HOW THE ELITE SABOTAGE BUSINESS, POLITICS AND HIGHER LEARNING

HOW THE ELITE SABOTAGE BUSINESS, POLITICS AND HIGHER LEARNING

(These thoughts are purely the blunt, no nonsense personal opinions of the author about financial fairness and discrimination and are not intended to provide personal or financial advice.

(The following is a comment on and summary of the excellent book “Winners Take All” and how the elites have taken over the business, political and higher learning institutions of the world.  Following this blog post are important pieces of discussion pulled from the book-forewarning: this is about 25 pages long)

Many are disillusioned by the all powerful control elites seem to have both politically and financially on the world.  The book “Winners Take All-the elite charade of changing the world” by Anand Giriharadas provides thought provoking ideas (as presented below) on how elites have been able to achieve their goals.

The Gilded Age and major changes in citizens’ financial lives helped to propel the advent of elite MarketWorld thought leaders who believe and promote ideas that social change should be pursued principally through free market and voluntary actions, not public life, the law and reform of systems that people share in common.

MarketWorld is an ascendant power elite that is defined by the concurrent drives to do well and do good, to change the world while also profiting from the status quo.  It consists of enlightened business people and their collaborators in the worlds of charity, academia, media, government, and think tanks. It has its own thinkers, whom it calls thought leaders, its own language, and even its own territory – including a constantly shifting archipelago of conferences at which its values are reinforced and disseminated and translated into action.  MarketWorld is a network and community, but it is also a culture and a state of mind.

There are two kinds of thinkers who share a common desire to develop important ideas and at the same time reach broader audiences.

First are “thought leader” thinkers who tend to know one big thing and believe their important idea will change the world.  Thought leaders use spreadsheets and statistical analyses to share their ideas which are often in the future tense like Venn diagrams without noting that the lion’s share of each circle (have and have-nots) remains outside the overlap of win-win.  They give TED talks that leave little space for criticism or rebuttal, and emphasize hopeful solutions over systemic change while taking little risk.

Thought leaders have often presented problems in precisely opposite ways by using their power to cause us to “zoom in” and think smaller.  They focus on vulnerability of poverty, not the wage of inequality. They don’t like “social justice” and “inequality” words, but rather use “poverty” and “fairness” while speaking of “opportunity”.

It is possible to counteract thought leader thinking by getting people to care about problems first by “zooming in” on a vivid person and then getting them to care by “zooming out” from person to see a system.  These thinkers are the “public intellectuals” who as wide-ranging ‘critics’ feel they bear a duty “to point out when an emperor has no clothes”. They are the ones who might give some hope to changing the trajectory of elite MarketWorld thought leaders.

“Zooming in” is known as the “identifiable-victim effect”…..People react differently toward identifiable victims than to statistical victims who have not yet been identified.

The social psychological concept, the one involving “zooming out” is the formal term for the concept “assimilation effect”, and it occurs when people link the personal and specific to the surrounding social context.

Re poverty, inequality and charity:  poverty is a material fact of deprivation that does not point fingers, but inequality is something more worrying:  It speaks of what some have and others lack; it flirts with ideas of injustice and wrongdoing; it leaves many chasing work instead of building livelihoods; it is rational.

MarketWorlders believe poverty can be addressed via charity by writing cheques to reduce that poverty.  “But inequality you can’t, because inequality is not about giving back, but about how you make the money that you’re giving back in the first place.”  Inequality is about the nature of the system. To fight inequality means to change systems as a group of people. With charity the elite work ALONE.

The changes of feudal financial and Gilded Age systems helped to develop organized philanthropy (whose leaders earn million dollar salaries and get tax credits for their charities while getting to keep their wealth) and ideas that after-the-fact benevolence justifies anything-goes capitalism.  The elites today do this from behind private gates, schools, jets: private world-saving behind the backs of those to be saved. Passively they do not reject public solutions in theory, but pursue private ones in practice. The private sector doesn’t merely add to public spheres, they change the language in which public spheres think and act.  This market-based, monetized thinking over all other disciplines and conceptions of value have helped to quickly spur a rising anger, nationalism and right-wing populism.

Thought leader ideas have permeated higher learning institutions.  Young people are taught to see social problems in a “zoom in” fashion by confining questioning to what socially minded businesses they can start up (buy one, give one), but not inequality.  They are persuaded by surrounding cultures that only by learning higher learning protocols can they help millions of people.

The question that elites refuse to ask is:  Why are there in the world so many people that you need to help in the first place?  The very problems elites have self righteously only partially solved have caused unrest because they act and talk in ways that insult, alienate, and energize many of their fellow citizens.

And MarketWorld’s private world-changing, for all the good it does, is also marred by its own “narcissism.”

When society helps people through its shared democratic institutions, it does so on behalf of all, and in a context of equality.  Those institutions, representing those free and equal citizens, are making a collective choice of whom to help and how. Those who receive help are not only objects of the transactions, but also subjects of it–citizens with agency. When help is moved into private spheres, no matter how efficient , the context of the helping is still a relationship of inequality:  the giver and the taker, helper and helped, donor and recipient.

History is not a straight line but a circle of events which repeat themselves such as the Gilded Age.  Many right and left political leaders have bought into the elite thought leader mythology. Are we being moved again to a Gilded age scenario?

To counteract MarketWorld our political institutions–laws, constitutions, regulations, taxes, shared infrastructure:  these million little pieces provide a counterbalance to help hold our democratic (capitalist) civilization together.

CONCLUSION

The one sided financial hegemony that elites have created has been helped by cutting funding to IRS and CRA budgets.  This means there is less money to prosecute financial high crimes of the elite. Shared economies–like Airbnb–do not help those persons of race, singles and poor who do not own homes. The present day college financial scandal provides evidence to the elite greed and graft.   The FAA allowing Boeing to “self-inspect” and SNC Lavalin corruption are clear examples of the private sector going amuck in the absence of laws and regulations counterbalance.

One word comes to the mind of this opinion writer-”brainwashing”. The elites have done a very good job of ‘brainwashing’ the political, financial and higher learning powers that be. At the very least it is “gaslighting”.

Counterbalance of MarketWorlders requires major public action for inequality and social justice change.  It is all about balance between MarketWord and government/politic worlds.

(This blog is of a general nature about financial discrimination of individuals/singles.  It is not intended to provide personal or financial advice.)

 

WINNERS TAKE ALL-The elite charade of changing the world (Anand Giriharadas) Book

MARKETWORLD DEFINITION

Page 30 MarketWorld is an ascendant power elite that is defined by the concurrent drives to do well and do good, to change the world while also profiting from the status quo.  It consists of enlightened business people and their collaborators in the worlds of charity, academia, media, government, and think tanks.  It has its own thinkers, whom it calls thought leaders, its own language, and even its own territory – including a constantly shifting archipelago of conferences at which its values are reinforced and disseminated and translated into action.  MarketWorld is a network and community, but it is also a culture and a state of mind.

HOW DID WE GET TO WHERE WE ARE

P. 18  …In the years since, though, Georgetown and the US and the world at large have been taken over by an ascendent ideology of how best to change the world.  That ideology is often called neoliberalism, and it is, in the framing of the anthropologist David Harvey, “ a theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets, and free trade.”  Where the theory goes, “deregulation, privatization,and withdrawal of the state from many areas of social provision” tend to follow, Harvey writes.  “While personal and individual freedom in the marketplace is guaranteed, each individual is held responsible and accountable for his or her own actions and wellbeing.  This principle extends into the realms of welfare, education, health care, and even pensions.” The political philosopher Yascha Mounk captures the cultural consequences of this ideology when he says it has ushered in a new ‘age of responsibility,” in which “responsibility – which once meant the moral duty to help and support others – has come to suggest an obligation to be self-sufficient”.

P. 19 ….Ronald Reagan and Margaret Thatcher as political figures rose to power by besmirching the role of government.  Reagan declared that ‘government is not the solution to our problem; government is the problem”. Two centuries earlier, the founding fathers had created a constitutional government in order to “form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity.”  Now the instrument had been created, an instrument that helped to make the United States one of the most successful societies in history, was declared the enemy of these things….What their revolution amounted to in practice in America and elsewhere was lower taxes, weakened regulation and vastly reduced public spending on schools, job retraining, parks, and the commons at large.

The political right couldn’t pull off its revolution alone, however.  That is where the need for a loyal opposition comes in. Thus neoliberals cultivated the left half of the political spectrum a tribe they could work with.  This liberal subcaste would retain the left’s traditional goals of bettering the world and attending to underdogs, but it would increasingly pursue these aims in market-friendly ways.  Bill Clinton would become the paterfamilias of this tribe, with his so called Third Way between left and right, and his famous declaration, regarded as historic from the moment it was uttered in 1996, that ‘the era of government is over.”

P. 20 …stirred by a desire to change things, their own ideas and the resources available to them tended to steer them toward the market rather than the government as the place where problems were best solved…that if you really wanted to change the world, you must rely on the techniques, resources, and personnel of capitalism.

P. 26….Sonal Shaw…. established the Office of Social Innovation and Civic Participation under President Obama.  That office, according to its website, was “based on a simple idea: we cannot drive lasting change by creating top-down programs from Washington.”  It was striking statement from a liberal government – but not an uncommon one in an age dominated by market thinking – and it reflected a theory of progress that the rich and powerful could embrace.

THE PUBLIC INTELLECTUAL (CRITIC) VERSUS THOUGHT LEADER

P.91-92….Two kinds of thinkers, who share in common a desire to develop important ideas and at the same time reach a broad audience.  One of these types, the dying one, is the public intellectual whom as a wide-ranging ‘critic’ and a foe of power, ….perhaps stays ‘aloof from the market, society, or the state,” and ….proudly bears a duty “to point out when an emperor has no clothes.”  The ascendant type is the thought leader, who is more congenial to the plutocrats who sponsor so much intellectual production today. Thought leaders tend…to “know one big thing and believe that their important idea will change the world”; they are not skeptics but “true believers”; they are optimists, telling uplifting stories; they reason inductively from their own experiences more than deductively from authority. They go easy on the powerful…..

Public intellectuals argue with each other in the pages of books and magazines; thought leaders give TED talks that leave little space for criticism or rebuttal, and emphasize hopeful solutions over systemic change.  Public intellectuals pose a genuine threat to winners; thought leaders promote the winners’ values, talking up “disruption, self-empowerment, and entrepreneurial ability.”

THREE FACTORS THAT EXPLAIN THE DECLINE OF THE PUBLIC INTELLECTUAL AND THE RISE OF THE THOUGHT LEADER

P. 92 Three factors explain the decline of the public intellectual and the rise of the thought leader.[1] one is political polarization….[2] another factor is a generalized loss of trust in authority…[3] the rising inequality has most altered the sphere of ideas.

….get pulled into MarketWorld’s orbit, how thinkers…are coaxed to abandon their roles as potential critics and instead to become fellow travelers of the winners….. Thinkers are invited to become the elite’s teachers on the circuit of “Big Idea”–TED, South by Southwest, the Aspen Ideas Festival….anything sponsored by The Atlantic.”  These thinkers often find themselves having become thought leaders without realizing it, after “a slow accretion of opportunities that are hard to refuse”.

P. 93 It could be…that even as plutocrats were providing these alluring incentives, less corrupting sources of intellectual patronage were dwindling.  On American campuses in recent decades, the fraction of academics on tenure track has collapsed by half. Newsrooms, another source of support for those in the ideas game, have shrunk by more than 40 percent since 1990.  The publishing industry has suffered as bookstores vanish and print runs dwindle.

MARKETWORLD IDEOLOGY

P. 27 …[History] Today’s problems were too hard for the government.  They had therefore to be solved through partnerships among rich donors, NGOs, and the public sector.  There was no mention of the fact that this method, by putting the moneyed into a leadership position on public problem-solving, gave them the power to thwart solutions that threatened them.

The solution of public problems through public action – changing the law, going to court, organizing citizens, petitioning the government with grievances went all but unmentioned.

P. 30 These elites [thought leaders] believe and promote the idea that social change should be pursued principally through the free market and voluntary action, not public life and the law and the reform of the systems that people share in common; that it should be supervised by the winners of capitalism and their allies, and not be antagonistic to their needs; and that the biggest beneficiaries of the status quo should play a leading role in the status quo’s reform.

P. 31….So successful is the belief in business as the universal access card for making progress, helping people, and changing the world that even the White House, with its pick of the nation’s talent, under Republicans and Democrats alike, grew dependent on the special talents and consultants and financiers in making decisions about how to run the nation.

P. 32 There was a case to be made that the very people being brought in to advise the government on the public good was implicated in many of the public’s most urgent problems.  Management consultants and financiers were critical protagonists in the story of how a small band of elites, including them, had captured most of the spoils of a generation’s worth of innovation.  The financial sector had extracted more and more value from the American economy, at the expense not only of consumers and workers but also of industry itself. More and more of the nation’s financial resources were swilled around Wall Street without taking the form of new investments by companies or higher wages for workers…..[Businesses had been taught] to optimize everything which made their supply chains leaner and their income statements less volatile.  This optimization, of course, made companies less hospitable to workers, who faced things such as layoffs,offshoring, dynamic scheduling, and automation as the downside of corporate progress.  This was part of why their wages stagnated while companies’ profits and productivity rose.

P. 33…. [This] seemed to contribute to the business world’s growing influence over social change.

P. 34….Many of them are trapped in what they cannot fully see. Many of them believe that they are changing the world when they may instead – or also – be protecting a system that is at the root of the problems they wish to solve.  Many of them quietly wonder whether there is another way, and what their place in it might be.

THE DARK SIDE OF THE FINANCIAL WORLDS OF THE ELITES AND THEIR PHILANTHROPY

P. 26...Wealthy donors [like the Beecks who made their money in mining business in South America]often had a financial interest in the world being changed in ways that left things like taxation, redistribution, labor laws, and mining regulations off the table.

P. 35…A charity called Portfolios with Purpose calls itself  “ a powerful platform combining healthy competition with giving” – a short phrase that manages to hit the notes of techno-utopianism, capitalism, and charity.

P. 36 (It goes without saying, for example, that if hedge funders hadn’t been enormously creative in dodging taxes, the income available to foreign aid would have been greater).

P. 40 The increasingly extractive financial sector is in part responsible.  That sector could be arranged in other ways, including tighter regulations on trading, higher taxes on financiers, stronger labor protections to protect works from layoffs and pension raiding by private equity owners, and incentives favoring job-creating investment over mere speculation.  Such measures should help to solve the underlying problem by preventing the capture of the gains from growing productivity….It would serve to further increase an abundant thing likely to be hoarded by elites (productivity), instead of a scarce thing that millions need more of (wages).

P. 41…”-there’s a lot of things for-profit end endeavors are not suited to do, where you need the nonprofit sector, you need the government sector.  But one of the things the for-profit section is great at is self-sustaining because you don’t have to be constantly fund-raising”.

P. 45 The new win-win-ism is arguably a far more radical theory than the “invisible hand”. That old idea merely implied that capitalists should not be excessively regulated, lest the happy by products of their greed not reach the poor.  The new idea goes further, in suggesting that capitalists are more capable than any government could ever be of solving the underdog’s problems.

P. 46 …They describe “philanthrocapitalists” as “hyper agents” who have the capacity to do some essential things far better than anyone else.

P. 47 ….the founder of the Collaborative Fund, a venture capital firm in New York [writes] – Once seen as sacrificial to growth and returns, pursuing a social mission now plays a role when attracting both customers and employees.” [He] used a Venn diagram to illustrate the investment thesis that his firm has created in view of this trend.  One circle was labeled “Better for me (self interest)”; the other was labeled ”better for the world” (broader interest).  The overlap was labelled “exponential opportunity.” A charitable interpretation of this idea is that the world deserves to benefit from flourishing business.  A more sinister interpretation is that the business deserves to benefit from any attempt to better the condition of the world…..P.53 But in…. Venn diagram, it is worth noting that the lion’s share of each circle remains outside of the overlap of the win-win –what mathematicians call the relative complement.

P. 51 …[leader of the Silicon Valley Community Foundation] he was told to stop using the phrase “social justice”.  [So he started to use the word “fairness”].

P. 52 ….Fairness seemed to be more about how people were treated by abstract systems than about the possibility of the winner’s own complicity.

….What these winners wanted was for the world to be changed in ways that had their buy-in – think charter schools over more equal public schools funding, or poverty-reducing tech companies over antitrust regulation of tech companies.  The entrepreneurs were willing to participate in making the world better if you pursued that goal in a way that exonerated and celebrated and depended on them. Win-win.

….leaves many chasing working instead of building livelihoods.

P. 54 …. the effects of a generation’s worth of changes in the lives of working class Americans, rooted in policy choices and shifts in technology and the world situation–including outsourcing, stagnant wages, erratic hours, defanged unions, deindustrialization, ballooning debt, nonexistent sick leave, dismal schools, predatory lending, and dynamic scheduling while doing nothing about these underlying problems.

P. 57 [quote from real life example] “Society tells me that I have to  go to school, get a good job, and then I’ll get a salary, because I am in America….And that’s what I did, and now I’m in debt.  And now I’m suffocating”. [Psychological stress and physical illness].

[Real life] story exposed multiple malfunctions in the machinery of American progress.  It implicated the country’s health care system and the problem of unaffordable drugs, its public transport system, its wage and labor laws; its food system and food deserts, its student debt crisis, its so-called great risk shift, through which corporate America has stabilized its own income statements over a generation of off-loading uncertainty onto workers, and the ways in which shareholders were running companies more and more for themselves, to the detriment of every other stakeholder.

P. 64 …VCs [venture capitalists] and entrepreneurs are considered by many to be thinkers these days, their commercial utterances treated like ideas, and these ideas are often in the future tense: claims about the next world, forged by adding up the theses of their portfolio companies or extrapolating from their own start-up’s mission statement.  That people listened to their ideas gave them a chance to lauder their self-interested hopes into more selfless-sounding predictions about the world. For example, a baron wishing to withhold benefits from workers might reframe that desire as a prediction about a future in which every human being is a solo entrepreneur.  A social media billionaire keen to profit from the higher advertising revenue that video posts draw, compared to text ones, might recast that interest–and his rewriting of the powerful algorithms he owns to get what he wants–as a prediction that “I just think that we are going to be in a world a few years from now where the vast majority of the content that people consume online will be video.” [Mark Zuckerberg did this].

P. 67 …[Shervin Pishevar, a leading venture capitalist in Silicon Valley] was not only casting venture capitalists and billionaire company founders as rebels against the establishment, fighting the powers that be on behalf of ordinary people.  He was also maligning the very institutions that are meant to care for ordinary people and promote equality. He referred to unions as ‘cartels’…..

P. 74 ….the Ubers and Airbnbs and Facebooks and Googles of the world are at once radically democratic and dangerously oligarchic….

P. 77 As America’s level of inequality spread to ever more unmanageable levels, these MarketWorld winners might have helped out.  Looking within their own communities would have told them what they needed to know. Doing everything to reduce their tax burdens, even when legal, stands in contradiction with their claims to do well by doing good. Diverting the public’s attention from an issue like offshore banking worsens the big problems, even as these MarketWorlders shower attention on niche causes.

P. 82 [Silicon Valley]….proposing “a new kind of economy,” as one of its digital pamphlets put it: For all the wonders the Internet brings us, it is dominated by an economics of monopoly, extraction, and surveillance.  Ordinary users retain little control over their personal data, and the digital workplace is creeping into every corner of workers’ lives. Online platforms often exploit and exacerbate existing inequalities in society, even while promising to be the great equalizers.  Could the Internet be owned and governed differently?

“PUBLIC INTELLECTUAL” THINKERS

P. 82…..One heard from speakers ways of thinking that were all but barred from MarketWorld:  the idea that there were such things as power and privilege; that some people had them in every era and some people didn’t; that this power and privilege demanded wariness; that progress was not inevitable, and that history was not a line but a wheel; that sometimes astonishing new tools were used in ways that worsened the world; that places of darkness often persisted even under new light; that people had a long habit of exploiting one another, no matter how selfless they and their ideas seem; that the powerful are your equals as citizens, not your representatives.

The attendees didn’t confine their speech to win-wins.  They spoke of exploitation and abuse and solidarity. They spoke of problems.  They were not bound by the genteel MarketWorld consensus.

THE CRITIC AND THE THOUGHT LEADER

P. 87 …[Amy Cuddy, social psychologist at Harvard] …continued to work on….project to study how men’s hegemony, that most global of phenomena, adapts to local conditions so as to enroot itself.

P. 91-92 [Cuddy – with her Wonder Woman pose]…Without necessarily intending to, she was giving MarketWorld what it craved in a thinker: a way of framing a problem that made it about giving bits of power to those who lack it without taking power away from those who hold it.  She was, to use a metaphor she would later employ, giving people a ladder up across a forbidding wall–without proposing to tear down the wall.

HOW TO MOVE TOWARDS THOUGHT LEADER AND AWAY FROM CRITICAL THINKING

P. 97-100 …The culture was full of instruction….about how to become more hearable as a thinker–how to move toward the thought-leader end of the critic/thought leader continuum….You start to see a few basic dance steps in common–what we call the thought-leader three-step.

“Focus on the victim, not the perpetrator” is first of these steps…..the second step is to personalize the political….This second step was, in a sense, to do the opposite of what a generation of feminists had taught us to do.  That movement had given the culture the phrase “the personal is political”….”Personal problems are political problems”

…In our own time, the thought leaders have often been deployed to help us see problems in precisely the opposite way.  They are taking on issues that can easily be regarded as political and systematic–injustice, layoffs, unaccountable leadership, inequality, the abdication of community, the engineered precariousness of ever more human lives–but using the power of their thoughts to cause us to zoom in and think smaller.  The feminists wanted us to look at a vagina and zoom out to see Congress.  The thought leaders want us to look at a laid-off employee and zoom in to see the beauty of his vulnerability because at least he is alive.  They want us to focus on his vulnerability, not his wage.

The third move is to be constructively actionable.  It is fine and good to write and say critical things without giving solutions–but not if you want to be a thought leader….

P. 103 [paid speeches]…may be right that each speech is its own thing, not enough to corrupt an honest person on its own.  But can a speaking career as a whole never form something like “ties” that have some degree of permanence and a two-way flow of influence and information?

P. 104 The idea that thought leaders are unaffected by their patrons is also contradicted by their very own speakers bureau website, which illustrate how the peddlers of potentially menacing ideas are rendered less scary to gatherings of the rich and powerful.

P. 106 Thought leaders can find themselves becoming like poets speaking a tax collector’s language, saying what they might not say or believe on their own.  And the danger isn’t only in what they say in this new language, but also in the possibility that they might somewhere down the line stop thinking in their native one.

CAN THOUGHT LEADERS TRANSCEND THE PITFALLS OF THOUGHT LEADERSHIP?

P. 117 Amy Cuddy wants to believe the thought leader can use the tricks of her trade to transcend the pitfalls of thought leadership.  She wants to believe there is a micro way into the macro….She thinks the secret to cajoling them toward systemic reform may lie in blending two disparate concepts from her field.  One is about how to get people to care about a problem by zooming in on a vivid person.  The other is about how to get them to care by zooming out from person to see a system.

The first of these concepts is known as the “identifiable-victim effect”…..People react differently toward identifiable victims than to statistical victims who have not yet been identified.  Specific victims of misfortune often draw extraordinary attention and resources. But, it is often difficult to draw attention to, or raise money for, interventions that would prevent people from becoming victims in the first place.

P. 118 …Wondered if a thought leader could use feedback like this to her advantage.  If you want to talk about the structural power of sexism, first make people think of their daughters.

P. 119 ….possibilities of the second social psychological concept, the one involving zooming out.  She felt it might break up this limiting symbiosis. The formal term for the concept is the “assimilation effect”, and it occurs when people link the personal and specific to the surrounding social context.

P. 120 When a thought leader strips politics and perpetrators from a problem, she often gains a access to a bigger platform to influence change-makers–but she also adds to the vast pile of stories promoted by MarketWorld that tell us that change is easy, is a win-win, and doesn’t require sacrifice.

POVERTY VERSUS INEQUALITY AND SOCIAL JUSTICE AND CHARITY

P. 120 What the thought leaders offer Market World’s winners, wittingly or unwittingly, is the semblance of being on the right side of change.  The kinds of change favored by the public in an age of inequality, as reflected from time to time in some electoral platforms, are usually unacceptable to elites….

P. 122 [Bruno Giussani, curator of TED organization].For example, ideas framed as being about “poverty” are more acceptable than ideas framed as being about “inequality”. The two ideas are related. But poverty is a material fact of deprivation that does not point fingers, and inequality is something more worrying:  It speaks of what some have and others lack; it flirts with the idea of injustice and wrongdoing; it is rational. “Poverty is essentially a question that you can address via charity.”  A person of means, seeing poverty, can write a check and reduce that poverty. “But inequality you can’t, because inequality is not about giving back. Inequality is about how you make the money that you’re giving back in the first place.”  Inequality is about the nature of the system. To fight inequality means to change the system. For a privileged person, it means to look into one’s own privilege. And, “you cannot change it by yourself. You can change the system only together.  With charity, essentially, if you have money, you can do a lot of things alone.”

PROGRESSION OF THOUGHT LEADER THINKING

P. 124 Many thinkers cut these moral corners and contort themselves in these ways because they are so reliant on the assent of MarketWorld for building their careers….”If they want to make potential benefactors happy, they cannot necessarily afford to speak truth to money.”

P. 125 It wasn’t necessarily malice or cynicism that sustained these patterns, but something more banal.  The people who served as tastemakers for the global elite were, like many, in an intellectual bubble…the sole way of thinking?  Everybody thinks the same way. In his world, he [Giussani] said, that meant an unspoken consensus (widespread but not total) on certain ideas:  Progressive views are preferable to conservative ones; globalization, though choppy, is ultimately a win-win-win-win; most long term trends are positive for humanity; making many supposed short-term problems ultimately inconsequential; diversity and cosmopolitanism and the free flow of human beings are always better than the alternatives; markets are the most realistic way to get things done.

What this…did was cause his tribe to “ignore a lot of issues that were relevant to other people and not to  us”, culture in a broad sense that then came back and is haunting us [in the form of] rising populist anger.

P. 139  [Sean Hinton, Economic Advancement Program]…..was learning the protocols to work his way into the arena of business….The protocols had grown out of corporate problem-solving, but increasingly MarketWorlders were employing them to elbow into the solution of social problems traditionally considered in other ways, by more public-spirited actors.  And the more people accepted the idea of the protocols as essential to public problem-solving, the more MarketWorld was elevated over government and civil society as the best engine of change and progress.

P. 140 ….young people…..are persuaded by the surrounding culture that only by learning the protocols can they help millions of people…..the bearers of the protocols elbow their way into the solution of social problems simply by offering their own style of diagnoses.

.It is possible to read into this that people are poor because of the absence of these linkages, not because of caste, race, land, hoarding, wages, labor conditions, and plunder, not because of anything anyone did–or is doing–to anyone else; not because of reversible decisions societies have taken.

[TechnoServe] Its managers come, in the main, from corporations, in areas such as investment banking, management consulting, health care, and fund management.

P. 141….Perhaps the clearest signal of…..faith in the power of the protocols to cure injustice–rather than, say, life experience–is the constitution of its board.  Of 28 board members listed online, 26 are white as of last check.

….If TechnoServe emphasizes the missing linkages between poor people and the right information, a rival firm…argues that too many good solutions are too small–another theory of what keeps people poor that, usefully, does not implicate the rich.

WHAT TO DO  ABOUT THE CRISIS OF INEQUALITY AND THE RISE OF ORGANIZED PHILANTHROPY

P. 154 …Ford Foundation and thus in the social justice business….

[from President of Ford Foundation]….letter….had raised, in sharp and provocative language, the question of what to do about the crisis of inequality.  This in itself was disturbing to many rich people, who preferred to talk about reducing poverty or extending opportunity, not about more thoroughgoing reforms that would perhaps require sacrifice….letter squarely blamed the very elites who give back to philanthropy for ignoring their complicity in causing the problems they later seek to solve.

P. 155….had broken what in his circles were important taboos:  Inspire the rich to do more good, but never, ever tell them to do less harm; inspire them to give back, but never, ever tell them to take less; inspire them to join the solution, but never, ever accuse them of being part of the problem.

….He was attempting to revise and update–or perhaps overturn–an old gospel that dates back to an era much like ours, a gospel that had itself transformed earlier American ideas of helping other people.

The late historian Peter Dobkin Hall….an authority on the American giving tradition, traces it back to the late seventeenth and early eighteenth centuries, as the colonial trade in commodities magnified differences in wealth and created “an increasingly visible population of poor and dependent people for whom the public was expected to take responsibility.”

P. 156 A marked feature of American giving before the big age of philanthropy was the helping of the many by the many….

As the nineteenth century drew down, major changes in American life helped to develop this early tendencies into what is today called organized philanthropy.

P. 157 Around the turn of the nineteenth century, a new industrial capitalism flourished. Incredible fortunes were made in railroad, steel, oil, and other factors of a booming nation’s growth.  Much as is the case today, inequality widened as some seized on the new possibilities and others were displaced.  Anger bubbled, and populist impulses surged. The money that was being made in this earlier gilded age was, in the view of the many, unseemly in its quantities, unjust in its provenance, untenable in the power it conferred over a republic breaking out in new populist sentiments.  It was also fuel for new ideas about giving: “Growth in inequality might be a foe to civic comity, but it is a friend to private philanthropy. [Robert Reich].

The new form of charity birthed by this era was the private foundation, which, Reich argues, was different from the charities of the past, both in its scale and in nature.  It was an entity with broad and general purposes, intended to support other institutions and indeed to create and fund new organizations (e.g., research institutes), seeking to address root causes of social  problems rather than deliver direct services (work “wholesale” rather than “retail”), and designed to be administered by private, self-governing trustees, with paid professional staff, who would act on behalf of a public mission.  One other aspect of these foundations was new: their vast resources enabled them to operate on a scale unlike other, more ordinary endowments.

P. 158 These foundations, were, in other words, allowing a small handful of wealthy people like Carnegie and Rockefeller to commit monumental sums of money to the public good and thus gain a say in the nation’s affairs that rivaled that of many public officials….

Despite the scale of the new generosity, there were criticisms.  One had to do with how the money being given had been made.  The new foundations were troubling, as Reich puts it,”because they represented the wealth, potentially ill-gotten, of Gilded Age robber barons.”No amount of charities in spending such fortunes can compensate in any way for the misconduct in inquiring them, said President Theodore Roosevelt.  Memories remained fresh of Rockefeller’s less than benevolent monopoly in oil and less than benevolent allergy to labor unions.

P. 159 Other criticism focused on how the new philanthropy not only laundered cruelly earned money but also converted it into influence over a democratic society. Reich writes that the new foundations “were troubling because they were considered a deeply anti-democratic institution, an entity that could exist in perpetuity and that was accountable except to a hand-picked assemblage of trustees.”

P. 160-162 Andrew Carnegie…helped to found a new vision of philanthropy that not only rebutted the kinds of criticisms that he and others had faced, but effectively delegitimized critics and questioned their right to question….he argued that inequality was the undesirable but inevitable cost of genuine progress.  The “conditions of human life have not only been changed, but revolutionized,” he wrote. Inequality is a better thing than it may seem.

P. 161 This is the first step of the Carnegie’s intellectual two-step:  If you want progress, you have to let the rich people make their money however they can, even if it widens inequality.

P. 164 This is the compromise, the truce, distilled:  Leave us alone in the competitive marketplace, and we will tend to you after the winnings are won.  The money will be spent more wisely on you than by you.  You will have your chance to enjoy our wealth, in the way we think you should enjoy it.

Here lay the almost constitutional principles that one day would govern MarketWorld giving: the idea that after-the-fact benevolence justifies anything-goes capitalism; that callousness and injustice in the cutthroat souk are excused by later philanthropy; that giving should not only help the underdogs but also, and more important, serve to keep them out of the top dog’s hair–and above all, that generosity is a substitute for and a means of avoiding the necessity of a more just and equitable system and a fairer distribution of power.

P. 165 (gala for charity) ….The whole night is divided into two types of performances from the stage.  The young and the helped, mostly black and brown, repeatedly dance for their donors. Then, between performances, older white men are brought up to praise them and to talk about, and be applauded for, their generosity to the program.

Most of the [older white] men work in finance. They include the corporate raiders who, seeking to raise profits by cutting costs, having helped to do away with stable employment. They are the gentrifiers who have pushed real estate prices through the roof and made it harder for families like those of the young dancers to maintain a livelihood in the city.  They are the beneficiaries of tax laws that give carried interest a major break and help to keep the public coffers low and the schools attended by the city’s poor underfunded, thus driving them into the streets and occasionally, when they are lucky, into the charity’s arms.  But these men have been generous, and in exchange for their generosity, these issues will not come up.  No one will say what could be said:  that these precarious lives could be made less precarious if the kind of men who donated to this program made investments differently, operated companies differently, managed wealth differently,  donated to politicians differently, lobbied differently, thought differently about pretending to live in Florida to avoid a minor New York City tax–if, in other words they were willing to let go of anything dear.  It is one night in one city, but it speaks of a broad, unstated immunity deal: Generosity entitles the winners to exemption from questions like these.

WHAT ABOUT CORPORATIONS WHOSE PRACTICES ARE HARMFUL WHILE GIVING HUGE SUMS TO PHILANTHROPY?

P. 176 The Sacklers, Purdue Pharma, developers of OxyContin.

P. 180 Contrary to the picture of helpfulness and cooperation Purdue attempted to paint, Purdue’s employees were actively and secretly trying to prevent West Virginia from imposing any control on the sale of OxyContin.

P.182 ….How did the Sacklers build the 16th largest fortune in the country?…Another answer to that question might be:  by thwarting the guardians of the public good every time they tried to protect citizens….[John Brownlee, U.S. Attorney in Roanoke, Virginia] It was later reported that Brownlee had received an unusual phone call the night before securing Purdue’s guilty plea.  A senior Justice Department official had called Brownlee ..and “urged him to slow down”…Brownlee rebuffed his superior.  “Eight days later,” the Washington Post said, “his name appeared on a list compiled by Elston of prosecutors that officials had suggested be fired.”….It was part of a larger attempted purge of prosecutors by the administration of George W. Bush.  Brownlee kept his job; Elston (senior Justice Department official) lost his amid the controversy of the lists becoming public. And what had occasioned the phone call? According to Elston, his boss, a deputy attorney general name Paul McNulty, had asked him to place the call to Brownlee after receiving a request for more time from a defense lawyer representing a Purdue executive.

P. 185 Hooters [exploitation of women, but many, like Cole who started in Hooters restaurant would progress to upper management]

P. 187 This rather audacious rationalization mingled with other, more plausible-sounding ones such as that if there were going to be bad industries, good people should run them. “If in a free-market society there will be demand, whether it is for sugary products or alcohol or scantily clad waitresses in a restaurant concept, then it will exist.”

P. 188 Cole’s [Hooters] rationalization were strongly and sincerely held.  [If the President of the Ford Foundation] wanted to change the money-making system itself, to change how business is conducted, he was not only up against powerful corporate interests and their lobbyists.  He was up against the psychologies of thousands of people like Cole, and a way of looking at life that didn’t require cynicism or callousness to commit harm.  It was a way of viewing things that inured the viewer to the larger system around you, that made these systems not your problem.

P. 190-195   Laurie Tisch [heiress to Loews Corporation–Loews also purchased a cigarette company]

P .194 This difficulty in escaping the status quo was especially evident in Tisch when it came to the aspect of her fortune that gave her the greatest guilt: her cigarette money.

BRIDGING MARKETWORLD AND THE PUBLIC INTELLECTUAL WORLD

P. 171 At the heart of Carnegie’s message, as Walker [President of Ford Foundation] read it, was the idea of extreme inequality as “an unavoidable condition of the free market system” and of philanthropy as an effective remedy.,,,But then Walker began to go off script.  The giving world, he wrote, needed “to openly acknowledge and confront the tension inherent in a system that perpetuates vast differences in privilege and then tasks the privileged with improving the system.”

P. 173 “….In most areas of life, we have raised market-based, monetized thinking over all other disciplines and conceptions of value.

P.174 …Walker pondered at the pushback he got..–the pleas to “stop ranting at inequality,” to speak of “opportunity” instead.

P. 196 …Walker spoke highly of his own experience in the financial services industry.  It had given him ‘skills’–some of which, presumably, were the protocols he could now tell himself he had redeployed in service of the weak.  It taught him how to multitask, manage a complex portfolio of projects, assimilate data and turn it into insight, have discipline. He wasn’t flattering his audience.  He was reciting the reasons why so many people…, who aspired to help millions of people, went to places like KKR before embarking on their work of changing the world.

P. 197 Eventually, he got to subject at hand.  “We have in America and in the world a level of extreme inequality that–I don’t mean to be hyperbolic–but I think really threatens our democracy.  Because at the core of the American narrative, in our democracy, is a very simple idea of opportunity.”  That’s how he did it: poking them with a thought that might not have been their favorite, and then quickly meeting them where they were, with the language of opportunity, that MarketWorld staple.

…Now, in front of a new generation of the “barbarians at the gate,” he was meeting them where they were.  “The more inequality we get in our system, the less opportunity there is.” he said….

P. 198 [from audience questions] And his subtlety and their imperviousness had conspired to ensure that he was not really heard.

He had been addressing people still in the fearful, climbing season of their lives [young professionals trying to establish themselves].  To get to the “rainmakers’, he said, you had to be in more private settings….

This thought led Walker to the observation that America was becoming privatized now. The American public had their big conversation out there in the messy democracy, and the elite had its own ongoing intramural chat….

P. 199  Walker looked at America today and saw his rich friends building their metaphorical buildings with gates on the outside and discos indoors.  Gated communities. Home theatres. Private schools. Private jets. Privately run public parks. Private world-saving behind the backs of those to be saved.  “Life goes more and more behind the gate,” he said. “More and more of our civic activities and public activities become private activities.”

P. 200 [Walker, President of Ford Foundation joining PepsiCo board] …..The move attracted some criticism, in part because this warrior against inequality would now be earning more than a million dollars a year from the Ford Presidency and this new, very occasional role, and in part because he now bore formal responsibility for what Pepsi did, including the company’s continuing choice to sell its harmful sugary drinks.  The critics could console, or depress, themselves with the thought that he was far from alone: Several of his counterparts at the major foundations served on the boards of firms like Citigroup and Facebook. The fear was that, yet again, MarketWorld would infiltrate and win…But Walker promised and seemed to believe that he would change them, not the other way around.  “I will bring my perspective as the leader of a social justice organization.”

P. 206 ….Walker (said)…. the new UN Week (Clinton Global Initiative) lived at “this intersection of doing well and doing well was doing good.”

P.207 However, Walker said, it was also the case that “philanthropists and commercial enterprises saw in CGI a platform that they could leverage for both doing good and building their brands.”  As a result, self-service flirted dangerously with altruism at CGI, in Walker’s view.

P. 209 ….Eight events had free registration, eight sold paid registration, and forty-eight were invitation-only.  The ratio told a truth about the new MarketWorld UN week: When private actors move into the solution of public problems, it becomes less and less of the public’s business.

FORMER PRESIDENT CLINTON’S PROGRESSION TO LIBERALISM

P. 201 Many of these people had been coming to Bill Clinton’s conference for years. Though they tended to label themselves as givers, philanthropists, social innovators, impact investors, at and the like, recent political upheavals has given their tribe a new name that was sticking.  They were coming to be known, by their friends and enemies alike, as globalists….Around the world, a suspicion seemed to be taking hold that jet-setters solving humanity’s problems in private conclaves was as much a problem as it was a solution.

P. 204  Clinton …(Yale Law School) …had embraced a liberalism that was….a “systems-building philosophy,” whose revelation was “that society, left alone, tended towards entropy and extremes, not because people were inherently awful but because they thought locally.” Private individuals couldn’t be relied to see the big picture of their society…but “a larger entity such as government could.” When he started in public office, Clinton believed public problems were best solved through public service and collective action. During the White House years, though, and even more decisively afterward, he had been won over by theory that it was preferable to solve problems through markets and partnerships among entities private and public, which would find areas of common cause and work together on win-win solutions.

P. 235 ….Clinton’s globalist dream was admirable, but it was also intolerant of other dreams.  It sought to make hard choices seem inevitable and uncomplicated. It sought to blur what happened to be good for the plutocrats in the room with was was good for ordinary people…It was among the things inspiring the revolt by making so many people feel barred from decision-making about the future of their own world.

P. 238 Still, his political opposition as president does not tell the full story of why recent decades have been so gruelling for millions of Americans.  Clinton, like Obama after him, was up against militant conservatives and libertarians, backed by plutocratic donors, who loathed the very idea of public, governmental problem-solving.  To be clear, that is the movement chiefly responsible for market supremacy’s takeover of America and the bleak prospects of millions of Americans. Yet the Republican party represented less than half of the nation, and the Democratic Party had a chance to stand for a robust alternative to market hegemony.  And you could say that it did to an extent–but it often did, under Clinton, and Obama, in a tepid, market-friendly, donor-approved way that conceded so much to government’s haters that the cause lost the fire of purpose.

……Jacob Hacker, Yale political scientist, who was once described as “an intellectual ‘It boy’ in the Democratic Party said, “Many progressives still believe in a role for government that is pretty fundamental, but they have lost faith in the capacity to achieve it, and they’ve in many cases lost the language for talking about it.”  Republicans, he said, are straight forward in their contempt for government. Democrats, especially those of the Clinton school of centrist, triangulating, market-friendly politics, don’t counter the contempt with a vigorous embrace of government…instead speak in a “gauzy” language….Even their proposed policies, though, reflect ambivalence:  health care for all, but not through public provision; help paying for college, but not free college; charter schools, but not equal schools….

P. 239 [Yale political scientist]...this hesitancy and “loss of faith” in government” has “hugely asymmetric effects on the two parties.”  He said, “For Republicans and the right, it is–for the most part, though not always–conducive to their aims, because if the government doesn’t do things, it can often be consistent with what they would like to see happen.  But for the left and the Democrats, it’s a huge loss, because their vision of a good society is one in which a lot of valuable public goods and benefits have their foundations in government action.”

….From an ex-president without legal power but still with the ability to galvanize a movement one could imagine a campaign, modeled on the Progressive Era, to pressure the government to put an end to this abusive profiteering.  Yet his proposed answer was to make it easier for the offending companies to make money selling healthy products.

“If you want to get them to do less harm, it requires innovation, because they will still have to make money, especially for publicly held companies,” Clinton said….The needs of the market came first.  Even a man who had spent his lifetime in politics felt a duty to be solicitous of the business person’s concerns…..

P. 241 Such attempts to work with government, though, were not the same as a conviction in the power of government, the supreme power of government, to better people’s lives….

P. 244 Through it all, Clinton saw truths in the anger bubbling up around him.  He saw how MarketWorld-style change crowded out the habit of democracy. He genuinely worried about young people seeing social problems and, unlike in his activist-prone generation, confining their questioning to what socially minded business they could start up.

CONFLICTS WITHIN MARKETWORLD

P. 210 …the question being asked was: Why do they hate us?  The “they” were the rootless cosmopolitans’ less-rarified fellow citizens, who in one place after another were gravitating to nationalism, demagogy, and resentful exclusion–and rejected some of the elites’ most cherished beliefs:  borderless, market cures for all diseases, inevitable technological progress, benign technocratic stewardship.

…..fellow MarketWorld elites had been drafted into a new class war.  It was no longer rich versus poor but rather people who claimed to belong to everywhere versus people stuck  somewhere–echoing his colleague’s notion of somewhere people and everywhere companies…What went wrong was that the Somewheres were simply no longer fooled by the Everywhere’s performance of concern and charity, and the numbers finally caught up with the Everywheres:  “No prizes for guessing which group is more numerous. No matter how many donations the global elite made, philanthropic and political, we could never quite compensate for that disparity.”

P. 212 [suggestion for change] A new approach has to start from the idea that the basic responsibility of government is to maximize the welfare of citizens, not to pursue some abstract concept of the global good.  People also want to feel that they are shaping the societies in which they live.

Jonathan Haidt [psychology professor, New York University] offered another theory of what went wrong in an essay…”If you want to understand why nationalism and right-wing populism have grown so strong and so quickly, you must start by looking at the actions of the globalists…In a sense, the globalists ‘started it.’”  They started it…because the “new cosmopolitan elite”…acts and talks in ways that insult, alienate, and energize many of their fellow citizens, particularly those who a psychological predisposition to authoritarianism.”

[This blog author’s words–The very problems the elites have self righteously only partially solved have caused the unrest].

P. 213 In Haidt’s analysis, globalism and anti-globalism are both cogent worldviews with valid concerns and data behind them.  There are advantages to a world of free and rampant human mingling and motion, and there are different advantages to stable, tightly bound communities. But…the globalists had so convinced themselves of the moral superiority of openness, freedom, and One World that they were unable to process the genuine fear these things aroused in millions of people.

P. 215-219 [examples of five political figures (Including Clinton)]  P. 220 It was striking to have five political figures share a stage and have not one moment of real argument.  They all seemed to suppose that the good society of entrepreneurs, whose success was tantamount to that of the society itself…

THE ARGUMENT FOR POLITICS

P. 220 One could forget, watching such a civilized group, that traditional politics is argumentative for a reason.  It isn’t that politicians don’t know how to be nice, but rather that politics is rooted in the idea of a big, motley people taking their fate into their own hands.  Politics is the inherently messy business of negotiating and reconciling incompatible interests and coming up with a decent plan, designed to be liked but difficult to love.  It solves problems in a context in which everyone is invited to the table and everyone is equal and everyone has the right to complain about being underserved and unseen. Politics, in bringing together people of divergent interests, necessarily puts sacrifice on the table.  It is easier to conjure win-wins in forums like this one, where everyone is a winner. The consensus was a reminder of all the kinds of people and perspectives that had not been invited in.

P. 222 Had the organizators of CGI truly been interested in why people resented the globalists, they could have invited…Dani Rodrik…an economist at Harvard….he had become one of the more incisive critics of how the globalists’ noble intentions undermine democracy.

”Today,” she [Theresa May, British Prime Minister] said, too many people in positions of power behave as though they have more in common with international elites than with the people down the road, the people they employ, the people they pass on the street.  But if you believe you are a citizen of the world, you are a citizen of nowhere.  You don’t understand what citizenship means.

P. 223 …In other words, politics is about actual places, with actual shared histories. Globalism, chasing a dream of everyone, risks belonging to no one.

For Rodrik, it isn’t just that solving things at the global level (which, in the absence of world government, often means privately, which often means plutocratically) lacks legitimacy. Pushing things up into that realm gives globalists “moral cover or ethical cover for escaping their domestic obligations as citizens of their own national setting.” It is a way of doing good that allows them to ignore the fact that their democracies aren’t working well. Or, even more simply, it allows them to avoid the duty they might otherwise feel to interact with their fellow citizens across divides, to learn about the problems facing their own communities, which might implicate them, their choices, and their privileges–as opposed to  universal challenges ‘like climate change or the woes of faraway places like Rwandan coffee plantations.  In such cases, diffuseness or distance can spare one the feeling of having a finger jabbed in one’s face.

P. 225 …”In an ideal democratic world, where citizenship is fully exercised and participatory, it’s a process of domestic deliberation where you’re testing your idea against other domestic citizens…”

P. 226 …”The locus of politics, I think, is the key issue here,” he said.  “What is the right locus of politics, and who are the decision-making authorities?  Is it these networks and these global get-togethers? Or is it at the national level?”  Who should make change, and where should they make it?

P. 227 …..’Probably people who get together in these congregations [CGI] don’t think of what they are doing as politics,” Rodrik said.  “But of course it’s politics. It’s just politics of a different focus and has a different view of who matters and how you can change things, and has different theory of change and who the agents of change are.”…The problem with the globalists’ vision of world citizens changing the world through partnerships, Rodrik said, is that “you’re not accountable to anyone, because it is just a bunch of other global citizens like you as their audience.”  He added, “The whole idea about having a polity, having a demos, is that there’s accountability within that demos.  That’s what a political system ensures and these mechanisms don’t.”

The political system that Rodrik speaks of is not just Congress or the Supreme court or governorships.  It is all of these things and other things. It is civic life. It is the habit of solving problems together, in the public sphere, through the tools of government and in the trenches of civil society.  It is solving problems in ways that give the people you are helping a say in the solutions, that offer that say in equal measure to every citizen, that allow some kind of access to your deliberations or at least provide a meaningful feedback mechanism to tell you it isn’t working.  It is not reimagining the world at conferences.

P. 228 It isn’t necessarily that simple.  A pair of Stanford sociologists...investigated the question and came up with a surprising answer.  When elites solve public problems privately, they can do so in ways that disrupt it.  The former occurs when elite help “contributes to and enlarges the public goods provided by the state, and attends to interests not readily provided for by the state.”  But the same elite help, backed by the same noble intentions, can instead “disrupt” democracy when it “replaces the public sphere with all manner of private initiatives for special public purposes.”  These latter works don’t simply do what government cannot do. They “crowd out the public sector, further reducing both its legitimacy and its efficacy, and replace civic goals with narrower concerns about efficiency and the markets.”

WOMEN’S EQUALITY

P. 232 Women’s equality, it was now said, was a $28 trillion opportunity.  This had become a near-constant refrain in the MarketWorld–some permutation of the words “women”, “equality”, and “trillion”.  If the logic of our time had applied to the facts of an earlier age, someone would have put out a report suggesting that ending slavery was great for reducing the trade deficit.  “Of course, you should do it because it was the right thing to do, but there’s a strong business case.”…..In other words, of course you should do it because morality is enough, but since we all know morality isn’t actually enough, you should know that the business case is fantastic.

HOW THE PRIVATE SECTION CHANGED THE PUBLIC SPHERE

P. 234 ….The private sector didn’t merely add to the public sphere activities.  It got to change the language in which the public sphere thought and acted.

P. 247 [Henry Crown Fellowship of the Aspen Institute] …The fellowship is a prestigious finishing school to assist the transition from making it in business to making the world a better place.  Its mission is to mobilize a “new breed of leaders” to “tackle the world’s most intractable problems.” But it defines leader in a particular way:  “All are proven entrepreneurs, mostly from the world of business, who have reached a point in their lives where having achieve success, they are ready to apply their creative talents to building a better society.”

P. 248 [Founder of Freelancers Union]…She originally wanted to serve as a broker to help these workers [Uber drivers and magazine writers] buy health insurance as a group.  Then she realized it would be easier and more effective if she simply created the health insurance company herself.  But the economy wasn’t set up for people like (her). A company not run purely in shareholders’ interests risked lawsuits from its investors.  The dominant interpretations of corporate law,….has since the 1970s came to regard companies’ first duty as being to earn a profit from shareholders.

THE RISE OF B CORPORATIONS (BENEFIT)

P. 249 (B corporations) ….do business in a different way….Andrew Kassoy…batted around ideas for addressing this problem, and at last alighted on the vision of creating a parallel capitalist infrastructure, next to the traditional one, in which companies could be more responsible and conscious, and nonetheless raise money from capital markets and comply with the law.  Thus was born the B Corporation, or benefit corporation, as it is also known….

P. 250 …started a nonprofit called B Lab, which gives better-behaved businesses a certification based on a rigorous analysis of their social and environmental practices …Ben and Jerry’s….

…hoped that by certifying conscious companies, they could change the larger system of business….but in the MarketWorld way, they didn’t take on the system directly.  They simply sought to cultivate examples of a different way….

….But now,….B Lab was in the midst of a rethinking process, which was guided by his conviction that “what got us here is not going to get us where we’re going.”

P. 251 The thorniest questions…involved whether to stick to the MarketWorld mantra of “make good easier,” or whether instead to seek to make those who commit harm to pay a higher price–which meant changing the system of business for everyone, fighting in the arena of politics and law rather than the market, and elevating the stopping of bad business over the encouragement of good business….

For example, one of B Lab’s great victories had been the creation of a parallel corporate law, first enacted in Maryland and then adopted in other states, that allowed companies to embed a social mission into their work without fear of legal trouble such as shareholder complaints…Was it more important to make it easier for Etsy to do good, or rather to make it harder for ExxonMobil to do harm?  Was it possible to do both?

Kassoy felt drawn toward the systems work, even though he had devoted the last decade to the other approach.  “I’m not be sure everybody would say this, but I believe there’s a huge role for government regulation of business.  We’re not going to change everybody. We’re not changing human greed. Businesses act badly.”  There were, in particular, “extractive industries where just the existence of the industry” means harm and social costs being dumped on humanity.  “We’re not getting rid of all of those things”…

The United States had millions of corporations and, after a decade of B Lab’s evangelizing, just hundreds of B Corps.  Kasoy, saw now, more clearly than he did at the company’s founding, that solving problems like inequality, greed, and pollution would require more than making good easier.

P. 253 …B Corps were championed all over MarketWorld….the founders were regularly praised by recognized “thought leaders”.

CONFLICT BETWEEN POLITICAL LIBERALS AND MARKET SOLUTIONS

P. 252 He [Andrew Kassoy] was not the only MarketWorlder coming around to the thought that their ways of operating might be inadequate to the actual work of changing the world, or even just one’s own country.  These MarketWorlders, though, often lacked an understanding of how actual change did work, or they felt, sometimes dubiously, that pursuing the other kind of change called upon skills they lacked.  If government was the place you went to change systems, what could they as individuals do? They could petition the government.  They could join movements fighting to change law and policy.  But,…many in MarketWorld were daunted by this approach. He had the feeling that many in MarketWorld do that in their grounding in the norms of business made them ill-equipped for the realm of politics, where win-lose was normal and where fights often had to be picked instead of mutually agreeable deals being struck….It was peculiar, this idea of activism as manipulation; it sounded more like an excuse for not working on systems than a reason.

…..I don’t think that what we’re doing can change capitalism by itself.  But I do believe that what this does is creates a model.” On other days, Kassoy wasn’t so sure about this logic.  He kept coming backing to regulation. “I’m a big-government kind of a person,” he said.  “I believe there’s a very strong role for the state. And I don’t know how to make that happen.”

P. 253 Kassoy’s ambivalence is what Jacob Hacker, the Yale political scientist, seems to have in mind when he speaks of political liberals who are philosophically committed to government, to the public solution of public problems, but who have absorbed, like secondhand smoke, the right’s contempt for public action.  While people on the right believe actively in the superiority of market solutions, liberals like Kassoy do so passively–passively in that they do not reject a public solution in theory, but pursue a private one in practice….And so no one’s really told us government is a good thing for a very long time.” Saying this seemed to make Kassoy reflect on whether he had unwittingly become the last link in this change of liberals consolidating the war on government by proffering private solutions to public problems.

P. 255-256 failure of big banks

CRITIQUE OF MARKETWORLD

P. 256  Chiara Cordelli, an Italian political philosopher at the University of Chicago….sought to unravel some of MarketWorld’s self-justifications.

Take, for instance, the view that MarketWorld has a duty, and right, to address public problems–and indeed, to take a lead in developing private solutions to them.  This…was like putting the accused in change of the court system. The questions that elites refuse to ask, she said, is: Why are there in the world so many people that you need to help in the first place?  You should ask yourself: Have your actions contributed at all to that?….And, if yes, the fact that now you are helping some people, however, effectively, doesn’t seem to be enough to compensate.”

P. 257 Cordelli was speaking of both the active committers of harm and the passive permitters of it.  The committers are what she calls “the easy cases.”…”If you have campaigned against inheritance tax, if you have directly tried to avoid paying taxes, if you supported and directly, voluntarily benefitted from a system where there were low labor regulations and increased precarity,” then, she argues, “you have directly contributed to a structure that foreseeably and avoidably harmed people.”  That is “direct complicity.”

As for the people who don’t help run Goldman Sachs or Purdue Pharma, who live decent lives and attempt to make the world slightly better through the market, Cordelli called them the harder cases….She saw in each of these types of efforts not a single moral act but two.  Alongside the act of helping was a parallel act of acceptance.

P. 258-260…. Economic reasoning dominates our age, and we may be tempted to focus on the first half of each of the above sentences–a marginal contribution you can see and touch–and to ignore the second half, involving a vaguer thing called complicity….

P. 261 As harsh as her criticisms might sound to  them, Cordelli is giving…. others in MarketWorld a way out.  She is confessing, on their behalf, what some of them privately fear to be true: that they are debtors who need society’s mercy and not saviors who need its followership.  She is offering what MarketWorlders so adore: a solution. The solution is to return, against their instincts and even perhaps against their interests, to politics as the place we go to shape the world.

P. 262-263 ….Businesspersons calling themselves “leaders” and naming themselves solvers of the most intractable social problems represent a worrisome way of erasing their role in causing them.  Seen through Cordelli’s lens, it is indeed strange that the people with the most to lose from social reform are so often placed on the board of it. And MarketWorld’s private world-changing, for all the good it does, is also, for Cordelli, marred by its own “narcissism.”…..

When society helps people through its shared democratic institutions, it does so on behalf of all, and in a context of equality.  Those institutions, representing those free and equal citizens, are making a collective choice of whom to help and how. Those who receive help are not only objects of the transactions, but also subjects of it–citizens with agency. When help is moved into the private sphere, no matter how efficient we are told it is, the context of the helping is a relationship of inequality:  the giver and the taker, the helper and the helped, the donor and the recipient.

When a society solves a problem politically and systemically, it is expressing the sense of the whole; it is speaking on behalf of every citizen.  It is saying what it believes through what it does. Cordelli argues that this right to speak for others is simply illegitimate when exercised by a powerful private citizen.  “You are an individual”, she said. “You cannot speak in their name.  I can maybe speak in the name of my child, but other people are not your children.”

“This is what it means to be free and equal and independent individuals and, for better or for worse, share common institutions,” she said.  Our political institutions–our laws, our constitutions, our regulations, our taxes, our shared infrastructure:  the million little pieces that uphold our civilization and that we own together–only these, Cordelli said, “can act and speak on behalf of everyone.”  She admitted, “They often don’t do that.” But that isn’t the way out that MarketWorld so often makes it out to be.  “It’s our job,” Cordelli said, “to make them do that, rather than working to weaken and destroy those institutions by thinking that we can effectuate change by ourselves.  Let’s start working to create the conditions to make those institutions better.”

P. 266 …Goldman Sachs- sponsored lunch…in which the company’s do-gooding was trumpeted and its role in causing the financial crisis went unexamined.

AUTHOR ANAND GIRIDHARADAS’ REMARKS

P. 267 This book is the work of a critic, but it is also the work of an insider-outsider to that which it takes on….

P. 268 (His Professor at Harvard)….was the first to plant in me the the thought that money had transcended being currency to become our very culture, conquering our imaginations and infiltrating domains that had nothing to do with it. (END OF POST)

COLLATERAL DAMAGE AND FUTURE CONSEQUENCES OF POLITICAL FINANCIAL FORMULAS

COLLATERAL DAMAGE AND FUTURE CONSEQUENCES OF POLITICAL FINANCIAL FORMULAS

(These thoughts are purely the blunt, no nonsense personal opinions of the author about financial fairness and discrimination and are not intended to provide personal or financial advice.)

In the last post of October, 2018 the Alberta Conservative proposal of a teen entry level wage was discussed.  This post discusses the collateral damage or unintended consequences such an action could have on future financial lives of teens.

Every action taken can have consequences reaching far into the future.  An example is the teen entry level wage suggested by Alberta Conservative candidates.  The collateral damage and consequences of this action may impact financial programs such as Employment Insurance in the short term and Canada Pension Plan benefits for those teens forty or fifty years into the future.

CPP is a government defined benefit plan whose benefits are based on contributions deducted based on wage levels.  Employees are required to work forty full time years to receive full CPP benefits. If entry level wage up to 21 years or first five years of employment is implemented this will affect the amount of CPP benefits received for those five years, maybe even as high as 10% lost in CPP benefits (five out of forty employed years and CPP benefits for twenty years from age 65 to 85).  Even if entry level wage up to 21 years was implemented for a number of years and then repealed because of its discriminatory nature, the CPP benefits for this minority group (and only for this group) will be affected forever if CPP benefits are not fully restored for those years.

Approximately 520,000 Albertans and 4.5 million Canadians were adolescents and young adults aged 15 to 24.  If the teen entry level wage is implemented only in in Alberta Conservatives will be forcing their Alberta teen constituents to earn less wages and CPP benefits than teens in all other Canadian provinces and territories.  How can Alberta Conservatives see this as morally and ethically fair?

Conservative goals on labour policies (Jason Kenney’s teen entry wage, Doug Ford’s broken promise on basic income pilot project, Trump’s tax cut for the wealthy) seem to try to circumvent and subvert in any way possible a decent minimum wage, a basic wage or living wage without concomitant tax loophole reductions for the wealthy and without evaluating the full consequences of those actions now and in the future.

It is time for Conservatives to use forward thinking instead of narrow mindedness in problem solving related to labour.  If small businesses are having difficulties then solve the small business problems instead of targeting labourers.

Jason Kenney needs to provide full details on the proposed teen wage reduction so voters can make informed choices.

(This blog is of a general nature about financial discrimination of individuals/singles.  It is not intended to provide personal or financial advice.)

‘EMPTY HOUSE SPECULATOR’ SYNDROME EQUALS THEFT AND UNETHICAL INVESTING

‘EMPTY HOUSE SPECULATOR’ SYNDROME EQUALS THEFT AND UNETHICAL INVESTING

(These thoughts are purely the blunt, no nonsense personal opinions of the author about financial fairness and discrimination and are not intended to provide personal or financial advice.) Post updated June 28, 2017.

Garry Marr’s Financial Post May 8, 2017 article “Spectre of empty houses haunts Canada’s two most expensive housing markets” (expensive) states that in Toronto ‘some believe vacant homes exist on a widespread basis, bought up by a stream of investors so consumed by speculation – or just a safe place to park their money – that they can’t even bother to rent out their properties in markets where the going rate can easily top $3 per square foot…..data seems to indicate there were as ‘many as 66,000 vacant units in Toronto in 2016 equivalent to 5.6 per cent of the city’s total stock of 1.2 million private dwelling units’.  If one calculates this based on a family of four one could guess that about 16,500 families are missing out on Toronto housing.  But wait, the article goes on to say that of the empty homes, 90 per cent are condos or apartments. If condos and apartments are more likely to be bought/rented by singles and poor families, then this would mean singles and poor families are more likely to be hurt by the empty units and Toronto housing crises.

Matt Levin’s Los Angeles Daily News May 13, 2017  ‘Amid state housing crisis, why 2 out of 5 millennials still live at home’ (millennials) article states ‘State lawmakers have introduced more than 130 bills this legislative session to try to solve California’s housing affordability crisis, proposing everything from 150 square-foot apartments to a $3 billion affordable housing bond’.  ‘Nearly a decade removed from the depths of the Great Recession, a staggering 38 percent of California’s 18 to 34-year-olds still live with their parents, according to U.S. Census data. That’s roughly 3.6 million people stuck at home.  If “unlaunched” California millennials formed their own state, they would be entitled to more electoral votes than Connecticut, Iowa or Utah.  If they formed their own city, it would be the third largest in the country’.  California’s population is slightly larger than Canada’s population.

‘Huge demand for tiny rental units in Vancouver’, by Bruce Constatineau in 2014 (rental) talks about  a 100-square-foot unit for $570 a month and there’s a waiting list of people wanting to rent other units when they become available.  In another development there are units as small as 90 square feet where each unit contains a tiny sink and fridge (no cooking facilities and windows?).. Renters in the 50 units share 11 bathrooms, and there are laundry facilities on each of the four floors.  Apparently  the mini-sized apartments attract a wide range of renters — from ages 19 to 56 — who want to live on their own with a downtown Vancouver address.  Budget-minded renters…..can find similar-sized or even smaller cubbyholes downtown for anywhere between $400 and $600 a month.  It is further stated than In order to make them affordable, they need to be very small, condensed units with shared washrooms. That’s just a fact of life.  Really?  The pictures of these units speak a thousand words.

Edmonton, Alberta is also considering construction of 100 square foot units.

Empty house speculator syndrome is equivalent to unethical investing and theft since the empty units have been taken off the market and are not available for occupancy.  Ethical investing excludes chocolate companies that use child labor. Children are taught it is wrong to ‘take candy from babies’, shoplifters are jailed for minor thefts and yet it appears to be okay for speculators to ‘steal’ housing all within legal limits of the law.  The present housing market is based on greed.  Greed begets greed and greed trumps family values.  In housing singles are worth less than other members of the family unit.  The bar has now been reset to a new low where it is okay for them to live in spaces equivalent in size to two jail cells (average jail cell is 45 square feet and provides ‘free’ accommodation and meals, but you can’t leave).

The complete disregard of the housing crisis is heightened by Dr. Ben Carson, head of the Department of Housing and Urban Development USA, who states poverty is a “state of mind” and Trumpian politics which rob the poor to pay the rich.  Liberals and Conservatives in Canada are no different.  The housing crisis is not a “state of mind”, but rather has been brought on by inadequate rules and regulations on housing, failure to increase the minimum wage to a living wage and the upper middle classes and wealthy paying less and getting more for housing and tax loopholes.

Housing is a basic human right as determined internationally in the “Universal International Declaration of Human Rights” and “International Covenant on Economic, Social and Cultural Rights” and is one of the principles of Maslow’s Hierarchy of need. In Canada there appears to be no shame in robbing singles, poor families and indigenous people of their housing.  Housing investors, politicians and families need to take a look in the mirror and reset their moral and ethical compasses to ‘true North’ re housing crisis.

LESSONS THAT SHOULD/COULD BE LEARNED

Where are the parents of millennials?  How can they allow the housing crisis and their children to be housed in 90 square foot units and smaller?  Where are the family values for housing?

Where are the governments, politicians and city counsels that have allowed the housing crisis to take over and last so long?  Where are the rules and regulations to prevent the building of ridiculously small units with price gouging rents?

Why do singles, who are more likely to live in small spaces, always have to pay more per square foot, sometimes outrageously so ($570 for 100 square foot unit)?  The upside-down pricing of housing (affordable-housing) where the smaller the space, the higher the price is per square foot needs to stop.  Doubling the price on rent equals pure greed and unethical investing.  Why do the upper middle class and wealthy pay so much less per square foot for their housing?  The estimate for the amount of house taxes, etc. that is collected by not making the wealthy pay their fair share per square foot must be astounding.

How do occupants of these small spaces learn life lessons, such as cooking for themselves, buying food and managing finances?

The minimum wage needs to be raised to an indexed living wage (cause-and-effect-of-financial-policies).  Building affordable housing will not solve the problem if the minimum wage is not raised.

Humane principles-there are many humane associations and principles related to animals, so where are the humane principles for humans re housing – 100 sq. ft. at $570 rent is not humane.

Where are the rules and regulations on how small a space can be developed, such as a minimum of 350 square feet, so at least there can be a bathroom and cooking facilities within the unit?  Surely, there must be point where it is is not financially feasible for developers to develop small units with minimum square footage in relation to the cost of building the unit and also provides dignity to occupants of these units.

Alberta Health Minimum Housing and Health Standards (Housing-Minimum) – the following condensed excerpt provides information on some Alberta standards for housing.

Space for Sleeping purposes (overcrowding): The owner of a housing premises shall not permit it to become or remain overcrowded. (a) A housing premises shall be deemed to be overcrowded if: (i) a bedroom in it has less than 3m2 (32ft2)of total floor area and 5.6m3 (197ft3) of air space for each adult sleeping in the bedroom, (ii) in the case of a dormitory, the sleeping area in the dormitory has less than 4.6m2 (49.5ft2) of floor space and 8.5 m3 (300ft3) of air space for each adult sleeping in the sleeping area, or (iii) a habitable room in it that is not a bedroom but is used for sleeping purposes in combination with any other use has less than 9.5m2 (102ft2) of floor space and 21.4m3 (756ft3) of air space for each adult sleeping in the habitable room. (b) For the purposes of calculating this section, a person who is more than 1 year of age but not more than 10 years of age shall be considered as a July 20, 1999 9 Revised June 30, 2012 Alberta Health Minimum Housing and Health Standards © 1999–2012 Government of Alberta 1/2(one half) adult and a person who is more than 10 years of age shall be considered as 1 adult; (c) This section does not apply to a hotel/motel.

Food Preparation Facilities:  (a) Every housing premises shall be provided with a food preparation area, which includes: (i) a kitchen sink that is supplied with potable hot and cold water and suitably sized to allow preparation of food, washing utensils and any other cleaning operation; and (ii) cupboards or other facilities suitable for the storage of food; and (iii) a counter or table used for food preparation which shall be of sound construction and furnished with surfaces that are easily cleaned; and (iv) a stove and a refrigerator that are maintained in a safe and proper operating condition. The refrigerator shall be capable of maintaining a temperature of 4 degrees C. (400F). (b) Shared Kitchen Facilities Occupants of a housing premises with more than one dwelling may share food preparation facilities provided that: (i) the food preparation facilities are located in a common kitchen room, (ii) the occupants have access to the common kitchen room from a public corridor without going outside the building, (iii) the common kitchen room is located on the same floor as, or on the next storey up or down from the floor on which the dwelling unit is located, July 20, 1999 10 Revised June 30, 2012 Alberta Health Minimum Housing and Health Standards © 1999–2012 Government of Alberta (iv) the food preparation facilities shall not serve more than eight persons, and (v) the refrigerator shall provide a minimum volume of two cubic feet of storage for each intended occupant.

Washroom Facilities:  Except where exempt by regulation, every housing premises shall be provided with plumbing fixtures of an approved type consisting of at least a flush toilet, a wash basin, and a bathtub or shower. (a) The washbasins and bathtub or shower shall be supplied with potable hot and cold running water. (b) The wash basin should be in the same room as the flush toilet or in close proximity to the door leading directly into the room containing the flush toilet. (c) All rooms containing a flush toilet and/or bathtub or shower shall be provided with natural or mechanical ventilation. Shared Washrooms (d) Occupants of a housing premises with more than one dwelling unit may share a flush toilet, wash basin and bathtub or shower provided that: (i) the occupants have access to the washroom facility without going through another dwelling or outside of the building; and (ii) the facility is located on the same floor as, or on the next storey up or down from the floor on which the suite is located; and (iii) each group of plumbing fixtures (toilet, washbasin, bathtub or shower) shall not serve more than eight persons.

(This blog is of a general nature about financial discrimination of individuals/singles.  It is not intended to provide personal or financial advice.)

AFFORDABLE HOUSING CRISIS BASED ON PURE UNADULTERATED GREED OF FORCING SINGLES AND POOR FAMILIES TO PAY MORE FOR HOUSING

AFFORDABLE HOUSING CRISIS BASED ON PURE UNADULTERATED GREED OF FORCING SINGLES AND POOR FAMILIES TO PAY MORE FOR HOUSING

(These thoughts are purely the blunt, no nonsense personal opinions of the author about financial fairness and discrimination and are not intended to provide personal or financial advice.)

This blog has published several posts on affordable housing  and psychological impact (housing).  How can we not talk about it yet again?  This post shows how much of the housing crisis is based on pure greed and the greedy appear to have no shame.  They do not seem to care that housing is a basic human right (as determined internationally in the “Universal International Declaration of Human Rights” and “International Covenant on Economic, Social and Cultural Rights”) and is one of the principles of Maslow’s Hierarchy of need. There also appears to be no shame that singles are more likely to have to pay more per square foot for their housing purchase or rent than for any other member of the family unit.  Poor families are less able to purchase detached housing so are forced to purchase or rent condos or apartments, many of which are not ideally suited to families. Besides purchase or rent (rent-or-own), what other options are there except to sleep in vehicles, couch-surf or live in homeless shelters?

The Calgary Herald May 8, 2017 article “Nobody’s Home” by Garry Marr further magnifies the plight of the housing industry in Canada much of which appears to be totally based on greed.  The article states that in Toronto ‘some believe vacant homes exist on a widespread basis, bought up by a stream of investors so consumed by speculation – or just a safe place to park their money – that they can’t even bother to rent out their properties in markets where the going rate can easily top $3 per square foot…..data seems to indicate there were as ‘many as 66,000 vacant units in Toronto in 2016.  That’s equivalent to 5.6 per cent of the city’s total stock of 1.2 million private dwelling units’.  If one calculates this based on a family of four one could guess that this means about 16,500 families are missing out on Toronto housing.  But wait, the article goes on to say that of the empty homes, 90 per cent were condos or apartments.  If one assumes that condos and apartments are more likely to be bought/rented by singles and poor families, then this would mean singles and poor families are more likely to be hurt by the empty units and Toronto housing crises.  Just what are cities and towns and developers going to do with the fact that singles and poor families are the biggest losers in Canada’s housing crises?

How do speculators manage to purchase housing with, for example, $20,000 down payment, $1,200 mortgage payment and $200 house taxes per month and keep the place empty while maintaining another residence to live in (they have to live somewhere)?  These people must be very wealthy and quite greedy to not care about those at the bottom of the property ladder?

Maclean’s Magazine May, 2017 article ‘Through the Roof’ by Joe Castaldo (archive.macleans) shows landlord greed when rent is doubled from $1,200 to $2,400 for a one bedroom apartment in the Toronto’s The Bridge Condo.  Sales for The Bridge condo complex (the-bridge) over last 12 months shows smallest one bedroom 449 sq. ft.condos sold for $224,000 or $498 per sq. ft.; sales price of average size one bedroom 521 sq. ft was $313,104 or $600 per sq. ft, and largest one bedroom 569 sq. ft. was $405,500 or $711 per sq. ft.  Two bedroom plus den 740 sq.ft. condos sold for $360,000 or $486 per sq. ft. (figures do not include parking and storage fees). The largest two bedrooms plus den condos sold for basically same price per square foot as the smallest one bedroom condos.  The pure unadulterated greed continues to force singles who are more likely to own/rent one bedroom condos to pay more per square foot for the smallest spaces with ripple effect of them paying more house taxes, mortgage interest and real estate fees on less space and more likely less income and biggest lifetime expense (upside-down-housing).

Singles are told to ‘go live with someone’ if they are having housing problems.  So, in this case, what are singles to do except ‘couch surf’/share one bedroom with someone they may not know well?  Renters also are likely forced to move every few years when landlords do renovations and/or raise rent on their dwellings.

Story of single mother with son – son still lives at home, mother helped him purchase a dwelling which he rents out because he would like to financially get ahead.  Moral of this story, single mother likely has jeopardized her ability to save for retirement by helping her son especially if the housing market crashes and both her and her son are left having to pay mortgage worth more than the house. Because this is her child, she has done this out of love for her son.  As most parents seem to do when their kids are still living at home, he is likely not paying her anything for rent or food.  Juxtaposition is that son is renting out this dwelling at market value to some Joe Shmoe who cannot afford to buy something, but has to rent.  To the mother and the son, they don’t see this person(s) as the child of someone else (part of the family unit), so it is okay to ‘sucker punch’ this person(s) with rent at or above market value.  Greed begets greed and greed trumps family values.

Financial Post April 28, 2017 ‘LePage warns of housing ‘market whiplash’ article by Garry Marr (market) states ‘concerns that government is going to slap more rules on the housing market, particularly aimed at Toronto’s residential section, appear to be growing among the real estate industry.  Royal LePage joined the chorus of those advising that Ottawa and its provincial counterparts should tread cautiously before considering everything from rent control to a tax on foreign investors.  “An unfortunate side-effect of heavy-handed government regulatory intervention is that we risk whiplash,” Phil Soper, chief executive and president of LePage, said in a statement.’…..Data from the Toronto Real Estate Board this month showed prices in Canada’s largest city were up 33 per cent in March from a year ago.’ (The inaction by politicians, developers and real estate companies will only worsen the housing crisis).

Los Angeles Daily News May 13, 2017  ‘Amid state housing crisis, why 2 out of 5 millennials still live at home’ article by Matt Levin (why-2-out-of-5-millennials-still-live-at-home) articulates ‘State lawmakers have introduced more than 130 bills this legislative session to try to solve California’s housing affordability crisis, proposing everything from 150 square-foot apartments to a $3 billion affordable housing bond.’ (Oh yes, that is what single millennials deserve – to live in 150 square feet that includes kitchen, bedroom and bathroom all in one space which is the equivalent to the size of the bedroom that person lived in as a child)…..Nearly a decade removed from the depths of the Great Recession, a staggering 38 percent of California’s 18 to 34-year-olds still live with their parents, according to U.S. Census data. That’s roughly 3.6 million people stuck at home. Think of it this way: If “unlaunched” California millennials formed their own state, they would be entitled to more electoral votes than Connecticut, Iowa or Utah. If they formed their own city, it would be the third largest in the country’.  (The rest of the article is a very good read on why millennials are being forced to live at home with their parents including low wages).

CONCLUSION

There is appears to be no willingness in Canada on the part of politicians, developers, real estate companies and families to deal with the housing crisis except to apply band-aid solutions or to take no action at all.  How many more times can it be said that until housing greed is resolved by taking ethical and moral responsibility and until the minimum wage is changed to an indexed living wage, the housing crisis will continue to worsen?

(This blog is of a general nature about financial discrimination of individuals/singles.  It is not intended to provide personal or financial advice.)

CONTINUED FINANCIAL ILLITERACY OF FINANCIAL GURUS EQUALS FINANCIAL DISCRIMINATION OF SENIOR SINGLES (Part 2 of 2)

CONTINUED FINANCIAL ILLITERACY OF FINANCIAL GURUS EQUALS FINANCIAL DISCRIMINATION OF SENIOR SINGLES (Part 2 of 2)

(These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to provide personal or financial advice.)

This blog post is a comment on the Broadbent Institute Report on the economic circumstances of Canadian seniors.  The Broadbent Institute is a left-leaning social democratic think tank founded by Ed Broadbent who was a past leader of the New Democratic Party .  It describes itself as an independent, non-partisan organization championing progressive change through the promotion of democracy, equality, and sustainability and the training of a new generation of leaders.  Its mission is to “Support, develop, and promote social democratic principles for the 21st century”, “Propose new solutions for a more equal society”, and “Equip a new generation of progressive campaigners & thinkers with the tools they need to build a social democratic society through training and education”.

This post addresses excerpts from the report first (Part 1), and then is followed by comments on the report (Part 2).

COMMENTS ON  REPORT – PART 2 OF 2

In February, 2016 the Broadbent Institute in Canada and Richard Shillington of Tristat Resources published the report:  “An Analysis of the Economic Circumstances of Canadian Seniors”.       (analysis_of_the_economic_circumstances_of_canadian_seniors)

The report information is mainly directed towards poverty of seniors without an employer pension plan (roughly 47 per cent) and therefore, many of these seniors have wholly inadequate retirement savings.

(It should be noted in the report that single seniors does not refer to marital status, but the fact that they live alone.  Therefore, single seniors includes ‘ever’-never married, no kids-singles, divorced/separated, and widowed seniors living alone).

Review of the report reveals some points that are very disconcerting.

  • The true facts of what it costs singles to live is under-reported.  Married/coupled persons and, indeed, the author of the Broadbent report do not seem to realize that the widowed (married/coupled persons whose spouses are deceased) are a part of the singles population.  It is a well known fact that it costs singles approximately 70 per cent of what it costs married/coupled persons to live as a single unit.  This fact is never addressed in the report. (Using LIM 11.1 percent of seniors live in poverty–719,000 seniors:  419,000 singles and 250,000 living in an economic family.  The poverty is astonishingly high at almost 30 per cent for senior singles without employer pension plans).  (Widowed persons and the extra benefits they get are discussed later in this post).
  • All the extra benefits that have been given to married/coupled persons are never addressed.  Governments continue to create financial silos where more and more benefits are given to married/coupled persons even though they are able to live with less because of economies of scale, but not to singles resulting in financial inequality.  (Following table was updated on March 8, 2016 with additional information).

financial silos6

  • It is ludicrous that this report does not treat home equity as a retirement asset.  Those who have to rent are at a much greater financial disadvantage than those who own their own home.  Quote from report : “ …..Many of those who argue that there is no looming pension crisis have included home equity as a liquid asset.  This analysis has not treated home equity as a retirement asset because the replacement rate analysis has as its objective an income that allows one to enjoy a lifestyle comparable to that which existed pre-retirement.  We do not include home equity here because we accept that the pre-retirement lifestyle for many middle- and moderate-income Canadians include continued homeownership”, (Page 19).

According to Statistics Canada 2011 articles “Living Arrangements of Seniors” and “Homeownership and Shelter Costs in Canada”:      (statcan.gc.ca) and (statcan)

  • The average household total income for couple-family households was about twice that of non-family households (which were primarily one-person households) and lone-parent households ($101,000 per year versus $43,000 per year and $55,000 per year respectively).  Thus, while lone-parent households and non-family households had a lower cost than couple-family households, the lower household total income results in a higher proportion exceeding the affordability threshold”.
  • Approximately 69 per cent of Canadians own their own home.  About  four out of five (82.4%) married/coupled people own their own home, while less than half (48.5%) of non-family households (singles) own their dwellings.  Just over half (55.6%) of lone-parent households own their dwelling.  (It stands to reason that more senior married/coupled and widowed persons will own their own homes, while senior singles–‘ever’ single and early divorced)–are more likely to have to rent placing them in greater income inequality and a lower standard of living and quality of life). Regardless of housing tenure, the proportion of non-family households and lone-parent households that paid 30% or more of total income towards shelter costs was about twice the proportion of the couple-family households.
  • Quote “approximately 56.4 per cent of the senior population (5 million total seniors in 2011) live as part of a couple and about 24.6 per cent of the senior population live alone (excludes those living with someone else, in senior citizen facilities and collective housing).

Singles are constantly told to ‘go live with someone’ when they have difficulties paying for housing; meanwhile married/coupled and widowed persons may be living in their big houses (enjoying the same lifestyle they had before pre-retirement) and seeking help with paying their taxes while refusing to move to a less expensive dwelling.  (senior-singles-pay-more-part-3-of-4)

  • It is ludicrous for this report to state that seventy per cent  income replacement should be a benchmark in the formulas.  Seventy per cent income replacement is entirely different for those who own their own home versus those who rent.  It is selfish to think that the rich and married/coupled persons should be able to live same lifestyle post-retirement as pre-retirement when singles and early divorced generally will have a poorer lifestyle throughout their entire lives.

An example is the Financial Post financial evaluation “Bright Future Despite Big Debt, Small Income” published in Calgary Herald on February 20, 2016 where Ontario young couple’s after tax income is $4,800 per month and their food budget is $800 and entertainment $160 per month for two people.  Just these two items are 20 per cent of their budget.  Either they live in an area with very high food costs or they are living the high life for one of the necessities of life in Maslow’s Hierarchy of need.  Seventy per cent replacement at retirement would give this couple an unreasonably high style of life for food in comparison to singles.   Reader letter mentioned above in ‘senior-singles-pay-more-part 3-of-4’ link suggested singles should be able to live on just $200 per month for food.

  • It is ludicrous to suggest that persons without employer pension plans cannot save, especially those with incomes over $100,000.

Quote from report:  “For those with incomes in $50,000-$100,000 range, the median value (savings) is only $21,000” (Page 3).

If those with pension plans have forced saving, it it is ridiculous to say that those without pension plans are not able to save.  For example, a $75,000 before-tax income may result in $600-$700 per month being deducted from pay cheque (employer deductions are excluded in this discussion).   It is also ridiculous to say that in this First World country persons with $100,000 plus incomes cannot save.  One of the principles of good finances is to save 10 per cent.  Whole report promotes greed of looking for more benefits and not planning for the future if there is no plan for saving during working years.

  • Reporting false information on marital status is a crime.  Quote from report states:  “Table 7 represents the results of increasing the single and married GIS amounts by the same percentage.  One should keep in mind that there is an incentive for seniors to appear as singles to governments even if they are living as a couple.  This is because the GIS for senior couples is less than twice the amount for singles.  An increase in the GIS for singles only (with no increase for couples) would increase this so-called ‘tax on marriage’ and associated incentives.  This would encourage couples to hide their cohabitation from the authorities for financial reasons”, (Page 21).

GIS for senior couples should, repeat, should be less than twice the amount for singles.  Singles (particularly ‘ever’ and early divorced singles including the author of this blog) have worked very hard to have financial formulas include singles at 70 per cent of married/coupled persons living as a single unit.  The GIS for senior singles is more than married/coupled persons because it costs more for singles (including widowed persons)  to live than it does for married/coupled persons living as a single unit.  Why can’t married/coupled persons understand this?  When married/widowed persons become widowed their living costs will go up.

The statement  “An increase in the GIS for singles only (with no increase for couples) would increase this so-called ‘tax on marriage’ and associated incentives. This would encourage couples to hide their cohabitation from the authorities for financial reasons” is absurd and selfish.  Tax on marriage, why can’t married/coupled persons realize all the extra benefits they receive as outlined in table above???  When is ‘enough’ ever going to be ‘enough’ for them???

The notation (# 28) at the bottom of page 21 states:  “While legislation treats those cohabiting the same regardless of their marital status, it is easier to deceive the government if you are not married”.  This statement is false and backwards.  If it is anyone being deceitful, it is the married/coupled persons.  Can someone explain why it would be easier to deceive the government if you are not married (‘ever’ single)?  The issue with false reporting lies with those who are married/coupled, divorced or separated.  They are trying to ‘milk’ the system by falsely reporting their marital status even though the Canada Revenue income tax rules clearly define the parameters of marital status.

False reporting is a crime.  It would be very easy to track deceit by following income tax declaration of marital status and address of residence over several years.  Deceit of married/coupled persons would incrementally increase the monetary value they would receive from the deceit as it costs them less to live as a couple than it does single persons.

It seems married/coupled persons want it all even if they have to lie about it.  So what will they do when their spouse goes to a nursing home or is deceased?  In order to collect the benefits they are entitled to as one spouse living at home and the the other in a nursing home and widowers, they will need to lie again and change their marital status from single to married/coupled or widowed when filing their income taxes.

‘Ever’ singles (never married, no kids) throughout their entire working lives pay same amount of taxes as each individual (with equal income to the single person) reporting income tax in a married/coupled relationship and have supported/subsidized families who use mom/baby hospital care, EI benefits for maternal/paternal leaves, etc.  They are never recognized for their tax support and for using less resources than families.  Since singles have paid supportive taxes throughout their entire working lives, they deserve to live with the same financial dignity and respect as seniors and as married/coupled persons.  As seniors, ‘ever’ singles deserve to have their own space and their own bathroom and not be forced to cohabitate with other persons.

The real financial lives of singles is revealed when a simple math calculation is used for the targeted tax relief where a single senior can now earn $20,360 and a senior couple $40,720 before paying federal income tax.  This so called tax relief for seniors allows federal tax relief for singles equal to $1,697 per month and for senior couples $3,393 per month.  The tax relief for senior singles hardly covers a rent or mortgage payment of $1,200 and $250 for food per month (Maslow’s Hierarchy of Need), but amply covers this amount for a senior couple.  For a couple $1200 for rent or mortgage and $500 for food leaves $1693 (or 50% of $40,000) for other necessities and maybe even a nice little vacation all tax free.

CONCLUSION

It is incredible how in just a few paragraphs a think-tank can undo the hard work that singles have been trying to achieve in seeking financial equality.  Think-tanks and financial gurus continue to practice financial illiteracy on what it truly costs singles to live.   (false-assumptions-four-ways-seniors-singles-lose outand (financial-gurus-financially-illiterate-about-singles-finances)

Even though the final statement of the report states:  The GIS is the most effective federal mechanism in the short term for reducing the poverty rate and the impact of poverty on seniors, and it can be targeted at senior singles who need it the most”, there are many shortcomings to this report.

This report is encouraging irresponsible financial behavior.  It is morally, ethically and socially reprehensible in a First world country to say that one cannot save with an income over $100,000 and to promote financial inequality and discrimination of singles.

The Broadbent Institute is supposed to be about ‘a more equal society’, so where is the financial equality?

SOLUTIONS

In order to ensure financial equality between singles (including widowers) and married/coupled persons the following measures need to be taken:

    • change financial formulas so that senior singles receive 70 per cent of whatever is given to married/coupled senior persons as it costs more for singles to live than it does married/coupled persons because of economies of scale
    • financial formulas should be revised to include all senior persons regardless of marital status in one financial formula.  To eliminate financial silos that benefit married/coupled persons most, delete benefits already given to married/coupled persons such as pension splitting (benefits the rich most) so that there is a level financial playing field for all regardless of marital status. (It is understood that it is expensive to raise children and  benefits given for children should last for first twenty years of the life of the child.  However, beyond the twenty years of the children, any other benefits given to married/coupled persons should be deleted or should also be given equally to singles at rate of 70 per cent)
    • create a side-by-side list of all possible benefits under categories of married/coupled, widowed and single and analyze the total value of benefits in each category (see table above).  Financial formulas should be created equally for all categories, not just the married/coupled and widowed.
    • delete allowance benefit that has been ruled to be discriminatory by the courts
    • education, education and more education on financial literacy for singles.  Think tanks, financial gurus and married/coupled people need to educate themselves on what it really costs singles to live.

(These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to provide personal or financial advice.)

 

 

GOVERNMENT CPP BAFFLEGAB MORE IMPORTANT THAN FINANCIAL DISCRIMINATION OF SINGLES AND QUALITY OF LIFE

GOVERNMENT CPP BAFFLEGAB MORE IMPORTANT THAN FINANCIAL DISCRIMINATION AND QUALITY OF LIFE OF CANADIAN SINGLES

These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to provide personal or financial advice.

There has been much discussion lately as to whether the CPP (Canada Pension Plan) system should be changed.  The objective of the government is for country to live in a society that takes care of its citizens.  The reality is that some citizens are being taken care of more than others, that is the rich and married/coupled persons while singles and low income are being financially discriminated against.

EXAMPLES OF FINANCIAL DISCRIMINATION

  • TARGETED TAX RELIEF PROGRAMS FOR SENIORS-The Federal Conservative government has a targeted tax relief program where a single senior can now earn $20,360 and a senior couple $40,720 before paying federal income tax.  Program claims that approximately 400,000 seniors (or 7 to 8% of total Canadian seniors) have been removed from the tax rolls altogether.  This so called tax relief for seniors allows federal tax relief for senior singles equal to $1,697 per month and for senior couples $3,393 per month.

The tax relief for senior singles hardly covers a rent or mortgage payment of $1,200 and $250 for food per month (Maslow’s Hierarchy of Need), but amply covers this amount for a senior couple.  For a couple $1200 for rent or mortgage and $500 for food leaves $1693 (or 50% of $40,000) for other necessities and medications and maybe even a nice little vacation all tax free.

It is a well-known fact that singles require more income to that of a married/coupled persons living as a single unit.  In Equivalence scales (Statistics Canada 75F0002M – Section 2 ‘The LIM and proposed Modifications’ (75f0002) (equivalence-scales) if singles are assigned a value of 1.0, then couples require 1.4 times for income, not 2.0. $20,360 times 1.4 equals $28,504 ($2,375 per month) (updated November 18, 2017).  If the federal government cared about income equality and quality of life for senior singles, it would increase the tax free amount for singles.  By not applying equivalence scales to  income for senior singles, they lose $678 a month or approximately $8,000 Lost Dollar Value annually in quality of  life to married/couple retired persons.  (From age 65 to 90, this amounts to $20,000).

When income for senior married/coupled persons is over $40,000 they again get another benefit, that is pension splitting, which singles cannot use increasing quality of life for married/coupled persons over senior singles.  This is a tax benefit piled on top of another tax benefit.

The number of senior ‘ever’ singles (never married, no kids) and divorced/separated persons comprises only about 13 per cent of the population, so how much would it cost to bring the quality of life for these citizens up to the standard of tax relief for married/coupled persons?  The answer is ‘not very much’ in comparison  to what has been given to  married/coupled senior persons.

“Ever” singles are told every day they are worthless and worth less than married/coupled persons even though they have worked 35 – 40 years subsidizing mother/baby hospital care, EI paternal/maternal leave, education taxes even though they have had no children and paid more taxes than families.

  • GOVERNMENTS IGNORE COURT RULINGSRe Allowance Program and Credits, (policyalternatives) 2009 Policy Brief, “A Stronger Foundation-Pension Reform and Old Age Security” by Canadian Centre for Policy Alternatives, page 4, states this program discriminates on basis of marital status as confirmed by case brought under Charter of Rights where federal court agreed program was discriminatory, and ruled it would be too expensive to extend program on basis of income regardless of marital status.’  So what is happening?  Age eligibility for Allowance will change from 60 to 62 beginning in 2023 with full implementation in 2029.  In this democratic, civilized country let’s just ignore federal court rulings and continue a $? million discriminatory program.  Article suggests that ‘OAS (Old Age Security) and GIS (Guaranteed Income Supplement) combined should be increased to at least bring it up to after-tax LICO (Low Income Cut Off) for single individuals.’  And why should married/coupled people get discriminatory marital status benefits where unused credits like Age Credits can be transferred to spouse?

Gross financial discrimination for singles occurs when governments choose to completely ignore court rulings.  Lost Dollar Value to singles:  unable to calculate.

  • PENSION SPLITTINGIt is immoral and ethically irresponsible for governments to deny that pension splitting benefits the wealthy most.  For families who can be exempt from paying 10 – !5 percent income tax on $100,000 and maintain the same income level during retirement as they had during their working years, even though they have less expenses during retirement, is financially discriminating to  singles who cannot pension split.  (This information was revised April 10, 2016 – Lost Dollar Value:  From estimate on income splitting, it has been suggested that income splitting would provide tax relief of $103 for income $30,000 or less and $1,832 for income of $90,000 and over or an average of $794 overall.  If $800 ($794 rounded off) is calculated times 35 years (age 65 to 90), then Lost Dollar Value will equal $28,000.)
  • HOUSING-Financial gurus seem to be leaning towards renting instead of home ownership.  This creates further hardship  for singles and the low income.  If young married/coupled persons are being told that they will probably need to rent because housing prices are out of reach, where does this leave singles and low income persons?  Trend now is towards tiny houses with composting toilets and tanks for storing water, but the rich don’t want to see tiny houses in their backyards.

Try telling singles and low income person that renting is the better alternative when they pay more per square foot and quality of housing is lower than that of houses for families.  If they have problems with not enough income for housing, they are told they should go live with someone.  These people ought to try ‘walking in the shoes’ of singles living in one room or communal situations, where because of low income, they don’t have their own bathroom, and it becomes a ‘dog eat dog’ world where others will, for example, steal food because there is not enough money to buy food. (cprn.org)

The housing market (rental and ownership) is financially completely upside down.  Instead of the rich and middle class paying more for the greatest amount of square footage, they are paying less for the greatest amount of square footage and niceties associated with that.  Singles and low income will be living in hovels, thus violating Maslow’s Hierarchy of Needs principle.

  • IF MONEY IS THERE YOU WILL SPEND IT, IF IT IS NOT, YOU WON’TFinancial studies have come to  conclusions that for people in the lowest income quintile on average have replacement rates of 100 percent, implying their real standard of living actually rises after retirement.  This is such a lie and is totally irrelevant to singles and low income persons.  If there is a poor quality of life before retirement, there still will be a poor quality of life on 100 percent replacement income for singles that does not meet the 1.4 income equivalent (updated November 17, 2017) to that of married/coupled persons living as a single unit.

CONCLUSIONS

Governments, decision makers, some financial advisers to the government. and think tanks are financially illiterate about the financial discrimination of singles.

It seems to be more important for governments to ensure that upper-middle class and upper class maintain their standard of living than it is to treat singles fairly.

Unprecedented growth in value of houses will result in huge tax-free wealth for families and married/coupled persons to the financial detriment of singles and low income.

Marital manna benefits like pension splitting has created a nanny state where married/coupled persons want it all and once these benefits are in place, it is very difficult to get rid of them.  Married/coupled persons have been made irresponsible by their own government.  They are not living a lower life style in their retirement.  A further question is whether these programs will be financially sustainable.

Assumption that retirement income only needs to replaced at 70 percent, for example, does not hold true for both singles and married/coupled persons, because singles require 1.4 income equivalent to married/coupled persons living as a single unit (updated November 17, 2017).  Twenty thousand dollars a year is not an adequate quality of life retirement income for Canadian senior singles.

GOVERNMENTS NEED TO ADDRESS FINANCIAL EQUALITY FIRST FOR ALL CANADIAN CITIZENS REGARDLESS OF MARITAL STATUS, THEN TWEAK CPP.

This blog is of a general nature about financial discrimination of individuals/singles.  It is not intended to provide personal or financial advice.

UPSIDE-DOWN FINANCES RE HOUSING FOR SINGLES AND LOW-INCOME-PART 1 OF 3

These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to be used as personal or financial advice.

UPSIDE DOWN FINANCES OF AFFORDABLE HOUSING SINGLES AND LOW INCOME-PART 1 of 3

Why does it seem more difficult for individuals/singles and low income persons to purchase affordable housing?  For possible reasons why, consider the following scenarios.

One example, condos presently being developed in Calgary by a developer in one housing complex includes 1 bed, 1 bath, 1 patio micro-condos of 552 sq. ft. with starting price of $299,900.  Two patio, 2 bed, 2 full bath, 2 story 1232 sq. ft. condos were already sold out so price not available.  Then there are 2 patio, 3 bed, 2.5 bath, 2 and 3 story 1830 sq. ft. condos priced from $649,900 to $749,900.  Apparently, ultra-deluxe model has master bedroom suite covering entire third 600 sq. ft. floor.  The third floor bedroom is bigger than total square footage of $299,900 condo.  When price per square foot is calculated, micro-condo is selling for $543 per sq. ft. while three bed condos are selling from $355 to $409 per sq. ft.

So who is more likely to buy micro-condos?  Possibly low income couples, single parent with one child, or environmentally conscious, and probably an individual/single person.  Who gets to pay $150 to $200 more per square foot for two-thirds less space?  Ripple effects are owners of micro-condos have to proportionately pay more house taxes, education taxes, mortgage interest and real estate fees on less house and less take home pay for biggest lifetime expense.  When it is sold, will seller recoup buying price?

To further magnify the issue, lottery in major northern Alberta city has first grand lottery prize of $2,092,000 for 6,490 sq. ft. house ($322 per sq. ft.), second grand prize of $1,636,000 for 5,103 sq. ft. house ($321 per sq. ft.), and third grand prize of $1,558,000 for 5,097 sq. ft. house ($306 per sq. ft.).  First house has elevator, games/theatre area, kid’s lounge, gym, and music room. Second house has hockey arena with bleacher seating, lounge and bar.  Third house has spa, gym, yoga studio, juice bar and media room.  Need anything more be said about the rich? They usually get more while paying less and acquiring choicest spots.

Average square footage of Canadian house is 1950 sq. ft. (2010) so how can a developer socially, morally and ethically justify charging $150 to $200 more per square foot for two-thirds less space?  “CREB now”, Aug. 28 to Sept. 3, 2015, page A5, talks about Calgary developer selling 440 sq. ft. condos in north inner city tower for $149,000 ($339 per sq. ft.) in 2012 and 440 sq. ft. condos in south inner city tower for $219,000 ($498 per sq. ft.) in 2015.  Two and three hundred sq. ft. condos are now being sold in Vancouver and Toronto for around $250,000 ($1250 and $833 per sq. ft. respectively).  In many cases salaries for low income and singles has not risen to same level, nor has Canadian housing for the middle class and rich ($400,000 and up).

How is any of this different than loan-sharking or pay day loans where targeting of the most vulnerable occurs?

Article, “The Micro Units Movement” May 27, 2015 (smartergrowth) states

‘although micro units are cheaper on an absolute scale for buyers, they tend to be more valuable for developer on a per square foot basis.  Shawn Hildebrand, vice president of condo research firm Urbanation, says condos under 500 square feet can bring in well over $3 per square foot, while the rest of the market averages around $2.50 or $2.60′.

(Lies, lies and more lies-Mark Twain quote ‘there are three kinds of lies:  lies, damned lies and statistics’-it is more than $3).  Cheaper on absolute scale? (These tiny spaces are not cheaper for economies of scale.)  Why is it okay on any scale to financially rob the poor, low income, young people and singles in what will likely be most expensive purchase of their lives and affecting one of most basic principles of Maslow’s Hierarchy of Needs, that is shelter?

MoneySense, September/October, 2015, (moneysense) ‘Two ways to cool white-hot home prices’ says as much by stating developers, motivated by profit, have built mostly smaller one and two bedroom units.  This article also talks about how concern should not be how much houses cost, but how out of reach home ownership for Canadians has become.

Further financial unfairness occurs when individual/single homeowners without children are forced to pay education taxes, but parents pay only fixed rate based on value of their home regardless of number of children.  For ‘nineteen kids and counting’ it is possible parents are only paying a few cents a day for their children’s education.  Some married/partnered seniors with kids are looking to have education tax payments eliminated from their house taxes.  For families with children, logic implies parents should pay education tax throughout their entire lifetime, or individuals/singles without kids should not have to pay education tax ever.  However, families don’t seem to be able to apply financial logic of their own finances equally to the financial realities of their single children.

There are many more examples of financial unfairness, but just the above few show how financial world for low-income families and individuals/singles has been completely flipped upside down and topsy-turvy.  Have governments, society, and our publicly and privately funded education systems failed us so miserably and family/corporate greed taken over with critical thinking, social/ethical responsible thinking sinking to all-time lows?  Since when is it okay under present financial system for families to accumulate wealth and huge inheritances while their low income and single children are not able to support themselves on a day to day basis?

Young individuals/singles not yet married are facing huge financial hurdles because of low incomes, less full time jobs, enormous education debt, and out of control housing costs.  Families (parents), governments, society, corporations, businesses to date have failed to provide support and responsibility that is needed to ensure all Canadian citizens are able to financially take care of themselves without financial parental aid, inheritances of parents and without bias of gender, race or marital status.

In this so called civilized, enlightened country of ours, it appears that citizens of value are only middle-income families and the rich while individuals/singles with and without children are being annihilated from financial, political, and everyday living scenes.  (Examples are present day TV home buying/renovation programs and married/coupled persons getting free homes in “Home Free” program.  Individuals/singles without children have been eliminated from these programs.  Why is this so-probably because they no longer have financial wherewithal to be part of this programming, just blatant discrimination or both?)

If families have such high family values, shouldn’t family values and moral social values take precedence instead of being trumped by almighty dollar greed and philosophy of charging what the market can bear and more?

Low income families, individuals/singles and young adults not yet married who can apply simple math and critical thinking skills are in financial despair and angst knowing that they, as the most vulnerable citizens of this country, have been targeted and pawned to pay more for housing than middle class families and the rich.

It is the duty of politicians elected by the people, for the people to represent all Canadian citizens, not just vote getting middle class families.  (MoneySense article-‘housing affordability for the many should take precedence over the political aspirations of a few’).  To stop gross financial discrimination of low-income families and individuals/singles, talk to your Member of Parliament and mayors about financial unfairness and the upside/down financial world you are being forced into particularly in the housing market.

The blog posted here is of a general nature about financial discrimination of individuals/singles.  It is not intended to provide personal or financial advice.

TFSA BOONDOGGLE FOR SINGLES AND LOW-INCOME CANADIANS

TFSA BOONDOGGLE FOR SINGLES AND LOW -INCOME CANADIANS

These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to be used as personal or financial advice.    

Comment: This article was previously published in a local newspaper and is available on the internet. There were 51 recommends for this article. The final outcome (dependent on the results of the October 2015 Canadian Election) was that proposed changes to increase the TFSA to $10,000 by the Conservative party election promises was reverted back to $5,500 by the successful Liberal Party under Prime Minister Justin Trudeau . Regardless of what the TFSA limit is, with no cap on the contribution amounts, individuals/singles will still be at a significant financial disadvantage to married/coupled persons. Wording has been slightly changed from the original publication but does not change the thought content of the original publication (changes and additions to wording have been italicized).

The Federal Progressive Conservatives had in their infinite wisdom proposed in an election promise that the Tax Free Savings Account (TFSA) limits be changed from $5,500 to $10,000 per year.

To show the effects of having just $5,500 as a contribution amount for married/partnered versus individual/single Canadians, everybody sharpen your financial pencils and dare to do this simple math exercise-calculator not required.

Step 1 – Create two columns, one labelled married/partnered, the other individual/single. In each column for year 1 enter $11,000 for highest possible contribution for both spouses, and $5,500 for a single. Continue up to year 5 or up to year 40 (suggested number of income producing years). Then total the amounts in each column. At year 5 married/partnered total will be $55,000, single amount will be $27,500.

Step 2 – Now using the ‘Rule of 72’ https://en.wikipedia.org/wiki/Rule_of_72 -calculate the amount of possible compounding interest, investment income that can be generated from amounts in each column. Rate of return of 7 per cent will double the bottom line amount in 10 years and double again in 20 years and so on. Okay, you can use a calculator for this step!

Step 3 – Create a graph for amounts in each column, one for married/partnered totals, another line for individual/single totals. Each step in the graph could be shown for every five years up to forty years.

Results for $5,500 contribution (not including investment or interest amounts) amounts are shown in table below:

 

TFSA MAXIMUM CONTRIBUTIONS PER YEAR FOR MARRIED/PARTNERED VERSUS SINGLES

NOTE: Does not include potential compounded interest/investment income

TFSA TOTAL        Married/Partnered    Individual/Single

Year 5                      $ 55,000                       $ 27,500

Year 10                     $110,000                     $ 55,000

Year 15                     $165,000                     $ 82,500

Year 20                     $220,000                     $110,000

Year 25                     $275,000                     $137,500

Year 30                     $330,000                     $165,000

Year 35                     $385,000                     $192,500

Year 40                  $440,000                    $220,000

tfsa graph

This simple math exercise, which takes TFSA financial amounts down to the lowest common denominator, shows the proposed $10,000 yearly TFSA (all tax free!) would exponentially increase the wealth of married/partnered and high-income Canadians, while flat-lining the wealth of singles and low-income Canadians.

Add in Registered Retirement Savings account (RRSP) amounts with potential investment growth and wealth spread becomes even wider.

Thank you, Progressive Conservative Party for failing this simple math exercise, lining your own pockets just because you are married/partnered and wealthy, lining the pockets of married/partnered and high-income Canadians to levels of untold wealth while kicking off the financial bus individuals/singles and low-income Canadians who are unable to max out TFSA and RRSP contributions or make contributions to both programs.

Shame on Finn Poschmann, V.P. and Director of Research, C.D. Howe Institute for also failing this simple math exercise. In the Calgary Herald, “Popularity of TFSAs could mean lifetime cap in the future”, April 23, 2015, page D3 and business.financialpost.com/personal-finance  he states:

“That is absolutely fantastic, when you picture a world where a huge share of Canadians are retiring and living for a very long time, knowing that they have significant savings on hand. And there will less draw on public support programs which is also great….” He further goes on to state: “When TFSAs do become big, they may be a political target, and a financial target for government. However, it would be morally wrong for government to turn course, then, and go back on the commitment made to savers when they are doing their saving. So changing the tax rules retroactively would be very, very bad”.

Who are your financial advisors that would lead you to such an off-balanced decision and statement? Why would think tank persons, who are supposedly critical thinkers, and politicians make such a morally unfair decision to increase TFSA amounts without a cap in the first place and then think it is morally wrong for government to change course after the morally unfair decision has been made? This decision does nothing to erase the use of public support programs as only the wealthy will benefit from raising the TFSA amount.

It is no wonder that Canadian individuals/singles with and without children and low-income persons are in financial despair, repeat, financial despair. With governments, businesses, society and families giving financial preference and perks to married/coupled people and full complement families with two heads of households, individuals/singles are repeatedly having to pay more and get less and can’t even remotely begin to ever ‘catch up’ or be on an equal playing field with married/coupled Canadians.

Financial discrimination and violation of the human rights of individuals/singles and low income people must stop. There must be a cap on TSFA amounts and the cap must be put in place right now rather than later. It is socially, morally and ethically reprehensible, irresponsible and shameful to consciously make the already wealthy even wealthier at the expense of the poor.

Political parties who fail to use simple math formulations to avoid financial discriminatory policies and promises don’t deserve to be in power. Get out and vote! Individuals/singles and low income Canadians, contact your Members of Parliament regarding the financial discrimination of singles and low income persons! (Election took place in October, 2015 with the Liberal party winning a majority and TFSA amount remaining at $5,500).

Lost Dollars Value List

Stay tuned, this is a work in progress and will hopefully appear in future blog entries.

(This paragraph on lost dollar value for TFSA was added April 10, 2016 – If age 25 to age 65 or forty years and annual contribution of $5,000 is calculated for maximum contribution of TFSA that can be used by spouse number two, then calculated lost dollar value equals $200,000 – $5,000 times 40 years.  This does not include amounts lost through compound interest and investment potential.)

The blog posted here is of a general nature about financial discrimination of individuals/singles. It is not intended to provide personal or financial advice.