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Friday, January 24, 2014

Transcript: Inequality, Poverty and Wealth: Galbraith, Gates, Bloomberg, Rogoff, Roubini, Bremer



That is the best we've heard. The book is highly technical but highly useful as well. Inequality and Instability, A Study of the World Economy Just Before the Crisis, by Galbraith and a large company.

On the other end of the spectrum, Bill Gates and Michael Bloomberg are making the round on behalf of the billionaires offensive against poverty. Gates and Bloomberg are talking up how philanthropists such as themselves are turning things around.
Listen to this episode
Bill and Mike

We had to check it out, so we went to the UN to see how this remarkable event had occurred without our being aware. It's so good we don't even know what people are dying from. Well, they're dying from poverty, lack of basic sanitation, unclean water, hunger and the attendant diseases and strife. What we found at the UN Millennium Goals project was that yes, Bill and Mike are right, extreme poverty is in decline. Not so much in numbers, which are pretty much flat, but in terms of the percentage of the population. Key note: Middle income is defined today as about $7,100 gross national income per capita. That is GDP per capita. Sounds okay. By comparison, the US GNI per capita is 52,300 per capita. That is, above the $51,700 median HOUSEHOLD income. Hard to make comparisons, but a middle income nation is about one-seventh the U.S. Naturally when you measure things in per capita terms you are washing out the income inequality. Didn't want you to get too cheerful.

The Millennium Development Goals were set in 1990, a very dark time. Progress to meeting them by 2015 looks better than progress to meet the Kyoto Accords, but not by a lot. Honored a lot in the breech.

The official reports are glossy and positive, though it is not so heartening to us to see kids sitting in the dirt eating a pasty gruel out of plastic bowls. We cringe to think of how this is better.

A brief look at the eight goals. One (a)reduce extreme poverty by half. On target -- for two thirds of the nations, (b) productive and decent employment. Nope. Maybe halfway there, (c) reduce hunger by half, not happening. In fact, in two regions -- Western Asia and Oceania, we're going the wrong way.

Two: Achieve universal primary education. Not going to happen. Enrollment is higher, though.

Three: Promote gender equality and empower women. (a) equal enrollment in primary schools, pretty much done, though total enrollment is below targets, (b) paid employment, not a chance, (c) women represented in national parliaments, goals not met.

Four through Eight

Reduce child mortality, improve maternal health, combat HIV, Malaria and other diseases, ensure environmental sustainability (which refers to clean drinking water, decent sanitation and improving slums; it does not refer to climate change) Not so good. Missing the goals.

This is not a case of jumping only halfway across the canyon. On the other hand, you don't set a goal to make yourself feel bad about not getting halfway there.

What has happened? According to the summary charts Eastern Asia has done well. I guess that would be China. Living better in the cities if you can breathe in the cities. Sub-Saharan Africa is still suffering. Good progress in drinking water, halting the spread of tuberculosis, reducing infant mortality, but not in reducing hunger or mitigating the condition of slum dwellers. Most of the poor live in rural areas and work in agriculture. Children are more likely to be poor, with a poverty rate above 50% in low income countries. Only one-quarter have access to clean water and sanitation.

Now we are not quite so wedded to our dismal look as to denigrate the efforts of tens of thousands of people who work hard for little pay to help make things better, apparently having escaped the neoclassical motive assumption. The work of Bill Gates, although his billions are founded more on monopoly profits than innovation, are helping real people in real ways.

We'll just quote the chief policy recommendations of the UN Millennium Development Goals Gap Task Force:

Reach a development-oriented conclusion of the Doha Round of trade negotiations, implement the commitment to eliminate all forms of agricultural export subsidies, and to provide duty-free, quota-free market access to Less Developed Countries products, assure timely debt relief for critically indebted developing countries.

Yes, agriculture is the major industry of LDC's, Less Developed Countries. Agriculture in the developed world, the industrial farms of the U.S., but also in Europe, is subsidized massively. The Doha round was the round after the Uruguay round of trade negotiations. There the developed nations got what they wanted, with the promise that agriculture and the interests of the LDC's would be taken up in due course. Oops. Didn't happen.

Meanwhile onerous and often odious debt continues to burden developing countries. Debt incurred by dictators or through corruption, often on behalf of big projects promoted by Western megacorporations, cannot be written off. There is no bankruptcy for nations. A country like Ecuador with oil revenue can afford to play hardball and demand writedowns, but other nations are at the mercy of the markets. Exacerbating this was the imposition of Neoliberal strategies that have never worked, AS CONDITIONS FOR DEBT ASSISTANCE by the IMF and World Bank.

Nice to have a few billionaires on the job, though.

There is much more in this arena. But Demand Side says, the right thing to do is to develop and empower the agricultural sectors of less developed nations, with low fossil fuel, sustainable methods. To enable them to compete in world markets, rather than running them out of business with extraordinary subsidies to American and European industrial farms. The U.S. needs itself to turn to smaller-scale, sustainable farming. People making a living on their farms in the LDC's is a recipe for stability, creating a social fabric from dignified work and a base for development. Continued dependency is a recipe for human disaster.

Is our thought

Now, from Doha, Ian Bremer, Nouriel Roubini, Kenneth Rogoff. A sequence in which we agree with Rogoff and disagree with Roubini. Bremer is just stating the facts.


Bremer with Roubini:

Today's podcast brought to you by the most coherent review of the Demand Side podcast we've read. We even put it up as a separate post. From Dan Lett and Liquid Lunch. The review's last paragraph makes me wonder if he has a camera in the room. Quoting

Demand Side Economics is not out to entertain: it expends little energy on production values and Alan Harvey's delivery is drier than a Churchill martini. Having never found a reliably genuine image of Harvey online, I always imagine his dour monologues delivered by Droopy the dog, and I suspect that the excellent transcripts he provides with each episode are really repurposed scripts. But there is a charm to the deadpan, and Harvey's glum sense of humour delivers the occasional wry smile. As an economics neophyte, I appreciate the clarity and scope of these podcasts, and I feel just that little bit better equipped to withstand the barrage of economic crypto-science masquerading as objective information.

Thank you,

Charts of 25 years:


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