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The 1% and Piketty

April 30, 2014 ByMichaelHudson

Welcome to The Real Nes Netor!" #$m %essica &es'arieu( in Baltimore" And elcome to this edition o) TheHudson Report"

No *oinin+ us is Michael Hudson" Michael is a distin+uished research pro)essor o) economics at the ni'ersityo) Missouri-.ansas /ity" His to neest oo!s are The Bule and Beyond and inance /apitalism and #ts&iscontents"Than!s )or *oinin+ us, Michael"

M#/HA H&5N, 6R5" /5N5M#/, N#7" 5 M#5R#, .ANA /#T89 Than! you, %essica"

&7AR#:9 o, Michael, this ee! e$re +oin+ to e tal!in+ aout the 'ery popular oo! y rencheconomist Thomas 6i!etty" #t$s a ;00-pa+e oo! that ta!es on the topic o) income ine

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ma!e us completely ta(-)ree )or all o) our illions o) dollars, *ust so the middle-class )amilies can maye end upith their house or so" o they$'e hidden ehind the middle-class to, really, aolish the e))ecti'e inheritance ta("And so this ealth is ein+ inherited to +ro and +ro" o the )irst thin+ he ants is an inheritance ta("

The second thin+ he ants is more prolematic" He said, ell, maye there can e a orld ta( on ealth,ecause a)ter all, the rich )amilies in America hold their money o))shore or in iss an!s or in the /ariean"

o he ants a +eneral ealth ta(" And that$s hat he$s een critici>ed )or, ecause he hasn$t really +one to theroot o) hat is creatin+ this polari>ation"

&7AR#:9 And, also, ho ould you e'en implement somethin+ li!e that, Michael=

H&5N9 Well, that$s hy the neolieral$s lo'e 6i!etty" That$s hy .ru+man lo'es 6i!etty" 8ou can$timplement it" o he$s produced a oo! ithout any solution, and the )ree enterprise oys li!e that" The 1 percentdon$t mind ein+ critici>ed as lon+ as there$s no solution to their prolem" And that$s hat the critics ha'e comeout sayin+9 ait a minute, there are a lot o) solutions" or one thin+, some !ind o) ealth is etter than others"8ou don$t ant to ta( people uildin+ )actories and impro'in+ li'in+ standards li!e the one percent pretend thatthey do, ut hat you do ant to ta( is unearned income, economic rent, capital +ains" Ri+ht no, the capital+ains ta(, most people, rich people, ma!e their money not uy earnin+ income@ the na!ed on capital +ains, onstoc! mar!ets +oin+ up, on ond prices +oin+ up, on all o) the asset prices that the ederal Reser'e$s ation" He doesn$t critici>e pri'ati>ation" And most o) this increased ealth y the 1 percent since 10 isall ta!en?a result o) pri'ati>in+ the pulic domain?pulic utilities, thin+s that?100 years a+o e'eryody e(pected

an!in+ to e a pulic utility, roads, railroads, pulic transport, telephone systems, roadcastin+ systems" Nothat these are ein+ monopoli>ed, the rich are +ettin+ their money y monopoly rents"

And the solution isn$t simply to let the rich e(ploit the percent y raisin+ the prices you pay )or your cale,)or )rid+es, )or transportation@ it$s to ta!e?to depri'ati>e these assets, to put them ac! in the pulic domain, sothat you can pro'ide asic ser'ices to people at a 'ery lo price instead o) at an e(tortionate price that$s allmeant to pay the 1 percent that asically has een )oreclosin+ on +o'ernments and +rain+ the pulic domain"

And 6i!etty ac, he said that the ori+in o) almost e'ery +reat )amily)ortune is a +reat the)t, o)ten undisco'ered, and people thin! it$s *ust a part o) nature" And it$s thie'ery and the)t,

as Bill Blac!, ho$s o)ten on your sho, also points out e'ery ee!9 you ha'e essentially the decriminali>ationo) )raud" And hat really pays is crime" And it$s the criminals that ha'e risen most rapidly into the 1 percent" #t$sthe Wall treet an!ers ho$'e een doin+ the *un! mort+a+es and en+a+in+ in the !ind o) )raud that e$'e eenhearin+ aout on Wall treet" This is not hat 6i!etty discusses" He doesn$t say, thro the cler!s in *ail@ hedoesn$t say, ha'e +o'ernment re+ulatory a+encies to pre'ent this !ind o) e(ploitation@ he doesn$t say, reimposeanti-monopoly re+ulations to pre'ent monopoly pro)its )rom enrichin+ the one percent@ he doesn$t say, ta!e all o)these pulic utilities that Mar+aret Thatcher pri'ati>ed in n+land and Ronald Rea+an did in America and putthem ac! in the pulic domain so that they can pro'ide asic ser'ices to people at cost" All o) this is a di))erenttopic )rom his oo!"