Tuesday, March 29, 2011

Part Four - Wealth Redistribution in Disasters

Lest we forget, a primer on capitalism.

MeanMesa takes a longer look at a suspiciously obscured reality.  This is the fourth of series of postings on illicit wealth redistribution in a free market system.

Wealth Redistribution Following Natural Disasters

Part Three of this series dealt with illicit wealth distribution in times of economic disaster.  However, we know that all disasters do not originate from economic manipulation, some begin as natural phenomena.  The point in this post is that, while these latter cases may begin with earthquakes, tsunamis or volcanoes, they become interludes of remarkable economic opportunity as the damage is repaired.

The discussion, for this reason, settles on observations and conclusions of the rather dated concept of "the commons."  Although a favorite line of discussion on Thom Hartmann's radio show (The Thom Hartmann Show, AM1350 KABQ, Albuquerque, 10AM - 1PM weekdays), the precise concept derives from the historical period when the possibility of publicly owned infrastructure emerged from the previous system where the nobility owned everything.

The new system which arose from these changes was one which relied upon public resources to construct such things as road and bridges, and included the idea that access to such things was conveyed to the public by certain rights.  We can see why such a development required such a long time.  The old aristocracy was not immediately enthusiastic about such fundamental changes.

Further, it would be something of a misinterpretation to characterize this change as exclusively a political or ideological matter.  Its major impetus arose from tax paying middle class folks wanting to increase the amount of public infrastructure beyond the level previously sponsored by the wealthy elite. 

All they needed to add was to create a government sufficiently free of corruption which could offer the prospect that their tax payments -- or, at least most of them -- would wind up in construction projects for things they wanted and could use.  Once such improvements were in place, the local economy, now hosted by such advances in infrastructure,  exploded.

Yes, "exploded" in the sense that there occurred a valid wealth redistribution downward to the growing middle class.  The social culture of the times quickly came to rely on this process to continually improve the physical infrastructure  and, hence, the new opportunities -- which supported its growth.

A "natural disaster" can be coarsely defined as one which damages the public infrastructure.  Recent examples are plentiful.  Katrina, the Indonesian earthquake and tsunami, the Indus flooding in Pakistan, various hurricanes, droughts, and most recently, the damages in Japan which not only included an earthquake and tsunami but also a subsequent nuclear infrastructure disaster.

The "Commons" 

However, when viewed through the frame of "the commons," infrastructure damage and repair moves quickly to the issue of illicit wealth distribution.  A week before the disaster, we found oligarchic interests benefiting from the infrastructure while paying essentially no taxes to fund its creation or maintain it afterwards.  MeanMesa visitors know, by now, that this serendipitous coincidence is fundamentally the result of the corporatist penchant for  "controlling" ("lobbying") the government's tax funding.

The "Commons" - an old idea? (image source)

A week after the disaster wrecks the infrastructure, subsequent chapters of the same story begin to unfold.  It will be middle class tax money which funds the reconstruction.  On the side lines -- and in the back rooms -- it will be advantages to the oligarch class which will govern the new design.  It will be well connected corporations which will supply the materials for reconstruction, and it will be equally well connected contractors who turn out to be the only viable choices in the "bidding" process to do the work, if there is one.

The recovery process will be an arena where "anti-union" values become persuasive attributes of companies seeking contracts.  Further, while lower class tax money is being spent in largess to support the mutilated contracts, the oligarch's public relations campaign will shift into high gear embedding the idea that whatever work will be done is too expensive, even though its sponsors will be paying basically no part of the cost, anyway.

Finally, cynical "side agendas" will emerge as the project proceeds.  For example, in the carefully crafted "rehabilitation" of New Orleans 9th Ward, a huge block of Democratic voters wound up -- more or less permanently -- in FEMA trailers in Arkansas while a major voting block of the party contested city miraculously migrated to the Republican side of the future election results.  Prior property ownership enters a carefully designed Draconian bureaucratic labyrinth with predictable results.

Idealistic Altruism or Just More Looting?

MeanMesa's point here is that it seems we almost entirely abandon the idealistic possibility of actually helping disaster victims recover in favor of a rampage of extracting every possible profit advantage from the ensuing chaos and misery.  The illicit wealth redistribution crowd starts salivating when the first trees fall or the first trash cans are hurled down the street by the wind.  After this stage, the question of "to loot or not to loot" is not a matter of police action around the electronics store.  It is the orgiastic frenzy of plutocrat lobbyists in the back rooms of the Senate.

"Great job, Brownie!" (image source)

US disaster relief in foreign country's ravaged by natural catastrophes too often takes the same turn.  Materials and contracts arrive via "American altruism" but they have been purchased and shipped at monumental costs compared to what more rational purchases from local or near by vendors might have been.  The corporate media floods the domestic "news" channels with "feel good" footage while the illicit profits stream from the US general fund to  opportunistic, corporate, domestic  pockets.

Further, when some of the "profits from disaster" are left on the table when the American oligarchs are through looting the pile, select foreign elites get the next chance to make a few bucks.  Even after the food and medicine arrives where it is desperately needed, it too often winds up in warehouses temporarily on its way to markets where it will be sold to the victims.  Worse, political supporters too often find something to eat long before the unconnected or opposition plates are filled.

This has been the case with every disaster from the Christmas tsunami in Indonesia to the drought in sub-Saharan Africa.  The Obama government has done better with this with the Pakistan earthquake and Indus flooding and the Haitian calamity, both occurring during a more sincere effort already in progress to assist the development of local economies in both places, suggesting that the first thoughts of an "ex-community organizer" in such matters are refreshingly more effective than those of a "profit at any cost" autocrat.

MeanMesa was shocked when the W authorized serious financial aid to save the "AID's sinners" in Africa, but the old, hollow skepticism rushed back when Indian companies which had previously made generic (cost effective) anti-virals were prohibited from continuing the practice in favor of "sky-high priced" front line American pharmaceutical alternatives.

Our altruistic hearts may be in the right place for such undertakings, but we must rededicate ourselves to a new, far more committed state of idealistic diligence in the future.  The fortunes made on the backs of previous disasters have already flowed into the family coffers and trust funds of new aristocrats who will enjoy the lavish returns for generations.

We can -- and must -- do better in the future.  It begins with elections.

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