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Corporate Greed Under Fire By Farouk Martins Aresa
Capitalism can restore its balance in the world market if politicians, its concept salesmen can persuade the voters about how much government regulation is enough. Capitalism retained its balance in modern time with the introduction of Social Security, Medicare, Medicaid, Children Health Insurance and food stamp programs in the United States. These were competing ideas between conservatives and liberals but eventually they got it together as socialism put a human face on capitalism.
If anyone doubts conservative’s ideology about too much government, we need to examine our Nigeria to see how layers of state and local governments consume most of the revenue legally through the so called Revenue Mobilization and Fiscal Commission (RMAFC), and illegally by looters. Even helpless Nigerians are alarmed at the salaries and allowances of these bureaucrats. We would not be surprised to find more local government councils than real people in some villages. Since they attract allocations, there are agitation for more states and local councils. It is nothing short of government gone wild, which is the fear of authentic conservatives.
This is why some of us consider the new anticorruption Czar, Mrs. Waziri’s statement that she is now going after the banks or the financial houses as too little, but never too late. The main source of corruption fire in Nigeria is the Government. She must have seen the Obasanjo-Atiku movie. Saw how money allocated to Petroleum Development Fund and other parastatals sourced into the private banks and then into the hands of cronies. If she is looking for anyone living above his or her means, she needs to start from Yar’Adua ex-governor sponsors. No matter what we thought of Ribadu, he went with permission or not, after known Obasanjo’s associates. But then, what is the legacy of anti-corruption Scorpion in South Africa or Githongo in Kenya? Africa! Africa!
Africa is rich in human and natural resources and we hate to pay taxes. Anyone who remembers the Agbekoya crisis in the then Western Region of Nigeria can attest to the evil of too much tax. Ironically, we had efficient leaders who gave us “free” education, healthcare, good roads, one of the tallest buildings in Africa, Cooperative boards to exploit arable land and market our cocoa, the first television station in Africa, supported two world class universities, a sport stadium, and teacher’s training colleges in the good old days. Yet we complained about the “ten per-centers”!
What we had in Western Nigeria then is what people are calling for in the richest countries in the world societies today. No wonder London disappointed us. Those were man oriented politicians. Voters have to be swayed to take sugar coated bitter pill from a smart politician, either liberal or conservative. In Nigeria of today a bag of Shagari rice or beans will do it for poor folks to see them through the month after an election. We can also throw in some ethnic biases within the party of the powerful and mighty that could sink the Country. But it is not only in Africa that we have suppression of voters, turning tables on voters-registration activities and misleading claims.
In the United States of America, there are folks who as in Africa vote against their own interest. Take the case of the so called Joe the Plumber who comes from the rust belt areas of Toledo, Ohio that has been in economic decline for about a decade, ranking as one of the lowest in jobs creation, high home foreclosure, with decrease in median household income. Yet, he rants against Social Security, could not care a hoot for Joe the taxi driver while dreaming about the day he would make more than a quarter of a million dollars as a plumber. To make that kind of money at his level, there has to be a more progressive tax structure to increase his purchasing power which he thought is tax grab. This guy is not a Nigerian and does not live in Africa.
United States is the richest, biggest producer; and consumers of world resources like Nigeria in Africa. Before US stock market sneezes, developing countries’ markets catch the cold. China and Japan worry about their US and European investment stake since they do not want the meltdown. Unless we want to believe that our market is protected or insulated from stock market quakes in global economy. For sure, it has led to decrease in oil demands, the only commodity that is not solely dictated to us by the buyers. Many poor Africans cannot scrape a living without generous support of their relatives abroad; with these layoffs, migrants will be the first to go as the last to come in. Some economists now doubt global unitary management of too much cash in a country.
According to the Paris based Organization for Economic Cooperation and Development: United States amongst its members has the highest inequality and poverty rates in the OECD after Mexico and Turkey. This is confirmed by the US Census Bureau that the richest 10 % earned an average of $93,000.00 and the poorest 10 percent earned $5,800.00. The top tenth of a percent had an average income of $5.6 million and the top one hundredth of a percent made up of 30,000 people had an average income of $25.7 m. A regeneration of neo-feudal system as in Nigeria!
The problem here is that the rate of rising inequality retards social mobility amongst the poor even by hard work and sweat, making children fall behind their parents if they cannot afford the training necessary to move into middle class. Children, who dare in the US, are loaded up with student loans that cut into their discretionary income after graduation. In Nigeria, our school children hawk and beg on city-streets. It simply means that the working class moving into the middle class with the help of Great Society, Fair Deal and the GI Bill even in US, has regressed.
There are other ways of correcting income inequality or redistribution by universal healthcare, good education up to university level for those able and willing without financial impediment, maybe in return for community or military services as presented by one of the US presidential candidates. Others as tax credits for the working poor have been savagely attacked as welfare, as if these people are not paying for the same food or other taxes apart from US Federal tax.
Who in his right mind would have expected US capitalists to lie down and play dead asking for government regulations in the financial market after opposing the same with all the vigor they can muster? If it had happened during the reign of a liberal US President, there could have been cries of communism. So this is what it takes to get staunch capitalists to back down? These are trying times when the strongest amongst us turned to government for solace. There are those of us who would have sworn: that only poor people seek welfare, not corporate bums!
Condemnations of greed are coming from the most conservative to the liberals. Mr. Greenspan, the former US Federal Reserve Chairman for about 18 years, claimed he was “surprised” that the market did not follow his ideologue to regulate itself in its own interest and “shocked” at the extent of the crisis. Sir, you were warned but blinded by the same conservative ideologue. Many warning signs have been coming in different forms about greed in the stock market.
It is true that some of the critics might have exaggerated by labeling stock market a casino. But it was set up as a win-win casino until someone barks at paying more and more for the same commodity changing hands. Some insured that same commodity, sold it, while others bet on its downward value. American stock market created the 1986 Boesky who boasted that greed was good and the Milken of junk bonds that were sent to prison as a result of fraudulent practices. The 1989 Keating Savings and Loan crisis and 2002 Enron “four-one-nine” companies were enough warnings. Regulation was long overdue.
Voters can elect politicians favoring compression of inequalities in wages, benefits; and social services for all; as Canada debated changing baby bonus in Trudeau years. Paid the poor spouse and tax it from the rich spouse in the same family. Conservatives think tax breaks would solve all problems like tax cuts fall from money trees. Tax burden must be spread progressively, most paid by those making most profit from the purchasing power of goods and services of the middle / working / poor classes. Stock markets all over the world will continue to rise and fall to the level most of us can afford. So if you are young and can wait 10 to 20 years to cash in, buy now. |