For the last 30 years, the United States is suffering from erosion of jobs and corporate big shots renouncing the values and spirit that once made America as great as it is perceived today because of short term profits – a classic case of uncontrolled deregulation practised in this crony capitalist system. This system has made a class of minuscule super rich even richer, driven by the Wall Street, but has marginalised the vast majority who faced the albatross of dead end jobs, lay-offs, lack of future and other destruction of the very tenets of any functional democracy!
One of the reasons that led to this out-cry is irresponsible lending by the banks and very high consumer debt. It has eroded the purchasing power of the common man. Lack of consumer demand is halting new investments and preventing new job creation. Obama’s steps to steer the economy to safer ground – mortgage refinancing, healthcare overhaul, student’s loan minimisation programmes – have not seen any breakthrough so far. The reasons are Republican’s opposition and consequent blocking of government’s intervention in the economy.
The Gini coefficient (that measures the income divide in a country) of the US is at par with that of undeveloped countries of Africa like Uganda. In 2010, the top 20 per cent of all Americans owned 49.4 per cent of the nation’s income. The top one per cent of all Americans owned 40 per cent of the total wealth of the US and 24 per cent of all income – most importantly an increase by 31 per cent in the last four decades. Moreover, in these four decades the income of wealthy Americans have increased by 300 per cent while that of middle class has increased by merely 20 per cent and that of lower strata by merely five per cent – thus increasing the Gini coefficient from 39.7 in 1967 to 46.0 in 2005. A report by IMF titled ‘Leveraging Inequality’ published back in December 2010 concluded that ‘long periods of unequal incomes spur borrowing from the rich, increasing the risk of major economic crises’ in the way it did during the Great Depression of 1929 and the Great Recession of 2007. This income gap kept many poor Americans away from schools and proper medical facilities, eventually affecting their productivity and income per se. The executives at the Wall Street enjoyed hefty pay packages and impressive compensation while others had to struggle for a decent salary. Studies show that in 2004 the top 25 highest paid hedge fund managers on Wall Street collectively earned more than the combined income of all of the CEOs from the top 500 large-cap American companies. The employment rate still lingers around 9.1 per cent with 4.5 million people still unemployed, which is at a historically high!
More than 6,000 protestors gathered on October 15, 2011 at Times Square and around 100 were arrested after the protest went violent. The protests have just been gathering steam. Chicago police also arrested more than 150 protestors. Similar phenomena was seen in London too and the police had to debar people from entering Paternoster Square (London Stock Exchange). The protests have crossed the domestic borders and reached almost all the continents of the world. Recently protestors were found displaying their anger outside Reserve Bank of Australia. Similarly, protest rallies have graduated into violent riots in Rome and other European nations and more than 100 protestors were arrested. People also got violent in Japan, Hong Kong and Korea. Read More....
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