This is a running commentary on contemporary social, political and religious issues. From the Introduction of James Comey's book "A Higher Loyalty -- Truth, Lies and Leadership" "Man's capacity for justice makes democracy possible, but man's inclination to injustice makes democracy necessary" Reinhold Niebuhr
I thought this blogger expressed my sentiments well or better than I ever could as economics is not my strong suit. Over two days the market has tanked and nervousness sets in as most of the middle and working classes are gun shy from the Great Recession perpetrated by the banksters and fraudsters of Wall Street greed. The question he does not answer is what the middle and working classes can do about it to secure their positions. Here is his blog below.
A Reuters article published Friday under the headline “Rout in emerging markets may only be in Phase One” stated: “The flight of investors from the once-booming emerging markets they previously favored with $7 trillion worth of inflows may have only just begun.”
These developments highlight the degree to which the world economy is dominated by the most parasitical and quasi-criminal forms of financial speculation. While the real economy continues to stagnate or decline, the capitalist system is kept afloat by massive infusions of virtually free cash into the financial markets. Central banks have pumped an estimated $10 trillion into the markets since the Wall Street crash of September 2008.
This has been paid for through the destruction of jobs, wages and social welfare programs upon which hundreds of millions of working people depend.
The banks and corporations have not used the handouts from governments and central banks for productive investment—to rebuild crumbling infrastructures or expand the productive forces. The Financial Timesreported Friday that US capital spending is expected to grow this year at its slowest pace in four years. And it is estimated that American non-financial companies are currently sitting on a cash hoard of $1.5 trillion.
Instead, the massive subsidies have been used to drive up the stock market and underwrite a speculative frenzy that has increased the wealth of the richest 1 percent at the expense of the overwhelming majority of the world’s people. The S&P 500 index has risen by 170 percent from a twelve-year low in March of 2009, soaring 30 percent in 2013 alone.
The result is a staggering growth of personal wealth among a minuscule layer of society. This week, as the world’s bankers and CEOs gathered at the annual World Economic Forum in the Swiss Alpine resort of Davos, the charity Oxfam released a report showing that the richest 85 individuals have more wealth than the bottom 50 percent of the world’s population—3.5 billion people.
The domination of the globe by a new financial aristocracy driven by greed and immersed in criminality was symbolized Friday by the announcement that JPMorgan Chase CEO Jamie Dimon, currently being feted at Davos, was awarded a 74 percent pay raise for 2013.
Dimon’s bank had to pay $20 billion in fines in 2013 to settle charges of mortgage fraud, concealing losses by lying to regulators and fixing the books, complicity in the Bernie Madoff Ponzi scheme and other crimes. This crook, who by rights should be serving time in prison, saw his compensation jump from $11.5 million for 2012 to $20 million for 2013.
Such is the historically unprecedented scale of parasitism at the very heart of the world economic system.