Call The Wealthy's Bluff

The Fusion of Plutocracy and Fascism—And the Fight to Rebuild Democratic Capitalism Before It’s Too Late

The top 10% of America’s wealthiest households are now responsible for 50% of all consumer spending.

Read that again. Half of all economic activity in the United States depends on the spending decisions of one-tenth of the population. This isn’t a sign of a healthy economy. It’s a symptom of extractive capitalism—an economic system where wealth accumulates upward so rapidly that ordinary people are being priced out of asset ownership entirely, leaving them dependent on wages alone while the wealthy collect rents on everything from housing to intellectual property to financial instruments.

And the proposed solution from our intellectual and capital elite? Lower taxes. Deregulate financial assets. Shrink government services. Cut social spending on education and healthcare. Let the market work its magic.

This is madness. And it’s driving us toward economic catastrophe.

The Dominant Narrative

We live under the hegemony of an idea: that economic growth comes from reducing government intervention in markets. Lower taxes on capital and high earners. Eliminate burdensome regulations. Shrink government spending. Let successful capital allocators deploy more resources. Trust that prosperity will trickle down as the wealthy invest and spend their gains.

This narrative has captured both major political parties, the venture capital world, the cryptocurrency enthusiasts, and most of the intellectual class that shapes economic policy. It’s presented as simple common sense: governments are inefficient, markets are efficient, therefore less government means more growth.

The argument goes further: worsening economic conditions for working and middle-class Americans are primarily a function of poor economic dynamism caused by excessive commercial regulation. If we just got government out of the way, entrepreneurship would flourish, competition would drive down prices, and prosperity would spread naturally through market mechanisms.

There is, admittedly, a kernel of truth here. Government regulation does sometimes create real problems. Land use restrictions are perhaps the clearest example—cities have developed a pathological inability to permit sufficient housing construction to meet demand, driven by entrenched local opposition from existing homeowners who benefit from artificial scarcity. This regulatory failure has contributed massively to the housing affordability crisis, pricing entire generations out of homeownership and forcing workers to spend unsustainable portions of income on rent.

But this kernel of truth is being used to sell a comprehensive lie.

The Bigger Problem

The real crisis isn’t too much regulation—it’s the rapid and accelerating accumulation of assets by the wealthy. When capital compounds faster than wages grow, wealth concentrates. When wealth concentrates, the wealthy can deploy their resources to acquire more assets. When they acquire more assets, they can extract more rents. When they extract more rents, they have more capital to acquire more assets. The cycle feeds itself.

We’re watching this happen in real time. The wealthy don’t just have more money—they own an increasing share of everything that generates returns. Real estate. Stocks. Bonds. Intellectual property. The platforms that mediate communication and commerce. The infrastructure that others must use to participate in economic life.

This isn’t theoretical. Asset prices have grown far faster than wages over the past several decades. Housing costs have outpaced income growth. Stock market gains have accrued primarily to those who already owned significant portfolios. Even basic financial services extract fees that seem small individually but compound into massive transfers of wealth from users to owners.

The standard response from the venture capital world—and I’ve heard this argument repeatedly—is that this is actually good. People who have proven themselves skilled at allocating capital are doing the overall economy a service by managing more and more of it. They can identify productive investments. They can fund innovation. They create jobs and drive growth. Concentrating capital in the hands of proven allocators is simply efficient.

This argument ignores a fundamental problem: wealth effects compound, and eventually this prices lower-income earners out of owning assets at all.

When assets become too expensive relative to wages, entire classes of people lose the ability to participate in wealth accumulation. They’re stuck earning wages while others collect returns on capital. This isn’t just unfair—it’s economically destructive. It creates a permanent class division between those who own and those who work, with diminishing mobility between them.

And it gets worse: the wealthy use their resources to reshape the rules in their favor. They lobby for lower capital gains taxes. They push for weaker labor protections. They fund think tanks that produce intellectual cover for policies that benefit capital over labor. They buy media outlets that shape public discourse. They’ve essentially captured the political system, ensuring that government policy serves their interests rather than broadly shared prosperity.

The Crypto Fantasy

Enter the cryptocurrency and Bitcoin enthusiasts, who claim to have identified the root cause: it’s the monetary system itself.

Drawing from the magical thinking of Austrian school economics, they argue that inflation represents a hidden tax on savings. The Federal Reserve’s ability to expand the money supply distorts price signals, creates malinvestment, and systematically transfers wealth from savers to debtors and first-movers who get access to new money. The solution, they insist, is “hard money”—currencies with fixed or predictable supply that can’t be manipulated by central banks.

In this vision, moving to hard money and embracing hyper-capitalism would solve inequality. Without government intervention distorting markets, competition would drive down prices. Deflationary pressure from fixed money supply would increase purchasing power. The need for government services would diminish as private markets provided everything more efficiently. Economic inequality would self-correct as the truly productive prospered and the rent-seekers lost their government-enabled advantages.

This is a self-serving fever dream by people positioned to become ultra-wealthy in such an arrangement.

Here’s what the crypto evangelists conveniently ignore: the bottom 50th percentile of wage earners have no significant savings to speak of. They’re not being harmed by inflation eroding their cash holdings. They don’t have cash holdings to erode. They’re living paycheck to paycheck, with their economic wellbeing determined entirely by wages relative to prices.

And wages—despite the inflation-eroding-savings narrative—are among the most sensitive prices to inflation. In fact, hourly wages for entry-level labor rose more rapidly than consumer prices in the period following COVID-19. Yes, wage growth contributed to inflationary pressure. But workers largely kept pace with or exceeded inflation through wage increases.

The real transfer of wealth during inflation isn’t from savers to non-savers. It’s from creditors to debtors—and disproportionately, from financial institutions to people with mortgages and other fixed-rate debts. Moderate inflation actually helps working people with debts while harming the wealthy who hold bonds and other fixed-income assets.

The move to “hard money” would reverse this. In a deflationary environment, debt becomes more burdensome over time. Wages become harder to raise. The returns to holding capital increase automatically. This systematically advantages existing wealth holders and disadvantages workers and debtors.

Which is precisely why the people pushing hardest for cryptocurrency and “sound money” policies are those who would benefit most from such a system: early adopters positioned to hold massive portions of the new currency, tech entrepreneurs who want to eliminate government oversight of financial markets, and wealthy individuals seeking to preserve purchasing power without the pesky problem of democratic governments potentially taxing or regulating their holdings.

It’s not a solution to inequality. It’s a scheme to lock in the current distribution of wealth and make it effectively permanent.

The Coming Crisis

Meanwhile, we’re careening toward a genuine fiscal crisis. Government finances in the United States and across the developed world are under severe strain. Aging populations require more healthcare spending. Infrastructure built decades ago needs replacement. Climate change demands massive adaptation investments. And tax revenues have been systematically undermined by decades of cuts sold as pro-growth policy.

The response from the intellectual elite—especially the hyper-capitalists in the crypto and Bitcoin communities, but also mainstream conservative economists and even many centrist Democrats—is that the only path forward is deep cuts to social services. Education spending must be reduced. Healthcare programs must be curtailed. Social Security needs “reform” (which always means cuts). Government must learn to do more with less.

The idea of raising taxes and expanding the tax base is treated as anathema. A slippery slope to Marxism. Economic suicide. They invoke the Laffer Curve (already thoroughly debunked in practice). They predict capital flight and economic collapse. And they issue an implicit threat: raise our taxes and we’ll leave, taking our capital to lower-tax jurisdictions. You need us. We don’t need you.

The time has come to call their bluff.

Because the argument that the only way forward is lower taxes, shrinking government services, and deregulating financial assets needs to be called what it is: a self-serving ideology that protects existing wealth holders at the expense of everyone else, wrapped in economic theory that has failed every empirical test.

Consider what we know from actual evidence rather than theory:

The relationship between tax rates and growth is weak to nonexistent. Periods of high growth in American history have occurred under both high and low tax regimes. The massive tax cuts of recent decades have not produced the promised prosperity—they’ve produced deficits, crumbling infrastructure, and increased inequality.

Capital doesn’t flee en masse when taxes rise moderately. People and businesses consider many factors beyond tax rates: market access, skilled workers, infrastructure, legal systems, political stability, quality of life. The U.S. has raised taxes before without triggering mass exodus. And the threatened departures are often more bluster than reality—where exactly are billionaires going to move that offers comparable opportunities?

Government spending creates demand. In an economy where the top 10% account for 50% of consumer spending, the spending patterns of the wealthy increasingly don’t support broad-based economic activity. They buy luxury goods, invest in assets, and save. Government spending on healthcare, education, and infrastructure directly employs people and creates demand for goods and services throughout the economy.

Public investment generates returns. The internet, GPS, touchscreen technology, and countless other innovations emerged from government-funded research. Public education creates human capital. Infrastructure enables commerce. These aren’t just costs—they’re investments that generate economic returns.

Inequality itself is economically harmful. When wealth concentrates excessively, economies become unstable. Demand weakens because most people lack purchasing power. Political systems get captured by narrow interests. Social cohesion breaks down. History shows that extreme inequality eventually produces either reform or revolution—and the longer reform is delayed, the more likely the alternative becomes.

The Madness of the Moment

The top 10% of households accounting for 50% of consumer spending should be a flashing red alarm. This level of concentration means the economy’s health depends on the choices of a tiny fraction of the population. If they decide to save more, demand collapses. If they shift spending patterns, entire sectors suffer. The vast majority of Americans have become economically marginal to aggregate demand.

This isn’t sustainable. And it isn’t hidden—the data is public, the trends are clear. Yet the response from our economic elite is to double down on the policies that created this crisis.

They tell us we can’t afford Social Security. But we can afford tax cuts for capital gains.

They tell us healthcare spending must be constrained. But financial deregulation that enables complex, rent-extracting instruments is celebrated as innovation.

They tell us government is too big. But corporate consolidation that creates monopolistic profits is dismissed as efficient market outcomes.

They tell us workers need to be more flexible and competitive. But they use non-compete agreements, occupational licensing, and intellectual property regimes to restrict labor mobility and competition.

The game is rigged. And increasingly, people know it.

The Fascist Response

Which brings us to the political consequences of economic extraction. When the system is obviously failing most people, when the promised prosperity keeps flowing upward while conditions worsen for everyone else, when the political class is clearly captured by moneyed interests—people lose faith in democratic governance.

And that’s when fascist movements emerge, offering simple answers: it’s not the system, it’s the outsiders. Not capital extracting from labor, but immigrants taking jobs. Not monopolies extracting rents, but international trade agreements. Not wealth accumulation pricing people out, but cultural degeneracy and moral decay.

This is what we’re watching happen. Fascist forces are scapegoating immigrants, scapegoating international trade, scapegoating any political opposition that might upend this order. They promise to restore prosperity through exclusion and domination rather than through redistribution or structural reform.

And why wouldn’t they? The extractive capitalists funding fascist movements understand that as long as popular anger gets directed at immigrants, trade partners, and cultural enemies, it won’t be directed at them. The wealthy are happy to bankroll nationalism and xenophobia if it means avoiding questions about why wealth keeps flowing upward while social services get cut.

This is how plutocracy uses fascism: as a pressure valve that redirects working-class rage away from economic structures and toward cultural and ethnic scapegoats. As long as people are angry at immigrants rather than billionaires, the extraction can continue.

The wealthy own the political class through campaign finance, lobbying, and media control. They own an increasing share of productive assets through capital accumulation. They’re working to eliminate what remains of the social safety net. And when people object, they either get bought off with culture war distractions or threatened with economic collapse if they dare to challenge the system.

It’s no surprise that middle America has lost faith in government. The government serves capital, not citizens. The surprise is that the response has been to embrace authoritarianism rather than to demand actual reform.

What Needs to Happen

I come to this argument late, and perhaps too late. I bought into much of what I’m now criticizing. I believed the narratives about regulatory burden and capital efficiency. I trusted that markets would self-correct. My change in perspective comes from finally being honest about what I was seeing versus what I wanted to believe. Which is why I’m writing this with urgency—if I was wrong for this long, how many others are still operating under assumptions that evidence has thoroughly disproven?

We need to start telling the truth about what’s happening and what it would take to fix it.

First, wealth concentration is the crisis. Not regulation. Not government spending. Not immigrants or trade. The rapid accumulation of assets by the wealthy, combined with their increasing ability to extract rents from everyone else, is destroying broad-based prosperity.

Second, markets don’t fix this. Market processes under current rules produce this outcome. Without intervention, wealth compounds, assets concentrate, and extraction intensifies. The “free market” solution is accelerating the problem.

Third, we need progressive taxation and expanded public investment. Not because taxation is good in itself, but because it’s the mechanism for preventing extractive wealth concentration from destroying economic dynamism and social cohesion. And public investment creates shared prosperity that market allocations increasingly don’t.

Fourth, capital flight is mostly a bluff. Some will leave. Most won’t. The U.S. offers access to the world’s largest consumer market, the most developed infrastructure, the strongest legal protections for property, and the most sophisticated financial systems. You don’t give that up over moderate tax increases unless you’re making a political statement rather than an economic calculation.

Fifth, we need to stop treating billionaires as job creators and start treating them as threats to democratic governance. Extreme wealth concentration creates power concentration. Power concentration corrupts political systems. This isn’t about vilifying success—it’s about recognizing that when individuals accumulate enough resources to shape political outcomes, democracy stops functioning.

Sixth, the crypto fantasy needs to be rejected. “Hard money” doesn’t solve inequality. It locks it in. Giving up democratic control over monetary policy to hand it over to whoever controls the most cryptocurrency is plutocracy with extra steps.

The Choice

We’re at a crossroads. One path leads toward increasingly extractive capitalism, where the wealthy own more and more while everyone else owns less and less, where government serves capital rather than citizens, where fascist movements redirect anger toward scapegoats while the extraction continues.

The other path requires telling uncomfortable truths to powerful people. It requires raising taxes on extreme wealth. It requires aggressive antitrust enforcement. It requires public investment financed by progressive taxation. It requires rebuilding social services that have been systematically destroyed. It requires calling the bluff of those who threaten to leave if asked to contribute fairly to the society that enabled their success.

The intellectual and capital class will scream bloody murder. They’ll predict economic collapse. They’ll threaten to take their ball and go home. They’ll fund think tanks to produce papers explaining why this is all impossible. They’ll buy media coverage warning of impending doom.

Let them.

Call their bluff. Tax extreme wealth. Break up monopolies. Fund public investment. Rebuild the social safety net. And when they threaten to leave, wish them well and remind them that the United States has the rule of law, the infrastructure, the markets, and the educated workforce that made their success possible.

If a few billionaires decamp to tax havens, the republic will survive. If we continue on the current path—where wealth accumulates upward, democracy gets captured, and fascism offers simple scapegoats—it won’t.

The top 10% accounting for 50% of spending isn’t sustainable. The bottom 90% being priced out of asset ownership isn’t sustainable. Government finances collapsing while we refuse to tax extreme wealth isn’t sustainable. Democracy surviving while billionaires own the political class isn’t sustainable.

Something breaks. The question is whether we choose to reform the system or wait for it to collapse into something uglier.

Call their bluff. Tax the wealthy. Rebuild social democracy. Or watch extractive capitalism destroy the country while fascists offer scapegoats instead of solutions.

The choice is ours. For now.