Dr. Manzur Ejaz:
Proud of my understanding of economics and my ability to express it in Urdu/Punjabi, I was trying to enlighten Rakha Maseeh on how the trickle-down would help him. Rakha Maseeh, a childhood buddy from my village, can very well fit into the category of the ‘wretched of the earth’. After listening to my complex argument, he blurted, ‘I have seen our thatched roofs dripping during the rain, but have never seen wealth dripping down. When you guys (rich farmers) are economically pinched, you squeeze us hard but your prosperous times never drip-down to us. This has been the way for centuries and it will remain thus forever.’
That observation is true for Pakistan and the speculation about the future will also prove correct if their culture, religion, and laws remain the same.
Since the beginning of the Reagan-Thatcher era, the poor, from the South to the North, have been expecting the fruits of the trickle-down theory. Economists have been assuring the poor that if the rich have more on their dining tables, more crumbs will be swept off and thrown down.
I don't know of any economist who has made that kind of statement. Dr. Ejaz doesn't even provide a single example.
In fact, trickling-up has been the order of the day: wealth is being transferred from the poor to the rich. The latest example of this is the way oil companies have ripped off consumers. In the last three months, the income of oil giant Exxon-Mobil was $100 billion and its profits $10 billion. No corporation has made so much profit in such a short period in the entire history of capitalism. And it’s not the only one: every oil company has made similar unprecedented gains.
The US got hit by some of the worst hurricanes in history. Oil prices shot up in the short run for everyone -- not just the poor -- and Exxon-Mobil made a measly 10% profit. Yes, you read that right, measly; Washington Post:
Altria Group, the maker of Marlboro and other cigarettes, made 22 cents for every dollar of revenue in 2004, and pharmaceutical company Merck made 25.3 cents for every dollar of revenue in 2004.
By other measures, such as profit per employee, return on invested capital and free cash flow, Exxon Mobil is nowhere near a standout.
More from the proud Ejaz:
These corporations could not make such a killing even during devastating wars or natural disasters. This time around, however, the main difference is that Washington is being ruled by oilmen and women: President George Bush, Vice President Dick Cheney, Secretary of Defence Donald Rumsfeld and Secretary of the State Condoleezza Rice have all come from the oil industry.
These people are like the conservative traders of any other country. Their allegiance to traders, industrialists and religious fundamentalists is no different than those of the pro-Khomeni Iranian bazaar or anti-Bhutto tajiran, who were the backbone of Tehreek Nizam-e-Mustafa of Qaumi Ittehad in 1977.
Give me a break. I'll let the Washington Post answer the "oilmen" charge:
... in 2004 Exxon Mobil earned more money -- $25.33 billion -- than any other company on the Fortune 500 list of largest corporations. But by another measure of profitability, gross profit margin, it ranked No. 127.
Also, see this post and its first three comments at Free Republic if you're unclear on the concept of profit margin. Back to Ejaz:
At present, US consumers have more debts than their total worth,...
Um, no. According to this year-old article, the median net worth (assets minus liabilities) by age groups in the US was all in the positive. This is not a matter of opinion. It's a simple fact.
Ejaz, then, goes on a tangent which produces jewels like this:
... the US crusade against religious extremism does not seem genuine
because the country itself is a fertile ground for religious
fundamentalism.
Riiight. Ejaz tried his best to showcase the US as a society that not only thrashes its own poor but harms the "wretched of the earth" as well. Unfortunately, he didn't let small things like facts get in the way of his warped world view.