In 2008, a financial crisis blossomed. It was caused by the rich, those who control the world. Some of the rich lost considerable amounts of money, mostly to other wealthy people and institutions (who had thus become even richer). So doing, the world financial system got destabilized: bankruptcies could propagate.
The most obvious way out was to recover as much money as possible from the rich. Instead, something else was decided, by the powers that be (themselves electorally financed by those who had set-up the system that crashed, and many of them had profited from).
Since 2007, The 1% Have Gone Off The Charts, Leveraging Crisis, Through Obama
To resolve optimally the near-destruction of the financial system in 2008, it was decided to make We the People pay. Saving the richest individuals and institutions was objective number one. So little savers saw their saving rates go down to zero. Workers, even productive workers, such as researchers in fundamental science saw financing go down drastically. Projects went unfinanced, researchers had to quit research. This happened in Great Britain, among nearly all other developed countries (Switzerland being an exception).
Thus “Austerity” is just about We The People going starving, in all sorts of ways and dimensions. Meanwhile, the richest people and institutions in the world kept paying no, or very little, taxes.
Google in Britain made billions, and paid very little tax (a “Google Tax” is supposed to come in, the Conservatives grandly declared, a few months before the elections). Hyper wealthy Brits claim to reside overseas, and thus pay very little tax, and it is perfectly legal.
All over we see the same problem. So question: why do not the richest people and institutions, those with the greatest means, who need very little of what they have, be the first to experience austerity?
Distributing their riches would augments economic activity overall.
Conversely, not distributing the riches of the hyper rich diminishes overall economic activity.
The graph above clearly shows that this entirely a political problem. Policies (at least in the USA) were not friendly to the hyper wealthy, after the crash of 1929-1930. During, and after the war, the USA was managed in a way that was, relatively speaking, socialist.
Reagan though surfed a wave of resentment by the wealthy that originated in California with Prop.13 (and Reagan’s election as governor, and Nixon as president, earlier than that).
So here we are. A few hands take all the decisions, and they are most happy, the more they can grab in money and power.
Larry Fink CEO of the fund company Blackrock (managing more than 4 billion dollars in investments) warned companies that they are demolishing societies by redistributing too much wealth to the wealthy, at the expense of everything else.
Carl Icahn, a plutocrat worth 24 billion dollars, hearing of Fink’s critique, agreed, and lashed out at the CEO class: …”What is even more dangerous and concerning is that so many of our companies do not have CEO’s that have the ability to make investments, let alone run the companies they are now charged with…”
It is even criminal: the hyper rich, and the CEO’s class serving it, are actually not just destroying the world’s socio-economy, but threatening the survivability of the biosphere (the CO2 crisis is a case in point: a handful of plutocrats, fully using their enormous powers, have poisoned world public opinion, and decision making; so we are adding 2% of the total content of CO2 in the atmosphere, every year, half going in the ocean. That was entirely avoidable).
Most very wealthy people are not amused by Fink’s and Icahn’s opinion. They would rather deny there is a problem, they will point out that we live in the best possible world, so far.
So did the passengers of the Titanic, enjoying the most luxurious, fastest trip ever, on a perfectly unsinkable ship.
Reality can be a most ominous fate. Even for plutocrats.
Patrice Ayme’
Patrice Ayme's Thoughts 