"Many political analysts are treating the outcome of the election as if it were a referendum on Iraq. But the fact is that the Iraq War was already going badly when President Bush was re-elected and there was at that time at least as much negative press about Iraq as there is now. What has happened in the recent election is that people voted - as usual - with their pocketbook. The election results should therefore be regarded more as a referendum on the economy. The average person or median household just isn't feeling particularly good about how he is doing, since the cost of necessities has risen in excess of income gains and despite recent accelerating wage gains.
I should like to remind our readers that educational costs, transportation, food and in particular health-care costs, are all increasing at a fast pace and significantly in excess of core inflation.
But aside from the economy of the median income households, there is another sector of the economy that bears no resemblance to the standards of living of the workers and the middle class: the economy comprising asset-rich people and, in particular, asset and money shufflers. It is the economy of the financial sector, and of the less than 1% of the population that owns substantial assets, which, with easy monetary policies, are showing stunning appreciation. It is the economy of the 173,000 employees of Goldman Sachs, Morgan Stanley, Merrill Lynch, Lehman Brothers, and Bear Stearns; the economy of prestigious property owners and art collectors. According to Bloomberg, 'never in the history of Wall Street have so many earned so much in so little time'. The 173,000 employees of the above- mentioned five Wall Street firms will receive this year US$36 billion in bonuses, which is a 30% increase on last year's record. This will average U.S.$397,707 at Goldman Sachs, U.S.$154,556 at Morgan Stanley, U.S.$174,683 at Merrill Lynch, U.S.$210,696 at Lehman, and U.S.$203,077 at Bear Stearns. (At Goldman Sachs, according to Bloomberg, total average compensation - including bonuses - will increase to U.S.$659,000.)
To put the U.S.$36 billion in bonus payments into perspective: the United Nations' World Food Program, which feeds 79 million people in the world's poorest countries, has a budget this year of only about U.S.$3.5 billion."
Marc Faber The Gloom, Boom, and Doom Report December 10, 2006