By Michael Smith (Veshengro)
The financial markets have gotten the jitters for sure and everything is going down and up like a yo-yo though more down, it would seem, most of the time.
The key cause of financial meltdown, it would appear, is when there is too high a concentration of wealth in too few hands. When this happens, calamity, chaos and collapse aren’t too far away; mathematically, they are a sure thing.
In America, the top 1% of the population own 40% of the wealth. To put this in perspective, that’s the same level of inequality seen in countries ruled by dictators and oligarchs or roughly the equivalent wealth inequality seen in Iran and Russia.
Associated Press recently reported on the release of a report by the International Monetary Fund (IMF) stating:
“A recent report by the International Monetary Fund destroys the myth that the current economic crisis—the worst in almost a century—was caused by fancy financial instruments, government intervention in the housing market or Main Street greed. It concludes, rather, that the global brush with economic depression was the result of the colossal gap in incomes between rich and working Americans.
The sadly obscure paper argues that a dramatic concentration in wealth at the top—at levels not seen anywhere else in the industrialized world—created a fundamental imbalance that brought the entire system down on itself. The document shows that the origins of America’s last financial implosion, in 1929, were almost identical to those of 2008. In both cases, income inequality was the culprit. And even in the collapse’s wake, the chasm between the top 10 per cent and the remaining 90 per cent appears to be widening further.”
The top 1% may have the best houses, educations, and lifestyles, but their fate is bound up with how the other 99% per cent live.
But, will we see Middle East style uprisings in the West over the next few years as more and more people start to awaken and realise the economic crimes against humanity that have brought about this ‘colossal inequality’? While this indeed this is the only thing that the 1% fear I am not sure.
The recent riots in the UK some would like to blame on the cuts in public services, and other austerity measures and such like which had to be implemented as a result of the fact that the government found the coffers to be empty from the previous administration, but to the most part those looting and battles with police were criminality pure and simple.
When it comes to inequality there is more than just the issue of the wealth and people in the West, such as in Europe and the USA, might do something like the people in the Middle East have done if they were not so lethargic and allowing themselves to be placated with bread and circuses, much like the ancient Romans.
We hand more and more over to government to do this and that and everything else for us and “to keep us safe”, at the same time giving away all freedoms and in the wake of those riots in the UK calls from the public even have been made for police to be able to shut down social networking sites such as Facebook, Twitter and Blackberry Messenger (and other messenger services). Those services, it is claimed, we used as a means for the rioters to organize themselves.
The powers people are, however, intending to hand to the governments are those that could also be used against them if and when they would every decide to hold protests and democratic marches and such as done in Tunisia, Egypt, etc.
On the financial front: The financial crisis, let's call it that rather than credit crunch, is in no way over and the economy in most places is so fragile that a double dip, the with the new dip going deep, deep, deep, being more than possible.
We better all brace ourselves for that for this is going to be a very bumpy ride on what could be a very fast roller-coaster headed way down. Mervin King, the Governor of the Bank of England, is predicting that we will never, ever, attain again the living standards that many enjoyed before the crisis hit.
This is going to be a seriously rude awakening for the great majority of Brits and surely also for Americans. Most still believe that the economy will get back to the high level we had and that all is going to be business as usual again with ever rising standards of living.
People better wake up and smell the roses, for the truth of the matters is that we cannot spend ourselves out of the crisis and that is why most people are also holding on tight to their money. And secondly things are changing in the world as with oil becoming scarcer and scarcer and thus more and more expensive.
As a result of the increasing energy prices the cost of everything, food, clothes, driving, heating, cooking, lighting, etc., is going to get more and more expensive and the disposable income of people is going down further and further. Add to that the fact that many workers have lost or are losing their jobs and that others have had to accept pay freezes or even pay cuts to retain their jobs means that there is less and less money around, amongst the 99%, to spend on goods.
Thus it is a vicious circle and we best be ready...
© 2011