February 26, 2017 at 12:10 pm #6040
Support Middle Class for Power AND The 49% for Prosperity
In golf – “Drive for show; Putt for dough” – is a truism that even the beginning player is sure to recognize. In Canada and the U.S., there is an equal truism that everyone should learn as a high-school student – Support the Middle Class for Power AND The 49% for Prosperity.
The “Middle Class” you will recognize, but who are the “49%”?
The 1% are the rich, the 0.1% are the super-rich, the top 20% quintile of the population own 85% of wealth, and the 51% are the voting majority who own 99.7% of a country’s assets. The 49% are those who own nothing; they have families and jobs in most cases, but they own few assets; they are usually stuck within repeating cyclic debt and they struggle to make ends meet.
Decent, hard-working, often high-school and higher-educated citizens who through career choices, lacking opportunities, poor health or luck, have come upon a road that is not as easy nor prosperous as others.
Capitalism suggested that these folks should simply need to “work harder” to get ahead, but Rich people make $3 million per day and good jobs are scarce today too, so inequity is not going to be overcome by working harder nor taking even three jobs – even if you could find them. Warren Buffet bought a farm with his paper route savings at age 17, but those opportunities are long, long gone.
Inequity – is the natural result of a healthy Capitalism, but at the point that inequity becomes so great that opportunity is denied to the 49%, the productivity of an entire nation suffers to the tune of hundreds of billions, and even trillions, of annual export dollars and wealth.
In the US 2010 Fed Reserve budget, the 49% were the bottom two quintiles – the 40% who were recorded to own just 0.3% of America’s wealth. That’s 160 million people without the ability to own a home, or afford a prescription medicine or pay a doctor’s bill. They can neither run a business nor contribute to exports; and “Contribution to Exports” is an important measure for any country because exports are how a country creates its wealth.
In the Netherlands, every citizen earns $33,000 annually in exports for their country. In the U.S., that number is $5,000. Google and Wikipedia have done a lot of excellent work to table GDP stats (like Export-per-capita) from every country so we can see and compare these easily online.
Supporting the 49%, results in economic prosperity. This is absolutely proven to be true both statistically and scientifically, but if you grew up in the G7, this truism is only something that you could have heard inside of an advanced Philosophy classroom – and only then if you were lucky enough to also have a very history-literate Philosophy Professor.
We discounted the Golden Rule as an unscientific religious text that had to be separated from state, but the Golden Rule was not religion; it was philosophy – and an important “lesson-learned” from history too. We were not told that it was an essential lesson in sustainability; so I looked on it as a nice-to-have lesson in sentiment and decency. For important reasons, it became a philosophy that was repeated in every religion ever recorded – even in the religions of antiquity which are no longer practiced.
What the Golden Rule is, in fact, is a time-tested Sustainability Model. You might like your neighbour – or perhaps not, but you have to support him and/or her family – or your society will surely begin to suffer; to Collapse. So say the statistics…
Today, 72% of all nations are trending toward collapse; High debt service-loads, sustained trade deficits, increasing unemployment & underemployment; these are the tell-tale signs that an economy, no-matter what size, is trending toward Collapse. Collapse, doesn’t happen overnight, it can happen over two hundred years – as in the case of the Roman Empire, or much less time as with Greece, Venezuela and Spain today. Canada, USA, UK, and France are all on this list of collapse trending nations too.
Collapsing nations see increases in incarceration rates, mental health and other social problems, Populism, Revolution, and – in a mature nuclear era – even a species-ending self-oblivion is possible.
A great Case Study is North America and the G7-west. Formerly the lands of the free and the bastions of democratic and capitalist success; presently, however, the lands of Brexit, Trump, Podemos (Spain’s two-year-old and sweeping Anti-eviction Party) and also – Trudeau – who won against a better campaign and candidate because his opponent’s party asked us to “Stay the course”.
Populist elections win because the down-trodden 49% have now increased in numbers to become 51% of voters. And the 49% of down-trodden, as you can imagine, demand immediate Change! And not just change, but a dramatic improvement in their living conditions specifically.
So, status-quo does not work any longer – but why? And in which direction should we change to – and at what speed? You don’t avoid a cliff by slowing down and you don’t initiate change in a positive direction by simply stopping either.
Direction in Policy, it turns out – is the easy part. If you consider that 72% of 180 nations researched – are in a Collapse Trending, this means that 28% of nations are Advancing; are succeeding even within an global economic recession and depression. By mapping out the policies of these Advancing Nations, we get a clear road map for how to move forward reliably – see Transition Economics Maturity Models for those answers.
As to the question of why the status-quo policies that built the American Dream no longer work – Inequity is the answer to that. In the 1950s, a high-school kid could have a job, pension, family, home, benefits, and a good life in a family-friendly community – at the age of 20. Young Russians had it even better as they could attend university and have all this – and a cottage, a dacha, too. Ensuring incomes and restoring spending-power solves the problem of Inequity sustainably; you can view a list of the specific policies that support these Success Stories here.
Not so easy, is the education of voters within our democracies. I think we have all come to expect imperfection from politicians – but what do you do when the University-trained Economics experts got it so wrong for so long too?
Enter the Marketing Teams and Spin-doctors …
The “Middle Class” is a term that means little and describes most of us. Within a healthy economy, you hope to see the middle-class comprise a majority as well.
When a Democratic Party tells you that they want to Support the “Middle Class” – without bolstering the 49% at the same time, two things are true: First, this group has little more depth than a marketing team that seeks to tell the largest body of voters what they want to hear – in the interest of giving their party the higher-probability of retaining Power, and second; your country’s economic and social troubles will worsen – with scientific certainty.
Educating citizens, therefore, is an important discussion whenever voters have yet to learn the economic importance of leaving no-one behind. In the G7, we have yet to learn the importance of supporting the 49% who are without a voice until millions upon millions of voices must be raised in populism and revolution.
Enter Education …
Millions of oppressed countrymen would never be permitted by educated voters who fully understood the cost to their economy for permitting this many citizens to be unproductive. Nor would politicians survive with Exports-per-Capita at just a fraction of what they should be. Why are our politicians not promising to double exports? Because we have not been taught to insist on it – and they have not been taught how to deliver it.
G7 voters can take some consolation in that they would have seen economic impacts more quickly had they lived in a smaller-population country. The costs of not supporting the poor, elderly, young, unemployed, and underemployed would have been visible in both GDPs and in our election outcomes quickly in a five million population country. In larger populations, however, it takes longer for the impact of unsustainable policy to become evident. In the example of the U.S., it took 51% of 360 million people – to become desperate before the richer half of the population could no longer ignore everyone else’s economic reality.
This is why smaller population countries like the Netherlands, Norway, Sweden, and many others – with populations of just five to sixteen-million, made socialistic policy corrections 20-years ago – and this is also the reason why most of these countries’ citizens are still living the American Dream today. There is a compelling case made here, to design much smaller economic electorate areas into future Democratic Reform discussions, for this reason.
The real costs of inequity will surprise you – the number is in the hundreds of billions, and even trillions, of dollars lost annually. All that we have to do to see this lost revenue is to adjust our American, or Canadian or any other, Export-per-capita statistic to Holland’s $33,000 – and then multiply our current exports by that amount. This is the real cost, in just lost exports-revenue and tax, for 160 million people being unable to contribute to the economy. See this math in more detail here in the article The Business Case for supporting the 49%.
A middle class majority that is terrified to lose their jobs means that no-one can stick their neck out or say “No” to short-sited corruptions like tax evasion, firing 20-year staff to evade a pension obligation, eliminating experience-rich middle management, and piling work onto fewer workers for the sake of meeting executive bonuses. We simply cannot make decisions for moral reasons given these circumstances – and we cannot promote by merit; instead, promotions have to be based on ever narrowing, even just monthly financial measures – which are about as dumbed-down as targets get – and these financial measures are incomplete as they externalize (ignore) any accounting for the much larger Opportunity Costs lost to the nation in Export.
Populism, which is the Revolution that JFK (John Kennedy) quoted about so famously, is a clear and overdue call for turn-around and proven economic reset.
To Support Prosperity and to support the Middle Class, you must support well your 49%.
CSQ Common Sense 101 is the High-School Course for training democratic youngsters about Sustainable Communities, Economics and much more.
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