Last January, just before the annual gathering of the global elites at the Swiss mountain resort of Davos, the anti-poverty group Oxfam released a shockling report that showed the world’s 85 richest billionaires hold as much wealth as 3.5 billion of humanity’s poorest half. That ungodly statistic quickly went globally viral. Now there's a new report...
Last week the 72-year-old organization launched a new campaign called "Even It Up" with a new 136-page report showing that the combined wealth of the world’s top 85 multi-billionaires is increasing at the rate of a half million dollars a minute.
The reports says: “Oxfam’s decades of experience in the world’s poorest communities have taught us that poverty and inequality are not inevitable or accidental, but the result of deliberate policy choices.”
Of their many recommendation, the Even It Up campaign called on governments to start taxing financial transactions and to clamp down on offshore tax havens. In 2013, Oxfam estimated that the world was losing $156 billion a year in tax revenue as a result of wealthy individuals hiding their assets in offshore tax havens (sometimes in small island nations).
In other areas — taxing wealth, for instance — Oxfam is recommending a 1.5 percent tax on individual wealth above $1 billion. Oxfam calculates that would raise enough money to fill the annual gaps in funding needed to get every child into school and to deliver health services in the world’s poorest countries.
Some of Oxfam’s other recommendations also target the engine of inequality, that the modern multinational corporation has become. Even It Up urges governments to steer procurement contracts to companies that pay their top executives no more than 20 times the pay that goes to their typical workers.
Oxfam UK chief Mark Goldring: "Governments around the world have been guilty of a naive faith that wealth going to those at the top will automatically benefit everyone. That’s not true."
In other words, trickle down doesn't. In the meantime, these mega-rich people have been divorcing themselves from the rest of humanity entirely by buying their own private islands.
In their latest issue of the Candy GPS Report (produced in partnership with Deutsche Asset & Wealth Management), they write:
"We focus on island real estate around the world. Surrounded by water and finite in number, islands encapsulate much of what is desired by ultra-high-net-worth individuals. They are both exclusive and rare, where the best properties carry a significant price premium over their mainland counterparts. Our research looks in depth at these markets and pinpoints the hot spots around the globe. We also look at the sustainability of these islands and the rise of private planes that are putting them within easy reach."
Such as the new $100 million Aerion AS2 private jet, which will seat 11 elitists and provide the ultra-mega-wealthy with a deluxe dining room and shower facilities. The supersonic plane will take just four hours to cross the Atlantic from New York to London. This may suffice for the time being, until some day, the mega-rich can completely isolate themselves buy living on another planet, when Virgin Galactic isn't just sending them into lower Earth orbit for "kicks" at $250,000 a pop (or about 30 seconds of income for some people).
As an aside: Hedge fund multi-billionaire Bill Ackman just bought a penthouse that tops Manhattan’s newest “needle” tower, the 90-story One57 for $90 million — an all-time record for a New York condo. In the meantime, the apartment will go vacant until he can flip it for a profit. Although, Ackman told the New York Times, he might hold a few parties there.
In other words, trickle down doesn't. But many Americans still naively believe it does, and today they will AGAIN vote for more of the same — because "marketing, media and money can get any entire population to vote against their own interests."
From James Morley: Quantitative easing is over, but...
Treasurer Joe Hockey and billionaire Rupert Murdoch recently made impassioned speeches expressing their deep concern about the problem of rising inequality — the rich are getting richer, while the poor are suffering from stagnant or even declining real wages...Hockey and Murdoch were arguing that lower taxes and smaller government are the best ways to address inequality.
If QE and monetary policy didn’t cause rising inequality, what did then? Technology has shifted the nature of work dramatically over the past century — from farms to factories to office buildings. It has also increased the returns to certain specialized skills and cognitive ability. This technological change has greatly improved standards of living. However it has left many people who do not have higher-education degrees with stagnant real wages or long-term unemployment. As a result, inequality has increased. This skill-biased technological change has been going on for a while, as has the resulting rise in inequality. [But] we could give everyone in the world a PhD, but there would still be a lot of inequality.
Instead, fiscal policy, rather than monetary policy, can reduce inequality via progressive taxes. Current Fed chairwoman Janet Yellen said as much in a recent speech on inequality, targeting inheritance in particular as a source of persistent gaps in economic opportunities for the rich and poor.
Countries with higher and more progressive tax rates have less inequality, but still grow just as fast or faster than countries with lower taxes and more inequality...So next time a Treasurer, a billionaire or anyone else tries to argue that QE is responsible for rising inequality and the best solution is lower taxes, I recommend being more than a little skeptical.