August 7, 2014 – RI Future

The future of democracy is being threatened and will be determined by our response to the problem of ever increasing wealth inequality. As a very few generate exceptional profits from capital investments, the rest of us recede ever further into relative poverty. Democracy and the open society are under serious threat from snowballing capitalism, which buys elections and access to the political system at prices the average citizen cannot compete with. It is not science fiction to suggest that our children may be slaves in all but name to uncaring oligarchs in some dystopian future.

One of the problems reformers run into is the opaqueness of the financial world. Not only are the systems that govern financial transactions intentionally byzantine and unnecessarily complex, financial actors working within the system do everything they can to obscure who owns what assets, who is paying how much to whom, and by what pathways money tends to flow. Everyone who has seen a movie is familiar with the idea of “shell corporations” and “offshore accounts” as a way of hiding financial assets for nefarious purposes, but few of us are aware of how pervasive these and similar practices are in reality.

If we seek to put an end to ever increasing economic and political inequality and prevent future economic crises similar to or worse than our recent recession, then economic transparency is of the utmost importance. As Thomas Piketty says in his landmark (but far from perfect) Capital in the Twenty-First Century, “there should be clarity about who owns what assets around the world.” (page 518)

Piketty argues that the debate around growing inequality and the management of global capitalism is operating in the dark. We have no reliable data about who owns what and how much money they are making. A significant portion of the world’s wealth seems to be squirreled away into secret black market accounts. Without accurate data, we are flying blind and suggesting solutions to problems we don’t fully understand.

It is in this light that I see the actions of Treasurer Gina Raimondo as contrary to the public good. Raimondo, far from fighting for the rights and economic prosperity of all Rhode Islanders, seems more interested in veiling herself and her allies from financial scrutiny. For instance, Raimondo’s use of a blind trust, to hide her investments and income from scrutiny during her gubernatorial campaign, flaunts economic clarity and openness.

More problematic is the outrageous letter Raimondo sent to the RI Attorney General’s office, in which the treasurer maintains that revealing the amount of money Rhode Island pays to its hedge fund managers might put hedge fund managers at risk of kidnapping! From David Sirota at the International Business Times:

Citing the case of Eddie Lampert, an investor who was abducted in 2003 by ransom-seeking kidnappers, the letter to Assistant Rhode Island Attorney General Michael Field from Raimondo’s office further argued that disclosing too much information about financial fees and compensation could endanger the lives of hedge fund managers.

The amount of money people like Treasurer Raimondo make from their jobs as elected officials pales to insignificance when compared to the amount of money they generate from their capital investments. If people were given a true picture of how wealth is distributed, there would be outrage. This is why financial transactions and the ownership of assets is hidden, and why a new era of financial transparency is mandatory if we wish to preserve our democracy.

Otherwise, the only viable financial plan for those wishing to avoid economic serfdom may be the realization of Treasurer Raimondo’s worst fears: the kidnapping and ransoming of the 1%.

It is impossible to understand the child refugee crisis at our southern border without understanding how the US–led war on drugs has destabilized, militarized, and corrupted Latin America.

For decades, the United States has provided weapons, combat training, and billions of dollars to governments, paramilitary troops, and even cartels themselves under the guise of protecting us from illegal drugs. Not only has that approach totally failed — after all, illegal drugs today are cheap, widely accessible, and more potent than ever before — but it has destabilized entire countries and created one of the most serious human rights crises of modern times. It may be difficult for us to admit, but we have a moral imperative to acknowledge our central role in creating and sustaining this destructive drug war that has forced tens of thousands of children leave their parents and flee their homes.

Just on the face of it, it is clear that the drug war has been massively counterproductive. Despite pouring more than a trillion dollars into the war on drugs over several decades, the United States leads the world in illegal drug consumption. The sale of illegal drugs to American consumers makes up the vast majority of cartels’ income and directly fuels the violence in Latin America. As with alcohol prohibition, our attempt to eradicate drug use by waging a war on the suppliers and producers has only created more corruption and bloodshed.

Instead of addressing the demand side of the equation — as we have done successfully with tobacco and other drugs — we have created a firestorm of violence in an attempt to eradicate the supply of illegal drugs in countries that produce them. Providing weapons and money to Latin American countries, our government has further escalated the destabilizing violence. We have used our imperial power to convince our neighbors to expand their military and police forces and mobilize them against the cartels. Fighting fire with fire has only turned millions of innocent bystanders into victims.

No other part of the world has felt the wrath of the drug war as severely as Latin America. Colombia is home to the world’s largest internal refugee population; Mexico saw more than 60,000 drug war related killings from 2006 to 2012; and Honduras has become the murder capital of the world. It comes as no surprise that some of the most outspoken leaders against the drug war are current and former Latin American presidents, including José Mujica of Uruguay, Fernando Henrique Cardoso of Brazil, César Gaviria of Colombia, and Ernesto Zedillo of Mexico.

Though responsible for the lion’s share of illegal drug use in the US, mainstream white America has for the most part managed to insulate itself from the destructive human costs of the drug war. Enforcement of our drug laws here at home has been focused on poor, urban, minority communities. For decades, guns and money have gone south while drugs have come north, eventually reaching the affluent suburbs, but leaving a trail of destruction in their wake. This arrangement has allowed us to export most of the violence and corruption to our inner cities and neighboring countries.

The new attention given to the child refugees at our border, however, provides an opportunity for us as a country to reflect on the damage we have inflicted on millions of children and families with our failed war on drugs. Imagine what it must take for a mother to decide that the best chances for her children’s survival is to send them through a barren desert accompanied by armed coyotes. The drug war has created such an environment of corruption, chaos, and indiscriminate violence that parents feel they have no other choice.

The child refugees at our border are fleeing a hell that we in the United States helped create. While many are quick to blame the victims, there is no denying that there is blood on our hands. We are fueling a war in our back yard in a futile attempt to kick our own drug habit. It’s time for us to break the taboo and begin seriously considering alternative drug control strategies. We must demand that our political leaders end the futile and destructive war on drugs immediately. The lives of children at home and abroad depend on it.

Rebecca McGoldrick is the Executive Director of Protect Families First, an organization working to end the war on drugs.

Day: August 7, 2014

Gina Raimondo and wealth inequality

Refugees are ‘fleeing a hell’ US drug war helped create