Every Trick in the Book | WHAT REALLY HAPPENED

Every Trick in the Book

It all gets down to wages, wages, wages. If wages don't grow, neither will the economy. Author Ravi Batra sums it up like this in his book "Greenspan's Fraud":

"A bubble economy is born when wages trail productivity for some time and result in ever-rising debt. Then profits grow faster than productivity gains, and share prices outpace GDP growth. However, a time comes when debt-growth slows down, and demand falls short of output, resulting in profit decline and a stock market crash. Thus, the very force that generates the stock market bubble seeds its crash." ("Greenspan's Fraud": Ravi Batra, Palgrave Macmillan, p 152)

Batra again: "The rising wage gap feeds profits on one side and debt on the other. A time comes when the debt binge slows. That is when the demand-supply imbalance, thus far masked by swelling debt and overinvestment, comes to the surface. That is when profit begins to fall, a the nation receives a sudden jolt. First, the stock market moves sideways. But as excess supply of goods continues, share prices begin to crash. (ibid: Ravi Batra, Palgrave Macmillan, p 153)

The "trickle down" Voodoo economic model was destined to fail because it was built on a fiction. Prosperity is not possible without the equitable distribution of wealth and fair worker compensation. As the financial crisis continues to ripple through the global economy through 2009 and 2010; the focus should be on creating a system that is sustainable, which means that the needs of workers should precede those of Wall Street.