Immigration

Most of us do not see the brutal parallel universe at the heart of the mainstream economy. But in the Fens, it has been highly visible – along with the transnational organised crime running a part of it. This has made people very angry. Now they want out of Europe – more than two–thirds of voters in Wisbech’s parliamentary constituency said in a 2014 survey that they would favour the UK leaving the EU.

The scene that plays out at the BP garage each day is not simply about migration or the human cost of cheap goods or isolated rogue operators. It is the manifestation of a profound social and economic change that has been enacted in little more than two decades.

From the late 1980s on, new technology allowed employers to eliminate much of the financial risk from their end of the chain. Supermarkets, for example, only reorder stock when a customer buys an item and its barcode is scanned, generating an instruction to their suppliers to replace it by the next day. Orders can double or halve within 24 hours, so workers to process and pack the goods are called in at short notice. This reduces costs and increases profits, since businesses no longer have to keep inventory or pay for full employment. Instead they have outsourced labour provision to agents or gangmasters. Agriculture and food processing pioneered this lean approach to business, but its zero-hours practices have spread to other sectors – to care homes, catering and food service, hotel work, cleaning, construction, and personal services such as nail bars and car washes. …

Blaming immigration rather than the forces that drive it, local people have turned to politicians who promise to curb it. In 2013, Ukip won all four Wisbech seats in the county council elections. There have been tense anti-immigration protests in the town. Both communities felt under attack – eastern Europeans remember how a gang of local teenagers beat up two members of their community in 2006. English residents I met were quick to say that they no longer felt safe or at home in their own town. …

Liberalising trade rules and financial flows has enabled the free movement of goods and capital across Europe – and, with them, people. But while World Trade Organisation rules prescribe global hygiene standards in minute detail, they are largely silent on the social and labour conditions in which the goods are produced.

A complex web of small rules widely obeyed – from paying your tax to insuring your car, to giving workers proper breaks – are the threads that weave a democratic social contract and a protective state. Many people in Wisbech have become more rightwing, in protest at what they see. The collapse of totalitarian structures of state control in former-Soviet eastern Europe has combined with a shrinking of state in the west. This shrinking of the state has created the vacuum into which organised crime has rushed.

The gangsters on England’s doorstep
http://www.theguardian.com/uk-news/2016/may/11/gangsters-on-our-doorstep

 

 

 

 

Beltwayland: The heartland of the military-industrial complex class

For them, a two-front war and Washington’s newly enlarged national-security state, much of which is hidden in plain sight, have ushered in a 21st-century gilded age only replicated in America’s few, most privileged enclaves. As Lofgren explains:

It is common knowledge that Wall Street and its inflated compensation packages have remade Manhattan into an exclusive playground for the rich, just as tech moguls have made San Francisco unaffordable for the middle class. It is less well known that the estimated $4 trillion spent since 9/11 on the war on terrorism and billions spent on political campaigns ($6 billion on the 2012 elections alone) have trickled down so extravagantly to the New Class settled around Washington’s Beltway that they have remade the landscape of our capital.

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Inequality in the USA

Although America has the largest economy in the world, real wages have not gone up since 1972 because most workers have experienced stagnating incomes for decades. Across the country middle-income Americans face a precarious economic future. Median income has fallen in over 80% of America’s counties since 2000, a trend that is accelerating. Even mortality rates reflect growing income inequality. Poor and rural Americans now die at rates well above that of wealthy and urban Americans. Continue reading

74% Of Billionaire Wealth From Rent-Seeking

[Didier Jacobs] recently explored this issue in my paper Extreme Wealth Is Not Merited, and found that American industries that produce more billionaire wealth than average relative to their size share one of three characteristics:

  • They depend heavily on the state whether through government procurement, licenses, or subsidies, and are therefore prone to rent-seeking. This category includes for instance oil, gas and mining, gambling, or forestry.
  • They are plagued by market failures such as imperfect information, like finance, or by the combination of intellectual property and so-called “network externalities”, which create monopolies like those that pervade the IT industry and industries prone to fads like fashion and music.
  • The billionaire wealth they have generated is largely inherited.

Building on that finding, I calculate that the billionaire wealth generated by these industries in excess of what other industries (considered here as competitive industries) generate represents 74% of America’s billionaire wealth. Continue reading

The Panama Papers are not about Tax Avoidance

One of the few people in the world who has a well-informed insider’s perspective who is also happy to speak out about it is Brooke Harrington of Copenhagen Business School, who took the remarkable step of actually obtaining a professional qualification in wealth management to pursue her studies. As she told our Taxcast recently:

“Tax avoidance was really only the tip of the iceberg. I didn’t realise how much bigger the problem is. Really what wealth managers do extend much more generally to law avoidance. And that creates problems of legitimacy for whole governments: it’s bad enough that people think they are getting shafted because the rich aren’t paying their fair share of taxes: it’s quite another matter when you say there is one law for the rich and one for everyone else and they are not the same: that is the sort of thing that can potentially topple governments.”

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The London Fairness Commission’s Final Report

London is a global city, yet compared to other cities of its standing the cost of living in London is high. Londoners on average salaries spend 49% of their pay on rent, compared with 26% for those on average salaries outside the capital. The average extra costs for householders who are renting and using childcare is £6,000. Would-be homeowners in London need to earn £77,000 a year to get on the housing ladder[1]. Across the UK, a first-time buyer needs a minimum income of £41,000.

The London Fairness Commission’s recommendations include: Continue reading

Bernie Sanders

A very good profile on Bernie Sanders.

Sanders prefers hating the rich. When Hillary Clinton was asked in a debate if corporate America should love her, she responded, “Everyone should. I want to be the president for the struggling, the striving, and the successful.” Sanders does not. When asked before a speech in Keene, N.H., what he would say to reassure the Bloomberg Businessweekreaders who work on Wall Street, or have millions of dollars, or run a hedge fund, and might be afraid he wants to tax them back to the Carter Age, Sanders puts down the manila folder containing his talk, which he delivers without a TelePrompTer. “I’m not going to reassure them,” he says. “Their greed, their recklessness, their illegal behavior has destroyed the lives of millions of Americans. Frankly, if I were a hedge fund manager, I would not vote for Bernie Sanders. And I would contribute money to my opponents to try to defeat him.” Then the only socialist ever elected to the U.S. Senate goes back to working on his prepared remarks.
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September Reading List

  1. How the west created the Islamic State
  2. Who’s Paying the Pro-War Pundits?
  3. The Pentagon’s $800-Billion Real Estate Problem
  4. Lefties and liberals still don’t do enough to stop wars
  5. How the super rich got richer: 10 shocking facts about inequality
  6. ISIS’s Enemy List: 10 Reasons the Islamic State Is Doomed
  7. Why the Ukraine Crisis Is the West’s Fault
  8. Democracy in the Twenty-First Century
  9. Israeli drone conference features weapons used to kill Gaza’s children
  10. New Report on Water Impacts of Shale Gas Development
  11. Behind the headlines: Fracking and water contamination
  12. Story of a War Foretold: Why we’re fighting ISIS
  13. Richard Brooks and Andrew Bousfield, 19th September 2014. Shady Arabia and the Desert Fix. Private Eye.
  14. “My childhood was not an episode from Downton Abbey”
  15. Russell Tribunal finds evidence of incitement to genocide, crimes against humanity in Gaza
  16. ‘Blood on their hands’: Glasgow activists shut down drone manufacturer
  17. Inequality is a choice: U.S. inequality in two shocking graphics
  18. Europe Tries to Stop Flow of Citizens Joining Jihad
  19. On the streets with the People’s Climate March
  20. The Great Frack Forward
  21. The Unaffordable Arsenal

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Five richest families in the UK are wealthier than the poorest 20%

Ricardo Fuentes-Nieva, “A Tale of Two Britains: Inequality in the UK,” 17 March 2014, Oxfam GB

Today, the five richest families in the UK are wealthier than the bottom 20 per cent of the entire population. That’s just five households with more money than 12.6 million people – almost the same as the number of people living below the poverty line in the UK.
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Economic cost of widening inequality in the UK

Tracy McVeigh, “Inequality ‘costs Britain £39bn a year’,” 16 March 2014, Guardian

The ever-increasing gulf between rich and poor in Britain is costing the economy more than £39bn a year, according to a report by the EqualityTrust thinktank. The effects of inequality can be measured in financial terms through its impact on health, wellbeing and crime rates, according to statisticians at the independent campaign group.

Researchers pointed to the fact that the 100 wealthiest people in the UK have as much money as the poorest 18 million – 30% of all people – and said that the consequences of such unusually high rates of inequality needed to be acknowledged by politicians.
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Global industrial civilisation could collapse in coming decades

Nafeez Ahmed, “Nasa-funded study: industrial civilisation headed for ‘irreversible collapse’?,” 14 March 2014, Guardian

A new study sponsored by Nasa’s Goddard Space Flight Center has highlighted the prospect that global industrial civilisation could collapse in coming decades due to unsustainable resource exploitation and increasingly unequal wealth distribution.
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China’s richest 10% of families own 64% of all family wealth

27 February 2014, 京华时报

宜信财富与联办财经研究院共同推出《2014中国财富报告:展望与策略》,报告撰写人之一西南财经大学经济与管理研究院院长甘犁在会上对报告中关于中国家庭财富的成长与风险部分时称,中国家庭资产的分布非常不均,最高资产10个百分点的中国家庭拥有63.9%的资产。
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Corruption is by far not the main factor behind persisting poverty in the Global South

Jason Hickel, “Flipping the corruption myth,” Al Jazeera, 1 February 2014

Many international development organisations hold that persistent poverty in the Global South is caused largely by corruption among local public officials. In 2003 these concerns led to the United Nations Convention against Corruption, which asserts that, while corruption exists in all countries, this “evil phenomenon” is “most destructive” in the global South, where it is a “key element in economic underperformance and a major obstacle to poverty alleviation and development”.

There’s only one problem with this theory: It’s just not true.
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