Economic Policy is made by the rich and done to the poor
I write this from the United States. My brief visit here has been instructive. Despite those who say American power now swoons, Washington remains the world’s most influential capital. The mindset controlling Washington eventually colours other nations. The world has become a discordant rush partly because an increasingly plutocratic America remains the closest thing the dismal orchestra has to a conductor. Yet, a conductor who insists all things must be done to place him in maximum fettle, is one incapable of directing us toward music of greater harmony and equity.
American society moves with a foul mood. Claims that the economy is improving seem to be merely that: Claims. People stew in uncertainty. This alleged land of plenty is the abode of plenty of new poverty. Income inequality has reached a peak last witnessed before the Great Depression nine decades ago. High numbers of people remain unemployed. Most new jobs are described by low wages and abbreviated hours.
Black people are doubly compressed by the hard times. A young Black man has as much of a chance to be on the streets jobless or incarcerated for petty crime as he has to be employed or enrolled in higher education. Detroit, the once proud capital of the American car industry and of soul music, no longer hums with the sound of machinery of car manufacturing. This once fine city had been a symbol of Black progress; it now does nothing but sing the blues. The city is bankrupt and at the prey of creditors seeking public assets on the cheap. The Black population in Detroit is shell-shocked like an ill-equipped platoon finding itself suddenly on a battlefield. Once robust neighbourhoods are blighted by vacant and ramshackle houses. The scene evokes the feeling that a plague has swept the place, consuming people as well as savaging brick, mortar, building and even the spirit of those who remain behind in the desolate town.
Against this backdrop, President Obama toured several cities touting his plans to revive the American economy by protecting the endangered middle class. Although not a great admirer of the President, I hoped this signaled he would hew a different course.
His tour produced high-sounding speeches before enthusiastic, often cheering crowds. The purportedly liberal corporate media lauded his every word. For my part, I dropped my head, wept dry tears and cried a silent cry.
First, the President pulled from the mothballs his threadbare plan for 50 billion dollars on infrastructural improvements. To the average person, the amount seems so vast as to impress. To those more knowledgeable, the amount is so paltry as to insult. America’s ruling crowd has become so selfish that it channels the bulk of the national wealth down its collective gullet. Because of lack of investment, the world’s greatest national infrastructural grid 40 years ago is now the worst among developed nations.
Obama’s 50 billion dollar scheme is a complete feign. It is akin to adorning a Chihuahua with a horse’s saddle then insisting the ill-fitted combination is primed to compete in a thoroughbred race. It is all farce but one the public’s ignorance and media’s connivance have given a hero’s welcome. The leading organisation of America’s civil engineers estimated the nation must spend over one trillion dollars to place its vital infrastructure in respectable order.
The White House knows this. Its policy statement was empty theatre, the slick tossing of saccharine but hollow words at a populace too ignorant to realise the speaker ridicules rather than respects them. The fund President Obama seeks will minimally improve the overall state of the nation’s infrastructure. It will be like giving a pedicure to a tuberculin patient. However, it presents a golden opportunity for a few large construction firms to make a real fortune based on expenditures giving the public false hope. Welcome to the feast where only the fat can eat their fill. It gets worse.
President Obama also unveiled a mortgage reform policy. Again, he declared the reform had the middle class in mind. If that were the case, he then has the mind of a prowler. His plan abolishes the two government-sponsored agencies responsible for broadening the mortgage market so middle and working-class people could own homes over the past several decades. With a broad smile, shut the door to future home ownership for many average people. He claimed this was required to allow the private sector and free market to work their magic. Someone forgot to tell the man the agencies were established because the unfettered, unregulated mortgage market had ill-served the nation’s needs even when working class wages were rising and the overall economy was robust. If such agencies were needed when the economy brimmed with vitality, they are of vital utility during the current period of economic flaccidity.
The two corporations are to be replaced by a curious scheme. Private firms engaged in melding individual mortgages together to form bundles of financial instruments secured by the real estate underlying the mortgages can now buy a government guarantee of repayment of these financial instruments. What he has taken from the common man, the president gives to the financial speculator in multiple portion. Valuation of these financial instruments is so subjective as to be more conjecture than precision. Enacting this policy will grant investors the open door to pay a nominal fee guaranteeing these instruments then claim outrageous values for the assets. If the market works, the investor gets paid via the market. If the market falters, he collects on the guarantee. Either way, he gets paid, meaning his reward comes not for taking a risk but simply because he had money in the first instance. The common man must fight life’s vicissitudes to earn his quotidian bread and keep. Meanwhile, the rich are protected on all sides; their bounty is promised and secured by the sweat of the poor.
In all of this, President Obama either is devoid of an economic bone in his body or he is as cynical as a man can be. I cannot believe he is so naïve as not to apprehend the ramifications of what he advocates. Thus, I am left to conclude he remains the loyal steward of deeply-pocketed interests who have little interest in the average person.
We approach the crux of this tale. We must be careful about the leaven we eat. The yeast of understanding is in a sparse plate on a small table. On the other side is the feast of fools. It is served in large, open halls upon wide, ample tables. The latest Obama escapades are instructive in that they reveal what is to come to much of the rest of the world. Just as there seems to be a dictator’s manual that authoritarians religiously apply to thwart democracy, there is a financialist handbook the economic elite applies to keep people poor.
Given the imperfection of our social arrangements, some poverty is unavoidable. However, due again to the flaws of the human character, the larger portion of human misery is the unnecessary byproduct of man’s greed. We live in an age of rank elite conservatism as virulent as any time in the past four centuries. Today’s elite believe they are entitled to life in the fullest; this entails owning and possessing as much as possible, including people. For this to occur, they need people to grow poorer so they can purchase more of them, more cheaply.
Knowing we know little economics, they hire honey-throated mouthpieces like Obama to tell us all is being done for our welfare. In fact, what they have in mind will harm us. However, we believe them and thus keeping playing the roles set for us, little realising the hard work we do will gain us little more than a victim’s status. We become dumb accomplices in setting our lifetime trap of penury, struggle and debt.
They tell us to look at economics as a collaborative venture where all parties cooperate to maximise output and production. They demand we believe what they know to be a lie. He who believes that this is the nature of economics is a charter citizen in a fool’s paradise balances on the edge of calamity. They need us to think this way so that we blind ourselves from seeing who they truly are and how they actually think.
They see economics as competition. If too many average people have all they need, the rich are afraid that the people will no longer work extra hard and will drive up wages. If masses don’t place their nose to the grindstone, there will be insufficient surplus and too much wealth among the common people to give the elite the lavish wealth upon which they have come to rely. They must keep you poor, grasping and so afraid that you willingly work your fingers to the bare bone in order for them to luxuriate at their desired level. In the current system, the average person works to indebt himself to an elite whom his work has already profanely enriched.
This is how capitalism was born. In 18th century England, architects of economic thought and policy lamented how the rural farmer and peasant were too happy for their own good. Because these people had small plots of land and recourse to common land to graze small herds, they were mostly self-sufficient in their bucolic simplicity. The aggressive captains of industry bristled at this waste of human fodder. They needed people to work their factories. To fuel their new way of life, they instituted legislation that would bar the theretofore self sufficient, life of the peasant. They willfully killed an entire social structure and imposed misery on the unwitting farmer and bumpkin just so their capitalist elite could reap the benefits of the forced labor.
Laws were enacted dispossessing small farmers of their meager holdings. Common pasture land was abolished. Effectively chased from the land and their means of livelihood, the peasant drifted to the city. They formed a pool of surplus labor competing against each other for the meager wages of nonstop work amidst a dreary, wretched urban poverty as has ever existed.
This is how capitalism was born. Clearly, the global economy has expanded and evolved. It is more sophisticated and nuanced but its basic nature remains unchanged. The cardinal principle upon which this edifice is built remains that the vast majority of the people must run the ceaseless treadmill so they have little time to question things or fight to change them.
In initial years of capitalism, people were dispossessed of their lands. Today, the people can now own land their ancestors once freely walked. However, they must now pay a high price. Given their low wages, paying such a price consigns them to a lifetime of debt. By nature of the obligation hovering over him, a debtor is willing to work for a wage below what he is due. In this perverted system, to strive to own a home is to acquire a debt that forces you to accept unjust wages which makes it more difficult to redeem the debt.
In the formative stage of capitalism, only landed wealthy men held the political franchise. Now, everyone can vote but voting matters little. Today, big money decides the candidates of the major parties. The average person votes but his franchise is of no avail. Money Power presents its choice of candidates from which he must select. Usually, all this does is present to the people a choice between bad and worse.
Africa, you have suffered greatly because of this. Led by America, Western nations suppress the bulk of their populations in order to meet elite demands. If Western nations willingly turn their own people into modern indentured servants, they have no compulsion about keeping African states and their peoples in a place of economic weakness. A vital instrument abetting this unfairness is the nature of many of the continent’s governmental structures. Too many nations have kept the warped values and ways that characterised the colonial political economy. In a profound way, Africa suffers under the weight of excessive capitalist practice shorn even of the false regard the Western elite must feign for its citizens. As such, colonialism bequeathed to Africa a political economy described as rawest form of exploitative capitalism accentuated by racism.
More than the populations of Western nations, the people of Africa have their work cut out for them. Most of today’s African leaders belong to the same elitist club as President Obama. They talk sweetly but act sourly toward the people’s interests. Instead of being genuine leaders of the people, many leaders are emissaries of the global elite to the people. Thus, instead of demanding from the global elite what Africa needs, these leaders are more apt to instruct the people about what the world says they should sacrifice or forfeit to maintain a good credit rating.
Breaking this age-old bondage falls on the people themselves. First, we must earnestly begin to learn more about economics and finance. The more you know is the less you can be fooled. The most important point to remember is that economic policy is rarely a completely collaborative venture. Few policies are class neutral. Policy is a subjective determination of who benefits and who losses in relative and absolute measure. Policy is the balancing of competing interests. You must know enough about your interests and those of other economic classes within your nation and of other nations so that you protect and promote what is vital to you.
Most importantly, we must envision a world free from the exploitation inherent to classical and now modern capitalism. There is a better road available. Adhering to this new path first starts with asking ourselves do we strive for a more just, equitable society for all or do we labor to win the individual lottery – that slim, desperate chance to escape the terse, bare confines of average existence so that we may join the lush elite. If we strive for the former, there is a chance. If all we do is individually labour for the latter, then our children and their children shall be the hand servants of a global system that seeks their harm.
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