Copy of May 2011 - Lazyfish Technology

May 2011 Kangaroo Valley Voice www.kangaroovalley.nsw.au Page 44
Valley finance views
by Abacus
This month it is all about scoops.
The Kangaroo Valley Voice March issue
scooped The Economist with its report on
the hollowing out of Australia’s economy
by the mining boom; it made the front
page of the latter in its April 2 nd issue.
Maybe they are readers
But there was gnashing of teeth when the
rating agency S&P published its downgrade of
the American economy. Because that is the
subject of this month’s issue – and this being a
monthly publication, they scooped me.
First, if we consider the similarities between
the countries now in the midst of civil warfare
and riots, effectively started from food
insecurity in the Middle East, it may look
something like this.
The elite 1% of the population take home 25%
of the country’s income. They also control
40% of the wealth. Twenty five years ago
those numbers were 12% and 13%
respectively, so wealth is being hoovered up by
the top 1%.
The middle class have seen their incomes fall
12% in the same period. In terms of income
equality the country lags any of those in
Europe.
When we look at the government, we find that
nearly every member is a member of that 1%
elite. They make the rules. The departments
that enforce these rules are also headed by
members of that top 1%.
We analyse the rules and enforcement and that
shows that they continue to cement the wealth
and power of that 1% rather than the general
populace.
Then we look at who is paying for the countries
services. 47% of people pay no taxes, and only
5% are paying 80% of all taxes. And it is not the
top 1% because many use corporate structures.
In 2006 the 400 top earners who did pay tax,
earned $105 billion but only paid $18 billion in
tax. That’s a 17% tax rate. Ten years earlier it
was a 30% tax rate; so the evidence is that as
they hoover up the wealth the elite’s tax
contribution to the common good is less and less.
The top 1% rarely serve in the military and in
most other aspects of society they pay no penalty
when things go wrong.
As the elite hoover up the wealth, controlled
through their ownership of the government, the
rest of the economy collapses. Quality food
becomes more expensive, so the poorer eat low
quality processed foods [made by the giant
corporations owned by the top 1%]. Their health
deteriorates; the health care system is swamped.
The education system for the community
becomes grossly underfunded, and it shows in
the workers profiles. The workers, as noted
above, are earning less and less as the unions are
undermined by the large corporations controlled
by the top 1%.
As the difficult periods for the country cannot
harm the elite they become less and less
interested in paying for the common good.
Eventually as we have seen, the citizens rise up
and overthrow the government and elite that
have taken away their opportunities and
beggared their families. The trigger may well be
food insecurity.
The above profile neatly fits most of the
countries now in severe conflict in the Middle
East. It is also the profile of the USA today.
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Gross inequality is what brings down great
nations – from Rome onwards.
Impoverishment of the masses is never a good
strategy for the long term sustainability of
nations. The USA is heading in that direction.
Disclaimer:
This is not advice. I am not licensed to give
advice of any kind. Advice can be understood
as individual advice to a person about their
particular financial circumstances, or general
advice about investing. So you cannot, and
should not, rely on anything written here. You
should only rely on advice from a licensed
advisor. If this article has sparked interest
please seek out a licensed advisor.
Special ANZAC memories
(Continued from page 37)
of the Netherlands East Indies with the 9th and
7th Divisions making amphibious landings on
Borneo in 1945.
The 9th Division landed on Tarakan in May
and Labuan Island and Brunei Bay in June.
The 7th Division landed at Balikpapan at the
start of July.
On 10 June the 2/4th landed and operated on
Labuan as part of the 1st Beach Group.
Men from the battalion were involved in
some of the fighting but incurred only five
casualties in the Borneo operation.
Japan surrendered in August and official
surrender ceremonies were held the following
month. The 9th Division was responsible for
carrying out surrender arrangements in British
Borneo, Sarawak, Brunei, Labuan, and the
Natuna Islands. The 2/4th became part of the
“Kuching force”, responsible for the area
around Kuching. With the war over the ranks
of the 2/4th gradually thinned, as men were
discharged or transferred.
The battalion returned to Australia in
December and was disbanded in early 1946.
Editor’s note: Our thanks to Phillip and Leonie
for sharing their family history and efforts
during conflict with us.