Sunday, August 14, 2011

How the Black Market Beat The Government: Collapsing Economies, Class Warfare and Other Such Nasty Realities

Alright already, this is the second country I have lived in during economic collapse.

For the first couple years of the 1990s, I lived and worked in Moscow, and watched their country and economy fall apart. When I arrived there, Communism was still clinging to what shards of control it could muster. The city was in ruins. The stores were empty. People had plenty of money, but there was nothing to buy. It was a country where no one worked, because under their model, they would get paid whether or not they did anything, and so what if they didn't get paid? Everyone had money, and you couldn't get anything...unless you could turn up some American of European currency and shop on the black market. I remember the bread lines that wrapped around the block. Soon people could buy only half loaves, and then quarter loaves, and then there was nothing left.

While all this was going on, the 'elite' had a great old time. They would drive in their special lanes in their motorcades. My Russian teacher got a notice that she had 'won' a crappy apartment on the outskirts of town, and her stuff was removed from her very nice, downtown apartment while an aparatchik moved in.

The Soviet Union was created by class warfare - the uprising of the peasants against the middle and upper class, and the then forced sharing of goods, while those in power quickly seized upon wealth.

As the Soviet Union waned, and was infused with money from the outside world, buying up their treasures and turning their landmarks into casinos, the wealthy continued to hold the reins. They were wooed by their western business partners, changed their names from Communists to Capitalists, and are still in control.

I have not been back to Russia in 20 years. Nor do I desire to return, except if I can go to the beautiful lands of Siberia and bypass Moscow. So I cannot speak to what it is like today.

I did see a great deal of pain and suffering among the people while I was there.

Now we seem to be faltering. Only it is the opposite problem we have: There are plenty of goods, but the money supply among the lower and vanishing middle class is drying up, so people are not buying as much.

This is the most basic flaw of the Tea Party ideals - if you keep pumping money into the people who make the goods and taking it away from those who buy the goods, then you have broken the economy.

So, the lower and middle class participated in a massive bailout of the wealthy: We paid taxes, while they didn't, and part of this tax money, as well as a good bit of borrowed money, went into bailing out wall street, the banks, and so forth. Now that the middle class and lower classes need a bail-out, who is helping? Not the government, not the wealthy, not corporations.

Across the world we have seen rioting - from the Middle East to London. Governments have fallen, and the greedy leaders have fled, usually emptying the national vaults on the way out, but there you have it. And so they go to isolated islands to live their lives away.

(Our own former president cannot leave the US for fear of being arrested for war crimes. Just a side note)

In London, with the riots raging, people are making note that it is not just the lower class behaving badly, but they have also put the blame on the rich, the MPs and other forces of power that have created the hopeless situation in which the poor find themselves.

Class warfare has been waged over the last 30 years in this country, as the policies of conservative leaders have attacked the middle class and eaten up 80% of the nation's wealth for themselves. Now that the middle class is dwindling they are stepping up their attacks, going after unions, public employees, public school, student loans, and many of the other mainstays of the working people.

I just see the country as a ripe tender-box awaiting a return strike from the lower portion of the economic food chain.

Polls keep indicating that 75% or more of the people in the country disapprove of the wealthy not paying their share in taxes. The GOP candidates at the debate last week blame the economy on Obama, forgetting about the Republicans who preceded him racking up trillions in debt as they took us into unnecessary wars, reduced taxes for the wealthy, and eliminated all controls on the banking industry, opening up the way for the toxic assets that burst the housing bubble and brought the stock market to its knees. They never mentioned the derivatives, whereby wealthy people could essentially gamble on poor people and win money if their houses were foreclosed, or they went bankrupt.

I can feel peoples' frustration rise.

John McCain had a rowdy and angry crowd on his hands, and was nearly booed off the stage for suggesting that the way out of the mess was to reduce the corporate tax rate at a town hall meeting.

People have called for people to show up at public meetings being held by their representatives and to carry signs that have a dollar bill and the words "do I matter now?"

I just don't know how much people are going to be willing to put up with.

Certainly in this country, people have the opportunity to peacefully change power through the use of the ballot box.

The sad thing is that unknowledgeable and easily manipulated millions keep buying into the 30 second sound bites and slick TV ads that blame Obama and the Democrats for the problems. And now that corporations are people and money is speech, unregulated millions of dollars are going to be further invested in painting a picture for you of why the wealthy machine should continue to feed itself.

I am concerned that we will not see enough change at the polls to see the sort of shift in congress that will release a deadlock and allow needed corrections to start repairing our situation.

Incidentally, for those of you unaware, every Republican member of congress has signed the Grover Norquist no tax pledge agreeing to never raise taxes. Ever. No exceptions.

So, an economy based entirely on output with no increase in revenue ever. This sounds like the predicament of the working poor - they work and work, and their wages go down, and they charge up their credit cards, and work... they look for another job, but none is out there. The bills keep coming, the paychecks don't... Hmmm

I am going into this school year with a reduced paycheck and an increased workload. Yes, we are all taking a 3% cut, and at the same time, the state is completely rewriting all standards, curriculum and so forth. We got rid of TV to reduce our spending by 3%.  It's a small price to pay, so it's not a huge thing, but still these little cuts in pay, and cuts in lifestyle add up. It's a result of the fact that people in Colorado don't want to pay taxes. We are 49th out of 50 states in terms of spending on education, heading toward being the very bottom spender in the country. Who is going to pay the price? Youth who do not receive the excellent, free public education to which they are entitled, and therefore future generations are deprived of some untold number of people who could have been the intellectual giants of their day, who are doing something unrewarding and mundane with their lives while trying to keep their heads afloat.

The best place to start an economic stimulus is by investing in the future. But to the right, stimulus and investment are bad words.

I think there is just going to come a tipping point where the greedy get so caught up in trying to rob the poor that there is going to be a backlash. I also feel that the longer this backlash is put off, the harsher the backlash will be. I hope the backlash will be peaceful and involve peaceful demonstration and change of power at the polls.

But I have seen the acts of desperate people. I used to stumble over the bodies, some still living, some not, that frequently cluttered the streets of Moscow, as people indulged in drugs and alcohol, often made in bathtubs and other such well regulated and sanitary venues. Sometimes people just give up. I hope this is not what is in store for Americans.

Those black marketeers I spoke of earlier in this article, they may have saved Russia. Through the years, they developed sophisticated means of acquiring and dispersing goods. The shadow economy provided what the government could not. Many of these same thieves, who survived the exciting shootout with police and other thugs and so forth,  later established ventures in conjunction with the government, and many are the entrepreneurs of today. Their shadowy methods were legitimized. So in Russia, the 'class warfare' was a subtle taking over of the economy by the people.

Maybe we can do something so sly.

1 comment:

  1. Something big needs to happen, and like you, I hope it's peaceful.