Saturday, March 17, 2007

Rant on the transfer of wealth. Economics

In reading that article about the Pfizer CEO profiteering from slitting the throats of his workforce I just have to rant a little on the economics of this type of fiscal policy.

Someone at Digg by the name of "SaSpurzFan" made the great point that this type of transfer of wealth is bad for society. I wholly agree.

Let's break it down into two categories of money. You have what are called utility dollars. This is the money circulated by the working class. It pays for food, energy, healthcare, and basic homeostasis for the average family. It is often seldom that after the utility dollars are spent there is very much for "low utility dollars". This is money spent on entertainment, recreation, and things like vacations.

The basic business practice of a major pharmacology company is the removal of wealth from utility dollars and converts that into low utility dollars for their shareholders.

I'd like to take the principle even further. Doctors should not make the money that they do on the basis that their conversion in lump sums of utility dollars into low utility dollars is a huge detriment to America. A physician uses their buying power to go far above and beyond basic homeostasis at the large expense of a major portion of a working class income. The reason this harms the economy is because the working class further resorts to more conservative fiscal spending to compensate the loss of utility dollars toward other basic needs. With low utility dollars being less utilized.

This is why the consumer confidence index is lowered and the markets centered around consumers spending low utility dollars have a generally more difficult time.

The other problem with this is that we continue to act as stilts for the few privelaged. It's turning into a truly bifurcated and uneven society. The few privelaged are not "trickling down" in their spending, instead they hoard it or it becomes a circular support system between themselves and other wealthy in the form of our stock system. It's more and more an aristocracy of an organized few with a self propagating support structure. The problem is also that it's continuing to be at the expense of basic needs choices for many of us.

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