The Price of Civilization
Here are my highlights and thoughts on Jeffery Sachs The Price of Civilization which may suffice as a sort of cliff notes and hopefully prove relavant to the pressing issues of the day.
On Wealth and Poverty
- I have no quarrel with wealth per se. My quarrel is with poverty. As long as there is both widespread poverty and booming wealth at the top, and many public investments (in education, child care, training, infrastructure, and other areas) that could reduce or end the poverty, then tax cuts for the rich are immoral and counterproductive.
- Our greatest national illusion is that a healthy society can be organized around the single-minded pursuit of wealth.
How we got here
- The economic crisis of recent years reflects a deep, threatening, and ongoing deterioration of our national politics and culture of power. We are not facing a short-term business cycle downturn, but the working out of long-term social, political, and economic trends. The crisis, in many ways, is the culmination of an era—baby boomer era—rather than of particular policies or presidents.
most defining moment of that era I believe is the Civil Rights Act. The parties we experience today are in many ways governed by that rift. The deterioration of our national discourse and it’s constant under tone of racism, sexism, classism, discrimination can be attributed to this juncture. But don’t forget Vietnam, this rift too remains.
- in the 1970s, the political Right, represented by Ronald Reagan, claimed that government was to blame for its growing ills. This diagnosis, although incorrect, had a plausible ring to it to enough Americans to enable the Reagan coalition to begin a process of dismantling effective government programs undermining the government’s capacity to help steer the economy.
the resulting course of action was more about repealing Johnson’s war on poverty than belief in free market principles and shifting discretionary spending away from minorities and the poor. This is the real class warfare that we have experienced and it has been the driver in increasing economic inequity.
- The 2008 financial crash resulted from a confluence of forces:
deregulation, monetary mismanagement, and reckless irresponsibility by the top management on Wall Street, who lusted after profits with sheer disregard for their shareholders, workers, and clients.
our share of the blame:
- American society is too deeply distracted by our media-drenched consumerism to maintain the habits of effective citizenship.
- Americans are repeatedly overconsuming today and regretting it tomorrow, whether by overeating, overborrowing, overgambling, excessive TV viewing, or indulging in yet other addictions.
if that isn’t apparent we may not find any common ground
- We are paralyzed by a shared lack of serious attention to our future.
our discourse on impending crisis of critical resources water, food, energy non-existent due to subdued populous, chronically entertained.
- Our challenges lie not so much in our productivity, technology, or natural resources but in our ability to cooperate on an honest basis.
despite all of these problems we are an extremely powerful economy and people with the capacity to do far better. It is a willful ignorance and lack of will more than ANY factor that holds us back.
- “The insulated mindset of individuals who know precious little history and civics and never read a book or visit a museum is fast becoming a common, shame-free condition.”
If you’ve made it this far you are free from my criticism but democracy is founded on knowledgeable citizens, we are collectively dropping the ball and it will be posterity who will suffer our ignorance.
Two Party System?
I will be voting for Obama again in 2012. He is not above my criticism, my criticisms however are different from those that come from the right of the spectrum because they are founded in the consistency of my political ethicand are not conditional fantasies peddled by anti-intellectual peons.
- Bush supported large deficits, in order to maintain low taxes and high military spending; Obama also supported large deficits, mainly as a macroeconomic stimulus.
large deficits from high spending and simultaneous tax breaks equals out of control debt, Econ. 101. Parties spend more in power and parties advocate austerity in the absence of power, Politics 101.
- Bush wanted tax cuts for 100 percent of households.Obama campaigned on tax cuts for 95 percent of the households but, when the deadline approached in December 2010, agreed to extend tax cuts for all.
- Bush favored nuclear power and deep-sea oil drilling; Obama favors nuclear power and deep-sea oil drilling.
- Bush filled his White House with Goldman Sachs and Citigroup executives; Obama has done the same.
- America’s political system today to be not so much a true democracy as a stable duopoly of two ruling parties.
This is not to say objectively there are not meaningful differences in our candidates, there are. Who pays for their campaigns is of paramount importance. Election years will magnify differences but this is a red-herring to enact centrist corporate agenda.
Corporate America
- There is absolutely no economic crisis in corporate America.
- Corporate profits in 2010 were at an all-time high.
- Wall Street compensation in 2010 was at an all-time high.
- It began with globalization, which pushed up capital income while pushing down wages. These changes were magnified by the tax cuts at the top. CEOs then helped themselves to their own slice of the corporate sector ownership through outlandish awards of stock options by friendly and often handpicked compensation committees
- A typical hedge fund manager receives as compensation a fraction of the assets under management and of the profits earned on the portfolios. Under an obscure IRS rule, the profit earnings are not treated as ordinary income for the manager, taxable at 35 percent, but rather as capital gains, taxable at 15 percent.
Mitt Romney will take any further questions on how to capitalize on this loop hole.
- Of the 100 largest public traded U.S. corporations, 83 reported operating in tax havens, tens of billions of dollars of revenues are lost per year as a result of shifting corporate profits out of the United States through transfer pricing and similar means.
Tax shelters should become a major part of our discussion. Personal income tax dominates our discussion but in terms of taxable income this is where the meat is.
The Way Out!
- Market forces, alas, will never solve these threats but only exacerbate them, until society, acting collectively at last, mindfully commits to creating a protective cordon around the threatened planet.
- America desperately needs a coherent energy strategy, since the country is being hemmed in on three sides:the global scarcity of oil; the intensifying competition over supplies in unstable regions of the world; and the environmental risks of a continued rapid rise in fossil fuel use.
couldn’t agree more.
- we must convince our fellow citizens that knowledge of science, and expert knowledge more generally, is vital to our well-being and even survival.
energy and climate problems necessitate new technologies to address
- the common thread of conviction is the Principle of Humanity: “Being human must be the ethical yardstick for all economic action.”
- The economy should fulfill the basic needs of human beings “so that they can live in dignity.”
- [We must foster]the importance of respect and tolerance for others; the right to life and its development; sustainable treatment of the natural environment; the rule of law; distributive justice and solidarity; the essential values of truthfulness, honesty, and reliability; and the core value of mutual esteem. The global market economy must remain guided by humane purposes and not be regarded as an end in itself.
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Frank Apisa
Kerry Lauerman
Joan Walsh
Salon.com
Comments
Allow me to summarize your point of view: the economy is a zero sum game. To the extent the rich are taxed and their wealth is redistributed to the poor, we will alleviate (not eliminate) poverty. However, the economy, as countless economists will attest, is a non-zero-sum game. In other words, as it grows more people will be lifted out of poverty because with a healthy economy comes jobs and less of a demand on our social welfare programs. In other words, one does not build a healthy economy by taxing the successful to reward the unsuccessful.
On a micro-level walk down the street and find the busiest hair salon you can find. Voila…more people working than in the sleepy salons. On a macro-level, take a look at the China. The strong economy has lifted over a billion people out of poverty. The surest way to sap the growth of your local hair salon or China is to force them to pay, via taxes, a portion of their success to the less fortunate. How hard would you try if you knew 75% of what you make ends up in the hands of someone else?
Stated differently, suppose it’s discovered that rich people drink more water than the poor who drink too much soda. Rather than force rich people to drink soda wouldn’t a smarter choice be to figure out a way for poor people to drink more water?
With regard to your point, " as it [the economy] grows more people will be lifted out of poverty because with a healthy economy comes jobs and less of a demand on our social welfare programs." That idea is yet to be demonstrated. Record profits have been reported throughout this recession and those profits are not reflected in job growth.
Companies and individuals invest for one reason…to make money. To the extent taxes rise, the prospect of making money declines. Please tell me you aren’t suggesting that companies will be more likely to invest their profits with a higher tax bill?
If you’re looking for a demonstration of an economic system where a healthy economy leads to more growth look no further than the United States of America. But if you know of a better system than capitalism please enlighten me.
One particular sentence stands out:
Our greatest national illusion is that a healthy society can be organized around the single-minded pursuit of wealth.
It should have been written all in caps; in bold typeface; and in large size print. We simply have to get away from that!
Since I have lived all my life after the Regan years I never got to experience this great country when a larger share of discretionary spending was targeted at keeping people out of poverty. All I have ever experienced is the cutting of funds to social programs and I have watched the state of the nation suffer as a result. Growth has been a constant, GDP has grown at about 3% my entire life and profits have soared and yet that growth has not yielded the results you claim. My generation is the most educated and most under employed to date, if that is the fruits of the growth you're talking about I'll let you keep it.
My purpose is to identify inequity and injustice and root it out. Fortunately, I have youth and the course of history on my side and one day we will have a discourse that doesn't involve fictional a capitalist country.
Thanks for reading and commenting!
Do tell, whose illusion is it that our society is organized around the single-minded pursuit of wealth?
Simon:
“we use socialist elements to produce public goods where profits would add waste”
“with further privatization of public goods we could get there”
I left my secret decoder ring at the office so I’m afraid I have no comment on the statements above but to say “huh?”
I know this sounds very third grade but I think you’re a very confused likely stemming from misinformation. Untangling your confusion will take more sentences than I’m in the mood to write, which leaves information as my only response. It’s is patently false that we have been cutting funding to social programs. The federal budget, especially over the last three years and especially for social programs, has soared. There are more false statements, but much like a house of cards, your arguments rely on the premise of cuts.
As for me the opportunity cost of this conversation is too rich for my blood(gotta catch the Clippers). Digest what you've taken in and stay tuned my friend and it will start making sense!
much more on econ in my blog.
Fever…you wrote:
Do tell, whose illusion is it that our society is organized around the single-minded pursuit of wealth?
You were referring to the sentence: Our greatest national illusion is that a healthy society can be organized around the single-minded pursuit of wealth.
I would say that when Simon (or Jeffrey Sachs) wrote the words to which you refer, the thought that was being transmitted was that there is an element of our society obsessed with the pursuit of wealth to the detriment of caring about one another…to the detriment of understanding that some of our number are not able, physically or mentally, to compete adequately in a “Hooray for me, screw you” society.
We probably would be a better society and the world would be a better place if that were not the case…even if the wording had a slight element of hyperbole to it.
Try to understand the communication…or refuse to do so. The choice is yours.
As for me, I loved it to the point where I wanted to highlight it and promote it. Thanks for helping me do that again.
We’ve identified four people that don’t believe a healthy society can be (currently is) organized around the single-minded pursuit of wealth and no person that believes it should/is. That pretty much defines the word “hyperbole”.
Let’s cut out the bull shit for a moment, Simon, Sachs and you think Republicans don’t care about the poor and I do. Your evidence is that we Republicans don’t believe in wealth redistribution. I counter with the concept that the poor would rather a job than dependency on the teat of Government. For those that still don’t make it there are charities and Government safety net programs. Now I would be happy to explain to you (Simon is pretty much a lost cause) both the logic and economics of my way of thinking or you a free to spend more time in hyperbole-land. The choice is yours.
I'm encouraged you keep coming back because despite the rhetoric it shows I have your attention and it demonstrates the need of far younger people like myself to get involved. When something like the principle of humanity becomes divisive we understand it is an out-dated ethical view that you are afflicted with. My generation does not share your view on humanity as is evidence with our overwhelming support of same sex marriage. You will find increasing frustration as my generation takes over and you see truths you've held near and dear get marginalized to the fringe and into irrelevance.
Let’s cut out the bull shit for a moment, Simon, Sachs and you think Republicans don’t care about the poor and I do.
Ummm…that is overstating the case for what I think about Republicans. I deficiently think the Republicans (conservatives) place a lower priority on helping the poor and disadvantaged than do…Democrats (progressives), for instance, but I certain am not of the opinion that they do not care about the poor at all.
I also think Republican/conservative priorities are aimed in a direction that gives less attention to helping the poor and disadvantaged than do the priorities of the Democrats/progressives.
Your evidence is that we Republicans don’t believe in wealth redistribution.
Au contraire, Fever, I think Republican/conservatives ARE interested in wealth distribution, but unfortunately, I think you want the direction of the redistribution to go in (what I consider) the wrong direction…toward the wealthy and away from the poor.
I counter with the concept that the poor would rather a job than dependency on the teat of Government.
And I would counter that many of the poor would just as soon suck at the governmental teat than do some of the shit jobs that they have to settle for. Many of them, by the way, I think should be kept out of the workforce if at all possible, because they help best by not helping. There are, Fever, many people who are so incompetent and averse to work, they subtract from productivity by being forced to work. (Another topic we can go into somewhere else.)
Your notion that the poor would, in general, rather work than sit at home sucking beers and watching television if they could is naïve.
For those that still don’t make it there are charities and Government safety net programs.
Okay, and I want to protect those governmental safety net programs…and I think the best way to do that is to keep Republicans/conservatives out of office and see that progressives are elected.
Now I would be happy to explain to you (Simon is pretty much a lost cause) both the logic and economics of my way of thinking or you a free to spend more time in hyperbole-land. The choice is yours.
I am not in hyperbole-land…and that statement is itself rank hyperbole. We can discuss these issue, if you like. But I have a feeling any explaining to be done is more likely to come from people like Simon and me…than from you. But I AM WILLING TO LISTEN TO WHAT YOU HAVE TO SAY. Let’s discuss. Simon has invited us to do so.
We’ve butted heads before and seeing that the only person paying attention is Simon, I don’t think it behooves us to waste more time. As with Simon, I’m simply going to point out one misconception and watch your arguments fall down like a house of cards. Let me see…so many to choose…Democrats “want to protect those governmental safety net programs”.
In case you haven’t noticed, the country is running off a debt cliff akin to Greece. The main drivers of this debt are safety net programs. The Republican controlled House passed a budget which saves these programs whereas the Democrats have passed nothing.
The main cause of the debt is freakin' stupid, destructive conservative policies. The debt skyrocketed beginning with Reagan and subsided a bit under Clinton, only to zoom skyward again under Bush.
The main driver of future debt is healthcare costs, which began zooming upwards under Reagan, making America famous for paying the most for the least. American Exceptionalism.
Social Security is in surplus and Medicare A is also paid by a specific tax.
After zeroing-out the paid for programs, the main driver of our debt is defense, easily. The main reason we don't have the revenues to cover this Republican debt and deficit mess...besides the crashing of our economy...is stupid, unpaid, created purely by borrowing from the future, Republican tax cuts.
You must not know the difference between math and meth, but we can always count on you delivering the True Believer Tool comments.