Sunday, 15 February 2009

The anger - Part II

We've read so much and heard so much about the financial crisis, the banking crisis and the economic crisis. But it's usually a pundit confusing us with more jargon and less clarity.

I wrote last week about the inequality - and the anger - that has pervaded the U.S. economy. But this article is a must-read. This one, The Blow the Working Class Saw Coming, seems more to the point than anything else I've read. And it's by a working class bloke, the people we don't tend to listen to. Iain's article is full of economic insights, disguising the anger that is simmering under the surface. I picked out seven pointers that the pundits ought to be listening to:

1. If you drive through a town after a big factory layoff, you'll notice peeling paint and weeds, the first signs of a community's economic distress, the lesions that warn of troubles to come.

2. The working poor always see it coming, well before the Wall Street analysts and the Federal Reserve wonks. Mark knows that when he makes $8 an hour, and gets a flyer in the mail telling him that he has guaranteed approval on a $40,000 SUV, there is something amiss in the world of finance, a disruption in the force.

3. The people for whom [the crisis] really is urgent have stopped listening [to the TV pundits], and not just because the cable is getting cut off. The problems are simply too immediate for them to pay attention to people who talk about economic theories, about bailouts and tariffs and gross domestic product. In this world, there are actual sheriffs with actual eviction notices. Something needs to be done now, today.

4. This time around [as compared to the Great Depression], we appear to have a class of individuals who think that they should not have to suffer with the rest. Circuit City, currently liquidating all its stores and laying off thousands, asked a bankruptcy court judge to let it give bonuses to executives to convince them to stay for the "wind-down process."

5. I earned $3.35 an hour at my first job washing dishes in 1981, and today, 28 years later, the minimum wage has barely doubled. Congress voted not to raise it for nearly 10 years, while members awarded themselves pay raises on a nearly annual basis. And during the years that the minimum wage was stalled, the pay of a CEO swelled to hundreds of times the wage of an average worker.

6. The people I work with have an arcane belief that money comes from somewhere, that value is added when things are made, and that the only real way to acquire money is to work.

And here's the best one:

7. The people who understand money the best are the ones who don't have it.

2 comments:

Prakash Kamath said...

You have correctly said that the 'working' class is angry that they are getting poorly paid while the 'members' are getting paid more than a 100 times than what is being given to them.
With the proposed bailout of the financial institutions they 'originally' were considering the imposition of 'salary caps' on the top execs and withholding of fat bonuses. Now with scare tactics of facing a 'brain' drain if this was done, the Govt is considering to back out and watering down this proposal.
The anger will multiply because the 'working' class are not only being poorly paid, but, also getting laid off in the name of cutting costs, and the very people who, through their 'profligate' ways, have created this situation and normally should have been termed as UNEMPLOYABLE are blackmailing the Govt that they would walk out and join other institutions who will continue to pay their high wages and bonuses.
The Govt should call their bluff and let them walk so that the other 'safe' institutions which they would join would be the next in line for a bailout which should not then be granted.
The present economic crisis is no doubt bad, but, it is also an opportunity to overhaul the systems and bring much needed reform and a semblance of justice to every member of the companies involved in the mess.

Anonymous said...

Dr.ARUN GANGULI....Just like the "Jaspal Bhatti-Flop Show" on Indian TV, corporate governance has proved to be synonymous with "corporate mis-governance"! Like the shameless, thick-skinned Indian Members-of-Parliament, who have shown exceptional promptness to upgrade their own perks and pay- packages at regularly frequent intervals that they could "serve the masses better", so has been the tendency of top executives of corporations!
"Self-help is the best help", "self-service the best service"...has been the motto!
And for all their misdeeds and recklessness, leading to collapses and crashes..governments bail them out with the tax-payer's money!
Frauds and cheats (as Raju, of Satyam fame) should be let loose on the streets and the 'junta' allowed to do the needful!