The dark, dirty secret you learn when you run the program at Davos is that the vast majority of CEOs have nothing to say.
For General Electric Co., hawking subprime mortgages was a long way from making light bulbs and jet engines.
That didn’t stop the industrial giant from jumping into the subprime business in 2004, lending blue-chip respectability to the market for risky home loans by paying roughly half a billion dollars to buy California-based WMC Mortgage Corp.
What GE got in the bargain, former WMC employees say, was a place where erstwhile shoe salesmen, ex-strippers and even a former porn actress could sign on as sales reps and make big money pushing home loans.
Americans should know that people in the UK have a greater chance than we do of improving their financial circumstances – 42% of Americans never escape the lowest income bracket, compared to 30% of Brits.
If you really want to achieve the American Dream, move to Denmark. A child born into the bottom fifth on the income scale in Denmark will almost certainly better his economic situation: only one quarter of those at the economic thin end stay there. The same is true of other Scandinavian countries.
American income inequality is becoming positively third world, with some of the richest US states having the largest populations of poor people. In California, 22% live in poverty. In Florida, it’s 20%.
Gross Domestic Product “measures everything… except that which makes life worthwhile.” —1968 speech by Robert Kennedy
Not So Much.
Sarah Palin’s Socialist Utopia of Alaska is second only to the Evil Empire New York in union representation.
Compare union representation to GDP per capita, by state:
…in Ayn Rand’s world, a man who self-righteously instigates the collapse of society, thereby inevitably killing millions if not billions of people, is portrayed as a messiah figure rather than as a genocidal prick, which is what he’d be anywhere else. Yes, he’s a genocidal prick with excellent engineering skills. Good for him. He’s still a genocidal prick.
2) We have crossed over into a new media era, one in which the rules, norms, forms, and whole institutions are in flux. There’s reason for both hope and despair.
3) But the question is not whether a reporter is either skeptical or cynical; the question is, About what?
The OECD created a tower of debt, but no longer has the cheap natural resources to pay it back through growth. So, we’ll pay it with paper. —Gregor Macdonald
…stark fact of electronics manufacturing !
…excess hours, low wages, unhealthy conditions for millions.
“If you think about it, it’s mind boggling that we can buy Fair Trade coffee, tea and chocolate, “conflict-free” diamonds and clothing manufactured by companies happy to trumpet their labor practices, but no electronics manufacturer seems to have taken the slightest (public) notice of the conditions under which their goods are manufactured.”
“It’s hard not to look at the situation and wonder why companies like Apple, Samsung, HTC, Motorola (now owned by Google) and Microsoft can’t figure out a way to direct just a small portion of their margins toward making working conditions more humane.”
There’s much commentary.
Recent popular demonstrations, from the Middle East to Israel to the UK, and rising popular anger in China – and soon enough in other advanced economies and emerging markets – are all driven by the same issues and tensions: growing inequality, poverty, unemployment, and hopelessness. Even the world’s middle classes are feeling the squeeze of falling incomes and opportunities.
To enable market-oriented economies to operate as they should and can, we need to return to the right balance between markets and provision of public goods. That means moving away from both the Anglo-Saxon model of laissez-faire and voodoo economics and the continental European model of deficit-driven welfare states. Both are broken.
The right balance today requires creating jobs partly through additional fiscal stimulus aimed at productive infrastructure investment. It also requires more progressive taxation; more short-term fiscal stimulus with medium- and long-term fiscal discipline; lender-of-last-resort support by monetary authorities to prevent ruinous runs on banks; reduction of the debt burden for insolvent households and other distressed economic agents; and stricter supervision and regulation of a financial system run amok; breaking up too-big-to-fail banks and oligopolistic trusts.
Over time, advanced economies will need to invest in human capital, skills and social safety nets to increase productivity and enable workers to compete, be flexible and thrive in a globalized economy. The alternative is – like in the 1930s – unending stagnation, depression, currency and trade wars, capital controls, financial crisis, sovereign insolvencies, and massive social and political instability.
This brings us to the charge that the governments of industrial market capitalist societies are bankrupt.
Even as market outcomes seem increasingly unsatisfactory, budget pressures have constrained the ability of the public sector to respond. How and when – not whether – basic programmes of social protection will be cut back is now back on the table.
The basic solvency of too many capitalist states seems in question.
When communities try to keep corporations from engaging in activities they don’t want, they often find they don’t have the legal power to say “no.” Why? Because our current legal structure too often protects the “rights” of corporations over the rights of actual human beings.
If we are to elevate our rights and the rights of our communities above those of a corporate few, we, too, need to transform the way laws work.
We’re offering the model Community Bill of Rights template, a legislative template for communities that want to protect their own rights.
It’s based on real laws already passed from the municipal to the national level…
We’re lying to ourselves about what we’re putting into our country.
Pilfering our pockets is popular. Real investment is not.
Standard thinking is that since the early 1980s capital spending has been booming and despite cyclical swings real business fixed investment has moved up to record levels…
Yes, that statement is baloney. We’ve abandoned real investment.
IT has accounted for virtually all the growth in real investment since 1980…
The IT share of total capital spending has been steadily increasing and now accounts for 45%.
Virtually all investment in capital goods and productive plant is flat or fallen to ~1%.
The underling mechanism for inequality growth need not include deliberate actions by wealthy individuals.
Wealth is generated based upon the work of accumulated capital rather than labor. Wealthy investors are making bets with peers that have similar levels of wealth. Since neither side is actually creating wealth from raw goods, on average there are equal numbers of winners and losers.
There are good arguments that too much inequality is detrimental to social well-being. Without deliberate mechanisms to redistribute wealth downward, inequality will grow without bounds out of statistical necessity.
Managing inequality means introducing mechanisms that redistribute wealth more equitably which are at least as strong as the statistical effects which naturally concentrate wealth.
This is where greed comes in !
In practice, those that have attained wealth, even if by the throw of the dice, feel entitled to their fortune and resist any attempt at leveling the playing field.
Whether it is luck or skill that is involved in negotiating one’s bets, winners consistently attribute their success to skill, and with that comes a sense of entitlement to their winnings.
Public Money for Public Purpose !
In the end, we are dependent and social creatures, built by nature for social and community life, and for relationships based on love, fellowship and friendship.
The cravings for ever more personal freedom, and for ever more liberation from the responsibilities of democratic government, will only lead to the eventual dissolution of democratic government and the triumph of authoritarianism.
The cause of genuine democracy will, of course, require steps that go well beyond reform of the monetary system.
If we seek a more democratic society, one in which decision-making power over our everyday lives and common futures is more evenly distributed among all of our people, it will be necessary for all of us to embrace the demanding responsibilities of democratic governance.
This can be hard to do in the face of so many decades of governmental failure, where government itself has sometimes seemed to have become nothing but a tool of the plutocracy.
Get some facts. Start here. Guideposts on the Road Back to Factville
Nearly six-in-ten (57%) people believe the wealthy do not pay their fair share.
About three-quarters (73%) of Democrats say that what bothers them most is that the wealthy don’t pay their fair share; this compares to just 38% of Republicans who say the same. Independents side with the Democrats — 57% say the wealthy don’t pay their fair share of taxes.
However, Republicans are internally divided. About four-in-ten (43%) say that the complexity of the tax system is their biggest gripe, while 38% are bothered most by their perception that the wealthy don’t bear their fair share of the tax burden.
Just 14% of Republicans point to the amount of taxes they pay as what bothers them most.
There is unanimity among Tea party Republicans: 57% of this group point to the complexity of the tax system as the factor that bothers them most, compared to 22% who say the wealthy don’t pay their fair share.
Oh. One more thing: Voters believe that most members of Congress are corrupt (48%).
It’s a nonsense neoclassical fantasy to blame this crisis on government debt, when its underlying cause has always been a private sector debt bubble that has now burst.
The last thing we need is for the public sector to also be pulling money out of circulation.
Slashing government spending in a depressed economy depresses the economy further; austerity should wait until a strong recovery is well under way.
…debt is not the disease — it is a symptom. Lack of aggregate demand or, to put it simply, insufficient consumption and investment is the disease.
Mike Luckovich, Atlanta Journal Constitution
This is not an esoteric line of inquiry.
The United States is not broke.
We should laugh at the delusion that we are.
The potential for abundance is everywhere around us, but it stagnates for sheer lack of funding.
Corporations have vast resources to pour into Congress.
Low or no taxes are paid thanks to rules they lobbied into law.
Some of the biggest companies in the United States have been firing workers and in some cases lobbying for rules that depress wages at the very time that jobs are needed, pay is low, and the federal budget suffers from a lack of revenue.
30 brand-name companies paid a federal income tax rate of minus 6.7 percent on $160 billion of profit from 2008 through 2010 compared to a going corporate tax rate of 35 percent. All but one of those 30 companies reported lobbying expenses in Washington.
“It seems America’s bankers are tired of all the abuse. They’ve decided to speak out.
“True, they’re doing it from behind the ropeline, in front of friendly crowds at industry conferences and country clubs, meaning they don’t have to look the rest of America in the eye when they call us all imbeciles and complain that they shouldn’t have to apologize for being so successful.”
The New Propaganda All Over Again.
“Let them eat cake.
“I want a reality show where the Billionaires come on every day and talk about their troubles.
“It could be like the old TV show ‘Queen for a Day’. The 1 Percenter with the biggest sob story wins a brand new dishwasher.” —Jon Taplin
“You’re the ones who’ve been slacking off!”
The imperative to develop new technologies and implement them on a heroic scale no longer seems like the childish preoccupation of a few nerds with slide rules.
It’s the only way for the human race to escape from its current predicaments.
Too bad we’ve forgotten how to do it.
“Hey, everybody, that’s our tree, not theirs.”
Destroying the Common Wealth is easy, abundant and cheap. It is what the vast majority of organizations do. Enhancing it, in contrast is the scarcest, rarest, and single most disruptive capability an organization can possess. –Umair Haque
The place to start is America’s executive suites, which should be cleared of mercenaries in order to encourage real leadership.
Contrast this with the America of bailouts, where the fat are considered “too big to fail.” In fact, many are too big – or at least too mismanaged – to succeed.
Public support should be shifted from protecting large established corporations to encouraging the growth of newer enterprises.
Armies of MBAs who have been trained to manage everything in general but nothing in particular are part of the problem, not the solution.
So are economists who study clouds without ever getting wet.
Following OWS, the Tea Party and the great global crash, you can bet if anyone takes the odds, there’s a billion now spent to re-frame the 1%.
I’d also wager any uptick in next waves of IMF GDPs will be driven by craftedly-proud bankers letting loose more billions they’ve accrued while world budgets argue austerity and plead urgent investment.
Thus, let’s bitch a little before smokes of propaganda dilute our rage.
Let’s write a letter to one of our Wall Street brigands. To begin:
In a nation bereft of royalty by virtue of its republican birth, the American people have done what any other resourceful people would do – we’ve created our own royalty and our royalty is the 1%. Not only do we not “hate the rich” as you and other em-bubbled plutocrats have postulated, in point of fact, we love them.
We worship our rich to the point of obsession.
We love the success stories in our midst and it is a distinctly American trait to believe that we can all follow in the footsteps of the elite, even though so few of us ever actually do.
So, no, we don’t hate the rich.
The ebook is called Betterness.
Umair Haque argues that just as positive psychology revolutionized our understanding of mental health by recasting the field as more than just treating mental illness, we need to rethink our economic paradigm.
Because business as we know it has reached a state of diminishing returns—though we work harder and harder, we never seem to get anywhere. This has led to a diminishing of the common wealth: wage stagnation, widening economic inequality, the depletion of the natural world, and more.
To get out of this trap, we need to rethink the future of human exchange. In short, we need to get out of business and into betterness.
In a positive paradigm, the healthiest state isn’t just one that minimizes pathologies, but one that maximizes potential.
The terra incognita we’ve never explored is whether it’s possible for prosperity and human exchange not merely to go less wrong, but more right.
What if, just maybe, the economy is only living up to a fraction of its potential?