Comparative Gems

Saturday, January 27, 2018

Billionaires Rule the Globe



There is nothing wrong with billionaires becoming billionaires and even wealthier if they were to produce products and services raising the living standard.   Unfortunately, this hasn't happened enough. The corporate shareholding structures and the global mutual harmonizing interest of billionaires prevents it.  They interact in identical fashion by investing in Wall Street, the London stock market or the emerging NEOM in Saudi Arabia.  Over the years, they have become conditioned and seemingly addicted to rapid profits extractable out of stock markets.
In fact, in many ways, the global corporate shareholding structures are the economic deformation that divert billionaires from raising the living standard.  It is terrifically easy for them to profit from buying and selling corporations, trading shares, benefiting from insider knowledge and short term rapid profits. Long term, decentralized initiated investments which raise the living standard are of little attractions to them.
As the global financial structure is playing out, it keeps the living standard from rising as much as it could if the structure were reformed.  Beyond this, the structure exhibits strange co-operations.  Chinese Communist billionaires are co-operating and happily investing and profiteering in western stock markets and capitalistic western corporations.  Arab billionaires are intensely interacting with pro-Israeli billionaires and are mutually profiteering while their people are locked into a seemingly never ending confrontation.  Cynics can emit a loud psychocathartic: ah, the ironies of history.
Examples of co-operating and mutually backscratching billionaires are plenty.  It emerges more and more that billionaires Trump and Putin co-operated.  Both are transnational, globally investing billionaires, yet both pretend to be nationalists.  Las Vegas billionaires Sheldon Adelson and Steve Wynn donate to billionaire politicians.   Adelson was a top contributor to the recent campaign, and Wynn is the head of the Republican National Committee finance committee.  Often opposing them politically is billionaire George Soros. 
Globally, Russian, Chinese, Muslim, Latin American billionaires are heavily investing in Wall Street and the London stock exchanges and in untold corporate and other investments.  Nearly all resent national boundaries and/or regulations restraining their rapid investments and profiteering that is mostly devoid of benefiting the people.  Some have citizenships of several nations and tax havens spread globally to no end.
Many of them are even exhibiting symptoms of the fact that there is no honor among thieves.  Trump and Putin, seemingly on very friendly terms earlier, are now estranged.   A Saudi billionaire playboy and heavy investor in Blankfein’s Citigroup, Lyft, Twitter and lots of western fancy hotels has been arrested for fraud by Saudi’s King.  He bonded investing with billionaires Murdoch, Bloomberg et al. in spite of the people of their societies being locked into a severe seemingly never ending diplomatic/military confrontation line.  The question arises if societies’ wealthiest people can co-operate, why can’t their people and their governments?
Meanwhile, wealthy Chinese and Saudis, having tasted the offerings of rapid massive profits through stock speculation, are expanding efforts to enlarge their financial markets.  Saudi Arabia is planning the so-called NEOM free economic zone, a 500 billion dollar project.  It would have few regulations with drone services and driverless cars and presumably becoming a hub for global investment.  No doubt if the Saudi state owned oil company offers its initial public offering to the world in NEOM, it would give Wall Street and London massive competition.  No surprise that Trump recently urged the Saudis to list its oil company on Wall Street.
The solution to unproductive investments by billionaires is actually quite simple.  Taxing less those investments which raise the living standard and taxing heavily unproductive ventures could easily be enacted.  A partial decentralization of all stock markets around the globe would definitely be beneficial for the people.  It would retain investment money regionally and locally where the results can be seen and enjoyed literally by the people.  It would spread wealth far more uniformly across all economies instead of concentrating it into the hands of the few.  As it is, the political will for this is still missing and may not emerge until some overwhelming event, so history proves too often.  The current disclosure of the Paradise Papers showing global tax havens is unlikely to evoke necessary reforms.  The fact that billionaire Secretary of Commerce, Wilbur Ross, is co-operating investing with billionaire Putin’s family is also likely to be insufficient to evoke long overdue reforms.
So the globe’s population will have to wait for the sine qua non reforms to serve the living standard and not the top 0.001 percent.


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