With the trauma of the Great Recession still fresh in the minds of all, abrupt swings in the stock exchanges this week could foreshadow a market correction in the near future, at the very least. This is particularly troubling given the fact that the ripple effects of the Great Recession are still in play. Meanwhile, revelations, such as the so-called “heartbleed” internet security fault and the NSA’s hacking scandal, undermine our faith in the internet. Because our banking system and much of our economy is now dependent on the internet to simply function, these internet issues should drive economic concerns. Given the growing number of stories surrounding these topic areas, we can expect renewed focus on the economy and weaning faith in the capitalist system’s ability to serve our interests. Consequently, we must do more to address these issues head-on in order to recalibrate the capitalist mechanisms of our economy to serve the interests of the majority of the People and renew our faith in our capitalist system.
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April 10, 2014 marked the 50th Anniversary of the Civil Rights Act of 1964, as well as the birthday of this writer. The overall impact of this law and the civil rights movement has been a cultural shift in America. We have moved away from a culture of inherited bigotry toward one where tolerance and acceptable reign. At most, we judge others on their behavior and character. Unfortunately, our society has grown blind to our natural impulses to discriminate against those things alien and marginalized. In places like Afghanistan, where cultural identify rules, there are those believe Islam respects the interests of women and those who twist the word of Islam to legitimize the abuse of women. Unfortunately, it seems the withdrawal of American forces and the empowered of those who view the abuse of women as a proper tradition will intensify their abuse of women. Although we can no longer understand the cultural aspects that allow this type of behavior to be considered acceptable, we must not forgot that the world is filled with pointless, destructive abuse against those who lack power. As we remind ourselves of what America and the rest of the West has accomplished in terms of civil liberties, we must also recognize the world must also see progress when it comes to making the world a better place for everyone.
Unfortunately, it appears Russia may well be taking steps to neuter Ukraine by weakening the central government and fracturing the nation into independent territories while a Russian invasion is a very real possibility. Whether or not Putin is directly behind the current seizure of Ukrainian government buildings by pro-Russian activists, the world can no longer trust a Putin-led Russia after Crimea and must assume Russia is behind efforts to destabilize Ukraine, as well as other neighbors when immediate Russian interests are at stake. Although any attempt to legitimize Russian action against Ukraine may be predicated on Ukrainian forces taking action against those occupying government buildings, i.e. Russia will take action to protect any Russian-speaking individual, and/or terrorist threats coming from Ukraine, Russia will attack if it chooses to do so without regard to what Ukraine does. While the International Community has some influence over the outcome, which is evident given Russia’s ongoing attempt to spin the situation, three things are sure to happen. First, the International Community must intensify its response to Russia’s rogue state behavior when any evidence surfaces tying Russia directly to action taken in Ukraine, especially if it chooses to use military force. Second, the Ukrainian government will have to use force against those breaking Ukrainian laws, eventually. Third, support of terrorism against Russia will be on the rise over the next few years and everything Putin does to bully his neighbors will make it worse.
The US government is now releasing information regarding what Medicare pays doctors. What this move does is allow reasonable transparency of a massive government program, thus allowing Americans to see how efficiently taxpayer dollars are being spent and any potential issues that might need addressed. Clearly, doctors should be among the highest paid in our society while some doctors are going to be more dependent on Medicare due to the age and health of their clients as well as their services. That said, understanding where Medicare dollars go through the release of this data and proper scrutiny can help policy advocates recognize the fallacies of the system. This might even include a lacking of spending when it comes to areas of concern.
“…the high-frequency traders, have today’s prices. And so imagine you had the results of the horse race before the race was run, and you could walk into the track and make bets against people about the race. It’s not — that’s not really a fair environment….,” Michael Lewis, PBS News Hour on April 4, 2014.
Stockbrokers have always made their money by skimming commissions off investors they represent and the profits of companies whose stocks they are trading. Although the financial services sector of our economy, as a whole, makes its money by taking capital out of the system, the services they provide help the markets stay liquid, i.e. businesses can raise when money when they need it and average people have a straightforward vehicle for investing the excesses of their earnings in order to expand their revenue streams, among other benefits. Unfortunately, the advent of the internet age has allowed a new class of traders to emerge who are able to trade so quickly that they are essentially guaranteed they will always buy low and sell high. This means average traders cannot compete and so-called high frequency traders are able to take more and more capital (money) out of the economy as a profit for themselves. When this happens, the services of the financial services sector are no longer valuable. In fact, they become a burden to the overall economy at such a point, because the stock market is simply siphoning off the savings of average investors and stealing away the profits of businesses that are needed for investment in innovation and human resources. Because high frequency traders are using computers and sophisticated software algorithms that allow them to make trades at less than a thousandth of a second, i.e. long before a human can even click a mouse, we should consider a floor to how fast trades can be made. Meanwhile, it is important to recognize our Nation made the foolish decision to allow our economy to shift toward a service-based economy, versus a production-based economy, when our leaders were seeking to expand our economy through policies like free trade. Someone working in a service industry does not produce anything as these jobs exist to support what already exists. This is not to say that services are not important or essential; after all, doctors are service providers that lengthen the gap between cradle and grave to delight of everyone. That said, what is in existence will only last so long, thus we need to be a productive society in order to have a future. At the same time, service industries cannot generate new capital as they do not produce anything. Consequently, they can only suck up what capital already exists in the economy, which would not be such an issue if there was enough production to compensate for the redistribution of wealth toward those providing services. Because the US economy has been rebuilt to favor those with a great deal of financial capital, i.e. the wealthy who are becoming ever more wealthier, the distorting influence of practices like high frequency trading and capital gains tax deductions for the wealthy are doing serious harm to our economy by starving the bulk of our population. Moreover, we need policy shifts to change these bad practices and fix our economy. |
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