July 11, 2007
by Cliff Carson
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In one of my previous offerings, "The Immorality of the War in Iraq," I called for a return to the four basic Governance Principles, or Linchpins, as a necessary action to restoring to the people their control of our Government and those we have chosen to be our leaders. Those four basics were "Rule of Law", "Financial Viability", "Guaranteed Public Redress", and "Morality and Fidelity of Leadership". I addressed "Rule of Law" in the Commentary "We Must Return to Our Constitution". Below is a follow-up on the Linchpin "Financial Viability".
According to Webster:
Finance: The management of money, banking, investments, and credit
Viable: Capable of living or developing under favorable conditions
Therefore Financial Viability is the condition in which our society can continue to live and develop positively such that the citizen as a consumer and producer can be an integral force in the financial well being of American society.
Our Middle Class is being squeezed unmercifully. Everybody is aware of this and rather than just resign ourselves to "I guess that's the way it is," we need to examine the cause of this malady and see if it has a solution that we might use to correct the problem. The seriousness of not correcting the squeeze is related to the fact that the Middle Class is the population segment of America that actually drives our country's economy and presents us, the common citizen, with opportunities to realize the American Dream.
Lou Dobbs of CNN has been addressing the problem for many months now. And the consequences of a defeated Middle Class will be no less than a loss of Financial Viability of our entire nation. In short, the ignoring of this problem just might, some future day, result in Economic and Political slavery for every American except those who are in the top 1%. They call themselves the Elite. The cause is that American Business and the American Government have developed an incestuous relationship designed to enrich the few at the expense of the many. And, of course, the conspirators are members of the few. The Elite.
A healthy economy is a Financially Balanced Economy. Neither Business nor Government can thrive, long term, operating in an environment that doesn't have financial balance. Our Society is currently out of balance.
For many generations the balance was established around the 80/20 rule. That means that 80% of the Wealth is controlled by about 20% of the people. This 80/20 rule also was a standard ratio observed across nature ( 80% of business problems are caused by 20% of the operations, etc. ). But slowly that balance has slipped away until today the wealth of the Richest people is out of balance with the net worth of the poorest. Review the following:
The United Nations Development Program (UNDP) reported in 1998 that the world's 225 richest people now have a combined wealth of $1 trillion. That's equal to the combined annual income of the world's 2.5 billion poorest people.
Microsoft CEO Bill Gates has more wealth than the bottom 45 percent of American households combined.
As of 1995 (the latest figures available), Federal Reserve research found that the wealth of the top one percent of Americans is greater than that of the bottom 95 percent. Three years earlier, the Fed's Survey of Consumer Finance found that the top one percent had wealth greater than the bottom 90 percent.
The wealth of the three most well to do individuals now exceeds the combined GDP of the 48 least developed countries.
These related phenomena led UN development experts to observe that the world is heading toward "grotesque inequalities," concluding: "Development that perpetuates today's inequalities is neither sustainable nor worth sustaining."
Business is an integral part of society, and it needs to be profitable such that entrepreneurship is fostered because this is the driving force underpinning economic growth. That's why a 50/50 balance is not desirable. Government is also an integral part of Society and Government needs to provide an environment to encourage Business because one cannot exist long without the other. But both have to work in harmony to feed the needs of Society. There must be a balance between these three factions (Business, Government, Society) to ensure a continuous opportunity for betterment in the standard of living. The 80/20 ratio served the World wonderfully for several generations.
Financial Balance doesn't mean everyone equally, but it does mean that the people who feed the Business machine and support the Government must have sufficient resources to buy what business produces, pay for Government Services, and provide for basic needs.
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If either the Government or Business begins to take too much away from the people, too much taxation or to much corporate profit, the result inevitably is that either Business or Government is sated and Society suffers. This condition is easily cured if Business or Government changes their business model or Governance. But greed and the quest for power or influence can cause easiest solutions to become just about impossible. If Business and Government enter into an incestuous relationship, a relationship where they work together to maximize their profit, power, and position to the detriment of the nation, then the only source left to squeeze is the individual. And this is where the imbalance begins to become as unstoppable as time - the imbalance continues to grow. The people get squeezed even more and it won't stop until there is nothing left to squeeze out. Then both Business and Government begin to fail. The result is that Anarchy breaks out.
In yet another commentary "Should Bush be allowed to choose which Laws he has to Obey?" I noted that Ignorance and Ineptitude are the two most significant factors determining outcomes over events that we have the opportunity to control. We can control the future of our Government. We can control our Financial Viability. The question is will we do it?
I went to Mexico City several years ago on business and while there I observed that there are two distinct segments making up the Mexican Public. Those that have money and power and those who can only exist day to day. There is just no Middle Class as such. How much, I asked the manager of the company I was visiting, does the average factory worker make in Mexico City? About $4 American per day was his answer.
In a line of sight from his facility was a very large lot full of newly assembled F-150's. Just think I mused, even though the Mexican Ford workers make more than $4 per day, how much cheaper can that Ford truck be made in Mexico and for how much less will the American consumer be able to buy one? And what of the American Auto worker? He can't feed a family on $4 per day or whatever is paid to the Mexicans. How does that impact the United States economy? And what of those that are privileged-The Super Rich, The Powerful, the Elite? They can send the margin to their bottom line. The Mexican privileged and the American privileged are very much alike. They run the place and they set the rules. As previously noted they consider themselves the Elite.
And as Elites, they believe that they, and only they, know what is good for the "little people". They believe they're better suited than those little people to manage their everyday lives. They prefer big centralized government because this enables them to become entrenched by bribing politicians to get them to fix rules and pass laws to their advantage. They work with the Government officials thru agents. We common folk call these agents - Lobbyists. Surely you won't be surprised to discover that those rules will be written such that the Elites continue to entrench their rule by building power, position, influence, and wealth. They feel entitled to an unquestioned rule by themselves, because they are the elite. Finally this scenario evolves into an Oligarchy. The country continues to be run by fewer and fewer and ceases to be good and as Eisenhower observed, it then ceases to be great. There is no Financial Viability in an Oligarchy.
The Italian Vilfredo Paredo, a giant of Economics in the history of our world, authored the famous 80/20 rule (80% of the wealth is owned by 20% of the people, 80% of the problems are the result of 20%, etc., etc.), just about every industry professional knows the rule, and applies it efficiently. But not quite so generally known is another economic observation of Pareto's: Once the Elites cement their economic and political power, those Elites divide into Elite factions, and about the only change the factions will allow is an overthrow of one Elite faction by another Elite faction. You know, kind of like our two party Political system every four years.
America became wealthy because we Americans had freedom to become entrepreneurs with success limited only by our individual imagination. Business was aided by our Government and this is as it should be. But greed is a most powerful corrupter. And as our great country flourished and became the envy of the world, Business and Government evolved into an incestuous relationship. Not satisfied with honest and moral returns for their investments, the powerful then drifted into Elitism. The relationship of Big Business and Government shifted into immoral deals and power brokering and the loser was the American worker and thus American Society.
Americans must live in an environment which allows an opportunity for the family to leave a legacy for their children, the chance to build a more financially secure and politically secure life for themselves and their children and again the opportunity to perpetuate their ever increasing standard of life. An increasing standard of life that is reflected in longer life expectancy coupled with a greater quality of life, better education, and always improving opportunities. Freedom from economic oppression caused by immoral Business practices buttressed by unfair labor laws giving license in favor of Big Business to the detriment of the employee cannot and should not be tolerated by we the people. The question is of course is will we do something about it?
The solution? Change our Government, bring in those that will govern with morality and Fidelity always observing the rule of law, get rid of the Lobbyists, pass the Read the Bills Act, throw out the Republicans and Democrats - neither has your best interest as their priority. They won't leave unless you make them.
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Cliff Carson [send him email] is a freelance writer and Populist Party contributor.
