5 Ways The Economy Is Rigged Against You


This is a perilous moment in our history. As Mark MacKinnon recently wrote in the Globe and Mail,

“Our societies are fracturing into tribes. In the U.K., it’s Leavers versus Remainers. In Turkey, the failed coup has cleaved society into Erdoganites and Gulenists (after the movement accused of supporting the failed putsch). Almost everywhere, lines are being drawn between immigrants and the native-born. Black and white. Us and them.”

Underlying these increasing divides is a broken and rigged economic system, a system concentrating wealth and power in the hands of a privileged few. It is something you can feel, it is something I can feel, it is something we can all feel. Something is wrong. The old truths we were told no longer seem to apply. It seems a select few know how things work, while the rest of us are left out.

This is what happens when the economy has been systematically rigged. But it can’t go on forever. People are starting to wake up. We are realizing that this system must change if we are to prevent our world from heading even further down the wrong path.

Below, I will explain the 5 ways the system is rigged against you, and the 3 ways we can restore fairness to our economy and our society.

Corporatism

The economy is rigged, and the system is corrupt.
Photo: Rihards https://creativecommons.org/licenses/by/2.0/

The serious problems I will explain below are the result of a broader attitude that has infected our politics and economy and twisted the system against the people. That attitude is corporatism, the idea that individuals and local communities can’t be trusted with their own money and power, so that power must be taken away.

Fighting corporatism is not about being anti-businesses or anti-government. When businesses compete fairly in the market society benefits. When the government actually looks after the people, society benefits.

Small, medium, and even large businesses competing ethically and fairly are not part of the corporatist problem. Politicians who fight for policies benefitting the majority of people, help those in need, and reduce income inequality are not part of the problem. Banks succeeding on their own merits and treating their customers with respect are not part of the problem.

But in today’s world, the corporatist problem is growing. That’s why we have to identify it, confront it, and end it.

Corporatism is when corrupt – either in law or in spirit – politicians collude with big corporations and banks and rig the system so that no matter what happens the average person gets screwed and those at the top get more rich and powerful.

We don’t have a capitalist or socialist system – we have corporatism – which manages to combine all the negatives of socialism and capitalism while leaving out all the positives.

The consequences of corporatism are all around us. The corporatist system has put our world on a trajectory of collapse and chaos. Obscene inequality, rising instability and violence are the symptoms of the underlying disease: The systematic dis-empowerment of the vast majority of people.

Is it any wonder that a system based on keeping people in a state of underlying fear and stress would lead to a world consumed by fear, stress, and violence?

It is an inevitable outcome of the corporatist system. Here are some of the ways the system is rigged against you:

 

Bank Bailouts

Bank Bailouts: The rigged system of corporatism takes power and money away from individuals and communities, and concentrates it in the hands of politicians, corporations, and banks.
Photo: carnagenyc https://creativecommons.org/licenses/by-nc/2.0/

When the big banks pushed the world to the brink of economic collapse and led to a sustained recession, they were bailed out with your money.

The bankers got bailed out, kept their jobs, and gave themselves bonuses.

But what happened to those who couldn’t pay their mortgages? What happened to those who found themselves crushed by debt? What about them?

They got screwed. They got punished.

Anger over this outrage, the fact that those who caused the crisis were rewarded and those victimized by the crisis were punished and left to fend for themselves – has not gone away.

We should be angry. Personal debt has reached massive levels, inequality is out of control, and the same people who caused the crisis are still in power and still in control of the economy.

The corporatist system – designed to extract your money and power and give it to those at the top – has done its job with ruthless precision.

 

Student Loans and Student Debt

Student Debt, Student Loans
Photo: Jagz Mario https://creativecommons.org/licenses/by-sa/2.0/

We like to talk about equality of opportunity. We like to think we have a fair society. But we don’t. Some people start way behind in life, and have to work way harder than everyone else just to keep their head above water.

One of the ways out of poverty and struggle is to get a good education. As the economy shifts people need to keep learning to stay ahead.

But instead of supporting people learning new skills, the corporatist system crushes them under a mountain of debt. This debt pushes home ownership and financial security further and further out of reach of the millennial generation.

And guess what else it does?

It makes the banks richer. Think about that. People try to get ahead and get punished with debt. That money goes to the banks – or the politicians – who almost destroyed the world economy. That is the ultimate sign of a rigged economy. Politicians give lip service to reform while keeping the broken structure unchanged.

As long as people are forced to go into debt to get an education, our society does not have economic or social justice.

 

Poverty

The rigged economy is pushing more and more people into poverty.
Photo: Kate Ter Haar https://creativecommons.org/licenses/by/2.0/

Despite massive amounts of wealth in our society, poverty and the risk of falling into poverty is spreading. Even in big, diverse industrialized cities, poverty is a huge and growing threat. I’m not just talking about people without jobs. More and more working people are in poverty too.

One example, as reported by the Canadian Centre for Policy Alternatives, “Over 100,000 working-age people in Metro Vancouver were working but stuck below the poverty line in 2012, not counting students and young adults living at home with their parents.”

The empty factories and sense of despair in states like Ohio, Pennsylvania, and Michigan make clear the extent of the problem.

This fits the overall trend of rising poverty in the developed world, according to the International Labour Organization’s 2016 World Employment Social Outlook report.

“Moreover, in developed countries, an increase in poverty has been recorded, especially in Europe,” the report states. “It is estimated that, in 2012, over 300 million people in developed countries were living in poverty (defined in relative terms on the basis of incomes representing less than 60 per cent of the median income).”

And if that wasn’t bad enough, “In developed countries, 36 per cent of all children live below the relative poverty line.”

Our society is not getting poorer overall. The total amount of wealth continues to increase. But it is being concentrated in fewer and fewer hands.

If you’re wondering why you keep working harder and harder but can’t get further ahead, that’s why.

The distribution of wealth is a political choice, cutting taxes for the wealthy and giving unfair advantages to big corporations and banks – as the corporatists do – makes our society more unequal. Providing more income security, supporting progressive taxation, giving debt-free access to education, and holding big businesses and banks to the same rules as everyone else makes society more equal.

These are choices. For too long our politicians have been making the wrong choices, and that’s how we ended up here today. The corporatist attitude has created the rigged economy, and with rising poverty and increasing income instability, we are all paying the price.

 

Fear of Job Loss

The failed corporatist system and rigged economy increases fear of jobs loss. More and more people are afraid of losing their job and falling into poverty.

History has shown that one of the best ways to control a population is through fear. And that is exactly what the corporatists have done.

You can always tell who is in control of a society by those who are secure no matter what happens in the world. In the 2008 recession big banks and corporations got bailouts, while most people got layoffs, pay cuts, and rising debt levels. Most politicians kept their jobs too.

During economic crises politicians always tell us we have to “sacrifice.” But do the politicians ever sacrifice? Do they ever cut their own pay? Politicians make far and above the average salary, yet no matter how bad the economy gets they never seem to take a pay cut.

“Sacrifice” seems like a one way street.

This unshared sacrifice leads to the fear experienced by many of us today. The fear of job loss, the fear of falling into poverty. The fear of living paycheck to paycheck. Studies show up to half the working people in North America are just one paycheck away from serious financial disaster.

Consider this report by Esquire:

“In a recent survey, 56 percent of Americans said they have less than $1,000 in their checking and savings accounts combined, Forbes reports. Nearly a quarter (24.8 percent) have less than $100 to their name.”

Living on the knife-edge of poverty creates a lot of fear. That fear keeps people from demanding better treatment and wages. It keeps people working harder and harder but never getting ahead.

The rigged economy is designed to keep people stuck. To keep you consuming enough to make sure the economy keeps going and you keep paying interest on your debts, but not much more than that.

That’s how the corporatists want it. It enables the same power structures to remain intact, with a few financially secure people at the top able to keep wages low and workers afraid, so they can run things without much input and challenge.

And many corporatist politicians like it that way, since financially desperate people have less time to get involved in politics and less time to question why the system is rigged against them. As much as they mouth platitudes about democracy, many politicians don’t want more participation. They want to decide everything quietly without much input.

Keeping people on the edge of poverty is one way to try to keep people quiet, because that’s what the corporatists want.

 

Attacking Immigrants and Minorities Instead of Fixing The Corrupt System

Hatred and anger towards immigrants and minorities is used as a distraction from the true cause of the corrupt system and rigged economy.
Photo: http://doctorfantastic.deviantart.com/ https://creativecommons.org/licenses/by-sa/3.0/

People are waking up to how flawed and rigged the system is. In their desperation, the corporatists are seeking to distract people by deflecting the people’s anger onto immigrants and minorities. This is an age-old tactic. It’s what Donald Trump is doing right now. Trump – despite being one of the most corrupt corporatists of all time – is using fear of immigrants and minority groups to avoid proposing real changes to the broken system.

Trump is promising a massive tax cut that would benefit the top 1% at the expense of the social programs that low-income and middle class people are counting on. As reported by Politifact (not that Trump gives a shit about facts), “the top 0.1 percent of taxpayers — people earning multiple millions of dollars a year, on average — would get more tax relief than the bottom 60 percent of taxpayers combined.”

He would stack the deck even more in favor of the wealthiest elite in America.

Trump distracts from his corrupt plans by blaming immigrants and minority groups for America’s problems, meaning the real problem – the corporatist system that takes money and power away from the people and concentrates it in fewer and fewer hands – goes unchanged.

Whenever you see a politician talk about fixing the system without offering any specific ideas, and starts blaming the most vulnerable members of society instead of holding those in control responsible, you can be sure you’re looking at a fraud, and a corporatist in disguise.

Only by recognizing that each of us – regardless of who we are or where we come from – deserves equal rights, including economic and social justice, can we truly fix the system. And we can’t do it by demonizing those who achieved financial success in a fair way.

There are many wealthy people who provide products or services that help people and who acted in an ethical way. They should not be demonized. Our energy needs to be focused on the underlying attitudes and actions of some politicians, big corporations, and banks who knowingly and purposefully rig the system against us and in their own favour.

 

The 3 ways we can restore fairness:

One of the key tools of the corporatists is to convince you to close your mind to alternatives. They use fear to stifle creativity and dissent. They build the box, and then tell you to think within that box.

We are told that our system can’t change, that we can only tinker around the corners, that higher income inequality and lower growth are inevitable. We are told to accept our lot in life.

But we don’t have to. We can change things. There are things we could do – starting right away – to turn the system around, to move from a corporatist system to a system that empowers you and your community to succeed.

We can restore fairness to our society and our economy. Below are 3 ways we can make it happen:

 

Universal Income Security

By providing Universal Income Security to every citizen, we can transform our economy from a broken rigged corporatist system, to an economy that is empowering for all.

The first and most important thing we can do is provide Universal Income Security to every citizen. This would be a universal basic income, negative income tax, basic income, guaranteed minimum income, etc. Whatever it would be called the idea is clear: Set an income floor below which nobody can fall.

For example, the minimum income could be set at $18,000 a year per adult. Each adult citizen would get a $1500 cheque every month. For those above a certain income level it would be taxed, so people making hundreds of thousands or millions of dollars wouldn’t get anything after taxes.

It would be a substantial investment, but it would eliminate poverty and provide a massive boost to the economy. It could even pay for itself, since poverty is one of the leading drivers of government spending.

As I wrote in a past article,

“According to a study by the Educational Testing Service reported in the Washington Post, the cost of child poverty in the United States is $500 Billion per year. This means that a Universal Basic Income that eliminated poverty would bring massive savings, not to mention a surge in economic growth and prosperity. And since those with low incomes tend to spend a higher proportion of new earnings, and spend it more often in the local economy, we would see the revitalization of poor neighbourhoods leading to increased opportunity and abundance, leading to an economic renaissance.”

Universal Income Security would also provide increased leverage for workers. Many people are stuck in low-wage exploitative jobs where they have to work hard for almost nothing. The only thing keeping people in those jobs is the fear of being fired or laid off and falling into poverty. Lots of employers know this, and some use that fear as a way to get away with treating working people badly.

With Universal Income Security, nobody would have to fear falling into poverty if they lost their job, giving people more leverage to demand better treatment, better working conditions, and better pay. It would also open up more opportunities for people to become entrepreneurs and create new businesses and economic opportunities.

The corporatists are terrified of this idea. They want people living in fear. They want government benefits to go through a massive bureaucracy which they control. They want people to feel the government is doing them a favor when it provides assistance, instead of realizing that it’s the people’s money the government takes and gives back in the first place.

The last thing the corporatists want is every person being empowered with income security, and that’s why we need to make it happen as soon as possible.

 

Debt-Free Access to College and University

Student Loans and Student Debt are a rising burden on the millennial generation.
Photo: DonkeyHotey https://creativecommons.org/licenses/by/2.0/

The rising cost of post-secondary education and the rising complexity of the economy has made access to post-secondary education more essential than ever before. Yet, it’s also less accessible for many people than ever before.

That’s the exact opposite of how it should be.

It’s time to make post-secondary access free for everybody. Nobody should be shackled by debt for life just because they want to gain new skills and succeed in the economy. Many places around the world provide free post-secondary education, so we know it’s affordable.

Again, the corporatists don’t want that to happen, since they want people stuck in cycles of paying debt and living in tough economic circumstances. They want the banks and the governments to keep control over people through being the gatekeeper to education and access to essential skills.

We need to get the banks out of the education businesses and treat post-secondary education the same way we treat elementary and high school education – as a right for all.

We also need to begin the process of forgiving student loan debt. An entire generation is being absolutely crushed by debt, which will depress our economy for years to come. Forgiving student loan debt would usher in an economic resurgence, massively increasing demand and consumer buying power in one fell swoop.

Confronting Income Inequality

Income Inequality is a result of the rigged corporatist system. Ending massive corporate tax loopholes is essential to reducing the gap between the rich and everyone else.
Photo: mSeattle https://creativecommons.org/licenses/by/2.0/

Today, low-income and middle class people are burdened by high taxes, just another part of the increasing cost of living that is hurting so many people. At the same time, massive corporations and banks receive obscene breaks and giveaways unavailable to the rest of us.

According to Business Insider, special breaks called “tax expenditures,” cost the U.S. over $100 billion per year.

It’s the same in Canada. As reported by the Toronto Star:

“Under the guise of combating tax evasion, the federal government opened up dozens of tax loopholes that have allowed Canadian corporations to avoid paying tax on $55 billion in international profits over the last five years. The money is funnelled into offshore tax havens and can be brought back to Canada tax free by multinationals based in Toronto, Vancouver and Calgary.”

Income Inequality: The Lesson of the Panama Papers

The Panama Papers detail the extent of the corporatist corruption that has turned the economy into a rigged system.

The Panama Papers showed the massive extent of corporatist corruption, and how there is one set of rules for those at the top, and another for the rest of us.

Our governments are there to serve all of us, not just those with massive wealth. It’s time they remembered that and crack down on corporate tax avoidance. Regular people are paying taxes, why should it be any different for anyone else, especially massive corporations swimming in money?

Making sure that big corporations and the super-wealthy pay their fair share is an essential step towards addressing income inequality and creating a more fair society. As long as the super-rich get to play by different rules than the rest of us, confidence in the economic system will continue to collapse.

A better world is possible

As I said at the outset, the world is facing severe challenges. We can all feel it. Something has gone wrong at a very fundamental level. If we stay on our current course, tragedy could be the result.

But we have a choice. We don’t have to accept the corporatist system and the damage it causes. We can build a fair and equal society. We can unrig the system by ensuring income security for all, debt free access to education, and holding big businesses and banks to the same rules the rest of us play by.

A better world is possible, and it will be ours if we have the will and confidence to stand up for it.

 


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