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Yes, I Can!  Why We Should Act, Not Gripe!

By Shlomo  Maital    

Germain Christophe & wife

   In our new book Cracking the Creativity Code (forthcoming, SAGE India, late Fall),  we offer 10 ‘exercises’ for stimulating the brain’s creative thinking.  The very first, perhaps the most important, is “Act – don’t just Gripe!”.     Once in a while, when there is a problem that angers or saddens us, we have to take action, and not just wring our hands and complain.  Find a creative solution to a problem, then…do it! Adapt Obama’s slogan (which he stole from an African-American woman, who used it to empower black women) and  transform it to  first person SINGULAR: Yes I can!   At least once in a while.       A post on Facebook drew my attention to this:     France’s parliament has passed a law allowing workers to give some of their days off to a colleague with a seriously ill child. The idea came from the case of a man whose colleagues donated 170 days while his son was battling cancer.    The man is Christophe Germain.  He works at the Badoit water plant, in France. When his son fell ill with cancer, his fellow workers ‘donated’ 170 work days to him, so he could be home with his dying son.     Now, the Member of the General Assembly for Christophe’s district has sponsored a law in Parliament, to enable any worker to donate work days for a fellow worker who needs compassion leave.  And the law passed!     Congratulations to the French General Assembly!  Congratulations to the Member of Parliament (from a right wing party, by the way!).   And congratulations to France, a nation that has a heart and is unafraid to let it guide its legislation.        Act, don’t just gripe.  A handful of good people did, in France, and have changed their country, and perhaps the world.   Yes, I can!    Try it.      The little boy died in 2011.   Christophe attended the Assembly debate on the proposed law.  The Socialists opposed it.  Shame on them.   If socialists oppose a law just because a right-wing party proposed it, they deserve our scorn.

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Is Money the New Morality?

It is – And That’s Good!

By Shlomo  Maital

Russia capital flight

Really bad things are happening in the world today – and good people seem powerless to do anything about it.  Syria’s Assad bombs civilians.  Russia’s Putin grabs Crimea.  Unspeakable crimes occur in Central African Republic.  And that’s just a start.  The United Nations?  Deadlocked.  Obama?  Words, no deeds.  European Union?  Russia’s gas and Russian oligarchs’ money parked in London dominate. 

    But guess what.  Where good people fail, money succeeds.  Here is how.  When countries like Russia do bad things, money flees.  When money flees, the currency declines, inflation rises and economic growth plummets.  This is happening to Russia, according to the World Bank.  Putin is paying the price — not because of Obama sanctions, but because of market economics.  Here are the figures:

    “… the (World)  bank said Russia’s gross domestic product (GDP) might shrink by 1.8 percent in 2014. …. The Economy Ministry estimates net capital outflow (out of Russia) at up to $70 billion in the first quarter alone, compared with $63 billion in the whole of last year.  … the World Bank envisages capital outflow at $150 billion this year and $80 billion in 2015. This year’s forecast exceeds the $120 billion in capital flight that Russia saw in 2008 during the global financial crisis. … The outflow of money will put further pressure on the rouble, which despite its recent firming is still 7 percent down against the dollar this year.   The weakening of the currency is likely to put upward pressure on inflation, which the World Bank sees at 5.5 percent in 2014, higher than the upper end of the central bank’s targeted range of 4.0-5.0 percent.”  

    So, it’s very simple.  When countries’ leaders do bad things, money flees.  Flight of capital trashes the economy.  People suffer.  They protest.  And eventually, the bad leader leaves, is removed, flees, or is forced to adopt repressive measures, which ultimately fail.  Russia cannot afford to lose $150 b.

   This is the new morality.  Money and capital keep leaders in line, not ethics, values or Obama.   It’s the new ethics of globalization.

    Is it so bad?   The message is:  Run your country properly, treat your people well, or, the money will leave and go elsewhere, where leaders are smarter and more ethical.     And every country needs to keep its capital at home, rather than flee abroad.

    The morality of the new global system is money.  Let’s watch Russia closely to see if it really works.  

Piketty: The Super-Rich Will Own Us

By Shlomo  Maital

Piketty

Thomas Piketty’s new book Capital in the 21st C. (Harvard/Belknap) should get him the Nobel Prize. It won’t because it is basically just carefully-built data.  But the data are shocking. And it took a French economist to do it; except for Paul Krugman it seems that the collective brains of the American economic establishment have shut down for good. 

  Piketty’s book is 700 pages long. Few will actually read it.  But the fierce and growing inequality he documents has already drawn huge media attention, and even the IMF is in on the act, with Christiane Lagarde (IMF Director-General) announcing that the IMF believes inequality is bad for growth, and pro-equality policies can actually stimulate economic growth.

    I will save my readers the time and effort of reading this huge book, by summarizing it.  Piketty says, there is “an oligarchic type of divergence, in which the rich countries would come to be owned by their own billionaires…or in which ALL countries would come to be owned by the planet’s multi-millionaires and billionaires…. All the ingredients are in place for the top centile and thousandth of the global wealth distribution to pull farther and farther ahead of the rest.”

    This has already happened, to a large degree.  Oligarchs run Russia.  They own the media in my country, Israel. They are powerful in America.  They are powerful in China.

     Why is this happening? Simple.  If you have great wealth, you can earn on average 6.8 per cent annual return (above inflation).  This doubles your wealth every decade, without your having to really do anything.  And you can keep the profits, because the wealthy easily find tax havens.  If you have little wealth, you earn maybe 1 per cent, and then you get taxed.    When the wealthy double their wealth every decade, in 30 years it is 8 times what it was at the start.  Great wealth confers huge political power. You can buy the media, you can buy lobbyists, and you can, yes, you can buy politicians. 

     Karl Marx got one thing right, and one thing wrong. He said that wealth would become more and more concentrated, under capitalism.  Right.  He said that the people (the government) should confiscate national assets and run them.  Wrong. Governments can’t run businesses.  

  Piketty’s solution is very French – perfect, optimal and utterly impractical. Impose a global wealth tax.  What are the chances this will happen, when the oligarchs already wield immense political power?  If one country does it, the money will flee to another, happy to welcome it by offering tax havens. 

   Either there will be enormous social upheaval, to bring the oligarchic wealth back to where it belongs, and decades of suffering and instability,  or we the people will find some clever way to deal with this ‘doom loop’, which is leading us to destruction.    The current situation cannot continue.  And Occupy Wall Street was largely ineffective, like the Arab Spring, because it brought passionate protest, it brought attention to a critical problem – but offered no creative solutions. 

     The solution?   To be presented in a future blog.  

     

Blog entries written by Prof. Shlomo Maital

Shlomo Maital
May 2014
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