Australian Financial Darwinism

[aussieboy]

SNIP

A case in point is my 25 year old cousin and his younger fiance who just visited us for lunch today. They are absolutely financially screwed and have no chance of having the life that his half brothers and sisters (circa 15 years older) or his parents have. I doubt they will ever buy a house if current wage/house price conditions continue. I wonder what stresses that will bring into their marriage?

I appreciate your position on this, but I remember having similar thoughts when I was in my teens: watching programs in the 80s about the property boom in London, Loadsamoney and all that. I was in the north of England at the time; visiting relatives in the south I thought I'd never be able to buy a house anywhere let alone back in Sydney. I wonder if this is a rights of passage for every generation, with just the scale of the unearned wealth adjusted for inflation.

It would seem that the estimate of the amount ripped-off has been adjusted upwards to $100m, although the SMH doesn't state whether that is all domestic or includes the other countries on Mr. Ali's world tour.

Alleged "marks" include a former Queensland State Treasury and a former NAB Senior Exec. I've not been here long enough to know the back-story as to why both of them now are described by the adjective "former" but I'd like to think it was for reasons of incompetence. If not, I may consider setting up a web server to flick out 419 emails to everyone in the finance departments of the larger states and anyone within 2 levels of the board of all of the major banks.

Oh, and the "boss" on the New Zealand version of the Apprentice TV show. There's a rich seam of comedy just waiting for someone funnier than me (yes, I know Aussieboy; that's everyone, right?) to mine.

Never said you weren't entertaining, Paddles.

[JonoP]

Quite - the more you travel the more things look the same.

Yes. Like credit and asset bubbles.......

[Tiger Woods?]

I appreciate your position on this, but I remember having similar thoughts when I was in my teens: watching programs in the 80s about the property boom in London, Loadsamoney and all that. I was in the north of England at the time; visiting relatives in the south I thought I'd never be able to buy a house anywhere let alone back in Sydney. I wonder if this is a rights of passage for every generation, with just the scale of the unearned wealth adjusted for inflation.

It's possible that this is just a slightly nastier version of the early 1990s.

However, last century was unsual in the West. The bottom end of society did relatively well. This has happened before, such as in the 2nd half of the 14th century when the population was decimated by the plague and the balance of power shifted between workers and capital. My gut feeling though is that the globalisation of the past 20 years is not insignificant to the outcome. Just as the workers lot has improved for most of the 20th century, there have been periods of history when the wealth has accumulated in proportionally fewer hands.Globalisation is the sort of thing that shifts the balance. Certainly this has been happening over the past 20 years, and I think it will continue.

There was a topic contrasting the aspirations and concerns in the UB40 songs of the early 80s with now, and I think it is pointing to real change to the status quo. In the past 20 years the Soviet Bloc, China, and India have added literally billions of workers to be used by the West's economies, many of them skilled. So long as we do not have an energy crisis or protectionism sweeps the world, we are only going to see a smaller and smaller proportion of labour added value going to workers in the West. Those owning the capital and controlling the means of exchange are going to receive a greater share. It may be we are heading into a world where, for most people in first world countries, a wage will provide for food, basic shelter etc. This has been a trend for the past 40 years, the effects of which have been avoided first by sending women to work, then by tapping families' savings, and then by burdening them with debt. Even with all of this, in the US, discretionary income of the typical family has been (inflation adjusted) dropping since the early 70s.

In summary, although I hope I am wrong, I'm not sure that this time isn't different from similar events in the past 100 years.