“Regression to the mean”, if allowed by politicians and regulators, will take care of the plutocrats, in due time.

Sir, Paul Marshall in “Blame the rise of the plutocrats on politics not capitalism”, January 9, holds that we need Schumpeter much more than Marx.

As you could deduct from my letter “Long-term benefits of hard landing” and which you kindly published, before you decided to name me a persona non-grata at FT, I totally agree with him

I have never been too much concerned by the rise of plutocrats, since I have always figured that, mostly, it was the result of something good… and I have always counted on the “regression toward the mean” theory, aka “reversion to the mean”, or aka “reversion to mediocrity”, to take care of the problem of the same plutocrats reigning into eternity.

But for that “regression to the mean” to happen, anyone that has that in him to be a plutocrat needs to be able to become a plutocrat… and that requires not only fair access to education as Marshall rightly puts forward, but almost foremost fair access to bank credit. And credit-risk weighted capital requirements for banks which operate in favor of those who have made it; and against those risky who have yet not made it, and who probably most of them will fail while trying to make it; blocks that fair access to bank credit.

And then of course, for the “regression to the mean” to happen, losses need to flow freely, and not be contained by QE dams, which quite often help to make the plutocrats even more plutocrats.

PS. There are some other issues related to the rise of plutocrats that need to be more closely looked into. One is intellectual property right. Why should income from a shielded property right be taxed at the same rate than those profits coming from competing bare-naked in the market?

Does not the price increases suffered by the Gatsby count as inflation too?

Sir, Wolfgang Münchau refers, as so often is done these days, to the problem of low inflation, and which has even caused “Germany´s conservative central bank to call for wages to rise faster than in the past”, “A desperate Bundesbank has abandoned principle” August 4.

But the fact that there is no inflation recorded could also be a result of how we measure it. For instance, if our inflation basket included assets Plutocrats buy, like stocks, prime property, paintings, collectibles and other fancy stuff, we would certainly observe a quite high inflation… something that by the way should be expected considering how money, assisted by quantitative easing and fiscal deficits, has primarily flooded their pockets.

And really, talking about money which has lost purchasing power… what about all those savings that now buy so much less because of the low interest rates?

And so of course there is inflation… but perhaps not where some would like it to be… though I must confess that, inflation for the plutocrats and no inflation for the poorer, does indeed sound like a Piketty designed plan to combat inequality… could it be a targeted financial repression?

No!, as I have mentioned so many times before, much more important is it for Münchau, and for the Bundesbank, to take some time out to reflect on how the European economies are becoming weaker and weaker, as a result of the risk taking austerity imposed by the Basel Committee´s risk-weighted capital requirements for banks.

The assistance by tech jerks could increase the Piketty inequalities.

Sir, Tim Harford defends the apps for obtaining a “reservation at a popular restaurant… something that have always been valuable but they have been hard to buy and sell” arguing that “none of the people hoping to secure a reservation at a Michelin-starred restaurant is poverty stricken”, “Lessons from tech jerks”, July 26.

Yes indeed but let us not forget that even the one-percenters or less, have to compete for the one-percenters-of-the-one-percenters, and as this new service will extract a higher price, we are again confronting a service that mostly benefits the plutocracy. In fact they will probably pay less for this reservation service that what they currently pay the concierge of the hotel where they reside… and so this can only help to drive up even more the Piketty-inequalities we are told to abhor.

Now on the positive side… when these Michelin-starred restaurants run their own auctioning of reservation system… perhaps they find it profitable to open up for instance early morning shifts… and then some non-plutocrat gourmets and gourmands like me could perhaps have a better chance of finding a seat… and hopefully the real chefs will then perform especially well for their real admirers.

But while, we are on the subject of jerks, let me again remind you that the worst ones are the bank regulators who discriminate against the fair access to bank credit of those who, because they are perceived as risky, are already being discriminated against… the #JerkRegulator

What if by lottery some patents are yearly declared null, in order to keep the pharma industry on its toes?

Sir, David Shaywitz writes: “If the pharmaceuticals industry is to remain in the vanguard of science it will have to embrace a far leaner approach, with less bloated bureaucracy”, “Addiction to deals reveals the depth of pharma’s ill” May 2.

Is that really possible in an industry accustomed to working in the protective environment provided by patents? Is it not high time we see to that all that extra money we are asked to pay in order to reward inventions and stimulate new inventions go to that, and not to some other purpose, like the further enrichment of a 0.01% plutocracy?

Perhaps a yearly lottery, by which 5 percent of their patents are declared null, no reasons given, could give these companies more incentives to be on their toes.

Call it a dividend to humanity if you want… in payment for how humanity helped the inventors run the last mile for a patent.

What a great letter!

Sir, I am not at all sure I grasped the whole meaning of Simon Schama’s “A letter from America to beatific Olympic Britain”, August 11, but, intuitively, I know that I love it… and that is not only because I find the concept of “democracy has become the catspaw of plutocrats” to be so right on the dot.