The Finance Foundation
Reinventing capitalism for all
AUTHOR
Michel
Gabrysiak
President of the Finance Foundation

99% poor, 1% rich. It is time to inject cash into national economies to create wealth for all
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            A photograph taken in New York two weeks ago shows a big shield. It reads “America: 99% poor, 1% rich”. This photograph is published by The Guardian newspaper. It has inspired many protests, shoutings………and a report by the International Monetary Fund. At the very last, academics conclude what seems absolutely obvious:  the widening income gap between rich and poor is bad for growth. 

            Without offence, a child of 12 could reach the same conclusion without great effort. 

            Many believe, the english Chancellor of the Exchequer M.Osborne still does, that there is a trickle down effect. When the rich get richer, they spend more, they buy, they consume, etc, and that money goes down to the poor. It’s not untrue, but very relative.

            The IMF economists believe now that we need to improve the standard of living, the availability of money, the capacity to spend of the  30% of the population, at the bottom of the pyramid, in order to help the whole society grow. I don’t want to seem ironical. At last.

In every other developed or emerging economy that principle applies. It is only by giving more income to the masses that the country will move, that the economy will progress.

It is time to listen to two American Nobel laureates, Professors Krugman and Stiglitz, who say that we have to stop the squeeze of economy and let it go quite a lot, in order to invest and create wealth.  

 

 

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