Tuesday, October 11, 2011

Worldwide Income Inequality

I admire the people involved in the Occupy Wall Street movement for bringing attention to some serious flaws in our financial system.  One of those flaws is the fact that many people responsible for our current financial problems have not had to face consequences for rigging the system so that they could bet on its failure.  Our system of investment has moved further away from realistic assessments of the productivity or profitability of an enterprise.

One of my Facebook friends works in banking.  He claims that the housing crisis and the financial collapse that followed were caused by legislation that forced lenders to make loans available to people who could not pay the loans back.  Although they have not used the exact words, he and other Facebook friends have made comments that lead me to believe that they think the people occupying Wall Street are operating under a sense of entitlement.

Income inequality is an important issue to address, but I get the impression from some things I read that some members of the Occupy Wall Street movement need to be reminded that no one owes anyone else a job.  Businesses hire people to do jobs because they think they can make a profit from the work that gets done.  If a worker is paid more than the revenue brought to the business as a result of the work done, that worker will not have a job for very long.  Those who protest income inequality in the United States need to consider income inequality worldwide.  Those who claim to be among the 99% in the United States may be among the 1% worldwide.

For many decades, the citizens of the United States have made up a small fraction of the world’s population, but have consumed the majority of the world’s resources.  We take many things for granted while people around the world do without food, housing and medical care.  Improved communication technology is changing that.  Employers can now find workers around the world who are more skillful and reliable than domestic workers, and will work for much lower wages.  This means more profit for businesses that send office work overseas.  As the Chinese economy grows, more people in China can now afford to buy things that they could not afford in the past, such as beef.  A greater worldwide demand for beef will result in higher prices for beef at supermarkets and restaurants in the United States.

Even if those who occupy Wall Street are successful in reducing income inequality in the United States, addressing income inequality and consumption inequality worldwide will mean that we in America will have much less than we do now.  The Arab Spring may result in even higher gas prices.  We forget that dictators in the Middle East made it convenient for us to extract oil from their countries at low prices.  Democratically elected governments in Egypt and Libya may want their fair share of oil revenues.  Overall, we can expect to become poorer as people in other parts of the world become less poor, especially if we continue to think that someone owes us a job.  We have to have skills or products that we can sell in a global marketplace if we want to maintain our current standard of living.  Advances in communication technology will give us the chance to do that, but will also give a chance to everyone else in the world.

Saturday, October 8, 2011

Invest, Don't Protest

The Occupy Wall Street movement is as historical as the movements that led to the fall of the Berlin Wall or the protests at Tiananmen Square, because instead of taking their protests to the United States Capitol, citizens are taking their complaints to the place where decisions about money are made.  They know that our government is unable to help them.  They acknowledge that our elected representatives are puppets of Wall Street.

I ask the people occupying Wall Street to look deeper.  Wall Street is a puppet, too.  Wall Street is merely one component in the Military Industrial Complex that President Eisenhower warned us about.  President Kennedy also warned us about a monolithic conspiracy.  Taylor Caldwell wrote a novel about an international cabal that controls our lives.  I am now starting to wonder if this vast complex devised a powerful system to control trading and banking that is now out of control. 

If Occupy Wall Street wants to correct the abuses of our financial system, I suggest that they use their organizational skills to get people to pool their money to invest.  Wall Street will not listen to protests in the park.  They will listen to how shareholders vote for board members.  If we want our media to give us real news instead of celebrity gossip, we need to elect enough directors to the boards of media corporations to make that happen.   If we want to make sure that pharmaceutical companies are not sitting on patents for lifesaving drugs, we need to organize with each other to put enough money together to buy enough shares of pharmaceutical companies to elect directors to the board.  If we don’t want a manufacturer to ship jobs overseas, we need to own enough of that company to make them keep the jobs here.

If corporations are our government, getting involved in public life means owning a piece of Corporate America and getting our neighbors to do the same.  We also need to organize boycotts of privately-traded firms if they do harm to the social good.  The boycott of one bus company helped end racial segregation on public transportation throughout the United States.  We can influence policy with how we decide to use the few dollars we have.  Getting more directly involved in the financial world may be the only effective way to uncover and correct the shadowy forces that control our government and our financial system.