Adonis Diaries

In 2002, Bush Junior reduced the tax rate on the richest class in America.  The tax rate is due to be reviewed and revised at the end of this year to come up as it was during the Clinton Administration (or 3% tax increase on the revenue):  The richest 1% of the Old Money (hoarding 30% of the GNP) are up in arm and claiming that they are not about to relinquish the rights and privileges they secured for over a century under this capitalist system.   Politicians are empathizing with the plight of those multimillionaires:  The politicians meet regularly with the representatives of the 1% richest (most probably to supplement their puny salary and extensive privileges?)  Those pocketing half a million per year are very vocal:  They say earning half a million does not signify being rich!  That the US government bailed the richest class first with trillion does not count as an argument:  The government is planning to rob them from their legitimate money!  It is probable that the capitalist judicial system would view the claim of the richest as valid legally based on tradition and customs?  Maybe the President should have run under a clear platform of drastic reforms to the capitalist system with clear programs on how to deliver his promises?

You would believe that it is the downtrodden and the millions who lost their jobs and homes who are growling.  There are differences in growling decibel: the growls of the richest with monopoly on power are dangerous, ominous, and have this incoming missile whistling frightening sound.  The US citizens will be hearing loads of crap in the coming two months.

There is another class of new billionaires who made fortune when Ronald Reagan declassified military basic research and application to private enterprises:  Instead of applying the GPS technology to locating Soviet submarines, private enterprises permitted locating the closest espresso cafe.  This additional 1% of new billionaires is more lenient and understanding of the need to supplementing the budget deficit with $700 billion over the next decade to be invested in infrastructure and education. 

Garret Gruener is one of those new billionaires; he currently directs Nanomix (a nanotechnology society) and the capital-risk corporation Alta Partners.  Gruener made fortune participating in the foundation of the research engine Internet Ask.com and created and sold many new enterprises.  Gruener said: “None of my investments were determined by tax rate on revenue.  As usual, the Republicans claim that the “trickle-down” strategy for wealth distribution works best in the capitalist system; which means, the richer are the richest classes the more enterprises are created and the more jobs are available.  The contrary happened in the last decade:  job market was the worst ever, salary stagnated, and wealth inequalities among the classes increased.  There is this inevitable trend:  the periods of the vaster inequality among the classes witness financial crashes such as in 1929 and 2008.  So far, the US economic performance is very poor and joblessness is increasing.  Congress has to understand that more largess in gifts and privileges to the rich classes will drive this capitalist system into a serious impasse.”

There is another emerging giant in the Americas: Brazil.  The capitalist system in Brazil produced 1% of the richest class hoarding more than 30% of the GNP; but the problems will not take effect in this decade for two reasons: First, the economic structure of Brazil did not reach a steady-state; and second, Brazil has vast natural resources to compensate budget deficit in the short-term.  How the richest financial classes make their wealth?

In Brazil, the 1% richest generated 52 of the GNP while the economy based on real work generated just 42%.  When the government of Lula spent over $7 billion on a program to support the 13 million lower middle class families the financial institutions reaped 23 times that amount or 36% of the budget.  How?  The lower middle class (earning over $600 per month; the minimum wage having increased $250) currently hold 80% of the credit cards issued and represents 76% of the consumption of higher life-style.  This class is heavily indebted:  For every dollar received from the program the financial institutions generate $23 in form of interest and other expenses.

Brazil has also to deal with two critical problems:  First, 75% of the population are practically illiterate (they cannot understand an article published in dailies); and second, private land owners of vast areas are powerful force who will not relinquish a custom going as far as 200 years.  Those private agricultural lands are focused on monoculture like sugar cane and whatever multinational agro-corporations demands to be grown.

What the US is currently experiencing will catch up soon with Brazil if the capitalist system is not reformed with the coming President that will facilitate the task of the succeeding President 4 years later.