Cryptocurrencies and the big bank bailouts
In the time that I've spent on Steemit, I've been taking a sort of crash course in cryptocurrency. I've been studying some of the history, reading the articles that I come by within and without Steemit, and especially reading the debates between people on the pros and cons of each currency.
Satoshi Nakamoto, whoever he/she or they was or were, wrote the whitepaper and the code for Bitcoin in response to the financial crisis of 2008. Bitcoin was introduced the following year. Bitcoin seems to have been born out of a frustration that high finance could bail itself out after making a really big mistake. Indeed, the Bitcoin Whitepaper talks about the need to make completely unreversible transactions a possibility:
Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model. Completely non-reversible transactions are not really possible, since financial institutions cannot avoid mediating disputes. The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions, and there is a broader cost in the loss of ability to make non-reversible payments for nonreversible services. With the possibility of reversal, the need for trust spreads. Merchants must be wary of their customers, hassling them for more information than they would otherwise need. A certain percentage of fraud is accepted as unavoidable. These costs and payment uncertainties can be avoided in person by using physical currency, but no mechanism exists to make payments over a communications channel without a trusted party.
(emphasis mine)
The bailout of the financial industry from their error in 2008 and 2009 was, in a very real sense, a reversal of millions of transactions gone bad. From my reading, it is clear that cryptocurrencies derive their existence from a financial sector that was and still is, clearly out of control. Historians of the housing bubble know well that the financial sector bet against the middle class and won. They knew they would win, too. So how did they know?
The relation between public policy influence and disenfranchisement
We know that since 1978, a series of public policy decisions began the effort in earnest, to decouple wages from productivity. This trend is well documented in books like, Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer, by economist, Dean Baker. This trend became especially evident with the Reagan Administration, proceeding through all succeeding administrations, even to this day with Trump. As productivity increases grew the economy, increasing shares of the new wealth created by labor saving technologies went to the top, and did not accrue so much to the middle and the bottom.
It is also noted that for 40 years, from 1942 to 1972, wages and productivity grew in lockstep. The middle class and the wealthy prospered during this period of time. They had a real middle class. They enjoyed the fruits of their labor, even as technology emerged to make their jobs easier.
But when Reagan came along, that all changed. Business owners began to forget that they were in partnership with their employees. The term, "stakeholders" began to exclude those who were performing the labor, and eventually, became exclusive to the owners of the company and the executives who ran it.
As wealth concentrated, both major political parties aligned with this wealth, forgetting too, their partnership with the worker, the wage earner. They became willing to write public policy that decoupled income from productivity. This effort has had the perverse effect of causing wages to rise just 30% over 40 years in terms of real, inflation adjusted dollars, while the CEOs saw their compensation rise by better than 900%. During that time, those same CEOs figured out they could use their money to influence politicians to grant them more income at the expense of their employees.
I've gone through some of the reasoning behind this. People who owned businesses justified the new distribution of income with the expense of technology they bought. The work was getting easier for the worker, or so it seemed, and since the employer bought the equipment, most of the gains should accrue to the employer, right? But all of this new technology didn't necessarily make the employer more productive. It didn't make them 9 times more efficient, smarter, better, faster or wiser. We know this because those same people pushed public policy that fomented the Great Recession.
Even during the Great Recession, while executive compensation and bonuses continued to climb, especially in the financial industry, essentially patting themselves on the back for a job well done, wages on the front line continued to decline in real dollars. What the captains of industry failed to see was that by decoupling income from productivity, they create a class of slave owners and slaves.
"Disenfranchisement" is just a polite word for "slavery"
Big money in politics has disenfranchised the average person to the point where his vote doesn't matter anymore. It seems a subtle realization then, that voter turnout has been declining steady since the second world war, with exception to a few blips here and there. Big money in politics writes public policy on the assumption that money = merit, but if that were true, then we would not have had the Great Recession and a few wars to boot.
Some may wince at the term "disenfranchisement" as I use it here. They say that people can always vote. True, they can. But if candidates for high positions of power must run the gauntlet of the "money primary" set up by entrenched wealthy interests, then all of the candidates we vote for have already been vetted by the wealthy. This is a stark naked example of disenfranchisement.
So not only do the wealthy get to call the shots, they get to decide who we get to vote for before the first vote is even cast. That is still disenfranchisement. Disenfranchisement is just a very polite word for "slavery", for when you deprive a man or woman of their right to be heard, to make their vote meaningless, you are forcing your will upon them. You've made them slaves.
The rise of the millennials
Now we come full circle. As income is decoupled from productivity, as income concentrates into meaningful political power at the top, the top can now impose their will upon everyone else with near impunity. Those at the top get to decide the value of work, and the worker is deprived of the power to seek a market price for his labor. As wages decline, real purchasing power decreases, the economy slows, and executives scratch their heads to figure out why things went south.
The Millennials can see this happening. They watched what Tom Brokaw called, "The Greatest Generation" become the "me" generation (much the same thing happened with the Boomers, too). It's all mine, it's all me, I did it all by myself. Maybe that is true, but if you don't pay it forward, the next generation will have a lower standard of living than you did.
The millennials, maligned as much as they have been for being "privileged and lazy", have been busy. They are leading the charge with cryptocurrency with Dan Larimer who introduced Steem and Vitalik Buterin who introduced Ethereum. They are leading the charge with blockchain voting. They are finding peace and happiness in minimalism, and they tend to eschew credit cards and other debts. They are leading the charge with a landmark climate lawsuit. A majority of millennials reject capitalism and consider socialism to be a better form of economics and conservative Republicans are absolutely terrified of this prospect.
The millennials are now the largest demographic of voters, now comprising some 81 million people. I suspect they will be expressing their concerns about inequality and disenfranchisement with greater and greater authority in the next few years. Hopefully for the better.