The world could be headed for another economic disaster if we continue to listen to free-market ideologues.
By Joseph E. Stiglitz
Posted Wednesday, July 6, 2011, at 3:38 PM ET
http://www.slate.com/id/2298580/
Just a few years ago, a powerful ideology—the belief in free and unfettered markets—brought the world to the brink of ruin. Even in its heyday, from the early 1980s until 2007, American-style deregulated capitalism brought greater material well-being only to the very richest of the richest country of the world. Indeed, over the course of this ideology's 30-year ascendance, most Americans saw their incomes decline or stagnate.
Moreover, output growth in the United States was not economically sustainable. With so much of U.S. national income going to so few, growth could continue only through consumption financed by a mounting pile of debt.
I was among those who hoped that, somehow, the financial crisis would teach Americans (and others) a lesson about the need for greater equality, stronger regulation, and a better balance between the market and government. Alas, that has not been the case. On the contrary, a resurgence of right-wing economics, driven by ideology and special interests, once again threatens the global economy—or at least the economies of Europe and North America, where these ideas continue to flourish.
In the United States, this right-wing resurgence, whose adherents evidently seek to repeal the basic laws of math and economics, is threatening to force a default on the national debt. If Congress mandates expenditures that exceed revenues, there will be a deficit, and that deficit has to be financed. Rather than balancing the benefits of each government expenditure program with the costs of raising taxes to finance those benefits, the right seeks to use a sledgehammer—not allowing the national debt to increase forces expenditures to be limited to taxes.
This leaves open the question of which expenditures get priority. If expenditures to pay interest on the national debt are not prioritized, a default is inevitable. Moreover, to cut back expenditures now, in the midst of a crisis brought on by free-market ideology, would inevitably prolong the downturn.
Advertisement
A decade ago, in the midst of an economic boom, the United States faced a surplus so large that it threatened to eliminate the national debt. Unaffordable tax cuts and wars, a major recession, and soaring health care costs—fueled in part by the commitment of George W. Bush's administration to giving drug companies free rein in setting prices, even with government money at stake—quickly transformed a huge surplus into record peacetime deficits.
The remedies to the U.S. deficit follow immediately from this diagnosis: Put America back to work by stimulating the economy; end the mindless wars; rein in military and drug costs; and raise taxes, at least on the very rich. But the right will have none of this, and instead is pushing for even more tax cuts for corporations and the wealthy, together with expenditure cuts in investments and social protection that put the future of the U.S. economy in peril and that shred what remains of the social contract.
Meanwhile, the U.S. financial sector has been lobbying hard to free itself of regulations, so that it can return to its previous, disastrously carefree, ways.
But matters are little better in Europe. As Greece and other countries face crises, the medicine du jour is simply timeworn austerity packages and privatization, which will merely leave the countries that embrace them poorer and more vulnerable. This medicine failed in East Asia, Latin America, and elsewhere, and it will fail in Europe, too. Indeed, it has already failed in Ireland, Latvia, and Greece.
There is an alternative: an economic-growth strategy supported by the European Union and the International Monetary Fund. Growth would restore confidence that Greece could repay its debts, causing interest rates to fall and leaving more fiscal room for further growth-enhancing investments. Growth itself increases tax revenues and reduces the need for social expenditures, such as unemployment benefits. And the confidence that this engenders leads to still further growth.
Regrettably, the financial markets and right-wing economists have gotten the problem exactly backward: They believe that austerity produces confidence, and that confidence will produce growth. But austerity undermines growth, worsening the government's fiscal position, or at least yielding less improvement than austerity's advocates promise. On both counts, confidence is undermined, and a downward spiral is set in motion.
Do we really need another costly experiment with ideas that have repeatedly failed? We shouldn't, but increasingly it appears that we will have to endure another one nonetheless. A failure of either Europe or the United States to return to robust growth would be bad for the global economy. The failure of both would be disastrous—even if the major emerging-market countries have attained self-sustaining growth. Unfortunately, unless wiser heads prevail, that is the way the world is heading.
Friday, July 8, 2011
Thursday, June 9, 2011
The Earth Is Full
NY Times Op Ed 6/9/11
By THOMAS L. FRIEDMAN
You really do have to wonder whether a few years from now we’ll look back at the first decade of the 21st century — when food prices spiked, energy prices soared, world population surged, tornados plowed through cities, floods and droughts set records, populations were displaced and governments were threatened by the confluence of it all — and ask ourselves: What were we thinking? How did we not panic when the evidence was so obvious that we’d crossed some growth/climate/natural resource/population redlines all at once?
“The only answer can be denial,” argues Paul Gilding, the veteran Australian environmentalist-entrepreneur, who described this moment in a new book called “The Great Disruption: Why the Climate Crisis Will Bring On the End of Shopping and the Birth of a New World.” “When you are surrounded by something so big that requires you to change everything about the way you think and see the world, then denial is the natural response. But the longer we wait, the bigger the response required.”
Gilding cites the work of the Global Footprint Network, an alliance of scientists, which calculates how many “planet Earths” we need to sustain our current growth rates. G.F.N. measures how much land and water area we need to produce the resources we consume and absorb our waste, using prevailing technology. On the whole, says G.F.N., we are currently growing at a rate that is using up the Earth’s resources far faster than they can be sustainably replenished, so we are eating into the future. Right now, global growth is using about 1.5 Earths. “Having only one planet makes this a rather significant problem,” says Gilding.
This is not science fiction. This is what happens when our system of growth and the system of nature hit the wall at once. While in Yemen last year, I saw a tanker truck delivering water in the capital, Sana. Why? Because Sana could be the first big city in the world to run out of water, within a decade. That is what happens when one generation in one country lives at 150 percent of sustainable capacity.
“If you cut down more trees than you grow, you run out of trees,” writes Gilding. “If you put additional nitrogen into a water system, you change the type and quantity of life that water can support. If you thicken the Earth’s CO2 blanket, the Earth gets warmer. If you do all these and many more things at once, you change the way the whole system of planet Earth behaves, with social, economic, and life support impacts. This is not speculation; this is high school science.”
It is also current affairs. “In China’s thousands of years of civilization, the conflict between humankind and nature has never been as serious as it is today,” China’s environment minister, Zhou Shengxian, said recently. “The depletion, deterioration and exhaustion of resources and the worsening ecological environment have become bottlenecks and grave impediments to the nation’s economic and social development.” What China’s minister is telling us, says Gilding, is that “the Earth is full. We are now using so many resources and putting out so much waste into the Earth that we have reached some kind of limit, given current technologies. The economy is going to have to get smaller in terms of physical impact.”
We will not change systems, though, without a crisis. But don’t worry, we’re getting there.
We’re currently caught in two loops: One is that more population growth and more global warming together are pushing up food prices; rising food prices cause political instability in the Middle East, which leads to higher oil prices, which leads to higher food prices, which leads to more instability. At the same time, improved productivity means fewer people are needed in every factory to produce more stuff. So if we want to have more jobs, we need more factories. More factories making more stuff make more global warming, and that is where the two loops meet.
But Gilding is actually an eco-optimist. As the impact of the imminent Great Disruption hits us, he says, “our response will be proportionally dramatic, mobilizing as we do in war. We will change at a scale and speed we can barely imagine today, completely transforming our economy, including our energy and transport industries, in just a few short decades.”
We will realize, he predicts, that the consumer-driven growth model is broken and we have to move to a more happiness-driven growth model, based on people working less and owning less. “How many people,” Gilding asks, “lie on their death bed and say, ‘I wish I had worked harder or built more shareholder value,’ and how many say, ‘I wish I had gone to more ballgames, read more books to my kids, taken more walks?’ To do that, you need a growth model based on giving people more time to enjoy life, but with less stuff.”
Sounds utopian? Gilding insists he is a realist.
“We are heading for a crisis-driven choice,” he says. “We either allow collapse to overtake us or develop a new sustainable economic model. We will choose the latter. We may be slow, but we’re not stupid.”
By THOMAS L. FRIEDMAN
You really do have to wonder whether a few years from now we’ll look back at the first decade of the 21st century — when food prices spiked, energy prices soared, world population surged, tornados plowed through cities, floods and droughts set records, populations were displaced and governments were threatened by the confluence of it all — and ask ourselves: What were we thinking? How did we not panic when the evidence was so obvious that we’d crossed some growth/climate/natural resource/population redlines all at once?
“The only answer can be denial,” argues Paul Gilding, the veteran Australian environmentalist-entrepreneur, who described this moment in a new book called “The Great Disruption: Why the Climate Crisis Will Bring On the End of Shopping and the Birth of a New World.” “When you are surrounded by something so big that requires you to change everything about the way you think and see the world, then denial is the natural response. But the longer we wait, the bigger the response required.”
Gilding cites the work of the Global Footprint Network, an alliance of scientists, which calculates how many “planet Earths” we need to sustain our current growth rates. G.F.N. measures how much land and water area we need to produce the resources we consume and absorb our waste, using prevailing technology. On the whole, says G.F.N., we are currently growing at a rate that is using up the Earth’s resources far faster than they can be sustainably replenished, so we are eating into the future. Right now, global growth is using about 1.5 Earths. “Having only one planet makes this a rather significant problem,” says Gilding.
This is not science fiction. This is what happens when our system of growth and the system of nature hit the wall at once. While in Yemen last year, I saw a tanker truck delivering water in the capital, Sana. Why? Because Sana could be the first big city in the world to run out of water, within a decade. That is what happens when one generation in one country lives at 150 percent of sustainable capacity.
“If you cut down more trees than you grow, you run out of trees,” writes Gilding. “If you put additional nitrogen into a water system, you change the type and quantity of life that water can support. If you thicken the Earth’s CO2 blanket, the Earth gets warmer. If you do all these and many more things at once, you change the way the whole system of planet Earth behaves, with social, economic, and life support impacts. This is not speculation; this is high school science.”
It is also current affairs. “In China’s thousands of years of civilization, the conflict between humankind and nature has never been as serious as it is today,” China’s environment minister, Zhou Shengxian, said recently. “The depletion, deterioration and exhaustion of resources and the worsening ecological environment have become bottlenecks and grave impediments to the nation’s economic and social development.” What China’s minister is telling us, says Gilding, is that “the Earth is full. We are now using so many resources and putting out so much waste into the Earth that we have reached some kind of limit, given current technologies. The economy is going to have to get smaller in terms of physical impact.”
We will not change systems, though, without a crisis. But don’t worry, we’re getting there.
We’re currently caught in two loops: One is that more population growth and more global warming together are pushing up food prices; rising food prices cause political instability in the Middle East, which leads to higher oil prices, which leads to higher food prices, which leads to more instability. At the same time, improved productivity means fewer people are needed in every factory to produce more stuff. So if we want to have more jobs, we need more factories. More factories making more stuff make more global warming, and that is where the two loops meet.
But Gilding is actually an eco-optimist. As the impact of the imminent Great Disruption hits us, he says, “our response will be proportionally dramatic, mobilizing as we do in war. We will change at a scale and speed we can barely imagine today, completely transforming our economy, including our energy and transport industries, in just a few short decades.”
We will realize, he predicts, that the consumer-driven growth model is broken and we have to move to a more happiness-driven growth model, based on people working less and owning less. “How many people,” Gilding asks, “lie on their death bed and say, ‘I wish I had worked harder or built more shareholder value,’ and how many say, ‘I wish I had gone to more ballgames, read more books to my kids, taken more walks?’ To do that, you need a growth model based on giving people more time to enjoy life, but with less stuff.”
Sounds utopian? Gilding insists he is a realist.
“We are heading for a crisis-driven choice,” he says. “We either allow collapse to overtake us or develop a new sustainable economic model. We will choose the latter. We may be slow, but we’re not stupid.”
Tuesday, April 12, 2011
Prediction
The Republican Party will choose a Hispanic-American vice-presidential candidate in 2012. I am guessing that Marco Rubio, the Spanish speaking son of Cuban exiles, current U.S. Senator for Florida, and rising republican all-star will fill those shoes nicely. As Suzana Martinez, current Republican governor of New Mexico, has shown, Latinos will vote for a Hispanic candidate regardless of their views on immigration or Latinos in general. Suzana Martinez ran the most virulent and overtly racial gubernatorial campaign against Latino immigrants in a state that is almost 50% Hispanic, and easily won a majority of the Latino vote. Rubio could, theoretically, be a hardliner on immigration and still attract huge numbers of votes for the Republican candidate in 2012. The Republican Party has to do something drastic. If not, they will be dragged down by the nativists within their own party and obliterated by the fastest growing demographic in the country.
Wednesday, April 6, 2011
Collins and Brooks
Gail Collins and David Brooks of the NYTimes tackle Ryan's budget. They do it far more justice than my own post, below. It would be nice if our elected officials could have such a serious conversation.
http://opinionator.blogs.nytimes.com/2011/04/06/the-budget-battles-and-beyond/?hp
http://opinionator.blogs.nytimes.com/2011/04/06/the-budget-battles-and-beyond/?hp
Smug Delusion of Exceptionalism
I saw this morning that Rep. Paul Ryan, R-Wisc., the GOP’s new rock-star youngster, has begun a media blitz to sell his austere new budget to the public. Joe Scarborough, practically drooling on himself in awe of Ryan’s cojones, was glad that a politician had finally put forward a “serious,” “bold,” and “courageous” proposal for dealing with the nation’s debt and deficit. I, too, was ecstatic. Not because I agree with much of anything that Ryan has included in the proposal but because the bill so clearly exposes the true Republican agenda: massive regressive tax cuts for the rich and systematic dismantling of the federal government’s safety net. Grover Norquist should be proud. Ryan’s government would indeed be small enough to “drag into the bathroom and drown in the bathtub.”
A quick look at the bill unveils the extent of Ryan’s ambitions. He proposes to eliminate Fannie Mae and Freddie Mac, repeal the recently passed Dodd-Frank financial regulation law, convert Medicaid from a matching fund program to federal block-grants indexed to inflation (disregarding the fact that health care grows at more than twice the rate of inflation), cut back on Pell Grants, repeal the Obama health care law, privatize Medicare, cut federal income taxes for corporations and the richest Americans from 35% to 25%, and support an energy policy that greatly expands offshore drilling in American waters. Even more alarming is that part of his proposal would require a two-thirds vote to increase taxes, giving a Republican minority the ability to veto any attempt to increase revenue, regardless of their numbers.
Conservative pundits are particularly impressed with Ryan because his budget tackles entitlements, the suicidal third rail of politics. When polled, Medicaid, Medicare, and Social Security are hugely popular, but they are also fiscally unsustainable and eat up about 40% of total government spending. The $31 billion that Rep. Boehner and Sen. Reid are currently sparring over for the rest of the current year’s budget is chump change compared to the entitlement behemoths. While everyone in Washington acknowledges that reform is necessary, few have been brave enough to propose serious cuts.
But Ryan’s proposal shouldn’t be celebrated. Unlike other serious proposals to tackle the nation’s fiscal problems (i.e., the President’s Simpson-Bowles commission), Ryan doesn’t want to balance the budget with a mixture of increased taxes and spending cuts. He doesn’t want to seriously tackle defense spending or close tax loopholes for outrageously wealthy corporations. No, he wants to gut the federal government by eliminating or fatally reforming the programs that sustain the poor, disabled, and elderly and transfer that wealth to the richest individuals and corporations. It is as if we are entering a time machine and returning to the Gilded Age when the ultra-rich Rockefellers, Mellons, Carnegies, and Vanderbilt controlled the economy and pulled the strings in Washington. Only this time the Republicans are trying to effectively neuter the labor unions before they can fight back against the corporate goliaths and their corpulent investors.
While Ryan and the Republicans frame their budget as a serious attempt to “save” the entitlement programs, any diligent observer can see that they are merely trying to finish what Republicans began in the 1980s: destroy the social safety net, dismantle the federal government, and concentrate the power and wealth in the hands of the few. The Republican establishment is not the champion of the middle class but the guardian of the rich.
What America needs is the exact opposite of what Ryan is proposing: a robust, accountable, and modern government. A prosperous and competitive 21st century is going to require massive amounts of investment in modern infrastructure, high-speed rails and efficient public transportation, clean energy, world-class schools, urban revitalization, and yes, a strong social safety net.
Ryan’s plan needs to be seen for what it is, a massive redistribution of wealth from the have-nots to the rich, a systematic and unprecedented dismantling of the federal programs that help those that need it most. It is an obscene and radical leap backwards, not a step forwards.
We need to wake up and abandon our smug delusions of American exceptionalism. The rest of the world is leaving us behind.
A quick look at the bill unveils the extent of Ryan’s ambitions. He proposes to eliminate Fannie Mae and Freddie Mac, repeal the recently passed Dodd-Frank financial regulation law, convert Medicaid from a matching fund program to federal block-grants indexed to inflation (disregarding the fact that health care grows at more than twice the rate of inflation), cut back on Pell Grants, repeal the Obama health care law, privatize Medicare, cut federal income taxes for corporations and the richest Americans from 35% to 25%, and support an energy policy that greatly expands offshore drilling in American waters. Even more alarming is that part of his proposal would require a two-thirds vote to increase taxes, giving a Republican minority the ability to veto any attempt to increase revenue, regardless of their numbers.
Conservative pundits are particularly impressed with Ryan because his budget tackles entitlements, the suicidal third rail of politics. When polled, Medicaid, Medicare, and Social Security are hugely popular, but they are also fiscally unsustainable and eat up about 40% of total government spending. The $31 billion that Rep. Boehner and Sen. Reid are currently sparring over for the rest of the current year’s budget is chump change compared to the entitlement behemoths. While everyone in Washington acknowledges that reform is necessary, few have been brave enough to propose serious cuts.
But Ryan’s proposal shouldn’t be celebrated. Unlike other serious proposals to tackle the nation’s fiscal problems (i.e., the President’s Simpson-Bowles commission), Ryan doesn’t want to balance the budget with a mixture of increased taxes and spending cuts. He doesn’t want to seriously tackle defense spending or close tax loopholes for outrageously wealthy corporations. No, he wants to gut the federal government by eliminating or fatally reforming the programs that sustain the poor, disabled, and elderly and transfer that wealth to the richest individuals and corporations. It is as if we are entering a time machine and returning to the Gilded Age when the ultra-rich Rockefellers, Mellons, Carnegies, and Vanderbilt controlled the economy and pulled the strings in Washington. Only this time the Republicans are trying to effectively neuter the labor unions before they can fight back against the corporate goliaths and their corpulent investors.
While Ryan and the Republicans frame their budget as a serious attempt to “save” the entitlement programs, any diligent observer can see that they are merely trying to finish what Republicans began in the 1980s: destroy the social safety net, dismantle the federal government, and concentrate the power and wealth in the hands of the few. The Republican establishment is not the champion of the middle class but the guardian of the rich.
What America needs is the exact opposite of what Ryan is proposing: a robust, accountable, and modern government. A prosperous and competitive 21st century is going to require massive amounts of investment in modern infrastructure, high-speed rails and efficient public transportation, clean energy, world-class schools, urban revitalization, and yes, a strong social safety net.
Ryan’s plan needs to be seen for what it is, a massive redistribution of wealth from the have-nots to the rich, a systematic and unprecedented dismantling of the federal programs that help those that need it most. It is an obscene and radical leap backwards, not a step forwards.
We need to wake up and abandon our smug delusions of American exceptionalism. The rest of the world is leaving us behind.
Tuesday, April 5, 2011
Balance the Budget on the Backs of the Poor
As the budget infighting continues between sane House Republicans and the Tea Partiers, GOP leaders are turning to moderate Democrats for help in passing this year’s federal budget. As of April 1st, they seem to have settled on a not-so-modest $33 billion in cuts (Tea Partiers demand no less than $61 billion). While the federal budget situation seems dire, cuts to state budgets are even more severe. Thirty-nine states are proposing major cuts in core public services. Twenty-one want severe cuts in funding for public education. Twenty-five have their targets set on health care, specifically for low-income individuals. To really give the middle finger to the working class and poor, governors in seven states are proposing tax cuts for corporations. Governor Snyder of Michigan wants to offset the loss in revenue from corporate income tax cuts by raising taxes on, surprise, low-income working class families.
Politicians say that everyone must “share in the pain,” yet they refuse to raise taxes on the very people who can afford to help out. As Mark Bittman argued recently, the budget has become a moral document. The United States is capable of closing its budgets gaps, rebuilding its roads and infrastructure, and strengthening its social safety net so that social mobility can once again become a reality for low-income individuals. Politicians can do it by decimating education and slashing programs for the poor, or they can reduce the military budget, close corporate tax loopholes, and modestly raise taxes on those who can easily afford to pay. Which seems like the better option?
Gross inequality of wealth has become the moral dilemma of our generation. The facts speak for themselves. The wealthiest 400 individuals in the United States possess more wealth than half of all American households combined. CEOs make an average of 530 times more than the average blue collar worker. In 2010, profits of corporations grew at the fastest rate since record keeping began in the 1950s. It was recently reported that GE, one of the world’s largest companies, made $14 billion dollars in profit last year. Due to loopholes, accounting tricks, and tax credits, not a single penny of that $14 billion went to the federal government as income tax. Meanwhile, average Americans suffer. Home foreclosure rates surge, poverty, unemployment, and underemployment are pushing all-time highs, the percentage of adults lacking health insurance continues to rise, wages remain stagnant, and one in four children report occasionally going to bed hungry.
Michael Moore was right when he said that America is not broke. It isn’t. $14 trillion dollars of annual output is not pocket change. But over the last 40 years, a massive transfer of wealth has been taking place. The United States has watched its manufacturing base crumble, and with it, good unionized jobs. Middle class wages have remained largely steady for 40 years despite record economic growth, rising wages for the top earners, and staggering corporate profits. The middle class is being squeezed and the poor are going hungry. And yet, the rich are better off than they ever have been.
I come from a family of small-business conservatives. My father works in the fishing, farming, and forestry industries. My uncles run a chain of successful Maine retail stores. They are firm believers in free-market rugged individualism. Their own father embodied the American dream. Through hard work and dedication, he pulled himself out of obscurity and poverty to become a very successful and influential businessman. Anybody else, they argue, can do the same.
But, as any economist will tell you, free markets aren’t fair. They are brutal. And from time to time they fail. The government exists to do more than provide security. It is there to provide a safety net for when an individual gets sick or injured. It is there to help when economic cycles (and greedy individuals) plunge the nation into bouts of extended unemployment. The government should exist to balance out the irregularities of the markets and to prevent the worst excesses of corporate greed. It used to.
I am not advocating that the government step in and simply take money from the rich and hand it to the poor, as many conservatives crudely suggest. I am advocating that the government properly regulate against the excesses of capitalism. I am advocating that multi-millionaires and billionaires pay a slightly larger percentage of their massive wealth to ensure that children don’t go to sleep hungry, that even more kids are not crammed into already overcrowded classrooms, and that low-income individuals who need medical attention don’t put off seeing a doctor until it is too late.
Politicians who suggest that massive cuts to education, health care, and core social safety net programs are needed to balance the budget are deluded. Yes, cuts do need to be made. Everybody must share in the pain of reduced spending. But let’s make sure that the rich pay their fair share as well. We do not need to balance the budget wholly on the backs of the already suffering poor.
In the past, class warfare was an ineffectual political strategy. As surveys point out, the less well off don’t necessarily resent the rich. Like most others, they relish the idea of possibly joining their wealthy ranks someday. How extraordinarily and obscenely wealthy do the rich need to get, and how much does the rest of the country need to suffer, before the masses realize that this gross inequality of wealth is not good for our country? Remember, Democracy only works when we claim it as our own. I am not advocating that we abandon a market economy. Let’s just restore some sense to our polity that is looking more like a plutocracy every day.
Politicians say that everyone must “share in the pain,” yet they refuse to raise taxes on the very people who can afford to help out. As Mark Bittman argued recently, the budget has become a moral document. The United States is capable of closing its budgets gaps, rebuilding its roads and infrastructure, and strengthening its social safety net so that social mobility can once again become a reality for low-income individuals. Politicians can do it by decimating education and slashing programs for the poor, or they can reduce the military budget, close corporate tax loopholes, and modestly raise taxes on those who can easily afford to pay. Which seems like the better option?
Gross inequality of wealth has become the moral dilemma of our generation. The facts speak for themselves. The wealthiest 400 individuals in the United States possess more wealth than half of all American households combined. CEOs make an average of 530 times more than the average blue collar worker. In 2010, profits of corporations grew at the fastest rate since record keeping began in the 1950s. It was recently reported that GE, one of the world’s largest companies, made $14 billion dollars in profit last year. Due to loopholes, accounting tricks, and tax credits, not a single penny of that $14 billion went to the federal government as income tax. Meanwhile, average Americans suffer. Home foreclosure rates surge, poverty, unemployment, and underemployment are pushing all-time highs, the percentage of adults lacking health insurance continues to rise, wages remain stagnant, and one in four children report occasionally going to bed hungry.
Michael Moore was right when he said that America is not broke. It isn’t. $14 trillion dollars of annual output is not pocket change. But over the last 40 years, a massive transfer of wealth has been taking place. The United States has watched its manufacturing base crumble, and with it, good unionized jobs. Middle class wages have remained largely steady for 40 years despite record economic growth, rising wages for the top earners, and staggering corporate profits. The middle class is being squeezed and the poor are going hungry. And yet, the rich are better off than they ever have been.
I come from a family of small-business conservatives. My father works in the fishing, farming, and forestry industries. My uncles run a chain of successful Maine retail stores. They are firm believers in free-market rugged individualism. Their own father embodied the American dream. Through hard work and dedication, he pulled himself out of obscurity and poverty to become a very successful and influential businessman. Anybody else, they argue, can do the same.
But, as any economist will tell you, free markets aren’t fair. They are brutal. And from time to time they fail. The government exists to do more than provide security. It is there to provide a safety net for when an individual gets sick or injured. It is there to help when economic cycles (and greedy individuals) plunge the nation into bouts of extended unemployment. The government should exist to balance out the irregularities of the markets and to prevent the worst excesses of corporate greed. It used to.
I am not advocating that the government step in and simply take money from the rich and hand it to the poor, as many conservatives crudely suggest. I am advocating that the government properly regulate against the excesses of capitalism. I am advocating that multi-millionaires and billionaires pay a slightly larger percentage of their massive wealth to ensure that children don’t go to sleep hungry, that even more kids are not crammed into already overcrowded classrooms, and that low-income individuals who need medical attention don’t put off seeing a doctor until it is too late.
Politicians who suggest that massive cuts to education, health care, and core social safety net programs are needed to balance the budget are deluded. Yes, cuts do need to be made. Everybody must share in the pain of reduced spending. But let’s make sure that the rich pay their fair share as well. We do not need to balance the budget wholly on the backs of the already suffering poor.
In the past, class warfare was an ineffectual political strategy. As surveys point out, the less well off don’t necessarily resent the rich. Like most others, they relish the idea of possibly joining their wealthy ranks someday. How extraordinarily and obscenely wealthy do the rich need to get, and how much does the rest of the country need to suffer, before the masses realize that this gross inequality of wealth is not good for our country? Remember, Democracy only works when we claim it as our own. I am not advocating that we abandon a market economy. Let’s just restore some sense to our polity that is looking more like a plutocracy every day.
The Gringo Trail
If somebody told me that they mountain biked down the “most dangerous road in the world,” I might scoff at them. Surely there are more dangerous roads. And surely people don’t mountain bike down them. Little did I know that I would meet two adventurers in Buenos Aires, Argentina, spend a month backpacking through Bolivia and Peru, and indeed live to tell the tale of when I tore down “Death Road,” my heart in my throat, on two wheels.
I had no intention of traveling after my semester studying in the “Paris” of South America. Buenos Aires was a large, crowded, dirty, noisy, and downright dangerous metropolis. My semester would wear me out, I was sure. I would be broke. I would have to change my flights. Then I met Adam, an adventurer and an expert on traveling on a budget.
Adam, a business major from Madison, Wisconsin had spent roughly a month before our program began backpacking through southern Argentina and Chile. He spent freezing cold nights camped out in a small personal tent in Tierra del Fuego where, during the summer, frigid Antarctic winds never cease. He was a capable, experienced traveler, who could coax even the most timid on any adventure.
Adam had post-study plans to conquer the “Gringo Trail,” the famous tourist route that starts in Buenos Aires and ends at the ruins of Machu Picchu. We traveled several times together during the semester; to Iguazu to see the world’s most magnificent waterfall, and Cabo Polonio, Uruguay an isolated, electricity-free, hippy beach commune, where we arrived a night earlier than planned. Stranded and without a hostel we crashed in the sand dunes, built a small fire, drank cheap whiskey and coke, and strummed a guitar until the fire died out and the sounds of crashing waves lulled us to sleep.
Adam had planned to attempt the “gringo trail” on his own but after tasting my fish bouillabaisse in Cabo Polonio, decided he could use the company and especially my skills as a hostel chef. At first I was hesitant but decided that if I didn’t go, I would forever regret it.
During the final few weeks of classes in Buenos Aires, we scrambled to acquire the necessary visa documents, a nightmare of bureaucratic paperwork, and reschedule our flights. We would leave in early July from Buenos Aires and would complete the trail by mid August. I was worried about my funds, being robbed, and dying in a bus accident, but was elated at the prospect of such an adventure.
Bolivia, the poorest country in South America, was the first stop. We met up with Joe, another American student from San Francisco who would round out our travel trio with his self-deprecating humor and impeccable soccer skills. We boarded a crowded 4AM bus to Bolivia. The bus attendant implored us to refrain from spitting on the floor, suggested that men sit down when they pee, and forbid us from removing our shoes. I knew that the 28-hour ordeal would be just the beginning of a month of severe culture shock.
The bus rolled to a stop at the Bolivian border town of Villazón as dawn broke. Heavily armed police officers boarded the bus and prodded our luggage with their assault rifles. At roughly 11,000 ft above sea level, Villazón is a village of stray dogs and fowl, dusty unpaved roads, rough cinder block buildings, and women dressed in beautiful colored skirts and bowler hats who peddle their goods on gravel sidewalks. When compared to the United States, Argentina is a relatively poor country, but the transition to Bolivia was like being transported to another world, the abject poverty was unavoidable and sobering.
We hopped on a late morning train to Tupiza, the base for our highly anticipated jeep tour of the Bolivian salt flats. After hours of breathing in dust in the lurching cabin of the local train we arrived. Tupiza turned out to be another depressing, hardscrabble town that survives on an infusion of tourist dollars. After a few negotiations and skilled bargaining, we secured a four-day jeep tour with a local tour guide company. Santos, a handsome, middle aged, short, and very cheerful Bolivian, would be our guide. A silent fourteen-year-old girl would tag along as our cook. Much to our surprise, she churned out filling lunches and impressive three-course meals each night.
Santos guided us through four days of breathtaking monochromatic desert vistas, terrifying blown tires, mechanical problems, wrong turns, and freezing nights in mountain villages that lacked electricity, heat, or running water. The trip concluded with a sunrise trip to the Uyuni salt flats. Located 12,000 ft above sea level, the Uyuni flats are dry prehistoric lake beds that consist of 4,000 square miles of perfectly flat, several meter thick white salt. When the sun peeked over the horizon that morning, our bodies cast mile long shadows across the seemingly endless flats. It was perhaps the most surreal experience of my life.
We meandered our way north, stopping in dilapidated Potosí, one of the highest cities in the world, to tour the silver mines. At the mines’ entrance, we had to sign a legal waiver protecting the tour company from lawsuits should a cave in occur. The small print told of the hundreds of thousands, or perhaps millions, of people who had died in the mines since their founding in the 1500s. Led by a retired miner, we went four levels and several hundred feet deep into the mines. Along the way we met some miners, fourteen-year-old boys in filthy clothing, who worked twelve-hour shifts for a few dollars a day. The miners subsisted on chewed coca leaves, soda, 200-proof grain alcohol, and cigarettes. Food was forbidden. Between the tight spaces, toxic dust, and 15,000 foot altitude, I nearly collapsed from breathing difficulties. The experience was truly a nightmare. There is no better way to put my own privileged life into perspective than to chat with children who break their backs in the bowels of the earth while praying to statues of Tio, the devil who looks over them. God, we were told, never enters the mines.
The large, modern capital, La Paz, was our jumping off point for mountain biking. Vertigo tours, a well-respected tour group, would be our guide for the twelve thousand foot plunge down the most dangerous road in the world. We started our descent next to a frozen lake in a mountain pass. Within three hours we had descended into tropical rainforest; the temperature changing from below freezing to a balmy 85 degrees. The winding unpaved road was ominously titled “Death Road,” due to the estimated 200-300 people that annually slide off to their death. Constructed by Peruvian prisoners in the early 1930s, the road is a mere 15 feet wide, has drop offs of up to a mile on the left side, lacks guard rails, and still supports two way traffic. Heavy fog, reckless drivers, slippery conditions, and road collapses result in many vehicles plunging off the edge. Not a single person has ever survived the fall. While a bypass was built in 2006, and mountain bikers now dominate the road, it is still not safe from danger. Many tourists lose control of their bikes and disappear over the side. I arrived safely at the bottom, after a three-hour white-knuckle descent. We were informed afterwards that an Israeli girl lost control of her bike and disappeared into the abyss just the week before. They were unable to recover her body.
Cuzco, a beautiful old Incan town that tourist dollars have well maintained, was our base for the trek to Machu Picchu. After a brief rest, we booked a tour and started off. Winding our way through the Peruvian countryside, we passed through small villages, coffee growing operations, and coca plantations. We sampled locally brewed, delicious, and refreshing chicha, a lightly fermented corn beer and picked passion fruit from the trees. On day two we climbed our way up and through the snow-covered Salkantay pass, 15,500 ft above sea level, and then began our two-day descent to the ruins. On the fourth day, we crashed at an overpriced hostel in Aguas Calientes, the base town for Machu Picchu. We awoke at 2:45 AM and rushed to the famous Incan staircase. Hundreds were already waiting for the gate to open, eager to be among the first 400 to arrive at the summit entrance to the ruins. Those lucky few would gain entrance to Wayna Picchu, the guard station that towers behind the traditional ruins and provides a clear view into the valleys on either side of the stunning site. After an exhausting race, we were among the first ten to reach the top of the staircase. Once in the ruins, we slowly and carefully climbed the narrow footpath up Wayna Picchu, knowing that if we lost our footing, we would plummet to our death. The risk was worth it. As the sun rose it burned off the clouds and early morning haze, casting long beams of light across the ancient city. I sat down on a large rock, looking out over Machu Picchu as an Incan guard had likely done nearly 600 years before, protecting the Incan government from attack. I took a deep breath of the fresh morning air and stared, transfixed, at the immaculate stone structures and into the lush green valleys below.
I was so glad I hadn’t flown home in July. I would have been pulling espresso shots for tourists or fishing for mackerel and, in vain, for striped bass. Had it not been for Adam’s insistence, I would have missed the most terrifying, the most exhilarating, and indeed the most enlightening travel experience of my life. I wouldn’t have seen how Bolivians survive in their ubiquitous poverty. I wouldn’t have learned about the terrible and difficult life of the child miners in the Potosi mines. I wouldn’t have risked my own life bombing down a nearly suicidal road in search of the ultimate thrill. My semester in Buenos Aires was indeed rewarding. But after spending a month wandering through some of the harshest, and certainly highest altitude terrain in South America, to stand on top of what was once, to many, the top of the world, was an experience that opened my eyes to an existence truly foreign to my own and to the harsh and cruel beauty of the world around me.
I had no intention of traveling after my semester studying in the “Paris” of South America. Buenos Aires was a large, crowded, dirty, noisy, and downright dangerous metropolis. My semester would wear me out, I was sure. I would be broke. I would have to change my flights. Then I met Adam, an adventurer and an expert on traveling on a budget.
Adam, a business major from Madison, Wisconsin had spent roughly a month before our program began backpacking through southern Argentina and Chile. He spent freezing cold nights camped out in a small personal tent in Tierra del Fuego where, during the summer, frigid Antarctic winds never cease. He was a capable, experienced traveler, who could coax even the most timid on any adventure.
Adam had post-study plans to conquer the “Gringo Trail,” the famous tourist route that starts in Buenos Aires and ends at the ruins of Machu Picchu. We traveled several times together during the semester; to Iguazu to see the world’s most magnificent waterfall, and Cabo Polonio, Uruguay an isolated, electricity-free, hippy beach commune, where we arrived a night earlier than planned. Stranded and without a hostel we crashed in the sand dunes, built a small fire, drank cheap whiskey and coke, and strummed a guitar until the fire died out and the sounds of crashing waves lulled us to sleep.
Adam had planned to attempt the “gringo trail” on his own but after tasting my fish bouillabaisse in Cabo Polonio, decided he could use the company and especially my skills as a hostel chef. At first I was hesitant but decided that if I didn’t go, I would forever regret it.
During the final few weeks of classes in Buenos Aires, we scrambled to acquire the necessary visa documents, a nightmare of bureaucratic paperwork, and reschedule our flights. We would leave in early July from Buenos Aires and would complete the trail by mid August. I was worried about my funds, being robbed, and dying in a bus accident, but was elated at the prospect of such an adventure.
Bolivia, the poorest country in South America, was the first stop. We met up with Joe, another American student from San Francisco who would round out our travel trio with his self-deprecating humor and impeccable soccer skills. We boarded a crowded 4AM bus to Bolivia. The bus attendant implored us to refrain from spitting on the floor, suggested that men sit down when they pee, and forbid us from removing our shoes. I knew that the 28-hour ordeal would be just the beginning of a month of severe culture shock.
The bus rolled to a stop at the Bolivian border town of Villazón as dawn broke. Heavily armed police officers boarded the bus and prodded our luggage with their assault rifles. At roughly 11,000 ft above sea level, Villazón is a village of stray dogs and fowl, dusty unpaved roads, rough cinder block buildings, and women dressed in beautiful colored skirts and bowler hats who peddle their goods on gravel sidewalks. When compared to the United States, Argentina is a relatively poor country, but the transition to Bolivia was like being transported to another world, the abject poverty was unavoidable and sobering.
We hopped on a late morning train to Tupiza, the base for our highly anticipated jeep tour of the Bolivian salt flats. After hours of breathing in dust in the lurching cabin of the local train we arrived. Tupiza turned out to be another depressing, hardscrabble town that survives on an infusion of tourist dollars. After a few negotiations and skilled bargaining, we secured a four-day jeep tour with a local tour guide company. Santos, a handsome, middle aged, short, and very cheerful Bolivian, would be our guide. A silent fourteen-year-old girl would tag along as our cook. Much to our surprise, she churned out filling lunches and impressive three-course meals each night.
Santos guided us through four days of breathtaking monochromatic desert vistas, terrifying blown tires, mechanical problems, wrong turns, and freezing nights in mountain villages that lacked electricity, heat, or running water. The trip concluded with a sunrise trip to the Uyuni salt flats. Located 12,000 ft above sea level, the Uyuni flats are dry prehistoric lake beds that consist of 4,000 square miles of perfectly flat, several meter thick white salt. When the sun peeked over the horizon that morning, our bodies cast mile long shadows across the seemingly endless flats. It was perhaps the most surreal experience of my life.
We meandered our way north, stopping in dilapidated Potosí, one of the highest cities in the world, to tour the silver mines. At the mines’ entrance, we had to sign a legal waiver protecting the tour company from lawsuits should a cave in occur. The small print told of the hundreds of thousands, or perhaps millions, of people who had died in the mines since their founding in the 1500s. Led by a retired miner, we went four levels and several hundred feet deep into the mines. Along the way we met some miners, fourteen-year-old boys in filthy clothing, who worked twelve-hour shifts for a few dollars a day. The miners subsisted on chewed coca leaves, soda, 200-proof grain alcohol, and cigarettes. Food was forbidden. Between the tight spaces, toxic dust, and 15,000 foot altitude, I nearly collapsed from breathing difficulties. The experience was truly a nightmare. There is no better way to put my own privileged life into perspective than to chat with children who break their backs in the bowels of the earth while praying to statues of Tio, the devil who looks over them. God, we were told, never enters the mines.
The large, modern capital, La Paz, was our jumping off point for mountain biking. Vertigo tours, a well-respected tour group, would be our guide for the twelve thousand foot plunge down the most dangerous road in the world. We started our descent next to a frozen lake in a mountain pass. Within three hours we had descended into tropical rainforest; the temperature changing from below freezing to a balmy 85 degrees. The winding unpaved road was ominously titled “Death Road,” due to the estimated 200-300 people that annually slide off to their death. Constructed by Peruvian prisoners in the early 1930s, the road is a mere 15 feet wide, has drop offs of up to a mile on the left side, lacks guard rails, and still supports two way traffic. Heavy fog, reckless drivers, slippery conditions, and road collapses result in many vehicles plunging off the edge. Not a single person has ever survived the fall. While a bypass was built in 2006, and mountain bikers now dominate the road, it is still not safe from danger. Many tourists lose control of their bikes and disappear over the side. I arrived safely at the bottom, after a three-hour white-knuckle descent. We were informed afterwards that an Israeli girl lost control of her bike and disappeared into the abyss just the week before. They were unable to recover her body.
Cuzco, a beautiful old Incan town that tourist dollars have well maintained, was our base for the trek to Machu Picchu. After a brief rest, we booked a tour and started off. Winding our way through the Peruvian countryside, we passed through small villages, coffee growing operations, and coca plantations. We sampled locally brewed, delicious, and refreshing chicha, a lightly fermented corn beer and picked passion fruit from the trees. On day two we climbed our way up and through the snow-covered Salkantay pass, 15,500 ft above sea level, and then began our two-day descent to the ruins. On the fourth day, we crashed at an overpriced hostel in Aguas Calientes, the base town for Machu Picchu. We awoke at 2:45 AM and rushed to the famous Incan staircase. Hundreds were already waiting for the gate to open, eager to be among the first 400 to arrive at the summit entrance to the ruins. Those lucky few would gain entrance to Wayna Picchu, the guard station that towers behind the traditional ruins and provides a clear view into the valleys on either side of the stunning site. After an exhausting race, we were among the first ten to reach the top of the staircase. Once in the ruins, we slowly and carefully climbed the narrow footpath up Wayna Picchu, knowing that if we lost our footing, we would plummet to our death. The risk was worth it. As the sun rose it burned off the clouds and early morning haze, casting long beams of light across the ancient city. I sat down on a large rock, looking out over Machu Picchu as an Incan guard had likely done nearly 600 years before, protecting the Incan government from attack. I took a deep breath of the fresh morning air and stared, transfixed, at the immaculate stone structures and into the lush green valleys below.
I was so glad I hadn’t flown home in July. I would have been pulling espresso shots for tourists or fishing for mackerel and, in vain, for striped bass. Had it not been for Adam’s insistence, I would have missed the most terrifying, the most exhilarating, and indeed the most enlightening travel experience of my life. I wouldn’t have seen how Bolivians survive in their ubiquitous poverty. I wouldn’t have learned about the terrible and difficult life of the child miners in the Potosi mines. I wouldn’t have risked my own life bombing down a nearly suicidal road in search of the ultimate thrill. My semester in Buenos Aires was indeed rewarding. But after spending a month wandering through some of the harshest, and certainly highest altitude terrain in South America, to stand on top of what was once, to many, the top of the world, was an experience that opened my eyes to an existence truly foreign to my own and to the harsh and cruel beauty of the world around me.
Subscribe to:
Comments (Atom)