And the poor shall eat the rich
Here’s a confident prediction for you – sooner or later people will notice the Emperor is butt naked, has twenty trillion plus in unpayable debt, is running yet another financial ponzi scam, and the US economy is going to tank like a black comedian at a white supremacist rally.
The world economy has been poor but bearable. Countries that didn’t have a George Osborne, or his halfwit cousin, David Cameron, avoided the Trap for Morons that declared Austerity an economic policy. The Conservatives no longer even use the word austerity now it has become obvious it did nothing but harm to 99%+ of the population, the UK economy trailed every other major economy in terms of growth, and the blues were going to take a beating at the polls as a result. The UK by the way will suffer the aftershock of this monumental stupidity for decades, and I hope to see George Osborne take his rightful place in a Hall of Shame as one of the most stupid and least imaginative Chancellors of all time.
The rest of the world seems to have traded its way out of the financial crisis. In the middle of the current recovery however, a bunch of economic illiterates in America, half of whom seem to be God bothering Creationists (just to give you an idea of average IQ), decided to pursue the tired old ideological dogma that created the financial crisis in the first place. What is the dogma they still cling to despite all evidence to the contrary? It is that if you make rich people richer they will generate more wealth for the rest. This might have been true in the time of Keynes, today it is b******t.
If you make rich people richer, you only increase social inequality. Today’s report by Oxfam states that 82% of all wealth created in 2017 went to just 1% of the people and the bottom 50% of people saw no increase in wealth at all. Eighty-two f***ing percent! Sorry, it’s a statistic that’s worth an expletive. Even if Oxfam’s figures are wrong, just how wrong can they be? Nevertheless, despite the data, just watch and listen as a host of morons spout ‘business friendly policies’, as if it is the business of government to put the creation of more wealth for the already wealthy ahead of the needs of society.
There was a time when rich people invested in human labour and ingenuity. Giving them more wealth to invest then was beneficial to all. Today, when rich people become richer, they invest in two things: ways to further reduce the dependence on other humans (self-driving cars, computers, Artificial Intelligence etc.), and ways to buy back assets they mortgaged on the cheap when they needed money. With interest rates at an all-time low, the big boys took out mega loans and bought back their shares. They didn’t do anything but line their silk pockets. Here’s how it goes:
A share for £1 generates £1.10. Interest rates are at 0.5%. The business is shelling out 10p to its shareholders for each share. Said business could borrow £1 from the bank, buy back the share, pay .5p to its new investor (the bank), and start earning the 9.5p difference for itself. Yeah, yeah, it’s more complicated than that, it’s a poor, easy-peasy example, but provided the outcome of a more complex scenario is the same, what do you think it will do? Apart from anything else, owning its own shares limits the scrutiny it can come under, and buying back its shares increases its value. Want to know why the US stock market is so high? Did you think it was because American companies had suddenly become hyper productive? That’s just rubbish hype; they don’t do anything any better today than they did yesterday. The bullish US stock market is a self-perpetuating Ponzi scam. Wall Street was having a high old time. Between 2010 and 2016, US companies bought back nearly 3 TRILLION dollars of their stock and paid out 2 TRILLION in dividend payments. What a massive benefit to society it was to make the taxpayer provide banks with cheap money, and businesses with low interest rates. NOT! What Trump and the GOP have done is pour fuel on the fire with massive tax cuts in pursuit of a bankrupt ideology. Let’s make the rich CEOs even richer, then poor people will benefit. Not according to the data, and data (unlike Trump) doesn’t lie.
You don’t need to be an economist to know all economic cycles come in swings, and the pendulum ALWAYS swings too far up before it swings back. The further past the proper mark it goes, the bigger the correction. It’s like a little weight is added to the tip of the pendulum just before it comes swinging back.
Sadly the whole world will suffer from America’s impending meltdown and there are too many political clowns everywhere who still believe old economic principles apply, largely because they’re too lazy to read. Someone should force them to take exams, acquire qualifications, learn some s**t before we’re all taught the lesson that when poor people have nothing left to eat the poor must eat the rich, and it’s not a pleasant banquet.