Sunday, March 02, 2014

Fix the debt?

There is a rather interesting organization of CEOs known as "Fix The Debt". This is a shady little cartel of CEO's who have amassed millions in retirement savings, millions each year as compensation and billions in stock values. This same group has been telling us for years now, to fix the (federal) debt.

They want to cut social programs that have already been paid for with taxes. They want to cut funding for research that no business wants to do, yet the results of that research has supported businesses just the same. If you need an example, consider the benefits of TCP/IP, the protocol that runs the internet.

Oddly, they won't touch the military budget. They won't talk about increasing taxes. They most certainly won't support increasing benefits for veterans. No, these guys have priorities that are different than the 99%.

They won't talk about their plunder of the economy with their fat accounts that permit them to loaf well into their 80s without a worry about income. No, these people will never have to work again for the rest of their lives if they decided to stop working today. Yet, they insist that the rest of us either have to work harder, longer hours, or we have to tighten our belts. The rest of us will have to wait until we're 72 before we can receive Social Security benefits.

One subject noticeably absent from the debate on the debt is the trade deficit. Even liberal economists seem to miss this one. Since the 1980s, not only have we cut taxes for the wealthiest among us, but we've insisted on a very strong dollar relative to other currencies. This creates trade deficits that only the wealthiest among us can take advantage of.

I want to clarify my position and point out the people I'm referring to with more accuracy. I'm not talking about your mom and pop small businesses where net incomes are around $250k or so. No, they don't often have the means to support the trade deficits we have now. I'm talking about the billionaires. OXFAM released a report showing that 85 people own wealth equivalent to the holdings of 3.5 billion people - half the world's population. They hold in total, about $11 trillion, collectively. These people, and the next step down, are directing our economy.

Want to know why we're so mired in a recession? 85 people are making decisions for the rest of us with no skin in the game. Remember, they will never have to work again and they have everything they could ever want, with no need to spend any money. Sure, they are thorough in what they do, they may even be efficient. At what? What else is there to do? Between 2009 and 2012, more than 95% of new income created during that time was vacuumed up by the one percent in the US. It's like they have nothing better to do. They're primary interest is in creating economic distance between the unwashed 99% and them. Conservative policy isn't about creating jobs. It's about creating economic distance between the 1% and everyone else.

Does that kind of behavior create jobs? The Bureau of Labor Statistics doesn't think so.

This is the problem. Capitalism says that the people with the most money get to make the most important decisions about how to allocate resources, irrespective of the harm those decisions may impose upon others. Global warming? Capitalism. Coal ash spills? Capitalism. 18% of GDP directed to health care? Capitalism. Housing bubbles? Capitalism. Get the picture?

The reason we have democracies is so that all voices can be heard, not just the lucky ones who happen to be born into rich families, or who happened to work for a startup that was bought by Google or Facebook. When more people have inputs into decision making processes, more people can benefit from the decision. Case in point: Linux. Millions of people use it, thousands of programmers built it, and input comes from users, programmers alike - and it's free for everyone to use

The wealthiest among us have created a bubble economy dependent on trade deficits to work. First, create the trade deficits, this will reduce the amount of money the middle class has to spend on things they want. Then create bubbles so that you can keep generating wealth. Stock bubbles, housing bubbles, it doesn't matter, as long as everyone with a brain and a 401k can get in. With insider information, you can get out before the bubble fails, leaving everyone else destitute. 

Then you can tell everyone else to work harder or tighten their belts. Wash, rinse, repeat every few years. But don't mention the trade deficits in relation to a depressed economy. People might wise up and demand a change in policy that requires you, the 1%, to continue working like the rest of us.
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