The New Golden Age
a revolution against political
corruption and economic chaos
by Ravi Batra
Palgrave/Macmillan, 2007, paperback
p2
In one form or another; U.S. economists espouse the well-know
trickle-down economics, or what may be called tricklism, whereby
prosperity is supposed to seep, drop by drop, from the top down
to the bottom. Such thinking nurtures policies that worsen disparities
in income and wealth.
p2
* 20 percent of the population in advanced economies consumes
more than 80 percent of the world's output.
* Less than a thousand millionaires have
as much wealth as the poorest 2.5 billion people of the planet.
* In 1999, the world's richest 200 people
had a net worth of $1 trillion, while 582 million people earned
an income of $146 billion.
p5
an editorial in the Athens News
[G.W.] Bush is fundamentally pro-business.
This isn't necessarily a bad thing, if leavened with common sense,
compassion and independent thought. Bush's corporate reflex, however,
never fails. On any given issue, if corporate interest is a factor,
that's the way he's going to go. This explains his environmental
and health-care policies, where energy companies, utilities, pharmaceutical
companies and the insurance industry call the shots. He reflexively
takes the corporate side, then roots around for a folksy-sounding
rationale to explain why, once again, he's taken up against the
public interest.
p8
a quotation from 'Finance and Corruption in America', www.socialscience.com
American government is corrupt. Those
who have enough money can almost get anything they want from our
government, whether it is tax breaks, or subsidies, or policies
and laws changed, removed, or added.
p24
Foreign investors are involved hugely in our housing market. Mortgage
loans have broken record after record in recent years, and the
bulk of this money has been provided by foreign individuals and
institutions. They have been buying mortgage-backed security (MBS)
assets, which have exposed them to the whims of the housing industry.
In the past, foreign investors bought U.S. government bonds, which
are among the safest of investments. But the purchase of trillions
of dollars of MBS assets has exposed foreign investors to an unprecedented
level of risk. If the housing market collapses, or even slows
down, these investors could suffer unacceptable losses due to
homebuyers' defaults. At that point, the entire global financial
system could unravel in a hurry. The foreign investors would then
stampede out of U.S. asset markets, and trigger a worldwide meltdown.
At present this scenario seems rather far-fetched, but the rate
at which Americans are borrowing money from abroad could make
it possible in the near future.
p24
The Economist magazine, June 2005
The worldwide rise in home prices is the
biggest bubble in history. Prepare for the economic pain when
it pops. Never before have real house prices risen so fast, for
so long, in so many countries.
p32
The oil market is now cornered by five major companies - Exxon-Mobil,
Chevron-Texaco, British Petroleum-Amoco-Arco, Royal Dutch Shell
and Conoco-Phillips.
p32
OPEC is no longer what it used to be; it supplies only 38 percent
of global oil output, but Big Oil controls over 60 percent of
gasoline production and distribution in the United States. However,
Big Oil controls only 21 percent of natural gas production, which
makes gas more competitive than oil.
p33
In the new millennium, oil costs escalated even though supply
jumped with demand, because by 2000 the oil industry had cornered
the market, with the Five Bullies [Exxon-Mobil, Chevron-Texaco,
British Petroleum-Amoco-Arco, Royal Dutch Shell and Conoco-Phillips]
controlling over 60 percent of refinery output.
p34
Tyson Slocum, research director of Public Citizen's energy program,
Senate testimony, September 2005
Recent mergers in the domestic oil refining
industry have consolidated control over gasoline, making it easier
for a handful of companies to price-gouge consumers.
This price-gouging has not only been officially
documented, but it is also evident in the record profits enjoyed
by large oil companies. Since 2001, the five largest oil refining
companies operating in America... have recorded $228 billion in
profits. While of course America's tremendous appetite for gasoline
plays a role, uncompetitive practices by oil corporations are
a cause-and not OPEC or environmental laws-of high gasoline prices
around the country.
p35
In 1999, U.S. oil refiners made 22.8 cents for every gallon of
gasoline refined from crude oil. By 2004, they were making 40.8
cents for every gallon of gasoline refined, a 79 percent jump.
p35
Tyson Slocum, research director of Public Citizen's energy program,
Senate testimony, September 2005
Although federal investigators found ample
evidence of oil companies intentionally withholding supplies from
the market in the summer of 2000, the government has not taken
any action to prevent recurrence.
A congressional investigation uncovered
internal memos written by major oil companies operating in the
U.S. discussing their successful strategies to maximize profits
by forcing independent refineries out of business, resulting in
tighter refinery capacity. From 1995-2002, 97 percent of the more
than 920,000 barrels of oil per day of capacity that has been
shut down were owned by smaller, independent refiners. An internal
Mobil document helps explain.., the need to prevent the independent
refiner from operating.
p335
The operating strategy of the Five Bullies [Exxon-Mobil, Chevron-Texaco,
British Petroleum-Amoco-Arco, Royal Dutch Shell and Conoco-Phillips]
is to force independent refiners out of business, tighten gasoline
supplies, and then jack up the price. Finally, when the profit
skyrockets, take ads in newspapers to claim that the profit is
reasonable
p35
Ever since 2000, big money has targeted the oil market, which
is cornered by just a few corporations that can be counted on
to ensure lofty crude and gasoline prices. Energy investments
are now high on the list of hedge funds, which speculate profusely
in the energy futures market. The oil price has stayed up for
so long that it is now moving into the realm of superspeculation.
p36
Hedge funds are now generating artificial demand for oil. They
spend billions every day to buy up oil futures, hoping the price
will go up in the near term. Their purchases add to the normal
global demand for petroleum products and tend to inflate the cost
of energy.
p36
Tyson Slocum, research director of Public Citizen's energy program,
Senate testimony, September 2005
Contracts representing hundreds of millions
of barrels of oil are traded every day on the London and New York
trading exchanges. An increasing share of this trading, however,
has been moving off regulated exchanges such as the New York Mercantile
Exchange (NYMEX) and into unregulated Over-the-Counter (OTC) exchanges.
The Bank of International Settlements estimates that in 2004,
the global OTC market has grown to over $248 trillion... Traders
operating on exchanges like NYMEX are required to disclose significant
details of their trades to federal regulators. But traders in
OTC exchanges are not required to disclose such information, allowing
companies like Goldman Sachs, Morgan Stanley and hedge funds to
escape federal oversight and more easily engage in manipulation
strategies.
p37
Are big fund managers manipulating the futures markets? From what
we have seen in the past, the answer must be yes... Hedge funds
are one reason that crude is now so expensive even though there
is no physical shortage of oil anywhere in the world.
*****
The Law of the Social Cycle - discovered
by P.R. Sarkar, historian and philosopher - categorized people
as warriors, intellectuals, acquisitors, and laborers.
p58
Every civilization, or mature society is made up of four classes,
each consisting of people whose behavior and predilections reflect
the predominance of a certain type of mind. There is a bit of
the acquisitive instinct in most of us, but only a few constantly
chase money and make it their life's goal. We all covet living
comforts and social respect, but some of us pursue them through
physical skills, some through intellectual excellence and some
by starting a business after saving a good deal of money.
... In the annals of every civilization,
modern or ancient, eastern or western, early medieval or postmedieval,
Sarkar posits that "The era of laborers is followed by the
era of warriors, the era of warriors by the era of intellectuals,
and the era of intellectuals by the era of acquisitors, culminating
in a social revolution - such a social evolution is the infallible
Law of Nature."
... a civilization starts out in the age
of laborers , where there is no state or any kind of government,
and then moves up into the age of warriors ... in the age of warriors
... the martial class consolidates its power and expands its influence
over the years; people's respect for the warriors also gradually
rises at that time. Around the peak, the warrior rule is more
or less unchallenged; most people then covet a career in the army.
Following the peak, warriors' influence
and social respect begin to decline ... the warrior rule is overthrown
by society's scholars, who then start the age of intellectuals...
The intellectuals are dethroned by acquisitors, who then win over
the hearts and minds of the populace... in the downward phase
of the acquisitive era, acquisitors have to share power with laborers,
thereby starting the laborer or the acquisitive-cum-labor age.
p64
Warriors are good at warfare and in expanding the realm of their
kingdoms, but they are inept in managing their domains. They need
experts in administering the territories that they capture on
the battlefield. Such experts come from the class of intellectuals.
p65
When the intellectual mentality comes to dominate society there
is a ~great shift in many aspects of life. People's love of fun,
adventure and sports may give way to asceticism, austerity and
the quest for a good afterlife; or it may be replaced by new-found
interest in scholarship and analytical pursuits in which theories
are debated and mastered for their own sake. Women are subordinated,
and poverty stalks the land. In the same way, when the acquisitors
come to power, the public's lifestyle cannot but change in numerous
ways.
... political power slowly passes into
the hands of wealthy landlords or businessmen. Thus begins the
age of acquisitors in which the principal power source is land
or wealth. In other words, the era of acquisitors arises either
as feudalism or as capitalism in every society.
... the intellectuals have a crucial role
to play. As in any era, most of them do what comes naturally to
them-that is, they invent dogmas rationalizing the hegemony of
the dominant class... they justify the supremacy of the acquisitive
class behind the cloak of individual rights, liberty and social
justice. In reality, however, such lofty principles are overtly
flouted, and are usually observed only when the nation faces a
crisis or when it serves the interests of the acquisitors.
In return, the wealthy offer patronage
to the intellectuals...
... in the age of acquisitors, most sections
perform services for the wealthy, with the intellectual class
justifying the acquisitors' rule, the warrior class entertaining
them in sports and fighting their wars, and the laborer doing
physical labor for them. In all civilizations, the acquisitive
class has consisted of such disparate groups as money lenders,
merchants, landlords and businessmen. longer does a keen f intellect,
by itself, bring political power and attendant perks; instead
the power base shifts to the money-chasing intellect.
Salient features of the era of acquisitors
include the following:
1. Family ties loosening with the rise
of individualism
2. Rising crime rates
3. Increasing prostitution and pornography
4. Growing aversion toward mental and physical discipline
5. Rising materialism and interest in money
6. Rising atheism and disrespect for religion
7. Continued low status of women
8. Highly decentralized government
9. The rise of reason, science and technology
10. Rising standard of living and rising wealth concentration
11. Frequent warfare based on competition for resources and markets
12. At the end, acquisitors' tyranny, poverty, general malaise
and the near anarchy of the laborer age.
... with the change in society dominant
mentality comes a major change in the public's thinking and lifestyle.
As the intellectuals lose power, their old theories go down the
drain with them. New theories, offered by a different group of
scholars, are born. Once the theocratic age of intellectuals ends,
religion no longer has the same hold on people as before. Individualism
begins to replace the earlier communal thinking.
... The government of the acquisitive
age differs sharply from that of previous eras. Political authority
was highly centralized during the age of warriors and somewhat
centralized in the age of the intellectuals, as absolutist kings
or authoritarian priests dominated the social order. The acquisitors
fear a centralized rule, because such a system can force them
to share their wealth with the state and the poor, Such incidents
are not that uncommon in the eras of warriors and intellectuals
So whenever acquisitors come to power, political authority is
gradually decentralized; there is no single, absolute or unchallenged
source of power any more. And the degree of decentralization only
increases over time, leading to the rise of many localized power
groups.
The chief hallmark of the acquisitive
age is a sharp improvement in the economy relative to the previous
age. As the noose of rules and regulations loosens, and as people
become more interested in the present life, they start thinking
about bettering their living standard. The quest for money leads
to new inventions and technologies, which raise worker productivity
as well as profits. In the beginning everyone benefits from technological
discoveries, and the public is very happy with the new system.
People have greater freedom, enjoy a better lifestyle and welcome
an end to warrior and intellectual tyranny. The living standard
remains high for a long time, and the other classes make a living
by working for the affluent.
... As time passes, increasing levels
of wealth become concentrated in the hands of the elite, and the
general living standard starts to decline. The ruling elite are
indeed the wealthiest in every age, but when acquisitors are on
top national wealth gets even more concentrated in fewer hands.
This is because the acquisitive class, by its very nature, seeks
to hoard money. It is never enough for them. A millionaire wants
to become a centimillionaire, a centimillionaire a billionaire,
a billionaire a mega-billionaire. Toward the end of this age,
the entire state machinery seems to be working to make the rich
richer, and the poor poorer.
... In spite of major differences in their
inherent qualities, all classes make roughly equal contributions
to the well-being of society. Without the warriors there would
be no law and order, which is crucial to happiness and prosperity;
without the intellectuals there would be no conceptualization
of human rights, liberty and justice, and we would all still be
oppressed by dictators; without acquisitors the economy would
be in a poor state; and without laborers there would not be much
production.
... Once certain intellectuals discover
that hoarding money and starting a business are keys to social
prestige and political influence, they quickly learn the art of
entrepreneurship from the acquisitors, and with their superior
intellect eventually come to dominate the arteries of government.
This usually happens after the acquisitors have caused a major
economic crisis, and then the baton of leadership passes into
the hands of intellectual acquisitors. That is when the engine
of exploitation runs full speed. This is because the intellectual
acquisitor combines in one brain the cunning of the bad intellectual
and the greed of the acquisitor.
... The salient feature of the era of
intellectual acquisitors is that the ruling elite amass wealth
but make people believe that such an endeavor is good for society.
For instance, they cut taxes for themselves while raising taxes
for other classes, and yet are able to convince the public that
such economic policies are in society's best interest. Or they
may persuade you that God has blessed them with opulence so that
they can take care of the indigent. They have the intellect to
make you feel better even as they hit you.
... There comes a point when intellectual
acquisitors are virtually unchallenged; that's when the process
of wealth concentration runs full throttle, with the rich getting
richer and the poor getting poorer at incredible speeds. The boundless
greed and hypocrisy of acquisitive intellectuals ultimately torments
the majority of people. Salaries go down, and the bulk of society
is forced to devote much of its time to making money. Warriors
and intellectuals then have to become laborers because they have
little time left for the finer pursuits of life. They have to
labor hard to support themselves and their children. The intellectual's
inherent love for art, music, painting and philosophy gives way
to routine work all day long to provide the means for family survival.
The warrior's innate predilection for adventure and sport is replaced
by overtime work to make ends meet. The vast majority of society
comes to adopt the laborers' way of living and thinking.
Only two classes then remain-acquisitors
and laborers, or the haves and have-nots. The age of acquisitors
eventually turns into the age of laborers, which may now be called
the acquisitive-cum-labor age, in which the acquisitive intellectual
is dominant. But many traits of the first era of laborers come
to afflict society, which essentially gets divided into two groups,
one consisting of all the wealthy acquisitors, and the other comprising
the destitute and the middle class. The poor include the physical
workers, and the middle class includes those erstwhile warriors
and intellectuals now forced into toiling long hours for their
survival.
For a while, people suffer through the
deceit and exploitation of the reigning class. They maintain their
lifestyle by increasingly getting into debt. Acquisitors now have
a field day. They make money left and right. They enrich themselves
through their control over businesses, farms and factories, and
through lending money to the other classes.
This is the time that creates a group
of disgruntled laborers from the former warriors and intellectuals.
New leaders emerge from this group. Fed up with the status quo,
one day they overthrow the ruling elite with the help of the masses,
culminating in a social revolution of workers. It is through this
process that the social cycle starts anew.
If the leaders of this revolution were
formerly intellectuals, the change is peaceful; if they were formerly
warriors, there is much bloodshed. In any case, rebelling against
the elite is not easy; it takes immense courage to oppose a regime
and become revolutionary. So those who muster such courage, no
matter what their initial grouping, are the true soldiers, who
then start another warrior age, which begins with an ascending
or magnanimous phase. With the return of the warrior mentality,
many features of the first eras of warriors make a comeback, but
some novel and progressive institutions also appear because of
inevitable social evolution through time. Once again the acquisitors,
having lost their credibility, go back to a lower status. The
public remembers their acts of oppression and imposes restraints
on their acquisitiveness. This way the social cycle goes on and
on.
p74
An acquisitor is someone whose intellect runs mostly after money
or wealth, and when the wealthy become politically prominent by
purchasing the services of the other three classes, the acquisitive
era begins. Most of the intellectuals then change their tune and
offer ideas that justify the primacy of the rich, while the warriors
fight wars and anarchy to protect the wealth of the opulent.
p75
European scholars define [feudalism as] a society in which the
political and economic power is primarily in the hands of rich
landlords, while people serve them in terms of well-defined contractual
obligations. Everyone is a vassal to someone, including the overlord,
who is a vassal to his king. According to historians E M Burns
and P L Ralph:
Feudalism may be defined as a structure
of society in which the powers of government are exercised by
private barons over persons economically dependent on them. It
is a system of overlordship and vassalage in which the right to
govern is a contractual relationship involving reciprocal obligations.
p75
Feudal nobles enjoy the power of government simply because their
people are economically dependent on them. This is precisely what
defines an age of acquisitors, who rule not because of their /
superior intellect or physical strength but because of their command
over the means of production, which in those days was based primarily
on land. Thus the second half of the Middle Ages, lasting from
the tenth to the fourteenth century, was an acquisitive age.
It goes without saying that feudalism
was not the same everywhere in Europe. Even democracy today is
not the same everywhere in the Western world. While Britain has
a prime minister as its chief, the United States has a president.
In the same way feudalism differed from place to place. In some
places kings were powerful and the central authority was strong,
but such scenarios were more exceptions than rules. Even powerful
kings had to appease their landlords, such as dukes, barons, earls
and margraves. Indeed some of the landlords had more land and
property than their king. Similarly today the U.S. president has
to defer to his wealthy supporters.
p76
Popular theories change to appeal to the interests of the dominant
class.
p76
Historically, whenever the acquisitive era has appeared in the
West, the government has been decentralized and in their self-interest
the intellectuals have offered new theories to rationalize the
social supremacy of the wealthy.
p76
[During the second half of the Middle Ages - 10th to 14th centuries],
most regions in Europe were organized in [a] segmentary way. A
region usually had a king at the top of the hierarchy, but his
power was limited; the real authority belonged to his vassals-the
dukes and barons-who in turn provided protection to their vassals,
including the priests and army officers, commonly called knights.
The knights in turn were obligated to take care of their vassals,
the peasants and the serfs.
In feudal society, therefore, kings and
nobles were the dominating acquisitors, priests and philosophers
the intellectuals, knights the warriors, and peasants and serfs
the laborers.
p79
The rise of the West was catastrophically interrupted by the bubonic
plague of 1348. Over a third of the population succumbed, giving
rise to a tremendous shortage of labor. The so-called Black Death
was the worst pandemic in European history. This episode could
not but shake the very foundations of feudalism, which had all
along rested on the slippery slope of an excess labor supply.
The population blight doubly hurt the
landlords. Rents sank for their surplus land, while wages soared.
The nobles responded by rescinding the freedoms they had granted
the serfs under commutation and tried to reinstate the labor obligations
as rental payments. The peasants, of course, resisted vigorously.
Peasant revolts broke out all over Europe, with massive destruction
of life and property. These rebellions were crushed with intense
brutality, but the relatively cozy world of the overlords was
irrevocably disrupted. It is not difficult to see parallels to
the West of today, where the more equitable wealth distribution
of a generation ago has vastly eroded, and economies are fragile
enough to be shattered by a chance event such as a plague. Could
we be on the verge of another cycle of chaos and disruption?'
*****
p89
Two colonial empires ... one modern (the British) and the other
ancient (the Roman), reveal four common traits. First, the empire
is created through the force of arms, either by military officers
or by commercial interests. Second, the ruling nation extracts
cheap labor from its colonies. Third, the colonies run trade surpluses
that raise the living standard of their rulers. Finally, the language,
institutions and culture of the victors spread across imperial
territories.
p90
The Chinese economy has become dependent on U.S. trade, and the
United States is increasingly dependent on the Chinese holdings
of American government bonds.
p91
Cheap labor comes to America in two ways. Immigration to the country,
legal and illegal, expands the U.S. labor supply and restrains
domestic wages. Illegal immigrants coming mostly from Mexico and
Latin America work for subsistence wages; were it not for their
influx, American wages would be much higher.
... American multinationals employ thousands
of workers in Latin America, Asia and Africa, paying local wages
that are just a fraction of U.S. salaries. Products made by this
labor force, which includes child labor forbidden in the United
States, are then imported into the country, further depressing
U.S. wages ... this practice generates exorbitant profits for
the multinationals and exceptionally high incomes for their executives.
p92
America' pays for its import surplus, the excess of imports over
exports, through paper dollars, and its only visible cost is the
cost of printing the money.
p92
More [$100] bills are in circulation outside than within the United
States.
p92
The world exchanges its quality goods for paper dollars and then
invests its dollars back into U.S. stocks and bonds.
p97
In today's business empire, America is at the center, while most
other countries are the surrounding provinces. The United States
does not appoint the governors of these states, but the rulers
of such states see their self-interest aligned with the interest
of the American elite. Japan's ruling party wants a prosperous
and stable America so it can keep its export machine alive, prevent
a rise in joblessness, and thus maintain its power. Hence the
Bank of Japan continues to pile up American bonds, keeping U.S.
interest rates low and the economy strong; China, Europe, OPEC
and others do the same. They help perpetuate their own power base
and the power base of the elite in the United States.
The world already owns trillions of dollars
of American assets, yet it keeps accumulating more. The export
surplus nations have, in fact, become U.S. business colonies.
You may call this the American colonization of the world economy.
'the interesting part is that all this is a purely voluntary arrangement.
As foreign individuals and central banks
purchase U.S. bonds, they end up investing billions of dollars
in the American economy every year. This is the secret of U.S.
economic growth since the early 1980s. However, almost all the
foreign money goes into American consumption, for which the bill
has to come due someday, perhaps in the near future.
The interests of the rich in America are
linked to those of the rich in other nations. The surplus goods
and services from the rest of the world flow at little direct
cost into the center, which is the United States. The foreigners
accept dollars, which are cheap to printout there could be high
indirect costs related to this practice in the future, because
it is now generating economic chaos in the form of financial imbalances
around the globe. Thus the elite of all nations are trying to
preserve the American business empire ... it is a corrupting process
that keeps wages low and profits high all over the world. It is
an artificial arrangement that magnifies income and wealth inequalities
around the globe, and contains the seeds of self-destruction.
p100
The Social Security program has been earning a growing surplus
that has been used to finance the federal budget deficit.
p101
U.S. multinationals are in a class of their own. Their top managers,
the CEOs, have the highest salaries in the world pan, Germany,
France and England also have global corporations, but managers
there earn about a third of what their U.S. counterparts make.
p101
Economic Policy Institute
U.S. CEOs earn three times the average
of CEOs in the 13 other advanced countries for ( which there are
comparable data. Only in one country, Switzerland, are 7 CEOs
paid even as much as 50 percent of what the average U.S. CEO makes.
p101
According to the Federal Reserve, while the CEO compensation in
Britain was 22 times the pay of an average worker in 2004, in
the United States it was 170 times, and in Japan only 11 times.
p101
Big business in America, as in other democracies, owns politicians.
In fact both Democrats and Republicans are beholden to the wealthy.
p102
The business elite in America are as greedy and ruthless as feudalistic
barons. Even when they take their company into bankruptcy and
extract large wage concessions from workers, they award themselves
millions in salaries. The word "CEO" now is synonymous
with crookedness. Money controls U.S. politics as never before.
As a result, the tax burden has gradually shifted from the wealthy
onto the backs of the poor and the middle class.
p102
From 1950 to 1980, the top-bracket income tax rate ranged from
70 to 90 percent, while the Social Security tax imposed on lower
incomes varied from 4 to 9 percent. By 2005 the top income tax
rate was down to 35 percent, but the Social Security tax had jumped
to 15.3 percent. Such are the tangible benefits that moneyed donors
receive from politicians.
p103
The vast majority of intellectuals, concerned about their careers
and comforts, act to justify the status quo and offer theories
that promote the self-interest of the ruling class.
p103
History is witness to the rise of countless dogmas that were false,
illogical and self-serving, yet, drawing upon the zealous backing
of established scholars, remained popular for centuries, until
unmasked by a few brave souls.
Today CEOs and wealthy businessmen are
the ruling elite in the Western world, especially the United States.
Their donations finance elections and even education, which they
are constantly saying has to adapt itself to the needs of the
market (that is, be molded to inculcate their views). It should
come as no surprise therefore that the theories offered by economists
rationalize the self-interest of big business and the wealthy.
Overtly, of course, such theories claim to benefit society and
the public's well-being. But covertly, they do just the opposite:
they make the great mass of people poorer while making the rich
fabulously richer.
p103
The theories offered by economists rationalize the self-interest
of big business and the wealthy ... claim to benefit society and
the public's well-being. But covertly, they do just the opposite:
they make the great mass of people poorer while making the rich
fabulously richer.
p103
The theories offered by economists rationalize the self-interest
of big business and the wealthy.
p104
Money rules; the vast majority of the public shares the acquisitive
mentality of the intellectual elite, even if they prey upon the
people. Greed dominates not only politicians but also scholars.
Most experts want to amass as much money as the CEOs and lawmakers,
so they offer ideas that please the affluent.
p105
Why don't elite economists ever want to reduce payroll, gasoline
and sales taxes? Why do they always want to cut income and corporate
taxes? Why do some Ivy League experts always want to slash tax
rates on capital gains and dividends? Why is their theory silent
about the beneficial effects of cuts for low-income people? The
reason is simple: these other rate cuts won't offer much benefit
to the rich, so well-paid economists working for the affluent
see no investment and growth benefits from such reductions. If
the experts urged consideration of tax cuts for the middle and
lower classes, their colleges would likely starve for donations
from the CEOs.
p105
Why does the well-paid economist insist that outsourcing is good
for America? Perhaps because his own job is not outsourced?
p106
Nowadays, increased profits mean increased bonuses and payouts
for company executives, not more American jobs.
p106
The U.S. economy has recovered since 2001, and real GDP has been
. growing, but only low-paying jobs are being created. As a result,
average family income has decreased by $1,500. This has rarely
happened in the United States before: GDP growth coexisting with
a declining living standard. Outsourcing is chiefly to blame.
Yet elite economists keep touting the practice; they are in effect
on the payrolls of multinational corporations whose CEOs earn
millions in salaries and perks, and who offer their hirelings
research grants, endowed chairs and lucrative consulting contracts.
p108
Big-shot economists have several things in common: they all hold
prestigious positions and endowed chairs, and they all love out-sourcing
and tax cuts for the wealthy. Money talks loudly and the distinguished
economists quietly listen, but in the process they offer ideas
that are slowly killing the middle class. They sell the self-interest
of the wealthy as sound economic policy, and in the process serve
their own self-interest.
p109
When someone's work previously done in America is awarded to a
low-wage worker abroad, the fired American worker is either unemployed
for a while, or has to accept another job at a lower salary. In
both cases the worker's spending and thus consumer demand falls,
which means some American-made goods will go unsold, causing further
layoffs in the process. This is the indirect job loss from outsourcing.
Who benefits? The company, its CEO and the Ivy League economists.
p163
The elite economists backed free trade in full knowledge that
it creates poverty in America.
p163
During the 1990s, a new scourge arrived for workers in the form
of outsourcing, which has been spreading like wildfire since 2000.
Now U.S. companies are demanding increasing concessions from labor
unions and older workers so the companies can compete with lower
wages abroad. Not just lucrative wages, but health benefits as
well as pensions are disappearing.
p164
Roper poll
72 percent of Americans view company executives
as just plain thugs.
p164
[Richard] Nixon and [Spiro] Agnew ... were involved in an unpopular
conflict - the Vietnam War. But unlike Bush and Cheney, they did
not shortchange the soldier. They did not cut taxes in wartime.
Now the soldier is making all the sacrifices, while the acquisitive
elite enjoy galloping incomes and tax windfalls at the expense
of the warriors' toil and blood.
p177
Nations with a trade surplus send their dollars back to the United
States as fast as they acquire them, because if they don't, the
dollar will plummet relative to their currencies. Then Americas
import surplus will fall sharply, sending shock waves through
the economies of China, Japan and Europe.
In theory this process could endure indefinitely,
because it is in the self-interest of the global economy to remain
America's colony. But it is a house of cards that will only take
a minor hit to collapse in a turbulent world. With Iraq, oil and
housing as looming disasters, only a miracle will keep the dollar
stable. It is more likely than not that the greenback will crash
by the end of this decade, which will further stoke the fires
of inflation. This is because each nation's goods are valued in
its own currency. So if foreign currencies appreciate sharply,
then the dollar prices of foreign goods will soar, as will U.S.
inflation.
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