france
The French Politics of the Pantheon and the Monumental Hypocrisy of Emmanuel Macron
It was striking that a center-right president like Emmanuel Macron, who has recently hardened his position on immigrants and immigration, would grant such a high honor to two immigrant Communists. ...
Introducing the Salary Cap Act
by Daniel Wortel-London
Obscene salaries are no longer sustainable and should be illegal. (Justin Pacheco, Wikimedia)
The daily news regularly features commentary about the outrageous and growing income inequality in the USA. The data support the outrage:
- In 1965, the CEO-to-worker salary ratio at the average U.S. company was 21-to-1. Today that ratio is 344-to-1.
- In 2022, CEO pay at 100 S&P 500 companies averaged $15.3 million, while median worker pay averaged only $31, 672, according to an Institute of Policy Studies analysis.
- Since 1978, CEO pay has increased 1,460 percent.
Many reasons can be cited for opposing large discrepancies in pay, including depressed morale of employees, diminished firm productivity, and widened gender and racial disparities. Another reason is their effect on the environment. High salaries tend to increase environmental impacts. And high pay, particularly high CEO pay, is dependent on—but also drives—the economic growth that is creating today’s societal and environmental crises.
To counter inequality in the USA, CASSE proposes adoption of a Salary Cap Act (SCA). The Act would create salary caps by major occupational sector, as Brian Czech proposed in Supply Shock. Almost no expansion of the Tax Code is entailed. The SCA would simply prohibit the issuance of salaries beyond the prescribed proportions (described below), making it a crime for employers to issue exorbitant salaries.
Exorbitant Salaries and Environmental Degradation
Generating money entails agricultural and extractive activity at the trophic base of the economy. Therefore, the need to pay exorbitant salaries results in more environmental degradation than paying for lesser salaries. Imagine, for example, the ecological footprint required to pay Elon Musk compared to a minimum-wage worker.
Highly paid individuals are more likely to purchase resource-intensive luxury goods, too. This is one reason why the USA’s top one percent of income earners was responsible for 23 percent of the growth in global carbon emissions between 1990 and 2019. And income inequality leads to inequality in political power, which helps CEOs lobby for policies that promote unsustainable growth.
Limiting the environmental impact of the economy entails limits on high salaries. (Richard Hurd, Creative Commons 3.0)
High salaries drive growth in less obvious ways as well. At many corporations, CEO compensation includes a generous grant of stock and stock options. These sweeteners motivate CEOs to strive for company growth, then use profits to buy back company stock, which raises its price and enriches the CEO even further.
For example, the compensation of oil company executives is intimately linked to exploring for new fields, extracting fossil fuels, and promoting consumption of their fuels and services, activities that contribute to the growth of the firm. As Richard Heede of the Climate Accountability Institute observes, “executives have personal ownership of tens or hundreds of thousands of shares, which creates an unacknowledged personal desire to explore, extract and sell fossil fuels.”
Moreover, high CEO compensation through stock options and bonuses encourages companies to take a short-term perspective that can involve boosting stock prices quickly through shortsighted sales or risky investments. The Enron scandal, for example, involved CEOs trying to quickly raise stock prices in pursuit of bonuses. Selfish and short-sighted decisions like these can take a serious environmental toll, and are disastrous at a time when companies should be committed to the long-term health of our planet.
Drivers of Unequal Pay
CEO pay has increased extensively in part because companies have grown larger and wealthier, which allows them to offer fatter salaries. It’s also because CEOs have increased their leverage over corporate boards and can therefore set their own pay more easily. But the greatest reason is because CEOs are compensated differently than ordinary workers: Some 80 percent of CEO compensation in 2021, for example, derived from vested stock awards and exercised stock options rather than “ordinary” salaries. CEOs are thus able to negotiate salaries that are orders of magnitude higher than the salaries of workers paid through more conventional means.
Policymakers have a deep toolbox for addressing pay inequality. They can, for example, ban or tax stock buybacks or deny public contracts to companies with excessively high pay inequalities. Measures like these are now law. The Inflation Reduction Act placed a 1 percent excise tax on stock buybacks, while San Francisco and Portland, Oregon have taxed companies with large CEO-worker pay gaps. Inspiration comes from outside the USA as well. The European Union will assist in bailing out failed banks only when their pay ratios are 10-to-1 or less.
Franklin Roosevelt called for a 100 percent tax on annual incomes above $1.2 million (in 2022 dollars). (Elias Goldensky, Public Domain).
But another, more direct remedy for pay inequality is salary caps. We’ve seen such caps in professional sports leagues for decades, including every major league in the USA except Major League Baseball. These caps are much higher than those prescribed in the Salary Cap Act presented below, but they achieve analogous purposes. Leagues use caps to keep overall costs down and ensure a competitive balance among teams. The USA would use salary caps to for purposes of social equity, but also to keep environmental impact at a lower, more sustainable level.
Salary caps, along with caps on wealth and other forms of income, have been proposed by various economists and progressive policymakers, occasionally with public success. A referendum was held in Switzerland in 2013 to cap executive incomes; while unsuccessful, it emboldened major candidates in France and England to endorse similar salary caps. And campaigns for wealth and income caps have taken various forms in U.S. history, from Huey Long’s “Share our Wealth” campaign to Franklin Roosevelt’s call for a 100 percent tax on high incomes during World War II.
In the spirit of these efforts, CASSE proposes the Salary Cap Act.
The Salary Cap Act
The Salary Cap Act is designed to curb exorbitant salaries for purposes of social equity and environmental health. Salary caps are set and enforced by the Department of Labor. A separate provision addresses pay for self-employed workers.
The SCA defines “salaries” as wages, bonuses, tips, and other forms of compensation specified under Section 3401(a) of the Internal Revenue Code. This broad definition is meant to encompass forms of compensation, such as corporate stock options, which are not traditionally classified as “salaries.”
Section 4 describes the target and structure of the salary caps. The Secretary of Labor sets the caps for each of the 23 major occupational groupings in the Standard Occupational Classification (SOC) Codes maintained by the Bureau of Labor Statistics. The caps are set, and updated annually, to correspond to 1.8 times the salary of the 90th percentile of employees for each occupational grouping. (In other words, maximum salaries in each occupational grouping are 80 percent higher than the salary at which 90 percent of salaries in the grouping are lower and ten percent are higher.)
For example, the annual salary cap for managerial occupations would be set at $400,000, while the cap for food preparation occupations would be set at $81,270. Salary disparities would remain, but they would be far lower than the disparity today. The average CEO-to-worker pay gap across occupational categories is currently 344-to-1. Under the SCA, the ratio would be roughly 7-to-1.
We can respect planetary boundaries, or we can have billionaires, but not both. (Adrian Cadiz, Wikimedia)
Meanwhile, traditional and reasonable salary discrepancies among professions are still respected. For example, licensable occupations that require extensive training or years of graduate school warrant a higher range of salaries than those for occupations requiring little training or education.
The value of 1.8 in the maximum salary formula is chosen because the salary of the President of the United States is currently 1.8 times the 90th percentile of CEO salaries. We do not believe a CEO deserves to be paid more than the president. Still, the SCA’s maximum salary formula offers plenty of room to reward superior performance while curbing the social and environmental distortions of exorbitant salaries.
Section 5 describes how the Office of Labor-Management Studies in the Department of Labor will enforce the SCA. The Office will have the power to petition a court if it believes the Act has been violated. Companies found guilty will face criminal penalties of up to $100,000,000, imprisonment not exceeding 10 years, or both.
A concluding section requires net earnings from self-employment or employee ownership in excess of $400,000 be taxed at 100 percent. Salaries derived from self-employment are not included in the NAICS SOC codes, so it is necessary to “cap” these earnings through taxation rather than salary caps.
The SCA is designed to be both a stand-alone bill and a component of the larger Steady State Economy Act. It will not, by itself, end wealth inequality or ecological overshoot. But it will help apply brakes on incentives that drive economic firms to grow the economy beyond our planet’s carrying capacity.
We also encourage the voluntary adoption of salary caps prior to passage of the SCA. In addition to contributing to the social and environmental purposes of the SCA, such voluntary caps provide a boost to employee morale and cut costs for small businesses and nonprofit organizations.
The Salary Cap Act may be revised pursuant to reader responses and the input of CASSE allies.
Daniel Wortel-London is a CASSE Policy Specialist focused on steady-state policy development.
The post Introducing the Salary Cap Act appeared first on Center for the Advancement of the Steady State Economy.
Globetrotting for Genocide: Foreign Fighters From US, France and India Are Fighting Israel’s War in Gaza
Israelis aren’t the only demographic among the IDF’s forces in Gaza. Foreign fighters from as far away as the United States, France, Spain, the Netherlands and even India actively participate in the hostilities. While the exact number of internationals fighting in Gaza isn’t known, what is known is that citizens from numerous countries appear to be at least complicit in what has been called a genocide.
Under Israel’s Law of Return, any individual with at least one Jewish grandparent or spouse can obtain Israeli citizenship. In this regard, many born abroad can serve in Israel’s military while still keeping their birthplace’s nationality. They often emigrate and then serve in the army.
Currently, 45% of the Israeli army’s “lone soldiers,” those who serve but don’t have family in Israel, are new immigrants. The current “lone soldier” program has troops from over 60 countries, with approximately 35% from the U.S. It’s important to note, though, that individuals part of Israel’s “lone soldier” program are not considered mercenaries, who are professionals hired by a country’s government to fight in its war and aren’t citizens of said country.
To widen the recruitment pool, the Israeli military now accepts great-grandchildren of Jews to join. While they aren’t eligible to become Israeli citizens under the Law of Return, they can serve in the Israeli army.
Another route is volunteering in Israel’s Mahal program, which permits Jewish youth from other countries to join the army without becoming citizens. There are currently 500 Mahal volunteers in Israel’s military.
“Most mercenaries fighting for Israel now are welcomed based on their religious affiliations and dual citizenships, making their accountability pretty complex,” Mustafa Fetouri, a Libyan journalist and analyst, told MintPress News. “Many countries whose citizens are fighting for Israel, including the USA, have laws criminalizing such actions, but it is not a straightforward issue when the dual citizenship is factored in.”
Fetouri expanded on this, writing in the Middle East Monitor that “America’s Neutrality Act, dating back to the founding days of the US, mak[es] it illegal for any American citizen to take part in any foreign war, or establish a militia for that purpose.” He noted the legislation, however, hasn’t been reinforced lately “as hundreds of Americans have participated in wars in Ukraine, in Libya in 2011 and, now, in Gaza.”
The Israeli military also openly recruits nationals of other countries. For instance, the Israeli consulate in Toronto has advertised appointments with its military representative for those wishing to join the military.
From November 11-14, the Israeli consulate in Toronto will be recruiting Canadians to serve in Israel’s terrorist military.
It is obscene that @justintrudeau’s government allows this terrorist recruitment to occur on Canadian soil.#Palestine #Israel #terrorism @CanadaFP pic.twitter.com/pOXyrQHLRJ
— Dimitri Lascaris (@dimitrilascaris) November 3, 2019
The consulate’s website said, “Young people who wish to enlist in the IDF or anyone who has not fulfilled their obligations according to the Israeli Defense Service Law are invited to meet with him.”
Organizations like Nefesh B’Nefesh, which encourages Jewish immigration to Israel from North America, have hosted events on joining the Israeli military. Sar-El (National Project for Volunteers for Israel) recruits Jewish and non-Jewish internationals to assist Israeli military efforts on army bases, such as packaging food and medical supplies.
The Nationalities Serving
In November, the Spanish newspaper, El Mundo, revealed that Spanish mercenary Pedro Diaz Flores is now fighting for Israel, having previously fought in Ukraine with the neo-Nazi Azov Brigade.
“So I came for economy, for money. They pay very well, they offer good equipment, and the work is calm. It is 3,900 euros [$4,187] per week, complementary missions aside,” Flores told El Mundo.
While pictured next to a border checkpoint with the Gaza Strip, he told the newspaper he’s working in the occupied Syrian Golan Heights, saying, “We only provide security support to arms convoys or the troops of the Israeli armed forces that are in the Gaza Strip, we do not fight Hamas directly, nor are we involved in assault operations.”
“We are in charge of the security of the checkpoints and access control on the borders of Gaza and Jordan. There are many PMCs [private military companies] here, and they share the work. Traditionally, they have guarded border terminals between Eilat and Aqaba,” he added.
He told the newspaper he was recruited by Raven and Global CST. Information on Raven isn’t available online. MintPress News reached out to Global CST to verify Flores’ contract. Global CST said it doesn’t know Flores and that “Global CST holds no security or military activities of any type or form, not in Israel, not in Gaza, and not in any other territory worldwide.”
Global CST told MintPress News it’s a renewable energy company and denied reports it’s providing defense and security services to governments and other organizations. On LinkedIn, Global CST is described as offering “strategic consulting and project integration management.” The website listed on Global-CST’s LinkedIn is currently down. When asked for a website, Global CST directed MintPress to Global Group’s website, which promotes agricultural projects worldwide.
The LinkedIn profile of the firm’s founder, Israel Ziv, a retired Israeli general, details Global CST as an “Israeli-based security consultancy group…which has built a vast and unique track record in various continents around the globe, such as South America, Eastern Europe, and Africa.” Global CST confirmed to MintPress News Ziv is its founder. The company, which also operates under the name Global N.T.M., was established in 2006 and remains active.
In 2018, the U.S. government imposed sanctions on Global CST and Ziv for allegedly supplying weapons to South Sudan. The U.S. Treasury Department said Ziv used an agricultural company “as a cover for the sale of approximately $150 million worth of weapons to the government, including rifles, grenade launchers and shoulder-fired rockets.”
The U.S. also said Ziv “planned to organize attacks by mercenaries on South Sudanese oil fields and infrastructure in an effort to create a problem that only his company and affiliates could solve.” The U.S. lifted its sanctions on Ziv and his company in 2020 without an explanation.
Since El Mundo’s publication, reports have also emerged of other nationalities involved in a more direct capacity with Israel’s assault on Gaza. Footage has surfaced of Israeli soldiers speaking with American accents or with American flag patches on their uniforms.
A soldier with a Southern US accent has reportedly called for Gaza to burn to the ground. In the video, he compares the people of Gaza to rats and tells Israeli soldiers “It’s hunting season”.
US officials said that 6 American citizens serving in Israel have died since October 7 pic.twitter.com/7KsV5aTYIK
— Middle East Eye (@MiddleEastEye) November 22, 2023
Bisan herself said she saw American troops months back.
There were also reports of mercenaries from the Azov battalion in Gaza https://t.co/sEqJvmvfRF— Najat Abdi (@theafroaussie) March 1, 2024
According to the U.S. State Department, 21 American citizens who were members of the Israeli military have been killed in Gaza since the war began. Canadian media has reported its own nationals are volunteering with the Israeli army and are motivated to serve in Gaza. And British newspaper, The Guardian, reported British nationals have been killed in Gaza while fighting for Israel. Britons are also arriving in droves to volunteer with the military like doctors and university chaplains. Around 100 British citizens are currently part of Israel’s military.
In December, Al Jazeera reported seven Ukrainian mercenaries were reportedly killed near Gaza City while fighting alongside Israeli forces. This news came as images of Israeli soldiers speaking Ukrainian circulated on social media. The Ukrainian government denies its citizens are fighting in Gaza, however.
I believe these guys are dual citizenship holders (Ukrainian and Israeli) and the majority served in the IDF. There were about 800-1000 of them in Ukraine fighting first for Ukraine and after Oct 7 with the call from the IDF, they went back home (which was actually a good excuse…
— Mike Mihajlovic (@MihajlovicMike) December 20, 2023
“We did not send any soldiers to the Gaza Strip or any other region of the world,” Ukrainian Foreign Ministry spokesperson told Al Jazeera.
“The footage that shows people speaking Ukrainian in the Gaza Strip may be Israelis of Ukrainian or Slavic origins who have no connection to the state,” the spokesperson added.
According to Australian journalist CJ Werleman, Israeli soldiers of Indian origin are also fighting in Gaza. The Indian Foreign Ministry did not respond to inquiries on whether its citizens are fighting in Gaza.
The involvement of Hindu mercenaries in Gaza’s genocide echoes Israel’s racist policies in Kashmir. The world must stand against this injustice.@BBC @CNN @SkyNews @MSNBC @nyTimes @washingtonpost @latimes @guardian @IntlCrimCourt @CIJ_ICJ @UNHumanRights @hrw https://t.co/jlAxikrOfN
— Abdulrhman A.Fathy | عبدالرحمن أ.فتحي (@Abdulrhman_25J) February 28, 2024
In December, Eekad, an Arabic open-source platform, revealed Forward Observations Group as an American mercenary company fighting alongside Israeli forces in Gaza.
Our inquiry unveiled reports from the Dutch open-source investigative journalism group Bellingcat. These reports categorized the Azov Battalion as Nazi and far-right, accusing it of perpetrating crimes of ethnic genocide in Ukraine.
Additionally, the reports exposed its ties… pic.twitter.com/sVyAfnnRwi
— EekadFacts | إيكاد (@EekadFacts) February 1, 2024
Close examination of Forward Observation Group’s Instagram account suggests the group has been cooperating with the Israeli army since October — first stationed around the Gaza border and then located within the enclave by the end of November. The last image on its account from Gaza is dated January 16. Another post dated January 11 depicts camera footage of Israeli soldiers fighting in Gaza. It is captioned, “Helmet cam footage from a LOTAR Special Forces team leader we embedded with shortly after the OCT 7th attack.” A recent Instagram Story from Forward Observations shows a soldier in a hospital bed draped with Forward Observation’s flag. An Israeli flag hangs on the wall next to him.
Fast forward to November 26, 2023, when the FOG account shared yet another image of a fully geared-up fighter accompanied by a caption disclosing that the photo was captured within the confines of the Gaza Strip. pic.twitter.com/0HDLaSKLmW
— EekadFacts | إيكاد (@EekadFacts) February 1, 2024
Eekad discovered the company was founded in October 2018, and while billing itself as a military gear shop, it currently only has one item in stock — a first aid bag. Forward Observations was registered as a foreign limited liability company in Nevada on October 15, 2020, and remains active. Derrick Bales, a former U.S. infantry soldier who fought in Afghanistan, founded the company. A Forward Observations’ Instagram post on November 9, 2023, confirmed Bales as the company’s former director and revealed his official Instagram is under the name “Raoul Duke.” In February, Bales responded to Eekad’s investigation with a photo from Gaza on his Instagram account, writing, “@eekadfacts here’s some more pictures for your article.”
An extensive search through publicly available sources revealed that the company was registered as a foreign limited company in Nevada. The registration, dated October 15, 2020, lists the company under the name “Forward Observations Group, LLC,” bearing the registration number… pic.twitter.com/6eJKQ3Rdf4
— EekadFacts | إيكاد (@EekadFacts) February 1, 2024
According to Foreign Policy, Forward Observations traveled to Ukraine to source medical supplies, gear, and money for Ukrainian soldiers. Bales has been criticized for associating with Vadim Lapaev, a member of the far-right Azov Battalion. He apologized for his connections to Lapaev but said the brigade isn’t as radical as alleged.
Yet Eekad found otherwise. For instance, Eakad’s thorough scrutiny of Lapaev’s social media accounts found photos of Lapaev giving a Nazi salute, holding a sign featuring a swastika, and wearing a necklace with the infamous Nazi symbol as well.
In May 2016, Vadim shared a series of controversial photos: one depicted him performing the Nazi salute, while another showed him holding a sign emblazoned with a swastika, the infamous Nazi emblem. He also posted images of himself wearing a necklace adorned with the same… pic.twitter.com/iTJoAjizjK
— EekadFacts | إيكاد (@EekadFacts) February 1, 2024
Forward Observations did not respond to MintPress’ inquiries to verify if its personnel are indeed in Gaza and what it’s doing there.
Complicit in War Crimes
Amid the revelations that citizens of other countries may be participating in Israel’s genocide on Gaza, some governments and activists are taking a stand.
In December, South Africa announced it might prosecute or even strip the citizenship of South African nationals who have joined the Israeli army and are fighting in Gaza.
“The South African government is gravely concerned by reports that some South African citizens and permanent residents have joined or are considering joining the Israeli Defense Forces (IDF) in the war in Gaza and the other occupied Palestinian territories,” the state’s Department of International Relations and Cooperation, said.
Also, in December, French parliamentary member Thomas Portes sent a letter to France’s Justice Minister, Eric Dupond-Moretti, requesting he investigate around 4,000 French citizens fighting with Israeli forces on the frontlines in Gaza.
The March 30 Movement, a European pro-Palestine group founded in November, has already filed seven complaints against Dutch Israelis currently serving in the Israeli army in Gaza. They have also filed complaints against Israeli soldiers who traveled to the Netherlands to protest the International Court of Justice proceedings and a French-Israeli soldier, who was also in the Netherlands. While these soldiers don’t have Dutch nationality, they can be investigated because they were on Dutch soil, the March 30 Movement told MintPress News. The group is also submitting a case in Belgium and other cases against French nationals.
“They’ve posted themselves on Instagram or on TikTok, standing on the rubbles of a house in Gaza saying, ‘We want to wipe out Amalek from under the sky, and we will kill them all,'” Dyab Abou Jahjah, president of the March 30 Movement told MintPress News. Amalek refers to Israelites’ rival in the Hebrew bible and was invoked by Israeli Prime Minister Benjamin Netanyahu when calling to attack Gaza.
Abou Jahjah added, “They think they are beyond the reach of justice. Maybe if they are only Israeli, but if they are Belgian, we are going to make sure that we take them to court.”
Feature photo | Illustration by MintPress News
Jessica Buxbaum is a Jerusalem-based journalist for MintPress News covering Palestine, Israel, and Syria. Her work has been featured in Middle East Eye, The New Arab and Gulf News.
The post Globetrotting for Genocide: Foreign Fighters From US, France and India Are Fighting Israel’s War in Gaza appeared first on MintPress News.
The Little Prince Haunts New York
When I moved to New York, I set out to discover how my new adopted home had influenced that sense of tristesse in The Little Prince, which Saint-Exupéry wrote during his 1941–1943 stay in the city....
Austerity. The Past That Doesn’t Pass
[As usual lately, this is a slightly edited AI translation of a piece written for the Italian Daily Domani]
The European Commission recently revised downwards its forecasts for both growth and inflation, which continues to fall faster than expected. In contrast to the United States, there is no “soft landing” here. As argued by many, monetary tightening has not played a major role in bringing inflation under control (even as of today, price dynamics are mainly determined by energy and transportation costs). Instead, according to what the literature tells us on the subject, it is starting, 18 months after the beginning of the rate hike cycle, to bite on the cost of credit, therefore on consumption, investment and growth.
This slowdown in the economy is taking place in a different context from that of the pandemic. Back then, central bankers and finance ministers all agreed that business should be supported by any means, a fiscal “whatever it takes”. Today, the climate is very different, and public discourse is dominated by an obsession with reducing public debt, as evidenced by the recent positions taken by German Finance Minister Lindner and the disappointing reform of the Stability Pact. The risk for Europe of repeating the mistakes of the past, in particular the calamitous austerity season of 2010-2014, is therefore particularly high.
In this context, we can only look with concern at what is happening in France, where the government also announced a downward revision of the growth forecast for 2024, from 1.4% to 1%. At the same time, the Finance Minister Bruno Le Maire announced a cut in public spending of ten billion euros (about 0.4% of GDP), to maintain the previously announced deficit and debt targets. This choice is wicked for at least two reasons. The first is that it the government plans making the correction exclusively by cutting public expenditure, focusing in particular on “spending for the future”. €2 billion will be taken from the budget for the ecological transition, €1.1 billion for work and employment, €900 million for research and higher education, and so on. In short, it has been chosen, once again, not to increase taxes on the wealthier classes but to cut investment in future capital (tangible or intangible).
But regardless of the composition, the choice to pursue public finance objectives by reducing spending at a time when the economy slows, down goes against what economic theory teaches us; even more problematic, for a political class at the helm of a large economy, it goes against recent lessons from European history.
The ratio of public debt to GDP is usually taken an indicator (actually, a very imperfect one, but we can overlook this here) of the sustainability of public finances. When the denominator of the ration, GDP, falls or grows less than expected, it would seem at first glance logical to bring the ratio back to the desired value by reducing the debt that is in the numerator, i.e. by raising taxes or reducing government spending. But things are not so simple, because in fact the two variables, GDP and debt, are linked to each other. The reduction of government expenditure or the increase of taxes, and the ensuing reduction of the disposable income for households and businesses, will negatively affect aggregate demand for goods and services and therefore growth. Let’s leave aside here a rather outlandish theory, which nevertheless periodically re-emerges, according to which austerity could be “expansionary” if the reduction in public spending triggers the expectation of future reductions in the tax burden, thus pushing up private consumption and investment. The data do not support this fairy tale: guess what? Austerity turns out to be contractionary!
In short, a decline in the nominator, the debt, brings with it a decline in the denominator, GDP. Whether the ratio between the two decreases or increases, therefore, ends up depending on how much the former influences the latter, what economists call the multiplier. If austerity has a limited impact on growth, then debt reduction will be greater than GDP reduction and the ratio will shrink: albeit at the price of an economic slowdown, austerity can bring public finances back under control. The recovery plans imposed by the troika on the Eurozone countries in the early 2010s were based on this assumption and all international institutions projected a limited impact of austerity on growth. History has shown that this assumption was wrong and that the multiplier is very high, especially during a recession. A public mea culpa from the International Monetary Fund caused a sensation at the time (economists are not known for admitting mistakes!), explaining how a correct calculation gave multipliers up to four times higher than previously believed. In the name of discipline, fiscal policy in those years was pro-cyclical, holding back the economy when it should have pushed it forward. The many assistance packages conditioning the troika support to fiscal consolidation did not secure public finances; on the contrary, by plunging those countries into recession, they made them more fragile. Not only was austerity not expansive, but it was self-defeating. It is no coincidence that, in those years, speculative attacks against countries that adopted austerity multiplied and that, had it not been for the intervention of the ECB, with Draghi’s whatever it takes in 2012, Italy and Spain would have had to default and the euro would probably not have survived.
Since then, empirical work has multiplied, with very interesting results. For example, multipliers are higher for public investment (especially for green investment) and social expenditure has an important impact on long-term growth. And these are precisely the items of expenditure most cut by the French government in reaction to deteriorating economic conditions.
While President Roosevelt in 1937 prematurely sought to reduce the government deficit by plunging the American economy into recession, John Maynard Keynes famously stated that “the boom, not the recession, is the right time for austerity.” The eurozone crisis was a colossal and very painful (Greece has not yet recovered to 2008 GDP levels), a natural experiment that proved Keynes right.
Bruno Le Maire and the many standard-bearers of fiscal discipline can perhaps be forgiven for their ignorance of the academic literature on multipliers in good and bad times. Perhaps they can also be forgiven for their lack of knowledge of economic history and of the debates that inflamed the twentieth century. But the compulsion to repeat mistakes that only ten years ago triggered a financial crisis, and threatened to derail the single currency, is unforgivable even for a political class without culture and without memory.
French economy minister tells EU to raid €35 TRILLION from private savings to fund war
“35,000 billion euros lying dormant today in European bank accounts… is no longer acceptable” – Bruno le Maire, who said he was going to collapse Russian economy, now wants the money of millions of EU citizens
Bruno le Maire’s ‘rant’
Bruno le Maire, arch-centrist French president Emmanuel Macron’s economy and finance minister, said in 2022 that France and the EU was going to collapse the Russian economy. Now, with Russia’s economy outperforming both the EU and US, le Maire has decided that the EU doesn’t have enough cash reserves and that he wants to raid the bank accounts of European citizens to get access to what he says is 35 trillion euros lying ‘dormant’.
And he wants them, at least in part, to fund war-readiness.
As French observer Arnaud Bertrand has pointed out, le Maire wants to “mobilize all the savings of Europeans” by taking their savings into a ‘European savings product’ – but while le Maire says that it will be ‘voluntary’ for EU nations to enter the scheme, there is no mention of ordinary people having the same freedom of choice if their country does enter it. In a video on the topic, le Maire says:
I am at the Council of Ministers of Finance in Ghent, Belgium, and I just raised a fuss because the capital markets union is not progressing. What is the capital markets union? It’s the ability to mobilize all of Europeans’ savings – 35,000 billion euros – to finance the climate transition, fund our defence efforts, and invest in artificial intelligence.
Since things aren’t moving forward with all 27 members, I proposed that we move forward on a voluntary basis with a small number of member states to propose a European savings product in the coming months, to propose European supervision of capital markets to ensure that regulation works well, and therefore to raise several tens of billions of euros to finance our growth and prosperity.
Europe cannot economically weaken as it has been doing for several months because it does not have sufficient financial reserves. Europe cannot miss the climate turning point because it does not have sufficient financial reserves. Europe cannot miss the artificial intelligence turning point because it is unable to agree on this capital markets union and make Europeans’ savings work.
35,000 billion euros lying dormant today in European bank accounts instead of fostering Europe’s prosperity tomorrow, instead of financing artificial intelligence, instead of financing the climate transition, is no longer acceptable. That’s the gist of my rant this morning in Ghent.
Deducing, probably correctly, that ‘defence’ really means the Ukrainian military, Betrand called le Maire’s plan:
immensely ironical that mister “I’ll collapse Russia’s economy” comes back to us 2 years afterwards, telling us “Europe cannot economically weaken as it has been doing for several months”, we need to take your savings… When Russia’s economy, far from collapsing, has been growing faster than all European countries. All this in part to “fund our defense efforts”, likely a code for “send it to Ukraine”, the most corrupt country on the continent currently fighting an endless money pit war that it has no chance of winning. Pure madness.
Europe and NATO seem increasingly determined to have war, with Sweden reintroducing conscription, other countries discussing it, the UK and EU banging the drum about Russia, whitewashing Ukrainian nazis and misrepresenting military goals, and many of them seemingly ready to conscript the life savings of civilians in order to fund endless conflict.
If only the same resolve was directed toward the actions needed to stop the actual genocidal war being perpetrated by Israel on the civilians of Gaza as there is to fanning the flames of war in Europe.
SKWAWKBOX needs your help. The site is provided free of charge but depends on the support of its readers to be viable. If you’d like to help it keep revealing the news as it is and not what the Establishment wants you to hear – and can afford to without hardship – please click here to arrange a one-off or modest monthly donation via PayPal or here to set up a monthly donation via GoCardless (SKWAWKBOX will contact you to confirm the GoCardless amount). Thanks for your solidarity so SKWAWKBOX can keep doing its job.
If you wish to republish this post for non-commercial use, you are welcome to do so – see here for more.
800+ US/EU officials sign statement that governments ‘risk complicity’ in Gaza genocide
Over 800 US and EU officials have signed a statement warning their governments that they are likely to be guilty of complicity in Israel’s genocide in Gaza and that their advice of the danger of “grave violations of international law” in Israel’s bombing and shelling of Gaza and its “deliberate blocking of aid” to create “one of the worst human catastrophes of this century” has been ignored. The statement comes from officials in twelve countries, including the US, UK, Germany and France.
The statement comes as a growing coalition of nations has committed to continuing to fund UNRWA, the UN aid agency providing desperately-needed humanitarian relief in Gaza, despite the collusion of the UK, US and other governments in defunding the agency after Israel claimed twelve of its 13,000 employees in Gaza participated in the 7 October raid. Ireland, Spain, Scotland, Norway, Belgium, Portugal, Slovenia and Luxembourg have all committed to providing continued funds.
Israel bombed Belgium’s aid agency office on Thursday night, shortly after Belgium’s announcement.
The International Centre for Justice for Palestinians has warned UK and US politicians it will bring prosecutions against those who collude in Israel’s slaughter of tens of thousands of Palestinian civilians, mostly women and children, in Gaza.
SKWAWKBOX needs your help. The site is provided free of charge but depends on the support of its readers to be viable. If you’d like to help it keep revealing the news as it is and not what the Establishment wants you to hear – and can afford to without hardship – please click here to arrange a one-off or modest monthly donation via PayPal or here to set up a monthly donation via GoCardless (SKWAWKBOX will contact you to confirm the GoCardless amount). Thanks for your solidarity so SKWAWKBOX can keep doing its job.
If you wish to republish this post for non-commercial use, you are welcome to do so – see here for more.
It’s Time to Ban Earth-Damaging Ads
by Daniel Wortel-London
Cigarette ads are restricted in many countries. What about ads for other unhealthy products? (Clotho 98, Flickr)
Advertising works. A recent study by the Advertising Association finds that every dollar of ad spending drives up sales by $21. Ads get us to recognize brands and hum jingles even if we are annoyed by pop-ups. They are particularly effective in driving the kind of unsustainable consumption that is destroying our planet.
This begs a question: Should advertising be limited for the sake of the environment? Is there political demand for such restriction? Is it even legally possible? The answer depends on which ads are banned, in what places, and at what times. But there’s a growing movement to ban advertisements for the most egregiously wasteful products and services, from fossil fuels to air travel.
For example, ads for fossil fuels have been banned in France and in 33 cities around the world. Associations of physicians, students, and climate activists have taken part in the campaigns like the fossil fuel ban. These efforts merit being replicated and expanded to spread a broader message: There’s a limit to how much consumption our planet can tolerate.
Promoting Pollution
What are the societal costs of advertising? We can start with climate change, whose roots in fossil fuel use are well known. Fossil fuels account for more than 75 percent of all global greenhouses gases and 90 percent of all carbon dioxide emissions. Then there are the health problems caused by these gases: In the United States alone, 350,000 premature deaths are attributable to air pollution.
It gets worse. Ads not only drive planet-wasting consumption, they are designed to convince us that this waste isn’t happening. Ads for fossil fuel companies routinely boast of their commitments to “clean energy” even as they pour money into the most polluting energy technologies. A recent study found that 60 percent of the advertisements produced by the five biggest oil companies contain “green claims,” even though they spend only about 10 percent of their capital budgets each year on low-carbon investments. A 2022 investigation by the House Oversight and Reform Committee concluded that “fossil fuel companies have been misleading the public about their purported commitment to reduce emissions.”
What you won’t find in a typical fossil-fuel ad. (Arby Reid, Creative Commons 4.0)
There’s a name for this kind of deceit: greenwashing.
To a certain extent, public bodies have begun to crack down on greenwashing in advertisements. The U.S. Federal Trade Commission has produced a new “green guide” that seeks to prevent companies from making deceptive environmental claims. The City of New York has filed a lawsuit against major oil companies for violating the city’s consumer protection law through “false advertising.” Actions like these are commendable.
But it isn’t enough to hide false claims. Promoting consumption of any kind, no matter how “green,” produces environmental impacts. To stay within the planet’s environmental boundaries we need to limit consumption. This means reducing advertisements that promote particularly wasteful products such as fossil fuels, and those directed toward people who consume the most, namely, the super-rich.
A Movement Grows
The good news is that there is a growing movement to ban such advertisements. The Intergovernmental Panel on Climate Change identifies advertising regulation as a policy measure that can reduce carbon emissions significantly. A panel of 12 prominent scientists has advised the Dutch Minister of Climate and Energy Policy that “a ban on fossil ads is essential for the sustainable transition.”
And citizens are responding. Health professionals in Canada are launching a campaign to ban fossil fuel ads in their country. There are similar national campaigns in Australia, as well as local campaigns in Cape Town, Berlin, and Geneva. Such campaigns have been supported by groups including the World Wildlife Fund, Greenpeace, the Green Student Movement, 350.org, Extinction Rebellion NL, and the Global Climate and Health Alliance.
There’s a growing movement to ban fossil-fuel advertisements around the world. (Matt Brown, Wikimedia)
They are getting results. In 2022 France passed a climate bill that banned advertising of all fossil fuels. Amsterdam, Sydney, and Liverpool have adopted similar bans in their jurisdictions. Thirty-three smaller cities in Australia, England, and the Netherlands have passed similar legislation.
That’s just the beginning of ad bans on environmentally problematic products. At least two cities in the Netherlands have banned industrially farmed meat and dairy products—industries with enormous environmental impacts—from public billboards. Other movements are pushing to extend the range of bans to cover products related to aviation, cruise ships, or automobiles. France now bans advertisements for gasoline-powered cars, and smaller cities have passed similar broadly impactful bans.
The USA Needs to Catch Up
Meanwhile, there isn’t a strong movement in the USA to ban wasteful advertising. We’ve seen ads banned on other grounds, of course. Cigarettes have been banned since the early 1970s, prompted by evidence linking smoking to low birth rates. Many states ban advertising that depicts minors gambling, and drives to further ban online advertisements for sportsbooks are in place at the federal and state level. But there isn’t a similarly strong drive to ban products because of their environmental impacts.
Many U.S. states have banned some advertising for gambling: Will they do the same for oil products? (Andie712b, Wikimedia)
This is in part because the issue of climate change and limiting consumption isn’t as broad a public concern in the USA as smoking was in the 1970s. In general, Americans seem less open to banning advertising than people in other countries are. A recent UK poll found that only 26 percent of respondents supported a ban on meat advertisements, as opposed to 45 percent who opposed. These numbers are likely to be even more lopsided in the USA. Without public support, federal agencies will have little cause to prohibit ad bans altogether. It will take evidence-backed, multi-level buy-in for federal departments to engage in such bans.
Then there’s the question of free speech. Since 1980, government bodies have been required to meet four criteria to regulate advertisements. They have to show how an advertising message is misleading; identify a legitimate public interest in curtailing the message; show that their regulation would advance that interest; and most importantly, apply a “least restrictive means” test showing that they are suppressing only as much speech as is proportional to their goal.
Prospects for Widening the Bans
Can a ban on fossil fuel advertisements or other ads that promote environmentally harmful products or activities pass these kinds of tests? They would very likely pass the first three criteria; the fourth might depend on the specific ban proposed. But merely attempting to pass such bans would constitute a win for the planet and its people. That’s because the point of these bills is not just to create new laws. It is also to raise awareness of the issue of over-consumption and the kind of advertisements driving it.
If we’re serious about conservation, ads for wasteful vehicles like SUVs must become history. (Zenel Cebeci, Creative Commons 2.0)
Advocates of advertising bans will need to be smart about their approach. They can make restrictions on advertising more palatable by starting on the local level and targeting a few high-impact product categories. And they can make sure that targeted products have an easily identifiable and limited demographic base.
Rather than starting with fossil fuels, for example, it might be smarter to focus first on fuel-inefficient vehicles. A recent study in the UK found that the richest fifth of households in England are 81 percent more likely to own a heavy-emitting car than those in other income bands. This ratio probably holds for many other product categories. Let’s target them.
Ultimately, a post-growth society will not spell the end of all advertising. In fact, we might see more advertising for things like regenerative enterprises, social non-profits, and other low-impact firms. But to reach that point, we need to shrink the most wasteful sectors of our economy and reduce aggregate production and consumption. Targeting advertisements is an excellent strategy for beginning this crucial work.
Daniel Wortel-London is a Policy Specialist at CASSE.
The post It’s Time to Ban Earth-Damaging Ads appeared first on Center for the Advancement of the Steady State Economy.