Global Analysis from the European Perspective. Preparing for the world of tomorrow

After the US elections: last call for the establishment

The overwhelming majority of polls gave her a strong lead in the electoral colleges count, but the outcome proved to be the exact opposite. America has asked for a change, just like in 2008 with Obama, and the repetition also means the latter did not deliver.

The week before the elections, the US Department of Labor reported that labor force participation had dropped by 425,000 units, reaching a multi-decade high in terms of people not in the job market: almost 95 millions. The US added 547,000 bartending jobs, lost 38,000 manufacturing ones; gained 90,000 part-time jobs, lost 103,000 full-time ones. Obama could boast a multi-year low 4.9% unemployment rate though1)Economic News Release, United States Department of Labor. Something is wrong.

The unemployment rate is dropping because people are giving up on the job market and even when they can find a job, it’s bartending, a very limited career prospect. The recovery boasted by the Obama administration is a bluff and so were the opinion polls calling for a landslide victory for Hillary.

This is all the intellectual brainpower of the establishment could produce: rigged polls and fabricated economic data; it was Trump’s message during the electoral campaign, a message that the American people believed, more than the polls, more than the Nobel laureates telling them how the American economy was in a great shape. Reality against propaganda. Trump rallies showed massive participation, Hillary’s ones needed camera angles to cover up the empty areas. At the end of the day, the truth came from the ballot.

The message is clear: this kind of tricks aren’t going to work any longer. It is time to use intellectual resources to solve problems, not to cause them and then cover up. The revolution is in full swing, it is peaceful and democratic.

What are the problems?

Tax havens: they essentially transfer wealth from those who can’t take advantage of them (the middle-lower classes) to those who can (the wealthy, the multinationals). The former have to pay taxes, the latter avoid them. The missing revenue caused by tax evasion requires government to oppress even further the middle and working class with austerity; higher taxes also further cause tax evasion, which in turn requires even higher taxes to compensate in a never ending cycle that is eating away the wealth of the citizens of the ‘’West’’ and bankrupting states. It is symbolic that the same day of the US elections, the finance ministers of the EU met to discuss definitions of tax havens and potential sanctions. The outcome of the meeting? They agreed that a 0% tax rate is not enough to define a tax haven2)EU agrees zero tax rate is not enough to define tax haven: Padoan, A symbol of a leadership that is not able and probably unwilling to solve the problem. It shouldn’t be of any surprise that most widespread profession found in the infamous ‘’Panama Papers’’ of tax evaders is the politician3)Panama Papers bubble chart shows politicians are most mentioned in document leak database, Independent 2016-05-12.

Immigration: while the previous problem hardly ever gets discussed, immigration has been discussed to death; the outcome is the same though, no results. On one side you have once again the establishment praising the benefits of open borders, on the other side the people, complaining about the lack of integration of immigrants, the high crime rates, the terrorist attacks, the compression of wages brought by the never ending stream of people. The refugee crisis offers a clear example of the problem. When refugees are welcomed, only a handful is settled in the richest areas, among the elites that then boast about their tolerance, their humanity and their welcoming attitude. The overwhelming majority are then settled in ghettos in the poorest areas, which leads to radicalization, crime and all the problems that the elites can ignore, but the lower classes can’t4)How Global Elites Forsake Their Countrymen, The Wall Street Journal 2016-08-11
. The solution is in the middle and comes from the past, not even long ago. Before the 90s, before the mass migration policies of Western governments started. Immigration needs to return to tens of thousands, not hundreds, if not millions. This is the only way Western countries can have the time and resources to properly integrate individuals of different cultures. Failing to restore this will inevitably continue the shift towards resentment against immigrants and a demand of closed borders.

Trade and jobs: the West cannot have an economy of services where goods aren’t produced at all, just imported. A loss of jobs because of modernization and mechanization is understandable. A loss of jobs because it’s cheaper to produce where human rights and working rights aren’t implemented is not.

A return to small-medium enterprises: the original American dream. For decades the establishment has been cozy with multinational, yet true liberalism, though Adam Smith calls for the opposite: small-medium enterprises competing against each other, which would provide the best price for consumers. Today’s Western capitalism is shifting towards oligopoly: few multinationals control the market, buy out competition, ensure that favorable laws are enacted thanks to their massive resources invested in lobbying politicians, and eventually become too big to fail without crashing the entire world economy. This is particularly true when it comes to the financial sector, whose collapse is a constant looming threat. The failure of a small enterprise on the other hand, can be easily absorbed by the market, both in terms of employment and loss of resources. Oligopoly limits the flexibility and competitiveness of the economy, hence it’s undesirable.



References   [ + ]

1. Economic News Release, United States Department of Labor
2. EU agrees zero tax rate is not enough to define tax haven: Padoan,
3. Panama Papers bubble chart shows politicians are most mentioned in document leak database, Independent 2016-05-12
4. How Global Elites Forsake Their Countrymen, The Wall Street Journal 2016-08-11

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