Wednesday, April 07, 2010

Third world is as third world does


Koch Industries, a huge privately-owned US company dominated by oil and chemical interests, is plowing millions of dollars into campaigns to discredit climate science and clean energy policies, a report alleged Tuesday. Between 2005 and 2008, the Kansas-based conglomerate that "most Americans have never heard of" spent nearly 25 million dollars to fund "organizations of the 'climate denial machine,'" environmental protection group Greenpeace said in the report.(...)Between 2006 and 2009, Koch Industries and the family that founded and still controls the conglomerate spent 37.9 million dollars on direct lobbying on oil and energy issues.(...) "The combination of foundation-funded front-groups, big lobbying budgets, political action campaign donations and direct campaign contributions makes Koch Industries and the Koch brothers among the most formidable obstacles to advancing clean energy and climate policy in the US," Greenpeace said. AFP

From 1950 to 1963--even under that radical Republican President Dwight Eisenhower--the federal tax rate on personal income over $400,000 never dropped below 91 percent. Between 1936 and 1980 it never dropped below 70 percent. But today, the top personal income tax rate after the 2001 Bush tax cut is just 35 percent(...) The tax rate on capital gains--which most benefits those in the highest income brackets--dropped to 15 percent in 2003, down from as high as 39.9 percent in 1977.(...) Check out these stunning stats: Between 1960 to 2004, the top 0.1 percent of U.S. taxpayers have seen the share of their income paid in total federal taxes drop from 60 to 33.6 percent. The top 400 income-earners have seen the share of their income they pay in federal income tax alone plummet from 51.2 percent in 1955 to 16.6 percent in 2007. In 2007, if the top 0.1 percent of taxpayers had paid total federal taxes at the same rate as they paid in 1960, the federal treasury would have collected an additional $281.2 billion. If the top 400 had paid the same rate as it did in 1955 it would have meant an additional $47.7 billion in revenue. (The incomes of the top 400 have multiplied by 27 times--adjusted for inflation--since 1955, yet back then they paid over three times more of their incomes in federal income tax.) Katrina Vanden Heuvel - The Nation

The crash of 2008 should surely have taught us that many of the profits reaped by Wall Street are pure rent seeking, the extraction of value from others' economic activities by disrupting ordinary business relations without providing anything economically worthwhile in return. Martin Hutchinson - The Prudent Bear
David Seaton's News Links
I think that there is a general misconception that the so called "Third World" countries are intrinsically poor. This is often not the case. In many instances these countries are in fact enormously rich in natural resources of every kind, with fertile soil and large, youthful populations.

However frequently these resource rich "Third World" countries  have certain common characteristics: poor public education and services, a small, weak, or nonexistent middle class and a very powerful, if tiny and parasitical, rentier,  minority that possesses practically all the wealth of the country and controls its politics and dwells surrounded by bodyguards, isolated from the general  run of the population.

You would be mistaken if you thought that because their countries are  considered "poor", because most people of those countries live in miserable poverty, that the rich of those countries are less wealthy than their "First World" counterparts.

Nothing could be further from the truth.

There are many examples, but here is an easy one: the world's richest man is a Mexican named Carlos Slim. Here is how Wikipedia describes his case:
The Mexican magnate's rising fortune has caused a controversy because it has been amassed in a developing country where per capita income does not surpass $14,500 a year, and nearly 17% of the population lives in poverty. Critics claim that Slim is a monopolist, pointing to Telmex's control of 90% of the Mexican landline telephone market. Slim's wealth is the equivalent of roughly 2% of Mexico's annual economic output. Telmex, which is 49.1% owned by Slim and his family, charges among the highest usage fees in the world, according to the Organisation for Economic Co-operation and Development. According to Professor Celso Garrido, an economist at the Universidad Nacional Autónoma de México, Slim's domination of his country's conglomerates chokes off growth of smaller companies, resulting in a shortage of good jobs and driving many Mexicans to seek better lives north of the Rio Grande.
If you look at the quotes at the top of this post, you'll probably be able to see what I am driving at. The United States is also a a country endowed with immense natural wealth and a youthful population, with a very weak social net, whose public education system has deteriorated notably, whose once world-leading middle class is being gradually degraded. A country of egalitarian republican traditions, now burdened with huge and growing inequality gap, whose politics and media are manipulated by a tiny minority of its super rich.

Stop and think about the Greenpeace report quoted at the top of the page: only two men, the Koch (that's pronounced "koʊk" not "cock") brothers, are able to manipulate the national global warming debate of the world's greatest producer of carbon dioxide, thereby endangering the very future of life on our planet for all its inhabitants, everywhere. We call this "democracy" and we call this "freedom".

That is the key characteristic of the "Third World" countries I have described: there is little or no pretense that all of the citizens are engaged in a common project or are in any way equal, the impoverished majority simply being a mass of servants, cannon fodder, prostitutes or stoop labor at the beck and call of a tiny group of people who might as well belong to another species for all the concern they feel for the plight of those around them.

The direction the United States is taking is clear though, and certainly in some areas it has already achieved the squalor we associate with the third world. The recent accident in the West Virginia coal mine bears this out.

The owner of that mine or the Koch brothers are no more affected by the condition of their fellow citizens than Carlos Slim is affected by the poverty of most of his fellow Mexicans.

If, in fact, we really see Liberty as the true path to Equality and Fraternity. if we truly believe that every human being has a right to health, education and peace, then, instead of lecturing others on democracy, we had better mind our knitting. DS

1 comment:

Jorge Tamames said...

I got a feeling of your post last week, working for an Indian businessman and a guy from Ubrique.

Yes, the Tatas and Ambanis here are also among the world's 100 richest.