Tag Archives: austerity

No Wonder The Business Class Thinks Everything Is Going Great

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It should come as no surprise that the business class believes the world is becoming a better place. Stock prices are setting all-time records, bonuses for CEOs are skyrocketing and regulation for multinationals and financial institutions is more distant than ever.

Henry Blodget, founder and CEO of Business Insider, wrote an article titled ‘OK, Haters, It’s Time To Admit It: The World Is Becoming A Better Place’. Indeed, being in a position such as is Blodget’s, one might argue the world is becoming a better place

'The economy is going great', says the business class (photo eastcountymagazine.org)

‘The economy is going great’, says the business class (photo eastcountymagazine.org)

Bet let us take a closer look at his arguments and juxtapose these arguments to some other facts that might demonstrate the world isn’t such a great place after all, at least not for those who are not part of the wealthy business class.

War deaths

His first graph should tell us more on the number of deaths by war and shows a significant decline in the last few decades. Good news, one would think. But his chart is quite flawed even if we look only at the 2001-2007 period.

The graph Blodget cites shows a few tens of thousands dead in the Middle East and seems to forget the one million dead in Iraq since the 2003 United States aggression and the several hundred thousand dead after the 2001 invasion and occupation of Afghanistan.

After the 1991 Gulf war led by the United States against Saddam Hussein, the United Nations, in fact the United States and the United Kingdom, imposed harsh sanctions on the Iraqi regime. As a result of these sanctions millions of Iraqis didn’t have access to basic health care and daily commodities. Estimates show a million of Iraqis died as a direct consequence of these sanctions, among these dead 500,000 children that didn’t get the necessary medication for easily-treatable diseases. Madeleine Albright, Secretary of State in the Clinton administration, said on TV that “we believe the price is worth it.” Leaving out these deaths seriously skewes reality.

The chart, however flawed to begin with, shouldn’t, under any circumstances, be a demonstration that the world is becoming a better place.

Poverty

Blodget’s second point shows us that poverty in the world is declining. That may very well be the case, given the enormous economic growth in developing nations such as Brazil, China and many Latin American countries. However, income inequality in the world is rising. The economic development of the last few decades seems to have been pretty advantageous for the wealthy (or super wealthy) upper class. Ordinary people, barely above the poverty line, are struggling to make ends meet. They are not represented in Blodget’s graph.

Let’s take a look at the United States, Blodget’s home country. Real wages of the many have stagnated or even declined since the late 1970s, while the wages of the rich and the super-rich have increased staggeringly. In the United States the top 1 percent has seen an increase in real wages of 125 percent, and the top 0.01 percent an astonishing 685 percent over the last three decades. The decade of the ‘80s, the decade of Ronald Reagan, was also the decade of the destruction of labour unions. Worker’s rights have deteriorated ever since, leading directly to worse working conditions.

The decade of the ‘90s, under the Clinton administration, was the decade of the NAFTA agreement, according to Chris Hedges “the most detrimental piece of legislation for workers since the Taft-Hartly Act of 1947.” NAFTA meant corporations could more easily ship production – and jobs – across the border with Mexico. Workers frightened of losing their jobs at any given moment don’t pose a great threat to the business class.

The same so-called liberal president was responsible, together with Federal Reserve chairman Alan Greenspan, for the destruction of the Glass-Steagall Act, introduced by Roosevelt in 1933 as part of the New Deal and separating commercial and investment banks. This evolution led to the creation of Monster of Frankenstein-like hedge fund banks directly responsible for the global economic and financial collapse of 2007.

No matter what the source, almost all show poverty has increased quite significantly in the US. Only the blind, or the ideologically fanaticized, would argue the last few decades have been helpful for the working class.

Life expectancy

His third argument, about life expectancy going through the roof, seems reasonable. It can hardly be seen as a miracle that in times of such technological development general life expectancy increases steeply. Disparity between rich and poor countries remains significant, just as an increase in average income doesn’t seem to advance working class groups.

Worker’s rights

Blodget’s statement comes at a moment when acquired democratic rights, such as labour rights, are being attacked all over the world. The Reagan/Thatcher era was just the beginning. Bill Clinton contributed generously with his NAFTA agreement, allowing so-called ‘free trade’ to cross Mexican and Canadian borders.

Today only 12 percent of American workers are unionised, most of them in the public sector where they do not have the right to strike. Lack of labour organisation is a brake on democratic development and an enormous gift to corporations who don’t have to pay their workers a living wage or guarantee a healthy and secure working environment.

The Transatlantic Trade and Investment Program (TTIP) will make sure this evolution continues in the direction the business class wants it to continue. Multinational corporations will be allowed to move their production to Eastern Europe, where wages are even lower than in the most impoverished areas of the United States. So-called ‘free-trade agreements’, who, in fact, have nothing to do with actual free trade, guarantee a race to the bottom in wages and working conditions.

This is not to say that nothing has changed for the better in the post-World War II-years. The improvement in civil rights since the ‘60s in the United States is one of the major examples. The improvement in women’s rights since the ‘70s cannot be underestimated. And even the growing power of the environmental movement and the increasing ecological consciousness among the general public is no small matter.

Austerity for some, but not for all (photo otherwords.org)

Austerity for some, but not for all (photo otherwords.org)

Environmental catastrophe

At the same time the world is being confronted with an environmental catastrophe threatening the survival of the human species. Corporations continue their activities without any concern for the externalities, that is, the future of our children and grandchildren. Greenhouse gases continue to fill up the air we breathe and might one day cause the total destruction of our kind. Only radical policy changes can stop this catastrophe from happening.

But one should not expect this change to come from the corporations. Their loyalty is to the shareholders only. Even their legal obligation is to maximize short-term profit.

It should come as no surprise that those who are part of the wealthy or super wealthy classes believe the world is becoming a better place. Blodget says there are thousands of examples to demonstrate this claim. He cites, however, just three.

So yes, if you belong to the wealthy or super-wealthy business class, the world is becoming a better place. Corporate profits are setting all-time records, Wall Street continues to hollow out democratic principles, shareholders are generously taken care of by upper management, while ordinary workers pay the high price for a crisis they did not cause and for an economic recovery they do not benefit from.

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