Thursday, March 24, 2011
"The bailouts of banks, speculators and manufacturers served their real purposes: the multi-millionaires became billionaires and the later became multi-billionaires."
Billionaires Flourish, Inequalities Deepen as Economies “Recover”
by Prof. James Petras
The bailouts of banks, speculators and manufacturers served their real purposes: the multi-millionaires became billionaires and the later became multi-billionaires. According to the annual report of the business magazine Forbes there are 1,210 individuals – and in many cases family clans – with a net value of $1 billion dollars (or more). There total net worth is $4 trillion, 500 billion dollars, greater than the combined worth of 4 billion people in the world. The current concentration of wealth exceeds any previous period in history; from King Midas, the Maharajahs, and the Robber Barons to the recent Silicon Valley – Wall Street moguls of the present decade
An analysis of the source of wealth of the super-rich, the distribution in the world economy and the methods of accumulation highlights several important differences with major political consequences. We will proceed to identify these specific features of the super-rich, starting with the United States and follow with an analysis of the rest of the world.
The Super-Rich in the US: Greatest Living Parasites
The US has the most billionaires in the world (413), better than one third of the total, the greatest proportion among the “big countries in the world. A closer look also reveals that among the top 200 billionaires (those with $5.2 billion and more) there are 57 from the US (29%). Over one third made their fortune through speculative activity, predators on the productive economy and exploiters of the property and stock market. This is the highest percentage of any major country in Europe or Asia (with the exception of England). The enormous concentration of wealth in the hands of this tiny parasitical ruling class is one reason why the US has the worst inequalities of any advanced economy and among the worst in the entire world. Speculators do not employ workers, they secure tax loopholes and bailouts and then press for cuts in the social budget, since they do not require a healthy, educated workforce (except for a tiny elite). In 1976 the top 1% held 20% of the wealth; in 2007 they commanded 35% of total wealth. Eighty percent of Americans own only 15% of the wealth. The recent economic crises, which initially reduced the total wealth of the country, did so in an uneven fashion – hitting the majority of workers and employees worse. The Bush-Obama bailout led to the economic recovery, not of the “economy in general”, but was confined to further enhancing the wealth of the billionaires – which explains why the unemployment/under employment rate has hardly moved, why the fiscal debt and trade deficit grows and the state lowers corporate taxes and slashes federal, state and municipal budgets. The “dynamic” sector composed of parasitical capitalists employ few workers, exports no products, pays lower taxes and imposes greater cuts in social spending for productive workers. In the case of the US, billionaires , their wealth is largely accrued via the pillage of the state treasury and productive economy and via speculation in the information technology sector which houses one-fifth of the top billionaires...