Global inequality may be much worse than we think | Jason Hickel

It’s familiar news by now. Oxfam’s figures have gone viral: the richest 1% now have more wealth than the rest of the world’s population combined. Global inequality is worse than at any time since the 19th century.For most people, this is all they know about global inequality. But Oxfam’s wealth figures don’t quite tell the whole story. What about income inequality? And – more importantly – what about inequalities between countries? If we expand our view beyond the usual metrics, we can learn a lot more about how unequal our world has become.

The first thing to say about Oxfam’s numbers is that they present a very conservative picture. Given that the rich hide so much of their wealth in tax havens and secrecy jurisdictions, it is impossible to know how much they really have. Recent estimates suggest that up to $32tn is stored away in tax havens – around one sixth of the world’s total private wealth. If we were to add that to Oxfam’s metrics, inequality would look much, much worse.

-Jason Hickel

Source: Global inequality may be much worse than we think | Global Development Professionals Network | The Guardian

We’re just starting to pull on the thread of hidden wealth. It’s not likely that we’ll ever uncover it all, but if we ever get enough of the picture to have a rough approximation that approaches reality, I’m guessing our current estimates will pale in comparison.

How to Fix Our Broken Primary System in Five Easy Steps by David Atkins | Political Animal 

By Joe Mabel, CC BY-SA 3.0,

The unexpected twists and turns of the 2016 presidential election have exposed interesting fault lines within both the Democratic and Republican coalitions. But they have also revealed something even more uncomfortable: that our system of picking presidential candidates is inadequate, lacks transparency and accountability, and faces a fundamental legitimacy problem. Clinton and Sanders have spent media cycles arguing over which states “mattered” more than others based in part on their election systems, and the fate of dozens of delegates may have been decided by whether a state held an election or a caucus, and whether that election was an open or closed primary. In both 2008 and 2016 Democratic candidates have publicly started to rely on a strategy of overturning the actual will of the voters by persuading the party mandarins who make up the party’s so-called “superdelegate” vote. Meanwhile on the Republican side Ted Cruz’ campaign is explicitly attempting to take delegates from Donald Trump at various nominating conventions and caucuses that in essence are controlled by state and local party insiders, in spite of the will of the actual voters in those states and districts.

-David Atkins

Source: How to Fix Our Broken Primary System in Five Easy Steps by David Atkins | Political Animal | The Washington Monthly

David makes great suggestions here, but I’m feeling pretty cynical about the possibility of such occurring. We have a system that is opaque and convoluted by design, and I’m not sure it’s worth saving (or even possible to do so). Honestly, for one to conclude that the current system is designed to serve the will of the people, I think you’d either have to have been fooled by the appearance of such, or you’re more likely the embodiment of Upton Sinclair’s line, “It is difficult to get a man to understand something, when his salary depends on his not understanding it.”

Donald Trump, The Coen Brothers, and the Decline of the American Middle Class – LARB

File:Thin Ice Sign in Central Park, NYC.JPG

Source: Wikimedia

These days, just about everyone in Hollywood is an independent contractor living from film to film. While you are working, you make a decent living, but once one movie is done, you have to sit by the phone or badger all of your contacts until you get the next one. This is the world “The Future” envisioned, and for most of us, it isn’t that pretty. One good year does not guarantee the next, and certainly not the one after that.

And it is not just Hollywood. The gig economy makes everyone from software designers to truck drivers to strippers to academics independent contractors. My father and grandfather pretty much worked for one company their entire lives. I haven’t held a staff job since 1987. When my father got sick, his employer found him doctors and continued to pay his salary. Had I gotten sick, they would have just forgotten my name. Risk used to be absorbed by the corporation. Today it has shifted to the working stiff.

-Tom Streithorst

Source: Donald Trump, The Coen Brothers, and the Decline of the American Middle Class – The Los Angeles Review of Books

To Save The Economy, We Have To Break Its One Sacred Rule | Co.Exist | ideas + impact

We tend to take the GDP measure for granted as though it has always existed. Most people don’t know that it was invented only recently. It has a history. During the 1930s, the economists Simon Kuznets and John Maynard Keynes set out to design an economic aggregate that would help policymakers figure out how to escape the Great Depression. Kuznets argued for a measure that would help us maximize human well-being and track the progress of human welfare. But when World War II struck, Keynes argued that we should count all money-based activities—even negative ones—so we would know what was available for the war effort.
-Jason Hickel

New Study Finds ‘Racial Resentment’ at Heart of ‘Tea Party’ Movement / Sputnik International

“From the beginning,” of the movement, he tells me, “what you’re seeing is this sort of racially-coded rhetoric. So, right from the beginning, you have a very great explanation of conservative politics of the last 30 years — which is plutocratic policies being wrapped up in racist rhetoric in order to benefit a plutocratic agenda. And you have a lot of white middle class and working class people who have bought into that agenda.”

“What Fox News has done is taken that model and actually weaponized it, politicized it, and used it to attack policies that benefit the vast majority of Americans,” McElwee argues, even as the Rightwing network’s viewers have little clue how they are being played. “What we have in a lot of cases are people who are very frustrated about what is going on, but lack the political knowledge to actually understand the causal mechanism for how this bad thing is happening. And if you don’t have that, if you don’t connect government policy to your lived experiences — what you end up doing is saying ‘I’m upset, I don’t know why my life is bad’. And if someone tells you your life is bad because ‘immigrants are taking your jobs’, or ‘the government is helping black people with your tax dollars’, people are susceptible to that message.”
-Seen McElwee (quoted on Sputnik News)
Read more:

Why Conservatives Hate Fiscal Policy – The Los Angeles Review of Books

The global economic slowdown that began in 2008 threatens to last even longer than the Great Depression. Although the recession officially ended almost seven years ago, the recovery since has been disappointing, to say the least. Wages stagnate, the middle class shrinks, and good jobs are still hard to find. Most postwar recessions saw a small drop in GDP followed by a rapid return to previous trend line growth. Not this time. The US economy is $3 trillion (almost 20 percent) smaller today than projected in 2007.

And with the Chinese economy slowing, the stock market tanking, world trade shrinking, oil prices plummeting, deflation threatening, bond yields falling, and emerging markets collapsing, a recession this year looks more likely than a strong self-sustaining economic expansion. We might well fall into another recession without ever enjoying the boom

-Tom Streithorst

The European Experiment: A Modern Greek Tragedy

The WPC site suffered a catastrophic loss in the fall of 2015. Attempts to restore it from backups failed, so I thought all of the old posts were lost forever. Fortunately, I was able to find some of the posts that I really wanted to hold onto via the Wayback Machine. (Why it took me six months to think of checking there…)

This post originally appeared on this site in early 2015.

Source: Wikimedia

Source: Wikimedia

Greece stands at the precipice waiting to see if they’ll be forced out of the Euro while the troika (EU, ECB, and IMF) engage in open economic warfare against the nation under the continued guise of unilateral profligacy. The Greek’s are the ones being punished, but loans aren’t self-originating. Greece’s lenders have somehow managed neither to share in the blame, nor much of the pain. Rather, the banks were absolved and made whole in the wake of the financial crisis. Half of the equation takes all of the blame, and most of the pain. And the pain is far worse than it might have been if it had been equitably shared as the Greek economy has suffered greatly at the clenching fists of austerity.

Now the troika stands – feet apparently firmly planted in cement – claiming they’ve made significant concessions, and that it’s time for Greece to accept the favorable terms they’ve been offered. As Erwin Grandinger puts it, “What we are witnessing in Greece and beyond, in Europe, is an absurd, but not entirely unexpected spectacle.”

We don’t know what exactly Europe is offering, but if serious concessions were on offer, wouldn’t the high-level details be trumpeted relentlessly? The latest offer from the Greeks was publicized, and their supporters are showing alarm at the concessions therein. Still the troika cry for more. How we are supposed to square the idea that their unknown offer is substantial and serious, but the known Greek offer is neither, is beyond me. And with reports of the Germans acting to disrupt the flow of information, I find myself losing enthusiasm for any offer they’re a part of.

It seems that Greece’s choice is this, either allow the troika to continue taking consecutive pounds of flesh, thereby perpetuating and accelerating country’s downward spiral, or sacrifice a limb and move on. Stuck between Scylla and Charybdis the Greeks now have to make a choice. Tsipras had a mandate to seek relief, but none is on offer, so he’s taking the decision to the Greek people. A referendum is scheduled for July 5th in which they’ll choose whether to accept the troika’s unilateral terms. It’s a bit of a Sophie’s choice to be sure, but it’s one in which, when considering the long-term consequences, a rational choice seems to avail.

Like the rock climber who cut off his own arm to survive, Greece must be prepared to do the same (Yanis Varoufakis has already proclaimed his readiness to do so, a well as his plan to step down if the Greek’s vote to accept the troika’s offer). Unlike the climber, Greece is not alone in the wild. They’ve got a climbing partner who could roll the rock off and help get the country back on its feet. Instead, the troika sits atop the rock admonishing Greece for having put themselves in this position. They’d love to help, really they would, but then Greece wouldn’t learn their lesson and then they’d just do it again with direr consequences next time. (All the while seeming to forget, or unwilling to recall, their role in delivering the rock to where it currently sits.) Worse yet, others might follow suit. So they encourage the Greeks to keep wriggling furiously as surely they can pull themselves up by their bootstraps if only they tighten their belts and push through the pain.

Ian Welsh gets at the heart of the matter:

These people are either very stupid or are doing what they feel they must to keep their jobs and their membership in a very lucrative club. If they were to say, “No, these policies don’t work,” would they keep their jobs?

It’s not that we don’t know austerity doesn’t work, if by “work” you mean “improve the economy more than not being in austerity would,” we do. It’s only ever worked in theory by making very dubious assumptions, and it has never worked in practice.

So, at this point, if you believe austerity works, you’re either an extraordinarily blind ideologue, or you’re crooked, on the payroll, and know what you’re doing.

Even knowing this, there are interesting twists at hand. The troika seems to believe that the Greeks won’t use the knife. Either that, or they’ve decided that the cost of a “Grexit” would be less than whatever fallout they expect would happen if they willingly took a haircut on the Greek loans. But here’s the thing, the climbing partners are hanging from the same rope. If Greece drops out, the rope may snap just above them, leaving the rest of Europe safely above the break, or it may drag the continent (and the global economy?) down with it.

If Greece drops out, the rope may snap just above them, leaving the rest of Europe safely above the break. Click To Tweet

The outcomes of such possibilities are anyone’s guess as it’s a wildly complicated scenario. The global economy is seen to be tentatively headed in a positive direction, but there are multiple warning signals. Could it handle a bit of a bump? Perhaps. But is the juice worth the squeeze? More pointedly, is this path being worn because it is the right thing to do, or because some savage ideology demands it? Jeffrey Sachs seems to think it’s something closer to the latter, writing that, “Europe’s demands – ostensibly aimed at ensuring that Greece can service its foreign debt – are petulant, naive, and fundamentally self-destructive. In rejecting them, the Greeks are not playing games; they are trying to stay alive.” Umair Haque adds that it’s “Tragic and embarrassing to see the EU betraying its very founding purpose by squeezing Greece for pennies for absolutely no reason.”

In addition to financial impacts, there are also political ramifications to consider. The leadership role in Greece has changed hands frequently since the outset of the crisis. Tsipras and Varoufakis currently have the helm, but it wouldn’t likely be long until elections were called if the negotiations go south. (Tsipras is already the fifth person to assume the role of Greek Prime Minister since the outset of the Great Recession.) After years of escalating austerity, Syriza was voted in with a mandate to bring some relief to the beleaguered Greeks. If they aren’t able to make hay, who would get the next shot?

One alarming possibility that waits in the wings is Golden Dawn, a right-wing political party which has gone from obscurity, to the third largest representation in the Greek parliament, over the last five years. All of the party’s MPs were charged with having membership in a criminal organization, so the organization appears to be on thin ice. But if the current negotiations create a vacuum at the top of the Greek leadership, what might fill the void? Having tried one end of the spectrum – to no avail – the possibility of the electorate running to the opposite pole seems ever less remote. If I seem alarmist here, at least I’m in good company as Noam Chomsky is suggesting the same.

I thought this might have all been a bit of high stakes poker; with the Europeans pushing as hard as they could for as long as they could, before relenting just enough to make a semi-reasonable deal seem palatable at the last-minute, but that doesn’t feel like what’s happening now. Instead it seems like an acrimonious, ideologically fueled bent towards punishment. Greek has wronged and must suffer until every Euro is repaid. But Greece is part of Europe. Cutting off one’s nose to spite one’s face is a classic blunder. It might feel good in the moment, but you have to eventually look yourself in the mirror.

A picture of a 77-year-old Greek man who was crying while slumped outside of a bank made the rounds on social media yesterday. He had waited in line at three banks to withdraw funds from his wife’s pension before being turned away each time. Rather than bitterly point fingers, he stated “Europe and Greece have made mistakes. We must find a solution.”

Loosen the vise. Call off the bloodbath. End this austerity NOW!
Loosen the vise. Call off the bloodbath. End this austerity NOW! Click To Tweet

Hillary Clinton, Single Payer, and the Overton Window by David Atkins | Political Animal | The Washington Monthly

Clinton’s argument is reflective of the larger primary debate: is it better to advocate for policies that are completely unlikely to make it through Congress in the hopes of a massive progressive turnout that upends politics as usual (a “political revolution,” as it were), or is it better to advocate for things that are simply highly unlikely to make it through Congress but still fall within the realm of the possible within current constraints?

-David Atkins

Source: Hillary Clinton, Single Payer, and the Overton Window by David Atkins | Political Animal | The Washington Monthly

This discussion keeps bringing me back to the following quote from Paulo Freire:

What can we do today so that tomorrow we can do what we are unable to do today?

Paulo Freire

Could you live on $1.90 a day? That’s the international poverty line – Jason Hickel for The Guardian

Image: Martin Baxter

Image: Martin Baxter

A few weeks ago the World Bank changed the international poverty line from $1.25 to $1.90 per day. Normally, changes to the poverty line slide by without attracting much attention, but for some reason this time people got excited. At first glance, it looks as if the bank has finally admitted that the old line was just too low, and has raised it to a more meaningful standard.

But the reality is closer to the opposite. The World Bank didn’t raise the poverty line at all – it simply “rebased” the old line to adjust for depreciation in the purchasing power of the dollar. The bank claims that the new poverty line is roughly equivalent to the old line, in real terms. But in effect it is actually significantly lower, and therefore makes it seem as though there are fewer poor people than before.

This is why the bank has suddenly announced that the global poverty headcount has decreased by 100 million people overnight, and that the poverty reduction trend has been declining more rapidly than we used to believe.

-Jason Hickel

Read the full story: Could you live on $1.90 a day? That’s the international poverty line

We can go on playing this game where we move the goal posts, claim victory, and throw a party. But there’s only so much field, and the farther we push the posts, the more obvious that’ll become. Or we could just be honest now, and dedicate ourselves to helping the billions of people mired in deprivation. If you ask me, I’d say our humanity demands it.