PLUTOCRACY PFOR THE PFEW – CITIGROUP’S VIEW OF OUTDATED DEMOCRACY

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:

  1. the rule of power of wealth or of the wealthy.
  2. a government or state in which the wealthy class rules.
  3. 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:

  1. a policy error may lead to asset deflation, which would likely damage plutonomy
  2. the rising wealth gap between the rich and the poor will probably at some point lead to a political backlash
  3. 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:

  1. higher taxation on the rich or indirectly through higher corporate taxes/regulation
  2. 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.

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About Charlotte A. Weybright

I own a home in the historical West Central Neighborhood of Fort Wayne, Indiana. I have four grown sons and nine grandchildren - four grandsons and five granddaughters. I love to work on my home, and I enjoy crafts of all types. But, most of all, I enjoy being involved in political and community issues.
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3 Responses to PLUTOCRACY PFOR THE PFEW – CITIGROUP’S VIEW OF OUTDATED DEMOCRACY

  1. iceironman says:

    This article isnt about PLUTOCRACY, you seem to want to substitue your word for theirs, PLUTONOMY. It doesnt state that the RICH rule, it states that the rich take in vast weath, and spend vastly. I almost thought it was anti plutonomy based on how many times they state how stinking weathy the top 1% are. Again, they provided facts, not feelings. They even state that there is no consumer, only the rich and the rest. Many statements seem very anti plutonomy, but factual. They do not defend the rich, they dont disrespect them.
    You even point out above that they say it how it is “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.

    They are not bragging, as you place it, they are stating facts. Facts that one could argue on for redistrobution?

    After reading the entire link, you have way over thought and rationalized a fear and hatetred of Citi Group for pointing out the obvious, stating its implications and comparing and contrasting the imbalance of economics that exist now and existed when citi wasnt even around, even when greedy banks were not around. They also state that this imbalance will not be detrimental in their opinion to sociaty or global economics.

    They only did a thesis, stating how plutonomy (this isnt a substitute for democracy by the way) exist, why they exist, what govts can do to aide AND destroy them. They point out why they exist and how they skew statistics on savings and spending in the countries.

    I have never known someone to hate corporations sooooo much. At the end of the thesis it clearly states “We at this point make clear that we have no view on whether plutonomy is good or bad, our anaylis is based on facts not what we want sociaty to look like.””

    They also do YOU the favor of stating that if you want to get into equities, its not a bad idea to buy what rich are buying, porche etc. Their plutonomy investment basket made 17.8% return, not bad.

    NOT ONE TIME DOES CITI SAY THAT ANYTHING ABOUT GOVERMENT TAKEOVER BY THE RICH OR A PLUTOCRACY, THIS IS A WORD YOU MADE UP. IT IS NOT A SUBSTITUE FOR DEMOCRACY THIS IS YOUR FEAR MONGERING TO THE LAYMAN. You tell me how a rich man can make laws without corrupt politicians???
    I appreciate the article, and your posting it, I have learned alot about how to invest, does that make me evil??

  2. iceironman says:

    No Response is a good response

  3. Snetphilie says:

    I agree that the author does not point out why Citigroup should be held accountable for this. Yes, this is simply a document consisting of research telling people how to invest. What is not mentioned is the fact that Citigroup only provided this document to their richest investors, that this document is being discussed here because somebody leaked it, and the fact that Citigroup has done everything they can to remove this document from public view.

    If Citigroup was not trying to help the rich get richer, why wouldn’t they have maybe rephrased the whole report to sound a little less harsh to less affluent people, and then released it to all of their investors? The truth is that Citigroup is part of the Plutocracy and they are only helping others within this Plutocracy.

    Yes, I did use the word Plutocracy. There is no proof that it exists in this document, only that we are a Plutonomy, but how can a Plutonomy exist without a Plutocracy. iceironman states that it is corrupt politicians that allow corporations to control our government, but I believe he is putting the cart before the horse. Corporations have been funding our elections for quite some time and lobbyists now outnumber our politicians. Once politicians owed these corporations favors, they began appointing employees of these corporations to positions within our government regulatory agencies. Once these agencies were nearly completely run by the corporations, the only thing stopping the corporations was the rule of law. It wasn’t long before our supreme court began to be populated by former employees of these corporations. Then, as if that weren’t enough, corporations helped get their employees elected directly into government office.

    So all three branches of our government are populated with former employees of the corporations they are in charge of regulating. It’s no surprise that the Citizens United vs. FEC case was put before the supreme court and they granted corporations all of the rights of citizens without any of the responsibilities. With all of this power being held by corporations, and these corporations being owned and often run by a small group of the wealthiest people, explain to me how we are not a Plutocracy.

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