Sunday, July 20, 2014

The GAP - Part VI - global

Friends in Djibouti; they struggle against a 
difficult international economy.
What happens in the developing world when Wall Street extracts their profit from the international market place?

The billions made at the top of the marketplace come from the productivity and resources of workers around the world.  It doesn't trickle down, and the rising tide doesn't float all boats equally.  Wealth is extracted from developing countries in the form of debt, perhaps primarily, and from trade in goods and raw materials.

International participation in Kenya's marketplace affects local prices; did you know?

A family in Kenya, dear friends of ours, has an income of around $60 a month.  About half is spent on cornmeal (maize meal) which is their staple.  In '07 when a few hundred Wall Street players crashed the marketplace, the price of cornmeal doubled in Kenya.  They had to choose between school and food for their children.  Many kids lost a year from their schooling.
 Wealth didn't trickle down, it trickled away to the rich people.

Such things are deliberate.  One Wall Street executive at Chase Manhattan described his job as (1) analyzing a developing country and determining its max earnings, and (2) creating a debt instrument by which that max could be extracted in the form of interest payments.  Sucking wealth out of a developing country; deliberately maximizing the cash flow despite the deadly effect on the targeted country.

In the 80's, western businesses moved from multidimensional focus to just the bottom line of profitability.  Gone were the community benefit considerations, the fair business practices, and the win-win collaborations.  Just the money was left as the definitive metric.  Did you notice?

That's where we are today; what are the possible paths forward?

Note:  I was encouraged by a town in Texas; family there tells me the community is aggressively pursuing local business with no ties to the larger marketplace.  Local workers, local suppliers, local customers; seems to be going well, at least on the small scale.

The only way for a small group of people to become obscenely rich is for huge masses of others to be kept quite poor.