Kurt Andersen: “Evil Geniuses” & wealth

Preface.  This is a well-written book with original insights into the economic, cultural, and politics behind how we got to a right-wing wannabe fascist incredibly unfair distribution of wealth. 

But Andersen is unaware that energy, not money, is the basis of our civilization.  Oil production peaked in the U.S. decades ago, and is a large part of why wealth for most people declined and factories moved to China and other nations that not only had cheap labor, but cheap coal and oil.  And that the reason new stuff didn’t keep appearing has to do with the limits of what is possible given physics and the Laws of the Universe. We aren’t going to venture to other planets, let alone galaxies: we used up the fossil fuels need to get there.  Nor will there ever be an AI robot as smart or smarter than we are, because that would require hundreds of trillions of lines of code with 20 trillion errors to fix. I was once a software engineer, even one bad line of code means coming in at 3 AM (Kasan, P. 2011. A.I. Gone awry: the future quest for artificial intelligence. Skeptic).

Since energy wasn’t taken into account, and because I’ve read hundreds of books on economics and politics, many of them at http://energyskeptic.com/category/books/book-list/, I skimmed most of the book, and extracted a few bits I thought were interesting below, so it will be disjointed and not flow as it does in the book itself.  Better than this book is “Fantasyland: How America Went Haywire: A 500-Year History” which brilliantly explains why Americans are so nutty and irrational and very fun to read as well.

Alice Friedemann www.energyskeptic.com  author of “When Trucks Stop Running: Energy and the Future of Transportation”, 2015, Springer, Barriers to Making Algal Biofuels, and “Crunch! Whole Grain Artisan Chips and Crackers”. Podcasts: Collapse Chronicles, Derrick Jensen, Practical Prepping, KunstlerCast 253, KunstlerCast278, Peak Prosperity , XX2 report

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Kurt Andersen. 2020. Evil Geniuses: The Unmaking of America: A Recent History. Random House.

Colbert joked on the first episode of his old nightly show, America had become increasingly “divided between those who think with their head and those who know with their heart.

Belief in every sort of make-believe had spun out of control—in religion, science, politics, and lifestyle, all of them merging with entertainment in what I called the fantasy-industrial complex.

Evil Geniuses chronicles the quite deliberate reengineering of our economy and society since the 1960s by a highly rational confederacy of the rich, the right, and big business.

The annual revenues of Goldman Sachs were greater than the annual economic output of two-thirds of the countries on Earth—a treasure chest from which the firm was disbursing the equivalent of $69 million to its CEO and an average of $800,000 apiece to everybody else at the place.

This was 2006, before Wall Street started teetering, before the financial crash, before the Great Recession. The amazing real estate bubble had not yet popped, and the economy was still apparently rocking.

It wasn’t the way things had worked in the modern age, for a century or two. In the past, certainly in my lifetime and that of my parents and grandparents, over any given 20-year period, whenever you glanced back, you’d notice how culture and what was deemed current changed unmistakably from top to bottom. Since the dawn of the modern, ordinary people could date cultural artifacts and ephemera of the recent past and previous eras. During the 20th century, each decade had its own signature look and feel.

Starting in the 1990s, that unstoppable flow of modernity—the distinctly new continuously appearing and making styles seem old—somehow slowed and nearly stopped. The dramatic new change in the culture seemed to be that things were no longer dramatically changing. The shortest and simplest answer is that a massive counterreaction to multiple overwhelming waves of newness on multiple fronts, one after another, sent all sorts of Americans, for all sorts of different reasons, to seek the reassurance of familiarity and continuity wherever they could manage to find or fake it.

The first wave was in the 1960s, a decade in which everything seemed relentlessly new new new. Which for several years felt exciting and good to most Americans, and the novelty glut seemed under control by the forces of reason and order. But then came the upheavals of the second half of the 1960s, when society and culture changed startlingly in just a few dozen months. In the early 1970s, exhausted by that flux, still processing the discombobulating changes concerning gender and race and sex and other norms, people all at once started looking fondly back in time at the real and imaginary good old days.

Hollywood revived and celebrated the recent past in a big way, right away, with nostalgia-fests like American Graffiti, Happy Days, and Grease.

The political right rode in on that floodtide of nostalgia, and then, ironically, the old-time every-man-for-himself political economy they reinstalled, less fair and less secure, drove people deeper into their various nostalgic havens for solace.

This new fixation of the culture on the old and the familiar didn’t subside. It became a fixed backward gaze. Then almost without a pause came another wave of disruption and uncertainty, caused by the digital technologies that revolutionized the ways people earned livings and lived, and which made economic life for most people even more insecure. And the culture in turn focused even more compulsively on recycling and rebooting familiar styles and fashions and music and movies and shows.

In 40 years, the share of wealth owned by our richest 1% has doubled, the collective net worth of the bottom half has dropped almost to zero, the median weekly pay for a full-time worker has increased by just 0.1% a year, only the incomes of the top 10% have grown in sync with the economy,

Americans’ boats stopped rising together; most of the boats stopped rising at all. But along with economic inequality reverting to the levels of a century ago and earlier, so has economic insecurity, as well as the corrupting political power of big business and the rich, oligarchy, while economic immobility is almost certainly worse than it’s ever been.

The proliferation of conspiracy theories since the 1960s, so many so preposterous, had the unfortunate effect of making reasonable people ignore real plots in plain sight. Likewise, the good reflex to search for and focus on the complexities and nuances of any story, on grays rather than simple whites and blacks, can tend to blind us to some plain dark truths.

I still resist reducing messy political and economic reality to catchphrases like “vast right-wing conspiracy” and “the system is rigged,” but I discovered that in this case the blunt shorthand is essentially correct.

The reengineering was helped along because the masterminds of the economic right brilliantly used the madly proliferating nostalgia. By dressing up their mean new rich-get-richer system in old-time patriotic drag. By portraying low taxes on the rich and unregulated business and weak unions and a weak federal government as the only ways back to some kind of rugged, frontiersy, stronger, better America. And by choosing as their front man a winsome 1950s actor in a cowboy hat, the very embodiment of a certain flavor of American nostalgia.

Of course, Ronald Reagan didn’t cheerfully announce in 1980 that if Americans elected him, private profit and market values would override all other American values; that as the economy grew nobody but the well-to-do would share in the additional bounty; that many millions of middle-class jobs and careers would vanish, along with fixed private pensions and reliable healthcare; that a college degree would simultaneously become unaffordable and almost essential to earning a good income; that enforcement of antimonopoly laws would end; that meaningful control of political contributions by big business and the rich would be declared unconstitutional; that Washington lobbying would increase by 1,000 percent; that our revived and practically religious deference to business would enable a bizarre American denial of climate science and absolute refusal to treat the climate crisis as a crisis; that after doubling the share of the nation’s income that it took for itself, a deregulated Wall Street would nearly bring down the financial system, ravage the economy, and pay no price for its recklessness; and that the federal government he’d committed to discrediting and undermining would thus be especially ill-equipped to deal with a pandemic and its consequences.

We didn’t pay close enough attention to the fine print and possible downsides. Living in the world actually realized by Reaganism, our political economy remade by big business and the wealthy to maximize the wealth and power of big business and the well-to-do at the expense of everyone else. We were hoodwinked, and we hoodwinked ourselves.

Our wholesale national plunge into nostalgia in the 1970s and afterward was an important part of how we got on the road toward extreme insecurity and inequality, to American economic life more like the era of plutocrats and robber barons of the 1870s.

Unlike longing for a fairer economy of the kind we used to have, which would require a collective decision to bring back, the itch of cultural and social nostalgia is easy for individuals to scratch and keep scratching. So for many Americans, who spent several decades losing their taste for the culturally new and/or getting screwed by a new political economy based on new technology, fantasies about restoring the past have turned pathological. Thus the angriest organized resistance to the new, the nostalgias driving the upsurge of racism and sexism and nativism—which gave us a president who seemed excitingly new because he asserted an impossible dream of restoring the nastily, brutishly old. The recent wave of politicized nostalgia is global, of course, taking over governments from Britain to Russia to India. But those countries at least have the excuse of being ancient.

Earlier I called the rich right and big business and libertarian ideologues highly rational. Selfishness is rational up to a point, even extreme and cruel selfishness, and this elite confederacy won its war by means of cold-blooded rationality. On the other hand, their increasingly essential political allies in this project are among the most irrational, emotional, unreasonable, and confused Americans of all—religious nuts, gun nuts, conspiracy nuts, science-denying nuts, lying-blond-madman-worshiping nuts.

Fantasyland’s magical thinking and conspiracism and mistrust of science fueled the widespread denial of and indifference to the crisis, and fused with the evil geniuses’ immediate, cold-blooded certainty that a rapid restoration of business-as-usual must take precedence over saving economically useless Americans’ lives.

Even before the pandemic and its economic consequences, and before the protests and chaos following the murder of George Floyd, we were facing a do-or-die national test comparable to the big ones we passed in each of the three previous centuries—in the 1930s, the 1850s and ’60s, and the 1770s and ’80s. Forgive the Hero’s Journey talk, but this is America’s Fourth Testing.

We can, in other words, fail to change what needs changing—and thereby guarantee America’s continued decline and fall.

Our forefathers created a nostalgia industry that fictionalized our recent past, turning Daniel Boone and Buffalo Bill Cody into living celebrity-hero artifacts and reenactors of the frontier days, Walden was driven by Henry David Thoreau’s nostalgia for the era of his childhood in the 1820s and ’30s, before railroads and the telegraph, and his dreamy wish “not to live in this restless, nervous, bustling, trivial Nineteenth Century.

America’s tragic flaw is our systemic racism, and it’s a residue of a terrible decision our founders made to resist the new and perpetuate the old: the enslavement of black people. Slavery had ended in most of Europe by the 1500s, but not in its colonies in the New World and elsewhere. France and Spain and Britain outlawed their slave trades and slavery itself decades before the United States did, and they found it unnecessary to fight civil wars over the issue. Tsarist Russia emancipated its serfs before democratic America emancipated its slaves. On abolition we were not early adopters.

White Southern nostalgia was also for the fictional feudal pasts depicted in the novels of Walter Scott, set in ye olde England and Scotland, published in the 1820s and ’30s, and particularly, phenomenally popular in the American South because the fictions served to romanticize their own slave-based neofeudalism. Mark Twain blamed secession and the Civil War on such Southern “love [of] sham chivalries of a brainless and worthless long-vanished society.

We almost only talk about “checks and balances” concerning Washington politics, presidents versus Congress versus the federal courts. But economies—especially modern free-market economies, loosely supervised day to day, operating mostly without government commanders-and-controllers—also need systems of checks and balances.

Nobody but the Rich (and Nearly Rich) Got Richer: 27 Ways the Pie Is Cut Differently Now

Tax Bonanzas for Rich People

  • In 1980 income above $700,000 (in today’s dollars) was taxed at 70 percent by the federal government, but today the top rate is 37 percent. And the richest Americans, who back in the day paid an average of 51 percent in federal, state, and local income taxes combined, now pay just 33 percent.
  • The richest 0.01 percent of Americans, the one in ten thousand families worth an average of $500 million, pay an effective federal income tax rate half what it was in the 1970s.
  • Profits from selling stocks (almost all of which go to rich people) are generally taxed at 20 percent, about half the rate they were taxed in the late 1970s.
  • Stock dividends (half of which go to the richest 1 percent) used to be taxed like salary income, but in 2003 they began getting special treatment—and today the tax on dividend income for the rich is 22 percent, instead of the normal income tax rate of 37 percent.
  • In 1976 one in twelve American heirs—basically anyone inheriting the equivalent of $1 million or more—paid federal estate taxes, and the maximum rate on the largest of those estates was 77 percent. Heirs today get the first $11 million tax-free, and the tax on everything above that is just 40 percent. In 1976 taxes were paid on the estates of the 139,000 richest Americans who died; these days fewer than 2,000 estates each year get taxed at all.

Bonanzas for Big Business

During the 1980s, the amount of corporate income tax paid as a fraction of the whole U.S. economy was cut by more than half, and in the years since, that fraction has been kept at half what it was before 1980.

Since 2000, corporate profits as a fraction of the economy have been 50 or 100 percent higher than they’d been for the previous five decades.

The Rich Are Different: Income

  • Before 1980, all Americans’ incomes grew at the same basic rate as the overall economy. Since 1980, the only people whose incomes have increased at that rate are people with household incomes in the range today of $180,000 to $450,000. People with incomes higher than that, the top 1 percent, have gotten increases much bigger than overall economic growth. (Meanwhile 90 percent of Americans have done worse than the economy overall.)
  • Since 2000, the salaries of the extremely well-paid ($150,000 or more) have increased twice as fast as the salaries of the well-paid ($100,000 to $150,000). Since 1980, the income of the wealthiest 1 percent of Americans has almost tripled.
  • During the 1990s and 2000s, most of the increase in Americans’ income went to the richest 1 percent—and in the years just before and after the Great Recession, they got 95 percent of the income increases.
  • The share of all income going to the ultra-rich—families making $9 million or more per year—is now 5 percent of the total, ten times what it was in the 1970s.
  • During the 2010s, the majority of all personal income in America went to just the top 10 percent, people with household incomes higher than $180,000.

The Rich Are Different: Wealth

  • Of all the stocks and bonds and mutual funds and houses and cars and boats and art and everything else that counts as wealth, the richest fifth of Americans, people with a net worth of about $500,000 or more, now own about four-fifths of it, a much larger share than they owned before the 1980s.
  • The unambiguously rich 1 percent—the million and a half households with a net worth of roughly $10 million or more—own 39 percent of all the wealth, almost twice as large a share as they had in 1980. Since the late 1980s, that wealthiest 1 percent have become $21 trillion wealthier, an average increase of about $12 million per household.
  • That top 1 percent own an even larger share of all the stock owned by Americans—56 percent, a quarter more of the total than they had in the late 1980s.
  • Of the wealth owned by the top 1 percent, more than half is owned by just the richest tenth of them. That is, the top 0.1 percent, one in a thousand American families, worth an average of $100 million apiece, own 22 percent of all the wealth—a share more than three times larger than it was in the 1970s.

Survivors and Losers: Income

  • During the grand decades between World War II and 1980, when U.S. median household income more than doubled, 70 percent of all increases in Americans’ income went to the bottom 90 percent. Since 1980, nobody’s income has doubled except for the richest 1 percent, and the incomes of the entire nonrich 90 percent of Americans have gone up by only one-quarter.
  • The average monthly Social Security retirement benefit more than tripled from 1950 to 1980, adjusted for inflation, but it has increased by just half in the four decades since.
  • During the last forty years, the median weekly pay for Americans working full time has increased by an average of just one-tenth of one percent a year—and for men has actually gone down 4 percent.
  • For the four-fifths of all private sector workers who don’t boss anybody, the average wage today is $23.70 an hour. In 1973, it was $24.29.
  • Forty years ago, a typical high school graduate working full time could earn an income of twice the poverty level, the equivalent of $56,000, enough to support a spouse and two children. Today the four in ten adults who have no more than a high school diploma and work full time earn a median salary of $39,000.
  • In 1980, 20 percent of all income went to the less prosperous half of Americans; by 2012, that share had shrunk to 12 percent.
  • In the 1980s the comfortably middle and upper middle class, the two-fifths of Americans with household incomes that put them below the wealthy top tenth but above the bottom half, earned 37 percent of all the income—almost exactly what their share would be in a perfectly equal society. By 2014, that share had shrunk to 27 percent.

Survivors and Losers: Wealth

  • The upper middle class of the 1980s, people who had a nice house and some savings, the 30 percent just below the top 10 percent, owned 29 percent of all the wealth—once again, almost exactly their share in a perfectly equal society. Today that same comfortable 30 percent own only 17 percent of all the wealth.
  • In 1987 the least-wealthy 60 percent of Americans owned 6 percent of all U.S. wealth. Today that same large majority—people in the middle and the lower-middle and below, households worth less than $175,000—own a third as much, just 2 percent of all the wealth.
  • The combined wealth ($2.5 trillion) of that same large U.S. majority, the 200 million Americans from just above the middle all the way down to the bottom, is less than that of the 607 U.S. billionaires ($3.1 trillion). Therefore a single average American billionaire owns the same as 400,000 average members of the un-wealthy majority, an entire big city’s worth of Americans.
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2 Responses to Kurt Andersen: “Evil Geniuses” & wealth

  1. Justin says:

    Thank you so much for this post – and all your posts!!

    I don’t think we’re going to turn this around. Obviously.

  2. Rice Farmer says:

    Unfortunately, the failure to see that “energy, not money, is the basis of our civilization” is not unique to the political right. The now-popular “modern monetary theory” operates on the same delusion.

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