Celebrate the Facts!
The inauguration of Ronald Reagan in 1980 was the dawn of neoliberalism, a political philosophy that favored free-market capitalism, deregulation, and reduction in government spending. Neoliberalism certainly benefited the wealthy but has failed the bulk of the country. Associated shareholder-value mantras favor profit at the expense of labor and so cause a huge social cost and transference of wealth. Moving toward a planned economy with strategic actions to support long-term growth and sharing of wealth is critical to resolving the social problems facing the United States and all mankind.
The election of Ronald Reagan in 1980 was the dawn of neoliberalism Reagan and his associates had a core vision of anti-communism, lowering marginal tax rates on the wealthy, and deregulation. The Reagan regime had arguable successes: stabilizing El Salvador, GDP growth, and buffering the Soviet Union. The empirical outcome of neoliberalist tax policy and its impact on the bulk of the population of the country are an example of failed policy.
The Reagan regime sponsored two major tax cuts: The Economic Recovery Tax Act of 1981 and the Tax Reform Act of 1986 which were summarized by the terms trickle-down economics and supply-side economics. The Economic Recovery Tax Act of 1981 cut the highest personal income tax rate from 70% to 50%. The Tax Reform Act of 1986 cut the highest personal income tax rate from 50% to 38.5% and which was decreased to 28% in trailing years.
The Reagan Revolution’s neoliberalist argument was a reduction in marginal tax rates would result in incentives for people to strive to get rich and consequent market incentives would result in benefits for all - hence the summary term trickle-down economics. The results have been startling and very positive if one is wealthy. Otherwise, not so much.
The evaluation of the current situation poses certain questions:
Information on median income was obtained at https://www.census.gov/data/tables/time-series/demo/income-poverty/historical-income-households.html. The graphic on the changes in distribution of wealth is presented at https://www.stlouisfed.org/open-vault/2019/august/wealth-inequality-in-america-facts-figures.
There is a nation within the United States – The Confederate States of Misery – consisting of seven states in the south-central part of the country: Alabama, Arkansas, Kentucky, Louisiana, Mississippi, Tennessee, and West Virginia. These states all share a common cultural identity and all follow an anti-democratic system of governance. The anti-democratic governments in these states have missed a big fact: repressing diversity, suppressing women’s reproductive rights, suppressing organized labor, legislating regressive tax policies, and encouraging segregation and racial prejudice throttle economic growth for all and result in the economic stagnation that is The Confederate States of Misery.
Five of these states were members of the Confederate States of America. West Virginia was partitioned from Virginia during the Civil War as a Union state. Kentucky was a neutral slave state occupied by Union troops. The cultural, economic, and governmental characteristics of these states tie them together in the Confederate States of Misery – a failed autocratic alliance of governance that does not serve its population.
There are no apparent geographic causes of grinding poverty in the Confederate States of Misery; all these states have substantial natural assets and resemble the United States as a whole. Many areas of these states feature beautiful topography and would otherwise be attractive for tourism and related development. The cause of the economic stagnation is poor governance based on archaic cultural dispositions including racial bias, and that is what separates them from prosperity. After the end of Apartheid in South Africa, GDP growth rose to nearly 3% from 1.25% during 1980–94. The stagnant economic conditions in the Confederate States of Misery appear very similar to what occurred in South Africa during Apartheid and the end to such is the first step towards progress for all.
Correlation is not causation is the mantra of data analysis but numbers do inform and perhaps an examination of the facts can help open a dialogue between ideologically opposed political groups. The Confederate States of Misery from 1997 to 2019 had a GDP growth of 1.3% annually, almost identical to the South Africa Apartheid value, compared to the United States rate of 2.3%, so they are falling farther behind the rest of the United States every year. This ideologically aligned group of repressive governments has empirically failed in the most important indicator of economic prosperity and in its duty to protect and help its citizens, but there is much more evidence for the thesis of this investigation.
Trailing is a snapshot of indicators of the human cost of that failed governance:
The facts on the governance:
The racial composition of these states is particularly interesting. The Confederate States of Misery include 20% African Americans compared to the United States value of 12% and that population is much higher in Alabama (26%), Louisiana (32%), and Mississippi (38%), all states with historic severe voting rights suppression. The Hispanic population in the United States is 18% compared to 4.3% in the Confederate States of Misery likely due to historic poor economic opportunities due to distressed wages and historical racism but empirical consideration is outside the scope of this examination. Asian populations are also negligible compared to the United States rate of 6%, perhaps also indicative of avoidance of residence due to hostile environments.
Republicans have deepened their hold on Southern state legislatures and gerrymandered House districts to minimize the ability of Democrats to make inroads in Congress. Various metrics are used to evaluate underrepresentation but they all essentially boil down to the same concept – taking the percentage of Democratic voters in the state and comparing that to the number of seats in the House in that state to provide an objective determination of the effect of gerrymandering. The Confederacy States of Misery uses gerrymandering to maintain a firm hold on power by white conservative Republican males.
Gerrymandering has been a topic of public debate since the birth of the United States and court decisions have ebbed and flowed depending on the political makeup of the federal bench and the Supreme Court. The recent sharp conservative turn of the federal judiciary as a whole and the Supreme Court does not bode well for future efforts to restrict gerrymandering and so free up opportunities for progressive representatives.
The future of the Confederate States of Misery appears bleak. Opportunities for progressive and diverse candidates seem out of reach and finding an end to Apartheid and repression of the poor in general appears hopeless. A generational approach to gaining state legislative seats and fostering good governance at the state level would help not only in the welfare of the state but also gaining federal representation that in some way resembles the demographics of the states. The national Democratic Party needs to focus and fund more than just presidential election campaigns to accomplish meaningful change and make that commitment long-term. Alas, the Democratic Party appears lost in tangential cultural debates and frivolous ideological disputes with its counterpart and seems to have written this area off as hopeless.
A focus on pragmatic economic issues at the national level would help but the two parties appear gridlocked on ideological tribal discussions that generate emotions but few results. It is odd the two parties can agree on incredible defense expenditures to defend against non-existent military challenges but not understand poverty and hopelessness is an existential threat to the United States. Past measures to improve poverty have been effective and the investment itself, while not only being moral and ethical, likely would pay back over time by improved GDP growth alone, but that is a subject of another investigation.
GDP data is available at https://apps.bea.gov/iTable/index_regional.cfm. Data on GDP growth in South Africa is found at https://www.imf.org/external/pubs/nft/2006/soafrica/eng/pasoafr/sach2.pdf. Poverty rates are provided at https://www.census.gov/data/datasets/2018/demo/saipe/2018-state-and-county.html. Rates of child poverty are presented at https://data.ers.usda.gov/reports.aspx?ID=17826. Life expectancy at birth data can be found at https://www.kff.org/other/state-indicator/life-expectancy. Flat income tax data is located at https://www.thebalance.com/state-income-tax-rates-3193320. Unionization by state information is presented at https://www.bls.gov/news.release/union2.t05.htm. The unionization rate for the United States is available at https://www.bls.gov/news.release/pdf/union2.pdf. Voter requirements can be referenced at https://www.theguardian.com/us-news/ng-interactive/2019/nov/07/which-us-states-hardest-vote-supression-election. Minimum wage information was obtained at https://www.ncsl.org/research/labor-and-employment/state-minimum-wage-chart.aspx. Data on federal representation can be reviewed at https://projects.propublica.org/represent/states. A good summary of reproductive rights status can be found at https://www.usatoday.com/in-depth/news/nation/2019/05/15/abortion-law-map-interactive-roe-v-wade-heartbeat-bills-pro-life-pro-choice-alabama-ohio-georgia/3678225002/.
Oil-rich countries Saudi Arabia, Kuwait, and the United Arab Emirates leveraged their oil wealth to build exciting consumer societies with a permanent servant imported labor class. Saudi Arabia (38% imported labor), Kuwait (70% imported labor), and the United Arab Emirates (88% imported labor) have used cheap imported labor to provide construction, household services, and some technical and educational occupations, creating a lavish lifestyle. The downturn in oil consumption due to COVID economic consequences has created budget issues for these countries and consequent downstream suffering for imported labor.
Oil has been associated from its very beginning with boom-and-bust cycles – in exploration, production, and distribution. The worldwide depression created in large part by the United States’ flaccid management of COVID created a severe downturn in the world’s largest economy, resulting in a huge international drop in both oil price per barrel and the amount of oil consumption.
The oil-rich economies in the Middle East used the historical revenues from oil sales to support a ‘rent’ distribution economic system in which each citizen both directly and indirectly participates in the money provided by oil production.
Kuwait is representative of this concept in action. There is no income tax in Kuwait and energy, water, and food is subsidized, plus there is an entitlement to public sector employment for citizens. About 335,000 Kuwaitis worked in the public sector in 2018, compared to only 64,000 in the private sector. Kuwaitis in the private sector earn less on average than in government as imported workers are far less expensive than Kuwaiti citizen labor. For instance, an Egyptian educator will work for far less than a Kuwaiti citizen.
In 2018, imported labor was nearly 3.4 million of Kuwait’s 4.8 million total population. The bulk of imported labor works in low-skill occupations such as construction labor, household services, and other service industry and is very poorly compensated. Only about 60,000 of the 1.61 million, or about 4%, of imported workers in the private sector in 2015 earned above the poverty line.
All three of these countries have made numerous efforts at economic diversification. The United Arab Emirates government has financed films, entertainment activities, development of resort and shopping venues, and construction of offshore islands in the shape of palm trees visible from space. The Saudi Arabian governmental company Aramco, through Aramco Americas and its business unit Motiva, owns and operates North America’s largest refinery in Port Arthur, Texas. But regardless of publicly represented successes, the efforts of these governments at diversification have been ineffective and they remain dependent on oil revenue.
Life remains fabulous for the entitled citizenry of these nations, or, at least the men, as all three countries remain deeply entrenched in fundamentalist religious implementation including repression of women through arranged marriages, legal polygamy, and repression of basic human rights.
The exploitation of imported labor is not without some benefits on both sides. Imported workers contribute substantially to the development of these countries but also send much-needed money, technically known as remittances, to their families back home.
Imported workers in the Arab States remitted over $124 billion in 2017, with the United Arab Emirates and Saudi Arabia ranking second and third globally in terms of remittance outflow, and Kuwait and ranking eighth. The leader in remittances is the United States as the chief exploiter of imported labor so American exceptionalism needs to look deeply in the mirror before scolding anyone.
In the United Arab Emirates, imported labor visas tie the imported worker’s status to a sponsor through a contract. The contract agreements provide sparse protection for the imported workers plus there is not much in the way of any form of governmental protection of labor, including basic safety requirements. The contracts make it incredibly difficult for workers to get out of abusive situations, including long work hours, wage theft, and sexual abuse and as such encourage such.
Beginning in early March, Arab countries closed borders as a public health measure. As in the United States, business more-or-less came to a halt. When belt-tightening needs to occur in hierarchal economic systems the bulk of costs are incurred by the unempowered, in this case, imported labor. These countries could well have afforded to tend to their imported labor through subsidies or at a minimum honoring their contracts. Job cuts in Saudi Arabia targeted imported labor first with more than a million imported labor jobs eliminated this year. In the Arab region, an estimated six million jobs will be lost; the majority imported workers.
For imported workers, this has meant massive unemployment, unpaid wages because of failed businesses and attendant wage theft, arrest and deportation, and hunger. Wage theft in this instance meant denying workers their last paycheck and food allowance. Many were stranded due to travel bans or unaffordable tickets and so left in limbo.
Remittances could fall by $100 billion in 2020 because of the pandemic. This shortfall will affect the people in the countries that provide that labor – mainly India, Bangladesh, and the Philippines. This decline will have significant downstream economic and social costs.
The boom-and-bust nature of oil plus its environmental costs in pollution and carbon emissions (resulting in global warming) make it an unsustainable resource. The lack of recognized international labor standards also plays against the bulk of humanity creating a race to the bottom in wages and living standards with an artificial enrichment of the uber-wealthy. The grinding exploitation of labor in the oil-rich Arab nations is only one example of this phenomenon and these topics remain for future investigations. The solutions to these problems remain undiscussed while the suffering is tangible.
Country profiles and information on the number of migrants can be obtained at https://www.un.org/en/development/desa/population/migration/data/estimates2/countryprofiles.asp. Information on Kuwait was published at https://economictimes.indiatimes.com/nri/visa-and-immigration/kuwait-wants-to-bring-down-migrant-population-from-70-to-30/articleshow/76187375.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst. Data on labor inequity and other issues were obtained at https://www.ilo.org/beirut/areasofwork/labour-migration/lang--en/index.htm. Data on remittances was published at https://www.brookings.edu/blog/future-development/2020/09/17/pandemic-highlights-the-vulnerability-of-migrant-workers-in-the-middle-east/.
The Dark Web is legendary, the stuff of tales of sordid deeds, assassination for hire, weapons, and drugs. Want your archrival in the boardroom out of the way? One site claims $100,000 worth of bitcoin will get it done. Feel like buying methamphetamine or heroin? A short tour on the Dark Web and it can arrive two days later by courier. But the hitmen are fables and the drugs, while real, are a flyspeck on the window of international vice and corruption. The Dark Web serves a bigger and higher international good that will be revealed in this investigation.
The Dark Web is a small portion of the Internet that exists on darknets that require special software to access. The Dark Web allows clandestine communication for legal, illegal, and quasi-legal purposes such as selling counterfeit currencies, illegal pornography, hacking tools, false identification, digital fraud instruments, and, especially drugs. Platforms known as darknet markets provide means for sellers to connect with buyers, with cryptocurrencies being the means of exchange and in some cases provide escrow accounts to help ensure transactions are honest. Illicit goods can be transmitted in a variety of manners including digitally but most goods come in standard packaging delivered by common carriers such as the United States Postal Service or FedEx.
The Dark Web was created by the US government to allow spies to exchange information anonymously. US military researchers developed the technology, known as Tor (The Onion Router) in the mid-1990s and released it into the public domain for everyone to use.
Estimates indicated about 100 sites are traveling in illegal goods or services on the Dark Web which includes forums for criminals and markets for illegal merchandise. A recent report by a cryptocurrency analytics firm claimed that cryptocurrency transactions on the dark web grew from approximately $250 million in 2012 to $872 million in 2018 which seems quite a lot but in the bigger scheme of things was beer money. For instance, the United Nations estimated the amount of money laundered globally in one year was 2 to 5 percent of global GDP or between $1.6 trillion and $4 trillion, clearing making much more impact on global health and prosperity.
There is more to this matter than an obese pothead living in his mom’s basement imagining relevance on a dark web forum and buying hashish or LSD or the troubled neighbor buying extra Xanax to get through COVID.
People also access the Dark Web for legal or at least legitimate purposes. They may be using it to browse the Internet anonymously. Many organizations maintain a hidden website on the Dark Web including The New York Times, Facebook, ProPublica, and the US Central Intelligence Agency (CIA). The New York Times and the CIA, for example, are both hoping to facilitate communication with people who can provide sensitive information such as intelligence information or inside stories.
For opposition factions to oppressive regimes that block large parts of the internet or punish political dissent, the Dark Web provides access to information and protection from persecution. For instance, the BBC’s website was specifically mentioned as offering access to people in China, where the BBC is censored. China, Iran, and Vietnam are among countries that have tried to block access to the BBC News website or programs.
Collections of subversive works are available on the Dark Web, away from meddling government censors helping people resist authoritarian governments. There are also sites created for journalists to share files and stories free of tracking. These sites serve as conduits reporters use to smuggle important information about authoritarian regimes that otherwise would wish it concealed.
Hacktivism, using a computer system or network for a socially or politically motivated reason, is an ambiguous area. Whether vigilante justice is ever justifiable is open to debate but certainly, the digital nature of hacktivism makes these self-appointed sheriffs even less accountable. Anonymous, a group branded with the Guy Fawkes mask, is the most recognized of these broad progressive claims but the efficacy of their efforts is debatable. They seem more hat than cattle plus they have an irritating badge as their brand avatar.
Whistleblowing is also a nice corner of the Dark Web. This can expose illegal or immoral corporate or government methods and sources, often in ways quite not appreciated by corporations or conventional governments. The Dark Web was used by whistle-blowers such as Chelsea Manning, Julian Assange, and Edward Snowden to expose government secrets. If these whistleblowers had used legal channels to make their complaints the information would have been concealed. The role of the press in checking abuses of power is inherent in healthy societies.
The undiscussed is always the most intriguing area for further investigation. The Western exceptionalism faction breaks their metaphoric arms patting themselves on the back about having a free and open society. There’s a great deal of finger-pointing in the West about Internet censorship and government repression in other countries such as Iran, Venezuela, China, and Cuba, but how often does Western society look in the mirror? The imprisonment of Julian Assange, regardless of his lack of personal appeal, and Edward Snowden’s exile in Moscow to flee imprisonment for providing information about the United States government breaking its laws are examples of anti-Democratic and oppressive acts.
The freedom of the press in the United States is also open to debate. Corporate media, a topic for a later investigation, is increasingly more consolidated and owned by wealthy interests. Also, it is increasingly more tribal and driven to feed spin information to specific audiences. Aside from that the growing influence of the Internet and social media in news dispensation has driven dissemination by clickbait – sensational articles intended to grab attention to garner advertising revenue rather than provide legitimate journalism. These factors tend to obscure legitimate journalistic exposure and analysis and favor Infotainment and tribally spun misinformation, bringing into question both the credibility and the freedom of the press in the United States.
In 2013 the United States Department of Justice charged Snowden with two counts of violating the Espionage Act of 1917. Chelsea Manning and Assange have also been charged under the same Act, as well as Julius and Ethel Rosenberg, Emma Goldman, Eugene V. Debs, and Daniel Ellsberg, among others. The Act, intended to be used against spies, is now commonly used again whistleblowers, and explicitly forbids the jury from hearing why the defendant acted and bars them from deciding whether the outcome was to the public's benefit. A charge is essentially a conviction which is the major motivation for Snowden’s self-imposed exile in Moscow.
The Dark Web, despite being home to loathsome pedophile groups, purveyors of fraud instruments, and drug dealers, serves legitimate purposes. The sword cuts both ways however and any authoritarian government or cavalier corporate interest is at risk due to its anonymity.
A good starting point is an article presented here https://www.tandfonline.com/doi/full/10.1080/23738871.2017.1298643. Playpen information was provided by https://www.fbi.gov/news/stories/playpen-creator-sentenced-to-30-years. Information on the amount of cryptocurrency spent on the Dark Web was obtained at https://www.imf.org/external/pubs/ft/fandd/2019/09/the-truth-about-the-dark-web-kumar.htm. Information on the Dark Web in China was presented at https://www.vice.com/en/article/d735aa/what-firewall-chinas-fledgling-deep-web-community and https://www.vice.com/en/article/d735aa/what-firewall-chinas-fledgling-deep-web-community. Snowden is often discussed but there is concise information available at https://www.techdirt.com/articles/20170606/18063037535/snowden-explains-how-espionage-act-unfairly-stacks-deck-against-reality-winner.shtml.
Michael Donnelly investigates societal concerns with an untribal approach - to limit the discussion to the facts derived from primary sources so the reader can make more informed decisions.