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Friday, January 13, 2012

Of Candidates and Negative Campaigning

by Rodrigue Tremblay

Happy New Year to all !

“[At Bain Capital] We got money from other people and we would use that to help start businesses or sometimes acquire businesses that were in trouble or not doing so well and then try and make it better or get the businesses to grow.”

Mitt Romney, Republican presidential candidate, former governor of Massachusetts and former venture capitalist and corporate raider (January 8, 2012)

“I like being able to fire people who provide services to me.”

Mitt Romney, former governor of Massachusetts and former venture capitalist and corporate raider (January 9, 2012)

“They [the corporate raiders] apparently looted the companies, left people unemployed and walked off with millions of dollars, … if somebody comes in, takes all the money out of your company and then leaves you bankrupt while they go off with millions, that’s not traditional capitalism.”

Newt Gingrich, Republican presidential candidate and former Speaker of the U.S. House of Representatives (January 8, 2012)

“I think people who don’t serve when they could and they get three or four or even five deferments – they have no right to send our kids off to war … I’m trying to stop the wars, but at least, you know, I went when they called me up.”

Ron Paul, U.S. Congressman and Republican presidential candidate (January 7, 2012)

In current American politics, money and wars of aggression abroad seem to rule the day. When a candidate’s fortune turns sour, the natural reflex is to spend $millions in negative ads to destroy adversaries and/or to issue hawkish policy statements with the promise to start new wars abroad and even to rekindle old ones. The motto seems to be that “If you destroy me with your negative ads; I will destroy you with mine.”—This is truly amazing.

Lobbyists have always played an important role in U.S. politics, but with the floodgates of money presently wide open, their work has been considerably facilitated. Indeed, since the U.S. Supreme Court’s (5-4) January-20-2010- decision to allow unlimited amounts of money to be spent by corporations or labor unions during elections under the specious pretext that such legal organizations are “people”, money rules unimpeded in American politics. This has the more or less unanticipated consequence of raising negative campaigning to a new level, to the delight of corporate media which rake in hundreds of $millions in political advertising or propaganda. Can democracy survive such an onslaught of money? This remains to be seen.

As for the U.S. presidential candidate Mitt Romney, for instance, during the recent primary campaign in the state of Iowa, he was confronted with a sudden surge of popularity of one of his opponents, former House Speaker Newt Gingrich. Romney’s camp and its allies went to work and pumped more than $2.8 million in a TV air deluge of negative ads against candidate Gingrich, arguing that the former Speaker had “more baggage than the airlines” and spelling out a series of flaws in Gingrich’s long political career. Sure enough, Newt Gingrich soon plummeted in the polls in Iowa and even nationally. He finished a distant fourth (13.3%) in the Iowa Republican Caucus (U.S. Presidential Primary) of January 03, 2012, while Republican candidate Romney squeezed by to finish in 1^st position.

In retaliation, the Gingrich’s camp has opted to turn the tables on candidate Romney for the New Hampshire and South Carolina primaries and has tried to picture him as the Wall Street movie villain Gordon Gekko. Indeed, thanks to a “super PAC”, supposedly financed by casino billionaire Sheldon Adelson, who is reported to have poured $5 million into Mr. Romney’s campaign, it intends to pump some $3.4-million into new television ads in order to picture multi-millionaire candidate Mitt Romney as a cold-blooded capitalist raider who made his fortune on the back of workers when they were fired en masse, after Mr. Romney’s private equity firm, Bain Capital of Boston, gorged itself on financially stressed companies. Mr. Gingrich has even suggested personally that Mr. Romney’s company was comparable to “rich people figuring out clever legal ways to loot a company.”

—And there you have it, negative campaigning at its best!

Negative ads, whether they are based on facts or on fabrications or on outright lies, can be very effective politically because they raise doubts in the mind of undecided or hesitant voters, even though some voters may be repulsed and turned off by them and this could translate into lower voter turnout. Nevertheless, the more distracted people are, the more they tend to remember negative information better than positive one. Therefore, for those who have no scruples in relying on such tactics and who have the means to pay for them, negative campaign ads have a triple advantage: First, they are a good way to change the subject and steer the debate away from one’s own failures; secondly, they place adversaries on the defensive, forcing them to spend time and money to try to refute the attacks; and, thirdly, they dispense the attackers from clearly spelling out their own positive political agenda beyond generalities and pious slogans. Negative ads maybe a curse for democracy but they work for those unethical politicians for whom power is the only thing that they yearn for in politics.

But negative campaigning or smear campaigns cost a lot. Indeed, they have to be researched and produced and, above all, they must to be aired in the mass media, especially on television. Historically, negative campaigning has always existed. However, modern means of communication and the concentration of national wealth in relatively fewer hands have multiplied its influence. Indeed, in the modern free-for-all electronically based U.S. politics, it can be said that those with the most money and with fewer principles have a decisive, if not an insurmountable advantage in winning elections. In the U.S., and especially with the benediction of a majority of judges on the current Supreme Court, so-called “super PACs” can accept unlimited donations for purposes of supporting or attacking candidates, thus placing the political game clearly in the hands of people or corporations or labor unions with the most money. Money has thus become the principal deciding factor in American politics.

The current campaign is a clear demonstration.

COMMENTS (7)

Dr. Rodrigue Tremblay, an economist, is the author of the book “The Code for Global Ethics, Ten Humanist Principles”,

Please visit the book site at:

www.TheCodeForGlobalEthics.com/

Posted, Friday, January 13, 2012, at 5:30 am

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Disclaimer: All quotes mentioned above are believed in good faith to be accurately attributed, but no guarantees are made that some may not be correctly attributed.

Friday, December 23, 2011

The End of the Bush-Cheney Disaster in Iraq

by Rodrigue Tremblay

"Just think of what happened after 9/11. Immediately before there was any assessment there was glee in the [Bush-Cheney] administration because now we can invade Iraq."

Ron Paul, U.S. Congressman (R-Tex.) and 2012 Republican presidential candidate

“After the war [against Iraq] has ended, the United States will have to rebuild much more than the country of Iraq. We will have to rebuild America's image around the globe.”

Sen. Robert Byrd, (D-W.Va), March 19, 2003

“Let me say this as plainly as I can: by August 31, 2010, our combat mission in Iraq will end... Through this period of transition, we will carry out further redeployments. And under the Status of Forces Agreement with the Iraqi government, I intend to remove all U.S. troops from Iraq by the end of 2011.”

President Barack Obama, Friday, February 27, 2009

The Obama administration officially put an end to the Iraq war on Thursday December 15, 2011, close to nine years after the March 20, 2003 military invasion of Iraq, dubbed “shock-and-awe.”

I had not intended to comment on the end of this most unnecessary war, but since I wrote a book to explain how it all came about, I feel that I must say something.

Analysts have begun to describe this war, launched on false pretenses, as “the Biggest Mistake In American Military History.”

Indeed, beginning right after 9/11 and throughout 2002, the Bush-Cheney administration had its mind firmly set to invade Iraq military, and no fact, law or argument could deter it from doing so.

In that, it was following the blueprint that neocons and pro-Israel "Likudniks" under the leadership of Paul Wolfowitz (Bush's future deputy secretary of defense) and Lewis "Scooter" Libby (Cheney’s future chief of staff) had drafted in 2000 under the auspices of “The Project for the New American Century”, in a report entitled "Rebuilding America's Defenses, Strategy: Forces and Resources For a New Century".

This was a neo-conservative imperial project that became officially the “Bush Doctrine”. Its goal was to project, as far as possible into the future, the "unipolar advantageous position" that the United States inherited after the break-up of the Soviet Union, in December 1991.

It was really a hubristic and bare-knuckle strategy of world hegemony, based upon unilateral interventionism—militarily, economically and politically—by the U.S. It was an "America First" doctrine, based not upon modern international law, but rather on a solipsistic approach to American interests and the elementary principle of brute force. In fact, it was a giant step backward that could have consequences for decades to come.

In the book that I wrote in 2003 to denounce such a suicidal shift in American foreign policy (see: The New American Empire), I pointed out that “the 'Bush Doctrine' was a near identical reenactment of the infamous 1968 Soviet Union's 'Brezhnev Doctrine', which ...paved the way for the [Soviet] invasion Afghanistan in 1979.” Ultimately, it also led to the demise of the Soviet Union.

Contrary to what some still think, the war against Iraq did not arise from a generous desire to promote democracy around the world. In fact, “spreading democracy” was little more than a domestic war propaganda slogan.

After the events of 9/11, the policy was to divert the war against international terrorism and the al Qaeda network, and turn it towards the real big prize, i.e. Iraq, its armaments and its oil. In the spirit of the newly designed “Bush Doctrine”, it was obvious that the war against international terrorism offered a strategic opportunity to promote American interests around the world.

Nobody can understand why so many lies, so many distortions and so many artifices were used by the Bush-Cheney administration and its sycophants in the media to justify the illegal invasion of Iraq, a country that had no connection to 9/11 whatsoever, if one does not understand the policy that prepared it.

But here we are with that most unnecessary war and what are the results?

This is a war that destroyed a country, killed hundreds of thousands of its inhabitants and drove 4,500 American soldiers to their death and severely injured 30,000 more.

This was a war that did not improve U.S. National Security to any extent, because it has now made Islamist Iran the primary influence in the Middle East region.

Moreover, this is a war that seriously diminished the United States' global credibility and moral posture around the world.

Finally, this is a war that has also contributed in breaking the U.S. economy, because it caused the U.S. government's fiscal deficit to spiral out of control and because that deficit was mainly financed with foreign debt.

All considered, except for the war profiteers who filled their pockets, this so-called Iraq war was an unmitigated disaster.

____________________________

Dr. Rodrigue Tremblay, an economist, is the author of the book “The Code for Global Ethics, Ten Humanist Principles”,

Please visit the book site at:

www.TheCodeForGlobalEthics.com/

Posted, Friday, December 23, 2011, at 5:30 am

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COMMENTS (10)

Friday, October 22, 2011

Financial Black Holes and Economic Stagnation: An Explanation

by Rodrigue Tremblay

“Financial markets are driving the world towards another Great Depression with incalculable political consequences. The authorities, particularly in Europe, have lost control of the situation. They need to regain control and they need to do so now.”

George Soros, international financier, ( Does the Euro Have a Future?, New York Review of Books, September 15, 2011.)

“The [financial] crisis was not a failure of the free market system and the answer is not to try to reinvent that system. ...Government intervention is not a cure-all."

President George W. Bush, Thursday November 13, 2008

"There is no cause to worry. The high tide of prosperity will continue."

Andrew W. Mellon, President Herbert Hoover's Secretary of the Treasury. September 1929

"I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a monied aristocracy that has set the government at defiance. The issuing power (of money) should be taken away from the banks and restored to the people to whom it properly belongs."

Thomas Jefferson (1743-1826), 3rd U.S. President.

Presently, one has the net impression that today's governments, both in Europe and in the United States, have their fingers plugging the holes in the financial dike, but fear that that the entire dam could collapse in the not too distant future with dire economic consequences.

Let's see if we can make sense of it all.

Let's say to begin that most financial crises are the direct result of unsustainable debt levels relative to income that need to be wrung out of the economic system. It has happened in the past (notably in 1873, in 1907 and in 1931, for example), and numerous times in developing countries, and it will undoubtedly happen again in the future. The process is more often than not always the same: some large banks, corporations, consumers or governments take on too much risky debt that becomes unsustainable when economic conditions change, thus launching the entire economy into a devastating process of debt deflation. Sometimes, it may take decades to overcome such a debt deflation and it usually creates an environment of economic stagnation when aggregate demand collapses.

What makes the current financial crisis so troublesome is not only that debt levels are historically high for some countries, but also because the usual instruments and procedures to reduce the debt burden, while doing the least damage to the real economy, have been rendered inoperative, due to a large extent, to the poisonous so-called financial “innovations” that have taken place since 1999 in the general climate of wholesale financial deregulation. As a consequence, financial debt in many countries creates a sort of financial black hole that siphons off money income and prevents it from being re-circulated back into the economy. This creates a serious deficiency of demand (when consumers spend less, when corporations postpone investments and when governments adopt austerity programs) that translates into low output growth, economic stagnation and high unemployment.

In this short article, I will try to identify some of these financial “black holes” that starve the economy of the necessary funds to prosper. I will also attempt to explain why this financial crisis may turn out to be much more serious than previous ones and why governments should take drastic measures to avoid a devastating economic depression. —I have done this in the past, again, in 2006, and again, in 2007, and again and again in 2010, but obviously some politicians, both in Europe and in North America, don't seem to get. Instead, they seem to think that fiscal austerity and lower taxes is all that takes to stimulate the economy and lower unemployment. They cannot be more wrong in the current context. Such policies in an open economy are going to make things worse, much worse if they are applied over time.

Here is why.

Many governments had the imprudence of piling up debt upon debt over the last thirty years, but especially over the last ten years. There are four main causes for such a public binge of debt in many countries.

-First, in Europe, the creation of the Euro zone in 1999 induced some imprudent member countries to go deep into debt by taking advantage of the credibility of the euro and by issuing bonds in euros at favorable interest rates. There was, indeed, a widely held belief on the part of lenders and borrowers alike that the new monetary union provided an implicit guarantee of stability to the safety of the loans.

-Secondly, lenders were induced to lend large sums at low interest rates because borrowers could avail themselves of a newly created financial instrument, the Credit Default Swaps (CDS) that allowed them to take a low cost insurance against an eventual default on their bonds. (By the way, the financial crises on both sides of the Atlantic are closely linked due to the fact that some large U.S. banks are heavily exposed to the European sovereign debt crisis as sellers of credit default swaps.)

-Thirdly, the persistent large trade imbalances in the world meant that some countries, such as mainland China (which joined the World Trade Organization in December 2001), piled up tremendous external trade surpluses and their excess funds became available to foreign borrowers. Indeed, large international banks found it most profitable to channel these newly created funds to willing sovereign borrowers around the world.

-Fourthly, some central banks, especially the American Greenspan Fed, thought they were obliged to provide an environment of easy money after the events of September 11, 2001 in the U.S., and they kept interest rates unduly low for too long, thus providing an additional inducement to eager borrowers to go deeper into debt. Indeed, the housing bubble in the United States that led to the subprime mortgage crisis was a creation of the Greenspan Fed with the encouragement of the Bush-Cheney administration.

A first conclusion, therefore, is that many institutional factors and policies contributed into encouraging some governments (and also some consumers and investors) to take on more debt than was prudent, often to finance unproductive spending such as military spending. Today, for example, there are dozens of countries whose gross general government debt stands above 100 percent of their gross domestic product (GDP). Moreover, when a high proportion of this debt is foreign-owned, money to service such debt flows out and this, of course, creates a drag on the domestic economy. Servicing an unproductive foreign debt is one of the financial “black holes” I have in mind here.

But what's even more important, the financial and banking systems have evolved in such a way over the last ten years or so that it has become very difficult, if not technically impossible, to solve a sovereign debt crisis through the traditional means used in the past.

How come? Because debt restructuring (a fancy term for reducing the capital owed by a debtor through debt write-downs that reflect actual market values and/or the extension of a debt's maturity and/or a lowering of interest rates) has been made most difficult by the fact that banks and other lenders have been “insured” against a debt default and are thus expecting to receive 100 percent of a loan and interests, no matter how risky their loans have turn out to be and how low their current value.

In the past, when a government faced a debt crisis, it usually did two things: 1- It petitioned its lenders for a restructuration of its debts if the latter wished to avoid a complete default; and, 2- it would devalue its currency to boost its economy's competitiveness and stimulate its economy after an unavoidable capital outflow.

For a country like Greece, a member of the European Union (EU) that is heavily in debt, these two options to alleviate its crushing debt burden are not easily available: -it cannot coerce large international banks and other lenders to voluntarily take a loss on its so-called “insured“ debt, and, -it cannot devalue the euro which is a common currency to sixteen other countries. The principal venue left is to keep borrowing at high costs from other members of the euro zone, the so-called the European financial stability fund, (N.B.: this is equivalent to borrowing from Peter to pay Paul!), and to impose a draconian fiscal austerity program on an economy that has been declining at more than five percent over the last two years.

The paradox is that the more austerity the government applies, the more the economy contracts and the higher is its fiscal deficit and its needs to borrow even more. This is a self-reinforcing spiral down. —That's really a true recipe to produce an economic depression. And, if many governments elsewhere follow the same foolish route for too long, this could lead to a worldwide economic depression.

There are two other major financial black holes that act to starve the economy of needed funds.

First, in the United States, it is the $1.5 trillion in excess reserves that banks hold at the Fed and find to their advantage not to lend to the economy. Some of that money came from American taxpayers when the Bush-Cheney administration put forward its TARP program to salvage large banks from bankruptcy in the fall of 2008. (N. B.: Part of it came also from the general public and from holders of U.S. dollars around the world when the Fed pushed short term interest rates to close to zero.) Secondly, also in the United States, it is another $1.5 trillion in cash that large U.S. corporations hold abroad in their subsidiary companies while parking it in tax havens where there are no taxes at all. They refuse to repatriate these funds for fear of paying taxes at home on their foreign earnings. (N. B.: The U.S. corporate income tax is imposed on all income no matter the country in which it was generated. However, the code allows for U.S. taxes to be deferred as long as the foreign earnings are kept abroad.)

Conclusion

So, don't look elsewhere to understand why there is so much economic stagnation around and why unemployment remains so high. It is because of all these financial black holes that suck money from the economy without putting it back. The correct policies would be to close these financial black holes, and the quicker the better. (The alternative would be even more massive government deficits!)

—But don't hold your breath before such appropriate policies are implemented. Too many politicians have been bought lock, stock and barrel by the same interests that profit greatly from the existence of these financial black holes.

Dr. Rodrigue Tremblay, an economist, is the author of the book “The Code for Global Ethics, Ten Humanist Principles”,

Please visit the book site at:

www.TheCodeForGlobalEthics.com/

Posted, Friday, October 22, 2011, at 5:30 am

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Monday, October 10, 2011

The Five Macro Crises of Our Times

by Rodrigue Tremblay

“Men accept change only when it is a necessity, and they see a necessity only in a crisis.”

Jean Monnet (1888-1979), French political economist and statesman

“I have two great enemies, the southern army in front of me and the financial institutions, in the rear. Of the two, the one in the rear is the greatest enemy….. I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country ... corporations have been enthroned and an era of corruption in high places will follow, and the money of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed. I feel at this moment more anxiety for the safety of my country than ever before, even in the midst of war."

Abraham Lincoln (1809-1865), 16th President of the United States (1861-65)

“The faster the present generation draws down the fossil energy legacy upon which persistently exuberant lifestyles now depend, the less opportunity posterity will have to live in anything like the same way or the same numbers. Yet most contemporary political proposals for solving problems of economic stagnation or inequity amount to plans for speeding up the rate of drawdown of non-renewable resources.”

William Catton, American environmental sociologist and population ecologist

"Societies characterized by enduring deep divisions of income and wealth, such as most third-world societies, are wounded societies with little sense of the common good... As America drifts in this direction, ending poverty and redistributing income should be at the top of the national agenda."

Charles Derber, Corporation Nation (p. 203)

[There are] “three ways to be influential in American politics: make donations to political parties, establish think tanks, and control media outlets.”

Haim Saban, Pro-Israel billionaire and major political contributor, (2009)

Our world has become very complex, and, as a consequence, it is increasingly open to macro crises of huge proportions.

Indeed, what makes our time such a dangerous period, I think, is the fact that we are facing simultaneously at least five intractable worldwide crises that it will take years to solve or to outlive. They are a financial crisis that it will take at least twenty years to jugulate, an energy crisis that's looming on the not too far horizon and which threatens the very foundation of the economic prosperity of the last half century, a double-barreled demographic crisis of a magnitude never encountered during the entire history of humankind, a political crisis that is related to the ingrained inability of governments most everywhere to solve society's problems, and, as a general background, a moral crisis that corrupts most institutions and makes them ineffective in promoting the common good.

I-The Financial Crisis

The misguided experiment with new synthetic financial instruments under the coat of hardly any government regulation is proving to be very disastrous to the world economy. They led to the near complete collapse of the banking and credit system in the fall of 2008, and are very much instrumental today in destabilizing the euro monetary zone and the European economy, the largest in the world. In fact, these new financial instruments play a central role in pushing down the American and European economies.

Indeed, these so called financial “innovations” have turned the world financial sector into a vast casino in which international bankers and speculators reign supreme. One may ask how was it possible to allow a casino-like financial capitalism to develop, especially after the hard lessons learned during the Great Depression of the 1930s?

When President Bill Clinton accepted the Republican proposal (GLBA) to gut the 1933 Glass-Steagall Act, that had regulated investment and commercial banking until then, he had no idea that his simple signature would herald, less than ten years later, a financial crisis of historical proportions. With this deregulation move and with the dismantling of other financial safeguards that had been in place for a long time, some since the financial panic of 1907, international bankers were allowed to merge their investment banking and commercial banking activities and discard many traditional banking rules. They adopted the new model of asset securitization, through which large banks de facto ceased being banks to become brokers, that is they ceased being lenders to become sellers of the sophisticated but untested new synthetic financial securities. Their names are now well known if not yet fully understood by many: Asset-based security (ABS), "Collateralized Bond Obligations" (CBOs), "Collateralized Debt Obligations" (CDOs), and credit default swaps (CDS). — In financier Warren Buffett's words, they turned out to be true financial weapons of mass destruction, and they are still doing their ravages, because politicians have as yet refused to rein them in and put an end to excessive financial speculation.

II- The Energy Crisis

Economic prosperity and population growth over the last half century have been sustained in large part by the access to relatively cheap energy and by an elevated capacity to produce food. But, the age of cheap energy is about to end, and this basic source of economic growth will disappear, unless some untapped cheap oil discoveries come to the rescue.

If the age of cheap energy is coming to an end, can the world economy continue to support a fast rate of population growth? This is unlikely.

Already, we observe a reemergence of hegemonic wars for oil and resources in some parts of the world that can be explained, at least partly, by the looming energy crisis.

Not surprisingly, the United States, with less than five percent of the world population while consuming about 25 percent of the daily world oil output, is at the center of this crisis.

Nobody can deny that oil access under American control played an important role in the Bush-Cheney decision to launch an unprovoked war against Iraq in the spring of 2003. Similarly, the recent Anglo-French involvement in Libya, under the cover of NATO, had something to do with Libyan oil riches.

In a globalized and shrinking world, geopolitics and the approaching energy crisis are closely intertwined.

III- The Demographic Crisis

The world is about to have a population of 7-billion to feed and equip with the necessities of life. And a larger share of that population is going to be older as the 21^st century unfolds.

Indeed, between now and 2050, the share of the population aged 60 and over is projected to increase in nearly every country in the world. All countries, both developed and developing, will be affected by this demographic shift, although in different ways. In the developing world, where fertility rates are still high (although declining), the crisis will come from too many young people without employment and too many old people living in poverty.

In advanced economies, the crisis will come from an onslaught of older citizens requiring more health care and social services at a time of economic stagnation and fiscal tightening.

The aging of the population will have a major impact on a society. For one, it will profoundly affect the economy during the next two decades, as the large contingent of baby boomers (USA: those born between 1946 and 1964; in Canada: 1946-1966) enters retirement and as mortality among the elderly continues to decline. In the U.S., 75 million people and close to one quarter of the population are baby boomers.

The retirement of baby boomers at the rate of between 3 and 4 million persons each year will redefine the basic economic structure and will create new economic, social and fiscal challenges.

Currently, in the United States, there are 3.3 workers to support each retiree, but by 2030, less than twenty years from now, this number will fall to only two. Consider also that twenty percent of Americans will be over 65 by 2050, up from 12 percent in 2005. As the consequence of the graying of America, payroll taxes and other taxes may have to be raised, which in turn will exert an important drag on economic growth. With so many retirees as a percentage of the working population, I would not be surprised to see a serious pension crisis developing in the coming years. It could arise either through uncontrolled inflation or through a general decline of the real return on capital. Either way, an erosion of pension income could ensue.

Secondly, it can be expected that some basic industries, such as manufacturing, will contract while those other industries related to health care and social services, like medicine and senior care, are destined to expand. The overall saving rate is also bound to decline, thus diminishing the pool of financing available to support new productive investments.

The result will be an economy that will become, even more than today, a service-based economy and also a more knowledge-based economy rather than being primarily a goods producing economy. With such a structural shift, unless per-worker productivity were to pick up substantially, considering that such productivity is lower in service industries, economic growth is bound to suffer and taper off.

In Canada, http://www.ic.gc.ca/eic/site/eas-aes.nsf/eng/ra02068.html for instance, average annual economic growth has registered 2.8 percent, between 1977 and 2010, but it is expected that between 2011 and 2086, mainly due to demographic shifts, economic growth could slowdown to a meager annual average of 1.6 percent. A slower economic growth means less government revenue at a time when demand for public services can be expected to increase.

That is why governments should prepare, fiscally speaking, for the expected onslaught of older citizens requiring more health care in the not too distant future.

IV-The Political Crisis

In many democratic countries, government has become the near exclusive tool of powerful private interests who use it at will to promote their narrow agendas. The cause is well known—the need to have tons of money to have access to the media, especially the electronic media, to get exposure. The result is everywhere to be seen: The people end up with the best politicians that money can buy.

The source of embedded corruption in politics is the overwhelming influence of money in politics. In the United States, things went from bad to worse on Thursday January 21, 2010, when the U.S. Supreme Court took upon itself to profoundly change the U.S. Constitution and American democracy in ruling that legal entities, such as corporations and labor unions, have the same purely personal rights to free speech as living individuals and can therefore use as much money as they wish to elect public officials of their liking.

In doing so, the U.S. Supreme Court severely devalued the individual's right to vote and made sure that the percentage of people who will bother to vote in the future will keep declining. Mind you, voter participation during the mid-term 2010 U.S. federal election, for example, was a meager 42 percent of registered voters. When a majority of the people don't even bother to vote, democracy is morbidly sick. Even though voter turnout is generally higher in American presidential elections than for midterm contests, it was nevertheless as low as 49.1 percent in 1996 (Bill Clinton vs Bob Dole) after it had reached a high of 60.1 percent during the 1960 presidential election between Richard M. Nixon and John F. Kennedy.

A question must be raised: Who profits the most when democracy dies?

V- The Moral Crisis

Our times mark the triumph of Machiavellism, i.e. of the corrosive ideology that politics and business should not adhere to any moral principles but should only be guided by narrow political interests and by the ruthless pursuit of profits. In this endeavor, the only principle that counts is the one that says that “the end justifies the means” and that craft, deceit and greed are OK in the pursuit of political power or of economic resources. —It is against this very destructive ideology that I wrote my book “The Code for Global Ethics”. I have the deep conviction that many of our other macro crises are the result of this moral vacuum.

If we go back in history, we see that the big financial crises of the past, those of 1873-1880 and 1929-1939 for example, had pretty much the same type of causes as the one we are experiencing today: They were basically caused by a general collapse of public and private basic morality among a very small elite that pushed its exploitation of public institutions to the breaking limit. For such a small elite, there comes a time when all means justify the supreme goal of enriching itself at the expense of the rest of society. All combines, tricks and schemes become acceptable and justified by pious ideological slogans such as “the market always knows best”, the new “wealth (no matter how acquired) will trickle down”, or, for the more delusional ones among them, “God is placing all that money in my hands, therefore, I must be doing some good”!

When that frame of mind takes hold, a decline of civilization can be feared. Unfortunately, that's where we stand today.

__________________________________

Rodrigue Tremblay

is professor emeritus of economics at the University of Montreal

and can be reached at rodrigue.tremblay@yahoo.com. He is the author of the book "The Code for Global Ethics" at: www.TheCodeForGlobalEthics.com/

The book “The Code for Global Ethics, Ten Humanist Principles”, by Dr. Rodrigue Tremblay, prefaced by Dr. Paul Kurtz, has just been released by Prometheus Books.

Please visit the book site at:

www.TheCodeForGlobalEthics.com/

See it on Amazon USA

See it on Amazon Canada

See it on Amazon UK

or, in Australia

Please ask your favorite bookstore and your local library to order

the book: The Code for Global Ethics, Ten Humanist Principles,

by Dr. Rodrigue Tremblay, prefaced by Dr. Paul Kurtz, Prometheus Books, 2010, 300 p. ISBN: 978-1616141721.

*****The French version of the book is also now available. See:

www.lecodepouruneethiqueglobale.com/

or on Amazon Canada

_____________________________________

Posted, Friday, September 9, 2011 at 5:30 am

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