Ill fares the land, to hastening ills a prey, Where wealth accumulates, and men decay…
These words, written in the 1700s by Oliver Goldsmith, apply today. For the past twenty or so years, wealth has been accumulating into the hands of a relative few.
(See my latest video, clocking in at 12 minutes and 30 seconds, hopefully viewable at the top of today’s blog entry. Sorry if it’s a bit loud; I am working on the microphone input levels. Or you can do a search on YouTube for “Ill Fares the Land”, published there on January 6, 2016.)
J.P. Morgan, during the Panic of 1893, gained control when President Grover Cleveland was forced to seek Morgan’s assistance. Later, during the Panic of 1907, a Banker’s Pool – a consolidation of big banks – paved the way for the spawning of the “Federal” Reserve in 1913. It has been downhill ever since, with the “Federal” Reserve mysteriously impotent to solve economic downturns. Instead, money keeps being funnelled to Wall Street and here we go again.
Here we go again: Monday’s collapse on Chinese markets, with the Shanghai Composite Index closing with a loss of 6.9 percent, was triggered by new data showing that Chinese manufacturing activity fell in December from the already depressed level of the previous month. The December decline marked the tenth consecutive monthly contraction.
Given the immense role of China as a magnet for imports, including oil and other industrial commodities as well as manufactured goods, the indication of stagnation spread fears of a further fall in commodity prices and a deepening crisis of commodity-exporting nations from Brazil and Russia to Australia and Canada.
In the United States, there has been “negative economic data.” The Institute for Supply Management reported that its index of factory activity fell to 48.2 in December from 48.6 in November. Any reading below 50 denotes contraction. The figure for December was the weakest since June 2009 and marked the first time since the 2008 crash that the US manufacturing sector had suffered two consecutive monthly contractions.
The McKinsey Global Institute last year published a report that gives some idea of the colossal growth of debt in the world economy—a measure of the increase in financial speculation and swindling. It noted that global debt has grown by $57 trillion since 2007, raising the ratio of debt to the world’s gross domestic product by 17 percentage points. China’s total debt has quadrupled, rising from $7 trillion to $28 trillion by mid-2014.
The final weeks of 2015 saw mounting SIGNS that the underlying stagnation and slump in the REAL economy (as opposed to the PRETEND economy) — marked by plummeting oil and commodity prices, declining global trade and dismal or negative growth rates — is beginning to undermine the mountain of speculative debt. The prices of energy-related junk bonds began to fall sharply, and mutual funds that speculate in them suffered a RUSH of redemption orders, prompting TWO such funds to REFUSE TO HONOR redemption requests from investors.
There has been a massive redistribution of wealth away from ordinary people and into the hands of a relative few. Wealth accumulates and the people decay. Ill fares the land.
——- Sources ——-
1919. From the USA trilogy, by John Dos Passos. Library of America, 1996.
The Panic Of 1907, by Robert F. Bruner and Sean D. Carr. Wiley & Sons, 2007.
“The New Year stock sell-off”, by Barry Grey. World Socialist Web Site, January 5, 2015.