The top 10%
Mountains of cash.
Hyperactive speculation.
Ponzi finance.
Captured government.
Column B – 90% of us
Anemic spending power.
Huge household debt.
Declining real wages.
Fewer jobs, more hours.
Some say laissez-faire markets are a good thing. It’s the ideology we’re sold and the hype we’ve bought.
Some say the economy is better served through pure competition. Here’s a small example, one of thousands, where leaving the marketplace alone is said to be good for the country. A case of corporate fine-print, a clause on the back of a cruise ship ticket says that if you want to sue, you have to sue in Florida. Of course, this is good for consumers!
Forcing people to sue in Florida deters frivolous lawsuits and lowers costs for the company. It can pass those savings onto consumers. Because if Alpha Cruise Lines doesn’t, then Beta Cruise Lines will.
Unhindered by consumer protection, why didn’t the cruise lines pass those savings onto consumers? Because they put that cash into shareholders’ pockets.
What did people at the top do with their money prize?
People at the top – high net worth individuals, investment funds, pension funds and the like – greatly increased the demand for complex financial products as they searched for ways to store their wealth.
The proliferating billionaires around the world pressured organizations like Goldman Sachs and JP Morgan to supply them with complex financial securities.
As long as this external pressure to supply complex financial securities for the super-rich to store their wealth continues, the financial system will remain prone to generate bubbles, followed by crashes.
You’d think we’d have reams of data describing the habits of the top 10%, 1%, .5%, .1%. So what’s the problem? By merely seeking preservation in a frenzy of packaged finance and global leverage, the wealthy and their wealth are significantly under-performing.