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The woman who had nothing and the man with the 100 billion

It’s freezing outside. The woman being interviewed on the radio explains that she is 28 years old and that she sleeps in abandoned railroad wagons. She is perpetually cold and cannot sleep. She has just taken refuge in a gymnasium opened by the municipality and inside which the temperature is a toasty 25°. It’s a shock, she says, she almost feels nauseous. The same story repeats itself with other protagonists on English television, on German radios. Homeless, with nothing.

The President of the French Republic, the candidate of the opposition Mr. Hollande, Mr. Cameron, Mrs. Merkel all go on-site, shake hands with the poor. In the United States, the candidates for the Presidential election do the same for here too, the same misery exists.

And meanwhile, Facebook is about to enter the stock market for 100 billion dollars. Its young and genial founder, Mark Zuckerberg, is going to have to pay 1.5 billion dollars in tax. In London, Glencore and Xastra, two giants of the mining industry have merged, forming an enterprise worth 88 billion pounds.

Last Thursday, France borrowed 8 billion euros with a 3.13% interest rate. Spain also borrowed, approximately 4 billion euros.

On the financial markets, machines are replacing human decisions with increasing frequency. The "high-frequency traders" buy and sell a value or financial instrument in 22 seconds flat, round trip. This operation can repeat itself millions of times per day with an infinitesimal profit, say a third of a euro cent or a quarter of a penny. At the end of the day however, this quickly adds up to a considerable sum.

And all the while, in Britain, in Scotland, in Pomerania, the woman speaking on the radio is overjoyed at the prospect of being able to curl up in a corner of the gymnasium opened by the local Town Hall due to the freezing weather conditions.

Nothing on the one hand, totally incomprehensible sums of money on the other. What’s the world coming to?

I can already hear and see the reactions and comments ranging over an entire specter of opinions. It’s up to the State to help them, they should pull their socks up, taxes must be increased for the rich. Last week in France, the presidential candidates were falling over themselves in order to show their support at the Abbé Pierre Foundation. Their support being verbal of course.

Of yore, Marxists spoke of the exploitation of man by man in order to explain these gigantic differences in standards of living, a reality at the heart of which we live. Today, the exegetes of the middle classes wonder that after 20 to 25 years, the majority of the population has seen its standard of living stall or drop.

It isn’t possible to simply ‘tax the rich’. It wouldn’t do much good. Instead, we must increase the revenues and standards of living by placing an emphasis on the even distribution of the fruits of labour and hard work at the heart of companies and by putting an end to the breaches of the financialisation of the global economy.

Two statistics: Between 1980 and today, the Dow Jones, the New York stock exchange index, increased by more or less 1000% depending on the given moment, whilst the American GNP increased my a mere 30%. The great William Shakespeare was right: Something is rotten in the kingdom of Denmark.

It’s up to the law, to regulations, to take the relay. For example, all investment funds, regardless of their nature, of their constitution, should be obliged to invest 25% of the money it collect in the support of companies, employment, the wealth of everyone.

We must massively invest in those activities that generate jobs and wealth. In other words, we mustn’t simply content ourselves with multiplying our money on highly sophisticated technological platforms.

As for speculation? Why no. But first, investing in order to employ the woman living in abandoned railway wagons and other like her.


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About me and the blog

As head, since the mid nineties of the Finance Foundation, Michel Gabrysiak, has contributed to the consolidation of the European capital markets. He witnessed the phenomenal boom of shadow banks -as opposed to genuine banks- which have led us into the present financial mess.  

As a journalist and writer he closely followed the ups and downs  of finance and economy since the beginning of the big boom of the early eighties.

He  created financial and business board games.  He had a family budget game show on French television. On CNBC he presented  a weekly talk show called Capital Ideas, discussing financial topics with CEOs, Central Bankers, regulators, politicians.

This blog is about democratic capitalism. Is it meant to benefit everyone or just the tiny few, the oligarchs, the shadow finance operators. Are the middle classes and the poor included in the creation of wealth or excluded from it ?

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