Contributing Writers: Azad Ali, Tangerine Clarke,
George Alleyne, Nelson King,
Vinette K. Pryce, Bert Wilkinson
GENERAL INFORMATION (718) 260-2500
Caribbean L 10 ife, February 7-13, 2020
By Jomo Kwame
Sundaram and Michael
Lim Mah Hui
KUALA LUMPUR and
PENANG, Feb. 4, 2020 (IPS)
- Financialization has worsened
inequality through
various channels, including
macroeconomic policies. For
example, quantitative easing
and low, if not negative interest
rates have fuelled credit
and asset price bubbles,
while fiscal spending cuts
have adversely affected those
depending on government
assistance.
Unequal gains
Inequalities have increased
due to financialization. The
rich benefit from more rentier
options and government
efforts to protect the value
of financial assets. The main
gains of financialization tend
to go to those who most successfully
speculate at low
cost, and to the asset management
and investment
firms involved.
Financial globalization
has been accompanied by
increased income inequality
and broad stagnation in
real incomes of wage earners
in OECD countries. These
developments starkly contrast
with the 1990s’ promises
of ‘citizens as investors’
and agents for ‘democratizing
finance’.
Financialization in highincome
countries has transformed
everyday life with
more and more financial
products (home mortgages,
private health insurance,
pensions, stocks, and other
securities) needed to deal
with future uncertainties no
longer mitigated by the welfare
state.
Financial globalization
affects lives and livelihoods
in developing countries
somewhat differently. Financialization
is less pronounced
in the South than in the
North as fewer people have
access to the formal financial
system. Middle class families
seek asset-based welfare —
via mortgage housing, insurance
and pension funds —
while financial inclusion may
reach others.
Financialization
enriches
As yields on long term
securities plunge and asset
prices surge, very low interest
rates encourage companies,
private equity, hedge
funds and the rich to borrow
even more to invest in financial
assets, sending prices
even higher.
Finance also increases
inequality through greater
wealth concentration thanks
to exclusive wealth management
services for rich clients
who get favoured access
to specialized services and
structured, high yield products.
Corporations and wealthy
individuals use the best available
professional services for
tax avoidance and evasion,
often facilitated by banking
secrecy.
Private banking employs
top fund managers to manage
the wealth of rich clients,
offering double digit returns
while ordinary depositors
have to accept modest interest
rates on their deposits.
Rising debt and equity
transactions have generated
lucrative fees for bankers,
traders, fund managers
and private equity investors,
mainly benefiting market
players with means.
With finance capturing
more profits than manufacturing,
unlike before, those
working for finance now
secure much higher incomes
compared to others. ‘Excessive’
financial sector salaries
took off in the 1980s, reaching
40% just prior to the
2008 Global Financial Crisis,
with ‘rents’ accounting for
30-50 percent of this ‘excess’.
The protracted decline of
real wages in the US and
the UK has been enabled by
new rules and laws favouring
wealth owners over labour
incomes. In the US, capital
gains can be taxed a maximum
of 20 percent, while the
highest marginal tax rate for
wages is 37 percent.
Financial inclusion
By contrast, the poor have
less, but also costlier access
to finance, and contribute
more to financial gains for
others, e.g., through subprime
mortgages, or unsecured
personal loans.
Stagnant or declining
wages have imposed greater
indebtedness on the poor,
with finance reaping lucrative
profits from such lending
to households. Between
1960 and 2007, US household
debt rose from 41 percent to
100 percent of annual GDP.
But the celebratory discourse
of ‘financial inclusion’
presumes that everyone
successfully manages their
involvement in increasingly
complex financial markets,
and that light regulatory
touches and ‘financial liter-
By Meg Gilmartin
With another American
Heart Month and National
Wear Red Day upon us, we at
the American Heart Association
in New York City are excited
about this new opportunity
to raise awareness about cardiovascular
disease and stroke.
As the new Executive Director,
I would like to express how
thrilled I am to begin this role.
I owe a huge thank you to
our local Board of Directors,
our dedicated volunteers and
the committed staff who have
made this transition seamless.
As a resident of New York City,
it is an honor to serve my
neighbors, all 8.6 million of
them!
During American Heart
Month each February, the
nation comes together, igniting
a wave of red from coast to
coast. From landmarks to news
anchors and neighborhoods
to online communities; this
annual groundswell unites millions
of people for a common
goal: the eradication of heart
disease and stroke. Among our
goals this month is to increase
awareness that heart disease is
the leading cause of death in
women through media stories,
local events and grassroots
activations.
This is a time to celebrate
the recent reports that show
heart disease and stroke deaths
continue to decline. But it is
also a time to recognize that
more people are living in poor
health, beginning at a younger
age, as a direct result of risk
factors that contribute to these
leading causes of death worldwide.
This American Heart Month
is also a good time to look
forward and announce our
2030 Impact Goal for our city,
the United States and globally,
which is to help all people
live healthier for more years
of their life. The Association
will develop new collaborations
with organizations and
communities across the city
that focus on overall health
and well-being while addressing
equity among everyone no
matter their race, ethnicity,
income or other demographic
or geographic characteristics.
Like John Warner, M.D.,
the former American Heart
Association president said, “To
improve individual health, we
must make the environments
where we live, work, learn
and play equitably supportive
of healthy behaviors. We
also need to help people better
OP-EDS
Financial
globalization has
been accompanied
by increased
income inequality
and broad
stagnation in real
incomes of wage
earners in OECD
countries.
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Continued on Page 11
Continued on Page 11
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Financialization increases
inequality in OECD countries
Living longer is
important, but
years need to be
healthy ones
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