So what are we talking about? In and , several analysts at Citigroup took a very, very close look at the economic inequalities within the USA and other countries and wrote two memos which were addressed to their very wealthy customers. So Citigroup did their duty and published two explosive memos, which should have become mainstream news, but eventually did not. Usually one should think that once such important documents are in the "public domain", nothing should stop them any more from being distributed and being openly discussed. Examples of their activities can be found all over the internet.
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Wait, now that I look around, I see that Yves Smith at Naked Capitalism posted about this on October 15, , almost three years ago, and called for people to protest the annual meetings of the American Bankers Association. Just google it. Nothing that surprising, economically speaking, except for maybe the fact that their reaction, far from being outrage, is something bordering on gleeful.
This equal voting power seems to be a pretty serious concern for their plans. They go on to say: A third threat comes from the potential social backlash.
To use Rawls-ian analysis, the invisible hand stops working. Perhaps one reason that societies allow plutonomy, is because enough of the electorate believe they have a chance of becoming a Pluto-participant.
Why kill it off, if you can join it? But if voters feel they cannot participate, they are more likely to divide up the wealth pie, rather than aspire to being truly rich. Could the plutonomies die because the dream is dead, because enough of society does not believe they can participate? The answer is of course yes. But we suspect this is a threat more clearly felt during recessions, and periods of falling wealth, than when average citizens feel that they are better off.
There are signs around the world that society is unhappy with plutonomy — judging by how tight electoral races are. But as yet, there seems little political fight being born out on this battleground.
The population at large might still endorse the concept of plutonomy but feel they have lost out to unfair rules. In a sense, this backlash has been epitomized by the media coverage and actual prosecution of high-profile ex-CEOs who presided over financial misappropriation. To this end, the cleaning up of business practice, by high-profile champions of fair play, might actually prolong plutonomy.
Note the perspective: what could go wrong. Lest we wonder who inititated class warfare. Share this:.
Bank of America CEO Brian Moynihan’s stock bonus jumps
Truth11 Truth So what are we talking about? In and , several analysts at Citigroup took a very, very close look at the economic inequalities within the USA and other countries and wrote two memos which were addressed to their very wealthy customers. So Citigroup did their duty and published two explosive memos, which should have become mainstream news, but eventually did not.
CITIGROUP PLUTONOMY MEMOS PDF
The real cash incomes and wealth of middle class and working class have stagnated since while there has been a spectacular rise in income and wealth for the owners, managers, and servants of capital. Realitybase readers know that I think this is in large part due to unbalanced foreign trade and even more to globalization by exposing Americans to foreign labor competition. That view is vigorously denied in public by banks, other business organizations, their trade groups, editorial boards, economists, policy elites, and other guardians of conventional wisdom. Our thesis is that the rich are the dominant drivers of demand in many economies around the world the US, UK, Canada and Australia. These economies have seen the rich take an increasing share of income and wealth over the last 20 years, to the extent that the rich now dominate income, wealth and spending in these countries. Asset booms, a rising profit share and favorable treatment by market-friendly governments have allowed the rich to prosper and become a greater share of the economy in plutonomy countries. Furthermore, the rising wealth gap between the rich and poor will probably at some point lead to a political backlash.