Tuesday, June 30, 2009

FT Op-Ed: Debt is capitalism’s dirty little secret

Ben Funnell wrote a great piece in Financial Times
:

The answer is capitalism’s dirty little secret: excessive lending was the only way to maintain the living standards of the vast bulk of the population at a time when wealth was being concentrated in the hands of an elite.

The amount by which the elite has benefited is startling, and illustrates the problem with lightly regulated free markets: the rich get much richer while the rest do not get richer at all. According to Société Générale economists, the inflation-adjusted income of the highest-paid fifth of US earners has risen by 60 per cent since 1970, while it has fallen by more than 10 per cent for the rest. As was recently pointed out in the New York Review of Books, the Walton family, of Wal-Mart fame, is wealthier than the bottom third of the US population put together – about 100m people. These are staggering statistics, confirmed by measures such as the US and UK’s ever-rising Gini coefficients, which estimate income disparity. Another way of putting this is that the share of profits in gross domestic product is at a 100-year high, or was until very recently.

Put simply, the benefits of economic growth have gone into the pockets of plutocrats rather than the bulk of the population. So why has there been no revolution? Because there was a solution: debt. If you couldn’t earn it, you could borrow it.

5 Comments:

Blogger Shared Folders said...

Thanks for eye opening article. It is written in a very simple way however contains much critical information.

8:36 PM  
Blogger heraish said...

http://www.arabnews.com/?page=6&section=0&article=124720&d=20&m=7&y=2009&pix=business.jpg&category=Business

Defaults on sukuk are happening and being tested in the courts.

7:13 PM  
Blogger azeez said...

azeezks@gmail.com
hey man,i was desperately searching different libraries in canada to get some info about islamic finance. i got access to a govt docu, which is worthless.i feel vomit when i read the copycat of IMFised Islamic junkies trying in vain to give a facelift to islam with wall street dyes- seemily heaven approved ways to amass huge wealth, leaving , as you said, 620 million Muslims as worms.poor muslims, feed on jannath dreams!give a chance for rich to build jannath here.
if deislamised this poor muslims are a dry stock of powder ready to blow out this islamic neoclassists.
yeah ,marx is right:religion is opium.
eureka, elgamalblog!!
thanks man
abdulazeez

10:29 AM  
Blogger azeez said...

azeezks@gmail.com
hey man,i was desperately searching different libraries in canada to get some info about islamic finance. i got access to a govt docu, which is worthless.i feel vomit when i read the copycat of IMFised Islamic junkies trying in vain to give a facelift to islam with wallstreet dyes-seemily heaven approved ways to amass huge wealth, leaving , as you said, 620 million Muslims as worms.poor muslims feed on jannath dreams while the rich make the jannath here with islam.
if deislamised this poor muslims are a dry stock of powder ready to blow out this islamic neoclassists.
yeah, marx is right :religion is opium.
eureka, elgamalblog!!
thanks man
abdulazeez from canada

10:35 AM  
Blogger Homequran.com said...

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5:05 AM  

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