Posted January 22, 2014
by Jerry Alatalo
“The liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is fascism – ownership of government by an individual, by a group, or any controlling private power.”
– Franklin Delano Roosevelt (1882-1945)
A recent report from an organization named Oxfam went viral and was titled “85 wealthiest people hold the equivalent wealth of 3.5 billion”. If this is broken down we find that each of those 85 individuals has wealth equal to the combined wealth of 41, 176, 470 people. Perhaps the decades-long trend toward greater inequality has gone a tad too far, signaling an obvious, urgent need for major structural change on Earth.
The Oxfam Report coincided with the World Economic Forum 2014 in Davos, Switzerland, where 2,500 members of the top 1% of wealth-holders in the world came together to offer thoughts on how to reduce the gap between rich and poor. A French television news outfit interviewed a number of people about the Forum, with each person giving their thoughts on the Oxfam Report. One man was making the point that the wealthy attending the Forum were different from other wealthy people who hold no interest at all in reducing income/wealth inequality.
Another man thought that billionaires in developing nations had more in common with billionaires in the developed, advanced nations than with the citizens in their own nations. He thought that it is a big step from the abstract ideas surrounding inequality to understanding that it is a huge economic problem, and that higher taxation is the next logical step to eliminate conditions which are negative for societies. So, this man’s opinion is definitely that wealth inequality is a matter which must be reined in.
Another guest said he thought that there has been, in recent decades, a “third-worldization” of the planet, where nations are having to reduce levels of quality in education and health-care etc. through austerity measures, while at the same time increasing their levels of debt in ever-intensifying vicious downward cycles. He notes that, since 2007-8, 95% of newly created wealth has gone to the top 1%.
There have been negative societal consequences to rising inequality, including unemployment, mental illness, crime, drug and alcohol abuse, suicide, along with other problems which no man or woman wants to see increasing in society. As problems increased after 2007-8, financial transactions have increased 40%, including derivatives transactions – which were the major factor in the 2007-8 to present economic crisis. So, since 2008 the economy has been increasingly dominated by financial corporations making money from money from money, and in the process creating nothing of use to strengthen the real economy.
The people involved in money making money – those who add nothing to the real economy – have through recent decades gained a disproportionate influence in public spheres of government, using a number of effective tools to successfully lobby politicians to vote for their agendas. It is important to note that the top tax rate in the time of President Dwight D. Eisenhower was 95%. In contrast to the theory which says that higher public spending, taxation, and wealth redistribution leads to a higher level of civilization, recent decades have seen tax rates on the highest income brackets fall steadily, based on the discredited theory of “trickle down economics”.
Inequality increases which have as their genesis transfers of wealth from so-called developing nations in the Southern hemisphere became a “convenient” way to re-colonize countries in the form of financial debt, or “low-intensity financial conflict”. Traditional means of extracting wealth from developing nations like direct military intervention became increasingly difficult as the world’s people strongly opposed this immoral action to obtain wealth and power. In 1997 the world’s first anti-debt campaigns began, with the largest financial institutions dragging their feet advising in ways like, “perhaps after trying another 6 years of austerity, we can discuss debt write-offs” etc.
Many nations face debt which can never be repaid, and find the people in their lands having to tighten their belts to meet interest payments. After many years of wealth extraction, the International Monetary Fund, World Bank, and other large lenders could easily absorb debt write-offs, but will stall and drag their feet because it means a loss of economic and political leverage. Finance ministers of various nations will expect to get some very interesting phone calls upon considering debt jubilees or similar debt reductions.
Continuing to force nations to repay money on debts which they will never be able to repay has seen an increase in a number of negative consequences. Higher prices for goods and services through privatization of publicly owned and operated entities, loss of potential sales for outside companies when the treasuries of debt-strapped nations are paying large amounts to northern banks, as well as lower earnings for export item producers because many other nations are in the same debt situations – producing the same competing products to earn money for their bank payments – driving export commodity prices down for everybody.
Forty-eight of the largest fifty transnational corporations are financial – banks, hedge funds, insurance, etc. – are of the kind which represent, because of their colossal size, what is known as “systemic risk”. In the five years since the greatest economic collapse since the Great Depression, no new laws were implemented to prevent a recurrence. The Glass-Steagall Act had protected against the speculation that led to the Great Depression and the 2008 crisis for over 60 years until it became struck down and repealed in 1999, while no politician has called for the act’s reauthorization – an obvious necessity. No financial sector executive has gone to jail, although millions of mortgage and derivatives frauds were carried out.
Ordinary citizens are having to pay for a crisis they are not responsible for, while those at the top of the wealth pyramid know exactly what they are doing. So-called “high net worth” individuals have never in history been both so numerous and so rich. These are people who can easily hire attorneys and accountants to hide their wealth in off-shore tax havens, unconcerned about paying for the infrastructure, public works, schools, parks, teachers, and public safety personnel their fellow citizens pay for – which allows them to transact business and generate income and profits in a decent society.
Democracy is in a very dangerous situation in 2014, with transnational corporations taking power away from elected representatives of the people through a variety of means, including secretive trade agreements, corruption in the financial sector carried out with impunity, writing of laws which favor them by lobbyists, and campaign contributions (bribes) – skyrocketing sums of money spent on elections after the Supreme Court’s Citizens United decision.
Major consequence, secret trade deals like the Trans-Pacific Partnership (TPP) and the Trans-Atlantic Trade and Investment Partnership (TTIP) effectively bypass democracy and the people of the world’s elected representatives by locking in unbreakable rules and regulations, tilted heavily in favor of transnational corporations and the world’s wealthiest investors.
One of the persons on the French news program discussing the viral Oxfam Report on inequality in the world was Susan George. She has spent decades researching political, economic, financial and other fields of study important for democracy as it relates to the world’s 99%.
In the following film Susan George joins Professor of World Politics Teivo Teivainen at a recent university lecture in Helsinki, Finland. I believe you will greatly appreciate her timely message – shaped over decades of research into the most important issues of 2014.
Dissident is defined as “adj. 1. refusing to agree or conform. – n. 2. dissident person”
Are the 99% dissidents for refusing to agree or conform with the .1%?
Or are the .1% dissidents for refusing to agree or conform with the 99%?
Who are the world’s REAL dissidents?
(Thank you to SorsaFoundation @ YouTube)