Free Markets, Free People
Welcome to "Backwardland" – political elite get it wrong … again
You’ve heard of "Flatland"? Well in Davos, we have "Backwardland", where elite politicians are talking about what ails the world. And you’re probably not going to be too surprised by this, but they’ve got it entirely backward.
Poverty and unemployment reared their heads at the World Economic Forum on Thursday, with speakers urging the elite audience to bridge a growing gap between booming multinationals and the jobless poor.
Greek Prime Minister George Papandreou, who also chairs the Socialist International group of center-left parties, said the global crisis had led to an "unsustainable" race to the bottom in labor standards and social protection in developed nations.
"Politically, I believe we are at a turning point where… there are signs in Europe of more nationalism, more racism, anti-Muslim, anti-Semitism, fundamentalisms of all types," he said. "We need to look to a different model."
Maurice Levy, chairman and chief executive of French advertising giant Publicis, said there was "a huge suspicion about CEOs, bankers, corporations."
"People do not understand that these large corporations are doing extremely well, while their lives have not improved and without the support of the people, there is no way we will be able to grow," he told a panel discussion.
"We have been led by greed. We have been led by only the bottom line, the profit and we have sacrificed the workers in order to please the stockholders."
If you’ve wondered why Greece is in the shape it’s in and France isn’t far behind, read this nonsense. Greece didn’t get in the shape it is in because of corporations. It is there because the government overspent on generous benefits such as early retirement and the like. The financial situation of nations isn’t the result of corporate greed or income inequality – it’s because they’ve spent more than they take in, entitlements are out of control, and they’ve provided decades of disincentives to work.
And the nonsense wasn’t confined to Europeans:
Former U.S. President Bill Clinton said tackling income inequalities was essential to future growth and needed to be part of the core of doing business in the 21st century.
The core of doing business in the 21st century is no different than it was in the 17th century. Good product, affordable price, satisfied customers. What Clinton is really saying is that the left intends to use the excuse of “income inequalities” to clamp down on corporations, extort more in taxes (we’ve already discussed who really pays those taxes and how regressive that is, not to mention the fact that at some point, when those taxes can’t be passed along, the corporation goes location shopping or dumps jobs) and generally kill the goose that laid the golden egg.
U.S. economist Nouriel Roubini predicted a backlash against budget cuts in Europe if there was no rapid return to economic growth.
Well yes, but again, with the plan that seems to be afoot, that’s almost assured, isn’t it? What this is, again, is a different approach to collectivizing corporate earnings. Terms like “income inequality” and “social justice” creep into the conversation. And “share” – you remember “share” as in “share your toys, little Johnny”. Well now it is time, say the elites, to “share” what hasn’t been earned by those receiving the “share”.
With unrest in Tunisia and Egypt a major talking point in Davos, Mthuli Ncube, the Tunis-based Chief Economist for the African Development Bank, predicted more trouble ahead if the fruits of growth were not shared more evenly:
"If you are not even creating jobs, not even sharing the economic growth that is coming through, then there will be push-back," he said. "It’s one thing to get good growth going. It is another to share that."
It is indeed – but here’s something that has worked throughout economic history: get good growth going, create jobs with profits and suddenly it is being “shared”. Tax the crap out of anyone or anything that looks like it is making money and you won’t get growth, you won’t create jobs because the profits won’t be there to support either.
Of course what Mthuli Ncube is talking about is “sharing” through government – they’ll take it and dole it out. Oh, and by the way, the unrest in Tunisia wasn’t driven by a backlash to “corporate greed”, it had to do with government greed and oppression.
This is the not so new approach by the left to use the financial crisis as an opportunity to loot corporations and support the welfare states that are in big trouble. Demonization is right around the corner. The real cause of the unrest among those the leftist elite like to use as their pawns has little if anything to do with corporations and a lot to do with the governments most of these boobs represent.