Friday, February 27, 2009

Class war - the rich against the rest?

[Image from Wall Street Trader]

Justin Fox, writing in Time magazine's March 2 issue, tells of a study done by two finance professors at the University of Chicago, the purpose of which was to determine "who was behind the spectacular rise in the very top incomes in the U.S."

Turns out it wasn't "corporate chief executives and their lieutenants," nor was it "highly paid athletes and entertainers."

It was those folks working on Wall Street.

"At least 2,500 people at major investment banks made more that $2.5 million a year," estimated professors Steven Kaplan and Joshua Rauh. They also surmised "that the actual figure was probably substantially higher."

"Overall," says Fox, "the top 0.1% of the income distribution in the U.S. in 2006 -- the most recent year for which data are available--was made up of 148,361 taxpayers who took home more than $1.9 million each. This top 0.1% accounted for 11.6% of personal income..."

Two things to remember: These folks produce nothing, they create nothing. The move money around for their own benefit! In other words, they could be considered leeches.

Secondly, as Fox notes, "the scads of lushly paid Wall Streeters have driven the financial sector into a ditch, and taxpayers around the world are spending trillions of dollars to fix the problem."

And the problems have just begun. The world is on fire, from China to Europe, from Russia to India, and all places in between.

Michael Kare, in an article for Salon, says "The global economic meltdown has already caused bank failures, bankruptcies, plant closings and foreclosures and will, in the coming year, leave many tens of millions unemployed across the planet. But another perilous consequence of the crash of 2008 has only recently made its appearance: increased civil unrest and ethnic strife. Someday, perhaps, war may follow."

All because a bunch of con artists without portfolios, who neither create nor contribute any good thing to the world, lined their pockets at the expense of the rest of us.

Sounds like class war to me.

1 comment:

Bob Poris said...

Read it and weep, unless you have benefited by all this. Making loans to people that have little possibility to repay them is very bad business. Turning around and selling those loans to friends and customers is, at the very least, dishonest and unethical.

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