Tuesday, December 18, 2012
The Five Pillars of the Growing Inequality in the U.S.
Wednesday, November 7, 2012
A Four-More-Years Mandate for Barack Obama: A New Opportunity
Sunday, August 5, 2012
Why Are Things Crumbling Around Us…and Could Easily Get Worse?
Friday, March 9, 2012
The Corrupt Influence of Money in the American Political System
Friday, January 13, 2012
Of Candidates and Negative Campaigning
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Tuesday, December 18, 2012
The Five Pillars of the Growing Inequality in the U.S.
“These unhappy times call for the building of plans that rest upon the forgotten, the unorganized but the indispensable units of economic power…that build from the bottom up and not from the top down, that put their faith once more in the forgotten man at the bottom of the economic pyramid.”
Franklin D. Roosevelt (1882-1945), 32nd American president (1933-1945), 1932
“Money becomes evil not when it is used to buy goods but when it is used to buy power... economic inequalities become evil when they are translated into political inequalities.”
Samuel Huntington (1927-2008), American political scientist
“Social and economic inequalities are to be arranged so that 'they are to be of the greatest benefit to the least-advantaged members of society' (the difference principle); offices and positions must be open to everyone under conditions of fair equality of opportunity.”
John Rawls (1921-2002), American philosopher and moralist, (A Theory of Justice, 1971, p. 303)
"When plunder becomes a way of life for a group of men living together in society, they create for themselves, in the course of time, a legal system that authorizes it and a moral code that glorifies it."
Frederic Bastiat (1801-1850), French economist
On November 6, 2012, American voters chose not to entrust their central government to ultra-conservative billionaires and their candidates and they rejected their anti-government, low taxation and no regulation ideology.
One reason may be that there is a perfect storm brewing in the United States in the direction of an ever greater income and wealth inequality. However, a majority of Americans are beginning to understand that the ultra-conservative ideology and the government policies it generates play a large role in the fact that a minority of very rich people are getting richer while a majority of poor and middle income people are getting poorer.
Recent studies indicate that over the last thirty years, in the United States, the rich have been getting richer at the same time that the poor and the middle class have become poorer.
Indeed, from 1983 to 2010, the share of total wealth in the U.S. held by the richest 10 percent of American households increased from 68.2 percent to 76.7 percent, while the other 90 percent of the population got poorer. Other measurements show the same results regarding a move toward greater income and wealth inequalities. For example, in 2010, the top 20 percent of the U. S. population owned 95 percent of financial wealth, while the other 80 percent of the population owned only 5 percent of financial wealth, and some were deeply in debt. In 1983, the comparable figures were 91 percent vs 9 percent.
Consider a few other indicators of income inequality:
-In 2012, the average CEO of the Standard & Poor's 500 companies earned in compensation 380 times more than the average American worker. To keep things in perspective, consider that in 1965, (N.B.: a time when an executive used to be viewed as a worker and not as an aristocrat or a god), the average CEO earned in pay 20 times more than the average American worker. You thus have an idea of how absurd the differential has become and how rigged the market for CEOs has become.
Similarly, the share of total U.S. income earned by the top 1 percent of Americans was around 8 percent from 1963 to 1983. Since 2000, however, this ratio has hovered around 20 percent. —Some people's greed has no limit. When they have millions $, they want billions $; when they have billions $, they yearn for trillions $.
The inevitable conclusion is that, over the last three or four decades, economic policies have favored the richest citizens while they have worked against the economic interests of the majority. This is bound to become an increasingly important issue in the coming years, economically, socially and politically.
What are the causes behind such a shift toward growing inequalities?
This is a complex question. In any given year, many factors influence an economy. Some economic policies, however, have a long-lasting effect.
Therefore, to answer such a fundamental question, we may begin by considering the implications of a recent fact finding by the central bank of Canada. Indeed, the Bank of Canada attempted to explain why American economic output is still about 6 per cent lower than its potential and why unemployment is nearly double of what it should be. It found the answer in the fact that one trillion dollars is missing from the U.S. economy. This is money that is missing from the income stream; money that has been taken out of the income stream and not re-injected into the economy. In a word, because of government subsides to recapitalize the banks, one trillion dollars has been taken from some Americans and put into the pockets of some other Americans who have not spent it. Thus the double wammy of having very rich Americans getting richer while the majority of Americans are getting poorer. In other words, the same causes that are behind the slowdown in the U.S. economy are also the same factors that explain why the very rich are getting richer and the poor and the middle class are getting worse off.
There are five main causes that go a long way towards explaining both the relative stagnation of the U.S. economy and the widening of the gap between the very rich and the rest of the population.
1- First. The ideology of an open world market and the free movement of capital and companies
Once the principal comparative advantage that the United States used to have over other national economies was its large domestic market. An economic principle states that “economic specialization is a function of the size of the market”. Indeed, when producers can mass produce, this results in economies of scale, with unit costs going down and productivity going up.
However, the U.S. government gave up a large chunk of this comparative advantage when, pressured by large banks and large corporations, it accepted free trade and free capital movements with some developing countries, including communist China.
This policy has allowed U.S. firms to out-invest and and to out-source their production to low-wage countries under the cover of the ideology of world free movement for capital. This was advantageous to the CEOs of these banks and companies, but it severely disadvantaged the American working class. What's more, out-sourcing campanies could take advantage of the U.S. tax code and not pay any tax on their foreign earnings. The U.S. central government and U.S. state governments have suffered as a consequence.
2- Second. A broken immigration policy
Not only did the U.S. government allow American companies to export their capital and technology abroad, but its immigration policy of letting in poorly trained and/or low wage foreign immigrants also has had the effect of keeping down the wages of low-skilled American workers in many industries.
3- Third. A tax code skewed in favor of the very rich
The overall fiscal crisis in the United States is the result of low economic growth, of a declining share of corporate tax revenues and of huge tax cuts for the very wealthy. Lower effective taxation for large corporations and for the very wealthy individuals who can park part or all of their financial wealth abroad, has allowed them to avoid domestic taxation. These taxation loopholes combined with huge public deficits are at the very root of the U.S. fiscal crisis.
Indeed, corporate tax revenues in the U.S. are at a 40-year low as a share of Gross Domestic Product (GDP). Presently, this ratio is close to 1 percent. In the 1950s, it was around 6 percent of GDP. This is because large American corporations have become "expert at avoiding taxes", by shifting production to low-wage countries and by shifting profits to low-tax countries.
Sycophant media sometimes point out that the U.S.'s top corporate tax rate is 35 percent. However, they fail to report that the real amount American corporations actually end up paying to the government is much lower, sometimes as low as 4 percent or less. This is the result of various deductions, write-offs, and other accounting tricks that allow corporations to legally reduce their tax burden.
As for the taxation of very high incomes, legislators should at the very least consider adopting Warren Buffett's rule for tax fairness. Indeed, according to the Buffett Rule for tax fairness, no household making over $1 million annually should pay a smaller share of their income in taxes than middle-class families pay.
4- Fourth. The Housing crisis, the Financial crisis and the Fed's policies to shore up large banks
The 2005 housing crisis and the subsequent financial crisis that unfolded after 2007 has hurt the American middle class badly. Not only millions of Americans lost their homes through bank foreclosures, but most everyone else suffered huge losses in their home equity and saw their net worth severely reduced.
Add to that the fact that savers and retirees have been crushed by a Fed policy of negative real short- and medium-term interest rates that have reduce interest income, a policy designed primarily to shore up large nearly insolvent, and close to bankruptcy, American banks.
5- Fifth. The waging of foreign wars financed with debt
The very rich in the United States are inevitably at the forefront when it comes to supporting U.S. foreign wars of aggression abroad, but they are usually most reluctant to pay for such wars with the required tax revenues. Moreover, not only do such foreign wars increase the federal fiscal deficit, they also increase the U.S. trade balance deficit and they put pressure on the U.S. dollar.
All these factors have contributed in lowering job creating investments in the United States, in squeezing the incomes of the American middle class, in reducing its wealth and in slowing down consumption spending and economic growth.
Indeed, even though the U.S. government runs huge fiscal deficits, this is not enough to compensate for the money draining out of the United States, thus leaving the U.S. economy in a state of permanent economic stagnation.
Faced with such protracted problems, what would be the best way to tackle them?
The logical approach would seem to be to simply stop and reverse the public policies that have resulted in creating the five causes behind the growing income and wealth inequalities in the United States. Saying that is also saying that the principal cause of economic stagnation in the U.S. is political. Indeed, on a practical level, only the U.S. government and its agencies can correct the bad economic and social policies of the past.
However, there is a conundrum: There is a vicious circle at play when income and wealth inequalities are growing. This comes from the fact that when wealth has become concentrated in a limited number of hands, the principle of compound interesttends naturally to make matters worse. Large fortunes tend to grow in a compound way, especially if taxes are avoided.
A second factor normally enters the picture: The more money the super rich have, the easier it becomes for them to corrupt the political process and to steer legislation and regulation in their favor. The problem may thus become intractable, and no reform may take place through normal legislation. Indeed, a government may be deadlocked for years by special interests. This is the murky world of “winners-take-all politics”. As President Thomas Jefferson once observed, such political problems are very difficult to correct, short of a revolution.
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Wednesday, November 7, 2012
A Four-More-Years Mandate for Barack Obama: A New Opportunity
(Author of the books “The Code for Global Ethics”, and “The New American Empire”)
“Behind the ostensible government sits enthroned an invisible government owing no allegiance and acknowledging no responsibility to the people.”
Theodore Roosevelt (1858-1919) 26th President of the United States (1901-1909)
"We have used our taxpayer dollars not only to subsidize these banks but also to subsidize the creditors of those banks."
Elizabeth Warren, Democratic senatorial candidate in Massachusetts and Harvard professor
"We're not very far from the level where the economy is not self sustaining."
Ben Bernanke, Fed Governor, Sunday, December 5, 2010, (on CBS 60 Minutes),
[U.S. officials have relayed to a] "very senior Israeli figure (that) in the eyes of the Democratic administration, Netanyahu is perceived as campaigning on behalf of Mitt Romney."
Yossi Verter, September 2012, (Iaraeli journalist writing in Haaretz)
We have to congratulate Americans for their democratic decision during this 2012 election to give President Barack Obama [xxx] a second chance, even if that was done within a close margin.
Indeed, President Barack Obama not only defeated his republican opponent, but he overcame a concerted effort by right wing billionaires, buttressed by the U.S. Supreme Court's decision of January 19, 2010 to open the gate for unlimited corporate money in U.S. elections, to defeat him. A majority of Americans have decided not give more power to the super wealthy in the U.S. government as compare to the huge influence that they already have.
During this campaign, President Obama was also subjected to some not-so-subtle racist attacks that he had to sidestep.
Similarly, Barack Obama overcame the efforts by a powerful foreign politician, i.e. Israeli Prime Minister Binyamin Netanyahu, to defeat him. Indeed, Netanyahu shamelessly and openly campaigned against the incumbent American president and he enrolled the powerful pro-Israel lobby and its neocon cohort in the media in that endeavor. His incendiary war statements had also the effect of pushing oil prices up, thus weakening the U.S. economy at a crucial political time for the President. A Romney win could easily have been viewed as a Netanyahu electoral victory in the U.S.
More immediately, President Obama has overcome the serious political set-back he suffered when he staged a poor performance during the first Obama-Romney debate, on October 3rd. Luckily for him, he was better prepared for the two subsequent debates and he somewhat succeeded in regaining a badly needed momentum.
Generally speaking, it is always a challenge for a president to be re-elected during tough economic times. For instance, in 1932, Herbert Hoover faced a devastating economic depression and he could not propose economic policies bold enough to fight it. In 1976, appointed Gerald Ford had the misfortune to run for re-election after the first oil shock and in the aftermath of the 1974-79 recession. In 1980, Jimmy Carter saw the U.S. economy hit by a second oil shock and inflation seemed then out of control. In every case, the American electorate went for a change.
President Obama's re-election in 2012, with the U.S. economy still railing after the worst financial crisis in half a century is quite an accomplishment and it deserves congratulations.
However, let us keep in mind that candidate Barack Obama was elected in 2008 with a mandate to change things, not superficially but fundamentally, after eight disastrous years under George W. Bush. The fact remains that he did not do that in any appreciative way and he did not meet the challenges facing him, nor did he meet his supporters' expectations. In a few words, Barack Obama was not a reincarnation of Franklin D. Roosevelt.
Maybe this was unavoidable, considering that Mr. Obama lacked both experience and some basic training in economics and finance. This was going to be a problem for a junior senator who had not run any complex organization in his life, before being thrown into the high profile and extremely demanding occupation of president of the United States. Even with a squeaker of a victory, the fact remains that Barack Obama so far has shown a reluctance to take bold actions in a time of crisis.
Aside from his half-baked health care reform (along the line of an original Republican proposal!) and his even more half-baked financial reform, Barack Obama did not accomplished much during his first term, domestically speaking. He even bent to those who wanted to extend the disastrous George W. Bush's tax cuts for the very rich, and he let the federal deficit and the public debt explode!
Internationally, President Barack Obama turned out to be probably less worse than would have been the 2008 Republican presidential candidate, senator John McCain, and he should be credited with trying to extricate the U.S. from George W. Bush's Iraqi war mess. However, he showed a lack of moral character when he let American generals intensify the use of killing drones in Afghanistan and in Pakistan, thus killing thousands of people, many of them innocent civilians. He has surprisingly demonstrated a lack of respect for civil liberties, going as far as claiming for his administration the right to target even American citizens for extrajudicial assassinations.
But, what about the future? Is it not an opportunity for President Obama now to be his own man and deliver on his previous promises to change things, not superficially but fundamentally, and meet his supporters' expectations by rising to the challenges of the times? For example, can second-term President Obama distance himself from the very reactionary Chicago political machine that played such an important role in his first term?
Of course, facing a Republican controlled Congress (???), the task will not be easy, but while the position of president of the United States conveys responsibilities, it also gives the means to fulfill them.
After the 2008 election, Barack Obama gave the impression that he wanted to be all things to all people. He wishfully hoped that republicans in Congress would put aside partisanship and help him to govern by consensus. That did not happen, and it was very naive idea on his part.
In the same conciliatory mood, he named to key economic posts persons who had been identified with the previous catastrophic George W. Bush administration.
For instance, he was persuaded by his surroundings to name as Treasury secretary Timothy Geithner (a large banks' spokesman from the New York Fed), and he reappointed Ben Bernanke as Fed chairman, even after it had been demonstrated that Alan Greenspan and Ben Bernanke had heavily contributed in creating the 2001-2005 housing bubble and the subsequent financial debacle that followed. And, for good measure, he chose Rahm Emanuel, a former employee of Goldman Sachs, as his Chief of staff. Surrounded by economic people who would have easily fit into a Republican George W. Bush administration, the Obama administration did not move appreciably from the policies put in place by the previous administration.
It is well known that some of Obama's advisers argued in favor of bold economic actions to be taken early on. Thus, in early 2009, Harvard economist Larry Summers, President Obama's first director of the National Economic Council, and former Fed chairman Paul Volcker, among others, advised the new president that he needed to take drastic action toward the largest insolvent banks, lest these failed banks drag the entire U.S. economy down. —Such advice went unheeded. For millions of Americans, the housing crisis lasted much longer than it should have and millions of them lost their homes through foreclosures, while the large super-banks received trillions of dollars in bail-outs to remain afloat. Their CEOs hardly suffered any hardship or retribution, since they were allowed to keep their huge salaries and bonuses.
To prevent large insolvent banks from dragging down the U.S. economy with them, the first-term Obama administration rejected suggestions to use a Resolution Trust similar to what President Ronald Reagan and President George H. Bush created to manage the Savings and Loans crisis of the late 1980s. Another financial shock, if it happens, could give President Obama a second chance to revisit that problem.
Indeed, the Bank of Canada has estimated recently that one trillion dollars is missing from the U.S. economy. That pretty much explains why American economic output is still about 6 per cent lower than its potential and why unemployment is nearly double of what it should be.
That money has gone to some banking black holes and it never got back totally into the economic stream. First and foremost, that money went from the public to the so-called “too big to fail” large banks under the guise of recapitalizing them. Secondly, while the Bernanke Fed artificially pushed real short-term interest rates to negative territory for the same purpose (it has announced that it will pursue this policy for three more years, i.e. until mid-2015), this has decimated the income of millions of retirees, money that was not spent. It also created a bond bubblewhich, when it comes crashing down three or four years hence, will be most destabilizing to the economy. In other words, the short-term gain will be paid with long-run pain. Thirdly, consider also that American corporations have been piling up cash, both at home and abroad in order to avoid paying taxes, and you can begin to understand why the U.S. economy is starving for investment funds.
These lingering problems will have to be tackled if the U.S. economy is going to get out of the current doldrums. Maybe the most immediate task is to avoid the January 1st fiscal cliff. If not, an arbitrary over-the-board rise in all kind of taxes and a cut in all kinds of public expenses are likely to bring forth a new economic recession in 2013-14.
In conclusion, reelected President Barack Obama should learn to be his own man during this second mandate and begin acting accordingly. Especially, large “too big to fail” banks should be better regulated and supervised. Similarly, American fiscal and monetary policies should be better managed if economic conditions are to improve on a more permanent basis. —Good luck.
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Sunday, August 5, 2012
Why Are Things Crumbling Around Us…and Could Easily Get Worse?*
(Author of the book “The Code for Global Ethics”, Prometheus)
"There are no nations. There are no peoples. There are no Russians. There are no Arabs. There are no Third Worlds. There is no West. There is only one holistic system of systems. One vast and immane, interwoven, interacting, multi-varied, multi-national dominion of dollars."
Clip from the movie "Network" (American satirical film, 1976)
"Each candidate behaved well in the hope of being judged worthy of election. However, this system was disastrous when the city had become corrupt. For then it was not the most virtuous but the most powerful who stood for election, and the weak, even if virtuous, were too frightened to run for office."
Niccolo Machiavelli (1469-1527), Italian writer, statesman and political thinker, Florentine patriot, author of 'The Prince', 1512
“The survivors of a generation that has been of military age during a bout of war will be shy, for the rest of their lives, of bringing a repetition of this tragic experience either upon themselves or upon their children, and . . . therefore the psychological resistance of any move towards the breaking of a peace . . . is likely to be prohibitively strong until a new generation . . . has had time to grow up and to come into power . On the same showing, a bout of war, once precipitated, is likely to persist until the peace-bred generation that has light-heartedly run into war has been replaced, in its turn, by a war-worn generation.”
Arnold J. Toynbee (1889-1975), British historian, (A Study of History, Vol. 9, Oxford University Press, London, 1954)
I- I believe that we live presently in what I would call a semi-civilized world; and I would like to demonstrate it.
We live indeed in a troubled period. When we look around us and see what is happening, we really feel that everything is collapsing.
In a recent article, for example, it was said: "Indifference to the importance of ethics and the common good is the Holy Grail of modern finance."
In fact, I do not think it is only in financial matters that we are regressing morally, but in many other areas.
There is a risk, in my view, that this twenty-first century will be more like the nineteenth and be the opposite of the second half of the twentieth century, during which humanity made considerable progress regarding international law and individual and collective rights —including the right of education for all—the triumph of the democratic way of government over all others and a better distribution of the collective wealth.
Conversely, if we were to continue on the current trend, the twenty-first century would be a world in which militarized empires and financial empires impose their laws, where other types of empire would impose their backward and totalitarian religious doctrines, where a self-centered individualism would erode the social fabric based on empathy and solidarity, and where wealth and power in society would be unduly concentrated. And, if I may cite Lord Acton, “Power tends to corrupt, and absolute power corrupts absolutely”, this will also mean a more corrupt world.
Indeed, in many fields, we see that the priority given to human beings–the only moral agents, it must be emphasized–is being neglected and has even become secondary to other priorities that fall within a narrow ideology and are far from being moral. The consequence is that the public interest, the common good, is increasingly being sacrificed in favor of ideological interests and economic interests, when it’s not to systems that crush rather than free the people.
In short, I believe that at the beginning of this twenty-first century we are in the midst of a moral and intellectual regression, as we gradually move away from the social and economic progress that was made during the twentieth century, and all that for a return to the jungle of the nineteenth century, when immoral and lawless empires controlled the planet and crushed peoples at will.
In some areas, notably regarding religion, there seems to be a wish to return to the darkness that existed before the eighteenth century, the century of the Enlightenment, that paved the way for the immense human progress the world has made since.
II- I see five main causes for this moral regression–if not an actual decline or even decadence–in the march for human progress.
I summarize:
What I see is
- First, a poor model of economic development.
- Second. Our democracies, under the impact of technology, give more power to money and to those who control it.
- Third, the weakening of nation states.
- Fourth. As a result of modern communication technology, homo sapiens is becoming homo digitalis.
- Finally, a fifth cause of the current decline is an old, religion-based moral code.
a - What about the current economic model based on globalization, especially financial globalization, with hardly any restraints? For some thirty years now–and I blame some doctrinaire and apologist operators partly for this drift and also the influence of some economists who were too doctrinaire–we have adopted an economic development model in which people seem to count less and less and money counts more and more. The current economic model based on stateless capital is, in my opinion untenable, because it is a source of repeated crises that are nearly impossible to solve.
– So, a bad business model to revisit.
b - Secondly, our political models, some dating back several centuries, are also outdated and counter-productive; they have changed little and have even worsened in the last thirty years. Indeed, their major shortcomings are now reinforced by the technology of communications. They give real power in our societies not to individuals, but to the occult forces of moneywhose privileges seem to have no limit.
– So, we are saddled with a bad political model that is in need of reform.
c - Thirdly, the weakening of nation states combined with the current explosion of world population, if not properly managed (we must prepare to have eight to ten billion world population in a few decades), may precipitate the world toward the lowest common denominator both socially and economically.
As a consequence of the bad economic model to which I refer, rather than privileging free trade in goods and services to raise standards of living (for my part I have always been a supporter of free trade), we have instead abolished for all practical purposes the borders of nation states for the benefit of faceless and stateless multinational corporations.
In some quarters, we have confused the idea of free trade in goods and services according to the comparative advantages of each country with the idea that such comparative advantages do not count and that a country could abandon its industrial and technological advantages with impunity, with no risk to its standard of living. – This is simply false.
Countries that abandon their economic comparative advantages get poorer, even if some corporations and some banks can benefit from the situation. This is the big difference between the common good and special interests. Today, in many countries, it is special interests that dominate the public interest or the common good.
We have even put aside the idea of adopting an industrial strategy to increase productivity, wages and employment, in the mistaken belief that markets–free-for-all markets it must be said, working perfectly and self-regulating–would lead to the greatest common good if left alone. This is a view that does not square well with reality. The scandal regarding the manipulation of the short term interest rate called the LIBOR (the London Interbank Offered Rate) by a few large banks in London is a perfect illustration. When we look around, what we see is that the countries that are currently doing the best economically, such as China or Brazil, are the very ones that have adopted a pro-active industrial strategy in the context of free trade.
When companies can roam the globe in search of the lowest production cost and an almost complete absence of taxation, in practice this means they search for the lowest wages and the lowest tax rates and regulations. In 2011, in the United States for example, the entire corporate world paid 11 percent in federal and state taxes on profits, while the poorest twenty percent of Americans contributed 17 percent tax of their income. In the current system, the tax burden is being shifted more and more from corporations and the owners of capital toward individual taxpayers, often among the poorest.
A recent study indicates how the super-rich of this world avoid paying their fair taxation share. It is estimated that as much as $32,000 billion of their wealth is stashed away in tax havens. The same thing can be said for large international corporations. As long as these corporations do not repatriate the profits they make abroad, those profits may end up not being taxed at all.
For instance, this brings me to say that the U.S. doesn’t have a deficit problem. It has a tax collection problem, and that’s because it has a political corruption problem.
There is no doubt that the combination of economic globalization and political corruption has shifted the tax burden in a very regressive way from corporations and owners of capital to individuals in general, and towards the poor in particular.
And, when a badly designed immigration policy is implemented as well, the demographic, social and economic balance in countries with high living standards is upset, and the result is magnified. We then witness a true economic disarmament of the states that translates into structural budget deficits and an exploding and uncontrollable public debt. We observe this currently in Europe and in the United States. Both are regions where economic stagnation seems to be permanently installed and where western civilization is the most threatened and even endangered.
The economic model of excessive globalization is actually a return to the situation that prevailed in the nineteenth century, under the gold standard. This model is generating major economic and social inequalities in many countries. In fact, it is a model that is fundamentally hostile to the middle class, i.e. to the great majority of people, and which concentrates wealth and power in the hands of a fraction of the population (the famous 1%!) It is a source of income stagnation for most individuals.
Studies show, in fact, that intergenerational social mobility and equal opportunities in industrialized countries of America and Europe fall when economic and social inequalities grow, as it is the case presently.
Ultimately, this will translate into a loss of democracy, because there can be no true democracy in a country where the middle class is atrophied or absent and where a regime of systemic inequalities prevails.
Therefore, I come to the conclusion that the all-out economic globalization that is currently being imposed on countries is a failure. This is a bad economic model because it transfers the real power in our societies from elected officials to large corporations and to owners of capital. They in turn use it to corrupt the political system and to create financial crises like the one the world has been experiencing since 2008.
I would like to quote French economist Frédéric Bastiat (1801-1850) who summarized a situation like the one we are saddled with in this way: "When plunder becomes a way of life for a group of men living together in society, they create for themselves, in the course of time, a legal system that authorizes it and a moral code that glorifies it."
There is no better example of this wise maxim than the U.S. Supreme Court's decision two years ago (January 19, 2010) decreeing that financial and industrial corporations are not only legal entities that have been granted privileges, but that they are in fact “human beings” with full human rights, some even more important than those endowed to humans. The Court stated that such artificial entities could spend uncontrolled and unlimited amounts of money, actually billions of dollars, and this anonymously, to influence U.S. elections at all levels.
Every ordinary American's voting rights were suddenly sharply devalued. As a consequence, nobody can say that the government of the United States is "the government of the people, by the people and for the people," as President Abraham Lincoln proclaimed in 1863 (in his Gettysburg Address).
Political power in the United States has de facto been transferred to corporations and to owners of capital. Remember, this is the same U.S. Supreme Court that put George W. Bush in power in 2000, even if the Republican candidate received a half million fewer votes than Democratic candidate Al Gore, with the disastrous consequences that we all know.
Here in Canada, we have become prisoners of the old British electoral model that gives power to candidates who receive a plurality of votes, but not necessarily a majority of votes. This means that when people divide their support among a half-dozen political parties, one particular party can take power and govern as if it had a majority, sometimes with less than forty percent of the popular vote.
On May 2, 2011, for example, the Conservative party of Stephen Harper formed a “majority” government while receiving only 39 percent of popular support, and this moreover after having relied on dishonest dirty tricks. Since then, that party has governed as if it had obtained 100 percent of the votes. In reality, the polls currently give the Harper government little more than one third of popular support. Nevertheless, on July 1st of this year, Harper even went so far as to order the playing of the British anthem “God Save the Queen” before playing the Canadian national anthem on official occasions, thus insulting not only the vast majority of Quebecers but probably also a majority of Canadians.
Despite the glaring flaws of such an electoral system, Canadian politicians seem to revel in it, and there is no reform in sight. A voting system with runoff elections, such as in France, would be logical, but our politicians pretend to ignore the problem. Therefore, I say that democracy is in trouble in Canada. In fact, it is in trouble everywhere. In some respect, democracy is fast becoming an anachronism, destined to be replaced by oligarchies and plutocracies.
I would add that the rise of militarized empires, and the decline in respect for international law that we have witnessed for some time, open the door to a return of imperial wars or to wars of hegemony. Such imperial wars seem to be concentrated at the beginning of each century.
Indeed, British historian Arnold J. Toynbee (1889-1975) identified the existence of one hundred year cycles of imperial war and peace over the last five centuries (“A Study of History”).
The Kosovo war of 1999 took place without the approval of the United Nations and with only the uncertain legal backing of NATO. Since that precedent, an imperial war outside of the current international legal framework is certainly possible.
In fact I would venture to say that if the Republican candidate Mitt Romney were to be elected to the U.S. presidency in November, (certainly a possibility), his repeated promises to go to war against Iran and his obsequious attitude toward Israel could easily lead to a global war, involving not only the United States and Iran, but also Europe, Russia and China. (Remember that when the conditions were ripe, it took but a single shot to trigger the 1st World War in 1914!) – Indeed, with a devout and ruthless Mormon as head of the U.S., the table would be set for a world war involving the three Abrahamic religions, Christian, Islamic and Judaic. I do not predict that. I am only afraid that it could happen.
World Wars of Hegemony
1494-1516: World War (France)
1580-1609: World War (Spain)
1688-1714: World War (France)
1792-1815: World War (France)
1914-1945: World War (Germany)
1999-2015(?): World War (!) (United States)
d – As a fourth cause of the current moral morass, I identify a more technological cause, that is to say the emergence among the younger generations of a homo digitalis, who is certainly connected by technology, but by a technology that isolates and which can eventually dehumanize the individual in confining him to a virtual space where human warmth and human interactions are greatly reduced. This new human is plugged in digitally and awash in information–and also in propaganda–but is also, paradoxically, more isolated, more fragmented, more homogenized, more individualistic, more competitive, less cooperative, more selfish, narcissistic and more fundamentally perhaps, more conservative in many respects.
Some studies and tests done in the U.S. show that American college students are showing about 40 percent less empathy for others than did students of 20 or 30 years ago.1 In other words, social consciousness in future leaders of tomorrow is down. This bodes ill for the future.
We can certainly ask the question: Is technology–which is developing faster than the moral sense–creating sociopaths2, that is human beings who have barely a modicum of compassion for others?
We already know, from experience, that psychopaths3–that is to say, people who have no remorse for their crimes, no empathy or sympathy for others–may occasionally climb to the highest spheres of political power. These are in fact people who show a particular mental structure in MRI tests. They represent about one percent of the population.4
If the population of the future is itself becoming antisocial, it is not only moral regression that lies ahead. A regression in the entire social and economic scale of values could occur.
Another example where technology advances faster than the moral sense is the use of unmanned Predator drones, controlled from far away (in fact, the control centers are in the United States), to kill so-called “enemy” people in remote lands. To his discredit, the current Democratic president, Barack Obama, (a Nobel Peace prize winner!), has authorized an explosion of such remote controlled bombings, especially in Pakistan, but also in other countries.
– We must therefore get prepared: Future warfare is bound to become increasingly a derivative of video games.
e - I come finally to the fifth cause, in my opinion, of the current decline and decay, and this cause is specifically moral. It is of course connected to the first four causes.
We live, indeed, under the influence of a bad moral code of religious origin, that unfortunately creates systematic divisions between human beings and which justifies, and even encourages, conflicts between human beings by sticking to some intransigent dogmatism.
We must be concerned, if not horrified, by the rise of obscurantism, of anti-scientific sentiment, of the myth of creationism and of religiosity in general in some powerful countries, especially in our own neighbor, the United States. Under these conditions, the rise of imperialist and militarist sentiment in that country should be a great concern to the world.
IV- General Conclusion
How to tackle all these problems?
I have a general conclusion and some more specific conclusions.
My most general conclusion is that the world needs now a moral revolution. I am under no illusions that this kind of fundamental change might occur soon; it could perhaps necessitate that the situation escalate to a point that change becomes inevitable. This could only happen after a major cataclysm.
My specific conclusions are more practical.
Regarding the economy and politics, for example, the remedies are obvious enough: we must stop digging and undertake real fundamental reforms.
First, we must stop managing the entire economy according to the interests of bankers and speculators. The problem is that these big interests corrupt politicians and control the media so that nothing gets done, except that things get worse. Also, secondly, it is essential to restore power to the people and to reduce or eliminate the influence of money in politics. In other words, we must do the exact opposite of what the U.S. Supreme Court says should be done.
The same thing can be said about our archaic voting system. At the very least we should copy the French political model and have run-off elections, to prevent political adventurers from gaining almost absolute power with a minority of popular support.
In regard to the moral character of individuals, studies show that there are only twenty percent of people who are spontaneously empathetic. Therefore, as the Chinese philosopher Hsün Tzu (c.310—c.220 BC) once said "The nature of man is evil; his goodness is only acquired by training," the teaching of moral rules of life in society seems to be an unavoidable necessity.
Regarding the climate of permanent war in which we live presently, I just wish that the cycle of one hundred years of hegemonic world wars, identified by Toynbee and others, won’t apply to our century and that war-crazy psychopaths will not succeed. Otherwise, the disaster that could hit humanity would be unparalleled.
I finally conclude that our civilization is still very primitive. Indeed, humanity has a long way to go, because we're still in the infancy of a genuine civilization.
1. See Sara Konrath's research (University of Michigan: Institute for Social Research), based on 72 different studies of students in American colleges, done between 1979 and 2009.
2. Sociopathy is an antisocial personality disorder is a mental health condition in which a person has a long-term pattern of manipulating, exploiting, or violating the rights of others. This behavior is often criminal. (See Blais and al., “Personality and personality disorders”, in Stern and al., eds. Massachusetts General Hospital Comprehensive Clinical Psychiatry. 1st ed. Mosby Elsevier, 2008, chap 39.
3. Psychopathy is a mental disorder in which an individual manifests amoral and antisocial behavior, lack of ability to love or establish meaningful personal relationships, extreme egocentricity, failure to learn from experience, etc. (See Skeem and al., "Psychopathic Personality: Bridging the Gap Between Scientific Evidence and Public Policy", in Psychological Science in the Public Interest (December 15, 2011), 12 (3): 95–162.
4. See Robert Hare and Paul Babiak, “Snakes in Suits: When Psychopaths Go to Work”, 2007. According to Dr. Hare, it is in politics and in business that one finds the largest concentration of psychopathic personalities. See also“Without Conscience: The Disturbing World of the Psychopaths Among Us” by Robert D. Hare, 1999.
* Notes for a presentation by the author at the Conference of the International Humanist and Ethical Union (IHEU), Montreal (Quebec), August 4 2012.
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Friday, March 9, 2012
The Corrupt Influence of Money in the American Political System
" I have a policy to prevent Iran from obtaining a nuclear weapon. And as I’ve made clear time and again during the course of my presidency, I will not hesitate to use force when it is necessary to defend the United States and its interests."
U.S. President Barack Obama, Sunday, March 5, 2012, speech to the pro-Israel lobby AIPAC (American Israel Public Affairs Committee)
“There are about 50 countries in the world that have the capability to produce a nuclear weapon if they chose to do so, making Iran far from unique but for its persistence as a thorn in the side of Israel and Israel’s powerful lobby in the United States.”
Philip Giraldi, Council for the National Interest
"The truth is there are very few members [of the U.S. Congress] who I could even name or could think of who didn't at some level participate in that [system of bribery and corruption in Washington D.C.]."
Jack Abramoff, professional lobbyist and onetime power broker for the elite of Washington, D.C. (during a CBS's 60 Minutes interview, Sunday November 6, 2011)
“I'm against very wealthy people attempting to or influencing elections. But as long as it's doable, I'm going to do it.”
Sheldon Adelson, casino magnate who has donated $11 million to Newt Gringrich's super PAC Winning Our Future, suggesting that he might give as much as $100 million to support the GOP presidential candidate
The 2012 U.S. presidential election is the first one to be held under the new electoral financing rule decreed by a majority of one by the Roberts Supreme Court on January 21, 2010. With this fateful decision, the Roberts Supreme Court really changed the meaning of the Preambule of the U.S. Constitution that says “We the People of the United States, in order to form a more perfect Union...” and decided on its own to change it for “We, the rich corporations of America...”
Under the new Supreme Court rule, indeed, any legal entity can spend as much money as it likes to control propaganda channels in order to influence and even dictate the election of the U.S. president and of the members of Congress. That's legalized corruption. —Sooner or later, this nonsensical decision will be over-ruled, but not before it may have caused irreparable damage to the U.S. political system by violating two basic democratic principles, i.e. the equality of citizens and the principle of one citizen-one vote. There is no other democratic country where the dictum of French economist Frederic Bastiat (1801-1850), applies more concretely:
—"When plunder becomes a way of life for a group of men living together in society, they create for themselves, in the course of time, a legal system that authorizes it and a moral code that glorifies it."
From now on, Americans will not have the most competent and the most dedicated politicians, but the best political hacks that money can buy. Where are the men and women of value and of independent mind who would want to run for office in such a corrupt system?
People are not fooled. They know that the quality of candidates to public office is very low and declining. Recent polls, for example, indicate that even among republican voters, a majority –58%– say they want more candidate choices, and a whopping 46% have outright negative opinions about the current field of republican presidential candidates: devout Mormon, former missionary, and vulture capitalist Mitt Romney; extremist papal Catholic Rick Santorum, a Taliban-like Biblical literalist who wants to ban contraception methods and who thinks that having a university education in this day and age is to be a snob; twice divorced Newt Gingrich, a former House Speaker ordered in the past to pay $300,000 for Ethics Violations and a dreamer who wants to send 13,000 people to live on the moon; and finally Texas congressman Ron Paul, a libertarian who would abolish Social Security, Medicare and Medicaid for the elderly if he could, all modern programs that have lifted American retirees from poverty. And there you have it.
As of now, with the uncontrolled flow of money coming from corporations, casino owners and banks, and more specifically from defense lobbyists, from pro-Israel lobbyists and Israel Firsters, from bankers' lobbyists, from oil lobbyists, and about 40,000 other registered paid lobbyists in Washington D.C., narrow special interests have free rein to use the resources of the state as if they were their own and to threaten any individual candidate or office holder who dares to oppose them. —Keep in mind that the pro-Israel lobby AIPAC, the most powerful single political lobby in Washington D. C., was the main driving force behind the 2003 military invasion of Iraq by the Bush-Cheney administration, an illegal war of aggression based on lies and false premises.
Indeed, in such a system, the party and the candidates with the most money can be expected to prevail and place their pawns and yes-men in position of power. This is a throwback to the corrupt “Robber Barons” era when a handful of rich capitalists formed a greedy political ruling oligarchy. Undoubtedly, there will be exceptions, but money and propaganda are bound to dominate American elections in the future.
It is not the first time that the U.S. Supreme Court has intervened massively in the American political process. As recently as December 9, 2000, by a one vote majority, the U.S. Supreme Court de facto elected Republican candidate George W. Bush President of the United States, by canceling the recounting of legally cast votes in the state of Florida. Nationally, Democratic candidate Al Gore had received roughly 500,000 more votes than his adversary.
The current Republican presidential campaign has also demonstrated what can be expected in the future under the new rule. The more money a candidate can raise, often from anonymous sources, the more he can buy time on TV and radio to air negative campaigns, not to advance positive proposals of his own, but to destroy the character and credibility of his opponents.
The leading Republican presidential candidate Mitt Romney, as of now, is turning out to be the money candidate and he has outspent his competitors on negative campaigning by a wide margin. In his younger years, before becoming a corporate banker-raider, Mitt Romney was a Mormon missionary leader in France (1966-68) and, while a strong advocate of the military draft for others, he received a personal 4-D deferment from the draft exempting him from going to Vietnam because of his status as a Mormon "minister of religion".
Unless the Republican convention in Tampa FL in August is in a deadlock, Romney, possibly with Santorum as his running mate, will be facing the incumbent Democratic ticket of President Obama and Vice-President Biden. Already, President Obamahas reluctantly decided to join the money game and has indicated that the political action committees (PACs) who support him will be allowed to accept unlimited donations to boost his re-election campaign, lest he be at a considerable disadvantage versus his well-financed Republican adversaries. Indeed, when there are no rules, the party that follows rules is doomed to defeat.
As a consequence, there is no doubt that the Obama-Biden ticket will have to bend to special interests to obtain money and support from wealthy donors. If re-elected, their administration will have its hands tied to special interests policies that would have been forced upon them. —Where are the common good and the public interest in all that?
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Friday, January 13, 2012
Of Candidates and Negative Campaigning
Happy New Year to all !
“[At Bain Capital] We got money from other people and we would use that to help start businesses or sometimes acquire businesses that were in trouble or not doing so well and then try and make it better or get the businesses to grow.”
Mitt Romney, Republican presidential candidate, former governor of Massachusetts and former venture capitalist and corporate raider (January 8, 2012)
“I like being able to fire people who provide services to me.”
Mitt Romney, former governor of Massachusetts and former venture capitalist and corporate raider (January 9, 2012)
“They [the corporate raiders] apparently looted the companies, left people unemployed and walked off with millions of dollars, … if somebody comes in, takes all the money out of your company and then leaves you bankrupt while they go off with millions, that’s not traditional capitalism.”
Newt Gingrich, Republican presidential candidate and former Speaker of the U.S. House of Representatives (January 8, 2012)
“I think people who don’t serve when they could and they get three or four or even five deferments – they have no right to send our kids off to war … I’m trying to stop the wars, but at least, you know, I went when they called me up.”
Ron Paul, U.S. Congressman and Republican presidential candidate (January 7, 2012)
In current American politics, money and wars of aggression abroad seem to rule the day. When a candidate’s fortune turns sour, the natural reflex is to spend $millions in negative ads to destroy adversaries and/or to issue hawkish policy statements with the promise to start new wars abroad and even to rekindle old ones. The motto seems to be that “If you destroy me with your negative ads; I will destroy you with mine.”—This is truly amazing.
Lobbyists have always played an important role in U.S. politics, but with the floodgates of money presently wide open, their work has been considerably facilitated. Indeed, since the U.S.Supreme Court’s (5-4) January-20-2010- decision to allow unlimited amounts of money to be spent by corporations or labor unions during elections under the specious pretext that such legal organizations are “people”, money rules unimpeded in American politics. This has the more or less unanticipated consequence of raising negative campaigning to a new level, to the delight of corporate media which rake in hundreds of $millions in political advertising or propaganda. Can democracy survive such an onslaught of money? This remains to be seen.
As for the U.S. presidential candidate Mitt Romney, for instance, during the recent primary campaign in the state of Iowa, he was confronted with a sudden surge of popularity of one of his opponents, former House Speaker Newt Gingrich. Romney’s camp and its allies went to work and pumped more than $2.8 million in a TV air deluge of negative ads against candidate Gingrich, arguing that the former Speaker had “more baggage than the airlines” and spelling out a series of flaws in Gingrich’s long political career. Sure enough, Newt Gingrich soon plummeted in the polls in Iowa and even nationally. He finished a distant fourth (13.3%) in the Iowa Republican Caucus (U.S. Presidential Primary) of January 03, 2012, while Republican candidate Romney squeezed by to finish in 1st position.
In retaliation, the Gingrich’s camp has opted to turn the tables on candidate Romney for the New Hampshire and South Carolina primaries and has tried to picture him as the Wall Street movie villain Gordon Gekko. Indeed, thanks to a “super PAC”, supposedly financed by casino billionaire Sheldon Adelson, who is reported to have poured $5 million into Mr. Romney’s campaign, it intends to pump some $3.4-million into new television ads in order to picture multi-millionaire candidate Mitt Romney as a cold-blooded capitalist raider who made his fortune on the back of workers when they were fired en masse, after Mr. Romney’s private equity firm, Bain Capital of Boston, gorged itself on financially stressed companies. Mr. Gingrich has even suggested personally that Mr. Romney’s company was comparable to “rich people figuring out clever legal ways to loot a company.”
—And there you have it, negative campaigning at its best!
Negative ads, whether they are based on facts or on fabrications or on outright lies, can be very effective politically because they raise doubts in the mind of undecided or hesitant voters, even though some voters may be repulsed and turned off by them and this could translate into lower voter turnout. Nevertheless, the more distracted people are, the more they tend to remember negative information better than positive one. Therefore, for those who have no scruples in relying on such tactics and who have the means to pay for them, negative campaign ads have a triple advantage: First, they are a good way to change the subject and steer the debate away from one’s own failures; secondly, they place adversaries on the defensive, forcing them to spend time and money to try to refute the attacks; and, thirdly, they dispense the attackers from clearly spelling out their own positive political agenda beyond generalities and pious slogans. Negative ads maybe a curse for democracy but they work for those unethicalpoliticians for whom power is the only thing that they yearn for in politics.
But negative campaigning or smear campaigns cost a lot. Indeed, they have to be researched and produced and, above all, they must to be aired in the mass media, especially on television. Historically, negative campaigning has always existed. However, modern means of communication and the concentration of national wealth in relatively fewer hands have multiplied its influence. Indeed, in the modern free-for-all electronically based U.S. politics, it can be said that those with the most money and with fewer principles have a decisive, if not an insurmountable advantage in winning elections. In the U.S., and especially with the benediction of a majority of judges on the current Supreme Court, so-called “super PACs” can accept unlimited donations for purposes of supporting or attacking candidates, thus placing the political game clearly in the hands of people or corporations or labor unions with the most money. Money has thus become the principal deciding factor in American politics.
The current campaign is a clear demonstration.
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