I have not always appreciated the Sojourner's slant, nevertheless, one of the best articles addressing "Occupy Wall Street" I have read recently is http://blog.sojo.net/2011/10/20/the-un-economy/ by Jim Wallis.
Here is a clip.
Unfair.Since the Occupy Wall Street movement began, the talk about inequality has been greater than I can remember it being for a very long time. This has been the elephant in the room in our discussions about the economy that nobody wanted to say out loud. In the last hundred years, there have been two peak periods of great inequality in American society—just before the Great Depression, and in 2008, right before our current Great Recession. And in the mysterious and secret global transactions between investment bankers and hedge fund traders, the profits continue to grow.
From 1973 to 1985, the financial sector peaked at 16 percent of domestic corporate profits. In the 1990s it reached postwar period highs by going between 21 and 30 percent. But this decade it hit 41 percent. These profits weren’t from products, and weren’t always from finding the best use for capital, but from money making more money for a new class of super-rich financial traders. And now, when their risk taking, greed, and selfishness created a mess for so many others, we bailed them out and left everyone else to suffer in the economic wilderness of unemployment, home foreclosures, pension losses, deep middle-class insecurity, and rising poverty rates.
Opportunity is a lost hope for many, as social mobility in America is now less than in Western Europe. And if you search the scriptures, you’ll find that God not only cares about poverty, but, especially, unfairness and inequality. That’s what the young people at Wall Street are angry about.
Well this hits familiar ground again. I think we understand that you, and many on the left, prefer a society where everyone makes $30k per year than one where some make $100 million, while others make $50k. I don't, and I don't believe the Bible does either, but for now I am satisfied that we just have clarity on that.
ReplyDeleteAs far as the financial sector increasing as a percentage of the economy, of course it has, for a 100 years as we move away from manufacturing and farming due efficiency gains and outsourcing.
But the financial sector did not create this mess, as he claims. I thought we had been through this, and no one has yet raised any examples of how hedge funds or financial traders produced or contributed to this problem. The reality is they didn't, but when one sees the world as a battle between rich and poor as most on the left ultimately do (as opposed to seeing it through the eyes of good and evil regardless of income level) it is difficult to do anything beyond blaming the rich.
The problems globally have just begun in my view, because governments are not yet taking the necessary action to shrink. It is not an issue of raising more funds through taxation, as there is ample data suggesting regardless of the tax rate (whether 92% as it was in the 1950s in the US, or 28% in the 80s) the tax receipts as a percentage of GDP have remained in a very narrow band for 70 years (i have plenty of data on this if anyone cares). Yet, we are precisely in the mess we are now in, as government deficits are too large, they are spending too much, and the impact is rippling through the economy. But instead, politicians are being successful at creating scapegoats out of the financial sector, and
encouraging people to play victim.
So yes, the income gap is wide, and it is worth a discussion of how we can narrow that over time. I really want to bring up the lot of the poor (even though the poor in Canada and the US are already very wealthy by global and historical standards). However, falsely accusing Wall Street for problems largely because they are rich, is naive at best and akin to the tactics of Lenin at worst.
I will take your first paragraph as a second invitation to serious Bible study. I will begin posting about passages I consider key; addressing the question of good and evil, rich and poor. If people engage, I will continue. If not, I will discontinue. Of course anyone is free to post on passages they choose.
ReplyDelete[At this time, I believe I, KH, Cab and Little Chief have permission to post. If anyone else wants permission, just ask me for it.]
Frankly I do not understand what is being measured when it is said "the financial sector accounts for 41% of domestic corporate profits." Maybe others do. Having said that, it seems to me that there is something seriously amiss when the system rewards us for increased efficiency, not with a shorter work week, not with more resources for nursing care to the sick, not with more resources for teaching children, but for more resources hedge fund managers or financial traders. If, in fact, it has been the financial sector that has been instrumental in creating those efficiencies, then the system is functioning correctly in rewarding that sector. My sense is that the efficiency came first, and then the financial sector grew.
I am concerned about income and wealth disparity. I am not sure what we do about it. If we can agree (as you seem to in your last paragraph) that the increasing disparity we are seeing is not desirable, I would welcome a discussion of what can be done to reduce that disparity. I doubt that the solution is a higher income tax. I think there are better solutions (even if I do not know what they are).
I also think that the term "Wall Street" can mean different things at different times. The term can be used to designate the financial system. But I think at other times the term refers to rich bankers. I do not believe that a criticism of the system implies a hatred of rich bankers.
Regarding Lenin, its my belief that those of the centre left are significantly more fearful of Lenin, than those on the Right. The lesson Lenin has taught those on the Centre Left is that social inequality leads to instability leads to revolution which is fertile ground for totalitarianism. Nobody of the centre left wants to go there. It's not clear to me what the Right has learned from Lenin, other than that they don't like what he did.
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ReplyDeleteKarl, since you frequently refer to the futility of increased tax rates for the wealthy, I would be very interested in your take on legislation to close tax loopholes - tax havens, tax on capital gain, inheritance tax, gift tax, etc. I'm sure you know much more about this than most of us.
ReplyDeleteI rather suspect that energy put into exploiting these loopholes pays off very nicely, without adding any real goods or services to the system.
What is your opinion of the Tax Justice Network http://tjn-usa.org/? My understanding is that TJN speaks largely for small business, but is an anathema to big business.
There is so much to catch up on, I would really like to respond to Eric's Oct 24 8:46 comment on Lenin and financial sector for you can imagine that I don't agree but my blog time has expired and well sorry I just don't know if I can get to it.
ReplyDelete