Are the Rich Different?

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I heard that the rich lie, steal, and cheat more than those that are not. I know it's true because I trust my source even though I will not provide a shred of evidence to make my case. You just have to take my word for it OK?

Oh wait, that is how the conservative idealogues here present "facts".

http://www.livescience.com/18683-rich-people-lie-cheat-study.html

Of course this was something that many people suspected so it's not news for them.

Dominic C
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Jun. 27, 2011 9:39 am

Comments

The rich are not like the rest of us. They have a lot more money.

DRC's picture
DRC
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Jul. 31, 2007 3:01 pm

I've seen it from experience. Business people when expanding will get ideas that are quasi-legal. Most will hire an attorney or even put one on staff so that the legality of every move they make can be checked. They often find "gray areas" and exploit them. When they have enough money they hire lobbyists to put "pull the ladder up" laws in place to eliminate competition. The latter is legal but indeed immoral and questionable. They often hide behind "public safety" for these kinds of laws.

I think that the maximum asset value for an individual should be around $12 million. I would ask "who needs more?" Otherwise those who believe they should have more are clinically insane and "money junkies" hooked on money as heroin junkies are hooked on heroin. Anyone up for starting a money rehab business? We could charge exorbitant prices couldn't we? ;-)

captbebops's picture
captbebops
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Jul. 31, 2007 3:01 pm

As Mitt would say "Why don't the poor just buy more money?" Problem solved!

Bush_Wacker's picture
Bush_Wacker
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Quote captbebops:

I think that the maximum asset value for an individual should be around $12 million.

The challenge you're going to get is "who's to decide how much an individual is allowed to have?" And any answer is hard to justify.

My idea is to annually tax someone's net worth, maybe at a rate of 3%. If you make a million dollars and you spend a million dollars, you don't pay any tax. If you stop working when you're 60 years old, almost 100% of your assets will be taxed before you die (assuming zero investment income in those years, which of course isn't going to happen.) And tax estates 100%. If you want to give money to your kids, do it before you die. Then the kids will either spend the money into circulation, or they themselves will pay the taxes.

Hoarding problem solved.

chilidog
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Jul. 31, 2007 3:01 pm
Quote chilidog:
Quote captbebops:

I think that the maximum asset value for an individual should be around $12 million.

The challenge you're going to get is "who's to decide how much an individual is allowed to have?" And any answer is hard to justify.

My idea is to annually tax someone's net worth, maybe at a rate of 3%. If you make a million dollars and you spend a million dollars, you don't pay any tax. If you stop working when you're 60 years old, almost 100% of your assets will be taxed before you die (assuming zero investment income in those years, which of course isn't going to happen.) And tax estates 100%. If you want to give money to your kids, do it before you die. Then the kids will either spend the money into circulation, or they themselves will pay the taxes.

Hoarding problem solved.

This would be a very nice solution.

Dominic C
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Jun. 27, 2011 9:39 am

There is a whole array of anthropology about how this problem is solved in various cultures. The Potlatch, for example. Or, the Jubilee. Or, as a new king took the throne, the forgiveness of debts or restoration of titles. High marginal tax rates could be part of the solution. There are so many ways.

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DRC
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Jul. 31, 2007 3:01 pm
Quote DRC:

There is a whole array of anthropology about how this problem is solved in various cultures. The Potlatch, for example. Or, the Jubilee. Or, as a new king took the throne, the forgiveness of debts or restoration of titles. High marginal tax rates could be part of the solution. There are so many ways.

These would all be great solutions but would be shot down as "communist" before they have the chance to be discussed in any significant forum.

Dominic C
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Jun. 27, 2011 9:39 am

Mill agreed that inheritance should be taxed. A utilitarian society would agree that everyone should be equal one way or another. Therefore receiving inheritance would put one ahead of society unless taxed on the inheritance.

http://en.wikipedia.org/wiki/John_Stuart_Mill

chilidog
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Jul. 31, 2007 3:01 pm

You know what is funny about this thread.

No mouthbreathers commenting...

I thought they would at least attempt to attack and debunk these studies but they must not have any ammo.

Or maybe they agree too...

Dominic C
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Jun. 27, 2011 9:39 am

Are gays different?

Are the poor different?

Are blacks different?

Are goverment workers different?

Are union bosses different?

Are illegals different?

Are Jews different?

I'm not comfortable with a mass judgements of people. George Soros, Al Gore, Nancy Pelosi, John Kerry, Warren Buffet and Jimmy Buffet and are rich. Are they different? Or are they exactly the same as Mitt Romney?

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rigel1
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Jan. 31, 2011 6:49 am
Quote rigel1:

Are gays different?

Are the poor different?

Are blacks different?

Are goverment workers different?

Are union bosses different?

Are illegals different?

Are Jews different?

I'm not comfortable with a mass judgements of people. George Soros, Al Gore, Nancy Pelosi, John Kerry, Warren Buffet and Jimmy Buffet and are rich. Are they different? Or are they exactly the same as Mitt Romney?

This has NOTHING to do with mass judgement. It merely points out a statistically significant difference found between the behaviors of the rich compared to those of lower classes.

If you want to challenge the study, you can in an empirical manner. Your response makes zero sense logically.

P.S. There is nothing to suggest in the study that says that ALL rich are different or even a majority are different. Don't toss a red herring out there.

Dominic C
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Jun. 27, 2011 9:39 am

C'mon rigel, try the blue herrings for a start. Like the Buffet Rule only being a small fish, but a start.

The worship and glorification of wealth does change those who have it and make it very difficult to be an ordinary person. If you don't have to worry about paying the rent or can afford to pay more than the average person, how does it change the way you make decisions. If you become accustomed to living high on the hog, do you take it for a given or remember how lucky and privileged you are? Can you think about how policies that don't bother you can bother others?

The major arguments of the Right about the economy rely on "moral" dogma rather than financial or economic reality. They are deeply distorted and deeply immoral, and the facts show them to be wrong when the facts get a chance in the propaganda blitz.

The temptation to take one's good fortune and join the club while pulling up the ladders of opportunity is strong. It is what makes those who overcome it worth hearing and respecting. Like Mr. Soros. It is also what infuriates those who feel their class is being betrayed by "one of them." It undercuts that "jealousy and resentment" meme.

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DRC
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Jul. 31, 2007 3:01 pm

I don't know if wealthy people are born differently but I would venture to say no. Wealth can however change people absolutely. Wealth is the polar opposite of poor so why wouldn't wealthy people act differently than the poor? I have never met a wealthy person who hated being wealthy and I've never met a poor person who loved being poor. By it's very nature wealth equals fear. The wealthy will always fear losing what they have and that in itself leads to a very different mind set.

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Bush_Wacker
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Jun. 25, 2011 6:53 am
Quote DRC:

C'mon rigel, try the blue herrings for a start. Like the Buffet Rule only being a small fish, but a start.

There a two problems with the Buffet rule.

1) The money will be wasted. Without serious spending cuts it will all be lost in the abyss. Gone. What's the point?

2) The government has no business asking for any more money from you, me or Bill Gates. Not a penny until they show some evidence that they can handle money. They are clueless. You might as well burn your money in your fireplace. At least you will get soemthing in return. We don't give guns to monkeys, we don't give whiskey to alcoholics and never,ever give more of your hard earned money to people who can't handle it.

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rigel1
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Jan. 31, 2011 6:49 am

Spending cuts are the wrong thing to do. Reduction of taxes is good. Actually elimination of all taxes is also good.

Government deficit is the only thing that grows the economy. Our deficits must be increased greatly. The national debt which is supposed to be getting out of hand and unmanageable is exactly the same as national peoples' wealth and need not be limited to 100% of GDP. For proof in numbers see http://pshakkottai.wordpress.com/2012/02/27/national-debt-and-national-wealth-compared/
http://pshakkottai.wordpress.com/2012/03/30/another-proof-of-mmt-4/
You are confusing household budgets with the budget for USA which is quite different.
(Federal Deficits = Net Private Savings+ net imports), applies to USA and other nations that have their own currencies.

Govt creates money by deficits which makes the private sector grow. I quote:
" Federal Borrowing
+ Federal Taxing
Dollars destroyed

What??! The federal government destroys all that tax money you and your parents send it?? And the government even destroys all the money it borrows??

That’s right. All dollars going to the federal government simply disappear, never to be seen again. Amazing, isn’t it? All the taxes you and your parents pay, gone. Borrowed dollars, too. Gone. Useless. If taxes were $0 and borrowing was $0, the government still could pay its bills."
from http://rodgermmitchell.wordpress.com/2012/03/22/monetary-sovereignty-for-young-people/

SUMMARY

1. National debt = National wealth
2. GDP = 5* govt_spending, approx
3. National debt = GDP, approx but generally GDP can be higher by a fair amount
4. Deficits are highly desirable to grow the economy
5. Reduction of taxes is good because deficit increases
6. FICA can be eliminated because deficit increases
7. Austerity of states is unnecessary because more money to the states increases demand which is good for private sector growth
8. If war funding is cut, deficits will decrease which is bad unless the money is used elsewhere to fund worthwhile causes
9. Taxes are not required to fund anything.
10. The inflation risk is very far away and all infrastructure can be supported fully.

pshakkottai's picture
pshakkottai
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Jul. 11, 2011 10:27 am
Quote rigel1:

1) The money will be wasted. Without serious spending cuts it will all be lost in the abyss. Gone. What's the point?

Where do you suppose the money goes when they spend it? What is the abyss? What evidence do you have of its existence?

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planetxan
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Jul. 31, 2007 3:01 pm

Rich are generally mistaken to be different but actually they're not. They're maybe judge beacause of their norms. Of course they will live in luxury because they can afford it. What really matters is how they become rich? Others were born naturally rich and that's what we called "luck." Some people becomes rich because of hardwork. Becoming rich is not bad, as long as you know that it is wrong to oppress people in order to become wealthy.

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Odai Abod
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Apr. 21, 2012 10:49 pm

Behind every great fortune is a crime.

planetxan's picture
planetxan
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Jul. 31, 2007 3:01 pm

Great idea Captain. I remember a PBS piece that stated something like....money does buy happiness, but has a ceiling of a couple or a few hundred thousand dollars. It doesn't help after that.

Here...How Wealth Reduces Compassion....no doubt there are idiot psychos who will argue that compassion can be a vice...rigel, cal,....

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MEJ
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Jul. 31, 2007 3:01 pm
Quote planetxan:
Quote rigel1:

1) The money will be wasted. Without serious spending cuts it will all be lost in the abyss. Gone. What's the point?

Where do you suppose the money goes when they spend it? What is the abyss? What evidence do you have of its existence?

The GSA going to Vegas and partying your money away. The Feds buying cocaine, getting rats high and finding out what kind of music they like to listen to. The feds discovering that the scent of lemon can help a monkey get a woodie.

Need more?

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rigel1
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Jan. 31, 2011 6:49 am

pshakkottai: Deficits for what?

The big problem I have with MMT is that it seems to be oblivious about the nature of the spending. There is good spending and bad spending

I think that war is a good example of bad spending. The govt goes into debt to make a lot of bombs, tanks, and airplanes. Then it sends a lot of guys somewhere to blow it all up. This puts a lot of money into the economy to make a lot of stuff that anyone really wants. This makes the cost of the things that people really want to go up.

Sure, GDP has gone up, but has the nation been made richer? It could be argued that the cost of things go up for two reasons:
1) There is more money chasing the same amount of consumer goods
2) The costs raw materials for the consumer goods also go up because a lot of it has been sent somewhere and blown up.

Is there no place in MMT for putting a value on the kinds of spending?

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olenzekm
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Oct. 26, 2010 10:01 am
Quote rigel1:
Quote planetxan:
Quote rigel1:

1) The money will be wasted. Without serious spending cuts it will all be lost in the abyss. Gone. What's the point?

Where do you suppose the money goes when they spend it? What is the abyss? What evidence do you have of its existence?

The GSA going to Vegas and partying your money away. The Feds buying cocaine, getting rats high and finding out what kind of music they like to listen to. The feds discovering that the scent of lemon can help a monkey get a woodie.

Need more?

My point was it goes into the private sector. (I seriously don't believe cocaine purchases are a significant part of the budget.) Even the things you list are such a miniscule part of the budget, if they are even true. When the government spends money, that money goes into the economy, not out of it or into an 'abyss.' When someone cashes their SS check, they spend it - money into the economy. If the gov't does not spend it, the only other way for money to enter into the system is for people to take out loans, i.e. go into debt. That is what happened during the Clinton surplus, Americans were borrowing massive amounts of money. That is in fact why there was a surplus. Eventually that has to get paid back, with interest. That interest goes to the banks. The banks use it to drive up prices through speculation (think housing bubble) and everything costs more for you and me. That is what a surplus means.

This is what pshakkottai is beating everyone over the head with trying to get them to understand:
gov't debt = private savings
gov't surplus = private debt

The deficit is not the money we owe, it is the money we own. The austerity people are trying to hoodwink us.

Quote olenzekm:

pshakkottai: Deficits for what?

The big problem I have with MMT is that it seems to be oblivious about the nature of the spending. There is good spending and bad spending

I think that war is a good example of bad spending. The govt goes into debt to make a lot of bombs, tanks, and airplanes. Then it sends a lot of guys somewhere to blow it all up. This puts a lot of money into the economy to make a lot of stuff that anyone really wants. This makes the cost of the things that people really want to go up.

Sure, GDP has gone up, but has the nation been made richer? It could be argued that the cost of things go up for two reasons:
1) There is more money chasing the same amount of consumer goods
2) The costs raw materials for the consumer goods also go up because a lot of it has been sent somewhere and blown up.

Is there no place in MMT for putting a value on the kinds of spending?

There is a place. MMT chiefly describes the mechanics, how things work. Obviously how the money is spent makes a huge difference. If you build a nuclear submarine, this does not add much to the economy, only the salaries of the people who work on it. It takes out of the economy all the material to make the thing, and the expertise of the engineers, designers, scientists, etc. If on the other hand you build a school, or a road, or a port, you have added something that aids private businesses in doing their business. These are the capital improvements of society and they are needed for industrial production. Because they are monopolies, and a private company could siphon off all the benefits, it is more fitting, and better for the economy if the gov't does it with the money they have created. The money they create is essentially the extra future profits that will be produced because of the infrastructure, that would not have been produced without it. It is no different than when a company invests in capital equipment. Yes, they could spend all there money on a bowling alley in the basement of the factory, or they could spend it on new manufacturing equipment, or a forklift, which would increase production.

The key difference is that the private company must go through a bank who credits them the money, based on the future profits, which then gets paid back over time to the bank as principle and interest, whereas the gov't, as the monopoly producers of the currency, can just create the money directly, without going through the credit process first (which is why it is so misleading to refer to it as gov't 'debt').

The problem right now is that most of the debt-money the banks create is not being used for productive purchases. It gets used for houses, cars, credit card purchases of plastic crap, and stuff like that. The banks do not, nor does Wall St, lend out money for industrial capital, or only a very little bit. This is why companies like Apple are sitting on huge sums of money. As a result, the economy is being deindustrialized and the collateral that the banks require for their loans, which cannot be paid back because of the deindustrialization, gets sucked up by the banks. So people are loosing their homes, their cars, and their jobs. So yes, there is a smart way to spend and a dumb way to spend. There is a debt-free way to put money in circulation and an interest bearing way. We are doing the dumb spending with interest bearing debt almost exclusively. This is why the economy sucks.

So, back to Rigel1, yes money can be wasted. And we probably agree on those things you list, though I would have to see the entire story to know what is going on. (The GSA people should certainly be loosing their jobs.) Keep in mind that those stories you list are cherry-picked to insinuate that those are the only activities of the gov't. It is a deliberate propaganda campaign, started on one hand by Justice Lewis Powell, through the Powell Memo:

Quote Lewis Powell:Business pays hundreds of millions of dollars to the media for advertisements. Most of this supports specific products; much of it supports institutional image making; and some fraction of it does support the system. But the latter has been more or less tangential, and rarely part of a sustained, major effort to inform and enlighten the American people.

If American business devoted only 10% of its total annual advertising budget to this overall purpose, it would be a statesman-like expenditure.

and on the other by Paul Weyrich's Free Congress Foundation.

Quote Free Congress Foundation:We will use guerrilla tactics to undermine the legitimacy of the dominant regime. We will take advantage of every available opportunity to spread the idea that there is something fundamentally wrong with the existing state of affairs. ... contribute to a vague sense of uneasiness and dissatisfaction with existing society. ... We need to break down before we can build up. We must first clear away the flotsam of a decayed culture.

This is a campaign of pure propaganda. I could not possibly exaggerate that point. These are people who are not interested in truth, or fairness. They are amoral and want to get what they want.

Quote Free Congress Foundation:We will be results-oriented rather than good intentions-oriented. Making a good-faith effort and being ideologically sound will be less important than advancing the goals of the movement...
planetxan's picture
planetxan
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Jul. 31, 2007 3:01 pm
Quote planetxan:

There is a place. MMT chiefly describes the mechanics, how things work. Obviously how the money is spent makes a huge difference...

You said "There is a place." I don't think that there is a place. MMT is mute regarding the nature of spending.

That's OK, MMT does not need to say what to do with the money. But apologists for the MMT seem to be saying that the govt can and should create money any time they want. If the spending is on the wrong stuff, it can definitely have negative effects. If nothing else you can, as you pointed out, divert resources to inefficient areas.

My main complaint is that MMT apologists seem like cheerleaders for spending. This may not be their intent, but that is how it seems.

olenzekm's picture
olenzekm
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Oct. 26, 2010 10:01 am
Quote olenzekm:
Quote planetxan:

There is a place. MMT chiefly describes the mechanics, how things work. Obviously how the money is spent makes a huge difference...

You said "There is a place." I don't think that there is a place. MMT is mute regarding the nature of spending.

That's OK, MMT does not need to say what to do with the money. But apologists for the MMT seem to be saying that the govt can and should create money any time they want. If the spending is on the wrong stuff, it can definitely have negative effects. If nothing else you can, as you pointed out, divert resources to inefficient areas.

My main complaint is that MMT apologists seem like cheerleaders for spending. This may not be their intent, but that is how it seems.

That's because right now there is a need for spending. Millions out of work, millions with no healthcare, millions living in cardboard boxes, and a crumbling infrastructure. If your country can create money out of thin air then those things should not be an issue. What is not an issue is that there's plenty of money created for huge corporations in the name of military spending. There is plenty of money created to loan out to Americans in exchange for real principal and interest. Create into existence the funds needed for the general welfare of your country and it's citizens. Nobody in my household would starve if I have the power to create money.

Bush_Wacker's picture
Bush_Wacker
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Jun. 25, 2011 6:53 am
Quote Bush_Wacker:

That's because right now there is a need for spending. Millions out of work, millions with no healthcare, millions living in cardboard boxes, and a crumbling infrastructure. If your country can create money out of thin air then those things should not be an issue. What is not an issue is that there's plenty of money created for huge corporations in the name of military spending. There is plenty of money created to loan out to Americans in exchange for real principal and interest. Create into existence the funds needed for the general welfare of your country and it's citizens. Nobody in my household would starve if I have the power to create money.

I do not disagree with you. You are giving specific spending proposals but the MMT does not.

The deficit spending could just as easily be caused by more tax cuts for the Rich and the MMT would not complain. That is my point, not that well thought out spending is unwarranted in our current problem.

olenzekm's picture
olenzekm
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Oct. 26, 2010 10:01 am

Like I said, it just explains how the money works. That way we know what our options are. If we do not understand how it works, we limit our options. MMT is not a political philosophy. Cutting taxes or spending have essentially the same effect, putting more money in the private sector. There is a presumption that a country wants to use all its resources maximally. Therefore, if people and stuff is sitting around because the private sector is not using it, then the public sector, the gov't can print money in order to use it. It helps to understand if you stop thinking of money as a thing.

How a country decides to allocate its resources is a political decision. MMT says money is not a constraint, only political will is because money is not a thing, and a government that produces its own currency cannot run out of it. It is nonsensical (or devious) to suggest it can. Imagine going to the bowling alley and finding it closed. The explanation is "We used up all our points yesterday. We will borrow points from another bowling alley and open at soon as possible." Either someone at that bowling alley does not know how points work, or someone does not want us to bowl. Money is the same. They exchange points for you knocking down pins, we exchange dollars for people producing something in some way.

planetxan's picture
planetxan
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Jul. 31, 2007 3:01 pm
Quote planetxan:

... MMT says money is not a constraint, only political will is because money is not a thing, and a government that produces its own currency cannot run out of it...

It is true that money cannot “run out” of numbers, but it can run out of purchasing power. I think that it is a too simplistic and even dangerous to ignore this fact.

If the wrong decisions are made then the purchasing power of the money will decrease (inflation) possibly to the point of hyperinflation. There are only so many productive projects to fund. So if nothing else, a govt should be constrained by that.

Let me ask you a question: should governments run surpluses in the good years like Keynes said? Should governments ever run surpluses?

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olenzekm
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The Death of the Middle Class was by Design...

Even in the face of the so-called Recovery, poverty and inequality are getting worse in our country, and more wealth and power is flowing straight to the top. According to Paul Buchheit over at Alternet, this is the end result of winner-take-all capitalism, and this destruction of the working class has all been by design.

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