Category Archives: Economics

Exorbitant Spending Sacrifices Public Well Being.

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Shared by: Syed Ehtisham.

Authored by: Ron Forthofer.

President Dwight Eisenhower gave his first major presidential speech, The Cross of Iron, on April 16, 1953. He laid out several important precepts guiding US conduct in world affairs as well pointing out the cost of military spending in very concrete terms. Eisenhower stated:

“Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed.

“This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities. It is two electric power plants, each serving a town of 60,000 population. It is two fine, fully equipped hospitals. It is some fifty miles of concrete pavement. We pay for a single fighter plane with a half million bushels of wheat. We pay for a single destroyer with new homes that could have housed more than 8,000 people.”

In 1957, General Douglas MacArthur also warned about military spending when he said:

“Our swollen budgets constantly have been misrepresented to the public. Our government has kept us in a perpetual state of fear — kept us in a continuous stampede of patriotic fervor — with the cry of grave national emergency. Always there has been some terrible evil at home or some monstrous foreign power that was going to gobble us up if we did not blindly rally behind it by furnishing the exorbitant funds demanded. Yet, in retrospect, these disasters seem never to have happened, seem never to have been quite real.”

Click the link below to read full article.

https://countercurrents.org/author/ron-forthofer/

Can Poverty Be Eradicated

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Can Poverty Be Eradicated?

By:  Shoeb Amin

The opinions expressed in this submission are those of the author and do not reflect those of the TF and its editorial board

Recently China announced it has eradicated “extreme poverty” in its country one month ahead of its stated goal. If everything that comes out of Xi Jinping’s propaganda machine is to be believed- I usually take it with a whole can of salt – that is a miraculous achievement .

 But before we look at the veracity of China’s claim and look at how those goals were achieved we need some definitions of the word poverty. Extreme or absolute poverty is defined globally by the World Bank as an income of $1.90 per family per day. China decided it will have its own definition of extreme poverty – at 1.52/day/family  instead of the globally recognized 1.90/day/family (I told you) and declared it had eradicated extreme poverty. (See the Breitbart link below). It still is not a small achievement … but China did so by spending billions and  through forced relocation and forced labor (as reported in the LA times link below).

The  next category is “relative poverty” which the Organization of Economic Co-operation and Development defines as an income less than half of the median income of all the country’s citizens. Thus the relative poverty level for India might be very different from that of Finland. The rates are in the following link. But instead of using these academic definitions I will refer to poverty, in my opinions below, to mean significant lack of the most basic necessities such as food, shelter, clothing and safety.

https://worldpopulationreview.com/country-rankings/poverty-rate-by-country
https://www.breitbart.com/national-security/2020/11/24/china-claims-it-has-eliminated-poverty-nationwide/
https://www.latimes.com/world-nation/story/2020-11-27/china-2020-poverty-eradication-dream

Some of the tactics China used to “eradicate its own definition of extreme poverty” would be considered human rights violations  in most other countries and cannot be applied everywhere. Since most of the world cannot adopt the Chinese formula what else can the rest of the world do? Solving any problem requires understanding the causes of the problem. Causes of poverty are complex and sometimes the causes and their effects form a vicious circle in the sense that one aggravates the other. According to UKEssaya the most common cause of poverty is hunger; if you are undernourished ,you don’t have the mental or physical energy to strive out of poverty. But hunger is also the effect of poverty so some people find themselves in a trap that they can never come out of.

https://www.ukessays.com/essays/economics/causes-and-effects-of-poverty-economics-essay.php

Christopher Sarlo of the Fraser Institute divides the the causes in 3 broad categories; “bad luck”, “bad choices” and enablement. Bad luck causes are those over which you have no control so if you are born as an untouchable in India or a Uyghur in China; or born with major physical and mental disabilities or born in a country  which is grossly mismanaged chances are you’ll end up in poverty. Personally I think being intellectually challenged  is the most common cause of poverty; it not only falls in the bad luck category (you can’t control the genes your parents give you) but also to a large extent in the bad choices category. The “bad choices” category includes dropping out of school, early child bearing, having children out of a committed relationship, drug use etc. Sarlo’s third category is “enablement” ; he believes by the govt. doling out welfare checks to the poor it actually perpetuates poverty.

Some people fall into poverty from”temporary” reasons like major natural disasters e.g. earthquakes, floods, hurricanes, war etc.

https://www.fraserinstitute.org/studies/causes-of-poverty

Now that we know all the causes of poverty can we eliminate them all and end poverty and hunger forever? I can categorically say NO, never. My view is not from pessimism, cynicism or negativism; it is just from realism that most of us do not want to accept.  Poverty has been with us since the time of the Pharaohs or even before that. It existed even before money was invented, when the rich had 100 sheep and the poor had one or none. It existed during all the great empires. It existed before capitalism and the industrial revolutions ( which some blame for poverty) came into being. Well meaning activists and philanthropists have tried for decades, if not centuries, to eradicate it and poverty still survives. I think wealth distribution, like our height and weight and other characteristics, will always vary on a bell shaped curve; there will always be folks below the 5th percentile (2 standard deviations below mean).There will always be people born with bad luck factors described above; always be people who make bad choices in life and there will always be a few – not all – people who, because of receiving their government’s financial assistance get trapped in that state or prefer to stay there. And there will always be populations living under Mugabe-like governments. You cannot make all those causes go away.

So am I saying helping the poor is a futile exercise? Not at all. Helping those who have fallen into poverty because of “temporary” causes listed above has very good results. Studies have shown that a majority of those so affected get back on their feet and get close to their previous financial state.Helping the chronically poor – certainly the ones who fall into the bad luck category – to alleviate their plight is laudable but that is different from the lofty but impossible goal of attempting to eradicate poverty and hunger. You can never make all the causes of poverty go away concurrently.  Even some Scandinavian countries, with all their high taxes and very generous socialistic policies have not been able to eradicate poverty. Refer to the second chart in the link below.

https://en.wikipedia.org/wiki/List_of_countries_by_percentage_of_population_living_in_poverty

I wish I had a more positive opinion on this subject and I certainly wish I could  be proven wrong.

The Fed is addicted to propping up the markets, even without a need-By Steven Pearlstein

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On Monday, the Federal Reserve announced it was expanding its program to get more credit into the hands of large corporations by buying a broad cross-section of investment-grade bonds, part of its pledge to inject $4 trillion into the global financial system to lessen the blow of a pandemic-induced recession.

Why, exactly, the Fed feels it necessary to inject more dollars into the corporate credit market is hard to fathom. The interest rate at which investment-grade companies can borrow on the bond market is now below 4 percent, about as low as anyone can remember. And the pace of bond issuance so far this year, at over $1.2 trillion, has been double that of last year’s torrid pace. Indeed, there’s so much capital sloshing around that investors are lining up to lend money to companies such as Boeing and Macy’s and the cruise-line operator Carnival, although these companies’ revenue has plummeted with along revenue in much of the travel and retail sectors. And this flurry of borrowing and lending comes despite warnings from Standard & Poor’s that the number of companies facing a downgrade in its credit ratings is at an all-time high.

The best explanation for this confidence is the widespread belief on Wall Street that the Fed will do “whatever it takes” — that is, print money to buy as many bonds as necessary — to keep credit flowing to the business sector, no matter the risk. By placing a floor under bond prices, the Fed makes it possible for over-indebted, sales-starved companies to borrow even more to cover operating losses, or refinance existing loans, allowing them to avoid, or at least delay, the day when they cannot pay their bills.

It’s not just creditors, however, who benefit from the Fed’s bond buying — by shielding shareholders from the risk of being wiped out through bankruptcy, their shares are also worth more. And it is that, more than the prospect of a quick recovery or the day-trading of individual investors, that has allowed what had been an overpriced stock market to regain almost all that it lost during the scary early days of the pandemic, despite an unemployment rate that is expected to remain close to double digits for the rest of the year. Things have become so crazy that Hertz stock, which should have become worthless when the company filed for bankruptcy last month, was trading at $6 a share at one point last week. The company has since announced plans to raise $1 billion to pay creditors by issuing new stock.

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How Buddhism & Marxism complement Each Other By Adrian Kreutz

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As the anthropologist Claude Lévi-Strauss wrote in 1955: ‘Marxism and Buddhism are doing the same thing, but at different levels.’

At least since Tenzin Gyatso, His Holiness the 14th Dalai Lama of Tibet, commented on his Marxist inclination in 1993, it is evident that Buddhism and Marxism have something in common:

Of all the modern economic theories, the economic system of Marxism is founded on moral principles, while capitalism is concerned only with gain and profitability … The failure of the regime in the former Soviet Union was, for me, not the failure of Marxism but the failure of totalitarianism. For this reason, I still think of myself as half-Marxist, half-Buddhist.

And Marx himself knew something of Buddhism. In a letter to a friend, written in 1866, he described his own meditation practice:

I have become myself a sort of walking stick, running up and down the whole day, and keeping my mind in that state of nothingness which Buddhism considers the climax of human bliss.

So do Marxism and Buddhism really complement each other? How?

Central to both philosophies is a schema of ‘diagnosis and treatment’. They share a diagnosis: life is essentially suffering. For Marx, the chief catalyst of suffering is capitalism. Capitalism creates more suffering for the working class, whereas the bourgeoisie and the capitalists are comparatively well-off – but that doesn’t mean that capitalism does not create suffering on the side of the winners too, as I shall soon point out. For the Buddha, the transient and fleeting nature of life makes suffering inescapable. In modern Japanese, the gentle sadness associated with nature’s state of flux is called mono no aware. The Indo-Tibetan Buddhist term for the effects of the impermanence of nature is duḥkha, which might be translated as suffering, but sometimes pain, frustration, sorrow, misery or dissatisfaction is more applicable. Duḥkha is the first of the Four Noble Truths that the original Buddha propounded right after his experience of enlightenment under the Bodhi Tree.

It is not difficult to see what is behind the concept of duḥkha: life is full of suffering – mental and physical – and in many cases there is little we can do about it. We get older and lose our physical and mental esprit, we lose the people we love, and the possessions we dearly hold on to will one day no longer be ours. All this is inevitable since the world is a world of impermanence and transience – anitya is the Buddhist term. We are plagued by anxiety caused by the fear of becoming ill, losing our job, losing a loved one, losing money, losing fame. The reality of suffering is an incontestable, ubiquitous truth.

This gets us to the second of the Noble Truths, which is trṣṇa, often translated as thirst, but perhaps better thought of as attachment. We are attached to our job, our family, our possessions and our selves. This is not necessarily a bad thing as it strengthens human relations and self-care, but it also causes suffering when paired with the impermanence of everything that we are attached to. So the cause of our suffering is not the nature of reality itself, but our attitude towards it. We cling to the erroneous idea that good things will go on forever and bad things will either never happen or, if they do, we will soon return to the good place.

According to Marx’s Das Kapital (1867), there is more to duḥkha than the impermanent nature of reality. There is this socioeconomic system that fosters a mechanism of competition between individuals in the quest for accumulated wealth to which the people that produce it have only limited access or no access at all. Through this process, the majority of people are abused, controlled and mistreated, alienated from their human essence – not to mention the exploitation of nature and its resources. Marx saw that capitalism generates an extra amount of unnecessary duḥkha: it keeps people in poverty (relative to the value of their labour), it keeps people unemployed (to nurture competition and to tie the workers to the capitalist), it plays with the health of people (by forcing them to work under harmful circumstances, having to fear pecuniary injury when medical care is necessary) and, above all, it alienates people from the essence of their human existence (by the division of labour and long working hours). Social inequality and horrendous living conditions lead to crime, violence and hatred – this is no surprise. Crime, poverty, alienation and exploitation cause suffering, but not exclusively on the side of the exploited workers. Capitalists live in constant fear of losing their status and their money, so they have to work hard to protect it – what you own, in the end, owns you.

App-based mindfulness practice has become the newest balm for the stressed-out capitalist

For Buddhists, the source of suffering lies in a conflict between how we take reality to be and how reality really is. To get rid of suffering, then, is to apprehend reality as it really is – this is being in the mode of enlightenment. According to Marx, there is an extra source of suffering in the mode of production. So, for him, the point is to change this awful mode of production to something better. But as with enlightenment, it is hard to see the problem in the first place, and the capitalist system does everything to hide its malevolence behind the welcoming curtains of consumer culture.

From a Buddhist perspective, the capitalist motor is fuelled by humankind’s deepest vice: its trṣṇa. Marx understood that the whole economic system is based on consumption, and marketing agencies know how to push trṣṇa to the realms of utter perversion, thereby warranting a continuum of consumption and labour. The worker is the hamster, consumer culture is the hamster wheel. People are tricked into believing that Furbies, iPads and all those other pointless goods and services are necessary for a happy and fulfilled existence. A sense of ‘meaning’ has been replaced with instant, short-term, on-demand happiness.

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posted by f. sheikh