Where did all the wealth go?
NATIONAL politics everywhere is all nonsense to the extent that it is all about power and money. The reality is that the farther you go up the “food chain” in a nation’s political system, amazingly your wealth increases along with your power.
The best leaders are usually those in small communities. The tribal elders on some Pacific Ocean island are more responsive to the needs of the people as are small-town mayors. The closer the leaders are to the people, the better the job they tend to do.
If you live in a community that has a homeowners’ association, you can see this principle at work.
As political systems have become more corrupted over the last 100 years, so have economic systems. That is not to say that the system was much better when people were relieving themselves behind the nearest tree, but now, virtually, all people on the planet live under a similar system.
If you consider income inequality as measured by the “Gini coefficient,” there is little difference between “wealthy” nations and the “poor.” The Gini is nearly the same between the US, with a per-capita GDP at $53,000, and China, with a per-capita GDP of $6,800.
Wealth inequality is even more interesting. A Gini model coefficient applied to wealth shows almost the same wealth inequality in the US (85 percent) as in the Philippines (82.7 percent), and a lower score indicates lower inequality. During the period 2010 to 2015, the Philippines had a much higher economic growth with per- capita GDP growing by 17.5 percent versus 13
Between 2005 and 2010, financial wealth (cash, insurance and stocks) for the average Filipino increased significantly, while the nonfinancial wealth increased by only 25 percent. However, between 2010 and 2015, nonfinancial (houses, condos, cars and business investment) wealth increased 375 percent more than financial wealth.
percent in the previous five years.
However, from 2005 to 2010, real annual per- capita wealth- growth rate was 7.5 percent, according to the Credit Suisse Research Institute’s Global Wealth Datebook 2015. Between 2010 and 2015, the wealth-growth rate was less than 4 percent.
Where did all the wealth go even with high economic growth? It was not all because the very rich got richer. Compared with 2010, the number of Filipinos in the top 10 percent of global wealth holdings increased by 75 percent. But the key is examining the kind of wealth we have.
Between 2005 and 2010, financial wealth (cash, insurance and stocks) for the average Filipino increased significantly, while the nonfinancial wealth increased by only 25 percent. However, between 2010 and 2015, nonfinancial ( houses, condos, cars and business investment) wealth increased 375 percent more than financial wealth.
Economic wealth increases between 2005 and 2010 put more money in the hands of the average Filipino. Then, that increase in “cash” created higher economic growth between 2010 and 2015, because Filipinos increased their buying activities of goods.
The Arroyo administration should have thanked Filipinos for working hard to increase their wealth (up 7.5 percent). The Aquino administration should thank Filipinos for spending to create a 6.2-percent average economic growth from 2010 to 2015.
Why do we need politicians again?