A Systemic Concentration of Power and Wealth

In 1906, an Economist named Vilfredo Pareto discovered that around 20 per cent of the population in his native Italy controlled around 80 per cent of the land. This observation has come to be known as Pareto’s Principle. He also found that, while ratios of wealth and control varied in detail from country to country, the broad distribution is always the same—wealth, regardless of human effort, tends to accumulate. That accumulation is also called wealth condensation, by analogy with the condensation of a gas. The popular expression is “money makes money”.

Now the New Scientist reports on a study of 43,000 transnational corporations and the share ownership which connected them. The Swiss Institute of Technology in Zurich used for the study a 2007 Orbis database of 37 million companies and investors spanning the globe.

A core of companies, mostly banks, has excessive power over the global economy. 1,318 companies with intertwined ownership structures, representing 20 per cent of global operating revenues, were on average connected to 20 other companies. This group of 1,318 controls most of the largest blue chip and manufacturing firms—the real economy—taking in 60 per cent of global revenues from goods and services. This group included a “super entity” of 147 companies that controls 40 per cent of the network’s wealth, several of the top 25 of which have familiar names:

1. Bank of America Corporation
2. Morgan Stanley
3. Goldman Sachs Group Inc
4. Merrill Lynch & Co Inc
5. JP Morgan Chase & Co…

The 147 of the surveyed companies controlling 40 per cent of the network have condensed—concentrated—a vast level of wealth into their coffers, just as Pareto would have predicted.

America Stops Laughing to Correct Apoplectic Republican Comic, Rush Limbaugh

Alternet has a plethora of interesting articles and often more interesting and informative comments. This link is to a comment thread to a short article about the right wing propagandist Rush Limbaugh, who is no repecter of the truth or even of facts. A comment by passnthru2 noted:

1. The richest 1 percent has 43 percent of the nation’s wealth—6 times that of the bottom 80 percent, which has just 7 percent
2. the richest 5 percent has 72 percent of the nation’s wealth—10 times that of the bottom 80 percent
3. the top 20 percent has 93 percent of the nation’s wealth—23 times that of the bottom 80 percent
4. the top 50 percent has 97.5 percent of the nation’s wealth—39 times that of the bottom 50 percent which has 2.5 percent

44 percent of Americans couldn’t get $2000 together if their lives depended on it, while the richest 400 families:

1. have $1.4 trillion, and yet,
2. pay under 14% income tax

These rich people and the big corporations they own are sitting on piles of cash, yet they refuse to pay decent wages, and do everything in their power to lower the workers wages, for example using professional bigots like Rush Limbaugh whose splenetic rants impress a substantial section of the redneck population. It explains why there is a recession, and illustrates the huge fault in capitalism.

The rich always want more, and have to drive up profits to get more. They can do it by charging more and by paying their workers proportionally or absolutely less. They can even move their businesses abroad and pay the domestic worker nothing at all! But when people have less to spend whether it is absolutely less through wage cuts or relatively less by price inflation, they cannot afford to buy as much as they could previously. The retail trade goes into recession, and manufacturing businesses follow.

RustyCannon observed that if they were to pay people better, retail and therefore industry would be stimulated. Poor workers necessarily spend what they receive in earnings. They do not earn enough to save it. So the economy would be stimulated if the rich would just realize that they are starving the economy of liquidity by their greed. If the rich will not do it then the government must. President Carter created jobs, then Reagan came in, cut taxes for the rich, and drove unemployment through the roof.

The theory was “trickle down”. Give the rich more tax breaks and less regulations and they will spend more readily, employing people to expand their businesses. It doesn’t work. Republican President, George W Bush did not create as many jobs in the two terms of his presidency as did Carter in the single term he had. The rich just begin to expect more tax breaks to accumulate more risk free wealth—it is easier than taking the risks of trading. 30 years of this has just lead to manufacturers closing factories and destroying lives at home to move maufacture abroad to low labor cost countries. 50,000 manufacturing companies went in the Bush administration alone.

The large and enterprising middle class that was the economic engine of the USA is being impoverished by the stranglehold the rich have on the nation’s ready money—the top 400 wealthiest own more than the bottom 150 million. The economy is starved of demand. Middle class wages have been flat for 3 decades, yet the cost of living has continued to climb. Two income homes are now needed just to get by. The middle class no longer has as much disposable income, and what it has is falling, leaving its demand for products and services lower, with knock-ons to other small businesses dependent on them.

When people, encouraged by the sleepwalking bankers, began using the equity in their homes, they created a false demand bubble, and a false sense of prosperity. Disastrous greed among bankers who thought our money was theirs, led them to gamble with those unsound derivatives. Trading them backwards and forwards each day yielded immense bionuses for doing nothing in the least bit useful. That bubble burst, leaving us in the mess we are in, yet with no will to regulate the banksters and the rentiers, and sustained “head in the sand” insanity among Republicans determined to tie down Obama, and bring him down, if at all possible.

Further cuts as demanded by the Republicans can only make the situation worse, and that is the fault of the Republicans themselves who ought to have accummulated in the good years to spend in the bleak ones. They spent through the good years and now, when spending is the only way out of depression, they want to cut. Strong financial regulation and a New Deal like FDR’s will be necessary to reinvigorate the economy—measures that Republican bigots like Limbaugh call socialism for the sake of their indoctrinated disciples.

GBS—Just What is the Point of the Rich?

Taxation of the poor and cuts in public spending by cutting government expenditure causes personal suffering among those who have to live off smaller take home pay, or who lose their jobs. The unearned income from returns on stocks, profits, bonuses and commissions—the ways the rich maintain their wealth—is treated “as so sacred that we must all tighten our belts sooner than touch it” (GBS). The media pundits and tame academics employed by the wealthy class explain to us that we need the investments of these rich people to replace and accumulate capital, without which we would have no industry at all. So we have to let this narrow class of super rich have so much money that it is quite impossible to consume, leaving them with no alternative but to invest it:

After stuffing themselves with every luxury that can be imagined on the face of the earth, they still have millions which save themselves because they cannot be spent. That is the argument for having an enormously rich class amongst you. What have we to say to that?

In the first place, it is an enormous waste to overfeed a handful of idle people and their millions of hangers on before you can save money when no money need pass through their hands at all. No sane nation, which could accumulate its capital in any other way, would chose that way. Well, what on earth is to prevent us from accumulating our capital in another way? Why not take its sources out of the hands of these gentlemen and accumulate it ourselves? They would then have to work for a living, but we would all be the richer and they all the happier.

G B Shaw, In Praise of Guy Fawkes, 1932

After all, they are always telling us that work is good for us, so they must be all the happier to be able to join with us in doing it, those of us, that is, who have jobs in the first place. But we will be able to sensibly organize employment by looking to rebuilding our decayed cities and providing better public amenities, thereby employing many who at present have no jobs and live in derelict inner cities despairing for the future of their kids who know nothing but the local drug baron.

Then again, what guarantee have we that these people will invest their surplus cash for the good of the nation? As a rule they send it wherever labor is cheapest, anywhere in the world except the USA.

Here we are with our cities rotted out with slums, and with the most urgent need for capital to do away with those slums and to improve the condition of our people, to give them better food, better clothing, better housing, and better education, for bringing our obsolete machinery up to date, organizing agriculture collectively, and introducing all the new scientific methods. We need capital for those things, but if there is a penny more in the way of dividend to be got by our capitalist class by sending money to the Argentine or anywhere else, they send it there.

G B Shaw, In Praise of Guy Fawkes, 1932

In the present day, China has vast amounts of US dollars. By controlling the release of these dollars on to the market, the Chinese can control the US economy, making exports expensive and imports cheap, perhaps, with disastrous consequences for home industries. What do the super rich class care? They bother only about their investments which make their money abroad anyway, so the US economy scarcely matters to them.

So you see the one defense you can set up for the conspiracy of silence about unearned income is nothing but a silly excuse for shirking the great enterprise of Socialism. It is not true that wages must be cut, public enterprises much be starved and stopped in order that more hundreds of millions can be added to those that are being wasted at present on idleness, extravagance and corruption of labor which are ruining us.

G B Shaw, In Praise of Guy Fawkes, 1932

As to innovation, it is true that private corporations have developed wonderful technological advances, but very much of the original scientific priming behind it is financed by the state not by the idle rich who too often consider it far too chancey to finance research, and then government contracts often under the auspices of the military are often necessary to encourage the private corporations to do anything towards technological development. In short, risk avoidance actually holds back progress when investment is in private hands. The rich look for security nowadays not enterprise. It is the small independent businessman, rising from the working and middle classes, who is often the entrepreneur, and they frequently have problems raising funds for start ups and growth.

Warren Buffet Says Squeeze the Mega Rich

We have noted elsewhere in this Blog that professor Greg Philo found some rich people—the intelligent ones—were willing, even glad, to pay additional tax if it meant greater economic and social stability in the nation and the world. Now, Warren Buffet, whose net wealth is valued at around $50 billion, in The New York Times has lashed out at Congress, saying that they were not handling tax breaks in a way that is best for the country. He called for higher taxes for the super rich of America, himself included.

While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we megarich continue to get our extraordinary tax breaks. These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species.

While he paid nearly $7 million in taxes last year, he should have forked over much more to the federal government but tax breaks kept him from doing so, he wrote. “It's nice to have friends in high places”, but Congress need not “coddle” the super rich any longer.

US Credit Worthiness, Tax Hikes and the Balancing of the Federal Budget

Krishna Tummala, director of Kansas State’s public administration program and professor of political science simply explains the reason for the nation’s burgeoning debt:

People demand more services but are not always willing to pay taxes. The politicians promise more services without telling them the cost and that they must be paid for. Instead, they use the so-called painless way to go about this by allowing deficit budgets. This means not only the politicians must educate themselves on the issues, but their constituents as well.

He adds that the argument that the federal government should live like we do, within our means, is hypocritical. The personal debt of Americans is close to $2 trillion, so effectively we all live in debt. The federal government just is behaving like we do. Moreover, it has the responsibility for the common welfare and general defense, as the Constitution requires. Yet state governments, 48 of which require a balanced budget by law, are favorably compared to the federal government. But state governments differ in their budgeting compared to the fed. The federal government has only one budget, but each state has two, a current account and a capital account. Only the state’s current account—effectively its day to day running costs—must be balanced. The capital account is the place for major project expenditures, and they have to be carried forward annually.

The federal government borrows money through Article I of the US Constitution, and had it not been able to, it could not have borrowed $15 million from Britain in 1803 to complete the Louisiana Purchase. It doubled the size of the country, made it possible for it to be united coast to coast, and without it, it perhaps would never have become the world power it is. Now the national debt is $14 trillion, but it is not owed to the British. The Chinese have around $3 trillion of it.

People who want a balanced budget, many of them Republicans, have to realize that it will need taxes to be raised. Cutting expenditures will not be enough, and will shut down the country first. But Republicans will not condone tax hikes because the people with the money are leading Republican donors. So, cooperation between the parties has been lacking, only quarreling, a lot of posturing and little dialogue. The deadline for increasing the debt ceiling is 2 August, with the country’s credit worthiness at stake. If the debt ceiling is not extended, the country will default, hitting the economy of the whole world, everything now being so interconnected.

The country’s credit worthiness underpins the financing of debts. Foreign countries must have confidence in the US economy or they will not be willing to lend. Of course, credit ratings agencies such as Moody’s and Standard & Poor’s can evaluate the soundness of the US economy but the ratings agencies were giving excellent ratings to the financial sector “before it went belly-up”, Tummala wryly concluded!

Houston, a Glimpse into America’s More Caring Future?

The 2011 Kinder Houston Area Survey took in a representative sample of 750 Harris County residents—including 240 respondents contacted by cell phone. The University of Houston administered the survey. Survey author, Stephen Klineberg, co-director of the Kinder Institute and professor of sociology, said:

Houston is where America’s four major ethnic communities—Anglos, Asians, blacks and Latinos—meet in more equal numbers than almost anywhere else in the country. The challenges and opportunities of creating a more unified and inclusive multiethnic society will be seen here first.

As a city at the forefront of the country’s demographic revolution, Klineberg thought that Houston offers a glimpse into America’s future, and the survey’s assessment of the city may offer important lessons for strengthening the rest of the country:

• create policies that moderate the inequalities
• nurture a far more educated workforce
• develop cities into environmentally and aesthetically appealing destinations
• empower all members of a multiethnic society.

Though Texas is a red state traditionally wanting less government, a majority of Houstonians today (52 percent) said that government has a responsibility to help reduce the inequalities between rich and poor in America (up from 45 percent in 2009). This year 48 percent said that “government should do more to solve our country’s problems” (up from 36 percent in 1996). 72 percent of respondents thought most poor people in the US today are poor because of circumstances they can’t control (up from 68 percent in 2007, and 52 percent in 1999). Although 86 percent agreed “if you work hard in this city, eventually you will succeed”, 67 percent also think “people who work hard and live by the rules are not getting a fair break these days”.

Respondents are a bit more upbeat in their personal economic outlooks—26 percent (up from 20 percent in 2010) report improving personal financial conditions—but remain pessimistic about the long term national prospects—only 31 percent (down from 43 percent in 2007) believe that young people will eventually have a higher standard of living than adult Americans today:

Houstonians feel that the bleeding has stopped, but a robust recovery is not yet on the horizon.

Stephen Klineberg

78 percent disagreed with the statement “A high school education is enough to get a good job”. The percent of people who spontaneously mentioned education when asked to name the biggest problem facing people in Houston jumped to 7.6 percent this year from just 1.7 percent in 2009 and 2 percent in 2010:

There’s a new awareness that this is now a high tech, knowledge based economy and there aren’t many good jobs for people without a college education. Education is more important than ever. Long gone are the days when you could get a job out of high school, work hard and make enough money until you retire. The resources of the knowledge economy are not found in factories, they are situated between the ears of the best and brightest, who can live anywhere.

Klineberg

Public support for new initiatives to improve the quality of life in Houston has remained firm or grown stronger across the 30 years of the survey. Area residents support measures to enhance the city’s green spaces and bayous, revitalize and preserve urban centers and improve air and water quality.

Though most respondents (52 percent) said they would prefer to live in a single family residential area, a large minority (45 percent) would choose an area with a mix of homes, shops and restaurants. In 2010, 41 percent said they’d prefer a smaller home within walking distance of shops and workplaces, rather than a single family home with a big yard “where you would need to drive almost everywhere you want to go”.

Asked how they would feel if a close relative of theirs wanted to marry a non-Anglo, 8 percent of the Anglo respondents this year said they would disapprove, down from 13 percent in 2002 and 23 percent in 1995. Among the Anglo respondents under the age of 30, 93 percent said they would approve of such intermarriage, compared with 69 percent of those 60 or older. Seventy percent of Anglos under 30, but only 35 percent in the older group, said that the increasing immigration into this country today mostly strengthens American culture. 73 percent of the younger respondents, compared with 52 percent of those 60 or older, said they are in favor of granting illegal immigrants a path to legal citizenship if they speak English and have no criminal record.

So, older Houstonians’ attitudes toward diversity, which will continue growing rapidly, are in conflict with younger Anglos more comfortable with the demographic trends.

Shopping Addiction—Thinking it Can Change Your Life!

People who overuse credit have different beliefs about products from those who spend within their means. Professor Marsha Richins says many people buy products thinking that the items will make them happier and transform their lives. Simultaneously such consumer materialism induces in them a disregard for debt. These two forces work together to increase credit abuse and overuse.

Wanting to buy products becomes a problem when people expect unreasonable degrees of change in their lives from their purchases. Some people tend to ascribe almost magical properties to goods—that buying things will make them happier, cause them to have more fun, improve their relationships—in short, transform their lives. These beliefs are fallacious for the most part, but nonetheless can be powerful motivators for people to spend.

Materialistic types hope for four kinds of changes when making purchases, but earlier research shows that these expectations are often not fulfilled. The four kinds of transformations expected are:

1. Transformation of the self—the belief that a purchase will change who you are and how people perceive you. This is commonly held by young people and people in new roles. Example—a woman wanted cosmetic dental surgery to improve her appearance and self-confidence.
2. Transformation of relationships—the expectation that a purchase will give someone more or better relationships with others. Example, a woman wanted to buy a new home because she thought it would enable her to entertain more often and make more friends.
3. Hedonic transformation—a purchase will make life more fun. Example, a man wanted a mountain bike because he thought it would give him more incentive to get out and go on “an adventure”.
4. Efficacy transformation—the expectation that purchases will make people more effective in their lives. Example, some people wanted to buy a vehicle because they thought it would make them more independent and self-reliant.

In proportion, none of these are a problem. They can be for people who have strong and unrealistic transformational beliefs, for then they are more likely than others to overuse credit and take on excessive debt. Other research by Fang and Mowen, 2009, and Netemeyer, et al, 1998 has also shown a relationship between materialism and gambling, and yet more by Mowen and Spears, 1999, and Ridgway, Kukar-Kinney, and Monroe, 2008, between materialism and compulsive consumption.

It is further evidence that our economic system is damaging to us, and professor Ritchins seems to agree. She thinks finance and credit counseling should be revised to help people understand their motivations for purchasing goods better, and recognize that products are not a quick fix for improving their lives:

Many financial literacy programs seek to prevent people from getting into financial problems by presenting the facts about interests rate and loans, but few seek to influence behavior directly, or focus on why people purchase things they cannot afford, and go into debt.

Is the Wagon Rolling Against the Robbing Rich?

Amid the recent fiscal carnage in Washington several studies of the US have been published concerning the situation of the average American. First, IMF economists analyzed the US public deficit and debt levels, and their relation to the demands aging Baby Boomers will place on the government’s Medicare and Medicaid healthcare programs, while the birth rate lags at a record low:

The United States is facing an untenable fiscal situation due to the combination of high fiscal deficits, an aging population and rapid growth in government provided healthcare benefits.

IMF study, An Analysis of US Fiscal and Generational Imbalances:
Who Will Pay and How?

To “go a long way in returning the United States to a fiscally sustainable path”, the US government must cut the entitlement programs and especially healthcare—among the most expensive in the world—that face rapidly rising costs in coming years. Americans will have to pay more taxes and the government will have to cut spending on Baby Boomers—those Americans between about 45 and 65—and their immediate heirs.

To eliminate all current deficits and long term shortfalls on social plans for the current generation “would require all taxes to go up and all transfers to be cut immediately and permanently by 35 percent”, and “delay in the adjustment makes it more costly”.

Unless currently living Americans pay more in net taxes or unless government spending on current generations is curtailed, future Americans will face net tax rates that are about 21.5 percentage points… higher than those facing current newborn Americans.

Of course, the IMF is an arm of US foreign policy, or rather, an arm of the international policies of the US uber rich class who rule the world for the sole purpose of making themselves richer than their already obscene levels of riches. The IMF always makes the people pay whenever the rulers of any country get its finances in a twist by their greedy machinations. The ruling clique in the US are among the main beneficiaries usually. It is time they paid! Normally, they pay least, often nothing!

But the average Yankee seems amazingly placid, or gets worked up over the wrong enemy, all too often supporting the greedy manipulators because they are all too easy to fool. Often, they seem to think that they are themselves among the uber rich, but less than a single percent of the population are. That one percent have gotten three times richer in real terms over the last 30 years, while the average Yankee has got poorer once inflation is accounted for.

Not surprisingly, more Americans say that their financial situation is worse not better in recent years. For the first time since 1972, 31.5 percent of Americans are “not at all” satisfied with their financial situation compared with 23.4 percent who are “pretty well” satisfied (General Social Survey, NORC, University of Chicago).

Americans are also more insecure about employment. A record 16.4 percent thought it “likely” (fairly or very) that they would lose their job or be laid off. As few as 52.2 percent thought it “not at all likely” that they would lose their job or be laid off, easily the lowest confidence ever recorded by the GSS. Those who thought their standard of living was “much better” or “somewhat better” than their parents declined.

The General Social Survey—which NORC has conducted for forty years based on 2,044 interviews—is a biennial survey that gathers data on contemporary American society to monitor and explain trends and constants in attitudes, behaviors, and attributes.

On top of these, American “happiness” has been measured and took some blows, but some American stoicism shone through here. While only 28.8 percent of Americans, the lowest percentage since 1972, were “happy”, another 14.2 percent were “not too happy”. Happiness was hit mainly because of the economy and people’s own finances. Even so, 85.8 percent of Americans were “happy”.

Not all aspects of happiness fell during the downturn. 97 percent of marriages were judged to be “happy” (very or pretty), and 86.0 percent of Americans claim to be “very satisfied” or “moderately satisfied” with their work, a steady average since 1972.

If anything, it suggests that the average American lives in a cocoon. They are concerned for themselves and their immediate family, and are satisfied that they are not being repossessed like the family over the street, and still have a job to hang on to. Despite the hugely vaunted Christianity of the Christian nation, the average American is indifferent to his neighbour, as long as he’s all right.

The motto is not “Do unto others as you would be done by”, it is “I’m all right, Bud, You look after yourself”.

Fortunately, recent proposed cuts in public services have been firmly rebutted by encouraging united strength and purpose. Is the US sleeping Leviathan waking up? Let’s hope so, then you smug financiers, corporate bosses, bankers and bought men will have to watch out! Once enough of the people stop being taken in by the great Washington Repucrat-Demoblican farce, then the wagon of unity may be rolling, and the callous and greedy exploiters of the rest of us will be crushed by its irresistible momentum.

Why Are Wealthy Countries Smart Countries?

A press release of the Association of Psychological Science tells us that Heiner Rindermann of the Chemnitz University of Technology and James Thompson of University College London have analyzed test scores from 90 countries, from the US to New Zealand, and Colombia to Kazakhstan, and found that the intelligence of the people, particularly the smartest 5 percent, is a factor in the strength of their economies.

They also collected data on the country’s excellence in science and technology the number of patents granted per person and how many Nobel Prizes the country’s people had won in science.

They found that intelligence made a difference in gross domestic product. For each one point increase in a country’s average IQ, the GDP per capita was $229 higher. For every additional IQ point in the smartest 5 percent of the population, a country’s per capita GDP was $468 higher. Rindermann says:

Within a society, the level of the most intelligent people is important for economic productivity. I think in the modern economy, human capital and cognitive ability are more important than economic freedom.

The press release is inadequate, admittedly, but the obvious criticism in the way these data are presented is that it is a typical chicken and egg question. IQ is not solely intrinsic, it can be trained, and nothing suggests that intelligence is the independent variable, and economic success the dependent one. It could be the exact opposite. Economic success provides some people with a surplus that they can use to recruit able people into their businesses, and educate their own children to a higher standard than ordinary workers. They can also marry their daughters to the most successful of their employees. Through successive generations, then, the ruling elite get cleverer and better educated.

Meanwhile successful managers who did not marry the boss’s daughter can launch businesses of their own, and when successful, can join the ruling elite. This latter is, of course, the American Dream, but it gets harder and harder for anyone actually to go from rags to riches via enterprise. Startup costs are prohibitive in a technological age unless someone is willing to sell their idea to a rich man called a “venture capitalist”. The entrepreneur from then on is no longer his own boss. The megarich insulate themselves from failure by buying the best ideas from potential rivals, employing clever managers and lawyers to preserve their wealth for them, and bribing politicians to wangle the political and economic system to suit them.

So what is the chicken and what is the egg? As ever the rich have grabbed all the best seats, and they are not going to give them up. They think they’ve paid for them. They will!

Downturn in Housing—Nothing has Changed

Nothing has changed in the last two years. Bankers still get obscene bonuses, and the ordinary Joe is still being robbed by a system arranged to suit the rich. A report from the W P Carey School of Business at Arizona State University suggests a new downturn in the housing market.

Foreclosures had been held steady by foreclosure moratoria, but as these played out, it seems the rate of foreclosure is going up to where it would have been otherwise. In the last few months of 2010, foreclosures had fallen to 30 percent, but, in January and February 2011, it had risen again to 43 percent of recorded sales. Associate professor of Real Estate Jay Butler, who wrote the report, said:

January 2011 showed a re-emergence of troubled times, which continued through February.

Housing prices were also being influenced by foreclosure related activity. 40 percent of normal market sales were resales of previously foreclosed on houses. Adding these to the 43 percent of sold foreclosed houses means 66 percent of the market in January and February related to foreclosed buildings. That and the absence of a strong move up market, which is fundamental to a housing recovery, is restricting growth in home prices, leaving many home owners in negative equity.

The median price for the traditional market in February was $127,500, which is an improvement over the $125,000 in January, but down from $140,000 last year. The foreclosed properties in February had a median price of $141,385 in contrast to $143,580 for January and $153,695 for a year ago. Even expensive homes continued to be foreclosed, with 19 being over $1 million in February, so people who consider themselves middle class are being hit too.

The ones who are not being hit are the 0.1 percent of the population who rule the country, the mega rich, whose wealth equals that of the poorest half of Americans. Half of Americans is around 150 million! The mega rich, have as much money as 50 percent of all Americans and the proportion is rising each year. These people are never satisfied by however much they have.

The sad thing is that so many Americans are intoxicated by the American dream, that they can, somehow, be one of the mega rich. A dream is all it is for 99.9 percent of Americans.

Wise up, Yankees!

Who are the “Mindless” Ones?

UK Students Protest Vigorously Over Political Liars

Yesterday the Liberal Democrats in the UK’s Con-Dem coalition government voted to increase university tuition fees by 100 to 200 percent. Some did vote against and a few abstained, and even a few Tories voted against the outrageous measure, but sufficient members voted for it to ensure a government majority of 21 in the House of Commons. The Tory House of Lords, newly packed by Tory leader, David Cameron, with a load of Tory time servers, will back the motion.

Students are so outraged at this that they have started a campaign to register their utter disapproval by confronting the state, and particularly, that section of the coalition, the Liberals who solemnly pledged before the election that they would not support the Tory proposals for higher university fees under any circumstances. Liberal leader, Nick Clegg, says the pledge was a mistake because the Treasury is worse off than he and his party had reckoned. It therefore cannot be honored.

Indeed, there can be no honor among thieves and Clegg had his own excellent education because he is from a long line of them. His family are among the country’s rich, he had a private education at Westminster school, and went to one of the UK’s best universities, Cambridge, because his father was a banker, and his varied family background includes Ukrainian nobility. He is, in short, not without a few quid to his name.

Now, having joined the coalition government led by another rich Tory, David Cameron, he has decided that the country can no longer afford free, or even cheap, university education because the Treasury is deep in debt, and the country has to fill it and meanwhile service its borrowing requirements—we have to borrow from the banks to pay the interest on our debts, and so we cannot afford public services like free education any more!

The Banks—Robbers!

The students, however, unlike many trades unionists and Labour Party supporters are intelligent enough to realize the public purse is empty because we have given all our money and more to the banks to bail them out of insolvency when they were on the verge of collapse two years ago through speculative investments meant to further enrich already super rich financiers, and line the pockets of their agents the bankers simultaneously, through the enormous bonuses they paid themselves for robbing the rest of us.

All of this done under the innocent and admiring gaze of the pathetic supporters of the criminal New Labour Party of one T Blair, otherwise known as T Bliar, who is now coining it for his neoconservative takeover of the British traditional trades union and socialist party on behalf of the big criminals who bribed him to support the US Bush administration in its greedy adventures, and are now faithfully rewarding him with their spare change.

Students know it, and are young enough and angry enough to want to do something about it, unlike most of the British working class who are gulled into a zombic stupor by a media controlled by the same class of megarich criminals feeding them mindless reality TV, soap operas and a “get rich quick” celebrity culture that blurs the distinction between fantasy and reality for many. The students, after sleeping for almost fifty years, are now waking up to the state of the nation. We are not broke, but we have been robbed in a blatant scam, and the students of the future are among the ones who will have to pay for the heist.

Note thet these mindless students are not protesting for themselves. Most of them will have graduated before the measures are brought in, but the university under-graduates have been supported by many school pupils and students of pre-university sixth form colleges, who know they will be affected by the government class-laden legislation. Class-laden? Young people from poor families will hesitate getting into massive debt before they even start on their adult careers, and the assurances of grants and special measures for the poorest does not impress them. They are sops to get the measures passed, and need be worth nothing more than the Liberal “pledge” to oppose such acts. That was plainly worthless!

Mindless MPs

Yesterday’s demonstrations ended up chaotic, and the culprits are being called names by the media—“mindless” and “thugs”. It is the media pundits who are mindless, and the idiotic MPs who think they can gull the people forever. The students are showing that is not the case. Unjust societies fall apart because people will not put up with it, and the British are beginning to realize how they have been tricked. It is simply that they have lost the will or the courage to publicly demonstrate their diaproval, but students are leading the way.

The students are not “mindless”, it is liberal MPs like the local empty-headed idiot, Don Foster, who represents the rather posh city of Bath. Someone threw a rock through his window, and Mr Foster responded that he did not enter politics to win a popularity contest but to change things. He seemed quite oblivious to the fact that he actually stood as an MP in a popularity contest—it is called democracy! MPs are elected when they gain the popularity of the electorate, and that popularity is based on what they promise to do.

The half witted Foster, reneged on his promise and merely had a brick through his window. Next time, if the electorate are learning anything, he will be evicted. The local MP for this constituency of Somerton and Frome, David heath, a Liberal Democrat, who has had a narrow majority for several elections can hardly expect to remain in his seat in parliament now that he too has voted against the students’ and the country’s best interests. These two and their fellow opportunists will doubtless by then have abandoned all pretence of being Liberals and will have joined the Tories.

Mindless Media

Media pundist are never “mindless”. They write their columns and usually have sufficient ego not to want to humble themselves even when proved to be wrong. One of them, on Murdoch’s TV tried to bombast an NUS spokesman into condemning the NUS organized demonstrations, but the young man admirably stood his ground despite the anchor man speaking over him, and attempting to harass him into slipping up. The demonstrations had been taken over by “anarchists”! It is a general assertion made by media pundits trying to make out that demonstrations are fundamentally vehicles for what they also like to call “rent a crowd”, professional rioters. Quite where these professionals hide or make aliving when there are no riots to lead, is hard to figure, but they always emerge mysteriously when a demonstration gets out of hand. No one ever seems to figure that it is frustration and anger at being duped by professional careerists called policemen and politicians.

No one ever considers either that, it being in the interest of the state apparatus to discredit demonstrations by introducing petty but violent acts, they have undercover agents provocateurs actually causing and inciting trouble. Any self respecting professional rioter, having broken into Millbank or the Treasury building would have set them both on fire, but these professional anarchists only set fire to a few placards and wooden staves in the streets. These professionals could hardly expect to get employed again, could they?

Mindless Police

Certainly the police professionally anger crowds by their so-called “crowd control” techniques. They “kettle” crowds or sections of a large crowd—confine them by force—into a narrow space and refuse to allow them to pass. This naturally causes immense frustration when people want to relieve themselves or to go for food or drink. Yesterday, a section of the crowd were induced to cross Westminster Bridge to escape the kettle, but then were stopped half way across and confined for hours in the narrow space of the bridge. The police are meant to be the guardians of the right of lawful citizens to move along the Queen’s highways, but they wilfully break the law themselves, with the result that violence is the only way to escape. Innocent people have died in these kettles, and a young man needed a three hour brain operation yesterday after a baton attack. It goes without saying that any rogue policeman will be innocent.

The police too are “mindless” because the media are forever highlighting violent protests but ignore peaceful ones. A peaceful “candle lit” vigil across the bridge in the South Bank was hardly mentioned by press or TV. So the provocation of the police and their plain clothes agents might actually be giving the publicity that will arouse the sleeping giant of the British public and their generally compliant trades unions from their slumbers.

The Effective Tactic—Destabilization

If Parliament relies on demonstrations being forever peaceful, and therefore of no consequence so it can simply ignore them, it is making a big error, one it has often made before. The present situation is plain to anyone who thinks just a little. The rich get richer even when the country is, they tell us, broke. Only last week, Ireland had to go cap in hand for a large multibillion Euro loan to bail out its own banks. This week the Irish banks are handing out tens of millions in bonuses, just as British and US banks have done. The banks and their employers, the super rich financiers, gleefully put up two fingers to the world, while the people have to scratch about to pay their mortgages and rents, aye and taxes, if they can. That is why the students are angry, and why we all should be angry too. It is why we should support them and ignore the whingeing special pleading of the press and the broadcast media.

Listen! The richest 1 percent of the world’s population owns over $200 trillion. No need to guess where most of the 1 percent live. Maybe as little as 5 percent of this largess would solve the world’s economic problems, but Obama has just caved in to the rich man’s lobby in the US called the Republican Party, and most of the world’s leading developed countries have bailed out their banks while putting the burden of their empty treasuries on the people, not where it should be, on the minority who own as much as the rest put together. Governments ought to be joining together to ensure the rich are taxed and pay it.

Curiously many, the most intelligent among the rich, do not mind it as a temporary burden! Those rich people not among the “mindless” realize that their riches are most secure in a stable world, and corporate and financial greed is now destabilizing the world. That they do not like. It follows in all logic that the best way to get the rich to pay their fair share towards economic stability is to threaten instability. That is what “mindless” students are doing.

Greg Philo: Privatize the National Debt

Britain is the sixth richest nation in the world. Total personal wealth in the UK is £9 trillion, and the richest 10% of the British people—about a million wealthy families—own £4 trillion of it, with an average per rich family of £4 million. The bottom 50% of the British people own just 9% of the wealth, the least wealthy being the bottom 10% of households who are in debt—they owe more money than they own.

Yet we are in such a crisis, having emptied the treasury to prop up the banks, and to pay the £ million bonuses the parasitic banking community take whether we like it or not, that we are all to suffer the worst cuts in public services ever! The media sing in chorus “we are all in it together”, but does it seriously sound as though we are, with such a vast inequality of wealth distribution?

The economy has already recovered sufficiently for the banks to have started making obscene profits again, and to have already returned to giving themselves financial commendations in the shape of fatter bonuses than ever, and the country is already richer than it was before the financial crisis, despite the media bleating. Maybe it is because the economy meant is that very wealth I made account of in the paragraph above. With stock markets rising, banks making profits, cash bonuses and champagne eqally profusely flowing, the sector of the economy that covers the rich are indeed looking up, and the reason is that the rest of us are having to count the cost!

There is no popular mandate for Con-Dem policies that will radically reduce growth, put up unemployment and affect the bottom 6 million people hardest—those who have no wealth at all. The Con-Dems are doing this though their popularity is already steeply in decline, and Labour has already gone ahead of the other parties according to a recent poll. The consequence of what they are doing is likely to be serious social unrest. The British people are not passive and it is a myth that they will accept policies that they see as profoundly unfair. The consequences of unfair policies is revolution—as a minimum, mass demonstrations, strikes, popular unrest and perhaps rioting.

Professor Greg Philo of the Glasgow University Media Group says the answer is plain, and he has checked it out via public opinion surveys and interviews with wealthy people. He proposes a one-off tax of just 20% on the wealthy decile. This tax of 20% on the very richest people in Britain would raise £800 billion—a fifth of the total £4 trillion they own. That is enough pay off the national debt and dramatically reduce the deficit, since interest payments on the national debt are a large part of government spending.

Nor would this rich segment of society actually have to produce the money immediately, if at all! Voodoo economics? Not at all. If the richest 10% assume liability for the £ billion national debt, it would be cleared from the governments accounts, reducing the deficit instantly to a manageable size. That would instantly relieve the pressure on markets which would soar, and the stock and bond owners, including the banks would immediately be presented with remarkable gains which would go a long way to returning to them the money they have agreed to pay out. Indeed, they can pay their 20% tax in installments out of the earnings they would be making, and even if that were not sufficient to pay off all of their 20%, they could simply agree to pay it along with their death duty.

Philo's group commissioned a YouGov poll of over 2,000 people to test attitudes to the tax and found it was an extremely popular proposal. 74% of the population approved (44% strongly), and agreement was spread right through social groups. Only 10% did not approve. Those in the higher income brackets were more supportive than the less well paid of the wealthy class. They were the ones who realized the measure would turn out to be beneficial for them as well as the country, not merely in the immediate returns they would get, but also in their desire to keep society on an even keel. They knew that unrest, strikes and riots would reduce confidence and profits, and that the poor are the ultimate consumers, and stripping them of the little they have will just depress markets. Even if they were unable to recover all of the 20%, they knew they were wealthy enough not to actually miss the loss.

A problem for the British and US economies is that much of the nations' resources have been directed into inflated property values, which is where many of the bonuses ended up. Extra houses is buried money. It is not liquid and is inaccessible. The tax would re-circulating some of it once the government had no need to cut services, as public spending, stimulating growth. Unemployment resulting from the proposed cuts would be avoided, extra benefits would then also be avoided, and tax revenue would not fall.

At present, we have a lot of billionaires resident in the UK who pay no tax at all. There is quite a separate call for them to pay their just taxes. If people have substantial assets, want to live here and to be British, then they will have to pay their bit. The public will have little time for non-doms, exiles or what will be seen as unacceptable attempts at avoidance. This proposal is similar, but is a mere one off necessity. The Revenue offices know who have the wealth and collecting it ought not to be a problem. The main problem indeed is likely to be the extent of privatization of revenue collection. That, most sensible Britain’s will think, should not be in private hands. Already it has led to absurd mistakes and injustices, so it should be returned fully to the civil service.

The absurdity of privatizing many of our public services is itself a symptom of the desperate need for reliable sinks for the surplus capital swilling around the world. It should be used to put people into work, not to squeeze even more unneeded capital out of them.

David Harvey on the Capitalist Crisis

David Harvey has had a series of short lectures made by RSA Animate into clever little animated movies, available at You Tube. They are educational and entertaining, and must be seen by anyone critical of our excessively bent system. Jail the Bankers!

Why the US has a Perpetual War Economy

During WWII, government decisions stopped all market fluctuations. A major power in the middle of a serious war, cannot allow markets to boom and bust. Economic effort was singularly aimed at victory. Besides victory, people just worried about what things would be like once the war was over. The Americans were not themselves suffering from bombing. They never have done. So, an extra year of war was not nearly as great a worry as the question of how the war economy could be switched to peacetime conditions.

Most economic experts thought the transition would involve a violent crisis. Americans were pessimistic. Post-war unemployment, counting women engaged in war work, of up to 20 million were commonly predicted, based on the heavy readjustment crisis after WWI. Things would be no different after WWII, they predicted.

Then there occurred the American economic miracle—the demobilization of ten million people without any upheavals. Transition to a peacetime economy was smooth. Unemployment rose to less than four million—half as much as before the war. The US had mild recessions in 1946, 1949, and 1954 but nothing like a real crisis. America's faith in heaven on earth revived, and the specter of 1929 faded.

Economic optimists quickly became confident, for three reasons:

1. the American economy was less speculative, as post war stock exchange transactions show, and speculation was strictly controlled compared with 1929, when reckless gamblers used unlimited credit to drive stock to precipitous heights—something that is again familiar
2. Keynesian principles were applied—a downward trend in the economy was helped by a dose of inflation, and conversely an unhealthy boom invited deflationary measures such as a gentle credit squeeze.
3. the main one, now obviously swept under the carpet, was rearmament—the perpetuation of the war economy. After WWII, the US continued to spend twenty times as much money on its armed forces and military aid abroad as before the war. In the early post war years, between 12% and 15% of the national income was directly or indirectly spent on war and war preparations, employing 10-12 million people on the Federal budget, near enough the same number as were unemployed pre war.

Post war, financial speculation gradually returned, and Keynesianism was abandoned under pressure from the right wing fad of monetarism, and eventually, Reagan and Thatcher abolished all the regulations that had kept banks and markets under control and stable.

As for the third, and most important factor, it never changed! Rather it has become increasingly important. In fiscal year 2010, total US defense spending accounted for 38–44% of estimated tax revenues. Over sixty years after the war, Americans still spend a large fortune on warfare and armaments supporting, with their tax dollars, the death of their own boys, 6000 miles away murdering mainly innocent Moslems, people simply trying to assert their own freedom in their own country. All of this mayhem to avoid giving benefits to those Americans they call idle—people who cannot find work—and profits to billionaires who could do with a lot less.

The US since the last war has maintained a war economy, supporting utterly wasteful and cynical military adventures all over the world. And the American people seem to be happy it should remain the case when the federal government could be creating useful jobs through civilian projects. Alternatively, why not just give the unemployed sufficient benefits to live on, so that by spending them they thereby employ others! Every tax dollar spent by the government at the grass roots of society is multiplied five times over, as it is successively spent.

A fabulously wealthy country spends over a third of its tax revenue supporting the military industrial complex, when it could transform derelict cities like Detroit, and the decaying suburbs of many other famous cities, taking millions of US citizens off drugs and tranquilizers by letting them live decently. Yet the childishly unselfcritical Yankees profess bafflement that the wicked world does not love them! Will enough Americans ever realize that they are being treated with contempt by the political caste in Washington, the gentlemen soldiers of the ruling megarich elite? They are too ready to believe the bullshit they are constantly fed.

Protests Make Political Parties More Responsive

Latin American protests have caused deaths and national crises since the 1970s, but democratic reforms too. Moises Arce, an associate professor of political science in the Missouri-Columbia College of Arts and Science, has found that political protests, although they can be violent, can bring about stronger political parties and more responsive policies (published in Party Politics):

Many of these protests in Latin America have led to changes in policies and the direction of the government. In some cases, protests may ultimately be helpful for democracy. The established parties may be taking things for granted. Political protests become forms of street accountability. The change that we have seen after many of these protests is the creation of new parties that better represent the popular interests of society, and, therefore, serve as more effective communication channels for political discourse.

By studying political activity and parties in 17 Latin American countries since 1978, Arce found that most protests were because economic policies favored the business sector. Most recent policies have given Latin America large scale economic stability but little improvement from the general public's perspective. There is still a high level of unemployment, and the public has become more knowledgeable of political corruption:

People have died, so it's unfortunate that government reforms happened that way. Currently, almost all Latin American countries have left or left leaning presidents who tend to be more responsive to popular demands and will create a new political equilibrium between those popular demands and the business sector.

Politicians often argue that protests are disruptive and should be suppressed, and that protests are unnecessary in a democracy, but they are happening and have not damaged democratic stability. Of course, generally the political right are ultimately not interested in democracy, only their own power, and many so called Liberals, and even New Labour “socialists” in the UK, are dupes of the rich anyway, so the trend towards unrestrained global capitalism means that “the existing power structure will be forced more and more to directly violate its own formal democratic rules”, as Slavoj Zizek puts it. The Patriot Act in the US and similar repressive legislation laid on incredibly thckly by the Blair and Brown governments are far more dangerous to democracy than a few protests, or even the terrorism attacks they pretend to be to prevent.

People in Latin America are becoming tolerant of protests. In Europe and the US, politicians are getting more and more scared of it. Democracy needs both parties and protests. We have the duff parties. All we need now, according to Arce, are more and more determined protests.

A Better way of Organising our Politics

Something is profoundly wrong, with the way we live today.

Tony Judt, Ill Fares the Land

We have wasted the two decades since the fall of the Berlin Wall. They have been consumed by the locusts, or more precisely by the shamelessly greedy. It has been the era of all the Dicks, from Cheney to Fuld, politically “an age of the pygmies”. Unregulated markets have crashed. Wars of choice have left bloody destruction in their wake. The snouts have been buried deep in the trough. Beyond the noise of guzzling, we can hear no moral critique of what has happened, no shout of rage that things don’t have to be like this.

Chris Patten on Tony Judt’s Ill Fares the Land

As recently as the 1970s, the idea that the point of life was to get rich and that governments existed to facilitate this would have been ridiculed, not only by capitalism’s traditional critics but also by many of its staunchest defenders.

Tony Judt, Ill Fares the Land

Tony Judt… encourages dissent from conformity, for which there is much to be said. Blessed are the troublemakers.

Chris Patten on Tony Judt’s Ill Fares the Land

[But] social democracy is not something that Americans can talk about, though there is a bit of cognitive dissonance about their attitudes to the public and private realms of social provision… [In the first thirty years after the War] planning, progressive taxation, high public spending and nationalized services brought inclusive economic growth with increasing equity and social harmony. A mostly benign state provided the security for which people yearn, replacing the market’s invisible hand with more visible supportive direction. Maybe all was not for the best, but it was pretty good all the same—and would have gladdened the heart of that scion of egalitarian Eton, John Maynard Keynes… According to Judt, since the 1980s, from Reagan to Bush, from Thatcher to Brown, it has been downhill all the way, with growing inequity, a declining belief in the role of the state and a falling away from civic engagement.

Chris Patten on Tony Judt’s Ill Fares the Land

Tony Judt is proudly a man of the left… He is intellectually brave—witness his well founded criticisms of Israel’s policies in Palestine. Beyond the imaginings of most of us, Judt is personally brave, too; motor neurone disease has left him quadriplegic.

Chris Patten on Tony Judt’s Ill Fares the Land

From The UK Observer

Is this a Scam or Not?

Bankers gambled our money away on dodgy bonds and appealed to governments for money to cover the debts they irresponsibly accumulated. Governments say they cannot let banks go to the wall, as they ought to according to the principles of capitalism, so they agreed to underwrite them. Trillions of dollars were passed over to the banks. Now national treasuries were empty or also in hock, so governments say they have to borrow money from the banks to run the economy, and have to cut public expenditure on education, health and so on, and increase public taxes, to service the borrowing from the banks.

So, government is borrowing money from the banks that it gave them to keep them viable. And we pay. Is this a scam or not?

Great Angel or Dangerous Psychopath—the US Today

US Popular Opinion

America has a great analyst of their political situation in Noam Chomsky, yet Americans are so indoctrinated by their Brahmin class of plutocrats that they take no notice of what he has to say, which is a lot, it is blunt, easy to comprehend and it is true. US politicians harp on about their uniquely brilliant democracy, but while most Americans will parrot what is said out of misguided patriotism, they just do not believe it. They do not believe they create their own institutions or run their own country. Pollsters find 80% of them think the government is controlled by a few big interests looking out for themselves and not for the people. Popular opinion is that less than 20% think much of Congress, yet voters re-elect most Senators and Representatives, though they have no real choice and play no real part in running the country.

In a true democracy, people would feel they are shaping their own lives, and would therefore, Chomsky says, be celebrating 15 April, the day when taxes are paid. It was the day when the financial flesh was put on the democratically chosen skeleton, when people publicly put their money where their democratic mouth is, to implement policies they had chosen. It is nothing like that. It is a day people resent because they are obliged to pay their hard earned tax dollars to maintain policies and programs they mostly find useless at best and objectionable at worst. They do not feel they have any stake in government, and none in leading corporations banked up by government. Voters have little regard for most institutions, little say in what they decide, and little enthusiasm for having to finance it.

Political issues hardly bear on electoral campaigns, and many electors, maybe most, are not even sure what the issues are. How then is democracy possible? US Elections are run by the PR industry and so are effectively bought by the parties and candidates with the deepest pockets. The Obama campaign was no different, as the annual award by the advertising industry for the “best marketing of the year” shows. It went to Obama’s campaign which beat Apple! Advertisers work on mood not meaning, and it works! Obama had little definite to say about the issues, but concentrated on the warm feeling words “hope” and “change”. When people vote for such objectively meaningless slogans, it shows that hope and change are what they do not have. It should tell the politicians that people felt hopeless, and did not like what they had, and that ought to be a warning. It shows that society is crumbling at its foundations.

The Reality of Capitalism

No feeling of hope exists in these depressed days, but the Great Depression was different. In the depths of despair people did not lose hope, they always felt there was a way through, things would come good. Admittedly, it took a world war and many deaths before brighter days came after the Second World War when the Brahmin business classes of the US built an incredible, yet unremarked propaganda campaign to eliminate all ideas of proper democracy, and social feeling while promoting social Darwinism, the false belief that survival of the fittest should be the norm of civilized communities, that selfishness was the essence of humanity as it was supposed to be in Nature. Capitalism was driven by greed and selfishness, and those who could not stand it went to the wall, or rather had a pauper’s funeral… and that was supposed, under the “Darwinian” capitalist ideology, to have been what society was all about.

Yet what did this capitalism actually do? It was a production and marketing strategy, not a creative one, except perhaps in PR and labor productivity. Where did technological innovations like computers and the internet come from? Overwhelmingly from research institutions like universities, mainly funded by the Pentagon. In other words, the principle fount of new products was a dynamic and creative public sector of the economy. Capitalism was not where technological novelties came from. It simply manufactured and distributed them for personal profit after communal endeavors had invented them. Inventions like computers and the internet were in use for decades before private enterprise made use of them for profit. Most of the economy is the same still. So, where is the capitalism that is so much vaunted and praised by the propaganda machine? It does not exist. What exists is this:

1. the public pays the costs
2. the public takes the risks
3. the plutocrats in the private sector take the profits.

The reality of capitalism can no longer be hidden after the collapse and bale out of the banks in the last two years. Saving inept and greedy banks is justified by the “too big to fail” slogan of our cringingly servile governments, who now are exposed as the paid monkeys of the profiteers, none more obviously than Tony Blair. Every attempt since Adam Smith to live purely by supposedly self regulating, free market principles has led to disaster.

If the banks have to be baled out because they are “too big to fail”, they are being treated as public utilities, except that the profit goes to the Brahmin caste, the bankers’ own class. In the UK, the government has had to take a dominant share in some banks, yet has been timid in acting, as a dominant shareholder should, to protect its investment from being siphoned off into private coffers, like some tinpot dictatorship supported by the US, contrary to the will of the local people. That is the democracy exported by America. Whatever is essential in a state must be publicly owned so that the state can make sure it does not fail, but the public get any profits and all of the benefits they produce. That is what a public utility is for.

Change?

As long as important peaks of the economy are protected by the public, our capitalist system is not capitalist, is it? Contrary to Margaret Thatcher’s slogan TINA, or “There is no Alternative”, and as Obama’s slogan of “Change” emphasized, change is possible, but it is undeniably difficult, and needs open public support to counter the well funded vested interests of the plutocrats. Indeed, swifter changes were needed during World War II, and the government made them. Wartime command economy enabled us to win the war, and mixed economies have proven to be more successful in economic history than doctrinaire capitalism. Why then is economic change not happening now? Why is there no firm move to regulate capitalist enterprises, and even to nationalize those that cannot be allowed to fail. Because Wall Street would not get enough out of it.

Better still than nationalization would be to let stakeholders—the workforce and the local community—take over these industries and make them produce what’s needed by the society with the profits going back to the workforce and community, and kept out of the already bulging purses of the mega rich. The trouble is that Americans have been brainwashed to think of such solutions as evil, as socialist or, heaven forbid, as communist. Yet no society, except the cooperatives of Spanish anarchism, has implemented genuine social production. The reason has nothing to do with these alternative systems not being feasible, or even being evil—cooperatives work!—it is because the Washington caste of lobbyists and the capitalist PR industry will not allow it to enter the consciousness of the US public.

Adam Smith, discussing England, pointed out that the principal architects of policy in England—merchants and manufacturers—made sure that their own interests were attended to, however grievous the effect on others, especially the common people of England. The US has remained stuck in this eighteenth century time warp in its economic philosophy. A lot has changed since Smith wrote The Wealth of Nations, and, though much of what he wrote remains true, after over 200 years, it is as doctrinaire to stick to an old economics tome for political economy as it is, after 2000 years, to stick unreservedly to the bible for our moral guidance. The function of US “intellectuals” is to suppress any proper consideration of reform of received thinking. Feigning objective advice, in lofty, obscure and profound rhetoric, they emphasize the objections, difficulties and risks of doing things in a better way, intending all along to discredit any progress. They are servants of the rich. The only real difficulty to economic progress is one of public will, and that exists largely because of the PR success of the ruling class.

Trying a Little Self Reflexion

Chomsky says Americans must adopt an often recommended but rarely applied principle—look in the mirror. Before they advocate murderous incursions into foreign countries, they must look at themselves to see whether they practise at home what they preach. Maybe the trouble is the fossilization of ancient practices. From the outset, the American nation was based on “extermination”, as the founding fathers put it, and its image as “an infant empire”, as George Washington put it. These ideas seem to be instilled into the American psyche when no one gains from them except the arms manufacturers and the military industrial complex. They were a poor moral basis to build upon, but were profitable for some, and that makes it all right in America.

So too was slavery immoral. The Civil War should have ended slavery, but, after about twenty years, in the South it started to be introduced again, and with the acceptance of the North. The former slaves were criminalized through spurious acts yielding racist laws against “vagrancy” or “talking too loud”. Much of the black male population were thrown into prison by these petty but seriously immoral laws. The victims found themselves permanently incarcerated, various machinations being used to suspend parole and extend the sentence indefinitely. This body of reintroduced slave labor built the accumulated capital at the base of modern industrial society—that of the mining, steel, cotton and other industries. Black men were worse off than they had been under slavery. Slave owners valued the slave to some degree because they had paid good money for him, and so mostly they took care of him. Now black men were like galley slaves, tormented by jailers, and with no appeal for mercy.

Only World War II ended it. The need to recruit, and the absence of soldiers abroad meant black labor had to be freed for more than the prison jobs they had been doing. The new liberation lasted for several decades after the war in the years of the “Golden Age” of capitalism. Then, from 1980, the incarceration of black men again went up sharply to new heights, higher than anywhere else. It was slavery again, prison slavery. So, today, slavery continues in the US where black men are disproportionately held in penitentiaries, and locked up for absurdly cruel terms. To take the moral high ground over what it perceives as injustice abroad, so as to justify sending punitive armies to correct it, the US should first correct its own faults.

What too of the 80% of the US population that sees their own government as run by big interests looking after themselves? Do they really think the US should export a system that they themselves find so grossly unpopular? When 85% of the US population think their government should cut medical costs from their exorbitant level, and leading Congressmen and Senators use dirty tricks to try to stop it, what right do they have to tell distant countries they should not be corrupt, but copy the US. The US can hardly teach anyone lessons. It needs to learn lessons of its own.

Americans brag about their model of US democracy and the American way of life, but seem unable to compare the image and the reality they experience directly, as revealed by opinion polls. People think the US can take freedom to others, but they do not live up to it themselves. Time after time the principles of freedom and democracy are violated. The self perception of the US is entirely distorted.

Iraq and 9/11

When the US first wanted to go to war in Iraq, Bush and Blair gave their war aims as to make Saddam give up WMD. The great intellectual, Condoleezza Rice, thought he was capable of nuking New York. Opinion polls showed US citizens went to war because they feared danger. Many people in the world hated Saddam, but America was the only country in the world scared of him. Saddam had no WMD, then, suddenly, the reason was that the love of democracy was so strongly in our hearts, it justified killing tens of thousands of innocent Arabs to rid ourselves of one dictator. As if in a totalitarian state, the media and intelligentsia enthusiastically fell for it.

The 9/11 attacks were an attack on US policy in the Middle East in particular, and an attack on the West in general because mostly it supports US policy. None of the intelligence agencies or senior policy advisers doubted it, but it could not be admitted to the public. As far as Al Qaida was concerned, the US was picking on Islam, and they were going to defend themselves, but the propaganda is that the US is too Christian to pick on people.

Though 9/11 was a horrible atrocity, what if Al Qaida had been more ambitious and had more resources, and had bombed the White House, killed the President, established a military dictatorship, tortured hundreds of thousands of people, set up an international terrorist center to overthrow governments and kill people all over the world, and introduced economic reforms that ruined the economy. It would have been terrible. Well, it actually happened on 9/11! On 9/11, 1973, when a rogue state, the US, organized the overthrow of the legitimate president—Allende—and government of Chile. It is never counted as terrible, especially in the US, because it was US terror, US violence. US terror is never terror.

America is psychopathic. its citizens are incapable of self reflexion, and self criticism. Whatever they do, however disgustingly immoral and murderous, is always right. Chomsky says Americans have to learn to look at themselves before they start moralizing and punishing the rest of the world. They should start fearing God, instead of thinking they are His Great Angel.

Is Your Incentive a Fat Bonus or Threat of the Sack?

When industrial changes causing hardships to some workers happen unexpectedly and without the government preparing for retraining, the workers remain conservative about their trades, and dislike innovations, new processes and new methods. When such changes are in the permanent interest of the community, they ought to be carried out without allowing unmerited loss to laborers whose old fashioned work is no longer wanted.

Why should, say, a coal miner suffer when the pits become uneconomic, or coal usage has to be curtailed because of climate change? He has not committed any crime, and the closures are entirely outside his control. Instead of being allowed to starve or suffer humiliating poverty, he must be paid to retrain, be given instruction in whatever other trade is within his grasp and is in demand. Everyone ought to have sufficient pay to ensure a livelihood, whether or not the work they are skilled in is wanted at the moment or not. If it is not wanted, some new trade which is wanted should be taught at the public expense. Is that socialist planning? It is capitalist planning because capitalism depends on public spending. Poverty restricts spending, and suppliers fall on to short time, and bankruptcy. It makes sense to ensure a minimal spending level, even when people are unemployed. Welfare is not a dead loss. It lubricates the economy.

Natural human conservatism tends to hold back progress. But most workers are interested mainly in security, security of employment and security of income. Workers determined to stick with dead end jobs are few and far between—a newspaper editors fantasy. People protect dead end jobs only because they know no, or inadequate, provision has been made for them when the obsolete factories close.

The tyranny of the employer, which robs most people of liberty and initiative, is unavoidable so long as the employer retains the right of dismissal and loss of livelihood. It is a right supposed to be essential for anyone to have an incentive to work properly, but, by some curiosity of human nature bankers and corporate bosses, people supposed to be highly motivated, actually need the opposite incentive—vast bonuses and “golden hellos”—to entice them to work. It needs no massive study to realize that this dichotomy of human nature is nonsense. It is the mentality of the slave master over the slave, propagagated largely by overly rich newspaper editors.

Bertrand Russell said as we get more civilized, incentives based on hope become preferable to those based on fear. Everyone, not just bankers, should be rewarded for working well rather than the right wing dogma of punishment for working badly. The banking instance of it is simply a scam—a way of robbing us all by dubious methods—but the system has always worked properly in the civil service, where anyone is only dismissed for some exceptional degree of vice or virtue, such as murder, or refusal to participate in immoral governments plans.

The civil service is always the first target of reactionary newspaper barons, but they are mainly exemplary workers. New Labour has done its best to destroy the civil service even at the highest level. To restore civil servants’ confidence and the esteem we had in them is another essential of any government that is to replace the odious one of the last decade or so.

Pay the People not the Banksters

Governments have given trillions of dollars to banks in the last few months, yet our economies are still shrinking. The banks are not lending the money, they are using it to cover the bad debts—the so-called toxic loans—they set up in vast numbers to reward themselves with outlandish bonuses. The idea of governments giving away money is supposed to be Keynesianism, the idea had by John Maynard Keynes that only by getting people back to work by large government spending projects would the long depression of the twenties and thirties be overcome. US President F D Rooseveldt tried the policy with the New Deal, and it worked. People got a job, spent the earnings they previously did not have, so shopkeepers sold their goods, and factories had to start making them again. It was a multiplier effect! Adolf Hitler also tried the policy in severely depressed pre War Germany by pouring government money into military projects in preparation for the second world war, and he also found it worked. Unemployed workers were building roads, aeroplanes and ships, spending their money in shops who wanted supplies, and so factories outside the military had to resume full production. Keynesianism works! But it depends on ordinary workmen being employed by the money the government spends. The government money has to go to people to employ them. Merely giving it to banks who then keep the money to cover for their own ineptitude does not employ anybody except the incompetents whose greed created the problem in the first place. Governments should not have given money to banks at all, but directly to the poor. Favouring the rich, just convinces us at the grass roots that governments are there to bail out the dolts and nincompoops using our money to make themselves richer, when their get rich quick schemes fall flat. Rooseveldt called the bankers “banksters” to imply they were “banking gangsters”, and if one of the few great presidents thought bankers were gangsters then it even more true now. In the UK, the Brown, supposedly Labour—that is as in labourer!—government has been bringing in a mass of repressive legislation similar to the Patriots Acts in the US, allegedly directed at terrorists, but ready to be used against anyone they choose to label as a terrorist, like anyone rioting because they are unemployed and forced on to workfare—another oppressive British law in the new welfare reform act. It shows the unscrupulous class nature of the New Labour Party. Keynes realized that not everyone could work! Always some people were too ill, disabled, unskilled or too simple, and some were always unwilling to work for whatever psychological reason, yet these people could not be left unprovided for. There were two reasons for it:

• No civilized society could leave people destitute. It was not morally right
• The same principle Keynes advocated applied to them too. Give them money, they will spend it out of necessity, and that will help to keep the factories running.

This is just where Labour under Dr Brown—yes, he’s got a higher degree! Can you believe it?—are typically blinded in their dogmatic class allegiance. They give crazy money to banksters who keep it, doing no good at all to relieve the economic bind, when they should be giving modest sums to every ordinary working person, because they will certainly spend it. That is where they missed the point of Keynes’ theory. Rather than forcing people on the workfare, they ought to be gladly giving everyone a modest basic sum every week, then those who work will get the basic besides their wages, but those on the basic will still have a modicum of spending power. Spending power is the crux of Keynesianism, not lining the pockets of bankers. We should not vote for anyone who is not willing to see the sense of this, and promises to get the robbers in the banks to repay their ill-gotten wealth or face clink. But we must nevertheless use our votes because our rulers cannot be displaced if we refuse to use it at all. Vote out the liars and grifters.