No more traditional democracy for Citigroup. The omnipresent international financial conglomerate with operations in consumer, corporate, and investment banking and insurance has decided that it is pretty pleased with progress toward a neatly done plutocratic society. Democracy can be messy, and, frankly, it interferes with Citigroup’s vision of world globalization by countries dominated by plutocracies.
But just what is a plutocracy? Here are definitions:
- the rule of power of wealth or of the wealthy.
- a government or state in which the wealthy class rules.
- a class or group ruling, or exercising power or influence, by virtue of its wealth.
In a lengthy, but little-noticed two-part report from 2005 and 2006, Citgroup brags that it coined the phrase “plutonomy” to explain global imbalances in wealth.
According to the report, which refers to a Survey of Consumer Finance data, the rich in the United States continue to be “in great shape” compared to main-street citizens who continue to be in a demoralized and declining state of finances. And, Citigroup thought that given the great shape of the rich, it was “a good time to bang the drum on plutonomy.”
Citigroup’s thesis is that the rich are the dominant drivers of demand in many economies around the world – specifically the United States, the United Kingdom, Canada, and Australia. These economies have seen the rich take an ever-increasing share of income and wealth over the last 20 years with the result that the rich now dominate income, wealth, and spending in these countries.
Citigroup posits that:
“despite being in great shape, we think global capitalists are going to be getting an even greater share of the wealth pie over the next few years, as capitalists benefit disproportionately from globalization and the productivity boom, at the relative expense of labor.” (my emphasis)
Those who oppose globalization already understand the ability of corporate giants and conglomerates to dominate and control growth in many areas of the world’s economies. Citigroup is ecstatic and gleefully states that, based on the consumer finance survey, the top 10% of families accounted for 43% of the income, while the bottom 40% of families accounted for ONLY 10% of income.
Kicking up its corporate heels, Citigroup uses charts to “show the income and wealth shares of the top two deciles, the next two quintiles and the remaining 40% of US households”, and that – brace yourself - “we have lumped the bottom 40% into one to emphasize how relatively small their income and wealth shares are.” Citigroup’s disdainful words.
Citigroup has even recognized certain well-defined risks – one being the risk that those who are increasingly shoved to the bottom of the ladder will fight back. Citigroup opines the following:
- a policy error may lead to asset deflation, which would likely damage plutonomy
- the rising wealth gap between the rich and the poor will probably at some point lead to a political backlash
- at some point, it is likely that labor will fight back against the rising profit share of the rich
The “push-back” – according to Citigroup – could be felt through the following:
- higher taxation on the rich or indirectly through higher corporate taxes/regulation
- attempts to protect indigenous laborers, in a push-back on globalization (either anti-immigration or protectionism)
Republicans – all the while spewing venom about the dangers of big government, unions, and the Democrats – support this path to destruction. As long as destruction of our democratic system comes from capitalistic means and corporate dominance, Republicans will turn blind eyes and deaf ears to the increasing disparity between the haves and have nots.
Rather than worry about the Obama Healthcare plan, Republicans should be worrying about the health of our democracy, which is slowly fading at the clapping hands of Citigroup and other corporate powers.