NEW YORK (CNNMoney) -- From 1979 to 2007, average household income for the nation's top 1% nearly tripled, while middle-class incomes grew by less than 40%, according to a new report from a research arm of Congress.
While those at the top have seen their incomes soar over the past three decades, middle-class and lower incomes have stagnated, the report by the Congressional Budget Office (CBO) found.
5 comments:
Please also refer to the insightful Chinese article below.
It concisely explain the current global economic dilemmas.
http://www.zaobao.com.sg/yl/yl111026_001.shtml
I have tried my best to translate and summarise it into key pointers below:
1.
The current world geopolitics landscape is in a dangerous and undesirable cross-roads, transition from Old Capitalism (OC) to New Capitalism (NC).
This is particularly more so since past decade, as the social welfare system in the West has come under excessive strain with increase of aging baby boomers.
2.
OC focused on positive industrial production, technological research and development etc, banking system was only playing a supporting role.
3.
The current NC focuses too heavily on banking and credit systems, as it has become the central pillar in the new age capitalism.
These 'asset-light' and 'production-light' industries do not create massive jobs, unlike the previous production-heavy industries from OC.
4.
Modern technological development has also sped up capital mobility. Various monetary easing initiatives (including QE 1 & 2) did not inject economic growth in the West.
Instead they have moved across to Asia resulted in asset inflation and also driven up commodities prices.
Extensive financial engineering, creative asset securitisation and emergence of leverage products etc have further complicated and entangled the whole global economic system.
5.
The age-old 'long term' business philosophy, prudence maxims and ethical values etc (under OC) have been superseded by excessive risk taking behaviour in NC.
People these days resorts to immediate gratification and instant success (hence short term focus) under NC.
6.
Politicians are hijacked by economic power-house (the mighty banking system), as the former need to rely on the latter to build up their political capital.
'Too big to fail' etc becomes a convenient excuse to bail out mega banks using taxpayers money.
My personal view:
We cannot change the world as the 1% will continue to be more powerful in time to come.
The capital market has become a big casino.
The key lesson for commoners like us (99%) is to equip ourselves with adequate financial literacy.
Continue to work hard and have a discipline saving plan, as well as stick to investing in long term with simple products (that we can comprehend).
Lip Wee
Over the last two years, however, the rich have also gotten poorer.
http://gregmankiw.blogspot.com/2011/10/rich-getting-poorer.html
My takeaway from this story is that NC, from the layman’s perspective, is one big casino in which the house always wins. The players’ greed for a quick kill keeps them from minding their farms and factories. Without a return to basics, booms and busts are the order of the day. When the music stops, the man in the street is the one who picks up the tab for the excesses of the rich and powerful.
These 2 days saw two scenes playing right in front of my eyes.
Yesterday at TSSH, an elderly Indian man was shocked at the cost of the medicine prescribed by his doctor. He told the pharmacist he has no money, and asked to pay another day.
This morning another elderly Indian man rung our doorbell, begging for money to continue his treatment of his persistent ezcema skin disease.
Seems the rich and poor divide happening all over the world.
We told the man at our door to go look for Dr. Lily Neo for help, after he said his MP Minister in his GRC did not bother.
Contd.
Our son went shopping at AMK Hub 2 weeks ago, and saw an insane man walking and talking to himself in the complex filled with shoppers, and the man's toes and feet were black and rotting, most probably suffering from uncontrolled diabetes.
Why are such things happening in affluent Singapore, where millionaires keep on adding up year after year. How many of such desperate fellow Singaporeans are there left out in the cold.
It was a distressing sight to behold, as we dun know how we could help.
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