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Scott Burns, Asset Builder
Media accounts immediately labeled the disappearance of $50 billion, masterminded by Bernard Madoff, as "the largest fraud in history." It is a greater wealth loss than having a household name company -- such as Walt Disney, Anheuser-Busch or Boeing -- vanish without a trace.
The loss is mind-boggling. But the figure does nothing to convey the damage this man has done.
One way to measure the extent of the damage is to compare the $50 billion to measures of loss in the FBI's Uniform Crime Reports. In 2007 there were 9.8 million crimes against property in the United States. This included about 2.2 million burglaries, 6.6 million larceny-thefts and 1.1 million car thefts.
I think you'll agree that 9.8 million crimes represent a veritable army of miscreants. In spite of that, our total losses to property crimes in 2007 were a mere $17.6 billion. To be sure, it didn't feel "mere" if you suffered a burglary. The average loss was $1,991. Nor was it "mere" if you were one of the 6.6 million people who suffered a larceny-theft. In those, the average loss was $886.
But when you add all the losses in 9.8 million common property crimes, it's just a fraction of the estimated $50 billion loss attributed to Bernard Madoff.
... Bernard Madoff has caused losses equal to all the losses caused by all the conventional thieves in America for nearly three full years.
An under-reported story is the extent of the fraud and disasters in the financial sector. Part of the reason is because it's hard to grasp the EXTENT of the damage, not only to the economy but to US prestige and the reputation of capitalism as well.
Chinese workers leaving cities in droves
Reuters via CNN Money
China's ocean of blue-collar workers is streaming back to the country's farming hinterland, bringing thwarted aspirations and rising discontent in tow as their city jobs, their paths out of poverty, fall victim to the global economic crisis.
... Officials estimate that more than 10 million migrant laborers have already returned to the countryside as thousands of companies have been dragged under by weak global demand for everything from clothes to cars.
The government, always concerned about social instability, is now on high alert, fearful of the consequences of a huge mass of jobless, disappointed, rootless young men.
... Over the past three decades, about 130 million people have left China's countryside for the smokestacks, assembly lines and construction sites of cities.
That migration, described as the world's biggest ever by the United Nations, has underpinned the country's heady growth and also given its poorest citizens a share of the spoils, as urban residents' incomes are much higher than farmers'.
... But China is heading into uncharted territory and the picture could deteriorate quickly. Many economists forecast growth next year of less than 7.5%, the country's lowest since 1990 and a level that would swell the ranks of the jobless.
"The redistribution of wealth through theft and robbery could dramatically increase and menaces to social stability will grow," Zhou Tianyong, a leading Communist Party scholar, wrote this month in a newspaper issued by a state think-tank.
Workers and officials alike hope the migration reversal is only temporary, but the numbers are too vast to ignore. The social security ministry says 10% of all migrants have already gone back to the countryside.
(30 December 2008)
Co-operative movement weathers economic storm (Video, transcript)
Matt Peacock (reporter), Australian Broadcasting Corporation
The world wide co-operative movement say that their banks and other businesses are flourishing in the face of the global financial crisis. The co-operative movement whose funding principles put people before profit claim they are a sustainable force in the community.
... MATT PEACOCK, REPORTER: Hard economic times and tough competition from multinational chains haven't killed off this traditional dairy farmers' co-op.
Quite the contrary, Hastings Dairy, which was launched as a milk co-operative nearly a century ago in the northern New South Wales town of Wauhope, has tripled production in the past five years. It now specialises in quality cheeses and yoghurts and the local community is the winner.
RAINER SCHULTER, CO-OPERATIVES EUROPE: We are a very substantial economic force within this community and every year we put back our profits, go back to the community.
MATT PEACOCK: This is no tiny rural collective. Hastings co-operative is big business.
PHILLIP BRYANT, CEO, HASTINGS CO-OPERATIVE: We operate two supermarkets, super IGA supermarkets. We've got two retail service stations, a bulk fuel distribution business plus also we have with our factory where our organisation started, we have the Hastings Valley Dairy which converts 19 million litres of local farmers milk into cheeses and yoghurts.
(2 January 2009)
Recommended by Big Gav, who says that video and audio should be posted soon.