Saturday, August 4, 2012

The "Wealth Creator" myth. Stealing the commons. Part two.


One of the memes the wealthy and their sycophants prefer to repeat is that, "the wealthy create wealth".

Lies the Rich Perpetuate.

That is demonstrably wrong.

"The wealthy got their wealth by entrepreneurship and starting new business" ?.
Well! no. Most are wealthy because they are born with it. The majority of the rest because they gamed our system to make money from existing assets and public utilities. Morally, no different from robbing someones house.

How Allan Gibb's made a Mint out of a Former Public Utility.
""Gibbs spotted his opportunity early in 1990 when he did his hallmark one-page analysis of what Telecom might be worth. "It was a lovely, fat company, with huge margins and a lazy balance sheet. It was obvious if you could keep the margins it would be a fantastic business." Like an alpha predator, he went for the throat"".

"The wealthy  became wealthy through start-ups and entrepreneurship. Selling people products they want".?

Less than 1% of the wealth held by wealthy households in the USA is invested as so called "angel capital". In reality the wealthy avoid risky start-ups, like the plague. They prefer privatizations of State utilities and financial products where there return is assured by tax payer funding. Those that are too big or too essential for the State to allow them to fail.
Affluent Survey.

In New Zealand many people bought into the myth that "if they wealthy were allowed to keep more of their wealth they would invest more in the productive economy and we would all be better off".
New Zealand went so far and fast with this Neo-liberal piece of B-s that, like Ireland, we were held out as a poster child for other countries.

The infamous "trickle down effect".

After 35 years of tax cuts for the wealthy, asset sales, anti-union legislation, deregulation of banking/finance and wage and welfare cuts.

We have;
 Huge capital losses to offshore bankers and profit takers.
Growth well behind the OECD average.
Increasing child poverty.
Steeply rising prices. Especially for privatised utilities.
Median wages are dropping while the wealthy get 17% annual increases.
Billion dollar bailouts for financiers.
Millions of dollars to reinstate previously privatised essential infrastructure.

Anyone who still believes that giving the already wealthy more of our wealth is the answer is either seriously deluded, or venal.

1 comment:

  1. Yep. Though I don't necessarily blame the wealthy for our situation but successive governments who have lacked the guts to manage them.

    If Green Tech and sustainable business is supported then thats where business will go. At the moment it is easier to transport goods on roads, cheaper to use coal than electricity in some areas, you can make more money investing in property than the productive sector and the sale of our assets is just going to encourage more gambling in the share market.