Why Economic Justice Matters: This Machine Provides Solutions (Part 2)


IMG_0031Faced with the onslaught of fascism and nationalism, finding a well fertilized situation in current economic trends, the question arises as to what we should do. Increasing the minimum wage in such a situation seems a bit too little, too late. Increasing the minimum wage would hold the same effect as to throwing a bucket of water onto a home engulfed in flames. Sadly, we do need a revolution to fix the numerous problems in our system. We need an entirely new way of thinking through our economy. We know the problems rest with greedy CEOs increasing their pay while keeping worker wages stagnate. We know the problem is that if the workers threaten to strike or unionize in order to obtain better wages, the jobs will just ship overseas to near-slavery conditions.

Increasing taxes on the wealthy – while necessary – doesn’t promise that we’ll distribute the wages. After all, while increasing taxes in the 1950s worked well the world wasn’t nearly as globalized as it is now. Globalization almost takes away the impact of increasing taxes on the wealthy as jobs can still be sent overseas in order to increase profits, a way to make up for the increase in taxes. Increasing the minimum wage is just ineffective. Capping CEO pay also makes little sense as any cap would be quite arbitrary. Plus, one might be the CEO of a company, but also be the only employee of that company (which can happen if one is a consultant to other companies). So can we really cap that individual’s income? Such an argument makes little sense.

There’s the other issue that while some forms of Democratic-Socialism have shown to lower income inequality, it also creates a high tax burden and does tend to make workers less productive. For instance, Financial Times reported back in 2014 that productivity in the Nordic nations had dropped and that cracks were beginning to show in its welfare state. Part of the problem is that people have such a huge safety net in Nordic nations that there’s little incentive to work harder. It’s why the Nordic nations have some of the highest income inequality in Europe, but also have the strongest middle class – the government essentially props up the middle class with little effort required from businesses. Such a model, while admirable and a good temporary solution, is not sustainable and will eventually need to be revamped.

So what do we do? How do we create a system that averts the problems of nationalism and fascism? How do we improve our economy to the point that people see no need for a revolution or to radicalize? I can see two options. These options presented are by no means comprehensive and are barely an introduction to the two potential solutions. Likewise, these solutions are not mutually exclusive – both could be put in place and I’d recommend both be put in place. They are way outside of the box, but that’s what we need. We need a system meant for the modern era and we have to stop pointing to past solutions for modern problems.

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Why Economic Justice Matters: This Machine Kills Fascism (Part 1)


JPEG image-552A266454C7-1It’s a common argument against socialism (or what is perceived as socialism): “We can’t have complete economic equality because it’d remove all incentive to work harder and be innovative.” And to a certain extent, that’s completely true. Why would I work harder to take on a position of more responsibility and risk if I didn’t make more money for it? Certainly there are some out there who’s egos alone would push for such a promotion, but at some point most people would ask why you’d want to be the CEO when you can make the same amount of money as being the janitor.

Yet, a similar argument that’s rarely brought up is that low wages have the exact same effect. After all, if people on the “fry line” or “flipping hamburgers” sees their managers, even general managers, struggle to pay bills, sees them on government support, sees them struggling paycheck to paycheck, then why work harder to take on that responsibility? If you tell someone who struggles to put food on the table that with 5-10 years of real hard work they can finally break through to the lower-middle class, what incentive is there in working harder? The more the middle class shrinks and the less meaning there is to being middle class (in that it doesn’t really provide as high a standard of living as its used to), the less incentive there is to work harder or be innovative.

Thus, it seems there’s a happy medium to be had, one where wages are staggered enough to provide enough incentive to work harder and be innovative, but pay well enough to provide enough incentive to get to that new position.

And that, kids, is why the minimum wage debate is so pointless. We’re debating over the minimum a person earns, which impacts about 3.9% of the population. Not that I’m against raising the minimum wage – we need to – but that in the best case scenario, raising it will give us one to two years of economic growth. After that, we’re back to debating on raising the wage again. And raising the minimum wage would inevitably send some jobs overseas (jobs that would have gone eventually, but an increase in minimum wage would be the tipping point). It wouldn’t be the doomsday scenario of conservative talkshow hosts, but it also wouldn’t be the economic utopia of liberal think-tanks. Raising the minimum wage, while necessary and overall good (even with some negative consequences), is focusing on the wrong problem.

See, our economic problem isn’t that our minimum wage is too low, it’s that our median wage is too low. Now, ultimately, our problem is greed, but you can’t legislate people to be virtuous and to give up their greed. You can, however, create an environment where they can’t practice their greed, or where you can limit their pursuits in the name of greed. After all, I can’t legislate someone from hating another person, but I can legislate stopping them from acting on that hate. Likewise, while I can’t prevent people having an attitude of greed, I can prevent them from acting on that greed. The reason our median wage is so low is because we’ve allowed people to act on their greed, and it’s time to stop.

When we allow economic inequality to continue, when we allow the poor to become poorer, when we allow the middle class to disappear quicker than the polar bears, we create an environment that inevitably leads to a revolution of sorts. The times we face are hardly unique to world history. Economic inequality preceded many horrible events in history, such as the French Revolution and the Bolshevik Revolution. In both cases income inequality erupted into violence. But we often forget that income inequality and its crippling effect on a nation preceded the election of Benito Mussolini and Adolf Hitler. Both Italy and Germany suffered from high income inequality prior to the rise of fascism, and Germany suffered from a national inferiority complex due to losing WWI (which radicalized their fascists into Nazis, a more extreme version of fascism). A combination of national pride, blaming of the “other,” and workers not making enough to live led to the eventual conquest of fascism.

Fast forward to the modern era and we’re on the brink of seeing a revival in fascism, both in Europe and the United States. In Europe the far-right parties such as UKIP (United Kingdom), Front National (France), Law and Justice (Poland), Danish People’s Party (Denmark), and many other nations are experiencing an increase in nationalistic movements. These movements typically focus on the struggle of the working class, but tend to blame immigrants rather than the ruling elite (though the ruling elite are still blamed, the vitriol is saved for immigrants). Within the United States we have Donald Trump on the verge of victory in the Republican Party and a legitimate shot at winning it all. Fascism is alive and well, but it doesn’t appear ex nihilo. Rational people who lead comfortable lives don’t just wake up one day and go, “You know what, I hate immigrants, the poor, and want a revolution.” Fascism can only find berth in a revolution, and a revolution only arises out of discontent. The breeding ground for fascism – lack of economic growth, stagnation in the real economy, lack of motivation to move ahead, a loss of hope – are real issues. Failing to adequately address and fix those issues will almost always lead to horrible results.

We’ve had 30 years of globalization policies that have all but destroyed our economy (as well as many other economies). There’s a popular video going around about a Disney worker losing his job and having to train foreign workers to take over his job, workers hired by Disney because they’ll work at a cheaper rate. Manufacturing jobs lost in the 80s and 90s due to recession went overseas and will never return. Wages have stagnated and fallen. We have an entire generation today that is worse off upon graduating high school and/or college than generations before them, which is a first in American history. A populist backlash – and make no mistake, fascism is populist, as is socialism – was inevitable. That backlash has taken on the form of Trump in the United States, but resembles different leaders and candidates in other nations.

The above are all very real problems. It’s a problem that a job can be sent overseas to near-slave labor (which doesn’t benefit the worker in that country or the worker in the US). The wage gap in America is a massive problem, allowing the super-rich undue influence in politics, which secures their position while lessening the position of the average voter. By ignoring economic justice, by removing our economic policies away from doing what is right, we’ve created a very dangerous situation, a breeding ground for one of the worst political ideologies to come out of the Enlightenment.

What, then, are we to do?

Why Millennials Want Bernie Sanders or, How America Could Have Stopped Socialism


N6YQRW1Bernie Sanders offers free stuff and makes socialism look cool. After all, all the rad kids are down with Democratic-Socialism. I hear tons of 20-somethings are totally dressing as the late Michael Harrington (a famous Democratic-Socialist thinker for you squares out there) this Halloween. What these young whippersnappers need to remember and learn is that they’re not entitled to anything and there’s no such thing as a free lunch. Just because they can #FeelTheBern for free and legal marijuana and Xboxes doesn’t mean socialism suddenly makes sense.

Of course, when we remove ourselves from the rhetoric of Baby Boomers and even Generation X (the last generation to have a shot at the American Dream), the support for Bernie Sanders among millennials does make sense, even if it’s misguided. What people fail to understand is that the world for someone who is 20-something years old isn’t the same world for a 20-something year old 20, 30, or 40 years ago. 40 years ago students could work a full time job at minimum wage and pay for a college education while also paying for rent at an apartment. Back then minimum wage was $2.30 an hour, or about $9 by today’s standards. That’d earn a minimum wage worker $4,784 (give or take) for the year. Going to school full time would have run a tab of about $2,600, or half their income. So even for those who couldn’t squeeze that full amount, a small loan could take care of their education and, even in a worst case scenario, they’d be able to pay it back relatively quickly after graduation. Of course, earning a college education back in 1976 would have guaranteed a middle class job with a middle class income. And the average rent in a big city ran around $220.

Compare that to today’s standards. If a student works full time while going to college at minimum wage, she’ll earn $15,080 a year (give or take). The average four-year degree at a public institution will run $17,500 a year, which is more than her income. Also, the average rent in a big city has jumped to well over $1,500 a month (assuming she’s not in government housing). And all this for a degree that won’t necessarily guarantee a much higher income. And I know, we can say, “Well go get a trade school degree,” aside from ignoring implicit idea of creating a servant class, trade degrees are very susceptible to new technological advances or even market saturation: If everyone has a trade degree, then the value of having a trade degree drops. The overall point is that the economy today for those entering college, leaving college, or who have been out of college since 2000 is in a dire situation.

What’s more is that there’s no hope for millennials. The trend we’re seeing in the economy right now is that as Baby Boomers retire, rather than younger people taking the vacant positions, the positions are either being eliminated, rolled into another position, or shipped overseas. Even those lucky few who do get to take the positions are typically treated to significantly lower wages than their predecessor, because of “experience.” While not typical in all situations – especially in upper management – it’s very true for the average worker. Ideally, as Baby Boomers retire it should create a job vacuum, which would naturally increase wages and decrease unemployment and underemployment. But instead, we’re seeing absolutely no increase in wages or progress for those under the age of 30.

What the above means is as follows: As Baby Boomers retire, the younger generations are not inheriting better jobs and better wages. In fact, already we’re at a point where the majority of Americans are no longer in the middle class. Since 2000, even though Baby Boomers have begun to retire, we’ve seen no real progress in wages and no high demand to fill those jobs. That means over the next 10-15 years, as the last of the Baby Boomers begin to enter into retirement, we’ll watch the complete disappearance of the middle class. People will either be rich, or they’ll struggle. There will be no one who just lives comfortably, who while not rich or wealthy, can still put money into savings and retirement. What that also means is that in the next 10-15 years, the US tax-base is going to shrink considerably. Even if we taxed the top 10% income earners at a 90% rate – which is almost too heavy a burden for most people even in the top 10% of income earners –  that still wouldn’t be enough to fund our government. Historically in the 20th century the United States was able to grow, create highways, run mostly efficient projects because of the large US tax-base. After all, it’s better to collect hundreds to thousands of dollars from hundreds of millions of people than millions of dollars from hundreds to thousands of people.

As it is, we’re looking at a situation where within 20 years the United States is going to struggle to pay for some pretty basic things. Already we’re watching our infrastructure completely crumble because there’s not enough revenue being pumped into necessary projects. Many police departments are underfunded, leading to legalized corruption in civil forfeiture. In the states, most schools – especially low-income schools – are significantly underfunded. Imagine how these things will work 20 years from now. Most government money will likely go to wealthy areas of the country, while the rest of the country is ignored or remains underfunded. As it is, 1 out of 5 Americans is on some form of government assistance, or welfare to use the pejorative term (medicaid, SNAP, housing assistance, Supplemental Security Income, and Temporary Assistance). You can’t just mismanage funds to get on those programs as they’re based on your income, not how you use your income. That means21% of the country earns somewhere around or below the poverty rate. When compared to other industrialized nations, it’s pathetic. If we increase the number to include social security, veterans’ benefits, unemployment, and other social services, that number increases to 49%.

We’re heading towards a nation that, within 10-15 years, more people will be taking money from the government than putting money into the government. Not because they’re lazy, not because they’re “moochers,” but because that’s how we’ve set up our economy to function. Such a government simply isn’t sustainable, so cuts will be made, meaning benefits will be cut. That always leads to unrest and can harm a nation.

So the above is exactly what millennials have to look forward to. And along comes a crazy-eyed, wild-haired, tough-talking guy pointing to other nations using Democratic-Socialism, pointing out how it’s succeeding, pointing out how it works, pointing to a brighter future, and you wonder why millennials are drawn to him? I know enough about the Nordic system to know that what Sanders says it is and what it actually is are two different things. I know enough to know that his plans are really a bastardized version of the Nordic system. And I know enough to know that his plans, while significantly flawed, are still better than our current system. The dark future that awaits us is why millennials are willing to look at Sanders and hold out hope. Personally, I like what Sanders offers and will probably vote for him, not out of hope, but out of, “Well, our current path leads to doom and some of his ideas have worked elsewhere, so let’s try it.”

What’s worse is that all of this could have been prevented. A person who earns a livable wage, who can save up money, who has good healthcare, who has a secure retirement plan, and who knows that they’ll continue to be promoted and advanced with hard work doesn’t want to pay higher taxes, doesn’t want multiple government programs to solve for poverty, and doesn’t want socialism. It’s why Baby Boomers – who have spent most of their lives in the middle class – are so opposed to Bernie Sanders. It’s why millennials – who will never be in the middle class – like Sanders. Not because he’s cool, different, or hip, but because he sees the problem and offers a solution. But if the problem didn’t exist, then they wouldn’t need Sanders’ solution. The problem does exist, and it’s caused by greed.

Contra Gordon Gecko, greed is no good. Greed is a cancer, but worse than cancer. Cancer is random and not celebrated, so everyone fights it. Greed, however, is intentional, chosen, and celebrated, so it spreads and consumed everything in its path. Millennials don’t care that millionaires exist or that corporations have made massive profits; what they care about is that these profits haven’t been dispersed to the people who earned them, the workers.

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US corporate profits after tax have increased dramatically since the early 90s. But when we look at income…

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Income has failed to match corporate profits. Which, to a certain extent, who cares if a CEO earns millions of dollars a year? I certainly don’t. If I can pay for the necessary things in life and lead a comfortable middle class lifestyle, not worry about my future, know that one day I can retire, why do I care that the CEO makes millions? But when his millions come at the expense of my paycheck? Well, now I care.

See, millennials don’t care that there are rich people, what they care about is that greed has essentially collapsed our society and economy. We’re just waiting on the other shoe to drop from 2008. If you want to know why millennials are turning to a self-avowed socialist, it’s not because they actually want socialism so much as it is they hate greed and what greed has done to our system. Greed is a horrible thing, a destroyer, and it’s causing the collapse of our nation.

Millennials, right or wrong, support Sanders because no one has supported millennials. Because we’ve allowed greed to run rampant, because we’ve celebrated greed, because we’ve created a system where the greediest people reap all the rewards, we’re looking at the decomposing flesh of what could have been a great nation. Greed is killing our nation and the masses are growing restless. This can either be settled through the wealthy giving up their greed and sharing their wealth voluntarily (ideal situation), or it can be given up through a political revolution by electing a far-left candidate (not ideal). Or, if the political revolution is stopped, one can only wonder when people will become so desperate that they’re willing to take to the streets in massive protests and riots (really not ideal). We came close in 2008, so it’s not difficult to imagine another shake up causing a more violent response.

So stop with the belief that millennials want free stuff. They don’t care about stuff. They just want a future. And if the wealthy business owners and CEOs don’t see fit to give them that future, they’ll vote for anyone who can promise it to them.