Visually bracketing the Davos Class

An invaluable graphical reference about the ‘Davos Class’ has been provided by the Transnational Institute, a worldwide fellowship of scholar activists, as part of its new Corporate Power project. In this superbly designed series of powerful infographics, TNI provides visual answers to the following questions: Who are the global 1%? What companies do they run? How do they escape accountability?

Planet Earth: A Corporate Run World - which are the biggest companies in the world? Which corporations control them? How does their power compare with states? Graphic by Transnational Institute

The economic, social and ecological crises humanity face are no accident, but a result of policies pursued by a small corporate elite – best known as the Davos class – that has systematically hijacked political and economic policy throughout the world. In her ‘Introduction to the Davos Class’, Susan George exposes the reality of corporate power, and our need to fundamentally change direction.

The Global 0.001% - Just 10.9 million people, or 0.15%, control $42.7 trillion dollars or two thirds of world GDP. An even tinier group of people, 0.001%, control a third of that amount. Where are they based? What could this money pay for? Graphic by Transnational Institute

“The Davos class run our major institutions and know exactly what they want, but they face a huge crisis of legitimacy because their ideology isn’t working and they have virtually no ideas nor imagination to resolve this,” said George. I’d say they do know quite well how this can be resolved, but since ‘fairness’, ‘equity’ and ‘justice’ are not part of their vocabulary, we are left with searing infographics that expose the social and environmental costs of global corporate power (this TNI page has links to hi-res files).

The World's Richest Men - Who are they and how did they make their money? Which are the best countries to be rich in? Graphic by Transnational Institute

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Official, how the rise of the 1% deepened social inequality in the USA

The report, ‘Trends in the Distribution of Household Income Between 1979 and 2007’, by the Congressional Budget Office (October 2011) on income inequality underscores the total disengagement between the Obama administration and the entire political system on the one hand and the interests and desires of the vast majority of Americans on the other. In the USA, the political and media establishment is presently occupying itself instead with a debate over how much further taxes for the corporations and the rich should be cut and how much more deeply social programs for workers and poor people should be slashed.

The Congressional Budget Office (CBO) report stated: “To assess trends in the distribution of household income, the Congressional Budget Office (CBO) examined the span from 1979 to 2007 because those endpoints allow comparisons between periods of similar overall economic activity (they were both years before recessions). The growth in average income for different groups over the 1979–2007 period reflects a comparison of average income for those groups at different points in time; it does not reflect the experience of particular households. Individual households may have moved up or down the income scale if their income rose or fell more than the average for their initial group. Thus, the population with income in the lowest 20 percent in 2007 was not necessarily the same as the population in that category in 1979.”

The massive growth of social inequality over the past three decades has been the result of an unrelenting ruling class offensive against the working class. That assault has been carried out under Democratic as well as Republican administrations.

The CBO report stated: “Real (inflation-adjusted) mean household income, measured after government transfers and federal taxes, grew by 62 percent between 1979 and 2007. Over the same period, real median after-tax household income (half of all households have income below the median, and half have income above it) grew by 35 percent. Because the mean (or average) can be heavily influenced by very high or very low incomes, the large gap between mean and median income growth signals a pattern of growth that was heavily weighted toward households with income well above the median.”

The offensive against American labour and the working class was launched in earnest during the Ronald Reagan presidency, as early as 1981. That was the signal for more than a decade of wage-cutting, strike-breaking, union-busting and labor frame-ups, made possible by the complicity of the trade union bureaucracy. It deliberately isolated and betrayed scores of bitter struggles in order to break the militant resistance of the working class.

The CBO report stated: “The distribution of after-tax income (including government transfer payments) became substantially more unequal from 1979 to 2007 as a result of a rapid rise in income for the highest-income households, sluggish income growth for the middle 60 percent of the population, and an even smaller increase in after-tax income for the 20 percent of the population with the lowest income.”

The spread of social misery in the midst of soaring corporate profits and CEO pay is starkly shown in the growth of poverty in US suburbs. The New York Times recently reported that the ranks of the poor living in the suburbs of US cities rose by more than half between 2000 and 2010. Two thirds of these new suburban poor dropped below the official poverty line between 2007 and 2010. The Times article, reporting analyses of US Census data by the Brookings Institution, said the increase in poverty in the suburbs was 53 percent, compared with 26 percent in the cities.

In fact, average real after-tax household income for the 1 percent of the population with the highest income grew by 275 percent between 1979 and 2007. Average real after-tax income for that group has been quite volatile: It spiked in 1986 and fell in 1987, reflecting an acceleration of capital gains realizations into 1986 in anticipation of the scheduled increase in tax rates the following year.

Income growth for the top 1 percent of the population rebounded in 1988 but fell again with the onset of the 1990–1991 recession. By 1994, after-tax household income was 50 percent higher than it had been in 1979. Income growth surged in 1995, averaging more than 11 percent per year through 2000. After falling sharply in 2001 because of the recession and stock market drop, average real after-tax income for the top 1 percent of the population rose by more than 85 percent between 2002 and 2007.

Occupy, pepper spray, democracy and the cop meme

Occupy has led to an outburst of creativity. One example is the many photos circulated on the internet showing the cop who pepper sprayed non-violent students at a California campus superimposed on works of art and other pictures, pepper spraying the people picnicking in a Seurat painting, pepper spraying the members of the Constitutional Convention and so forth. It was American Police Lieutenant John Pike who pepper-sprayed the students at the University of California Davis on November 18th, 2011. Here’s a gallery of the casually pepper spraying cop.

 

The EU crisis pocket guide

The Transnational Institute has produced a terrific pocket guide on the financial crisis in the European Union, called, not surprisingly, ‘The EU Crisis Pocket Guide’. It’s a very handy alternative to reading about 257,000 words of confusing and jargon-heavy tripe authoritative commentary written by hopelessly compromised economist-blokes commentators and observers of the financial scene.

‘The EU Crisis Pocket Guide’ tells you, as straight as a punch to the chin, how a crisis made in Wall Street was made worse by EU policies, how it has enriched the 1% to the detriment of the 99%. It doesn’t stop at that – quite unlike the boring and largely clueless economist blokes who take great delight in pointing out a problem but have little to say about how to solve it, keeping the 99% in mind.

In keeping with the civilised socialist tendency therefore, ‘The EU Crisis Pocket Guide’ outlines some possible solutions that prioritise people and the environment above corporate profits.

You are well encouraged to download the booklet from these links:
Pocket guide: 12 page (PDF, 403KB) or Pocket guide: 8 page (PDF, 399KB)

What ‘The EU Crisis Pocket Guide’ contains: How a private debt crisis was turned into a public debt crisis and an excuse for austerity; The way the rich and bankers benefited while the vast majority lost out; The devastating social consequences of austerity; The European Union’s response to the crisis: more austerity, more privatisation, less democracy; Ten alternatives put forward by civil society groups to put people and the environment before corporate greed; Resources for further information.

I am much obliged to the peerless Links International Journal of Socialist Renewal for calling our attention to this absolute gem of a guidebook. Links, if you didn’t already know, promotes the exchange of information, experience of struggle, theoretical analysis and views of political strategy and tactics within the international left. You are well advised to read it regularly.

Here are some of the eye-openers from this Pocket Guide, things we suspected but which the dibbly-dobbly economist blokes and their corporate sponsors never admitted:

Much of the so-called debt crisis was caused not by states spending too much, but because they bailed out the banks and speculators. European Union government debt had actually fallen from 72% of GDP in 1999 to 67% in 2007. It rose rapidly after they bailed out the banks in 2008. Ireland’s bank bailout cost them 30% of their national output (GDP) and pushed debts to record levels.

As austerity cuts swept Europe, the numbers of the wealthy in Europe with more than $1 million in cash actually rose in 2010 by 7.2% to 3.1 million people. Together they are worth US$10.2 trillion. The five biggest banks in Europe made profits of €28 billion in 2010. There are 15,000 professional lobbyists in Brussels, the vast majority of them representing big business.

European Union’s answers to the problem? More austerity. In the UK, 490,000 public sector jobs are being cut; in Ireland, wages for low paid workers have been reduced; in Lithuania the government plans to cut public spending by 30%. The EU is planning to impose requirements by 2013 that means that no European member state countries can have a budget deficit of more than 3% of GDP or a public debt of more than 60% of GDP which will mean even more austerity.

Alternatives from the 99% – Clearly, there is a strong need to break with the dangerous free market fundamentalism that has created and worsened a social crisis of vast proportions. Here are some proposals for alternatives – put forward by many civil society groups – that could create a fairer and more just world.