There was a torrent of cash for subprime loans thanks to a banking breakthrough called Structured Finance. ibid.
Most of the world’s big banks ... were stampeding to make profits by turning risky subprime loans into supposedly high quality investments. ibid.
More of the borrowers defaulted than they expected. ibid.
Northern Rock went to the brink of insolvency because its business was dependent on raising money by selling its mortgages to international lenders. ibid.
There are still plenty of opportunities for the new super-rich to increase their fortunes. ibid.
The chief enjoyment of riches consists in the parade of riches. Adam Smith, Wealth of Nations, 1776
There are few genuine conservatives within the US political system, and it is a sign of the intellectual corruption of the age that the honorable term ‘conservatism’ can be appropriated to disguise the advocacy of a powerful, lawless, aggressive and violent state, a welfare state for the rich dedicated to a lunatic form of Keynesian economic intervention that enhances state and private power while mortgaging the country’s future. Noam Chomsky, The Culture of Terrorism
The Republicans have an answer to this [unemployment]: we should enrich the rich; they don’t use the word rich any more, there’s a euphemism – they’re called the job creators … The big banks for example are enormous takers; now they get thirty billion dollars a year from just the government’s insurance policy alone … The super-rich are incredible takers … tax breaks amount to more than 7% of GDP. Noam Chomsky, lecture University of Massachusetts at Amherst 27 September 2012, ‘Who Owns the World? Resistance and Ways Forward’
The Republicans some time ago abandoned any pretense of being a normal parliamentary party: they are just dedicated lockstep with a kind of catechism that everyone has to repeat towards service to the super-rich and the corporate sector. ibid.
This is the permanent tension that lies at the heart of a capitalist democracy and is exacerbated in times of crisis. In order to ensure the survival of the richest, it is democracy that has to be heavily regulated rather than capitalism. Tariq Ali, The Obama Syndrome: Surrender at Home, War Abroad
Bourgeois democracy, although it is a historical advance in comparison with medievalism, always remains, and under capitalism is bound to remain, restricted, truncated, false and hypocritical. A paradise for the rich and a snare and a deception for the exploited, for the poor.
The whole point is that a bourgeois state which is exercising the dictatorship of the bourgeoisie through a democratic republic cannot confess to the people that it is serving the bourgeoisie. It cannot tell the truth and has to play the hypocrite. Vladimir Lenin
There is nobody in this country who got rich on their own. Nobody. You built a factory out there – good for you. But I want to be clear. You moved your goods to market on roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory ... Now look. You built a factory and it turned into something terrific or a great idea – God bless! Keep a hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along. Elizabeth Warren
To get rich, one must have but a single idea, one fixed, hard, immutable thought: the desire to make a heap of gold. And in order to increase this heap of gold, one must be inflexible, a usurer, thief, extortionist, and murderer! And one must especially mistreat the small and the weak!
And when this mountain of gold has been amassed, one can climb up on it, and from up on the summit, a smile on one’s lips, one can contemplate the valley of poor wretches that one has created. Petrus Borel, Champavert, le lycanthrope
When you say fiscal responsibility, it seems to me that you really mean rich people keeping their money. Alice Adams
Corruption dominates the ballot-box, the Legislatures, the Congress and touches even the ermine of the bench. The fruits of the toil of millions are boldly stolen to build up colossal fortunes for a few, unprecedented in the history of mankind; and the possessors of these, in turn, despise the Republic and endanger liberty. National Platform of Populist Party, 1892
The rich are different from you and me because they have more credit. John Leonard
You know, Mr Bernstein, if I hadn’t been very rich, I might have been a really great man. Citizen Kane 1941 starring Orson Welles & Joseph Cotten & Everett Sloane & Dorothy Comingore & Agnes Moorehead & Ruth Warrick & Ray Collins & William Alland & Paul Stewart & Philip van Zandt et al, director Orson Welles
Why do we have an economy where the poor have to pay so the rich won’t lose money? Reds 1981 starring Warren Beatty & Diane Keaton & Jack Nicholson & Gene Hackman & Edward Herrmann & Jerzy Kosinski & Paul Sorvino & Maureen Stapleton & Nicolas Coster & William Daniels & E Emmet Walsh & Ian Wolfe & Bessie Love et al, director Warren Beatty, him to her
It is from a strange mixture of tyranny and cowardice that exclusions have been set up and continued. The boldness to do wrong at first, changes afterwards into cowardly craft, and at last into fear. The Representatives in England appear now to act as if they were afraid to do right, even in part, lest it should awaken the nation to a sense of all the wrongs it has endured. This case serves to shew that the same conduct that best constitutes the safety of an individual, namely, a strict adherence to principle, constitutes also the safety of a Government, and that without it safety is but an empty name. When the rich plunder the poor of his rights, it becomes an example of the poor to plunder the rich of his property, for the rights of the one are as much property to him as wealth is property to the other and the little all is as dear as the much. It is only by setting out on just principles that men are trained to be just to each other; and it will always be found, that when the rich protect the rights of the poor, the poor will protect the property of the rich. But the guarantee, to be effectual, must be parliamentarily reciprocal. Thomas Paine, 1792
Rich and powerful people are always explaining how they wish to expand their wealth and power not for themselves but for everyone else. Their basic claim for the ‘free-market’ system which has made them rich is that it is the only known system which fits what is produced to what people want and need.
Yet the plainest fact of all about a world dominated by the free market system demonstrates exactly the opposite. From every corner of the world comes the suffocated howl of millions of people whose desperate needs and wants are being systematically ignored. Paul Foot, The Case for Socialism ch4
The answer has its roots in the other major social development of the 1980s: the enrichment of the rich. This has been so stupendous as to defy statistics. In all the countries of the world, including the poor countries, the rich have been enjoying the greatest bonanza ever. The top 10 per cent of incomes in the United States of America, already far, far ahead of the rest of the population, increased their share of the wealth by another 7 per cent. In Britain the value of shares on the stock exchange multiplied five times between 1983 and 1987, and even the stock exchange crash of 1987 did not stop the fantastic accumulation of riches for the already super-rich.
Old-fashioned ideas, especially in publicly owned state industries, that the chairmen and managing directors should keep their earnings down as an example to their workers, vanished. As the public utilities in Britain were turned, ‘in the interests of competition’, from public monopolies to private monopolies, the chairmen and directors rewarded themselves for what they assessed as their ‘true worth’ – and promptly doubled and tripled their salaries. Enormous fortunes were flaunted by the millionaires’ press. At the start of the decade there were only a handful of billionaires in the world: at the end there were 157. Millionaires increased four times – from half a million to two million.
Tax-cutting everywhere aided the process. The highest rate of income tax in Britain was cut from 83 per cent at the start of the decade to 40 per cent at the end. With this went cuts in all the taxes which affected the rich: corporation tax, capital gains tax, inheritance tax. The poll tax, in abolishing property rates, put further millions into the pockets of the already rich. ibid.
On the rare occasions when the rich are called to account, they accuse their accusers of jealousy. They claim two major justifications for their wealth. The first is that ability and enterprise has to be rewarded. The rich, they say, are rich because of their contribution to society, which is exceptional and therefore deserves to be rewarded exceptionally.
Most rich people, however, are rich through no ability of their own. A recent survey of wealth in Britain found that the greatest amount of wealth is still owned by people who have inherited it. In other words, they are rich because their fathers, grandfathers or ancestors, with a great spurt of initiative and enterprise, died; leaving all their wealth – which was almost certainly acquired by some form of privilege or plunder – to their children, grandchildren and so on for evermore.
A lot of very rich people have no recognisable ability – with inherited wealth you don’t need ability. Many are rich precisely because they have no sensitivity or intellectual depth: they can read a financial balance sheet while ignoring the human exploitation that the profit figures represent. Such a man, for instance, was Roy Thomson, who became boss of one of the world’s greatest paper and publishing chains. Howard Hughes was another from the same mould. He started life as a playboy and ended it as a lunatic. He designed a plane which crashed and made a film which no one went to see. Because of an ability to be at the right place at the right time, and to read a balance sheet, he became head of a vast financial and industrial empire, and was able to nominate the president of the United States.
The new millionaires who emerged in the 1980s, almost to a man, are people without any noticeable skill, intellect or ability. They are expert only at playing the stock market or sacking workers – the two activities most likely to make a fast million.