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Saturday, August 2, 2014
In this column, Johan Galtung, rector of the TRANSCEND Peace University and author of "50 Years - 100 Peace and Conflict Perspectives" (www.transcend.org/tup), suggests lifting the bottom up, as one solution to the economic crisis.
- Political terrorism failed. The House Republicans used voting in one chamber to put the livelihoods of millions of people inside and outside the U.S. at risk, for their own political goals. And made the mistake of most terrorists, non-state or state: when people suffer they will join us, against our enemy; to find out that people turn against the terrorists instead.
And they were not a small group of Tea Party extremists but a clear majority of the House Republicans: 144 voted No in the end, only 87 Yes.
President Barack Obama has himself to thank for the general House Republican majority; having betrayed most groups voting for him in 2008 he was punished in the 2010 mid-term elections. Like the Republicans will be in 2014 for their political terrorism.
The budget deal postponed the government shutdown to Jan. 15 and the U.S. default to Feb. 7, solving nothing.
Worse, there was much reporting but few ideas floating in the media. Worse still, there was no massive million “Stop this Nonsense” March on Congress, but widespread apathy. Worst: the most clearly outspoken group was veterans and reserve officers (1.1 million strong) – indicative of a major threat should their Nov. 1 paychecks not arrive.
The two blocs hardly talk, but treat each other like they treat the Taliban. Terrorists are punished by not being listened to – a bad thing when the Republicans have arguments. The Health Care Act may not be affordable, there may be a coverage gap, etc.; work remains to be done.
There are solutions for a country as resourceful as the U.S. The government shutdown is about the federal budget deficit. Do as households do: decrease the expenditure, increase the income.
Three major parts of the federal budget are loan interest, the military, and Social Security-Medicare-Medicaid – all enormous.
The three giants are in a NATO vs Shanghai Cooperation Organisation (SCO) arms race; joint military terrorism putting humanity at risk. How about the U.S. making a deal with the Chinese and the Russians? Chinese forgiveness of 50 percent of the U.S. debt against a 50 percent U.S. reduction of the most offensive military components – the 800 bases around the world – over 5-10 years?
Accompanied by a similar multilateral and balanced reduction in offensive arms in all three, building on the Russian chemical arms momentum?
Social Security: let everybody at an older age who wants to work do so. More tax revenue, less expenditure.
Medicare-Medicaid: create a more healthy population. The decrease in smoking, mainly thanks to the U.S., was a great step forward. Next in line: sodas. Selling and serving sodas should become as illegitimate as smoking in public; much more to gain than from outlawing marijuana.
The debt ceiling is a deeper problem, affecting an economy that does not produce a surplus sufficient to run a modern society with an acceptable livelihood for all of its citizens. A sixth or even a fifth of the population lives in misery.
A source of much new income, at the individual, family, local community, state and federal levels. Politically difficult, but economically simple: lift the bottom up. Identify the poorest local communities, give short-term credit to cooperatives for growing and selling cheap, organic food, build affordable housing, and provide simple polyclinics for the common diseases.
Employing the neediest. Make people fend for themselves rather than depend on taxation. Like any small business, they need some initial credit; unlike small businesses they need the protection of cooperative production and consumption.
Learn from positive experiences in Spain; Mondragon, Marinaleda: a small investment in people marginalised by the mainstream economy, and they (re-)enter and become consumers and producers.
Reduce suffering, decrease inequality, and make the real economy grow; three huge flies with one huge stroke. Is the U.S. up to it?
The U.S. economy is strong on goods – with decreasing unit costs due to high resource-labour-capital-technical-administration efficiency – but weak on services, with skyrocketing costs in education, health and old age care.
Credits are needed, but not from money banks: from time banks with people exchanging services on a one hour = one hour basis.
The U.S. real economy is weak today relative to the Wall Street finance economy – and Washington bail-out rather than stimulus – using money to make more money, directly, not via cumbersome investments; in seconds, not in years, at tremendous risk; with more 2008’s lining up. Stop it.
Remedy No. 1: The five or six financial behemoths are too big to use. To stop feeding them money is like stopping to serve alcohol to an alcoholic. Let thousands of local saving banks grow for people to put their savings in, not risking that they will be used for betting, but for local investment.
Remedy No. 2: A much overdue one percent sales tax on the stock exchange.
Remedy No. 3: Outlaw money trafficking, like trafficking in drugs and women.
No such items on the table by January-February, only small-scale budget bickering and the Chinese approach comes up: de-Americanise the world economy. A “world reserve currency” – the dollar – from just one country is madness anyhow; from a country with cyclical shutdowns and ceilings – like the U.S.- it is insanity.
Strong leadership has to emerge from the White House and Congress, but especially from people – the local level, local banks and businesses. The future is above all in their hands.