Extraction Economies and politics
What makes Western Democracies profitable and Central American Countries poor - Ask the immigrants.
We asked immigrants in our state why so many people were immigrating to the USA from South and Central America. We were told that to make money in their county, they had to earn enough to live on, but not enough to attract the attention of the gangs or the tax collectors. They were trying to explain what it was like to live in an extractive economy.. . Many places in Central America has this kind of economy where anyone with a noticeable paycheck gets targeted by gangs or a family that extracts as much wealth as they can..
This is called an extractive economy, and it is common. North Korea, Venezuela, Nicaragua, Guatemala, and … Russia… Hungary… United Emirates… are some of the world-wide examples, The economy only functions for the elite and not for the average citizen and the system is difficult to change once it falls into this rut. Judicial decisions are bribed and the law enforcement becomes part of the problem. The average person can not start a business, create banks, get loans or generally get ahead. It is like a monopoly game in which someone has already won, but the players can’t just quit the game. ….That is, unless they immigrate to a country that does not have an extractive economy and a political agenda of extraction. This is why we see immigration from extractive economies.
Extraction Economies are Poor on the whole, but rich for the upper 1% of the elite ruling class. The middle class is typically absent because the average person can not get ahead. There is no ‘flow of money’ through the economy and no way for banks to survive as there are dangers to becoming too wealthy. This is why we have 60,000 people asking for refugee status into the US every year ,and 43,000 people per year approved for asylum into the country.
Inclusive Democracies and Economies
The US and the Western economies, on the other hand, have economies that thrive with the hope that everyone gets a chance at earning a piece of the pie with fair rules to play by. We have a government full of federal statesmen acting as referees to ensure that we all play by the same rules. We can get loans, open bank accounts, increase our net worth without a ruling family or gang stealing it away. Generally these political systems have a functioning and nonpolitical judicial system that ensures financial laws are obeyed and that no governing entity can violate the the constitution and citizen’s rights. . These countries have robust nonpartisan federal economists that independently run the economy. Most importantly these countries have a dynamic middle class with the voting clout and will to anchor this ideal politically and stabilize it economically.
These are inclusive democracies and economies. Various countries and people trust it to be fair and impartial - making it a valuable asset and lucrative. These country’s economies grow wealthy. Money flows through it without pooling into the wealthy elite and powerful families or gangs. Citizens can participate openly and rules are fair and enshrined.
We should be proud of our success. But…Over the last 10 years in America, the erosion of the Rule of Law has become a concern for legal scholars, judges and institutions. The Judiciary is increasingly politicized with their ‘shadow docket rulings’. Supreme Court rulings have become increasingly judged along ideological and political divides rather than siding with normal legal precedent or doctrine. The Department of Justice was designed to. be a a nonpartisan institution to advise the president. and act as a trusted mediator - but now it openly operates as a judicial weapon for the executive branch - prosecuting opposition.
We should be proud of our accomplishments. But… Our Federal workforce that act as referees to make sure that we all follow the same rules has been gutted. No longer do we have agencies overseeing policies and healthcare. The Department of Education and agencies defending against cyber warfare has been gutted. The independence of the Federal Reserve is constantly under siege.
We should be happy that our stock market is free and strong. But… The middle class has fallen from over 60% of households in 1971 to less than 50 % in 2023. In the same years the aggregate income of the middle class fell from 61% to 42% while the wealthy’s share rose to 48%. The cost of living outpaced wage growth for many middle class families, as job security and benefits have declined - pushing much of the middle class families to livelihoods not that far out of line with the lower class. Meanwhile to chart the CEOs and that ultra- rich 1% in America requires a whole different set of graph papers due to it’s skyrocketing wealth.
The middle class knows this. People without capital struggle to start a business or invest in new ideas. This limits our upward mobility and destabilizes economic dynamics. Our paychecks disappear to the power company and rent. What is left of it goes to giant medical corporations and credit companies. In this economy, every dime gets extracted from the middle class- leaving it weaker and used up. Concentrated wealth historically flows into speculative markets like real estate and big tech which can create economic bubbles. When these have burst, it is the middle class that has shouldered the cost and the damage. Naturally most Americans currently feel like they are playing the end of a Monopoly game, and they are not the winner.
Stark differences in wealth foster resentment and distrust. Wealthy individuals tend to exert undue influences over political systems. When people see that the system is rigged it creates political polarization and civil unrest.
We know this. And if we do not, our kids see it with their inability to buy a house and healthcare. It is why the young professionals are moving in record numbers to countries that have a political system which is fair, backed by the judicial branch and protected by the middle class.
- We believe that if the wealth disparity is not addressed, our economy and country will become increasingly unstable.
- We believe that the country needs a strong middle class politically and economically.
-We understand the difficulties of the rural people and middle class.
- We know that this will take a grass- based, third party to actually get the job done.