Hey, Rich Criminals, The Guillotine Won't Have To Be Reinvented
You can only push people so far before they react
The big news out of the U.K. this morning was that the country's biggest corporate bosses have gotten big pay raises over the last year and now make an average of $7.2 million, a tidy 140 times more than their employees' average earnings. Theresa May, the U.K.'s new Conservative Prime Minister, whose party's policies have made this possible, said "There is an irrational, unhealthy and growing gap between what these companies pay their workers and what they pay their bosses." I suppose the two previous posts had to lead directly to this one about how hedge fund managers are preparing for the armageddon-- or revolution-- they are helping create with their unfettered greed and control of (the coercive powers of) government. Alec Hogg, reporting last year from Davos-- yes, I'll be honest: I would vote for a Trumpanzee if he'd promise to use a nuke (a small one ONLY) on one of these Davos summits-- wrote that the predatory super rich were "preparing getaways by buying airstrips and farms in remote areas."
With growing inequality and the civil unrest from Ferguson and the Occupy protests fresh in people’s mind, the world’s super rich are already preparing for the consequences. At a packed session in Davos, former hedge fund director Robert Johnson revealed that worried hedge fund managers were already planning their escapes. “I know hedge fund managers all over the world who are buying airstrips and farms in places like New Zealand because they think they need a getaway,” he said.Two days later, Hogg was still reporting from Davos about how our elites have engendered a feeling of worldwide pessimism and geopolitical tensions by not doing enough to reduce runaway inequality. The Davos elites, who gave us Austerity for monkey politicians like Paul Ryan and David Cameron to espouse, were worried that "the next big revolution will be in regulation rather than innovation."
Johnson, who heads the Institute of New Economic Thinking and was previously managing director at Soros, said societies can tolerate income inequality if the income floor is high enough. But with an existing system encouraging chief executives to take decisions solely on their profitability, even in the richest countries inequality is increasing.
Johnson added: “People need to know there are possibilities for their children-- that they will have the same opportunity as anyone else. There is a wicked feedback loop. Politicians who get more money tend to use it to get more even money.”
Global warming and social media are among the trends the 600 super-smart World Economic Forum staffers told its members to watch out for long before they became ubiquitous. This year, income inequality is fast moving up the Davos agenda-- a sure sign of it is poised to burst into the public consciousness.
Jim Wallis, founder of Sojourners and a Davos star attraction after giving the closing address in 2014, said he had spent a lot of time learning from the leaders behind recent social unrest in Ferguson. He believes that will prove “a catalytic event” which has already changed the conversation in the US, bringing a message from those who previously “didn’t matter.”
But as former New Zealand prime minister and now UN development head Helen Clark explained, rather than being a game changer, recent examples suggest the Ferguson movement may soon be forgotten. “We saw Occupy flare up and then fade like many others like it,” Clark said. “The problem movements like these have is stickability. The challenge is for them to build structures that are ongoing; to sustain these new voices.”
So what is the solution to having the new voices being sufficiently recognised to actually change the status quo into one where those with power realise they do matter?
Clark said: “Solutions are there. What’s been lacking is political will. Politicians do not respond to those who don’t have a voice In the end this is all about redistributing income and power.”
She added: “Seventy five percent of people in developing countries live in places that are less equal than they were in 1990.”
Republicans aren't the only politicians who sell out-- Schumer and Murphy
The panellists were scathing about politicians, Wallis describing them as people who held up wet fingers “to see which way the money is blowing in from.”
Author, philosopher and former academic Rebecca Newberger-Goldstein saw the glass half full, drawing on history to prove society does eventually change for the better. She said Martin Luther King was correct in his view that the arch of history might be long, but it bends towards justice.
In ancient Greece, she noted, even the greatest moralists like Plato and Aristotle never criticised slavery. Newberger-Goldstein said: “We’ve come a long way as a species. The truth is now dawning that everybody matters because the concept of mattering is at the core of every human being.” Knowing you matter, she added, is often as simple as having others “acknowledge the pathos and reality of your stories. To listen.”
Mexican micro-lending entrepreneur Carlos Danel expanded on the theme. His business, Gentera, has thrived by working out that “those excluded are not the problem but realising there’s an opportunity to serve them.”
He added: “Technology provides advantages that can lower costs and enable us to provide products and services that matter to the people who don’t seem to matter to society. And that’s beyond financial services-- into education and elsewhere.”
Which, Danel believes, is why business was created in the first place – to serve. A message that seemed to get lost somewhere in the worship of profit.
Laura Tyson, professor of business administration and economics at UC, Berkeley says she's worried that accelerating economic inequality will lead to clashes all over the world, although she focused particularly on the Middle East. "We have not done nearly enough about inclusive growth. We’re now having economic growth with increasing inequality."
Thomas Piketty's former professor, Christopher Pissarides, a 2010 Nobel winner at the London School of Economics, said governments need to use tax revenues to create jobs but saying what you might expect someone with a "Sir" in from of his name warned that punishing the rich is not the way to go. "I don’t think taxing high incomes and simply taking the money and passing it on as transfers to lower incomes can work in today’s open globalised world," he said. Parroting the standard age-old, right-wing world view, he insists that redistribution takes away the incentive for lower-skilled people to acquire skills and go into the labour market and creates disincentives for higher earners to stay in the country, work hard and look for new ventures to make money." Yes, he could be Paul Ryan if he wanted to give up half his IQ. But where he parts ways with garden variety conservatives like Ryan is that he calls on governments to use more imaginative ways of rebalancing incomes by creating more and better jobs at the lower end and investing in better education.
One example of such innovation, Pissarides said, is in Sweden. Tax rates can be as high as 60% but tax revenues are used to provide services that would not otherwise be created by the free market at a reasonable price. He said the best example is subsidised childcare, which allows both parents to work, and creates jobs for carers.The American right-- long before Trump came around-- figured this out and set about-- with a great deal of success-- to undermine that faith and in fact, preach hatred of government and persuade their partisans that "government is the problem, not the solution."
This, he said, “is boosting the income of the family, as well as the childcare worker because their salary is subsidised, and it reduces inequality.” Couples on lower incomes, who would not be able to afford expensive childcare, can stay in the workforce while raising a family, not just people on high incomes.
One reason this model is so successful in Sweden, he argued, is that people have faith in the state: “You have to have trust in the public sector. There should be no corruption. [In Sweden], because people have trust in the public sector to make use of the money, they pay it and tax evasion is very low.”
One last bit about how the Davos elites think, a report from Jo Confino, on whether or not the criminal billionaire class thinks it's profitable to just let the world go to hell. He points out, for example, that most CEOs care not a whit about Climate Change.
How depressed would you be if you had spent more than 40 years warning of an impending global catastrophe, only to be continually ignored even as you watch the disaster unfolding?
So spare a thought for Jørgen Randers, who back in 1972 co-authored the seminal work Limits to Growth, which highlighted the devastating impacts of exponential economic and population growth on a planet with finite resources.
As politicians and business leaders gather in Davos to look at ways to breathe new life into the global battle to address climate change, they would do well to listen to Randers’ sobering perspective.
The professor of climate strategy at the Norwegian Business School has been pretty close to giving up his struggle to wake us up to our unsustainable ways, and in 2004 published a pessimistic update of his 1972 report showing the predictions made at the time are turning out to be largely accurate.
What he cannot bear is how politicians of all persuasions have failed to act even as the scientific evidence of climate change mounts up, and as a result he has largely lost faith in the democratic process to handle complex issues.
In a newly published paper in the Swedish magazine Extrakt he writes:
It is cost-effective to postpone global climate action. It is profitable to let the world go to hell.Randers says the reason for inaction is that there will be little observable benefit during the first 20 years of any fiscal sacrifice, even though tougher regulations and taxes will guarantee a better climate for our children and grandchildren.
I believe that the tyranny of the short term will prevail over the decades to come. As a result, a number of long-term problems will not be solved, even if they could have been, and even as they cause gradually increasing difficulties for all voters.
Trump's standard Republican economic agenda, delivered in Detroit today was geared right towards wealthy donors, not towards workers. For example, he boasted about abolishing the inheritance tax, babbling about how "workers have paid enough," but perhaps not aware that "workers" don't pay a dime of inheritance taxes. In fact no one does except a fraction of the top 1% of earners. It kicks in at around $11 million and that tends-- in real life-- to be unrealized capital gains which hasn't been previously taxed, negating one of the primary right-wing talking points about estate taxes. The whole plan sounded like it could have been written by one of Paul Ryan's interns aimed to increase rather than decrease economic inequality. Just as Señor Trumpanzee was speaking, a new Monmouth poll was released showing Hillary clobbering him 46-34% among registered voters, with Gary Johnson at 7% and Jill Stein at 2%.Among likely voters, it's Hill-dog at 50% and Mr. T at 37%. Independents prefer Trump by 2 points, 32 to 30%, a rapidly eroding advantage.