Sunday, March 31, 2013

Minimum Daily Requirement: Looting

A Brief History of Pillaging and Plundering

If we were to call an academic committee to review the Viking raids in Europe during, say, the 9th Century, among those we would invite would be an economist, a sociologist and perhaps a social psychologist.  Naturally, we would probably increase our invitation list to include learned individuals with other disciplines, but for this post MeanMesa can concentrate on these areas.

The important issue here is about what happened to the previous, indigenous wealth of the "victim village" when the Vikings plundered it.

It was nothing if not straight forward. (image source)

Our team could put together a fairly reasonable estimate of what the village was worth before the raid.  The list would include structures, infrastructure, stored food, all manner of accessories such as fishing boats, grain grinders, field equipment, wagons and so on.  Naturally, items representing concentrated wealth such as gold and silver would be of "top interest" to the raiders.

The local church with its own precious accoutrement's was definitely getting looted, and comely village girls -- and occasionally boys -- might also be herded on board the departing long boats.

After the Vikings had set sail, the villagers would have taken a sorrowful look at what was left.  The "economic value" of the looted village would have been starkly diminished.  Both the years of human labor required to establish that village before the Vikings and the years required to rebuild or repair all the random damage done afterwards could be added to the "loss column."  The prospect of perhaps facing a winter without the benefit of stored food, if it could be translated into an economic loss, would add to the debit calculation.

Even quilts, coats and things like everyday kitchen utensils could well have been lost.  Vikings commonly took all forms of forged iron.

The corpses of slain villagers among the smoking ruins, the missing children, the empty granaries and the equally empty ruins of the local church would have brought its own kind of enduring despondency to the survivors. Worse, in the case of Viking raids, the pillage would probably be repeated in a few years.

However, if we were able to total up the complete value of the loot on board those departing Viking ships and compare it to the total wealth lost in the village, we would see that the looting process was anything but cost efficient.  The value of the loot would not even come close to the value of the damage.

That's the fundamental reality of looting.  Looting doesn't really fit on a balance sheet which might record the profits and losses, costs and revenues, for a modern business or factory.

While the fundamental process of looting has remained fairly unchanged through the centuries, the exquisite details of the process have painlessly modernized themselves year by year.  We can also take a cold look at some much more modern examples than the Vikings.

During WWII the German army undertook a well organized campaign to loot valuable European artwork from individuals and museums which had been identified as "enemies of the Reich."  Many of these items, particularly old paintings, had content or messages which had been deemed "antagonistic" to Reich principles.

The looted wealth of Europe. (image)
The "end game" of this business model remains, even to this day, unclear.  The destruction of these "unsympathetic" masterpieces as apostasies was postponed in favor of stashing them away in a hidden, bomb proof bunker somewhere so their "cash" value might be recovered after the war.  The paradox arises from confiscating them as "objectionable" but anticipating a post-war market for them as "non-objectionable" later.

All this during a time when even voicing the prospect of a German loss could leave one in front of a firing squad.  Nonetheless, the potential "cost to revenue" ratio must have trumped the specific nuances of loyalty or caution.

Not all modern looting has been the direct pilfering of valuables, either.  During the twenty years the war in Vietnam grumbled forward at a cost of $1 Mn per minute, all eyes were transfixed upon the "faux-military victories" being dutifully reported daily.  However, a quick look at the books revealed that every NVA soldier or Viet Cong sympathizer killed cost $70,000, whether by Howitzer, bomb or bullet.

This was "kindergarten" for the war profiteers -- themselves already well established as professional looters of the finest calibre.  The old Viking idea, while still the foundation of such ambitions, was officially moved into a new, "modern business model."  Vietnam brought the realization that when huge masses of money were being spent on anything, a pricey war for example, that opportunists could harvest even the smallest, unnoticeable percentage of the flow and still wind up rich beyond measure.

The Cold War offered similar opportunities but enlarged to exponential scope.  For decades even the most innocuous criticism about the cost of the newest ICBM was tantamount to screeching treason on a street corner.  In fact, Reagan's Strategic Defense Initiative, while never designed to be even remotely effective at vaporizing Kamchatkan SS-18's in boost phase, was cravenly designed to simply outspend the, by then, faltering Soviet economy.

Reagan's SDI cost around -- perhaps too sympathetically -- $5 Tn, yet never materially resulted in an improved strategic position because almost none of the component systems were ever functional.  The Treasury ponied up the dough for the untouchable military procurement contractors while the White House launched an elaborate, bone crushing, propaganda war littered with both hollow terror and hollow hope.

The "garden" which was to host that propaganda war was already endowed with  rich soil from decades of absolute Cold War "Mutual Assured Destruction" horrors.

While Saint Ronnie literally sucked a nuclear weaponization, he shined brightly as a propagandist.  Roughly a fourth of the current national debt originated as money paid for the inoperable SDI equipment procurement.  As for looters, the missile makers did swell until the Soviets tanked, but then the interest collecting bond holders moved in for a continuing take.  The immense, permanent debt as a "career opportunity" has proved not only securely durable, but outlandishly profitable.

It's the stuff from which oligarchs are made.

The Looting Under the George W. Bush Autocracy

It might be easy enough to characterize the incredible looting of the Bush years as something of a "new occurrence" which began for the first time rather quickly after the unelected autocrat had been appointed by the Supremes.  However, this would be, shall we say, denial in a scope that not even Americans could handle.

The oligarchs had already moved decisively into their ambitious plans for almost complete wealth redistribution and sweeping asset ownership for decades before Bush arrived for "Inauguration."  When, still riding the terror "coat tails" of the highly suspicious -- yet also highly convenient -- events of 2001, the democracy shuddered toward its historic nadir, the citizens could not comprehend the perfidy which had been inflicted.  For a time the mayhem continued to appear legitimate, shocking and tragic, but the scheme gradually began to stumble under its own weighty improbability.

Under cover of this now infamously ineffective "War on Terror," the modern Vikings who had so gleefully purloined the full power of the government began their relentless dismemberment of the nation's remaining wealth.  Anything which was not "bolted down" -- symbolically including even the carefully dissected steel girders of the World Trade buildings systematically exported beyond the reach of any investigators -- was "liquidated" whether in the shadowy depths of some huge hedge fund or a foundry in Jingag or Qing dao.

Now, at this point it would be refreshingly straight forward to simply point at deposit slips for exactly the amounts which had "turned up missing," but, as mentioned above, the "take" from this heist didn't have to be every last drop which had been spent.  The tiniest fraction of that kind of money was more than enough to hurl the recipients to literally atmospheric new heights of lavish wealth.

This plan worked.

"Today the wealthiest 400 individuals in America own more wealth than the bottom half of America, 150 million people."  Bernie Sanders, Sen. [I-Vt Read the article.]

Notably, during the Bush times fundamental new models of wealth exclusion were introduced in the American economy, most of which continue to prevail as the over all "norm" even today.  The scheme was anything but subtle.  Two long massive wars, the non-negotiably expensive MediCare Part D and, perhaps most brazen of all, the Bush tax cuts for the high earners.

Trillions were extracted from the economy, most of it borrowed from foreign sales of US Treasury notes and, domestically, from huge "withdrawals" from the Social Security Trust Fund.  Sadly, while most of those trillions were spent for something approximating the stated purpose, around $1.5 Tn or so went directly into the pockets of oligarchs establishing their new American aristocracy.

$6 Bn in cash to "rebuild Iraq." (image)
In hindsight, it's pretty clear that those "stated purposes" were direly lacking themselves, but it's become even more clear that the extractions for direct wealth redistribution had slipped to a rapacious level beyond that of even the common sense restraint of a professional house burglar.

By 2007 the national economy looked like an out of control junkie transporting an 18-wheeler full of heroin across the country.  Remember: The new looting model targets a small extraction from a huge expenditure.  The pallets of US cash were "spent," but Iraq was hardly "rebuilt."

MeanMesa posted another, similar quote from Sanders before -- in May 2011.

MeanMesa has used a quote from Senator Bernie Sanders (I-Vermont) frequently in many previous postings.  "Not everyone had a hard time during the last eight years. (Bush Jr. administration)  The top 400 richest Americans saw their  personal wealth increase by $630 Billion dollars."

Look at the numbers.  First, $630 Billion is roughly 5/8's of $1 Trillion.  Next, if these were the "top" 400, how many Americans are there in the "top 2%" everyone is talking about?  Thousands.  Actually, tens of thousands.

That "top 2%," along with an even larger crowd of slightly "less rich" hangers-on are the ones who are now sucking the huge, continuing Bush Jr. "tax cuts" out of what is left of the economy.  Remember, the "missing money" total amounts to around $12 Trillion.  When we discount the "vanished" money, that is, the part of the "take" which didn't actually make any of these folks richer but still mortally wounded the economy for the rest of us,  there's still plenty left over to have made these rich folks even richer.  

A lot richer.  They became John Boehner's bosses.  They ordered the House Republicans to extend their tax cuts at any price.  They ordered the House Republicans to forget about jobs so they could work full time on transferring the Social Security Trust fund to their Wall Street cronies. (Read the post here. )

Like most Americans, MeanMesa's eyes glaze over at the sight of the $14 Trillion dollar national debt, but we have to take care not to think of that huge problem as one which is not composed of thousands of little pieces.  When 400 Americans walked away with 5/8 trillion of it, the whole thing, while still immense, is no longer so unapproachable.

Very many of "those little pieces" were eagerly slipped into place in the wake of the autocrat's famous promise to return the Clinton surplus to the "job creators."

This NY Times chart offers a glimpse of where the money went.(Image source.)
While outrageous and shocking, even these "cost figures" are low when a longer term accounting is conducted on the same spending centers.  Notably, there are no "direct transfers" representing material checks handed to the crowd which had designed this.  Instead, subsidies and tax expenditures, no-bid contracts, wildly expensive military procurement contracts and the like provided the wealth re-distribution funnels the scheme needed.

For any cronies unable to profit from these opportunities, banking and insurance de-regulation favors stepped in so they, too, could "share the wealth."

Recapping the historic record of Republican debt creation, we can add roughly $6 Trillion of direct Bush debt to the $4 Trillion of the Reagan debt.  Remember, we are "shooting for" an explanation of about $14 Trillion.  The Bush deficits -- with or without the inclusion of the "off the books" war "emergency supplementals" -- were breath taking.

The annual deficits of the "debt experts" explain everything.
The autocracy encountered its "mortal problem" when the extractions finally over whelmed the economy.  George W. Bush and Richard Cheney may be gone -- along with their torture chambers, emergency "no-bid" contracts and cheap ambitions to become American aristocrats -- but their debt remains.  Ironically, even the current, more modern versions of the Republican idea of a budget remain strikingly similar

Go ahead.  Total up the national debt being generated as these annual Republican deficits pile up -- use your pocket calculator. Don't forget to add in the interest -- for easy calculations, it runs roughly 1/4 trillion per year. [The data for the chart comes from the Office of the National Debt, Department of the Treasury.  It was published while Bush W. was in the White House.]  Try to remember your figures the next time you hear a Republican on your television saying "We don't have a revenue problem, we have a spending problem."

Again, $14 Trillion in debt may seem incomprehensible, but when we look at smaller parts, we see a very finite political reality.  The point here is simple.  Although there are no longer marauding Vikings in long boats, modern looting has equally direct manifestations:

1. Wealth is redistributed by means other than capitalistic, free market endeavors.
2. The "specific rate" of this wealth redistribution makes individual cases almost imperceptible, but it makes the ultimate consequences unavoidable.
3. While the various channels of redistribution may be different, much of the debt created inevitably becomes public debt, that is, national debt.

The Looting Under the Boehner - McConnell Dynasty

Following along after the public debt idea, it's not surprising that the oligarchs have eagerly pursued the control of Congress.  Although the remaining "take" has been reduced by their previous looting, the money class remains intent on both continuing the extraction, although perhaps at a lower rate thanks to the diminishing wealth of the country, and protecting the mechanisms of that extraction.

"Diminishing wealth of the country?"  Remember.  In the period of just a few months during 2008 the accumulated wealth of individual citizens dropped 40%.  Did the oligarchs saunter over to the teller's window to deposit every dime of this?  No.  They didn't have to walk away with every dime.  This was so much wealth that if they could walk away with 1% of their "Vikings' Loot," they would be rich beyond measure.

They would also have plenty of "extra dough" to continue their influence on the Congress to extract even more in the future.  All this hyperbolic economic theory may seem distant and academic, but we need to remember that this "missing money" is in the pockets of these same oligarchs as we speak.  Today.

The following in an interesting AlterNet article about just how incredibly rich they became.  (Read the article here. The links in the AlterNet article are left enabled.)

Five Ugly Extremes of Inequality in America -- The Contrasts Will Drop Your Chin to the Floor

March 24, 2013  |     
AlterNet / By Paul Buchheit
Any of the ten richest Americans could pay a year's rent for all of America's homeless with their 2012 income.

The first step is to learn the facts, and then to get angry and to ask ourselves, as progressives and caring human beings, what we can do about the relentless transfer of wealth to a small group of well-positioned Americans.
1. $2.13 per hour vs. $3,000,000.00 per hour

Each of the Koch brothers saw his investments grow by  $6 billion in one year, which is three million dollars per hour based on a 40-hour 'work' week. They used some of the money to try to  kill renewable energy standards around the country. 

Their income portrays them, in a society measured by economic status, as a million times more valuable than the  restaurant server who cheers up our lunch hours while hoping to make enough in tips to pay the bills. 

A comparison of top and bottom salaries within large corporations is much less severe, but a lot more common. For CEOs and minimum-wage workers, the  difference is $5,000.00 per hour vs. $7.25 per hour. 

2. A single top income could buy housing for every homeless person in the U.S.

On a winter day in 2012  over 633,000 people were homeless in the United States. Based on an annual single room occupancy  (SRO) cost of $558 per month, any ONE of the  ten richest Americans would have enough with his 2012 income to pay for a room for every homeless person in the U.S.  for the entire year. These ten rich men together made more than our entire  housing budget.

For anyone still believing "they earned it," it should be noted that  most of the Forbes 400 earnings came from  minimally-taxed, non-job-creating capital gains.
3. The poorest 47% of Americans have no wealth

In 1983 the poorest  47% of America had $15,000 per family,  2.5 percent of the nation's wealth. 

In 2009 the poorest  47% of America owned  ZERO PERCENT of the nation's wealth (their debt exceeded their assets). 

At the other extreme, the  400 wealthiest Americans own as much wealth as 80 million families --  62% of America. The reason, once again, is the stock market. Since 1980 the American GDP has approximately doubled. Inflation-adjusted wages  have gone down. But the stock market has increased by  over ten times, and the richest quintile of Americans  owns 93% of it. 

4. The U.S. is nearly the most wealth-unequal country in the entire world

Out of 141 countries, the U.S. has the 4th-highest degree of  wealth inequality in the world, trailing only Russia, Ukraine, and Lebanon. 

Yet the financial industry keeps creating new wealth for its millionaires. According to the authors of the Global Wealth Report, the world's wealth has doubled in ten years, from $113 trillion to $223 trillion, and is expected to reach $330 trillion by 2017. 

5. A can of soup for a black or Hispanic woman, a mansion and yacht for the businessman

That's literally true. For every one dollar of assets owned by a  single black or Hispanic woman, a member of the Forbes 400 has over  forty million dollars.

Minority families once had substantial equity in their homes, but after Wall Street caused the housing crash,  median wealth fell 66% for Hispanic households and 53% for black households. Now the average single black or Hispanic woman has about  $100 in net worth.

What to do?

End the  capital gains giveaway, which benefits the wealthy almost exclusively. 

Institute a  Financial Speculation Tax, both to raise needed funds from a currently untaxed subsidy on stock purchases, and to reduce the risk of the irresponsible trading that nearly brought down the economy. 

Perhaps above all, we progressives have to choose one strategy and pursue it in a cohesive, unrelenting attack on greed. Only this will heal the ugly gash of inequality that has split our country in two.

Paul Buchheit teaches economic inequality at DePaul University. He is the founder and developer of the Web sites, and, and the editor and main author of "American Wars: Illusions and Realities" (Clarity Press). He can be reached at

A Last Thought

The oligarchs with the ambition to own everything and, hence, rule the rest of us in the country are aware of something that many of us "lesser souls" have not yet fully embraced.  The looting and the public "situation" left in its wake, well described in the article above, actually lead somewhere quite unpleasant.

Even though the corporate class has invested mightily in media efforts to control public opinion and equally mightily in arming themselves for the ultimate defense of their purloined wealth, what we read in this MeanMesa post will inexorably lead to violence. Count on it as much as you count on the rising of the sun.

The man who has just thoughtlessly finished another meal cannot understand the man who is hungry -- and who was hungry yesterday.

The man who has wealth beyond measure cannot understand the relentless sorrow of the man who worries constantly about money.

The rich man without even the memory of ever sweeping the sweat from his brow will not lose sleep over crushing the dream of the man in the dirty shirt and boots.

These are, today, poetic aphorisms.  However, they both have and will quite expectedly and quite predictably metamorphose into bullets, bricks and fire bombs.  Quite aside from all issue of ideology or religion, hungry, hopeless people will fight.

There may be all sorts of fairly valid reasons for wanting to alter the relentless wealth redistribution, but at the top of that list we should probably add:

"Avoiding civil war."

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