Minyan Mailbag:Two Class Society
Food for thought into our requisite respite.
Note: Our goal in Minyanville is to remove intimidation from the financial markets and encourage an interactive dialogue among the Minyanship. We share this next discussion with that very intent.
I believe that any honest examination of the facts will show that the vast majority of human history has been dominated by two class societies. Even in socialist and communist societies, this has been the case. France is a good example of the former, as the aristocratic class dominates the business and political power structure while throwing crumbs to the rest of society via the welfare state. It is quite predictable what their answer will be to the current uprising - throw a few more crumbs via the welfare system.
The true brilliance of the original US structure was its design as a Federalist Republic. I am astounded as to how many educated people I know who think that we live in a democracy. Of course, all democracies eventually end up as two class societies as the have's slowly take control of the business and political power structure. The design of our original Federalist Republic was set up to preserve the rights of the individual by limiting government. To do so, the Federalist system inherently has competition at its core as states compete against one another.
This system allows for the true nature of society to develop - a bell shaped one in which equal opportunity is provided but equal outcome not assured. I agree with you longer term as to our move to a 2 class society, but its root cause is our abandonment of the Federalist system. To my mind, the major losses in this long battle were the Civil War, FDR's Great Society, and LBJ's "War on Poverty". Obviously slavery was/is an abomination but the way it was addressed did major damage to the Federalist system.
The two welfare binges simply created a permanment class of dependent people that started the process of making the poor a "fat tail" in the bell curve of society. The final rejection of hard money by Nixon accelerated the process of pushing the middle class down the economic scale. I firmly believe that our nation is well past the point of no return and that we are eventually heading towards a truly 2 class society. The credit creation has masked the middle classes slow demise. There will be many potential catalysts to stoke civil disturbances, but two I see as most possible currently are:
1. The lack of assimilation of the Latin immigration wave into main stream American culture. Of course, this is a complicated issue but the idiotic immigration policies of the US have gone a long way in creating an underground society of illegals - most reminds me of France but thankfully without the potential religious overtones.
2. The potential for a generational "war" is certainly there as the baby boomers work to place our national finances in shambles at just the time that they will, in total, be looking to goverment for even more support. What happens when the battle arises between increasing taxes on younger workers to fund entitlements for the very generation who largely created the financial mess to begin with?
The major question is where does the leadership come from to return our system to one that actually provides equal opportunity? Unfortunately, I don't see any as most look to ever greater Federal intervention when that will only make things worse. When most people don't even know what system we actually live under what hope do we have that the spirit of that system will ever be reinvigorated?
Keep up the good work - this is a critically important topic and would love to see more content on potential solutions as opposed to just identifying the problem. I think you know what my solution is now!
PS: In case you don't recall, I am a die hard Broncos fan. Rather than rub your nose in the R... (I can't bring myself to type that name) losing record, let me be honest and say that they have really impressed me this season and their record is as much a product of bad luck (Eagles, Chiefs, etc..) and that I recognize that they are much better than their record would suggest. I am a big PSU fan and I hate the R... a bit less these days because of Kerry Collins and it is great to see him playing so well. So with that said, Broncos win 45-42 in OT with Collins throwing 6 touchdowns!
Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at email@example.com.
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