Tag Archives: Poverty

Political Collapse: The Center Cannot Hold

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By Kirkpatrick Sale

Source: CounterPunch

Have you noticed? From Hong Kong to Baghdad, Paris to Tehran, 2019 is shaping up to be, as the New York Times dubbed it, “the year of the protest.” Violent—and often deadly—anti-government protests are breaking out throughout the world in an unprecedented fashion, in rich countries as well as poor, as people everywhere are expressing their anger at corrupt, inefficient, brutal, and unresponsive regimes.

But what isn’t so much in the news is worse—worse enough that they don’t want to tell you. At the moment, there are no less than 65 countries are now fighting wars—there are only 193 countries recognized by the United Nations, so that’s a third of the world. These are wars with modern weapons, organized troops, and serious casualties—five of them, like Afghanistan, Libya, Syria, Somalia, and Yemen, with 10,000 or more deaths a year, another 15 with more than 1,000 a year—all of them causing disruptions and disintegrations of all normal political and economic systems, leaving no attacked nation in a condition to protect and provide for its citizens. From 2015 to 2019 more state-based conflicts were engaged in than at any time since World War II, with an estimated 1 million deaths in all.

In addition, there are at least 638 other conflicts between various insurgent and separatist militias, armed drug bands, and terrorist organizations, increasing each year as states fail or collapse completely.

What has made the wars and internal disputes even more egregious as the years go on is that chaotic weather has a direct effect on how societies function. Agriculture, of course, is impacted by higher temperatures, lack of rain, droughts, and wildfires, and crops have failed in many places over the last five years, including North and Central Africa, the Middle East, India, Pakistan, northern China, northern Europe, Argentina, Brazil, Central America, and even parts of North America. The collapse of Syria, for example, and subsequent civil wars were made more devastating if not directly caused by the drought of 2006-2011, in which 75 per cent of the farms failed and 85 per cent of the livestock died. And an official United Nations report in 2019, by 100 experts from 52 countries, warned that things will only get worse, with the world’s land and water resources exploited at “unprecedented rates,” threatening “the ability of humanity to feed itself.”

One obvious consequence, beyond death, famine, disease and starvation, is, as the U.N. report’s lead author says, “a massive pressure for migration,” a desperate attempt to find some refuge and relief when homes have been destroyed and families are uprooted. According to the United Nations, in what I regard as a certain undercount, in 2019 there were 272 million migrants worldwide, up from 258 million in 2017, with the weather in 2019 causing more refugees even than warfare. (The unprecedented crisis at the U.S. southern border in 2019 is only one manifestation of the porous and chaotic collapse of boundaries across the Americas, Africa, and most of Asia.) And meanwhile, the International Committee of the Red Cross in 2018 estimated that more than 100,000 people are simply “missing,” a figure it admits “represents only a fraction” of those who are unaccounted for by any government or organization.

Given the turmoil over wars and immigration threats, it is not surprising that half the world is without coherent government.

Organizations that track these things say that of the 174 covered nations, 76 are in various stages of collapse—that would be 43 per cent—and that excludes a dozen smaller nations that are locked into autocracy and poverty. These include seven completely failed states—Congo-Brazzaville, Central African Republic, Syria, Yemen, Somalia, South Sudan, and Venezuela—and another seven that are on the edge—Guinea, Haiti, Iraq, Zimbabwe, Afghanistan, Chad, and the Sudan—plus 19 that are in an “alert” category, meaning that some but not all government functions have failed, 15 in Africa and 4 in Asia.

In other words, many political systems in the world have effectively collapsed, people are dispossessed and without governments, and almost everywhere else, including the U.S. and Europe, governments are severely strained and political rifts abound. The vote for Brexit in the U.K., the election of Donald Trump (and the subsequent attempts to overturn it), the turmoil that erupted in December 2018 in France and Belgium, the continued protests in Poland were all examples of the population of developed nations coming to see that the attempt to establish capitalist-led democracies in an internationalist arrangement of benefit to corporate and banking interests just was not working, and a rising segment of what were called “deplorables” in America did not want any longer to be powerless, manipulated, and disdained. These turmoils also demonstrated that the established powers in these countries, especially the U.S. and Britain, resisted all of these attempts to change the status quo and in effect ignored or tried to thwart the popular will (cf. the “impeachment” farce)—the developed world’s form of the failed state. Those fissures have widened as the years have worn on, and as one astute observer, James Kunstler, put it in 2019, “The West is enduring paroxysms of political uproar and disenchantment.”

And here’s something weird that sums it all up. It is the opinion of two recent political scientists that “the state system seems to be failing all over the world,” and they have proposed a new study called “archy” to examine how to grow, maintain, and fund states so as to avert their collapse. No better evidence of the seriousness of the world’s “uproar and disenchantment” can there be when academics need to create a discipline to overcome it.

Yeats summed it up some years ago: “The center cannot hold. Mere anarchy is loosed upon the world.”

 

Kirkpatrick Sale’s new book The Collapse of 2020 will be published in January.

Is the U.S. Becoming a Third World Nation?

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By Charles Hugh Smith

Source: Of Two Minds

This is a chart of an informal kleptocracy which cloaks itself in the faux finery of democracy and a (rigged) “market” economy.

Back in the day, nations that didn’t qualify as either developed (First World) or developing (Second World) were by default Third World, impoverished, corrupt and what we now refer to as failed states–governments that were incapable of improving the lives of their people and the machinery of governance, generally as a result of corruption and self-serving elites, i.e. kleptocracies.

Is the U.S. slipping into Third World status? While many scoff at the very question, others citing the rise of homelessness, entrenched pockets of abject poverty and the decaying state of infrastructure might nod “yes.”

These are not uniquely Third World problems, they’re symptoms of a status quo that’s fast losing First World capabilities. What characterizes Third World/Failing States isn’t just poverty, crumbling infrastructure and endemic corruption; at a systems level these are the key dynamics in Third World/Failing States:

1. The status quo protects insiders at the expense of everyone else.

2. There is no real accountability; failure has no consequences, bureaucrats are never fired for incompetence, reforms are watered down or neutered by institutional sclerosis.

3. Pay-to-play is the most cost-effective way to influence policy or evade consequences.

4. The status quo is incapable of differentiating between complexity that serves the legitimate purposes of transparency and accountability and complexity that serves no purpose beyond guaranteeing insiders’ paper-shuffling jobs. As a consequence, complexity that adds no value chokes the economy and the government.

5. There are two sets of laws: one for insiders and the super-wealthy, and another harsher set for everyone else.

6. The super-wealthy fear nothing because the system functions to serve their interests.

7. The super-wealthy and state insiders control the media’s narratives and the machinery of governance to serve their interests. Reforms are in name only; the faces of elected officials change but nothing changes structurally.

8. Insiders, well-paid pundits and the technocrats serving the corporate and state elites believe the status quo is just fine because they’re doing fine; they are blind to the soaring inequality, systemic corruption, stupendous waste and the impossibility of real reform.

Does America’s status quo protect insiders at the expense of everyone else? Yes. As for the other seven characteristics: yes, yes, yes, yes, yes, yes and yes.

And lets’ not forget #9: the vast majority of the economic gains flow to the elite at the very top of the wealth-power pyramid: is this true in the U.S.? Definitively yes. Just look at this chart: this is a chart of an informal kleptocracy which cloaks itself in the faux finery of democracy and a (rigged) “market” economy.

That’s the very definition of a Third World failed state.

Related Video:

Billionaires are a Sign of Economic Failure

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Inherited wealth and crony capitalism have created an aristocratic class that undermines social mobility and democracy

By Max Lawson

Source: Inequality.org

The New York Times published an editorial comment on its front page in January 2019, provocatively entitled “abolish billionaires.” The editorial raised a serious question: what if instead of being a sign of economic success, billionaires are a sign of economic failure?  In what ways can the boom in billionaires, and the dramatic increase in extreme wealth generally, be harmful?

To answer this question, we need to understand the origins of billionaire wealth, and to understand how that wealth is used once it is gained.  The answer to both these questions I think rightly casts doubt on the value of the super-rich in our society.

Approximately one third of billionaire wealth comes from inheritance. It is very hard to make the case for the economic utility of inherited wealth, and instead there is a strong case for the fact that it undermines social mobility and economic progress. It creates instead a new aristocracy who are rich simply because their parents were rich which is hard to see as a good thing.

Whether inherited or secured in other ways, extreme wealth takes on a momentum of its own.  The super-rich have the money to spend on the best investment advice, and billionaire wealth has increased since 2009 by an average of 11 percent a year, far higher than rates ordinary savers can obtain.

Bill Gates is worth nearly $100 billion dollars in 2019, almost twice what he was worth when he stepped down as head of Microsoft.  This is despite his admirable commitment to giving his money away.  As Thomas Piketty said in his book Capital in the 21st Century, “No matter how justified inequalities of wealth may be initially, fortunes can grow beyond any rational justification in terms of social utility.”

My Oxfam colleague Didier Jacobs calculated a few years ago that another third of billionaire wealth comes from crony connections to government and monopoly.  This could be for example when billionaires secure concessions to provide services exclusively from government, using crony connections and corruption.  The Economist has developed a similar measure of crony capitalism with similar findings. What is clear it seems to me is that corruption and crony connections to governments are behind a significant proportion of billionaire wealth.

Almost all sectors of our global economy are also now characterized by monopoly power, as is detailed by Nick Shaxson in his great new book, the Finance Curse. Whether food, pharmaceuticals, media, finance, or technology, each sector is characterized by a handful of huge corporations.

Decades of largely unquestioned mergers and acquisitions, where corporations have bought up competitors, have led to this.  Historically, and especially in the United States in the early part of the 20th century, monopoly power was rightly viewed as a serious threat to the economy and to society, and steps were taken to break up monopolies.  It was President Franklin Roosevelt who famously said that “government by organized money is just as dangerous as government by organized mob.” However, in recent decades, neoliberal economics has led a much more benign view of monopoly power, and very little action is now taken to dismantle them. I think this is a key distinction between neoliberalism and classical liberal economics.  These monopolies impose hidden monopoly taxes on every consumer, as it enables these companies, and their wealthy shareholders, to extract excessive profits from the market, directly fueling the growth in extreme wealth at the expense of ordinary citizens.

The actions of corporations, including the move towards monopoly, are driven by a relentless focus on ever-increasing returns to shareholders — shareholders who are primarily the very same extremely wealthy people.  Our new Oxfam paper on the “Seven Deadly Sins” of the G7, released this week, shows how returns to shareholders have increased dramatically whilst real wages have barely increased.

Behind corporate power and corporate actions is increasingly the power of super-rich shareholders.

Once billionaire wealth is accumulated, the way it is used also casts doubt on how useful it is to have billionaires.  The super-rich use their wealth to pay as little tax as possible, making active use of a secretive global network of tax havens, as revealed by the Panama Papers and other exposes.

One ground-breaking study that made use of this leaked information showed that the super-rich are paying as much as 30 percent less tax than they should, denying governments billions in lost tax revenue, that could have been spent on schools or on hospitals.  The super-rich are supported in this by the Society of Trust and Estate Practitioners (STEP), a secretive organization of over 20,000 wealth managers that actively pressures governments to reduce taxes on the richest.

Billions are not just used to ensure lower taxes. They can also be used to buy impunity from justice, to buy politicians, or to buy a pliant media.  The use of “dark” money to influence elections and public policy is a growing problem all over the world. The Koch brothers — Charles and the recently deceased David — two of the richest men in the world, have had a huge influence over conservative politics in the United States.

Another recent Oxfam study  showed the many ways in which politics has been captured by the very rich in Latin America.  Many of today’s new breed of nationalist, racist leaders have substantial financial backing.

This active political influencing by the super-rich directly drives greater inequality, by constructing reinforcing feedback loops, in which the winners of the game get even more resources to win even bigger next time.

For all these reasons, I think there is a strong case to be made that rather than being celebrated, as one U.S. commentator recently said, “every billionaire is a policy failure,” and that in particular if we are to end poverty and build fairer societies, we need to bring an end to extreme wealth.

Media Just Can’t Stop Presenting Horrifying Stories as ‘Uplifting’ Perseverance Porn

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By Alan Macleod

Source: FAIR.org

“THIS IS AWESOME!” That’s how Fox 5 DC described its story (5/28/19) about Logan Moore of Cedartown, GA, a disabled two-year-old whose parents were unable to afford to buy him a walker, so employees at Home Depot fashioned one together themselves for him.

“No… it’s not awesome at all. It’s a painful indictment of the state of healthcare in America,” reads the first comment under this tweet by Fox 5 DC (5/28/19).

The story closely resembles another recent CNN report (4/1/19): “A Two-Year-Old Couldn’t Walk on His Own. So a High School Robotics Team Built Him a Customized Toy Car.” That piece noted how Minnesotan toddler Cillian Jackson couldn’t walk due to a genetic condition, and how his parents couldn’t afford treatment. It described the ingenuity of the school children who built him a car, and Cillian’s new found freedom, but did not explore why a baby with a disability had been abandoned by US society.

The clear implication in these stories was that those children would have been left permanently unable to move if not for the help of underpaid employees or the kindness of other children. How many disabled American children with poor parents were not so lucky? The articles did not ask. Instead, they were presented as “uplifting” human interest pieces.

Cillian’s story is part of CNN’s Good Stuff series, which asks its readers:

Want more inspiring, positive news? Sign up for The Good Stuff, a newsletter for the good in life. It will brighten your inbox every Saturday morning.

Unfortunately, these stories are part of a popular trend of unintentionally horrifying “uplifting” news, which we at FAIR have catalogued before (FAIR.org, 8/3/17; 3/25/19), where out-of-touch corporate media give us supposedly charming, wholesome and positive news that actually, upon even minimal retrospection, reveals the dire conditions of late capitalism so many Americans now live under, and makes you feel worse after reading it.

A lot of these stories involve mothers and the extremely difficult circumstances of raising children in the US while poor. CNN’s “feel good” story (8/24/18) about a teacher sitting in a car with her student’s baby so the new mom could attend a job fair raised far more questions than it asked (which was zero). Why is there so little public childcare in the US? Should a new mother really need to immediately find a job so badly? Is this good for infants’ development?

On a similar subject, Good Morning America (7/17/18) describes the “trendy” new baby-shower gift of donating your pregnant co-worker your days off to give her maternity leave. Every country in the world except the US and Papua New Guinea guarantees paid maternity leave, meaning the trend is unlikely to catch on abroad.

Donated maternity leave is a “trendy” gift you don’t need—unless you live in the United States or Papua New Guinea (Good Morning America, 7/17/18).

Many outlets (CBS, 5/20/16; Huffington Post, 8/6/16; People, 4/11/16) cheerfully reported on how one man did at least 15 years of backbreaking labor as a night shift janitor at Boston College so his children could attend for free. But none even mentioned that if he lived in nearly any country in Western Europe, this wouldn’t have been necessary, as university there is free or virtually free to attend.

In fact, rather than discussing ballooning tuition costs, Yahoo! (11/15/17) used the story to take jabs at disloyal millennials:

Millennials move from job to job in order to climb the ladder…. For baby boomers and other generations…loyalty and dedication to a single company or career drove, and still drives, much of their working lives.

Any of these stories could have been used to explore the pressing social and economic realities of being poor in the United States, and having to work for things considered fundamental rights in other countries. But instead they are presented as uplifting features, something only possible if we unquestionably accept the political and economic system.

Kids Do the Darndest Things

Many of what Think Progress (8/2/18) labels “feel-good feel-bad stories” involve children doing things they wouldn’t have to in any reasonable society. CBS invites us to enjoy an account of a boy selling his Xbox computer to help his (single) mom (4/2/19), and another repairing his town’s ravaged roads himself (4/12/19). The Hill (6/10/19), meanwhile, describes a nine-year-old saving his pocket money to pay off his school friends’ “lunch debts.”

“Hardships were never an excuse for Moseley,” CNN (5/22/19) reports—as they are, implicitly, for homeless teens who aren’t offered millions in scholarships.

NBC (5/22/19) likewise shared the story of homeless Tennessee teen Tupac Moseley graduating high school as a valedictorian and earning many college scholarships, something that was widely reported (BBC, 5/22/19; Newsweek, 5/21/19; Business Insider, 5/21/19). NBC matter-of-factly noted that after his father died, Moseley’s family’s home was foreclosed and they were on the streets, accepting this situation without comment. This was still among the most critical of the reports, however, as many did not even describe why a child in the richest society in history became homeless. CNN’s report (5/22/19), for example, did not explain the background circumstances, let alone comment on them, and frames the story with the sentence, “Hardships were never an excuse for Moseley.”

This sentence is telling: To corporate media, even the trauma of losing a parent and being forced onto the streets is merely an excuse, not a cause for poor grades. The implication is that poor housing, a lack of an adequate safety net, underfunded schools and a decimated public education system are simply excuses from bellyaching lazy people as to why they did not attend the private Boston University (at over $54,000 per year tuition), like the article’s author did.

“No excuses” is a common phrase in “perseverance porn” stories. For example, Today (2/20/17) used it in the headline of a story about a Texas man who is forced to walk 15 miles to work every day. It reveals the ultimate bootstrap ideology of the media, where societal factors are irrelevant and everyone is where they are on merit.

Thus Moseley’s story is effectively weaponized by CNN against anyone who would question the system. Terrible work conditions? No excuses! Homeless? Stop complaining!

In case you thought homeless children were something of an aberration in America, CNN (7/2/19) also recently ran a story about how over 100 homeless children graduated high school in New York City this year alone—again without comment on what this says about US society.

Another reprehensible story treated as heroic by media was that of a Michigan mother who had to quit her job to look after her terminally ill son, who died of leukemia. She could not afford a headstone, so his best friend, 12-year-old Kaleb Klakulak, worked many jobs to attempt to pay for one. Many media outlets (e.g., Associated Press, 12/8/18; Fox News, 12/9/18; NBC Chicago, 12/12/18) celebrated Kaleb’s spirit, but none asked why children are  performing hard, outdoor labor through a Michigan winter so other children can have adequate burials. Such reporting implicitly normalizes this situation, and the system that allows it to happen.

“Sweet” Stories

A common media trope is presenting kids selling lemonade as cute,  sweet stories, no matter how horrifying or depressing the reason, including to pay off school lunch debts (Yahoo! News, 5/21/19; MSN, 5/22/19), or to raise money for their baby brother’s medical treatment (New York Post, 5/28/18; CBS, 5/29/18) or their mother’s chemotherapy (KTSM El Paso, 8/4/18).

Such stories (CBS, 5/29/18) rarely if ever ask why a baby with a life-threatening illness is forced to rely on his nine-year-old brother’s selling lemonade to pay for treatment.

Or how about the story of a New Mexico girl selling lemonade trying to fund her mother’s kidney transplant? People magazine (5/9/18) applauded her resolve, and local radio described it as “heartwarming” that she had raised over $1,000. The massive problem is a kidney transplant in America can cost over $400,000. To anyone with a heart, what this story actually represents is the desperate struggle of a child trying in vain to save her dying mother. Worse still is the fact that if she lived in Sweden, Spain or Saskatchewan, she would be given a kidney free of charge and without question.

Any of the numerous other outlets (ABC, 4/30/18; Good Morning America, 5/1/18; Albuquerque Journal, 4/30/18) that picked it up could have used the story to discuss the dysfunctional healthcare system that is the leading cause of bankruptcy in the country, while producing some of the worst health outcomes in the developed world, or to scrutinize how corporate healthcare gouges the sickest and most vulnerable Americans, including children. Surely the most basic function of government should be to prevent its citizens from needlessly dying? Not if you wholly accept the tenets of neoliberalism, where education, housing and healthcare are not basic, inalienable human rights, but commodities to be bought and sold and bargained for on the market.

To be clear, while we can admire the never-say-die attitude of those in tough conditions, this is no substitute for guaranteed public programs to help those in dire need. The problem with perseverance porn is not the brave subjects of the articles, but the lack of any journalistic scrutiny examining the failings of society that placed them in such desperate circumstances to begin with.

What these articles highlight so clearly is not only the grim, inhuman and unnecessary conditions so many Americans are forced to live under, but the degree to which mainstream corporate journalists have completely internalized them as unremarkable, inevitable facts of life, rather than the consequences of decades of neoliberal policies that have robbed Americans of dignity and basic human rights. Because corporate media wholly accept and promote neoliberal, free-market doctrine, they are unable to see how what they see as “awesome” is actually a manifestation of late-capitalist dystopia.

‘Deaths of despair’ soaring among Gen Z & millennials: ‘It’s the economy, stupid’

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By Helen Buyniski

Source: RT.com

Young Americans are killing themselves in record numbers, the victims of a confluence of economic and sociological factors that have singled them out – even above a nationwide surge in so-called “deaths of despair.”

Suicide rates among teens and young adults aged 15 to 24 – the older end of “Generation Z” – spiked in 2017, reaching their highest point since 2000, according to a study published Tuesday in the Journal of the American Medical Association (JAMA). They’ve risen 51 percent in the past 10 years, buoyed by rising rates of anxiety and depression along with social media and drug use, and the figures may be even higher, since some intentional overdoses are not counted as suicides.

Young men saw the steepest rise in deaths, according to the JAMA study, though women are catching up to them at an alarming pace. Teens and young adults report higher rates of anxiety and depression than previous generations, and multiple studies in recent years have shown that social media use exacerbates both conditions, creating a self-perpetuating feedback loop that can have tragic consequences.

But Generation Z is simply following in the footsteps of its predecessors. The much-maligned millennial generation, defined by the Census Bureau as those born between 1982 and 2000 (meaning some are included in the JAMA study), are also killing themselves in record numbers. Drug-related deaths among ages 18 to 34 have increased 108 percent since 2007, while alcohol-related deaths are up 69 percent and suicides are up 35 percent, according to a report published last week by Trust for America’s Health. While millennials have long been written off as entitled, spoiled snowflakes, the media and society are belatedly realizing that they aren’t just layabouts unmotivated to exit their parents’ basement – this “despair” has a cause, and it’s primarily economic.

The rise of millennial and Gen Z “deaths of despair” can be traced to the yawning gap between reality and expectations. Raised on the myths of the American Dream, these are the first Americans to experience a markedly lower standard of living than their parents, the Baby Boomers who grew prosperous on the fruits of the postwar economic boom. The national debt has ballooned, driven by two decades of an unwinnable war whose cost is poised to top $6 trillion, and the Pentagon’s budget has swollen to an unprecedented size even as cuts to social services have decimated what little social safety net Americans could once count on. Multiple rounds of tax cuts for the wealthy and corporations destroyed the government’s revenue base, and perhaps unsurprisingly, economic inequality has grown to exceed even the rates seen during the Great Depression.

And even these concerns are beside the point for a generation that left college already shackled with student loan debt that can run into the hundreds of thousands of dollars and cannot be canceled even by declaring bankruptcy. Millennials who graduated in the aftermath of the 2008 crash entered the “real world” to find no jobs waiting for them. Lucky if they could find an unpaid internship or a waitressing gig, they were forced to retreat back into their parents’ basements, a crushing blow for anyone but particularly for a generation told since birth that they were special, that they could do anything they wanted, that the world was their oyster.

The US, perhaps uniquely in the developed world, views poverty as a sin, and many millennials suffer in silence, believing they are the only ones in their peer group to “flunk out” of the “real world.” Instead of finding support from friends and family, they take advantage of the ready availability of alcohol and opioids, a factor that has caused the number of “deaths of despair” to skyrocket. Some economically-depressed states, like West Virginia, have seen drug overdoses increase more than fivefold in the last 12 years, according to a report published earlier this month by the Commonwealth Fund, and many more have seen their number double and triple. That pharmaceutical companies flooded the market with opioids at the same time the rise of social media devastated the quality and complexity of human relationships is a particularly deadly coincidence.

Since 1996, the average net worth of “consumers” under 35 has declined 35 percent, according to management consultancy Deloitte. Advertisers are starting to realize that targeting this group, while it may seem like a savvy marketing decision – they constitute a quarter of the US population, after all – doesn’t make sense, since they can’t afford to buy anything. Student debt is up 160 percent since 2004 for the under-30 population, and the home-ownership rate for millennials is only 37 percent – fully eight percentage points lower than their parents. Fully 89 percent would like to own a home, according to a survey conducted last year, but nearly half have zero dollars in savings – let alone the 20 percent most mortgages require for a down payment.

Young people aren’t the only ones afflicted by the “deaths of despair” phenomenon. Life expectancy nationwide is down for the third year in a row, and a report from Trust for America’s Health published last year projects that this “epidemic” – which they define as drug and alcohol deaths plus suicide – is on track to kill more than 1.6 million people by 2025 if it continues to grow at its current rate. As the Baby Boomers start to retire only to find they cannot live on their meager savings – assuming they still have any – they, too, are killing themselves more often, with suicide rates up 40 percent from 2007 to 2015.

This is not only a young people’s problem, nor is it an easy one to solve, but acknowledging the systemic poverty afflicting the “richest country in the world” – where two-thirds of the population doesn’t have enough saved to cover a $500 crisis – is a good place to start.

Poor Folks

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By Peter Van Buren

Source: We Meant Well

A guy on Facebook I don’t know wrote a version of what has become a kind of set-piece article in today’s America. Here’s a portion:

Losing The War of Attrition or How To Turn Any Normal Person Into A Broken, Angry Radical

You are one of the millions who are employed at minimum wage. Or you are one of the millions who are euphemistically called underemployed, or you are one of the millions with no job and no prospects. You are retired- how did that happen?- or disabled- why did that happen?- and trying to survive on Social Security.

You reach a point when you realize that getting ahead is no longer possible. After that you reach a point when you realize that holding on to what you have is no longer possible. Then you reach a point when you realize that replacing what has been lost or depleted is no longer possible.

I wrote a book about this five years ago called The Ghosts of Tom Joad. No one read it. Publishers in the process of turning me down mocked me for writing about “poor people” and seemed surprised there were poor people in America who weren’t black and living in ghettos. Well, hell, then Trump happened. Because people watching a way of life — a middle class existence where the rich have more but we had some — fall away are easy targets for demagogues. Always have been. Because before we dismissed things as whataboutism we used to study them as lessons from history. Other people’s’ mistakes. History shows very clearly this economic game we’re playing ends with everyone but a small handful at the top losing badly.

I concluded five years ago the game was already decided. Our society was already then like those photos of railroad tracks, where in the distance it seems like the two rails come together in a single point. That point is essentially feudalism, where a tiny minority owns almost everything and everyone else lives off whatever scraps they let us have. Like in the Middle Ages, where everyone farmed for the king as serfs. It’s worse than slavery, because slaves at least know they’re slaves and have the possibility, however small, of freedom. Maybe for their kids if not for themselves.

We are not at the singularity, but we are inexorably headed toward it. Five additional years of data has only made that clearer; five years ago we spoke of the 1%. That number no longer matters. The new figure is .1%, an even smaller group who owns even more.

And no, none of this is new Because Trump. Since 1980, the incomes of the very rich (the .1%) have grown faster than the economy, for about a 400% cumulative increase in wealth. The upper middle class (the 9.9%) has kept pace with the economy, while the other 90% of us, the middle class and the poor have fallen behind.

By the way, it is these numbers which sent Barack Obama and Hillary Clinton during the 2008 campaign to both use $250,000 as the upper limit of the middle class. They sounded misguided, but it was sort of true. They just were still lumping what we’re calling here the “Upper Middle Class” and the “Middle Class” together. Just words. At present in the U.S. we have three-and-a-half classes: The .1%%, the 9.9%, everyone else hanging on, plus some people way at the bottom with basically nothing.

But bad news for the 9.9% Since the they the most (the most the .1% does not yet have) they have the most to lose. At their peak, in the mid-1980s, people in this group held 35% of the nation’s wealth. Three decades later that had fallen 12%, exactly as much as the wealth of the 0.1% rose. And do understand the people at the top are constructing walls and throwing nails off the back of the truck to make sure no one can catch up with them. The goal of .1% is to eliminate the competition, the 9.9% below them. They’ll only effectively have it all when the ratio is down to two classes, the .1% and the 99.9%

We are kept in place via shiny objects (500 channels, more movies and Apple watches and drugs!) and curated divisions. The ever-increasingly sharp lines between say blacks and whites are a perfect tool. Keep the groups fighting left and right and they’ll never notice the real discrimination is up and down. Some groups just found down earlier and harder, but as long as a poor white man in south Kentucky thinks he has nothing in common with a poor black man in the South Bronx they will never work together, never even see the massive economic forces consuming both equally. Forces are even now hard at work to tell us the Republican party is for whites, POC head Democrat, and any third party is a Russian shill in place to hurt the candidate you favor.

Whether your housing is subsidized via a mortgage and that tax deduction or Section 8, you’re still on the spectrum of depending on the people really in charge to allow you a place to live. I do not see a way out of this, only maybe steps that can slow it down or cause it to speed up.

Very short version summary: People like you and I fell through the cracks; we weren’t supposed to end up here but the .1% hadn’t worked out the details so they got as much as they do now and we basically ended up with bigger crumbs than we should have, especially me lucking into a “career” with no real skills.

Our own kids may do OK with what we leave for them, but only if your son is a medical doctor will he have a decent shot at our lifestyle and only because of the “cartelization” of the profession by the AMA. The rest of our kids are unlikely to have any shot at what we ended up with.

Sorry, I’m not a more cheerful guy but these conclusions are based on a fair amount of honest study.

The Erosion of the Middle Class — Why Americans Are Working Harder and Earning Less

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By John Liberty

Source: The Mind Unleashed

“I don’t have to tell you things are bad. Everybody knows things are bad. It’s a depression. Everybody’s out of work or scared of losing their job. The dollar buys a nickel’s worth, banks are going bust, shopkeepers keep a gun under the counter. Punks are running wild in the street and there’s nobody anywhere who seems to know what to do, and there’s no end to it.” — Howard Beale

Howard Beale, the main character in the 1976 film Network, became a part of cinematic history when he uttered the line “I’m mad as hell and I’m not gonna take it anymore.” That one line expressed a growing rage among America’s shrinking middle class at a time when Americans were reeling from years of war, political scandals and economic downturn.

In the four decades that have followed, little has improved for the average American. We’re still ‘mad as hell’ and the middle class is being eroded right in front of our eyes. When adjusted for inflation, many Americans are working longer hours and earning less than they did in 1976. So, how have we gone from vibrant middle class to the working poor in a matter of decades?

Median Incomes Are Stagnant

Despite increases in the national income over the past fifty years, middle class families have experienced little income growth over the past few decades. According to U.S. Census data, middle class incomes have grown by only 28 percent from 1979 – 2014. Meanwhile, a report from the Congressional Budget Office (CBO) shows that the top 20 percent of earners has seen their incomes rise by 95 percent over that same period of time.

Contributing to the stagnation of wages is a notable decrease in the workforce participation rate. According to the Brookings institute, “One reason for these declines in employment and labor force participation is that work is less rewarding. Wages for those at the bottom and middle of the skill and wage distribution have declined or stagnated.” Historical data from the Bureau of Labor Statistics backs up these findings, showing a steady decrease in workforce participation over the last two decades.

The Erosion of the Minimum Wage & America’s Purchasing Power

Anyone who has read a comment thread on the internet about minimum wage laws knows the debate is currently one of the most highly contentious political topics in America. In the halls of Congress, the debate has turned into a nearly decade long impasse. As a result, workers at the low end of the wage scale have watched the purchasing power of their wages decrease from $7.25 in 2009, to $6.19 in 2018 due to inflation. In 2018, you need to perform 47 hours of minimum wage work to achieve the same amount of purchasing power as 40 hours of work in 2009.

The inflation-adjusted minimum wage value has been in steady decline since 1968, when the $1.60 minimum wage was equal to $11.39 (in 2018 dollars). Since then, lawmakers have reduced minimum wage increases relative to the rate of inflation. As Christopher Ingraham reports:

“Recent research shows that the reason politicians — Democrats and Republicans alike — are dragging their feet on popular policies such as the minimum wage is that they pay a lot more attention to the needs and desires of deep-pocketed business groups than they do to regular voters. Those groups tend to oppose minimum wage increases for the simple reason that they eat into their profit margins.”

To be clear, the erosion of the purchasing power of everyday Americans is hardly a new phenomenon. According to data from the U.S. Bureau of Labor Statistics, the purchasing power of the U.S. Dollar has plummeted by over 95 percent since 1913, the year the Federal Reserve was created. The Bureau’s Consumer Price Index indicates that prices in 2018 are 2,436.33% higher than prices in 1913 and that the dollar has experienced an average inflation rate of 3.13% per year during this period.

The Rich Get Richer

While the outlook may be grim for low-wage workers, this is fantastic news for large corporations. Data from the U.S. Bureau of Economics shows that corporate profits are approaching all-time highs. But it’s not just workers who are feeling the effect of growing income inequality. The contrast is also being felt on Main Street. An analysis of the S & P 500 and the Russell 1,000 & 2,000 indexes by Bloomberg revealed a growing gap between America’s largest employers and smaller businesses.

A report from the Institute for Policy Studies entitled Billionaire Bonanza: The Forbes 400 and the Rest of Us echoed these findings when it revealed that America’s 20 wealthiest people — a group that could fit comfortably in one single Gulfstream G650 luxury jet –­ now own more wealth than the bottom half of the American population combined.

Although the Trump administration continues to tout stock market and labor force increases as signs of economic prosperity, numbers show that the wealthiest 10 percent of Americans own 84 percent of all stock. A study conducted by the Economic Policy Institute found that wage growth remains too weak to consider the economy at full employment and that stagnant wage growth has contributed to the growing level of income inequality in America. The study noted that while wages have recovered from the 2008 recession, the gap between those at the top and those at the middle and bottom has continued to increase since 2000. As the study’s author, Elise Gould writes:

“We’re looking at nominal wage growth that is still slower than you would expect in a full employment economy, slower than you would expect if you thought there were any sort of inflation pressures from wage growth.”

The Decimation of the American Dream

Comedian George Carlin once said, “The reason they call it the American Dream is because you have to be asleep to believe it.” For millions of middle class Americans Carlin’s statement has proven eerily accurate. Stagnant wages and decreased purchasing power has put the prospects for middle class children in a tailspin as upward mobility trends have reportedly fallen by over 40 percent since 1950.

A poll conducted by the Pew Research Institute corroborates this claim. According to Pew, only 37 percent of Americans believe that today’s children will grow up to be better off financially than their parents. That means more Americans think that today’s children will be financially worse off than their parents than those who believe they will be better off.

The sentiments expressed by millions of middle class Americans appear to be wholly justified due to the fact that middle class families are becoming more fragile and dependent on two incomes. A report from the Council of Economic Advisors found the majority of the income gains made by the middle class from 1979 to 2013 were a result of increased participation in the workplace by women. The report also noted the fragility of two income families amidst a decline in marriage and a drastic rise in single parent homes in recent years.

As a result of the slow growth in wages, over half of Americans now receive more in Government transfer payments (Medicare, Medicaid, food stamps, Social Security) than they pay in federal taxes. An analysis of all 50 states also found that in 42 states the cost of living is higher than the median income.

The rising cost of healthcare is also putting the pinch on the wallets of many Americans. As Jeffrey Pfeffer noted in his book Dying for a Paycheck, healthcare spending—per capita—has increased 29 fold over the past 40 years, outpacing the growth of the American economy.

While many Americans continue to look to the government to fix problems like wage stagnation, income inequality and rising healthcare costs, the sad truth is that we live in a time when 1 in 3 households has trouble paying energy bills and 40 percent of Americans face poverty in retirement at the exact same time the Federal Government has admitted that they lost $21 trillion. Not only did they lose $21 trillion (yes that’s TRILLION with a T), but the Department of Defense indicated in a press conference that they “never expected to pass” the audit to locate the missing taxpayer money.

John Emerich Edward Dalberg Acton famously proclaimed in 1887:

“Power tends to corrupt, and absolute power corrupts absolutely. Great men are almost always bad men.”

Perhaps it’s time for the millions of Americans who are quietly ‘mad as hell’ to start expressing their rage at the corrupt institutions of power that are decimating their livelihoods rather than expecting those very same institutions to fix the problems they created.

 

Degrowth: closing the global wealth divide

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Contradicting the dominant paradigm that economic growth equals development, degrowth theorists argue that serious cutbacks are crucial to protect life on our planet.

By Riccardo Mastini

Source: ROAR

Today, some 4.3 billion people — more than 60 percent of the world’s population — live in debilitating poverty, struggling to survive on less than the equivalent of $5 per day (which is the mean average of all the national poverty lines in the Global South). Half do not have access to enough food. And these numbers have been growing steadily over the past few decades.

With these data, Jason Hickel, an anthropology professor and global development expert, starts his controversial book, The Divide: A Brief Guide to Global Inequality and Its Solutions, in which he meticulously and convincingly debunks the narrative told by the UN and the likes of Bill Gates and Steven Pinker. In fact, while the good-news story leads us to believe that poverty has been decreasing around the world, in reality the only places this holds true are in China and East Asia. And these are some of the only places in the world where free-market capitalism was not forcibly imposed by the World Bank and the IMF, allowing these governments to pursue state-led development policies and gradually liberalize their economies on their own terms.

Development agencies, NGOs and the world’s most powerful governments explain that the plight of poor countries is a technical problem — one that can be solved by adopting the right institutions and the right economic policies, by working hard and accepting a bit of help. As Hickel writes: “It is a familiar story, and a comforting one. It is one that we have all, at one time or another, believed and supported. It maintains an industry worth billions of dollars and an army of NGOs, charities and foundations seeking to end poverty through aid and charity.” But it’s against this narrative that Hickel takes aim.

ECONOMIC UNEQUAL EXCHANGE OVER THE CENTURIES

The main argument presented in the book is that the discourse of aid distracts us from seeing the broader picture. It hides the patterns of extraction that are actively causing the impoverishment of the Global South today and actively impeding meaningful development. “The charity paradigm obscures the real issues at stake: it makes it seem as though the West is ‘developing’ the Global South, when in reality the opposite is true. Rich countries aren’t developing poor countries; poor countries are effectively developing rich countries — and they have been since the late 15th century,” argues Hickel.

In the book it is laid bare for all to see that underdevelopment in the Global South is not a natural condition, but a consequence of the way Western powers have organized the world economic system.

It’s not that the $128 billion in aid disbursements that the West gives to the Global South every year doesn’t exist — it does. But if we broaden our view and look at it in context, we see that it is vastly outstripped by the financial resources that flow in the opposite direction.

If all of the financial resources that get transferred between rich and poor countries each year are tallied up, we find that in 2012, the last year of recorded data, developing countries received a little over $2 trillion, including all aid, investment and income from abroad. But more than twice that amount, some $5 trillion, flowed out of them in the same year. In other words, developing countries “sent” $3 trillion more to the rest of the world than they received.

What do these large outflows from the Global South consist of? “Well, some of it is payments on debt. Today, poor countries pay over $200 billion each year in interest alone to foreign creditors, much of it on old loans that have already been paid off many times over, and some of it on loans accumulated by greedy dictators,” states Hickel. Another major contributor is the income that foreigners make on their investments in developing countries and then repatriate. Think of all the profits that Shell extracts from Nigeria’s oil reserves, for example, or that Anglo American pulls out of South Africa’s gold mines.

But by far the biggest chunk of outflows has to do with capital flight. A big proportion of this takes place through “leakages” in the balance of payments between countries. Another takes place through an illegal practice known as “trade misinvoicing.” Basically, corporations report false prices on their trade invoices in order to spirit money out of developing countries directly into tax havens and secrecy jurisdictions. A similarly large amount flows out annually through “abusive transfer pricing”, a mechanism that multinational companies use to steal money from developing countries by shifting profits illegally between their own subsidiaries in different countries. But perhaps the most significant loss has to do with exploitation through trade.

Hickel explains that “from the onset of colonialism through to globalization, the main objective of the North has been to force down the cost of labor and goods bought from the South. In the past, colonial powers were able to dictate terms directly to their colonies. Today, while trade is technically “free,” rich countries are able to get their way because they have much greater bargaining power.” On top of this, trade agreements often prevent poor countries from protecting their workers in ways that rich countries do. And because multinational corporations now have the ability to scour the planet in search of the cheapest labor and goods, poor countries are forced to compete to drive costs down. As a result of all this, there is a yawning gap between the “real value” of the labor and goods that poor countries sell and the prices they are actually paid for them. This is what economists call “unequal exchange.”

Since the 1980s, countries of the West have been using their power as creditors to dictate economic and trade policies to indebted countries in the South, effectively governing them by remote control, without the need for bloody interventions. “Leveraging debt,” argues Hickel, “they imposed “structural adjustment programs” that reversed all the economic reforms that Global South countries had painstakingly enacted in the previous two decades. In the process, the West went so far as to ban the very protectionist and Keynesian policies that it had used for its own development, effectively kicking away the ladder to success.”

DEGROWTH FOR SUSTAINABLE AND FAIR LIVELIHOODS

Hickel then ponders over how — if these unfair trade and business practices were amended — poor countries could actually go about developing their economies following the same path as the one embraced by the Global North over the past two centuries. He references a study by the economist David Woodward in which the latter shows that given our existing economic model, poverty eradication can’t happen. Not that it probably won’t happen, but that it physically can’t. It is a structural impossibility.

He explains that:

Right now, the main strategy for eliminating poverty is to increase global GDP growth. The idea is that the yields of growth will gradually trickle down to improve the lives of the world’s poorest people. But all the data we have shows quite clearly that GDP growth doesn’t really benefit the poor. While global GDP per capita has grown by 65 percent since 1990, the number of people living on less than $5 a day has increased by more than 370 million. Why does growth not help reduce poverty? Because the yields of growth are very unevenly distributed. The poorest 60 percent of humanity receive only 5 percent of all new income generated by global growth. The other 95 percent of the new income goes to the richest 40 percent of people. And that’s under best-case-scenario conditions.

Given this distribution ratio, Woodward calculates that it will take more than 100 years to eradicate absolute poverty at $1.25 a day. At the more accurate level of $5 a day, eradicating poverty will take 207 years. To eradicate poverty at $5 a day, global GDP would have to increase to 175 times its present size. In other words, we need to extract, produce and consume 175 times more commodities than we presently do. It is worth pausing for a second to think about what this means. Even if such outlandish growth were possible, the consequences would be disastrous. We would quickly chew through our planet’s ecosystems, destroying the forests, the soils and, most importantly, the climate.

According to data compiled by researchers at the Global Footprint Network in Oakland, our planet only has enough ecological capacity for each of us to consume 1.8 “global hectares” annually — a standardized unit that accounts for resource use, waste, pollution and emissions. Anything over this means a degree of resource consumption that the Earth cannot replenish, or waste that it cannot absorb; in other words, it locks us into a pathway of progressive degradation. The figure of 1.8 global hectares is roughly what the average person in Ghana or Guatemala consumes.

By contrast, Europeans consume 4.7 global hectares per person, while in the US and Canada the average person consumes 8 — many times their fair share. To get a sense of how extreme this overconsumption is: if we were all to live like the average citizen of the average high-income country, we would require the ecological capacity equivalent to 3.4 Earths. Hickel elaborates:

Scientists tell us that even at existing levels of aggregate global consumption we are already overshooting our planet’s ecological capacity by about 60 percent each year. And all of this is just at our existing levels of aggregate economic activity — with the existing levels of consumption in rich and poor countries. If poor countries increase their consumption, which they will have to do to some extent in order to eradicate poverty, they will only tip us further towards disaster. Unless, that is, rich countries begin to consume less.

If we want to have a chance of keeping within the 2°C threshold — which the Paris Agreement on climate change sets as an absolute cap — we can emit no more than another 805 gigatons of CO2 at the global level. Now, let’s accept that poor countries will need to use a portion of this carbon budget in order to grow their incomes enough to eradicate poverty; after all, we know that for poor countries human development requires an increase in emissions, at least up to a relatively lowish point. This principle is already widely accepted in international agreements, which recognize that all countries have a “common but differentiated responsibility” to reduce emissions. Because poor countries did not contribute much to historical emissions, they have a right to use more of the carbon budget than rich countries do — at least enough to fulfill basic development goals (as I also argue in this article). This means that rich countries have to figure out how to make do with the remaining portion of the budget.

Professor Kevin Anderson, one of Britain’s leading climate scientists, has been devising potential scenarios for how to make this work. If we want to have a 50 percent chance of staying under 2°C, there’s basically only one feasible way to do it — assuming, of course, that negative emissions technologies is not a real option. In this scenario, poor countries can continue to grow their economies at the present rate until 2025, using up a disproportionate share of the global carbon budget. That’s not a very long time, so this strategy will only work to eradicate poverty if the gains from growth are distributed with a heavy bias towards the poor.

As Hickel writes: “The only way for rich countries to keep within what’s left of the carbon budget is to cut emissions aggressively, by about 10 percent per year. Efficiency improvements and clean energy technologies will contribute to reducing emissions by at most 4 percent per year, which gets them part of the way there. But to bridge the rest of the gap, rich countries are going to have to downscale production and consumption by around 6 percent each year. And poor countries are going to have to follow suit after 2025, downscaling economic activity by about 3 percent per year.” This strategy of downscaling the production and consumption of a country is called “degrowth.”

Hickel describes this visionary idea as follows: “All it means is easing the intensity of our economy, cutting the excesses of the very richest, sharing what we have instead of plundering the Earth for more, and liberating ourselves from the frenetic consumerism that we all know does nothing to improve our wellbeing or happiness.” And since the book first came out in 2017, Hickel has been developing an increasingly clearer position on how we can go about making such changes happen.

His thinking on degrowth was recently encapsulated in a captivating blog exchange he had with Branko Milanović, another global development expert. But Milanović still maintains that economic growth should be at the core of poverty relief. Paraphrasing a passage from Kate Raworth’s Doughnut Economics, we could summarize Milanović’s position as “economic growth is still necessary, and so it must be possible,” while Hickel argues that “economic growth is no longer possible, and so it cannot be necessary.” I side with the latter, simply because the laws of physics trump the laws of economics.

In light of this, perhaps we should regard countries like Costa Rica not as underdeveloped, but rather as appropriately developed. We should look at societies where people live long and happy lives at low levels of income and consumption not as backwaters that need to be developed according to Western models, but as exemplars of efficient living — and begin to call on rich countries to cut their excess consumption.