The New Feudalism

Dec. 24, 2002

Those of us privileged to grow up among the inner party quickly come to know that quite often things are not as they appear on the surface.

For example, I have long known that the inner party supports the progressive income tax because they benefit from paying it. And the larger their payment and more disproportionate relative to our own, the more they benefit.

It is a self-evident proposition if you stop and think about it - self evident, that is, to all but conservative Republicans who cherish the notion that they can remake the inner party into disciples of Adam Smith, and thus useful political allies, by promising to lower their income tax bills.

The wild improbability of this conservative Republican hope reminds me of a hilariously naive film produced by Goebbels during WWII entitled, in English, "Hitler gives the [inner party] a Town." in which he shows the inner party inmates at the Theresienstadt concentration camp being taught crafts and the raising of vegetables so that they could learn to be like other Germans and, presumably, assimilate and lead normal German lives after the war.

But by calling the conservative Republican hopes and the German film hilariously naive, I do not mean to belittle those entertaining the hope. After all, Theodor Hertzl, founder of Zionism, had a similar dream of a territorial nation in which the inner party would grow their own crops, sweep their own streets, collect their own garbage, and produce their own crafts.

And the sole reason why the Israeli - Palestinian conflict continues is precisely because wage rates sufficient to induce members of the inner party to perform such tasks would render the entire national enterprise wildly uneconomic. The inner party needs Palestinian labor to perform these essential tasks and has developed a particularly nasty form of multi-culturalism which provides the cheap labor that is the object of all multi-culturalisms, but which dares not attempt Western methods of deceiving the cheap alien labor into peaceful relations with the standard unifying public mythos of equality and preference schemes for its leadership.

If such diaspora methods were adopted, then Israel's essential character as an inner party racial-state would be lost to its core population. To forge a system that squares the occupational proclivities of the core inner party population with its emotional demand for an explicitly racial state, they have created a system in which alien laborers are housed in ghettos and searched each day on their way to work (much as the outer party in the U.S. is searched at airport gates). Instead of propaganda and preferences, Israel has resurrected the classic bolshevik program of decapitation against the alien leaders within those ghettos who are killed by occupying soldiers in plain view of their neighbors if they oppose the subjugation of their people.

It is yet another failed Twentieth Century experiment in inner party domination, and a lesson to nationalists everywhere on what to avoid when in the process of nation building.

Good fences make good neighbors only if honest labor is rewarded not only with a living wage, but by a culture that marks labor's contribution with honor and social respect.

In medieval times, European kings collected their taxes from the lesser nobles who collected rents from their tenants.

Thus, kings had a powerful interest in pursuing policies which enhanced the wealth of the tax paying nobles. And the position of the nobles was enhanced by paying the taxes. They had the ear of the king as to the policies, practices and laws that would benefit them all.

The nobles clearly understood that the extractive powers of a strong government were unmatched, and that the rent-seeking opportunities afforded by shaping its policies were equally unmatched. Indeed, tax revolts by nobles were rare, and were typically fought over the issue of who should do the taxing. Opposition to taxation itself was never put forward by them as an explicit ideology nor an active political program.

It was left to the Scottish nationalist Adam Smith (see Race and Economics, Thomas Sowell) to develop the ideology of low taxes and unregulated private enterprise as a political program for limiting the power of multi cultural empires (England) and thus maximizing the freedom of action and power of ethnic minorities within the empire.

Opposition to taxes represents the civilization of the peasant revolt, and is thus anathema to grandees everywhere and to races which have adopted the mind set of grandees.

At the age of 14, the Ole Ygg instantly recognized a fellow tribesman in the excellent work of the Reverend Mr. Smith.

I thought his idea a capital one, and imagined it would be embraced by all minorities everywhere. Naturally, I took great alarm at the uniform rejection of his vision by my inner party classmates and could not extract from them a satisfactory explanation for that rejection. I was not then aware of the equally uniform lack of interest in tax cutting and limited government by nobles, grandees and dominant imperial elites the past.

While the names we use are different, little of substance has changed as we move from the medieval to modern times.

The facts of disproportionate inner party incomes and progressively disproportionate inner party tax payments are crystal clear. What has been lacking, up until last week, was any clear statement by a politician in the employ of the racial extortion coalition that shows an overall solicitude for their prosperity and wealth, and that makes a direct connection between that wealth and the fiscal health of the government.

Tracing back from the multitude of complex federal programs and policies to the incomes and interests of those who pay the greatest taxes is a Herculean task. What I needed was fiscal emergency that would cause a puppet politician to give up the ghost and make that connection obvious.

And indeed, last week was most excellently productive in that regard, as help finally arrived from Gray Davis, Governor of California, in a press conference he held on December 18, 2002 concerning the escalating deficits and fiscal crisis in his state:

"As you well know, we have a very progressive system in this state. 80% of our revenues come from 10% of the tax earners. So, we depend heavily on the well-being of highly compensated Californians. From 1995 to 2000 these taxpayers experienced an increase in what they were providing state government on the order of about 18% in '95, '96, '97, and '98, and then it shot up in '99 to about 25%, and a little higher in 2000. In 2001, they actually dropped down to zero, so there was a dramatic falloff in 2001. And 2002 they are down about 3%...

"But when you have a very progressive tax system which basically exempts everyone from taxes making up to $45,000 a year and depend heavily on the performance of the top ten percent of your wage earners, then you run the risk that, if they do badly, services have to be reduced and there's not the revenue for other things we'd like to do in government. So, if there is one single problem that has caused this problem, this is it.

"Another way of looking at it: If you just took people whose incomes exceed a million dollars, and look at the impact they've had on state revenues again going back to '95 - it was a 46% increase that year in what they contributed to state revenues. '96 it was a 20% increase, 33% increase in 1997, 21% increase in 1998, 62% increase in 1999, 45% increase in 2000, and a drop off of 47% in 2001. That's about a 50% drop in the revenues coming into state coffers from the millionaires in one year.

"There's another way of looking at it, because capital gains is a big part of the problem. Obviously, people that do well invest their money. Many of their investments are in the stock market. I've told you many times that the NASDAQ was at 5,000 in April 2000; it's now at about 1,400 - it's a 75 or 80% reduction. Here again, from ‘90 through '95, you have a fairly steady indication of how much money is coming into the coffers of around $20 billion. Then you have a pretty good run up from '95 up through '98 - we're up to about $50 billion. But you never realize this until after the fact, but you have a spike in 2000 up around $110 billion. 2001 you're back down to $40 billionish and 2002 will be less, so that's another way of looking at the same picture."

Notice that Governor Davis is talking a about people who make over a million dollars a year.

As I have mentioned before, the pay pyramids in publicly held corporations are incredibly narrow at the top.

The CEO's earn well over a million dollars each, but the very purpose of corporations is economic efficiency, and that means holding down salaries for everyone else - something which corporations do quite well. There are more athletes in the NFL and NBA earning a million dollars per year than there are CEO's of the fortune 500. Add to the athletes several thousand 8-A preference program government contractors, add another few thousand actors, actresses, rock stars, movie and TV producers, along with many thousands of investment bankers, contingency fee trial lawyers, venture capitalists and hedge fund managers and you begin to understand the occupational and income profile of the real constituency of the Democratic party in the U.S.

Every one of these occupational categories is heavily regulated by the government, every one is populated overwhelmingly by Democrats, and every one depends on continued favor and permits from government for its prosperity.

In contrast, the bedrock of the Republican party is the hundreds of thousands of engineers, doctors, accountants and middle managers in corporate America who earn from $100,000 to $300,000 per year. Their incomes are regulated largely by supply and demand. Thus, they see no visible connection between government policy and their incomes, and they are subjected to higher marginal rates than the million dollar earners because of the phase-outs of personal exemptions and itemized deductions, as well as the alternative minimum tax.

Their interests are served by the classic peasants revolt, and they respond politicially to the ideologies and political programs of the peasant revolt so long as they are packaged in polite and universalized forms.

Last week the Wall Street Journal was kind enough to flesh out this picture of our new feudal overlords with an article entitled "Options Frenzy: What Went Wrong?" On page B-2 of the 12/17/02 edition. The article lists the ten CEO's who recieved the largest single year option exercises during the stock market bubble.

Here they are:

Of the ten, seven are inner party and two, Case and Chambers, are outer party. I am unsure about Siebel.

What you see in the table above is a clear representative picture of the "inner party" as originally conceived by the brilliant Italian economist Vilfredo Pareto and defined by its economic function and its direct ties to government power. (The Ole Ygg uses Pareto's term to refer to the overwhelmingly dominant racial/ethnic group within Pareto's functionally defined "inner party," as well as their less prosperous and less well connected kinsmen who share their psychological feelings of dependence upon, and allegiance to, state power as a dominant tool in the racial struggle for power and dominance). With many inner party sources affirming that more than 50% of the World's billionaires are inner party, it is clear that when you subtract the oil sheiks and princes from the mix, most billionaires in the European world all belong to the same temple.

Thus, the degree of solicitude by politicians for the interests of grandees earning in excess of a million dollars per year has profound consequences not only for government revenues, but for the outcomes of the racial struggle for power and dominance as well - a struggle which the largely Republican outer party barely recognizes.

During normal times, the politicians supported by our new class/race of grandees crow about the necessity for high taxes and income redistribution. This is their way not only of promising tangible benefits to the racial extortion coalition that forms the bedrock of their party, but of motivating those constituent racial groups to turn out at the polls by offering them the psychic satisfaction of punishing their racial adversaries as well.

And the lesser races within the inner party engineered racial extortion coalition never figure out who pays the most taxes and never calculate the leveraged return these inner party grandees receive from their ability to shape government policy in their own favor.

All the inner party need do is import low IQ hostile races incapable of connecting the dots, and the racial extortion coalition takes on the characteristics of a perpetual motion machine.

Thus, during normal times the inner party controlled politicians stay on message.

But these are not normal times, and Governor Davis is faced with a fiscal crisis but has little power to fix the problem because the government policies that he must rely upon to restore the wealth and incomes of the grandees are primarily federal.

In Governor Davis' own words:

" We had a lot of one-time solutions, and we did it in part because everyone from Alan Greenspan on down was saying, "The economy will recover - it will recover in the spring of 2002. In the worst-case in the summer of 2002, but it will recover." And so we didn't want to savage health and welfare programs and knock people off of programs for which they are eligible when we think the economy is going to bounce back that quickly. Now, the finance department has its conference with a number of financial experts and the consensus now is that it will be very unlikely there will be a recovery in 2003 at all and we'll have to wait until 2004. But now we are faced with a very different situation and you'll see when I make my budget plan on January 10th, with a very different response."

As you can see, Governor Davis drifted off message and revealed the fact that our super rich are joined at the hip to the government as a means of deflecting blame - because the problem can only be solved if Alan Greenspan and the Federal government can reflate the bubble. The state of California has very little power to fix the problem on its own.

Indeed, the fact that Governor Davis drifted off message indicates that our high income grandees have reached a state of political nirvana, where their incomes and tax payments have become so huge that they no longer have to assume the posture of supplicants or make bribes, but can rely upon the government and politicians to serve their interests sua sponte - without excessive prompting, just like in feudal times.

The nature of the new feudalism should alert you to opportunities and dangers.

First, it seems abundantly clear that the government will do all in its power to reflate the bubble and attempt to preserve inner party incomes and control, which have become very nearly identical, at the margin, to its own tax revenues.

Thus far, efforts to keep the bubble inflated have done little besides boosting the price of gold. The more desperate the reflation efforts become, the higher gold prices will rise.

And rising gold prices are a form of peasant revolt.

Rising gold prices threaten not only the leveraged financial structures by which the inner party extracts its rents, but the power of the American Empire itself, which is tied to the vast pool of dollars held by other countries.

Given who is involved and given the political stakes, it seems crystal clear that efforts to keep the bubble inflated will persist for many years, thus guaranteeing that present market trends continue for a very long time.

The inner party and the American Empire will eventually become desperate and will seek domestic enemies to blame - anti-egalitarian heretics and economic saboteurs. In the early stages, asset confiscations will be the punishment of choice, as these now require mere "connections with" and "links to" someone bad, rather than the more traditional proof of overt criminal acts.

Any bank branch manager will tell you how trivially easy it is for the government to erase your bank balance - it exists only in a computer memory bank. Same applies to your brokerage account which exists only in a computer memory bank. Given the identity and "connections" of our new feudal lords, it will also be easy for the private entities they control to make your dollar denominated balances disappear as soon as they feel threatened.

And if your dollar balances disappear without explanation, who is going to believe that you didn't lose or spend them?

In contrast, the confiscation of your physical gold requires much more intrusive and old fashioned processes. The government will need a warrant which not all federal judges and magistrates are slutty enough - nor yet sufficiently intimidated by all those mysterious Izzy art students showing up unexpectedly at their front doors - to rubber stamp.

And when an armed swat team shows up to break down your door and search your personal effects, it is frightfully visible to your neighbors, and has a clear demonstrative effect - particularly when they know you to be a peaceful sort and learn that gold was the object of the search.

Second, the existence of the new feudalism places a particular burden on the inner party neo-conservatives to explain their precise role in this system.

If we make an alliance with them, or accept their leadership, how exactly do we benefit?

Do any of their policy prescriptions to limit government really cripple the wealth and power of their fellow inner party grandees? For if not, then the racial extortion enterprise keeps chugging along undisturbed, and our median incomes which are already 20% lower than those of our racial competitors of the same IQ will continue to decline, as the animus of university admissions officers coincides to an increasing degree with the economic interests of their employers in discriminating against our children - all because we increasingly lack the incomes to pay high tuition and to make conspicuous displays of generosity as alumni, relative to our racial competitors with similar IQs and much higher incomes.

Is the intensity of inner party neo-conservative effort motivated by a generous impulse to benefit us in some way - to restore us to equality relative to those in competing racial groups with the same IQ?

Or is the degree of neocon effort carefully proportioned to the power of their statist brethren - protecting them by diverting political discontent into safe channels, and keeping the escape routes open to the special hell hole they have created for themselves in the middle east in the event of an emergency?

We are no longer so easily diverted!

Yggdrasil-

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