Tag Archives: Inequality

The Inequality and Iniquity of Growth.

This Christmas there will be millions of puzzled and sometimes hungry people staring at their televisions. Their hunger is easily explained – they are poor but what will confuse them will be the newsflashes showing smiling people shopping and talking about ‘Tablets’ at £500 each, Champagne, and a million other expensive items and yes…even Christmas turkeys!

Then they will see celebrity chefs cooking Brussels sprouts with pancetta, more champagne, the perennial debate about goose fat versus oil on roasties and how we’ll ALL be ‘over-indulging’ and falling asleep on the sofa! An alien world which some will have tasted but sadly, too many – especially children, will never inhabit.

This (to them) is a ‘make-believe’ world of plenty. They know it exists somewhere near them but it is like the parallel universe of science fiction….there but impossible to access.

They see shiny, smug politicians saying words about ‘the recession being over’….something the poor haven’t been too acutely aware of because what the politician calls ‘recession’ and ‘austerity’, they call “LIFE”.

‘The economy’ appears to be doing very well! …………..By the way….what is that?

The disparity between the most affluent Brits and the rest is hurting the economy. This chasm between rich and poor appears to have become an unacknowledged issue, primarily as the result of too many of the Cabinet belonging to ‘the Affs’. It is apparent that few understand that everyone (up to middle class) has seen their income stagnate, whilst wealthy households have really thrived.

Note: I propose to dispense with euphemisms such as “the well-off” and “society’s disadvantaged”. Let’s stick to rich and poor.

Bonuses, higher salaries, higher profits and exceptional stock market gains are flowing almost exclusively to the already-rich. Proportionately, however, the affluent household ‘spend’ represents much less of their money than that of  low and middle-income consumers.

One of the priorities of this government should be to engineer a much broader spending base – one which encompasses the poor……allowing them to actually participate in the economy.

Currently, there is a very distorted  picture of consumer spending because it is driven by the rich. The poor and the poorer are doing their best to keep up but inevitably need to borrow in order to spend – thus making themselves even poorer. Meanwhile, many rich are gaining profits from  bank or lending company shares which are fueled by the poors’ accelerating poverty….but the rich have something else which the poor have never had: OPTIONS or CHOICE!

One very profitable option this year has been the stock market – but once the markets have calmed down (which they will!) and gains are no longer eye-wateringly high, the affluent (As and Bs) will stop spending or at least, cut back dramatically.

THAT will have an immediate and devastating effect on this virtual economic recovery. SO, it is in the government’s interest to sustain the recovery illusion by keeping interest rates low and Quantitative Easing flowing to the banks so that , from an investment point of view, the equity markets (stocks and shares) remain the only game in town, so that the rich retain their mega spending power for as long as possible – at least until May 2015!

That is a very dangerous game for any government to play.

This is the phenomenon which has created and is sustaining the ever more bitter ‘CLASS’ debate and is in danger of feeding Populism and ultimately, major unrest.

Income Inequality and not airports or trains should be the government’s priority.

There is now little doubt that in spite of government policy, the United Kingdom’s economic growth is picking up….as it is everywhere else (Global Economy!)

NOW, while the mini-recovery lasts, would be a good time for the government to tackle the INEQUALITY OF GROWTH which is not an iniquity but the iniquity of modern times.