Time to re-Occupy Wall Street?

             Three years after bashing the Occupy Wall Street movement, I’m on board.  Yes, the Occupy Wall Street movement had a point after all. (Too bad it fizzled.)

Inequality is rising and it’s putting the economy at risk.  That’s the assertion of a number of economists, including the author of Capital in the 21^st Century, a 577-page dissertation on inequality over the past three centuries.

            I won’t suggest by any means that this book’s a page turner, but its research and message is revolutionary.  My family has watched me lug around this 10-pound book for the last three months.  If you don’t wish to learn how the capital-income ratio works, I would suggest skipping to the juicier parts on page 250 (or just read my blog, if you can get through it!)

            In the U.S., it turns out the uber rich have been having quite the ride.  Since 1977 (a great year, by the way), the top 1% of the population have absorbed 60% of the additional wealth produced.  This left a meagre 0.5% annual wealth increase for the “bottom” 90% (the majority of us).

            In the U.S. today, the wealthiest 10% of the population control 50% of the nation’s wealth.  The bottom 50% control 20%.  Perhaps even more striking, the top 1% (approximately 2.6 million people in the U.S.) own 20% of the nation’s wealth.  Canada isn’t too far behind with its top 1% owning 12% of national wealth and taking home one third of the nation’s gains from 1997 to 2007.

            It’s not a trend that’s reversing itself anytime soon.  The rich have a tendency to make great returns on their investments.  Given America’s current low-tax environment compared to 30 years ago, the top 10% will likely control over 60% of the wealth by 2030.

            Inequality has already reached the heights that once existed in Europe prior to World War 1.  This was a time when land and factory owners controlled most wealth and when the rest of society lived in misery and filth.  Out of this filth came child labour laws, the formation of unions, the birth of the weekend (yippee!), greater taxation of the wealthy, and much greater equality.

            While the poorest in society today benefit from better labour laws, a social safety net, and greater income overall, it doesn’t mean that we’re moving in the right direction.  A moral question arises: Is it right for Bill Gates to pay less tax as a proportion of income than a single working mother?

Not to mention the economic risk that inequality creates.  Piketty, along with a number of other economists, suggest that inequality creates a stagnation of purchasing power of the middle class that contributes to economic failure.  The wealth of the population’s top 10% peaked twice in the last one hundred years – once in 1928 and again in 2007 – both, not coincidentally, prior to major economic crashes. 

            While many in the U.S. make the claim that the rich create jobs, their investments, in reality, appear to do little but sit and grow interest. 

            And while in the 1800s it was the land-owners who occupied the top 10%, this population segment today consists mostly of “supermanagers,” those highly compensated executives of large firms.  Of the wealthiest 1% of the population, Piketty indicates that 70% are top managers of firms, with only 5% constituting “celebrities” such as actors and athletes. 

The supermanager has found a new niche in society as the meritocratic royal class, where they tend to be compensated Communist-style – whether they perform well or not.  They and the friendly board members who set their salary are all very generous with shareholder funds – when friends start awarding friends salaries, the sky is the limit.  In Canada, I recently heard the average CEO now makes over $9 million. 

The trend will only continue unless serious reforms take place, largely through increased taxation.  As the Conference Board of Canada indicates, taxation works to reduce inequality.  Piketty suggests a straight-forward tax on capital, but it could be as simple as a higher income tax bracket.

Such ideas are never popular among politicians so dependent upon corporate donors.  But something will need to change if greater equality is to be achieved.

Whether we really want it to be achieved is a whole nother question.

When good Mennonites go bad

            Some news you just can’t make up.  Last week I read in Maclean’s that Mennonites are at the heart of a new bylaw in Taber, Alberta, that prohibits spitting, yelling and swearing in public.  In Taber, “rude and destructive” Mennonites are apparently a problem that can only be dealt with by beefing up the law.

            That’s right, Mennonites.  The “quiet of the land,” as they were once known (before they started swearing, I guess). Back in the 16^th Century, Mennonites (a.k.a. Anabaptists) were persecuted for being do-gooders.  In that period, a person who didn’t drink to excess, curse, or abuse his fellow workers could be suspected of being an Anabaptist and consequently be burned at the stake.

            How times have changed.  Now we’re known for hanging out in parking lots, swearing at innocent Wal-Mart shoppers (after church, no less).  

            I suppose with every ethnic group there comes a point in time where a few members tarnish the reputation of the broader group.  And I’m not about to say that Mennonites haven’t done things to upset the applecart in the past (they were persecuted plenty for their refusal to participate in the military), but it’s usually in defense of some higher, moral value like peace or social justice.

             This is just plain embarrassing.  I was once proud to be a Mennonite.  And I realize this is an oxymoron, as Mennonites are taught to be humble.  But I was proud of our humble and quiet ways, gosh darn it!

            As Mennonites, we traditionally enjoy quiet gatherings, with no dancing or alcohol permitted.  Sometimes we’ll have watermelon and roll kuchen (you can look it up) and break into hymns of praise, but that’s the extent of our rabble-rousing. 

            Now we’re at risk of being lumped together with those who allegedly break into cars, chew tobacco and spit at people.

            I suppose I could take the low road and blame this on a different kind of Mennonite.  From what I’ve read, most of the trouble-makers involve the youth of those who have emigrated from Mexico. This group had originally fled to from Ukraine and Russia over 100 years ago, just as my grandfather immigrated to Canada from Russia in the 1920s to escape the Soviet Union.  Now they’re escaping the drug-related violence of Mexico.

They’re certainly used to a different kind of life in Mexico, and seem to face challenges adjusting to Canadian norms and customs.

Despite our divergence in cultures over the last 100 years, we nonetheless bear the same name and ancestral roots.  And just as the majority of Muslims shudder when they hear about the atrocities of the new Islamic State, so I shudder when I hear about Mennonites terrorizing the poor citizens of Taber, Alberta.

            Now if you’ll excuse me, it’s just about time for my meta schlop.