inequality

Rebuilding the Yellow Brick Road

A new worker-ownership evolution-revolution featuring more virtuous capitalism communities of practice is demonstrating that doing well can realistically and profitably be based on doing good. This brave new economic world is emerging from green-shoot, “made in America” antidotes to structural unemployment and income inequality, sprouting ubiquitously among increasing absentee-owner-plagued urban and rural geographies. Hybrid home, land, and workplace sovereignty-recuperation models through local equity enterprises are building a “new green economy” equation, where labor seeks to operate in a permanent seller’s market as does domestic energy sourcing with renewables and distributed generation serving as means to better, more sustaining, stakeholder-centric ends.

Societal benefits from this approach are inclusive and sustaining. Comparative labor advantages are sourced locally, stakeholders equate to shareholders, and profits recycle to the businesses and communities that produce them. Local labor regains its natural place-based sovereignty in regards to its relationship with local and exterritorial capital which, while necessary and hopefully sufficient, is subordinated to the needs of the working class people and communities it finances instead of the reverse. Under this approach, solidarity as a founding American immigrant-inspiring and hosting community principle so closely aligned with freedom and daily liberties is reborn, rewired, and reused. (more…)

Public/Private Sector Ownership Proposal (P2SOP)

A new socio-political populist movement is sweeping America in reaction to the 2008 financial tsunami of deregulated, greed-based causes and massive wealth transfer effects or receipts to the financial one-percent. Based purely on the numbers seen to date, this movement is and will be composed of rising and current Millennials and the “Net Generation” or “Generation Edge”, immigrants and minorities, plus any white person with a progressive conscience. Converging as a new coalition of the socially and technologically willing, these voters (unless effectively wholesale disenfranchised) will provide a national elections cycle majority for decades as America becomes a majority minority country even though some geographical revisionist and recidivist pockets will persist (such as the Mason Dixon healthcare divide) based on political gerrymandering and subtext political culture.

Represented in numerous cross-pollinating private and nonprofit sector organizations across the country, this movement reacts to no-way-out diminishing expectations and desperation. Practitioners are studying and forming various hybrid, virtuous cycle, cooperative and collaborative capitalism models that honor individual initiative in the context of broad-based and transparent stakeholder ownership centered in “local living economies.” (more…)

The Reading Revolution

The debate over who lost Detroit and how to fix it rages on while Politico reports in “Break-up-the-big-banks fever hits the states” that legislators from “at least 18 states have introduced resolutions this year calling on Congress to split up banking giants by putting back in place a wall between commercial banking, taking deposits and making loans, and investment banking, the world of traders and deal-makers.” It turns out that quarantining the banksters and salvaging our cities have a lot in common in an America that currently ranks below Zimbabwe in global income inequality and social mobility.

The key issue facing America’s liposucked cities is how to monetize assets without giving up public sector control. (more…)

Our Broken Social Contract | The New York Times

By Thomas B. Edsall

Many Americans think that their country has lost its way. But when they try to make sense of what’s happening, they disagree about whether the problem is essentially economic or whether it stems from cultural and moral decay.

Charles Murray, the provocative author of “Coming Apart” and “The Bell Curve,” argues that the cultural insurgencies of the 1960s yanked crucial underpinnings out from the social order and undermined traditional norms of self-restraint, responsibility, family, faith and country. Murray’s latest portrayal of America’s social deterioration focuses on the long-term impact of these insurgencies, notably on a typical, though fictional, working-class community he calls Fishtown. Fishtown is made up of whites who “have no academic degree higher than a high school diploma. If they work, their job must be in a blue-collar, service, or low-level white-collar occupation.”

Murray continues:

Now let us return to the relationship of Fishtown’s decline with America’s civic culture. The decline of industriousness among Fishtown males strikes at the heart of the signature of America’s civic culture — the spirit of enterprise, stick-to-it-iveness, and hard work to make a better life for oneself and one’s children. The divergence in marriage and the rise of single-parent homes has cascading effects. The webs of civic engagement in an ordinary community are spun largely by parents who are trying to foster the right environment for their children — lobbying the city council to install four-way stop signs at an intersection where children play, coaching the Little League teams, using the P.T.A. to improve the neighborhood school. For that matter, many of the broader political issues in a town or small city are fought out because of their direct and indirect effects on the environment for raising children. Married fathers are a good source of labor for these tasks. Unmarried fathers are not. Nor can the void be filled by the moms. Single mothers who want to foster the right environment for their children are usually doing double duty already, trying to be the breadwinner and an attentive parent at the same time. Few single mothers have much time or energy to spare for community activities.

An eloquent description of American social dysfunction comes from my colleague David Brooks, writing about Edward Snowden, who leaked information on domestic surveillance. Brooks argues that Snowden is the product of an upbringing lacking “gently gradated authoritative structures: family, neighborhood, religious group, state, nation and world,” who thus became party to a

rising tide of distrust, the corrosive spread of cynicism, the fraying of the social fabric and the rise of people who are so individualistic in their outlook that they have no real understanding of how to knit others together and look after the common good.

A very different assessment of where and how America has lost its ethical and moral moorings comes from Alan Krueger, the chairman of President Obama’s Council of Economic Advisers. Krueger has argued in two recent appearances, at Oberlin College and more recently at the Rock and Roll Hall of Fame (of all places) that the uncritical worship of the free market in the 1980s allowed the nation’s corporate elite to abandon longstanding constraints in its treatment of labor, especially in shifting the rewards of rising productivity from employees to the owners of capital.

With the blessing of the new right, Krueger argues, corporate America has abandoned its commitment to the commonweal over the past three decades. It no longer honors norms of fairness and equality. To Krueger, it is in the economic sphere that American integrity has been eroded and its ideals corrupted.

At Oberlin, Krueger put it this way:

In considering reasons for the growing wage gap between the top and everyone else, economists have tended to shy away from considerations of fairness and instead focus on market forces, mainly technological change and globalization. But given the compelling evidence that considerations of fairness matter for wage setting, I would argue that we need to devote more attention to the erosion of the norms, institutions and practices that maintain fairness in the job market. We also need to focus on the policies that can lead to more widely shared – and stronger – economic growth. It is natural to expect that market forces such as globalization would weaken norms and institutions that support fairness in wage setting. Yet I would argue that the erosion of the institutions and practices that support fairness has gone beyond market forces.

As the point man for the Obama administration on economic policy, Krueger has become the leading opponent of those who believe that growing inequality and middle-class stagnation are the inevitable consequences of technological innovation and the disruptive force of globalization.

Read the whole op-ed at The New York Times.

Judo Inequality

“Think about it this way. We’re killing people in foreign lands in order to extract 200-million-year-old sunlight. Then we burn it . . . in order to boil water to create steam to drive a turbine to generate electricity. We frack our own backyards and pollute our rivers, or we blow up our mountaintops just miles from our nation’s capital for an hour of electricity, when we could just take what’s falling free from the sky.”

– Sungevity founder, Danny Kennedy –

From “The Secret to Solar Power,” (New York Times, August 9, 2012), by Jeff Himmelman

Subconsciously but in good conscience, Danny Kennedy has framed a solar version of the new “Judo Economy” paradigm. In his “Judo Economy” energy framework, massive amounts of naturally incoming energy are reflected and redirected without impacting and hollowing out the earth’s layered crust, breaking up shale formations, absorbing and contaminating fresh water supplies, or inciting earthquake and volcanic instability. Naturally occurring momentum is deployed as a positive force to society’s advantage as opposed to boxing with the inevitable and unmovable, absorbing one crushing body blow after another. (more…)

The Hidden Prosperity of the Poor | The New York Times

By Thomas B. Edsall

A concept promulgated by the right — the notion of the hidden prosperity of the poor — underpins the conservative take on the ongoing debate over rising inequality.

The political right uses this concept to undermine the argument made by liberals that the increasingly unequal distribution of income poses a danger to the social fabric as well as to the American economy.

President Obama forcefully articulated the case from the left in an address on Dec. 6, 2011 at Osawatomie High School in Kansas:

This kind of gaping inequality gives lie to the promise that’s at the very heart of America: that this is a place where you can make it if you try. We tell people — we tell our kids — that in this country, even if you’re born with nothing, work hard and you can get into the middle class. We tell them that your children will have a chance to do even better than you do. That’s why immigrants from around the world historically have flocked to our shores.

Read this detailed take on inequality from The New York Times.

Countering the Emptiness

In this nation I see tens of millions of its citizens—a substantial part of its whole population—who at this very moment are denied the greater part of what the very lowest standards of today call the necessities of life. I see millions of families trying to live on incomes so meager that the pall of family disaster hangs over them day by day. I see millions whose daily lives in city and on farm continue under conditions labeled indecent by a so-called polite society half a century ago. I see millions denied education, recreation, and the opportunity to better their lot and the lot of their children. I see millions lacking the means to buy the products of farm and factory and by their poverty denying work and productiveness to many other millions. I see one-third of a nation ill-housed, ill-clad, ill-nourished.”

 – FDR’s Second Inaugural Address, January 20, 1937 –

What really has changed 76 years later except that this deplorable statistic has gone from 33 to the 47 percent called out in last November’s election cycle?  Even worse, America’s suffocating and selfish pursuit of wealth inequality has created the highest percentage of absentee ownership since pre-colonial times when European monarchs claimed vast swaths of a relatively uninhabited new world because they could. Today, instead of drawing from its emancipating and egalitarian historical roots to nourish a vibrant middle class ownership society, America competes with authoritarian command and control economies such as China in a global race to determine which culture produces more self-serving and self-reinforcing oligarchs and oligopolies. The worst of these, in turn, conspire to buy elections, park their wealth in overseas tax havens, practice global labor arbitrage with impunity, and then target local government subsistence programs for political extinction.

After four decades of factory outsourcing, American cities and outlying rural regions burned by such a protracted economic genocide siege now face perennial cold winters of geographical inequality exacerbated by societal climate change without cultural transformation. (more…)

The Self-Destruction of the 1 Percent | New York Times

By Chrystia Feeland

Ms. Freeland writes, “The history of the United States can be read as one such virtuous circle. But as the story of Venice shows, virtuous circles can be broken. Elites that have prospered from inclusive systems can be tempted to pull up the ladder they climbed to the top. Eventually, their societies become extractive and their economies languish.

“That was the future predicted by Karl Marx, who wrote that capitalism contained the seeds of its own destruction. And it is the danger America faces today, as the 1 percent pulls away from everyone else and pursues an economic, political and social agenda that will increase that gap even further — ultimately destroying the open system that made America rich and allowed its 1 percent to thrive in the first place.

“You can see America’s creeping Serrata in the growing social and, especially, educational chasm between those at the top and everyone else. At the bottom and in the middle, American society is fraying, and the children of these struggling families are lagging the rest of the world at school.” (more…)

No Longer The “Gimme Election”

This year is no different from any other national election year in recent memory. Primal political party strategies emerging before November’s archetypal vote continue to mark strong differences between “prosperity gospel” versus compassionate conservatives on the right pitted against “divine left” elitist class versus working class progressives on the left. The principal similarities between the two inner party schisms are that both the “prosperity gospel” and “divine left” wings have dominated when governing while the themes of compassionate conservatism and working class justice serve to win elections. Choosing to honor what wins elections while ending this equally flawed dichotomy within either party will create the next decade’s governing mandate.

Similarly, juxtaposing campaign contradictions with economic reality, this year’s presidential candidates confront two principal problems trying to drive a political and philosophical schism between “an opportunity society, where free people and free enterprise thrive and success is admired and emulated,” and an activist, more efficient and effective government working to promote equal opportunities to “ensure that all Americans have a fair shot if they work hard.” First, really smart and competitive nations know how, eclectically, to converge both so that the whole exceeds the sum of the parts. Second, unmistakably skewed U.S. income inequality statistics show that the voting public knows that neither of the two approaches is working correctly either independently or together. (more…)

I Versus We, Me Versus You

For three full decades we’ve seen wrenching social dislocations in America’s rust belt occur when an unleashed, unchained, and morally unregulated private sector picks winners and losers. Today, roughly 23 million Americans are currently unemployed or under-employed, more than five million American homeowners have suffered foreclosure since the 2008 start of the financial “Great Recession” and, as Katrina vanden Heuvel reports in her recent “Extremism in defense of Gilded Age privilege” opinion piece, “the top 1 percent of Americans captured a staggering 93 percent of national income growth in 2010.” Statistics emerging from 2011 and 2012 threaten more of the same.

As a pathway back from this wealth inequality abyss, the Fall edition of the Harvard Business Review, “Managing Your Stakeholders,” stands out as an intriguing oxymoron in a shareholder-centric, “we built it all ourselves” economy that rewards practicing global labor arbitragers with oversized private equity fees for services rendered. The most original piece, “CEOs Must Engage All Stakeholders,” by Venkat Ramaswamy and Kerimcan Ozcan, highlights technology-induced “structural shifts in value creation” platforms that propel successful companies to “engage the individual in both defining and delivering” what really matters to “business-civic-social ecosystems.” According to the authors, these “experience-based,” “co-creative” engagement platforms (“assemblages of people, interfaces, processes, and artifacts”) reach outward rather than inward, embrace the synergistic global creative village rather than glorify just one leading individual, and represent the “new engines of capitalism” with a “more holistic wealth creation process” as their natural outcome. (more…)

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