JimPinto.com - Connections for Growth & Success™
No. 324 : 14 March 2014

Keeping an eye on technology futures.
Business commentary - no hidden agendas.
New attitudes, no platitudes.

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Corruption of Capitalism

Whenever I write about wealth and poverty in America, I get immediate reactions. My recent eNews on the subject resulted in a few “remove” requests. However, I also got several positive responses. The subject always generates lots of good discussions - which is indeed my purpose.

I'm a Capitalist. I came to America because of the opportunities for growth and success. I started my own company, Action Instruments in San Diego, California, with a significant level of employee ownership. Action was featured in INC. magazine among "companies employees love”. Some 30 years later, I sold the company and retired - 15 years ago.

At 76, blessed with good health, I write and speak on futures related topics. I have the opportunity to think on things I was too busy to consider before, which include many of the topics I discuss in my regular eNews. I think and write about Capitalism as a Capitalist.

It’s clear to me that the growth in relative materialism over the past couple of decades is the root cause of major problems America. It generates an increased level of selfishness. This is the subject of a recent book, “The Selfish Capitalist”.

Capitalism is selfish. It cultivates selfish habits and operates with the rules of selfishness. It represents greed, an ideology of accumulating more - for me and not for you, whoever you are. This generates never-ending competition. It intensifies the struggle for status, access and privileges. It intensifies self-pride and envy.

The ultimate tragedy of Capitalism in our time is that it has achieved dominance without being connected to any other metric for human progress. Things are measured only by growth and profit. Profit is the metric by which the health of society is measured.

The wealthy elite creates more and more exclusive institutions and relationships. It applauds selfish competition. It generates ever more complex and artificial means of winning and profiting. It builds excuses that can alleviate its own sense of moral and spiritual inadequacy.

Those outside the wealthy elite, the hangers-on, develop warped imitations of wealth patterns. Talented individuals become increasingly boastful, aggressive, cynical and amoral. They become “wolves” that worship Hedonism (have you seen the latest movie: Wall Street?)

Those without much opportunity take on a fatalistic feeling that life is simply a game that will always be rigged and can only be played by scamming the system. Under harsh conditions, the politics of competition causes the reactive experience of non-elites to spread from the bottom of the socioeconomic ladder to the middle. The poor are despised as people who are too lazy or too stupid to grasp the available opportunities.

The decades old ideas of Capitalism making America the land of opportunity make people blind to the creeping corruption of the system. People get annoyed that I’d dare to criticize the system that benefitted me. Middle America, busy with the day-to-day business of making a living, remains unthinking about what’s occurring.

Does this make sense? Is this kind of selfish Capitalism good? What can you and I do about it?

Click Selfish capitalism is bad for our mental health

Click Book - Selfish Capitalist

Click The Death Of Self-Centered Capitalism

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Political Bribery - Supreme Court "Citizens United" Ruling

In January 2010, the US Supreme Court ruled 5-to-4 to allow corporations to fund political campaigns. The 4 dissenters said that allowing corporate and union money to flood politics would corrupt democracy. The winning 5 votes said that the government could not regulate political speech. Just one vote switch would have changed the decision.

This ruling overturned laws that kept Big Money from flooding the system. The new law, with the terrible misnomer, “Citizens United” has had major political consequences and reshaped the way elections are now conducted.

Since the new law was passed, political spending has skyrocketed. The 2010 elections saw a record-breaking $489 million spent by outside groups — 4 1/2 times increase over 2006. A new breed of Political Action Committees, so-called super-PACs, are now proliferating. They can spend unlimited sums of money directly to support or oppose candidates.

Citizens United unleashed a torrent of money from businesses and the billionaires who run them. As a result we are now seeing the corporate takeover of American politics.

Corporations can now essentially spend whatever they want in elections. That’s why the 2012 election cycle cost over $6 billion. In the 2012 election, conservative groups alone, including a super PAC led by Karl Rove and another group backed by the Koch brothers, spent more than a billion dollars trying to take down Barack Obama.

In his new book, "Extortion: How Politicians Extract Your Money, Buy Votes, and Line Their Own Pockets”, Peter Schweizer, argues that politicians have developed a new set of legislative tactics designed to extort wealthy industries and compel donors into forking over huge amounts of cash that is often funneled into pockets of friends and families. What goes on in Washington is more about money-making than law-making.

The fundamental purpose of government is being lost in the quest for power and money. Nothing is sacred under this system - political donations are extorted from every industry. Schweizer’s book delivers hard, documented facts.

So, what’s corrupting American politics? Funding of campaigns by PACs? Or corruption of the politicians themselves? In the law’s current condition, the line is blurry between the exercise of constitutional rights and the criminal behavior. The common theme is, “Everyone does it - why not me?”

What can you or I do about this?

Click Book - Extortion: How Politicians Extract Your Money,
Buy Votes, and Line Their Own Pockets

Click Is it bribery or just politics?

Click How Much Has Citizens United Changed the Political Game?

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Edward Snowden - Hero or Villain?

Edward Snowden is a 30-year-old American computer geek, former employee of the US Central Intelligence Agency (CIA) and former contractor for the National Security Agency (NSA).

Snowden came to international attention when he disclosed thousands of classified documents to several media outlets. The leaked documents revealed operational details of global surveillance programs run by the NSA, with the cooperation of a number of businesses and European governments. Snowden's release of classified material was the most significant leak in US history.

From the moment he decided to disclose numerous top-secret documents to the public, Snowden was determined not to opt for the protection of anonymity, "I have no intention of hiding who I am because I know I have done nothing wrong."

The US Justice Department has charged Snowden with espionage and his passport was revoked. In May 2013, he flew from Hawaii to Hong Kong, where he later met with journalists and shared several documents. He left Hong Kong and landed at Moscow's International Airport on June 23, reportedly for a one-night layover en route to Ecuador.

Snowden remains stranded in Moscow where the Russian government has granted him temporary asylum. He is seeking permanent asylum in a democratic country such as Germany or France. He would eventually like to return to the US “if the conditions were right”.

A subject of controversy, Snowden has been variously called a hero, a whistleblower, a dissident, a traitor and a patriot. His "sole motive" for leaking the documents was, in his words, "to inform the public as to that which is done in their name and that which is done against them."

Edward Snowden was the runner-up for TIME Magazine’s 2014 Man of the Year. That TIME issue included a major article on him.

Snowden is still considered a fugitive by the American government. In June 2013, he was charged with espionage and theft of government property. In early 2014, some media outlets and politicians called for leniency in the form of clemency, amnesty or pardon.

Snowden recently did an interview for German TV that was largely ignored by US mainstream media. Even though this is big news in Europe and most other parts of the world, every time it's put on YouTube, it’s removed.

Edward Snowden is bright and thoughtful, a man of courage and integrity who has done Americans a great service. In my view, he is a patriot and an American hero! Watch his recent half-hour interview and judge for yourself.

Click Edward Snowden: the whistleblower behind the NSA surveillance revelations

Click TIME (Person of the Year runner-up) Edward Snowden, The Dark Prophet

Click Snowden Nominated For Nobel Peace Prize

Click Media Blacks Out New Snowden Interview The Govt. Doesn’t Want You to See

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Book: Death by China

The American economy has been in trouble for more than a decade. The primary structural problem underpinning slow growth and high unemployment cannot be solved with tax-cuts or fiscal stimulus. The problem is a massive, persistent trade deficit with China that cuts the number of jobs created by nearly the number needed to generate full employment.

A major cause of the rapidly growing trade deficit is currency manipulation. Unlike other currencies, the Chinese yuan does not fluctuate freely against the US dollar; it remains artificially low.

China has aggressively acquired dollars to further depress the value of its own currency and tightly pegged its value to the US dollar at a rate that encourages a large surplus. Currency intervention artificially raises the cost of US exports to China, making American goods less competitive.

Each and every day, American consumers buy $1 billion more in Chinese exports than US manufacturers sell to China. China alone accounts for about 70% of America's trade deficit in goods, excluding oil imports. Chinese import dependence has led America to owe China more than $1 trillion, while China holds more than $3 trillion in foreign reserves, most of them in US dollars.

The most potent of China's "weapons of job destruction” are: An elaborate web of export subsidies; blatant piracy of America’s technologies and trade secrets; counterfeiting of brand names like Nike and Chevy; cleverly manipulated and grossly undervalued currency; and forced transfer of technology of any American company wishing to operate on Chinese soil or sell into Chinese markets.

A 2011 book, "Death by China: Confronting the Dragon – A Global Call to Action" by economics professor Peter Navarro and Greg Autry details currency manipulation, abusive trade policies, slave labor and deadly consumer products.

A feature length documentary film, also titled "Death by China”, based on the book, is narrated by Martin Sheen and was released in 2012. The film portrays China's policies as being immoral. It suggests that the US government is also at fault by not creating laws against Chinese imports.

The China relationship is spiraling out of control. DEATH BY CHINA shows that the US-China relationship is broken and must be fixed. When do you think this will happen?

Click Book: Death by China: Confronting the Dragon - A Global Call to Action

Click Death by China - Youtube trailer

Click Peter Navarro Op-ed in LA Times - How China unfairly bests the US

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Languages of the future

English continues to spread internationally. The desire to learn the English language seems insatiable. In the twenty-first century the world is becoming more urban and more middle class, and the adoption of English is a symptom of this. English serves as the lingua franca of business and popular culture.

English has spread because of British colonialism, the technological advances of the Industrial Revolution, American economic and political ascendancy, and further (mostly American) technological developments in the second half of the twentieth century. Its rise has been assisted by the massive export of English as a second language, as well as by the growth of English-language mass media. Everywhere in the world, language schools offer English classes, courses and summer schools.

The world’s most spoken languages are Mandarin-Chinese (1 billion+), English (510 million), Hindi (490 million) and Spanish (410 million) (2010 estimate).

Globalization and cultural homogenization are spreading Mandarin and English quickly all over the globe. Spanish is spoken by more people than English, though English is growing faster because of its dominance in areas such as shipping, diplomacy, computing, medicine and education.

Spanglish is formed by the blend of Spanish and English. Although it is not an actual language, variation are used widely among Spanish-speaking populations around the world.

Which of the 3 or 4 major languages do you speak?

Click Is English or Mandarin the language of the future?

Click Spanglish: English's Assault on Spanish

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Dave Wibberley agrees that our current system has problems for most people:
    "I am a big supporter of your points around the future of the human race. The collaboration and manipulation of politicians by big business is extremely sad and will ultimately lead to a catastrophic failure in this system.

    "I think we all realise that the current system is not working for most people because it is heavily controlled and influenced by big money. The world is getting sicker, poorer and more unhappy. Unless things change I think we are in for a lot of trouble over the next 50 years."

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Investor and entrepreneur Bob Fritz [rjf5@me.com] always has practical suggestions:

    "Poverty in America has been going on since at least the 1970s. The problem is not that the 1% have become richer - those 1% pay 39% of the taxes. Without that, the rest of us would pay far higher taxes and have a smaller economy because the 1% would not see a reason to increase their size of the pie.

    "The problem is that the channels for upward mobility are being shut down. When I was in high school, those who graduated and did not go to college went to mills or factories and could expect to work there for the next 45 years. What are today's kids going to do?

    "The problem is jobs, or the lack of them. Here are things we can do:

    "First, force China to float its currency. A decent and level playing field would find China and other countries less able to eliminate American jobs. Imagine if WalMart instituted a 'buy American' program.

    "Second, harmonize our business tax treatment with that of other nations. Right now, we give large American companies a paid incentive to locate jobs overseas.

    "Third, get rid of useless regulations that do no good and hinder economic growth. Simplify the tax code. Why should we incentivize the best and the brightest to go into Wall Street and private equity instead of engineering or manufacturing?

    "Finally, fix the obscene aid to the education system. The cost of a college education has increased far above the rate of inflation, and for no apparent reason. Students graduate with no useful skills and in heavy debt. The government should simply stop all aid to any college unless they reduce their costs. There also needs to be more attention paid to skilled training for blue-collar trades."

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My brother Jude Pinto [email@indiabandwidth.com] is an economist and business analyst. He gives this insightful India perspective:

    “I enjoyed this issue of your eNews, especially your first two articles and comments from the ‘Retired Rebel'. It’s amazing how a rich country can be as 'third world' as a poor one. I’m even more amazed that the US Supreme Court is so pro-rich.

    “You should write about how the American dollar has contributed to the current global mess. Because the dollar cannot fall (the world has too much of it, partly due to Americans forcing oil countries to trade only in dollars) the Fed can print $85 billion of new money without the inflation rate budging. If countries like India try this stunt, American rating agencies would threaten to downgrade their economy, forcing the finance ministers to run for cover.

    "The Fed, on the other hand, prints money - which rich Americans (through the banks) invest in global stock markets and global risk products. So, the American rich really don’t need other people in America for their wealth to grow. They just need more of the Fed’s largesse.

    "Maybe when the world finally manages to bring the dollar to heel and makes it behave like other currencies, and make inflation in America behave like it does everywhere else, only then will more employment be valued in America."

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