As Jay H. Ell has blogged the financial system that made America the richest and most powerful nation in the world no longer exists. For practical purposes you had a society that encouraged entropenerial investment. That self same society previously regulated itself by a formula whereby the middle-class would benefit by this success and the unfortunate poor would receive support through private charity and government regulated welfare. This would result in the rich being rewarded, the middle class being prosperous by getting a fair wage and the poor being supported. The outcome was the USA having the highest standard of living in the world- for it’s rich, it’s collosal middle class and even it’s poor.
This formula has now been challenged resulting in a life or death struggle as to the future of the middle class while the safety net for the poor is being constantly lessened. All this is happening at a time when focus on financial inequity has been heightened by Pope Francis who shattered the financial and religious worlds by his statements on the subject. These came in an 84 page document entitled, “Evangelii Gaudium", (The Joy of the Gospel). The central message was on the evils of unfettered capitalism and the Church’s responsibility to the poor. So Pope Francis has shown he can walk the walk as well as talk the talk. (Blog: Well Hello Pope Francis, 3/17/13).
This document was released in the same week as groups of Walmart workers protested against their “poverty" level wages and Sixty Minutes featured The Billionaires Club where a number of Billionaires pledged to give at least half of their fortune to the less privileged. (Warren Buffett was quick to point out that large numbers of billionaires had refused). Contemporaneously, the Republicans proposed a cut in the Food Stamp program of 4 billion dollars over 10 years as part of their austerity program. Obama also proposed a substantial increase in the minimum wage that is going nowhere.
THE WALTONS AND WALMART
In this controversy of redistribution of wealth or rather the lack of it, Walmart and their owner heirs, the Waltons, fairly or unfairly, have become the poster child for this discussion. The Waltons’ according to a blog, written by Hamilton Nolan, are the richest and greediest people in the world. Bloomberg news reported in September that they have utilized every possible tax stratagem to keep their fortune intact for them and their heirs. In the 1990’s they hired lobbyists in Washington to lobby on “tax matters”. Their combined wealth from Walmart exceeds a 100 billion dollars.
Sam Walton founded his success on low costs, high turnover and big profits. He stated that, "I pay low wages. My success is on the basis of a very low wage and low benefits". (PBS Internet news, “Frontline”, September 2004). In fairness to Sam he was one of the shrewdest most talented businessmen ever. He built his company up to be the biggest employer in the world with 2 million on his pay rolls.
Walmart pays its employees, on average $18,720 before taxes. Dean Baker of the Huffington Post states on that income it is extremely difficult for one person to survive without food stamps. For a family of two the Los Angeles Alliance for a New Economy believes another $10,000 is needed.
A survey conducted in the nineties by the Wisconsin Democratic party showed that a Walmart store employing 300 was subsidized by taxpayers to the of tune of millions in that they needed Public Aid medical care and other Welfare benefits including food stamps. Goetz and Swanimathon of Penn State University showed, in 2004, that Counties with a Walmart suffered more poverty than those without. Common gripes against Walmart include killing small business, pressuring manufacturers to bare bone prices and by buying almost exclusively in China being responsible for massive job loss.
It has to be said that Walmart provides society with low cost goods on a scale hitherto unheard of. The real question is, is it worth the cost?
POLICIES SUPPORTING WALMART AND THE WALTONS
Now none of this can happen a vacuum. The government is entrusted with regulating the economy and the rules. To rely on the largesse of Bill Gates and Warren Buffett is no way to run a country. Involved in all of this is the tax policy and the redistribution of wealth in a fair fashion. Also you need regulations that do not allow certain unfair employment practices. Leaving aside the morality of the issue for the moment why should society subsidize the wealth of the Waltons? The way the consumer based economy was supposed to have worked in the USA was to pay people decent wages who would then purchase and stimulate the economy and its growth. Nothing is geared to that at the moment - the tax policies bolster all of this wealth accumulation thereby keeping money out of circulation, the lack of a decent minimum wage stunts growth and unregulated behavior of the industries, especially the finance industry are but a few examples that are counter productive to stimulating the economy. Taking away food stamps that 47,000,000 receive will not help Walmart as hungry employees are not very productive.
While all the ills of the current financial mess cannot be exemplified by Walmart and the Waltons, the culture of greed, and unfairness of unbridled unregulated capitalism can be, so let us see what the Pope said.
POPE FRANCIS
Pope Francis left very little doubt as to where he stood on these issues. He equated economies that prey on the poor with murder. His exact words were, “Just as the commandment, 'Thou shall not kill’ sets a clear limit in order to safeguard the value of human life, today we also have to say, ‘thou shalt not’ to an economy of exclusion and inequality. Such an economy kills. How can it be that it is not a news item when an elderly person dies of exposure, but it is news when the stock market loses two points. This is a case of exclusion.”
As for trickle down economics he gave it a full go: “Some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably bring about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naive trust in the goodness of those wielding power and in the socialized workings of the prevailing economic system. Meanwhile, the excluded are still waiting".
The Pope also stated that he conducted his own life in terms of these edicts and that the Church should focus on the poor not on divisive issues such as abortion and same sex marriage. The Church must restore hope to young people, help the old, be open to the future, spread love. “We need to include the excluded and preach peace."
In a stinging open letter to the British Prime Minister on the eve of the G-8 Summit he called capitalism a new form of idolatry. Money should serve humanity not lead it. He went on, “Every economic and political theory or action must set about providing each inhabitant with the minimum wherewithal to live in dignity and freedom”. He ended by saying,”We have created new idols. The worship of the golden calf of old has found a new and heartless image in the cult of money and the dictatorship of an economy which is faceless and lacking any truly humane goal”.
WOW.
Talk about telling as it is. This is the most influential voice in the Christian world. He is the elected leader of 1.2 billion Catholics - 20% of the World’s population. Maybe some - one out there will listen. Politicians need to take his words to heart as individuals like Bill Gates and Warren Buffett already have.
But the faithful need not worry that all this has been allowed to pass without answer. Sarah Palin called the Pope a liberal and Rush Limbaugh went one better and labelled him a Marxist.
To reinforce the Pope’s point this major policy statement of his hardly captured the center stage of the media arena - instead politics focussed, with uncontrolled glee, on the mishaps of the instrument that had been designed to offer equity in health care, to all Americans.
Great blog!
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