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by John Brian Shannon | June 16, 2016
The 1 percent are already ‘In’ and for obvious reasons. Now, what about the 99 percent?
Widespread dissatisfaction among very large numbers of people is manifesting itself in various ways around the world.
We’ve seen it in regards to the Occupy Wall Street protests, the Scottish referendum, Arab Spring, Syrian uprising, in the deepening distrust of globalization and free-trade agreements, lower voter turnouts, and most recently, in the potential for Grexit and Brexit from the European Union.
But it wasn’t always that way. In the postwar world, people from all walks of life and in every country ‘pulled together’ towards a common and better future. Sure, the Cold War interrupted that mood. But if anything, and in the broadest possible context, the Cold War served to sharpen competition and increase the overall flow towards a better civilization.
When the Cold War ended, Earth’s then-population of 6 billion took a collective deep breath and said; “Now we can get somewhere!” — in regards to creating the kind of world anyone would be proud to live in.
But 26 years on, we have fallen massively short of those aspirations. And it’s becoming more apparent and it is grating on people, moreso with each passing year.
Instead of a giant leap forward for the human race, we had trillion dollar wars in Iraq and Afghanistan that were based on falsehood (the U.S. Iraq Study Group said so) a major recession caused by the unethical and perhaps illegal actions of ‘too big to fail’ financial institutions (but only one person has gone to prison) we had democratic voices being dragged away from peaceful and legal #OWS rallies, we have dangerous people trying to re-ignite the Cold War because it used to be good for the military-industrial-complex economy (so why not try that again?) we suddenly have a 1 percent cohort that owns more than HALF of the world’s wealth (by 2030 they will own 76% of the world’s wealth if measures aren’t taken) we have more outsourcing of jobs (and therefore a larger proportion of low-paying jobs) and we have unelected, elitist, bureaucrats in Europe telling the rest of the continent where to go and what to do.
And that isn’t the half of it.
“It is time for the global leaders of modern capitalism, in addition to our politicians, to work to change the system to make it more inclusive, more equitable and more sustainable.
Extreme inequality isn’t just a moral wrong. It undermines economic growth and it threatens the private sector’s bottom line. All those gathering at Davos who want a stable and prosperous world should make tackling inequality a top priority.”
Lady Lynn Forester de Rothschild, Chief Executive Officer of E.L. Rothschild and chairman of the Coalition for Inclusive Capitalism, who spoke at a joint Oxfam-University of Oxford event on inequality in 2015
(So far, not a single recommendation has been implemented)
Consequently millions of people are losing faith in and blaming globalization when in fact globalization isn’t the problem.
Twenty-six years after the Cold War has ended, our civilization is so much less than it could be that it boggles the mind.
The 1 percenters and their acolytes can’t understand what all the fuss is about.
And I understand that! Their lives are so far removed from reality that; “Let the peasants eat cake.” doesn’t begin to describe the disconnect they have with the other 7.2 billion people on the planet.
(For the record, none of it was caused by the 1 percent — they are merely the beneficiaries of the trickle-up economy — therefore, we can never blame them for the problems of the 99 percent)
Ongoing troubles with Russia, China, #OWS, the global economy, Brexit, etc. are just the beginning of our problems. Five years out and ten years out, we will look back longingly to the 2010-2016 timeframe where we had these relatively minor problems to contend with!
We need a new global vision, one that is orders of magnitude better than the present mediocre vision, so that 7.2 billion people will say to themselves, “Now this, I can support and work diligently towards.”
The present vision of; ‘Let’s keep making corporations and the 1 percent richer and richer at our expense, getting into conflicts with Russia and China for no reason good enough to justify the risks involved, and unelected and elitist technocrats ruling the Earth (seems to be a growing trend) all so that we can feel grateful to have a low-paying job and a declining middle class?‘
That’s not a vision! That’s the path to economic suicide!
While there won’t be revolutions there is likely to be widespread voter dissatisfaction and a much lower level of ‘buy-in’ to our civilization from everyday citizens. That alone, is enough to cause irreparable damage to our world.
Everyone has a different idea about why the former Soviet Union failed;
Some say it was the sudden drop in oil prices (not really, that was merely the straw that broke the camel’s back) some say it was Western plots (slight attribution there, IMHO) while some said its fall was due to their failure in Afghanistan (embarrassing, but not Warsaw Pact demolishing by any standard) or by other, unspecified means.
But no, the real reason for the failure of the former Soviet Union was passive defiance by Soviet workers, whose favorite (quietly-spoken) saying was;
“As long as they pretend to pay us, we will pretend to work.”
And that is everything!
Once it became obvious to Soviet workers that the Soviet Union was ‘no longer working’ for their best interests, they employed a sort of ‘passive defiance’ in return for the crass neglect they felt they had endured, which lowered the USSR’s productivity to such an extent that all it took was a few months of low oil prices and some sniping from U.S. politicians for the whole thing to implode.
Now, 26 years after the fall of the Soviet Union, Western workers are beginning to think in terms of ‘passive defiance’ and may soon follow the path of those Soviet workers.
Long story short; There are very real reasons for the growing dissatisfaction and the disconnect between 7.2 billion people on the one hand — and the 1 percent, their acolytes, and the elitist technocrats that serve them, on the other hand.
The grievances of that many people can’t simply be waved away in a ‘Let them eat cake’ kind of way.
We need a grand and new vision, one that is orders of magnitude better than the present non-vision, and one that 7.2 billion people will urgently wish to support.
Anyone up for that?
If not, we’re already on the path to lose everything we’ve built.
- The World’s Ins and Outs (Project Syndicate)
- Richest 1% will own more than all the rest by 2016 (Oxfam International)
by John Brian Shannon | April 15, 2016
A long time ago when there were unicorns, there was a justifiable need for international trade agreements in order to spur trade, increase movement of capital flows and to promote movement of labour — but mainly to gain access to potentially larger markets in both developed and developing nations.
International trade agreements like NAFTA and even today’s TPP are throwbacks to a day when we didn’t have all of that. Many global economies then were practically closed markets, with few exceptions.
It’s almost the opposite these days — globalization has certainly prevailed — and it’s the rare country that isn’t buying or selling wares from around the world on a daily basis.
North Korea is a closed market, so is Japan (although it is a huge exporter) and only a handful of other nations could be considered ‘closed markets’ in any substantive sense.
In your home country you can probably buy a car, a music player, clothing, food, and almost anything else — and it likely wasn’t built, created, or grown, in your country.
Globalization has succeeded wildly and we now live in a globalized world.
How’s it working?
For the people in developed nations it has meant 25-years of inexpensive goods on store shelves — goods that were either built, created, or grown, in developing nations, which has been a real bonus for developed world consumers — and it has also benefited workers in the developing world.
Unfortunately, it also led to many high-paying jobs being sent overseas, resulting in higher unemployment and worse social ills than that in some developed nations.
Liberalized international trade has become all that it could be
Which is fine. It’s served it’s purpose and we now have open markets around the world with levelization of trade, capital, knowledge, labour, and general market equilibrium — if not market symbiosis.
But there isn’t much more room for globalization to grow. Other than tidying-up some intellectual and property rights regulations we’ve arrived at our free trade destination. We’re already living in the globalized economy.
Where do we go from here?
There are a number of things that can strengthen our domestic economies without turning back the clock to the (almost) closed economics of the 1960’s.
Ten Ways to Make Our Country Better and Stronger – While Helping Citizens to Succeed and Live Happier Lives
The Ten Ways: Increasing Intellectual Property Rights, Increasing Government Revenue Streams, Preventing Obscene Government Debt, and Enhanced Government Services Designed to Move the Bottom Economic Quintiles Towards Middle Income Status
- We and our trade partners should sign a simple trade agreement to protect intellectual property rights, one that includes universal patent, trademark and copyright protections. The point is to get it done now while it is still relevant. If we wait, there’s no point in bothering with it, as all the secrets (the patents, trademarks and copyrights) will be ‘out of the box’ and in the general marketplace. (The rule must be that we don’t trade with nations that won’t sign and abide by those laws)
- We and every country we trade with should pass legislation to allow a simple 5% tariff on every imported and exported good — from supertankers full of oil, to consumer electronics, to clothing, to food, — in short, everything. This simple tariff would replace all other import and export taxes/tariffs/levies and related charges. Billions of dollars of goods are imported and exported every month and the tariff revenue stream can be used by the federal government; To improve productivity by funding R&D, and to improve government services and infrastructure — or used to raise national GDP and quality of life for citizens, by reducing unemployment and to lower taxes on the poor and working poor.
- We and our trade partners that don’t already have a national Goods and Services Tax (of 7% for example) on all retail goods, should implement one immediately. This revenue can contribute to the overall economy to improve services and infrastructure, reduce unemployment, and lower taxes on the poor and working poor, and should be shared 50/50 with states or provinces — who after all, would be the parties responsible for collecting it.
- We, and every country we trade with should pass legislation making deficits of more than 4% of GDP illegal, at the federal, state, and municipal level. This prevents obscene government spending and prevents the trap of eternal debt servicing costs, once interest rates rise. Which they always do.
- Our own country and every country that we trade with should no longer charge income tax on those who earn less than the equivalent of $25,000. per year.
- We and our trade partners should pass legislation to the effect that every worker has the right to a minimum of 25 weeks of full-time employment, per year. Yes, it would require a job-sharing programme managed at the state level. Some workers may receive layoff notices in order to accommodate unemployed workers. On the positive side, long-term unemployed people could then contribute to the economy (and to their own personal income!) for a minimum of 25 weeks per year. In countries like Sweden, this is common in industries that can’t keep all of their workers employed, and it is normal for two workers to share the same job for many years (6 months ‘on’ and 6 months ‘off’) so that over the course of a year, every worker in the country will have worked a minimum of 6 months. Which keeps their skills sharp, makes them eligible for automatic unemployment insurance benefits during their layoff, and lowers the welfare rate to near-zero.
- Most government unemployment insurance programmes around the world pay 66% of a worker’s salary during periods of unemployment, often after a significant wait and a worker’s claim can be turned down for any number of strange reasons. It’s inhuman. Workers pay into unemployment insurance — it’s not their fault that there are millions more people looking for work than there are jobs available — because their jobs have been sent overseas since globalization began. In some countries, a brilliant solution exists whereby workers can opt to pay into a private unemployment insurance programme, one that can top-up their unemployment insurance payments to 99% of their normal salary for the equivalent of 1 or 2 cents per dollar earned. The employee merely indicates how much extra unemployment insurance coverage he or she wants to purchase, and the deductions are automatically made from their wages and directed to the private unemployment insurance company. The private insurer also begins paying unemployment benefits from the first day of a worker’s lay-off. Workers no longer need subsist on 66% of their normal income while unemployed. (Imagine working in the fast-food industry, living on subsistence wages, then getting laid off due to a slowing economy, and then having to exist on only 66% of your already subsistence-level wage!) NOTE: In Sweden, both the government-run unemployment insurance plan and the private unemployment insurance plan make a respectable profit, every year. That’s how easy it is to do, when it’s done properly.
- Every city, town, village or county in the country should have the option to receive a free website from the federal government for as long as certain information is continuously updated by the local jurisdiction. Simply by entering the name of a jurisdiction in Google Search, anyone should be able to find the local time, weather, federal, state, city, village or municipal phone numbers and addresses, emergency services and other essential services (like Hospitals and Veterinary Clinics) and employment information for that city, town, or region. Standardization is key so that workers looking for work, or visitors to a region can quickly navigate to and access important services without a frustrating search (or fruitless search, because not all jurisdictions have their own site or mobile-friendly site — but you don’t know that until you do an hour’s searching and discover that there isn’t one!) Quick access to important phone numbers and addresses can save lives and help to increase productivity.
- Streamlined government websites for self-employed people to set-up and begin working in one day with a minimum of confusion, stress and red-tape.
- Legislation to require internet service providers to provide basic internet plans of $10. per month with low entry barriers — enough to check emails, find a job, find rental accommodation, and perhaps practice the preferred local language in hopes of finding a job. The internet is an essential service in our era, and those entering the workforce or returning to work after illness, etc. need to be able to start somewhere.
It’s easy to look around the world to see what’s working well in other jurisdictions and write similar legislation.
Legislators in Sweden and Norway don’t have two brains nor any other super powers, that we know of. If they can manage to get these things done, so can we. And if we can’t, we’re not half as great as we imagine ourselves to be.
But we are! Therefore, all we lack is the will to act. So let us act, and help our country to leap forward by one order of magnitude.
- A Progressive Logic of Trade (Project Syndicate)
- The Secret of Norway’s Success (JohnBrianShannon)
- In Sweden: Nobody Sleeps in Dumpsters (JohnBrianShannon)
- The Silver Bullet for the Economy (JohnBrianShannon)
- The Most Profound Metric of All (JohnBrianShannon)
- Stephen Poloz calls for defence of free trade amid wave of protectionist talk (CBC)