he played).
Instead, what Obama focused on was resuscitating the Reagan economy, already twice shown to be a bubble-driven farce. He moved procedural mountains to get some form of “Catfood Commission” on SS, sponsored more “free trade” bills that were (like most) more about protecting IP and privileging the rights of “corporate people” over ordinary ones, protected the surveillance state against both legal recourses and against external critics (Chelsea Manning, Edward Snowden) and more. Obama could have raised taxes on the rich by SIMPLY DOING NOTHING and letting the Bush tax cuts expire, but no, “doing nothing” was apparently part of the “change is hard” shtick he played. Like Clinton, I believe he *wanted* the Rs to recapture Congress so that he and they could have an entitlement-slashing bipartisan lovefest together; these attempts both failed–in Clinton’s case, due to Monica Lewinsky saving SS and in 2011-2012, due to the Republican noise machine so effective in turning Obama into the Great Satan to the base that no R leader could make a deal with Satan even when Satan was offering them the whole house and all the retirement savings (according to Woodward, Obama offered them concessions based on the mere *promise* of some unspecified tax increases, and we know how well Mitch McConnell always kept his promises don’t we?).
But the problem with the US is far deeper than corrupted leadership. It’s in the US people themselves. As Thaddeus Stevens complained to Lincoln in the 2012 movie, he complained that the American people’s morality had been corrupted by decades of tolerating slavery, and I likewise feel that decades of Reagan neoliberalism have made too-many Americans so narrowly selfish that even the smallest of sacrifices necessary to achieve some common good are off-the-table. For instance, both the Biden child tax credit and student loan forgiveness initiatives didn’t poll well, mostly because of childless adults and/or people who had paid off smaller student loans (or had none at all) griping “What’s in this for me?” even though it should be transparently obvious to the dimmest of dimwits that helping children and helping people get education is of benefit to everyone. Likewise, provoking some posters here, these types couldn’t be inconvenienced to get either a free jab in the arm and/or wear a mask during Covid if they thought that they themselves were at low risk (“Why should I be inconvenienced for some at-risk person I don’t know?). However, the painful thing about these “stupid people” (by Bonhoeffer’s definition) is that they will act against their very own best interests when it comes to showing fealty to corporate propaganda when buying extremely expensive things (say, full-sized gas-guzzling full-sized pickups) for mere status symbols, when it’s obvious that they never use these as trucks.
Also painfully obvious–most of the rightwing success has come either illegally and/or undemocratically. We have mass surveillance pretty much because President Cheney broke the law, ignoring Congressional directives that a mass spying system not be set up, and taking money from other programs approved by Congress to build it. This has a long pedigree, starting with Nixon, and was used by Reagan (Iran-Contra), and currently by Trump. Of course, Obama bears blame for not tearing it down in 2009, but the thing is that while we proudly tout we’re a “nation of laws” breaking our highest law, the Constitution, carries no criminal penalties and indeed doesn’t even disqualify anyone from holding office again!
Fixing the US would take both smarts (the fixes are no longer simple, but complicated) and enough power, and I don’t see anyone becoming a leader democratically who will have both the smarts and the power. Undemocratic change may work but that comes with downsides too (you may think that Xi is doing more things right than wrong now, but you also risk a Mao or even worse, a Pol Pot by that route).
spud
StewartM:
obama and biden were worthless, i never have deviated from that. however, its not a majority reagan or carters economy. they share blame. but the most damage done, was by bill clinton. almost everything you rail about, was done by bill clinton.
almost all power trump is wielding now, was initiated by bill clinton.
yes obama and biden helped grease the skids to fascism, those skids and the gallons of grease were created by bill clinton.
https://www.youtube.com/watch?v=5KemkW5E55k
Democrats Paved the Way for Fascism — Jennifer Welch on MAGA, Socialism, and Political Revolution
as Keen has stated there has been no real wage increases since 1993, and Pickettys graph shows 1993 was the year.
the rich knew what clinton was going to do, because like hitler, he told them what he was going to do before he was elected.
clinton elevated capital over sovereignty, capital over civil society, and capital over labor.
and here we are today. all obama and biden did, was to bail out those disastrous fascist polices, and expand them.
one name keeps popping up on what led to the economic blowout in 2008, that name was bill clinton.
Feral Finster
“If that doesn’t happen America’s decline will continue until it is just a larger version of Brazil or India: lots of poor people, a small but prosperous upper middle class who are direct retainers of the rich and a mass of poor people.
It’s quite clever really, the only downside is that this sort of financialization and rentierism weakens America as a whole since returns on manufacturing can’t match financial returns under this sort of economic engineering, and industrial power is effectively military power in the post-industrial revolution world.”
In fact, financial power is as much military power as anything. Which is why the world so craves American financial carrot and fears American sanctions stick.