Billionaire
Bangarang
by
John Maxwell
This
article originally appeared in the Jamaica
Observer.
“The
world is in the throes of a billionaire problem.”
There
are basically two kinds of people in the world: those with too little
money and those with too much. Those with too much between them
control nearly half the world’s wealth, could fit comfortably in
two or three jumbo jets.
According
to Forbes magazine, the global stock of billionaires increased
from 793 in 2006 to 946 in 2007 – a comfortable audience for the
Ward Theatre, in Kingston. According to figures from the United
Nations University/WIDER, the richest 1% of the world’s population
— about 37 million people own 40% or nearly half of the world’s
people – while the bottom half, nearly two billion people,
together own just about one percent of the world’s assets.
In
these computations, wealth does not include houses, however grand,
nor transportation Rolls Royces or personal jets.
The
world — or at least some parts of it – is in the throes of a
billionaire problem. A Wall Street Journal columnist reported
last October on a visit to the super rich ski resort of Aspen,
Colorado and says he was struck by the number of rich people in town
and by the number of locals who complained about the number of rich
people in town.
Since
our new Jamaican tourism thrust is premised on the attraction of the
super rich, I decided to do a little research into possible problems.
The
rich do have one nasty habit: they keep on getting richer while the
rest of us get poorer. In Aspen that causes problems. Natives can’t
afford houses in their own town anymore. The price for a single
family unit begins at US$ 5 million (about J$ 350 million). Not even
doctors can afford to buy houses in Aspen any more. People are
worried that there are too many Prada and Gucci stores in town and I
would hate to imagine the price of a bottle of Perrier water or a
Blue Mountain coffee.
I can
just imagine it. I am the guest of some billionaire in Aspen and the
party is on her. So, to impress her a little bit I take her to the
nearest Starbucks (or the billionaire equivalent) and order two
coffees. I then discover that I have to pawn my plane ticket to pay
for them.
“Billions
have been sucked out of the middle-class, some of it almost literally
vaporized into the high altitude world of sophisticated financial
products, or derivatives.”
The
rich grow richer effortlessly, but some of them, of course, like to
grease the skids even though they know the lolly is coming down in
floods anyway As we have seen in the united States, the middle class
of that country, particularly the black middle class, is undergoing a
painful process of wealth extraction, taken to the cleaners by
mortgage brokers and their outlaw in-laws in the derivatives
business.
This
has created a small problem, because though billions have been
sucked out of the middle-class, some of it has almost literally
vaporized into the high altitude world of sophisticated financial
products, or derivatives, in which sub-prime mortgages were valued by
eminent bankers as better than sovereign bonds issued by Jamaica or
Venezuela or even the US itself.
”Wealth
creation” depends eventually on the players finding a great number
of what they call “Greater Fools” willing to come in at the zany
end of the market. The theory is that if millions of naive punters
lose their shirts the loss will be spread over wide areas and no one
will take too much notice.
But
the “wealth creation” game depends on a high velocity of
circulation, with each hand retaining a smidgen of the gold dust that
attaches to the securities which zip through the system like pork fat
through a goose. Wealth cannot be created or destroyed. I have no
intention of going into the theory of surplus value but you can take
it from me that there sweat is the real currency of the world and the
source of all wealth. The transmutation of sweat into money and
profit is what makes the world go round, but while the Earth may
appear to be a perpetual motion machine there is no human system
which can duplicate its effects for more than a moment.
“Sweat
is the real currency of the world and the source of all wealth.”
So
while wealth is extracted from middle class Americans and workers all
over the world, eventually, classical economics and common sense all
tell you that sales and profits depend on markets and markets depend
on people and people depend on earnings and the whole structure
collapses when the working class is gutted, as is happening at this
moment.
Greed
is the frictional element. If capitalists could be satisfied with
‘rational’ profits, all would be well. But they are not. Which is
why the take home pay of the American workers has stagnated at 1973
levels and the wealth of his masters has expanded exponentially
meanwhile.?
As
Professor James Petras points out in an article
published last year,
the rise of the billionaires was accompanied by serious social
problems. Mass uprisings became commonplace in India and China.
“In
India, which has the highest number of billionaires (36) in Asia with
total wealth of $191 billion, Prime Minister Singh declared that the
greatest single threat to “India's security” were the Maoist-led
guerrilla armies and mass movements in the poorest parts of the
country. In China, with 20 billionaires with $29.4 billion net worth,
the new rulers, confronting nearly a hundred thousand reported riots
and protests, have increased the number of armed special anti-riot
militia a hundred fold, and increased spending for the rural poor by
$10 billion in the hopes of lessening the monstrous class
inequalities and heading off a mass upheaval.”
It may
surprise you to discover that in the United States, one in every 100
adult Americans is in jail. That amazing statistic includes one in
every nine black men between 20 and 34 and one in every hundred adult
black women behind bars.
Mind
boggling.
Disparity
in Growth
Petras
said the total wealth of this global ruling class grew 35% per year
while income levels for the lower 55% of the world’s people
declined or stagnated. While General motors and Ford lay off
thousands of workers the Federal Trade Commission is besieged by
reports of millions of toxic toys from China flooding the market and
Lou Dobbs on CNN is pathetically demanding action against Mexican and
other illegal immigrants and some drastic surgery perhaps, on NAFTA.
“The
Russian oligarchy stands out for its most rapacious beginnings.”
Petras also deals
with the “the newest, youngest and fastest-growing group of
billionaires, the Russian oligarchy stands out for its most rapacious
beginnings. Over two-thirds (67 per cent) of the current Russian
billionaire oligarchs began their concentration of wealth in their
mid to early twenties. During the infamous decade of the 1990s under
the quasi-dictatorial rule of Boris Yeltsin and his US-directed
economic advisers, Anatoly Chubais and Yegor Gaidar, the entire
Russian economy was put up for sale for a “political price.”
which was far below its real value. Without exception, the transfers
of property were achieved through gangster tactics –
assassinations, massive theft, and seizure of state resources,
illicit stock manipulation and buyouts. The future billionaires
stripped the Russian state of over a trillion dollars worth of
factories, transport, oil, gas, iron, coal and other formerly
state-owned resources.”
Globalization,
it is clear, does work for some.
The
Obama Charisma
The
fact that it doesn’t work for most of us is one of the factors
behind the steamroller effect of Barrack Obama’s charismatic
appeal. People see in him an answer to their frustrations with a
government that does not seem connected to their concerns, their
lives and their welfare.
The
press, bless their hearts, are in a state of total confusion,
incessantly parsing language and producing every day some new piece
of intelligence which would a few years ago, have had the American
electorate in a flutter. The problem is that the electorate is paying
almost no attention to the conventional media or to their delegates
in politics, the John McCains and the Bill Clintons.
An
almost unnoticed development last week suggests that the American
political system, like the economic structure, is in for a seismic
shock. In the rock-ribbed Yankee Republican region of Upstate New
York, in a seat held by Republicans for a century, a Democrat beat
the wealthy Republican candidate in a special election. It was a seat
with nearly 80,000 registered Republicans, nearly twice as many as
the 47,000 Democrats. The New York State senate has been controlled
by Republicans for all but two years since 1939.
The
prospect of Obama is scaring the Republicans silly. The one thing
preventing an unprecedented flood of money for John McCain is that
when his campaign seemed all but dead some six months ago, he entered
into a deal with the Federal Elections Commission for public
financing. Now that the Obama heat is on and billionaires are waiting
in line to give him money, he wants to get out of the arrangement,
but the FEC can’t even vote on his request because it has no
quorum.
The
result is that the real Republican campaign will be effectively
financed from outside McCain’s purview by the kind of people who
financed the Swift Boat campaign against John Kerry in the last
election. That means that this election campaign, despite the
civility and sophistication of Barack Obama and Mr. McCain’s pious
burblings, is going to be by far the dirtiest in the history of the
United States.
You
read it here first.
Copyright
© 2008 John Maxwell
John
Maxwell of the University of the West Indies (UWI) is the veteran
Jamaican journalist who in 1999 single-handedly thwarted the Jamaican
government's efforts to build houses at Hope, the nation's oldest and
best known botanical gardens. His campaigning earned him first prize
in the 2000 Sandals Resort's Annual Environmental Journalism
Competition, the region's richest journalism prize. He is also the
author of How to Make Our Own News: A Primer for Environmentalists
and Journalists. Jamaica, 2000. Mr. Maxwell can be reached at
[email protected].