REALITY TV’S ONLY BLESSING.
Stupidity is everywhere.
About thirty, forty years ago the people in power liked to suggest that to be successful and to make money you have to be smart, with luck playing little part in such success. For the longest time since I can remember that was the guff that was fed down from politicians and the media that if you are smart then you have a better shot at most at being successful. People who challenged this idea were usually deemed conspiracy theory nuts, socialists or militant, left-wing, red-under-the-bed types of people, basically dangerous folk.
Then, thankfully, two things occurred over the last ten years that shattered that idea utterly. First, was reality TV. Now, reality TV over the last ten years showed something that to a large degree those at the top did not want everyone to see, that even if you were incredibly, let’s say, docile, you could still make an absolute fortune as long as those in the business of manipulation thought that you had marketability. People could see that no longer where savvy and smart people earning fortunes who deserved it but lucky schmo’s with neither notable talent and in some cases even less personality. That was the first thing that shattered the bubble of smarts at the top.
The next, of course, was the credit crunch.
The fact that the world came to a juddering financial halt because investment banks, commercial banks and pretty much every financial institution on the planet had bought into a range of mortgages given to people with little or no means to pay showed the rest of humanity just how STUPID those at the top really where. These were business-men and women (but basically men) who had sneered at the rest of the world as they had questioned whether they were indeed worth the gargantuan salaries that they commanded when the answer, really, was no.
When the going was good it was all because they were super, they had brilliant business acumen and luck played no part, however, when the bad times came it was bad luck and everybody else’s fault and they should still keep all their money.
No-one went to jail for gross negligence
No-one went to jail for fraud.
The only man to admit any major wrong-doing at a bank was HSBC’s head of compliance David Bagley who resigned over compliance failures at the bank which allowed millions of drugs dollars to be laundered through the bank ...Charges have yet to brought.
So, why write about that now? What has triggered this wave of reflection of the flaws at the top of the system?
Three things, one relates to the flaws of the financial markets, the others the failures of the media and the final relates to politics. It has been five years since the crash when we were told lessons would be learned, not only have lessons not be learned but stupidity it seems is increasing.
The first thing that caught my eye recently was the share sale at Manchester United. The floatation stated that the shares would be for 10% of the value of the club but the shares in voting issues would only be a 10th of the owners comparable shares meaning 10 of the “For-Sale” shares would only be worth 1 of those held by the Glaziers. Or to put it another way, the remaining 90% stake are actually worth 98.901% control, therefore, IF, all shares have been sold, supposedly at a price of $233 million for the price of the 1.099% control of the club (And control ...Is everything) then Man United would be worth 21.203 TRILLION DOLLARS. Yes that’s right, the stake that has been sold prices control of United at 21.203 trillion dollars, and yet, AND YET, people seemingly have still bought them.
That’s right, with only a 1.099 percent controlling stake in United investors have allegedly bought them shares, with no dividend, no real say in the running of the club and a controlling stake so small even a billionaire could afford to avoid their pitiful 10% stock, analysts have been falling over themselves NOT TO recommend this stock and yet people for some reason have decided that the ridiculous possibility that the Glazers will sell their cash-cow to some billionaire and buy up all the stock was reason to invest showing that even after the credit crunch there are still people out there with money to spare that believe in magic beans.
Proving beyond doubt that the financial markets are as stupid as ever.
BUT, that’s just the first part, let’s look at the media’s undeniable stupidity.
In the not to distant past documentaries and more importantly political documentaries were hard-hitting, socially-aware and deliberately politically insensitive. “World in Action” and “Panorama” led the charge to show the country exactly what was wrong with it, who in power my have been abusing it and exactly what special interests were in play to stop the movement of genuine democracy. While they may not have won much and their victories may have been fleeting we knew through these shows, and later Channel 4’s excellent “Dispatches” what was going on and when it was bad who was to blame.
Cut to now, five years after the credit-crunch with nothing really changing for anyone at the bottom of the pile other than now there are benefit reductions, minimum wage reductions and regional pay all with the lower and middle classes (Both in and out of work) being squeezed for every penny, meanwhile journalists on TV news channels remained baffled as to why the market forces won’t rebalance after the crash, what could be causing this recession to become a depression, what is going wrong with our monetary system? For them it is a complete mystery ...Oh and by the way in other news the world’s super-rich have squirreled away 21 trillion dollars over the last few years in non-taxable foreign bank accounts but back to the markets and the mystery of why they’re not rebalancing.
Oh I’m sorry, what was that you just said?
Yes, the super-rich according to a recent report, had stashed away 21 trillion dollars or to put it in a way that’s easy to understand about a third of the world’s annual wealth output (60 trillion dollars). Now I have little doubt that the media back in the day would have seen these two little bits of info, the world still in recession and dire economic trouble and the hiding of 21 trillion and been able to put the pieces together but our current breed of investigative journo’s, well...
In the past in the times of “Panorama” (In it’s heyday) and “World-in-Action” documentary makers for the small-screen were a bold and intrepid bunch. This was the age were two journalists uncovered the WATERGATE scandal, it surprises me that the new breed can find their own garden gates. To those with intuitive minds and an ability to see what is going on we can see that the inability to rebalance may well be caused by the removal of funds from the financial cycles by the super-rich, something that those in the media just cannot see.
AND FINALLY
The politicians, the very people who govern us who tell us they know how to get rid of our problems and make everything all better, like the financial world they delight in telling us everything going well is all their doing and everything going bad is someone else’s fault. NOW recently Mitt Romney made the announcement of his running mate in the upcoming presidential election, the supposedly fiscal conservative Paul Ryan. Now much has been made of his PATH TO PROSPERITY and how he plans to bring America back into balance. Is this by finally paying off their ever increasing debts and building an America and even a world where the excesses of the world’s financial behemoths would finally be a thing of the past.
Of course not.
The big plan is to tackle those troublesome payments that legally they have to make like social security and pensions. The plan is to privatise social security, replace pensions with food vouchers and “reform” the medical aid to the elderly and the poor, no doubt to promote what they always talk about as being trickle down economics where the wealth from the top trickles down through the rest of the economy.
From what has been said I have no doubt that the Republicans have a buyer for the “Burden” of social security who state that they will do it cheaper and give less to these “Freeloaders” to get America working again (or should that be work harder for less?)
Private businesses running social security ...Mmmm.
Lessons learned after the crash ...zero.
Let us imagine just how this will work in practicality, it will be a business running social security and not a charity therefore I would think that under the American work ethic this will mean bonuses not for the number of people who are served but for the number of people denied social security, if ever there was a good example of how a privatised social security system would work then that would be ...er ...Here ...In the UK.
PPI was devised as a way for the banks to protect themselves against the risk of unemployment for people who they were giving unsecured loans. Problem was with them being banks and being businesses they wanted to do all they could to prevent themselves paying out. This meant that said insurance was on various occasions useless, one time in my role as a debt counsellor I dealt with someone who had taken the insurance out to protect against unemployment and was denied payment because he was made redundant and not unemployed (?????)
This is how I would wager America’s new social security working ALSO with payments operating as loans rather than benefits with interest added when people return to work (or if they do).
BUT, if America ever wanted a wake-up call to privatised care over public care it need only look of course at its very privatised health system. Comparative to the systems of Japan, Canada, Germany and France, whose models are based on a system of care free for citizens at point of entry, the US health service falls short on life expectancy, INFANT MORTALITY (This one really annoys me!) cost per person and cost against GDP. In short America pays way more for a service that is on average inferior to most of its competitors AND THIS is, no doubt, what will be brought to social security.
Tax cuts at the top and income cuts at the bottom will lead only to one thing ...recession. Bad as the US’s debt problems are what every country across the globe has failed to figure is that economies tend to grow from the bottom up not the top down, politicians have to constantly balance out tough choices to make sure asset prices don’t out-strip income, they have to watch that the economy doesn’t overheat in-terms of wage inflation and most importantly of all they must have balance. Gear to much to the bottom and wage-inflation causes the economy to stall, gear too much to the top and you guarantee bad things will happen as the bottom is what drives the economy.
If people at the bottom cannot buy then people at the top cannot sell. It is not trickle down it is growth from the bottom up.
Sadly we live in a world where these things are not only not discussed they are routinely ignored to present a world of trickle-down economics that not only doesn’t exist, but never existed, where the wealthy corporations pay party donations so they get what they want and through corporate advertising the media also turn their heads to what is actually happening?
I’ve been Mister Chatable. Thanks for listening world.
