Monday marked the one-year anniversary of the start of the Occupy movement, and INET Executive Director Rob Johnson went on CNBC to discuss the significance of the milestone.
In particular, Johnson pointed out that Occupy protesters had brought the important issue of economic inequality to the forefront of the national dialogue. However, he also noted that the problem of inequality in America isn’t really about the last year – it’s about the last 40 years.
Johnson described how the economics profession had provided the world with “bad maps” that have led society far off course. He suggested that economists need to, “redraw the maps and make them a better reflection of reality” so that they include important issues like inequality – a problem that orthodox economics has simply assumed doesn’t matter.
He also suggested that while inequality has been a problem for decades it is now “growing at a rapid rate.” But political problems have played an important role in preventing a solution to this vital issue.
“The most important thing we have to recognize is that the system of money in politics in the post-Citizens United world is broken,” he said. For an example this dysfunction, Johnson and CNBC host Carl Quintanilla pointed to the lack of an effective national education system to train an American workforce that can compete in a globalized world, which Johnson called “a national tragedy.”
To start solving these problems, Johnson said that economists need to redraw their maps in a way that addresses society’s current “social disequilibrium.” Only then can the global economy get back on course toward a cooperative game where people can find the necessary solutions.
Comments
Rob Johnson did an excellent job conveying that there is social disequilibrium and that there are human costs due to this incoherence. His statement on CNBC today was memorable when discussing the Occupy Movement. We need to engage and look under the hood at the real inequality that is surfacing this great nation of ours.
I think that a key facet to INET is to investigate this phenomena of inequality. The problems that we have in this global economic system is not just economic and the solutions will be multidisciplinary. My hats off to all that take the challenge - the economists and non-economists alike.
Paul Cottrell, BSC, MBA
Ph. D. Candidate at Walden University
Twitter: paulcottrell
YouTube: Paul Cottrell
And the renewed Occupy Wall Street movement, http://abetterorganization.net/OccupyWS.php, is a precursor to the social strive which will develop sooner or later if the growing inequality trend is not countered by some wise policies of our government. What a beautiful dream!
Countries with export potential have a huge, cost-effective labour force. According to profit maximizing algorithms, which happen to be based on the same values as puritan ethics, Western capitalists have outsourced the manufacturing sectors to the periphery, where the production has been much more cost efficient.
• Because the manufacturing sector in the West is disappearing,
• so are the spendable wages of its employees
• which results in a corresponding drop in the demand for goods.
• At the same time millions of new jobs have been created in the manufacturing sectors of Asia and South America.
Dani Rodrik wrote:
“Indeed, the manufacturing sector is also where the world’s middle classes take shape and grow. Without a vibrant manufacturing base, societies tend to divide between rich and poor-those who have access to steady, well-paying jobs, and those whose jobs are less secure and lives more precarious. Manufacturing may ultimately be central to the vigor of a nation’s democracy.” Read more:
http://www.moneytaoism.com/#!publication/24_german_taxpayers
This topic deserves better than my previous off-the-cuff comment.
It is good to recognize that the INET voice is heard by a wide TV audience. The interview was broadcast not only on CNBC, but also on other networks.
The growing disparity in incomes is unquestionable. The existence of such a multi-decade-long trend is supported by the official government statistics in both the U.S. and Canada. Even more disturbing is the fact that 20 to 25 percent of children in either country live in families subsisting below the official poverty line. If the trend of widening disparity continues unabated, it will sooner or later lead to social unrest of unseen proportions.
We can doubt however that the economics profession with their bad maps is to blame for the problem. First, I submit, governments do not listen much to the economists. Second, there are as many good maps, conflicting with each other, as there are schools of economics. The point I would like to make here is that economics and politics are inseparable as to resolving the disparity problem.
I would also suggest that to “redraw the maps and make them a better reflection of reality” is a multi-disciplinary task.
The INET’s New Economic Thinking would not bear fruit unless we find ways to be effective in persuading our government to make policy changes in the desirable direction, which the INET may possibly devise.
this is a link to an imf working paper onn swithcing to 1005 reserve requirement banking and debt repudiation as a means of getting out of the crisis. this was the position I adopted over 4 years ago before I knew the concepts existed as a way to get the us out of the great depression. a must read, and I'm a bit surprised the insitutue hasn't come up with something like this
http://www.imf.org/external/pubs/ft/wp/2012/wp12202.pdf
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