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Paul B. Farrell
March 1, 2011, 12:01 a.m. EST
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"? Previous Column
Market Crash 2011: It will hit by Christmas
First Take "?
Enjoy February retail sales, drama seen in March
By Paul B. Farrell, MarketWatch Continued from page 1 Page 1Page 2
Economist Peter Morici: "Capitalism is broken, America's government is two bankrupt political parties bankrupting the country."?
David Stockman, Reagan's budget director: "If there were such a thing as Chapter 11 for politicians"? the "tax cuts would amount to a bankruptcy filing."?
BusinessWeek recently asked analyst Mary Meeker to run the numbers. How bad is it? America really is bankrupt, with a "net worth of a negative $44 trillion."? Bankrupt.
And it will get worse. Unfortunately, nothing can stop America's self-destructive Wall Street bankers. They simply do not care that their "doomsday capitalism"? is destroying themselves from within, and is bankrupting America too.
One mega-millionaire sent me an email after reading my Jan. 4 column, "America's worst 10 years start now."?
"Paul, you may well be right about the coming decade, but the rich exist in a different world from the one you write about. They live privileged lives in gated communities. Meet for holidays at the world's elite resorts. The richest just aren't worried about today's economy like your readers. Their issues revolve around who's the best masseuse, best Pilates teacher, best concierge medical doctor, which private school to choose, what investments they are making at this time, etc. Folks at the top are not concerned with the underlying deterioration of America, except in the abstract, because they aren't directly affected. That's why no amount of information from you will ever change things. To them, it's irrelevant. Best wishes, always enjoy your stuff."?
Yes, the rich live in a different world. And no, information won't change them. But a revolution will. Revolutions build slowly over a long time. Then, suddenly, a critical mass, a flash point, something totally unexpected ignites the ticking bomb.
It happened recently in a remote Tunisian village. Mohamed Bouazizi, a 26-year-old college graduate, unable to pay bribes, set himself on fire to protest police confiscation of his unlicensed vegetable cart. That triggered a revolution. And his death rapidly led to the collapse of a 24-year dictatorship.
Today we have four hot time bombs, tick-ticking, soon to make history; any one can easily accelerate the revolution that's already killing Wall Street from within.
The gap: In one generation, America's wealthiest 1% has exploded from 9% to 23% of America's income, while middle-class income has stagnated. Even Buffett admits: "There's class warfare, all right, but it's my class, the rich class, that's making war, and winning."?
But my rich friend tells the real story, of their social disconnect. The rich just don't care. They live in a different world, live by a self-centered code lacking a moral compass. The public welfare is honored only if supported by tax benefits.
The wealth gap is widening and soon something unpredictable will ignite a Wall Street revolution.
A key Supreme Court decision accelerated and codified Wall Street's ability to use billions stolen from taxpayers to lobby Washington and solidify its power, all for its own self-interest, through campaign payola, senators' votes, presidential access, manipulation of regulators, grabbing tax benefits, etc. And it's every man and woman for themselves.
Don't believe it? Know this, democracy is dead and you're in denial. Wall Street CEOs and Forbes 400 billionaires are either engaged in a secret conspiracy, or a classic anarchy picking apart America, oblivious of the fact they are setting up the next big revolution.
The mathematics of our $75 trillion Social Security and Medicare deficits often seem insurmountable, but can be recalibrated. However, the war-loving mindset of America's neocons "â? fueled by China's military actions, the insatiable expansion of our military spending and a Pentagon prediction that global population growth "â? is putting more and more pressure on the world's scarce resources, and will, in turn, increase global wars and the demand for more war spending, increasing the risk of sudden revolutions everywhere.
As the world population explodes from 7 billion to 10 billion in the next generation, the demand for more jobs and the pressure on scarce resources will increase, while expectations will fall as the ratio of haves to have-nots increases, making the world all around Wall Street a burning powder keg setting up a revolution.
Bottom line: Forget jailing Wall Street's dictators. It's naïve and too late. We missed that opportunity. But a revolution will do the trick, give us a second chance to jail the crooks.
Until then, remember, these four factors are building to a head, merging into a critical mass that will accelerate into a revolution and destroy Wall Street from within: The widening wealth gap, capitalism's new rule-by-anarchy, the high cost of feeding the Pentagon's costly war machine, and the huge global population explosion.
Paul Farrell writes the column on behavioral economics. He's the author of nine books on personal finance, economics and psychology, including "The Millionaire Code," "The Winning Portfolio," "The Lazy Person's Guide to Investing." Farrell was an investment banker with Morgan Stanley; executive vice president of the Financial News Network; executive vice president of Mercury Entertainment Corp; and associate editor of the Los Angeles Herald Examiner. He has a Juris Doctor and a Doctorate in Psychology.
February retail sales should show signs of life, but don't get used to it. More drama is coming in March, writes Angela Moore.
12:36 p.m. Today12:36 p.m. March 1, 2011
"Four time bombs that will blow up Wall Street http://on.mktw.net/fCQPKa" 12:39 a.m. EST, March 1, 2011 from MKTWFarrell
"Market Crash 2011: It will hit by Christmas http://on.mktw.net/h1z7Kz" 12:20 a.m. EST, Feb. 22, 2011 from MKTWFarrell
"Fed dictator Bernanke needs to be toppled http://on.mktw.net/gXKXXe" 12:35 a.m. EST, Feb. 15, 2011 from MKTWFarrell
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