The Economic Facts; Lots of Reasons Which are Contributing to Our Economic Turmoil!
I expect if you are reading this blog you will already know a number of contributors to the crisis, for example sub-prime loans, the selling of debt within the banking system, Credit Default Swaps, Collateralised Debt Obligations, the use of the heap of trillions that must be invested!, etc
Here are some other economic facts. Many of them you may work out are influenced by the knock-on affects of the main causes of the financial and economic crisis.
1.... The London School of Economics carried out research in 2008 and concluded that the biggest
influence to income inequaility in the U.K. was due to pay explosion in the City (London) leading up to the financial crisis. Three quarters of the increase in income concentration amongst the top 1 % of earners went to people working within the finance industry, virtually all of it in bonuses.
2....The income of the top 25 hedge fund managers in the U.S. in 2004 exceeded the total amount paid to all of the CEOs of the entire S&P 500.
3....In 2002 the distribution of marketable wealth in the U.K. of the bottom 50% of the population had reduced to just 6% from 10% in the mid 80s.
4....In 2007 the income of the top 1% of earners in the U.S. received 23.5% of the income of the total population.
5....The wealth of the top 1% of the U.S. population increased from 19.9% in 1976 to 34.6% in 2007.
6....U.S. liquid wealth (that is wealth minus the value of their home), 42% is with the wealthiest 1% !
7.... The difference between pay of Chief executives Officers of medium or large U.S. Companies compared to the average of all workers was a ratio of 344 to 1 in 2007.
8....In the U.S., although average workers pay increased by 4.3% after adjusting for inflation, pay to CEOs increased by 300% for the same period between 1990 and 2005.
9....American Business Magazine Forbes listed 946 billionaires across the globe in2007 with a combined worth of $3500 billion. This is higher than the GDP figure of Germany.
10....One of the influences of a rising number of Billionaires in Eastern Europe, for example Roman Abramovich, is due to the collapse of communism. This resulted in the sell off of state industries by the new democratic governments. People like Roman Abramovich borrowed money to buy them up. The benefits are sudden cash flow for the government that sells them. The buyer benefits from capitalist costs like the interest payments on the debt used to buy them which the ordinary people will be for ever paying plus any margin he or she desires to add for profit. There is nothing entrepeneurial about this. Its just borrowing money to buy control. Many billionaires around the world have materialised in the same way, by just borrowing money to buy control of businesses. Although the people involved and the bankers may not intend it, collectively this type of 'business' is inevitably going to bring the world to a grinding halt or bring about a poverty epidemic throughout the developed world. Many people around the world are borrowing to pay for gas, electricity, telephone, internet and water bills as well as food and rent for their home. Yet they all still rise in cost. For this to continue one of two things will have to happen.
a.... The world economy suddenly improves, employment increases, and we can afford to pay the higher costs that are demanded of us.
or..
b... Lots of us are going to be left out in the cold or without food or a reasonable standard of living, without television. Vital services being run in the current capitalist way can continue as they are with rising prices as long as they make the wealthier people pay more. And they will pay more when asked. So basically the capitalist owners of these companies can continue as they are. But the lower end of the economy will be left with little or no standard of living. Poverty and the ultimate effects of poverty will increase within the developed world. They are also more likely to become unemployed in the future because our living costs must be covered by our income.(Our rising unemployment is certainly being contributed to by this fact currently). Realistically, its absolutely un-sustainable. - If your going to have democracy you really need to make sure you have a suitable government that doesn't sell off all the control it was given to begin with!
to be continued..
I expect if you are reading this blog you will already know a number of contributors to the crisis, for example sub-prime loans, the selling of debt within the banking system, Credit Default Swaps, Collateralised Debt Obligations, the use of the heap of trillions that must be invested!, etc
Here are some other economic facts. Many of them you may work out are influenced by the knock-on affects of the main causes of the financial and economic crisis.
1.... The London School of Economics carried out research in 2008 and concluded that the biggest
influence to income inequaility in the U.K. was due to pay explosion in the City (London) leading up to the financial crisis. Three quarters of the increase in income concentration amongst the top 1 % of earners went to people working within the finance industry, virtually all of it in bonuses.
2....The income of the top 25 hedge fund managers in the U.S. in 2004 exceeded the total amount paid to all of the CEOs of the entire S&P 500.
3....In 2002 the distribution of marketable wealth in the U.K. of the bottom 50% of the population had reduced to just 6% from 10% in the mid 80s.
4....In 2007 the income of the top 1% of earners in the U.S. received 23.5% of the income of the total population.
5....The wealth of the top 1% of the U.S. population increased from 19.9% in 1976 to 34.6% in 2007.
6....U.S. liquid wealth (that is wealth minus the value of their home), 42% is with the wealthiest 1% !
7.... The difference between pay of Chief executives Officers of medium or large U.S. Companies compared to the average of all workers was a ratio of 344 to 1 in 2007.
8....In the U.S., although average workers pay increased by 4.3% after adjusting for inflation, pay to CEOs increased by 300% for the same period between 1990 and 2005.
9....American Business Magazine Forbes listed 946 billionaires across the globe in2007 with a combined worth of $3500 billion. This is higher than the GDP figure of Germany.
10....One of the influences of a rising number of Billionaires in Eastern Europe, for example Roman Abramovich, is due to the collapse of communism. This resulted in the sell off of state industries by the new democratic governments. People like Roman Abramovich borrowed money to buy them up. The benefits are sudden cash flow for the government that sells them. The buyer benefits from capitalist costs like the interest payments on the debt used to buy them which the ordinary people will be for ever paying plus any margin he or she desires to add for profit. There is nothing entrepeneurial about this. Its just borrowing money to buy control. Many billionaires around the world have materialised in the same way, by just borrowing money to buy control of businesses. Although the people involved and the bankers may not intend it, collectively this type of 'business' is inevitably going to bring the world to a grinding halt or bring about a poverty epidemic throughout the developed world. Many people around the world are borrowing to pay for gas, electricity, telephone, internet and water bills as well as food and rent for their home. Yet they all still rise in cost. For this to continue one of two things will have to happen.
a.... The world economy suddenly improves, employment increases, and we can afford to pay the higher costs that are demanded of us.
or..
b... Lots of us are going to be left out in the cold or without food or a reasonable standard of living, without television. Vital services being run in the current capitalist way can continue as they are with rising prices as long as they make the wealthier people pay more. And they will pay more when asked. So basically the capitalist owners of these companies can continue as they are. But the lower end of the economy will be left with little or no standard of living. Poverty and the ultimate effects of poverty will increase within the developed world. They are also more likely to become unemployed in the future because our living costs must be covered by our income.(Our rising unemployment is certainly being contributed to by this fact currently). Realistically, its absolutely un-sustainable. - If your going to have democracy you really need to make sure you have a suitable government that doesn't sell off all the control it was given to begin with!
to be continued..
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