Tag: inequality

Citizenship As Big Business

On the one hand there are now more refugees and stateless persons than ever before. On the other, the selling and buying of citizenship is a $25 billion a year global industry. Citizenship is viewed as an investment, marketed as such by its brokers. Wealthy Chinese who don’t feel safe in China, for example, or people who want to be able to travel freely within Europe or start a business there. More than half of the world’s countries have a program of citizenship through investment. In the US it costs $900,000 invested in a business that would create at least 10 jobs. In the UK it costs at least $2.5 million to buy a citizenship. Other countries are cheaper, although sometimes the cost can be surprising. Bulgaria’s is $560,000 close to that of Spain at $550,000 and the Caribbean islands from $150,000 or even in some cases $100,000. One of the most popular is the citizenship from Vanuatu which is $150,000, a program which is only 4 years old. It raises a lot of money for the tiny country which gained independence in the 1980’s and which can identify with what it means not to have a passport. It can take as little as a month and many of the people who have Vanuatu citizenship, which enables people to travel throughout Europe, have not even visited the tiny country made up of some 80 small islands in the Pacific.

One could say this business is a step, however distorted towards the notion of one world and it may slowly be causing a redefinition of what citizenship is—a point the marketers make.  But regardless of how it is pitched, it is an option that benefits the rich and as such contributes to the inequalities of the world. It is also a business open to corruption. Couldn’t a drug lord buy a US citizenship, and at the very least use it to launder money?  And so the issue of the buying and selling of citizenship begs the question: Are the minuses overshadowing the pluses?

Broken Capitalism

The Guardian has been running a series they call Broken Capitalism, and have featured articles about Jamie Dimon, CEO of JP Morgan. Warren Buffet of Berkshire Hathaway or Ray Dalio, founder of Bridgewater, the world’s biggest hedge fund. Suddenly these and others have become aware that the way capitalism is currently practiced will soon affect their bottom line and possibly their future. It is not yet clear how serious they are in fixing capitalism, in making it more equal and in addressing the economic inequalities of our society, but the mere fact they are acknowledging it is hopeful. What I found of note in the article about Ray Dalio are the figures which are prompting his interest. Here they are.

  • 40% of Americans would struggle to raise $400 for an emergency.
  • The childhood poverty rate is 17.5% and has not meaningfully improved in decades.
  • In the developed world the US scores lower than any country (except for Italy and Greece) in educational achievement.
  • The US incarceration rate is nearly 5 times the average of developed countries and 3 times that of emerging ones.
  • For the bottom 60% premature deaths have increased about 20% since 2000.

Auto Debt and Inequality

Seven million Americans, according to numbers from the US Federal Reserve Bank of New York, are at least three months behind on their car payments. By the summer of 2018 Americans owed more than   1.26 trillion, more than they did at the end of the recession in 2009.  It paints a troubling picture. Car delinquencies usually come after housing but nevertheless are used to reflect a measure of inequality. While some do own cars they cannot afford, car ownership which is a necessity for many to be able to go to work, is associated with more stability and a bank account that may have a  bit of a balance. Experts say that the number of people defaulting on their car loan points to “financial duress”. People are delinquent on their house first, their credit cards second and their car third. So the increase in delinquencies with car debt is more significant than it first appears. It means that too many people are not able to hold on to something they consider an important or necessary asset.

We hear about near full employment, about the economy doing well and it’s easy to forget about income inequality and how it manifests itself, but it is a mistake to do so. It’s not only a question of remembering those who are struggling, it’s also seeing what lies behind a prosperity that benefits too few.