WAYNE BROWN: Revolution is a threat to super rich
Sunday Star Times | Sunday, 12 August 2007
By WAYNE BROWN
A couple of worldwide trends seem to be gathering momentum and both could lead to painful results.
The last decade's worldwide super-strong earnings and value growth has created more billionaires than could have been believed a decade or so ago. The intense focus on business growth, and with it the rise of a whole industry built around high net worth individuals, has seeded more growth and prosperity.
While this has generally accompanied a worldwide lift in living standards, it has created a phalanx of super wealth that is starting to resemble the noble classes of Europe a couple of centuries back. Whole cities have become playthings for the super rich and even socialist governments like ours are spending taxpayer funds on toy sports like superyachting.
Put this with the salary-setting impacts of percentage growth, rather than flat increases, and you have steadily separating wealth between all socio-economic levels. Nothing overly worrying in this, if those lower down the system don't move from curiosity about the vacuous lives of the super-consumers to deep resentment. Remember "let them eat cake"?
Could this happen? Could it start in the US, that kingdom of capitalism? Well, maybe. The start of the meltdown in overstretched home mortgages has seen a mini slump on Wall Street, followed with great relief by a compensating mini surge, but what if that didn't happen? How would life in the mortgage belt play out?
Have a look at the other trend. Long term uber-growth of China's economy, coupled with China's sense of 5000-year history and deep indignation at the change of circumstances for its people over the last 200 years as America surged to world power.
Have US politicians really noticed the massive growth in China's US treasury bond holdings to trillion-dollar plus size, at the same time as America squanders similar vast sums on an unjustified and hopeless war on Iraq?
Not only has America squandered its financial holdings, but it has blown the international goodwill built up by Bill Clinton. Then look within the US. The army and those dying in it are all from the mortgage belt. Those same Republicans who declare war use their wealth to keep their own sons out of it.
An army of pizza workers recruited because of better pay not only finds it hard to match the fervour of the local freedom fighters, but will sooner or later experience resentment, particularly when large numbers of them get home not to a hero's welcome, but to the rising prospect of mortgage failure.
Meantime China is playing a friendly game in Africa, carefully wooing oil suppliers while it build its US treasury stock holdings to dangerous levels. Conspiracy theory? Maybe, but less so than pr****ding Iraq was home to weapons of mass destruction.
At some stage the super wealthy must decide what to do with that power. How they handle it will be telling. The generosity of Bill Gates and Warren Buffet contrasts with the growing gap between the average Mexican and cement magnate Carlos Slim.
Most revolutions have been started when the gaps between rich and poor get too big, or some really big name does something provocative to the already resentful - all the while another nation looks on with something to gain tactically. Now there's something to think about!
Wayne Brown is chairman of Auckland DHB and Kordia, and deputy chairman of Transpower. He owns businesses in construction, development, apparel and media.
Sunday Star Times | Sunday, 12 August 2007
By WAYNE BROWN
A couple of worldwide trends seem to be gathering momentum and both could lead to painful results.
The last decade's worldwide super-strong earnings and value growth has created more billionaires than could have been believed a decade or so ago. The intense focus on business growth, and with it the rise of a whole industry built around high net worth individuals, has seeded more growth and prosperity.
While this has generally accompanied a worldwide lift in living standards, it has created a phalanx of super wealth that is starting to resemble the noble classes of Europe a couple of centuries back. Whole cities have become playthings for the super rich and even socialist governments like ours are spending taxpayer funds on toy sports like superyachting.
Put this with the salary-setting impacts of percentage growth, rather than flat increases, and you have steadily separating wealth between all socio-economic levels. Nothing overly worrying in this, if those lower down the system don't move from curiosity about the vacuous lives of the super-consumers to deep resentment. Remember "let them eat cake"?
Could this happen? Could it start in the US, that kingdom of capitalism? Well, maybe. The start of the meltdown in overstretched home mortgages has seen a mini slump on Wall Street, followed with great relief by a compensating mini surge, but what if that didn't happen? How would life in the mortgage belt play out?
Have a look at the other trend. Long term uber-growth of China's economy, coupled with China's sense of 5000-year history and deep indignation at the change of circumstances for its people over the last 200 years as America surged to world power.
Have US politicians really noticed the massive growth in China's US treasury bond holdings to trillion-dollar plus size, at the same time as America squanders similar vast sums on an unjustified and hopeless war on Iraq?
Not only has America squandered its financial holdings, but it has blown the international goodwill built up by Bill Clinton. Then look within the US. The army and those dying in it are all from the mortgage belt. Those same Republicans who declare war use their wealth to keep their own sons out of it.
An army of pizza workers recruited because of better pay not only finds it hard to match the fervour of the local freedom fighters, but will sooner or later experience resentment, particularly when large numbers of them get home not to a hero's welcome, but to the rising prospect of mortgage failure.
Meantime China is playing a friendly game in Africa, carefully wooing oil suppliers while it build its US treasury stock holdings to dangerous levels. Conspiracy theory? Maybe, but less so than pr****ding Iraq was home to weapons of mass destruction.
At some stage the super wealthy must decide what to do with that power. How they handle it will be telling. The generosity of Bill Gates and Warren Buffet contrasts with the growing gap between the average Mexican and cement magnate Carlos Slim.
Most revolutions have been started when the gaps between rich and poor get too big, or some really big name does something provocative to the already resentful - all the while another nation looks on with something to gain tactically. Now there's something to think about!
Wayne Brown is chairman of Auckland DHB and Kordia, and deputy chairman of Transpower. He owns businesses in construction, development, apparel and media.