Meet The Extreme Super Rich

Meet The Extreme Super Rich: A List Of The 80 People Who Own As Much As The World’s Poorest 3.6 Billion

Submitted by Tyler Durden on 01/28/2015

Submitted by Mike Krieger via Liberty Blitzkrieg blog,

Before I get into the meat of this post, I want to make it clear that the definition of oligarch, a term I use a lot, does not center solely around money.

Late last year, in the post Inside the Mind of an Oligarch – Sheldon Adelson Proclaims “I Don’t Like Journalism,” I attempted to frame the word oligarch as I use it. I wrote the following:

In a nutshell, while many oligarchs are extremely wealthy (or have access to extreme wealth), not all people with extreme wealth are oligarchs. The term oligarch is reserved for those with extreme wealth who also want to control the political process, policy levers and most other aspects of the lives of the citizenry in a top-down tyrannical and undemocratic manner.
They think they know best about pretty much everything, and believe unelected technocrats who share their worldview should be empowered so that they can unilaterally make all of society’s important decisions.
The unwashed masses (plebs) in their minds are unnecessary distractions who must to be told what to do. Useless eaters who need to be brainwashed into worshipping the oligarch mindset, or turned into apathetic automatons incapable or unwilling to engage in critical thought. Either outcome is equally acceptable and equally encouraged.

With that out of the way, Five-Thirty-Eight provided the following:

Eighty people hold the same amount of wealth as the world’s 3.6 billion poorest people, according to an analysis just released from Oxfam. The report from the global anti-poverty organization finds that since 2009, the wealth of those 80 richest has doubled in nominal terms — while the wealth of the poorest 50 percent of the world’s population has fallen.

There you have it. The reason the wealth of the richest has doubled since 2009, is because “it’s not a recession, it’s a robbery.” Central bank and government policy has done this, it is no accident.

For more evidence…

Four years earlier, 388 billionaires together held as much wealth as the poorest 50 percent of the world.

Thirty-five of the 80 richest people in the world are U.S. citizens, with combined wealth of $941 billion in 2014. Together in second place are Germany and Russia, with seven mega-rich individuals apiece. The entire list is dominated by one gender, though — 70 of the 80 richest people are men. And 68 of the people on the list are 50 or older.

Oxfam notes that global wealth inequality is increasing while the rich get richer. If trends continue, the organization projects that the richest 1 percent of people will have more wealth than the remaining 99 percent by 2016.

Now here’s the list:

I didn’t provide this list to say whether these people are good or bad. I provide it, because whenever 80 people own as much as the poorest 50% of the globe, we sure better know who they are. We should also be cognizant of the disproportionate influence any of them can have on public affairs should they want to.

Prominent Economists Call for End to Fractional Reserve Banking

Submitted by George Washington on 05/01/2014 

Excessive leverage by the banks was one of the main causes of the Great Depression and of the 2008 financial crisis.

As such, lower levels of “fractional reserve banking” – i.e. how many dollars a bank lends out compared to the amount of deposits it has on hand – the more stable the economy will be.

But economist Steve Keen notes (citing Table 10 in Yueh-Yun C. OBrien, 2007. “Reserve Requirement Systems in OECD Countries”, Finance and Economics Discussion Series, Divisions of Research & Statistics and Monetary Affairs, Federal Reserve Board):

The US Federal Reserve sets a Required Reserve Ratio of 10%, but applies this only to deposits by individuals; banks have no reserve requirement at all for deposits by companies.

So huge swaths of loans are not subject to any reserve requirements.

Indeed, Ben Bernanke proposed the elimination of all reserve requirements for banks:

The Federal Reserve believes it is possible that, ultimately, its operating framework will allow the elimination of minimum reserve requirements, which impose costs and distortions on the banking system.

Economist Keen informs Washington’s Blog that about 6 OECD countries have already done away with reserve requirements altogether (Australia, Mexico,  Canada, New Zealand, Sweden and the UK).

But there is a growing recognition that this is going in the wrong direction, because fractional reserve banking can destabilize the economy (and credit can easily be created by the government itself.)

It was big news this week when one of the world’s most prominent economics writers – liberal economist Martin Wolf – advocated doing away with fractional reserve banking altogether… i.e. requiring that banks only loan out as much money as they actually have on hand in the form of customer deposits:

Printing counterfeit banknotes is illegal, but creating private money is not. The interdependence between the state and the businesses that can do this is the source of much of the instability of our economies. It could – and should – be terminated.

***

What is to be done? A minimum response would leave this industry largely as it is but both tighten regulation and insist that a bigger proportion of the balance sheet be financed with equity or credibly loss-absorbing debt. I discussed this approach last week. Higher capital is the recommendation made by Anat Admati of Stanford and Martin Hellwig of the Max Planck Institute in The Bankers’ New Clothes.

A maximum response would be to give the state a monopoly on money creation. One of the most important such proposals was in the Chicago Plan, advanced in the 1930s by, among others, a great economist, Irving Fisher. Its core was the requirement for100 per cent reserves against deposits. Fisher argued that this would greatly reduce business cycles, end bank runs and drastically reduce public debt. A 2012 study by International Monetary Fund staff suggests this plan could work well.

Similar ideas have come from Laurence Kotlikoff of Boston University in Jimmy Stewart is Dead, and Andrew Jackson and Ben Dyson in Modernising Money.

***

Opponents will argue that the economy would die for lack of credit. I was once sympathetic to that argument. But only about 10 per cent of UK bank lending has financed business investment in sectors other than commercial property. We could find other ways of funding this.

Our financial system is so unstable because the state first allowed it to create almost all the money in the economy and was then forced to insure it when performing that function. This is a giant hole at the heart of our market economies. It could be closed by separating the provision of money, rightly a function of the state, from the provision of finance, a function of the private sector.

(The IMF study is here.)

In fact, a lot of experts have backed this or similar proposals, including:

Interestingly, the Chicago Plan for full reserve banking came very close to passing in 1934. But the unfortunate death of one of its main Congressional sponsors – Senator Bronson M. Cutting  – in a plane crash reversed the momentum for the bill.

As Wikipedia notes:

Cutting played a key role in the political struggles over the reform of banking which Roosevelt undertook while dealing with the Great Depression, and which resulted in the Banking Reform Acts of 1933 and 1935. As a supporter of the Chicago Plan proposed by economist Irving Fisher and others at the University of Chicago, Cutting was among a handful of influential Senators who might have been able to remove from the private banks their ability to manipulate the money supply by enforcing a 100 percent reserve requirement for all credit creation, as stipulated in the Chicago Plan. His unfortunate death in an airliner crash cut short what may have been his most enduring legacy to the nation.