Der.

If you’ve been following the American and European economic situations there’s a common two-sided debate. In the US for example the Republicans want austerity measures to bring down the deficit, currently $14 trillion, while the Democrat’s want to borrow more, to get the economy going again. The problem is demand that is so low industry is if anything contracting and debt levels are already too high. Now consider an orange and two guys, Fred Murdock of Fred Murdock’s Fish and Chip shop, and Rupert Murdock owner of Phone Hackers Inc. One has an average bank balance and the other has squillions. There are millions more Freds and only one Rupert but both will consume roughly the same number of oranges, even if Rupert is on some extreme orange-only diet. So even if Rupert comes off his diet orange growers won’t notice a drop in sales. But if the million Freds are feeling the pinch those same orange growers will go out of business. Now we know the pay gap between rich and poor has increased and we all hate bankers etc but lets forget that and just look at what they buy on a daily basis. Well roughly the same as all of us except the millions of Freds buy their food, TV, electric kettles and cars in the mass market and Rupert buys his banquet, cinema and Aston Martin from elite one-off specialist shops. So as most of us are Freds, and most of industry is geared to supplying Freds, when Freds feel the pinch all of industry, services, schools and hospitals, 95% of our economy will contract. When Rupert feels the pinch he just keeps his Aston Martin another year. My point is when the rich stash away over a certain amount of the money supply there is less to maintain the economy as a whole and we get into this situation. It’s not that they’re just rich it’s that by accumulating too much wealth they strangle the broader economy. We don’t need to tax them because they’re earning a lot, we need to tax them to release a percentage of their dormant cash back into the money supply. The stated UK policy of being a low tax regime in order to ‘attract entrepreneurs’ simply allows those financial to strangle our overall economy even more. It’s rather like the financial sector is a Hotel California for money where it can, “check of anytime you like, but you can never leave”, followed by the finest guitar solo in the history of Les Paul. This is serious stuff. In the US, Greece, Portugal, Ireland, and to a lesser extent the UK and Spain, whole countries including millions of Freds are suffering and the debate between more borrowing or more austerity doesn’t even recognising the basic problem.