I am re-posting this Citigroup document dated March 6, 2006. There have been several attempts by Citigroup to remove this piece from the internet--for obvious reasons. Fortunately, the non-profit website, Biblioteca Pleyades, has archived this on their website and I think it will remain secure there.
It illustrates the unvarnished thinking of the ruling class which in their arrogance see that they are in command of the world, and they command it to extend their wealth and power. It's clear that when communicating within their own circles, they have no compunctions about recognizing this as a fact and encouraging their members to take full advantage of it.
Because someone leaked the document, we are fortunate to have a "fly on the wall" opportunity to see how this ruling class, who comprise less than 1% of the population, view the world.
From my May 1, 2010 commentary and original posting:
I found an especially interesting mini-segment of Bill Moyers' final program when he, after the interview with Jim Hightower, briefly referred to this Citigroup document of 2006. In the interview it can be found at 37:13m. After some searching, I found the document on line. The conclusion at the end of the article is sufficient to get the main points:
The latest Survey of Consumer Finances for 2004 from the Fed, just released, shows that the richest 20% of Americans have gotten even wealthier since the last survey was conducted in 2001, and continue to enjoy a disproportionately large share of both income (58%) and wealth (68%). We should make clear that we have no normative view on whether plutonomies are good or bad. Our analysis is based on the facts, not what the society should look like.As you can see, the Citigroup document starts off with a disclaimer at having any moral values with regard to the increasing disparity between the rich and poor. That is because one can only function well at the top of the capitalist world if one is a sociopath, that is, one who doesn't have any regard for the morality or ethics of the capitalist system, especially in regard to the widespread effects of social inequality and injustice that it causes.
This lies at the heart of our plutonomy thesis: that the rich are the dominant source of income, wealth and demand in plutonomy countries such as the UK, US, Canada and Australia, countries that have an economically liberal approach to wealth creation. We believe that the actions of the rich and the proportion of rich people in an economy helps explain many of the nasty conundrums and fears that have vexed our equity clients recently, such as global imbalances or why high oil prices haven’t destroyed consumer demand. Plutonomy, we think explains these problems away, and tells us not to worry about them. If we shouldn’t worry, the risk premia on equity markets may be too high.
Secondly,we believe that the rich are going to keep getting richer in coming years, as capitalists (the rich) get an even bigger share of GDP as a result, principally, of globalization. We expect the global pool of labor in developing economies to keep wage inflation in check, and profit margins rising–good for the wealth of capitalists, relatively bad for developed market unskilled/outsource-able labor. This bodes well for companies selling to or servicing the rich. We expect our Plutonomy basket of stocks–which has performed well relative to the S&P 500 index over the last 20 years–to continue performing well in future.
Then you can see why the ruling classes so vigorously pursued globalization: greater profits by employing working people in 3rd world countries while firing relatively unskilled working people in the US and other Western countries. You see, dictators and ruling classes in third world countries are easy to bribe to keep wages low by preventing working people from organizing into labor unions and ignoring any environmental laws they may have. Increasingly of late, more skilled workers in the US are finding their jobs outsourced to developing countries. This, combined with the rich making the rest of us pay for their gambling debts, has resulted in devastated communities, foreclosures on homes, poor health care, cuts in public services, etc. But that doesn't bother the rich and powerful--they avoid taking any "normative" stand on these issues.