Most people are realizing that our economy is broken, and that despite their hard work, very few people find a good job or get paid well. This article (“Saving Capitalism”), from the cover of Time Magazine, shows how the financial services sector has gone from serving businesses to extracting 85% of all the money. It employs very few people, discourages research and development, and focuses only on short-term gains and consumption. But we can change things. Our system of capitalism has good elements, and it had good rules. Those broken rules can be fixed!
Article: How Wall Street is choking our economy and how to fix it, by Rana Foroohar:
As news and business reports are making clear, the rich have a huge (and growing) influence over both the economy and politics.
In an animated GIF created by the Financial Times, the damage to working people is easy to see, and getting worse.
(Graph via Michael Hiltzik, of the LA Times)
The Pew Research Center study on America’s middle class shows the 40 year trend:
- The biggest group used to be in the Middle Class, but now is the rich.
- Income is down for everyone, except for the rich.
- There is a growing number of people in poverty.
In other words: the GREED and CONTROL by the rich is at an all-time high, and getting worse!
What the graph does not show is that there is MORE MONEY than ever being generated by our economy. So not only are working people earning less and families stressed more, but the rich have MORE MONEY THAN THEY EVER SPEND. The rich no longer need to create businesses to get richer – they use the stock market and rent-taking – without the need to give people jobs.
By paying people less there is also less spending and supporting of local businesses, so things keep getting worse.
It is clear that the current system of taxation is skewed to benefit the rich, and that tax havens are hiding away massive, hidden wealth. The Panama Papers have exposed the tip of the iceberg of high-level secrecy and corruption.
The rich are taking money out of the loop, and old-fashioned income taxes barely affect them. So new ways need to be enacted to reset the balance.
It’s time for new ways to reset the prosperity balance, including:
- Social Responsibility Payments (“SoRePs”), which reflect the publicly-funded inputs into a company’s success. As an example, Apple could not have created iPhones without publicly-funded and invented GPS, Internet and touch screens. Some percentage of successful companies’ wealth needs to flow back to the public, much like other types of indebtedness.
- Transaction Taxes on the Stock Market and Currency Markets. These micro-slices barely affect the rich people using these systems and can add up to benefit the public. These make further sense because the rich rarely create long-term employment anymore, but use the stock market instead to increase their wealth.
- Get the big money out of politics, and bring back a people-focus to legislation.
It’s time for a balanced economy and people-focused government!
The American people have seen their economic hopes and hard work sucked up by the wealthy, and cast adrift by the Money-First focus of both Republican and Democratic leaders. But Americans know who is most important (People!) and what is most important (Shared prosperity).
Donald Trump and Bernie Sanders each offer fragments of change: Sanders has his focus on flowing money back to people, while Trump uses and encourages anger against the system. The difference, for now, is that Trump is not unifying the people, but dividing them with racism and insults.
There is no doubt that Americans are shifting from brooding to demanding change. Here’s hoping that the next President will bring positive and inclusive economic and social change.
For economic and social change to happen there needs to be both a movement (that values shared prosperity and excites people) and institutions (that generate and encourage improvements). In the past the people-focused institution was labor unions. But with unions being squeezed out by the rich and global pressures to reduce wages, there needs to be another type of grass-roots institution that brings about change.
Here’s a forward thinking article about changing our economy to have more worker-owned co-ops, community land trusts, and publicly-owned banks.
Click here to read the article.
Here is a link to the author’s books on transforming the economy and strengthening shared prosperity and democracy.