What's the Difference Between a Third World Autocrat and a Wall Street Mogul?
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In America we tend to look down on Third World autocrats who siphon their country's wealth into their personal Swiss bank accounts at the expense of their citizens. But I would argue we have our own class of kleptocrats that in many ways behave the same way -- and often with the same result.
I was recently at a seminar in Africa that focused heavily on human rights.
One of the most insightful participants made a powerful argument that autocratic leaders who violate their people's human rights by restricting their freedom of speech and assembly were even more culpable for human rights violations when they siphon off millions of dollars into Swiss bank accounts and deprived their country's children of decent health care, education and an opportunity to make a prosperous life.
In fact, every day African children go to bed hungry and are prevented from attending school so they can engage in child labor - while in some countries their leaders live in luxury and personally expropriate profits from the sale of their country's bountiful natural resources to foreign corporations.
Of course, this is far from true in many African countries. In fact, the gross domestic product in many emerging African countries has been exploding - and the fruits of these increases are being shared with average people through massive new health care programs, new roads to take their products to market, and new educational opportunities. The U.S. HIV-AIDs program has been a huge success - dramatically reducing the prevalence of the disease and giving millions new hope with ant-retroviral drugs.
In many countries, their policies not only expand per-capita Gross Domestic Product, but they are also dramatically reducing economic inequality. In fact, the GINI index of income inequality in some emerging African countries is now lower than it is in the United States.
In those countries that are not so lucky - where inequality continues to soar and wealthy autocrats rule -- stagnation, hopelessness, and often war - continue to be the rule as well.
But what exactly is the difference between those autocrats and some of the wealthiest men on Wall Street - the "Masters of the Universe"?
Those Third World autocrats - or kleptocrats -- have created a system where they can extract huge shares of the country's wealth for themselves, no matter the impact on their people. They believe they are entitled to kickbacks from concessions -- given by their governments to oil and mining companies - that enable them to spend millions of dollars on jet planes, European villas, and over-brimming Swiss bank accounts. And they do it even though their actions deprive millions of people of an opportunity for a better life.
But in so many ways the gang that makes billions from trades in derivatives and clever investment deals are just like the Third World autocrats. When the financial sector siphons billions from the American - and world - economies, it takes that money from the hands of ordinary consumers whose wages they cut, the workers whose jobs they outsource, the education of our children, the infrastructure that provides the foundation for long-term economic growth.
The fact is that, the financial sector has tripled its share of the GDP since 1950 -- from 2.8% to 8.4%. The Wall Street sharpies have created a system that in the end has the same effect on the prospects of ordinary people as the extortion and graft of Third World tyrants. They've just created a system that dresses up their activities in fancy suits and electronic trading systems.