We can best define “global oligarchs” by looking at the global-inequality report — “An Economy for the 1%” — Oxfam America released just before the Davos gathering. Oxfam America is a part of Oxfam, an international confederation of 17 organizations working in some 94 countries worldwide, seeking solutions to global poverty and injustice.
The Oxfam report emphasized:
- In 2015, just 62 individuals had the same wealth as 3.6 billion people – the bottom half of humanity. This figure is down from 388 individuals as recently as 2010.
- The wealth of the richest 62 people has risen by 44% in the five years since 2010 – that’s an increase of more than half a trillion dollars ($542 bn), to 1.76 trillion.
- Meanwhile, the wealth of the bottom half fell by just over a trillion dollars in the same period – a drop of 41%.
You can bet that the Big 62 or their reps were rubbing elbows at Davos with multinational corporate heads and politicians.
Reports from Davos showed much talk about four major areas of concern in the global economy: (1) the “volatility” of the Chinese economy; (2) plunging stock markets; (3) sinking oil prices, and (4) debt crisis in the emerging markets, led by BRICS (Brazil, Russia, India, China, and South Africa).
[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]the problem: global public/private debt[/pullquote]
Peculiar Progressive, however, sees global private and public debt as the real, long-term problem, spurred by the world’s central banks colluding to hold interest rates down. For example, Jim Rickards, author of the books Currency Wars and The Death of Money, complained in 2014 that the Federal Reserve’s zero interest rates had led to a transfer of $500 billion from American savers to Wall Street banks. That, along with decades of stagnant incomes and recent lack of full-time employment for U.S. workers, has led to dependence on credit to make ends meet, and the dissolution of the middle class.
We wrote in 2014 about William White, who predicted the 2008 global financial meltdown, expressing grave concern about the growing worldwide private and public debt. White is former chief economist for the Bank of International Settlements, and currently chair of the review committee for the Swiss-based Organisation for Economic Cooperation and Development (OECD). He was interviewed last week before Davos by the UK’s Telegraph, in which he warned of even deeper concerns about the growing global debt. Summarizing White, the Telegraph reported:
Mr. White said Europe’s creditors are likely to face some of the biggest haircuts. European banks have already admitted to $1 trillion of non-performing loans: they are heavily exposed to emerging markets and are almost certainly rolling over further bad debts that have never been disclosed.
The European banking system may have to be recapitalized on a scale yet unimagined, and new “bail-in” rules mean that any deposit holder above the guarantee of €100,000 will have to help pay for it…
…Mr. White said stimulus from quantitative easing and zero rates by the big central banks after the Lehman crisis leaked out across east Asia and emerging markets, stoking credit bubbles and a surge in dollar borrowing that was hard to control in a world of free capital flows.
The result is that these countries have now been drawn into the morass as well. Combined public and private debt has surged to all-time highs…
What’s the Answer?
We believe White and his committee from The Group of Thirty (G30) in Washington, DC have provided the logical long-term solution in an October 2015 report: “Fundamentals of Central Banking: Lessons from the Crisis”. The G30 is an international body of financiers and academics who examine economic/financial issues and their consequences. In its executive summary, the report observes:
…the ultimate resolution of crises that have their roots in excessive credit creation and debt accumulation often can only be accomplished through arms of government other than the central bank…
…Supportive actions by central banks can be useful, but there are serious risks involved if governments, parliaments, public authorities, and the private sector assume central bank policies can substitute for the structural and other policies they should take themselves. The principal risk is that excessive reliance on ever more central bank action could aggravate the underlying systemic problems and delay or prevent the necessary structural adjustments.
So there you have it: Our political policymakers have continuously passed the responsibility buck to unelected manipulators in the central banks; and politicians have “kicked the can” down the road for making any legislative reform to take care of their citizens and national and global economies.
So, do you see how important the coming 2016 November elections are, at every level of government? And particularly in the U.S. for electing a Congress who must take responsibility for basic economic reform policies?
Following the 2014 November national elections, we wrote a column listing 11 major economic areas where Congress has let us down. You can read those in the column, “As Austerity Deepens, Prepare for Revolution”.
Currently Congress consists of a majority of millionaires who cater to Wall Street and the military-industrial complex, encouraging the racket of endless war and debt growth. They won’t change our democracy-turned-oligarchy. Only a citizen-led revolution at the polls might do it. So you’ll have to get organized, educated to issues, and active to see America become a nation with a sound economy for you and your children.