The Economy!! This term has become broadly known for describing the performance, accountability and credibility of a government or corporate entity. It is used to measure the performance of these bodies with respect to “market indicators” of growth, success, and sustainability. Unfortunately, it is rarely used to monitor and measure the impact, effect and outcome of economic decisions upon the average lay person in the population, that hard working family with the 2.4 children, one dog, one cat, a mortgage, and two cars. The twenty first century economies of the world have become so driven by achieving arbitrary targets and performance indicators (KPI’s) set by market analysts and other people with vested interests, that many people in the street (the author included) fail to understand what the myriad of terms, numbers and definitions actually mean to them. To most people, good economic management is basically making sure that you have enough money coming in, to pay for the things you need and want to buy, and then to have a little bit left over for a “rainy day” into the future, should it be needed in an emergency or unplanned situation. When we are daily bombarded with numbers telling us that the Gross Domestic Product (GDP) or the Consumer Price Index (CPI) or any other kind of indicator is up or down relative to another market, or commodity, it simply disconnects most people, and makes them feel that they are ignorant or, quite plainly, stupid for not understanding it. People simply want to know that the economy that they have entrusted to the elected leaders of the community, is in good shape, and that they will be able to put food on the table, a roof over their head, and send their kids to school for the foreseeable future. What has slowly, and inexorably, occurred during the recent past, is an explosion in the number of so called experts whose jobs it is to monitor, adjust, tinker and even forecast the path that economies will take in order to chase a certain indicator value, or inflation rate, or other stimulus that needs immediate attention in the economy. This has given rise to a “market led” economy that has become driven by Economists, Financial Analysts, Share Traders, Stock Brokers, Commodity Brokers, Mergers and Acquisitions, and so many other people whose very job it is to feed off the insecurities, ignorance, simple mindedness and faith that the general population place in them to manage our economies in order to provide us with a comfortable life. The main problem with this is that, we are in effect, placing the future of our economy (and our hard earned savings and living standards) into the hands of the very people who are in a position to most profit and manipulate the outcomes of the economy from this control. Do we really want to give Hannibal Lecter the scalpel to perform surgery on our economy? This is a question that many of us should seriously begin to consider, especially in light of the recent economic events of the past such as the Global Financial Crisis (GFC), the Resources Boom, and the growth of previously third world economies to prominence on the global economic stage. While I personally have no problems with the emergence of these economies into the global arena, I do believe that the resistance and caution shown by existing first world economies to this emergence, is a reflection of the activities and decisions previously made by such “enlightened” market leaders as those analysts and brokers previously mentioned above. The problem that I have with all of this is that, with all the financial pain and insecurity that recent economic changes have brought to the world from such events as the GFC, these very people whose choices, recommendations and actions have brought about these changes, have enjoyed significant and overtly exceptional salaries and bonuses for steering our economies down this path. How is it that we can reward these people with exorbitant salaries when they are never made responsible or accountable for the pain and misery that their decisions have inflicted on the masses of hard working, diligent, lay people who simply try to make a good life for themselves and their families? And the worst part of all this, is that these people are also responsible for the decisions, investment options and future directions taken by the major banks with YOUR hard earned money and investments, while the banks happily charge ridiculous fees and charges for their own services, yet happily pass on any cost increases or, heaven forbid, the result of any bad investment outcomes directly to the consumer, YOU. How is it that one of the most crucial sectors of any economy, the sector that should be responsible and accountable to each and every one of us for directly or indirectly affecting our future financial security, should be in a position to have such total disconnection from us when it comes to “playing” with our money in the world markets? They show little more than disdain at the pain and difficulty that the average person in the street must deal with on a daily basis as they try to build a career, grow a family, pay off a mortgage, and raise their children with appropriate values and morals. Yet they are given free range to effectively “gamble” with our life savings on their own “hunches” about where the markets look to be headed, while all the time never having to worry about the real outcomes because they have a policy of “cost neutrality” where any mistakes made by them can be covered by the many people they are representing. In this way, they are given a sense that they are “bullet proof” because any negative outcomes are quickly passed on to the markets that they themselves administer, and therefore are passed on to the man in the street to suffer the losses, or their successes are quickly used to vindicate their self worth, and to justify and, in some cases, increase their own ridiculous financial rewards. While on this topic, it is pertinent to raise the subject of government complicity in this matter. It seems that most modern governments coming into power in the recent past, have placed far too much importance on “balancing the books” and having “strong economic growth” at all costs because the only real measure of a government’s performance has, in reality, been it’s economic credentials and management. Doesn’t it seem odd, that the people who are elected to govern on the basis of the American creed as stated by Abraham Lincoln, being a “government of the people, for the people, by the people“ seems to forget the one true aim of responsible government? Surely, the well being of the population, the constituents of the elected government, should be placed paramount in the rules, laws and decisions made by government on their behalf? Why then, does the government need to make “tough choices” on our behalf when it is known that they will harm many of the people, if the only underlying justification for it, is “responsible economic management”? I believe that governments need to adapt to changing environments just as a family has to do the same in their own micro economic situation at home… When a family is faced with hard economic times, it sits down, thinks very carefully about its own expenses and income, and makes calculated decisions based on what is best for ALL the family, and not just most or some of the family…Governments should be held accountable to do the same…When times are tough, and the belt needs tightening, the expenses most usually cut first are those that affect the lowest common denomination of society. Social spending, policy and accountability seem to go out the window in order to achieve a “bottom line in the black” as soon as possible again. Surely, it would be in the best interests of ALL constituents when times are tough, for everyone to “pitch in and help those less fortunate during the tough times”? I often wonder if this is because, put simply, the weakest people are the ones least likely to fight back in these circumstances, and so they can afford to be “sacrificed” for the common good of the masses. Why does it seem acceptable to allow the poor and downtrodden to continue to suffer in their circumstances during tough times, while at the expense of retaining the highest standards of living for those fortunate enough to still afford it? This can only create division, resentment, and disillusion in the minds of those that believe their government is there to “catch them when they fall through the cracks”. Is it too much to ask of a government that it take care of its people in all times? Obviously, when the times are good, everyone can benefit and reap rewards from the bounty of the time…but when the times are tough, the government should not allow the excesses of some greedy individuals to outweigh the needs of the many who are at or below the poverty line. Taxes are an inevitable part of life in the world, and it seems only fair that everyone should pay their fair share…But governments should also be charged with the responsibility of making such taxes fair and equitable for everyone…It is simply unthinkable that some companies and very rich individuals should be in a position to pay very marginal taxes on their rather large wealth, when many of the lowest paid workers pay a disproportionate amount of their salary in taxes… It seems that the interminable and endless reviews of the taxation system only end in “tinkering” and minor adjustments to show the perception that the issues are being addressed. But in reality, the issues are more often swept under the carpet because they are considered too hard to fix. The reality is that they are probably too hard to fix because the hard decisions that need to be made, are those that will affect the very people who are charged with making the decisions. For in fact, the hard reality is that if you have more money, and you earn more money, then you should pay more taxes… The taxation rules in most developed countries, being economies driven my consumerism and capitalism, are devoted more to protecting the wealth of those that have it, rather than rewarding those that don’t have it, but want to strive for more. So many working class people seem to say the same kind of message these days, when they lament that it doesn’t pay to work hard any more because the government takes far too much in taxes, and leaves too little to make ends meet. I find it a damning indictment of modern society that such corporations, entities, governments and trusted institutions should essentially run their organizations in such a way that their prime motivation for existence, is greed and profit, and the “almighty dollar”. It seems that the whole world has become fixated on the notion that if the economy is doing well, and the stock markets are climbing, that we ALL have reason to feel good and happy about the world. It is all too easy to forget, for example, that the many homeless people living under bridges, or in sewers don’t quite have the spare cash to invest in stock portfolios or investment properties or even holiday homes like the more affluent in society do. The real question that should be asked of ourselves, is how affluent are we all really? When we allow a pyramidal structure of wealth to exist such that the top few percent of the population controls or owns the vast majority of the wealth, while the best that the rest of the world can only aspire to, is to struggle to put a roof over their heads and food on the table while working one, and in many cases, two or more jobs to make ends meet. And when do any of us have real time to devote to thinking about the truly poor in the world? The people dying of hunger in the developing countries who face daily struggles with starvation, disease, war, famine, drought and the like. Who will tell them that they can aspire to greater lives if they work hard, and apply themselves? Why do we tell them that we go into their countries in order to help them, and to foster their entry into the modern world, when in reality, we simply go in to plunder whatever resources are available for our own use, be it minerals, agriculture, or simply cheap labor in order to allow us to continue to grow our wealth at the expense of yet more people at the bottom of the pyramid. Surely, it is the structure of our world economies that, by definition, MUST create an underclass of peoples who are left bereft of the basics in life, so that the rest can measure their own wealth against it. For there can be no rich or middle classes in the world, if there are also no poor against which to compare. This is the economic sign of the times, and it is the greatest challenge for the existing world economies. How can the first world countries with developed economies assist and mentor the developing third world economies to emerge from the depths, and into modernity, while still maintaining their own relatively superior economies? For without the poor in the world, there can be no rich. To paraphrase the brilliant Albert Einstein….”It’s all relative” Isn’t this a Paradox??
Posted on: Wed, 17 Jul 2013 11:53:01 +0000
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