Lack of Trust – Caused by Institutional Corruption – Is Killing the Economy

People Are Losing Trust In All Institutions

The signs are everywhere: Americans have lost trust in our institutions.

The Chicago Booth/Kellogg School Financial Trust Index published yesterday shows that only 22% of Americans trust the nation’s financial system.

SmartMoney notes today that more and more Americans are keeping valuables at home because they have lost trust in banks.

Robert Shiller said Monday:

Our whole economy has been affected by variations in confidence. Central banks are sort of trusted, but the actions they have often affect people’s confidence by appearance rather than substance. We’re not in the most trusting mood now.”

The National Journal noted last week:

Infographic

Seven in 10 Americans believe that the country is on the wrong track; eight in 10 are dissatisfied with the way the nation is being governed. Only 23 percent have confidence in banks, and just 19 percent have confidence in big business. Less than half the population expresses “a great deal” of confidence in the public-school system or organized religion. “We have lost our gods,” says Laura Hansen, an assistant professor of sociology at Western New England University in Springfield, Mass. “We lost [faith] in the media: Remember Walter Cronkite? We lost it in our culture: You can’t point to a movie star who might inspire us, because we know too much about them. We lost it in politics, because we know too much about politicians’ lives. We’ve lost it—that basic sense of trust and confidence—in everything.”

***

After a 50-year decline, just 14 percent of respondents in a 2011 Gallup Poll said that the federal government could be trusted “a great deal

Gallup reported last month that – for the second year in a row – Americans said that gold is the safest long-term investment.   This  shows that Americans don’t trust the government.  Specifically, as Time Magazine points out:

Traditionally, gold has been a store of value when citizens do not trust their government politically or economically.

Indeed:

  • The U.S. financial system is so corrupt and unregulated that many don’t believe the government and businesses’ promises to follow the rule of law … and simply won’t do business here anymore

It’s not just the U.S.

As the Economist reported in January, trust in institutions is plunging worldwide:

The latest annual “trust barometer” published by Edelman, a PR firm, on January 24th [finds that] overall trust has declined in the leaders of the four main categories of organization scrutinized—government, business, non-governmental organizations and the media. Of the 50 or so countries examined, 11, nearly twice as many as last year, are now judged “sceptical”, with less than 50% of those polled saying they trusted these institutions. Trust in Japanese institutions plunged to 34%, from 51% in 2011, not surprising given the handling by leaders of the Tsunami and its aftermath. But the collapse in trust was even more striking in Brazil, the country in which trust was greatest in 2011, at 80%, but now, following a series of corruption scandals, has slipped to 51% (admittedly, still above America and Britain, among others).

This headline slump in trust is due, above all, to the public losing faith in political leaders. In 2011, across all countries, Edelman found that 52% of those polled trusted government; this year, it was only 43%. Government is now trusted less even than the media …. Trust in business fell slightly, from 56% to 53%, as did trust in NGOs, which still remain the most trusted type of institution, at 58%, down from 61% in 2011. As in previous years, the barometer is based on a poll of what Edelman calls “informed people”, which typically means professional and well-educated, though this year for the first time the views of the informed were benchmarked against a poll of the public as a whole. For each institution, the broader public was even less trusting than the informed, with government trusted by 38%, business 47%, NGOs 50% and the media 46%.

Lack of Trust Is Killing the Economy

Top economists have been saying for well over a decade that trust is necessary for a stable economy, and that prosecuting the criminals is necessary to restore trust. Indeed, as we have repeatedly noted, loss of trust is arguably the main reason we are stuck in an economic crisis … notwithstanding unprecedented action by central banks worldwide.

Economist Daniel Hameresh writes:

A number of economists have shown recently that income levels and real growth depend upon trust—trust greases the wheels of exchange.

In 1998, Paul Zak (Professor of Economics and Department Chair, as well as the founding Director of the Center for Neuroeconomics Studies at Claremont Graduate University, Professor of Neurology at Loma Linda University Medical Center, and a senior researcher at UCLA) and Stephen Knack (a Lead Economist in the World Bank’s Research Department and Public Sector Governance Department) wrote a paper called Trust and Growth, arguing:

Adam Smith … observed notable differences across nations in the ‘probity’ and ‘punctuality’ of their populations. For example, the Dutch ‘are the most faithful to their word.’ John Stuart Mill wrote: ‘There are countries in Europe . . . where the most serious impediment to conducting business concerns on a large scale, is the rarity of persons who are supposed fit to be trusted with the receipt and expenditure of large sums of money’ (Mill, 1848, p. 132).

Enormous differences across countries in the propensity to trust others survive
today.

***

Trust is higher in ‘fair’ societies.

***

High trust societies produce more output than low trust societies. A fortiori, a sufficient amount of trust may be crucial to successful development. Douglass North (1990, p. 54) writes,

The inability of societies to develop effective, lowcost enforcement of contracts is the most important source of both historical stagnation and contemporary underdevelopment in the Third World.

***

If trust is too low in a society, savings will be insufficient to sustain positive output growth. Such a poverty trap is more likely when institutions –
both formal and informal – which punish cheaters are weak.

Heap, Tan and Zizzo and others have come to similar conclusions.

In 2001, Zak and Knack showed that “strengthening the rule of law, reducing inequality, and by facilitating interpersonal understanding” all increase trust. They conclude:

Our analysis shows that trust can be raised directly by increasing communication and education, and indirectly by strengthening formal institutions that enforce contracts and by reducing income inequality. Among the policies that impact these factors, only education, … and freedom satisfy the efficiency criterion which compares the cost of policies with the benefits citizens receive in terms of higher living standards. Further, our analysis suggests that good policy initiates a virtuous circle: policies that raise trust efficiently, improve living standards, raise civil liberties, enhance institutions, and reduce corruption, further raising trust. Trust, democracy, and the rule of law are thus the foundation of abiding prosperity.

A 2005 letter in premier scientific journal Nature reviewed the research on trust and economics:

Trust … plays a key role in economic exchange and politics. In the absence of trust among trading partners, market transactions break down. In the absence of trust in a country’s institutions and leaders, political legitimacy breaks down. Much recent evidence indicates that trust contributes to economic, political and social success.

Forbes wrote an article in 2006 entitled “The Economics of Trust”. The article summarizes the importance of trust in creating a healthy economy:

Imagine going to the corner store to buy a carton of milk, only to find that the refrigerator is locked. When you’ve persuaded the shopkeeper to retrieve the milk, you then end up arguing over whether you’re going to hand the money over first, or whether he is going to hand over the milk. Finally you manage to arrange an elaborate simultaneous exchange. A little taste of life in a world without trust–now imagine trying to arrange a mortgage.

Being able to trust people might seem like a pleasant luxury, but economists are starting to believe that it’s rather more important than that. Trust is about more than whether you can leave your house unlocked; it is responsible for the difference between the richest countries and the poorest.

If you take a broad enough definition of trust, then it would explain basically all the difference between the per capita income of the United States and Somalia,” ventures Steve Knack, a senior economist at the World Bank who has been studying the economics of trust for over a decade. That suggests that trust is worth $12.4 trillion dollars a year to the U.S., which, in case you are wondering, is 99.5% of this country’s income.

***

Above all, trust enables people to do business with each other. Doing business is what creates wealth.

***

Economists distinguish between the personal, informal trust that comes from being friendly with your neighbors and the impersonal, institutionalized trust that lets you give your credit card number out over the Internet.

In 2007, Yann Algan (Professor of Economics at Paris School of Economics and University Paris East) and Pierre Cahuc (Professor of Economics at the Ecole Polytechnique (Paris)) reported:

We find a significant impact of trust on income per capita for 30 countries over the period 1949-2003.

Similarly, market psychologists Richard L. Peterson M.D. and Frank Murtha, PhD noted in 2008

Trust is the oil in the engine of capitalism, without it, the engine seizes up. Confidence is like the gasoline, without it the machine won’t move.

Trust is gone: there is no longer trust between counterparties in the financial system. Furthermore, confidence is at a low. Investors have lost their confidence in the ability of shares to provide decent returns (since they haven’t).

In 2009, Paola Sapienza (associate professor of finance and the Zell Center Faculty Fellow at Northwestern University) and Luigi Zingales (Robert C. McCormack Professor of Entrepreneurship and Finance at the University of Chicago Booth School of Business) pointed out:

The drop in trust, we believe, is a major factor behind the deteriorating economic conditions.

***

As trust declines, so does Americans’ willingness to invest their money in the financial system. Our data show that trust in the stock market affects people’s intention to buy stocks, even after accounting for expectations of future stock-market performance. Similarly, a person’s trust in banks predicts the likelihood that he will make a run on his bank in a moment of crisis: 25 percent of those who don’t trust banks withdrew their deposits and stored them as cash last fall, compared with only 3 percent of those who said they still trusted the banks. Thus, trust in financial institutions is a key factor for the smooth functioning of capital markets and, by extension, the economy. Changes in trust matter.

They quote a Nobel laureate economist on the subject:

“Virtually every commercial transaction has within itself an element of trust,” writes economist Kenneth Arrow, a Nobel laureate. When we deposit money in a bank, we trust that it’s safe. When a company orders goods, it trusts its counterpart to deliver them in good faith. Trust facilitates transactions because it saves the costs of monitoring and screening; it is an essential lubricant that greases the wheels of the economic system.

In 2010, a distinguished international group of economists (Giancarlo Corsetti, Michael P. Devereux, Luigi Guiso, John Hassler, Gilles Saint-Paul, Hans-Werner Sinn, Jan-Egbert Sturm and Xavier Vives) wrote:

Public distrust of bankers and financial markets has risen dramatically with the financial crisis. This column argues that this loss of trust in the financial system played a critical role in the collapse of economic activity that followed. To undo the damage, financial regulation needs to focus on restoring that trust.

They noted:

Trust is crucial in many transactions and certainly in those involving financial exchanges. The massive drop in trust associated with this crisis will therefore have important implications for the future of financial markets. Data show that in the late 1970s, the percentage of people who reported having full trust in banks, brokers, mutual funds or the stock market was around 40%; it had sunk to around 30% just before the crisis hit, and collapsed to barely 5% afterwards. It is now even lower than the trust people have in other people (randomly selected of course).

In his influential 1993 book Making Democracy Work, Robert Putnam showed how civic attitudes and trust could account for differences in the economic and government performance between northern and southern Italy.

Political economist Francis Fukiyama wrote a book called Trust in 1995, arguing that the most pervasive cultural characteristic influencing a nation’s prosperity and ability to compete is the level of trust or cooperative behavior based upon shared norms. He stated that the United States, like Japan and Germany, has been a high-trust society historically but that this status has eroded in recent years.

Chris Farrell notes:

Trust matters. It’s kind of like a recipe or a software protocol that allows for economic exchange and all kinds of innovation.

***

There’s compelling evidence that both higher levels of trust in institutions and a belief in the general trustworthiness of individuals in society carry large economic benefits. Sociologists, political scientists and economists have all showed in an impressive body of research that higher levels of trust increase trade and even foster economic growth,.

Dallas Fed president Richard Fisher said last year that a growing distrust of the nation’s political institutions is keeping businesses on the sidelines.

Forbes notes in March that a lack of trust was one of the main factors hurting the Greek economy:

There are a number of issues that have contributed and exacerbated the levels of distrust. For instance, Greece, with the help of Goldman Sachs, concealed the state of their finances for over a decade until they ran into this major debt crisis. Because they failed to disclose the extent of their financial problems, the EU and other players in the global credit market are extremely reluctant to cooperate or put faith in the representations made by the Greek leadership.

***

If the leadership in Athens cannot reestablish trust with the citizenry and develop open and honest communication amongst themselves, their constituents, and the individual leaders of the financial institutions involved, the agreements they make will not even be worth the paper they are written on.

Ken Eisoldan internationally respected authority on the psychodynamics of organizations – writes:

Most of us view trust as valuable and desirable, something that improves the quality of our personal lives.  We seldom take the next step and view it as indispensable, a vital ingredient in society – and in the economy. But all credit is based on trust, and the fundamental problem in a credit crisis is not just the lack of “liquidity” but also the absence of trust, the trust that is essential to all financial transactions.”

But the problem is not that people should be more blindly and naively trusting. The problem – as Eisold points out – is that the institutions have to act in a more trustworthy manner:

The essential point is not that people need to be encouraged to trust. Most of us want to trust and have the basic capacity to trust. We need institutions that are trustworthy.

No Economy-Revving Optimism Without Trust

Economist Robert Higgs – who has studied the effect of World War II on the economy in great detail – argues that it was optimism, rather than stimulus spending, which got us out of the depression:

The performance of the war economy … broke the back of the pessimistic expectations almost everybody had come to hold during the seemingly endless Depression. In the long decade of the 1930s, especially its latter half, many people had come to believe that the economic machine was irreparably broken. The frenetic activity of war production—never mind that it was just a lot of guns and ammunition—dispelled the hopelessness. People began to think: if we can produce all these planes, ships, and bombs, we can also turn out prodigious quantities of cars and refrigerators.

***

The transformation of expectations—justify an interpretation that views the war as an event that recreated the possibility of genuine economic recovery. As the war ended, real prosperity returned.

Unlike after WWII, Americans now are pessimistic (even though we’ve been various wars against third-rate countries far longer than we were in WWII) and our expectations are stuck in the gutter.

Why?

Perhaps because we don’t trust our government, our big corporations or our other institutions to do anything very helpful for the country. Indeed, we don’t trust our government, big corporations and other institutions to even allow a fair playing field where we have a chance of competing fairly to get ahead on our own initiative.

Why should we work harder, invest more or spend more when we don’t trust that we might have a bright future?

Prosecuting the Criminals Is Necessary to Restore Trust

Nobel prize winning economist Joseph Stiglitz says that we have to prosecute fraud or else the economy won’t recover:

The legal system is supposed to be the codification of our norms and beliefs, things that we need to make our system work. If the legal system is seen as exploitative, then confidence in our whole system starts eroding. And that’s really the problem that’s going on.

***

I think we ought to go do what we did in the S&L [crisis] and actually put many of these guys in prison. Absolutely. These are not just white-collar crimes or little accidents. There were victims. That’s the point. There were victims all over the world.

***

Economists focus on the whole notion of incentives. People have an incentive sometimes to behave badly, because they can make more money if they can cheat. If our economic system is going to work then we have to make sure that what they gain when they cheat is offset by a system of penalties.

Robert Shiller said recently that failing to address the legal issues will cause Americans to lose faith in business and the government:

Shiller said the danger of foreclosuregate — the scandal in which it has come to light that the biggest banks have routinely mishandled homeownership documents, putting the legality of foreclosures and related sales in doubt — is a replay of the 1930s, when Americans lost faith that institutions such as business and government were dealing fairly.

Economists such as William Black and James Galbraith agree. Galbraith says:

There will have to be full-scale investigation and cleaning up of the residue of that, before you can have, I think, a return of confidence in the financial sector. And that’s a process which needs to get underway.

Galbraith also says that economists should move into the background, and “criminologists to the forefront”.

Government regulators know this – or at least pay lip service to it – as well. For example, as the Director of the Securities and Exchange Commission’s enforcement division told Congress:

Recovery from the fallout of the financial crisis requires important efforts on various fronts, and vigorous enforcement is an essential component, as aggressive and even-handed enforcement will meet the public’s fair expectation that those whose violations of the law caused severe loss and hardship will be held accountable. And vigorous law enforcement efforts will help vindicate the principles that are fundamental to the fair and proper functioning of our markets: that no one should have an unjust advantage in our markets; that investors have a right to disclosure that complies with the federal securities laws; and that there is a level playing field for all investors.

Nobel prize winning economist George Akerlof has demonstrated that failure to punish white collar criminals – and instead bailing them out- creates incentives for more economic crimes and further destruction of the economy in the future. Indeed, William Black notes that we’ve known of this dynamic for “hundreds of years”. And see this, this, this and this.

And when Zak and Knack – quoted above – discuss “enforcing contracts”, “raising civil liberties”, and “reducing corruption”, they are talking about enforcing the rule of law, which means prosecuting violations of the law. Likewise, when they refer to “enhancing institutions”, they mean regulatory and justice systems which enforce contracts and prosecute cheaters.

And when Zak and Knack promote reduction of inequality, that means prosecuting fraud as well. Specifically, as I recently pointed out, prosecuting fraud is the best way to reduce inequality:

Robert Shiller [one of the top housing economists in the United States] said in 2009:

And it’s not like we want to level income. I’m not saying spread the wealth around, which got Obama in trouble. But I think, I would hope that this would be a time for a national consideration about policies that would focus on restraining any possible further increases in inequality.

***

If we stop bailing out the fraudsters and financial gamblers, the big banks would focus more on traditional lending and less on speculative plays which only make the rich richer and the poor poorer, and which guarantee future economic crises (which hurt the poor more than the rich).

***

Moreover, both conservatives and liberals agree that we need to prosecute financial fraud. As I’ve previously noted, fraud disproportionally benefits the big players, makes boom-bust cycles more severe, and otherwise harms the economy – all of which increase inequality and warp the market.

Of course, it’s not just economists saying this.

One of the leading business schools in America – the Wharton School of Business – published an essay by a psychologist on the causes and solutions to the economic crisis. Wharton points out that restoring trust is the key to recovery, and that trust cannot be restored until wrongdoers are held accountable:

According to David M. Sachs, a training and supervision analyst at the Psychoanalytic Center of Philadelphia, the crisis today is not one of confidence, but one of trust. “Abusive financial practices were unchecked by personal moral controls that prohibit individual criminal behavior, as in the case of [Bernard] Madoff, and by complex financial manipulations, as in the case of AIG.” The public, expecting to be protected from such abuse, has suffered a trauma of loss similar to that after 9/11. “Normal expectations of what is safe and dependable were abruptly shattered,” Sachs noted. “As is typical of post-traumatic states, planning for the future could not be based on old assumptions about what is safe and what is dangerous. A radical reversal of how to be gratified occurred.”

People now feel more gratified saving money than spending it, Sachs suggested. They have trouble trusting promises from the government because they feel the government has let them down.

He framed his argument with a fictional patient named Betty Q. Public, a librarian with two teenage children and a husband, John, who had recently lost his job. “She felt betrayed because she and her husband had invested conservatively and were double-crossed by dishonest, greedy businessmen, and now she distrusted the government that had failed to protect them from corporate dishonesty. Not only that, but she had little trust in things turning around soon enough to enable her and her husband to accomplish their previous goals.

“By no means a sophisticated economist, she knew … that some people had become fantastically wealthy by misusing other people’s money — hers included,” Sachs said. “In short, John and Betty had done everything right and were being punished, while the dishonest people were going unpunished.”

Helping an individual recover from a traumatic experience provides a useful analogy for understanding how to help the economy recover from its own traumatic experience, Sachs pointed out. The public will need to “hold the perpetrators of the economic disaster responsible and take what actions they can to prevent them from harming the economy again.” In addition, the public will have to see proof that government and business leaders can behave responsibly before they will trust them again, he argued.

Note that Sachs urges “hold[ing] the perpetrators of the economic disaster responsible.” In other words, just “looking forward” and promising to do things differently isn’t enough.

As Wall Street insider and New York Times columnist Andrew Ross Sorkin writes:

“They will pick on minor misdemeanors by individual market participants,” said David Einhorn, the hedge fund manager who was among the Cassandras before the financial crisis. To Mr. Einhorn, the government is “not willing to take on significant misbehavior by sizable” firms. “But since there have been almost no big prosecutions, there’s very little evidence that it has stopped bad actors from behaving badly.”***

Fraud at big corporations surely dwarfs by orders of magnitude the shareholders’ losses of $8 billion that Mr. Holder highlighted. If the government spent half the time trying to ferret out fraud at major companies that it does tracking pump-and-dump schemes, we might have been able to stop the financial crisis, or at least we’d have a fighting chance at stopping the next one.

Of course, the Europeans have been trying to avoid fraud prosecutions as well.

On the other hand, Iceland has prosecuted the fraudster bank heads (and here and here) and their former prime minister, and their economy is recovering nicely … because trust is being restored in the financial system.

Indeed, even evangelical leader Pat Robertson agrees:

Pat Robertson discussed the banking crisis and glowingly spoke about how Iceland jailed many of the bankers who devastated their nation’s economy by taking out fraudulent loans. Robertson hailed the Nordic nation for its actions and said that Americans should deal with the financial crisis in the same way.

***

“They are putting people in jail.  Prime ministers are being indicted. They are going after banks. The people said the banks are ripping us off. We don’t like what they did, and they brought our country to ruin. Suddenly, Iceland is turning around and they look like a big success story!”

***

“We could start putting all of those bankers in jail. There was not one banker prosecuted and so many people were lying, and so-called “no-doc loans” and liars’ loans, and none of them have been held accountable.

***

Iceland is leading the way and their GDP is growing, and all of a sudden, they were in a terrible mess, terrible mess, and look what is happening!”

This entry was posted in Business / Economics, Politics / World News. Bookmark the permalink.
  • http://blogdredd.blogspot.com/ Dredd

    Great post, stunning graphics, stunning data, unbelievable facts.

    The signs are everywhere: Americans have lost trust in our institutions.”

    There is reasonable justification for that.

    The one percentage I do not really get is the high rating of the military, the lackey of the oil barons, seeing as how Vietnam, Iraq, Libya, and Afghanistan are depleting the treasury and doing damage to us economically.

    • Byzcat

      This is probably due to the large numbers of people who have either served int he military or who have close relatives or friends serving now.

  • gozounlimited

    Lack of TRUST? Putting IT mildly ….. reads around the internets…..

    MUST SEE: If I Wanted America To Be A Dictatorship …. see video: http://www.activistpost.com/2012/05/must-see-if-i-wanted-america-to-be.html
    *************
    Crooks and Criminals in High Places with Gerald Celente…..see video: http://www.prisonplanet.com/crooks-and-criminals-in-high-places-with-gerald-celente.html
    ************
    Media’s Wall Street Bailout Lies Debunked: TARP Hasn’t Been Repaid
    The overseer of the Wall Street bailout fund debunks repeated media lies – The bailouts haven’t been repaid and they haven’t helped the average American.

    read more… http://blog.alexanderhiggins.com/2012/04/30/medias-wall-street-bailout-lies-debunked-tarp-repaid-127741/
    ************
    Do You Know Who Owns Your Congressional Representative?

    Bloomberg has yet another stunning revelation that Tea Party Congressional members are being funded heavily by the Banksters.

    Tea Party favorites such as Stephen Fincher of Tennessee were swept into Congress on a wave of anger over government-funded bailouts of banks.

    Now those incumbents are collecting thousands of dollars for re-election campaigns from the same Wall Street firms whose excesses they criticized. They have taken no significant steps to curb them or prevent future taxpayer-financed rescues.

    see video … article: http://www.economicpopulist.org/content/do-you-know-who-owns-your-congressional-representative
    ************
    Corporate Welfare By Job Blackmail

    You know how States are hurting? How budgets are in the red to the point some towns cannot even hold elections? Adding insult to injury comes the news States are allowing corporations to pocket taxes they take out of your paycheck and pocket the money for themselves. I kid you not.

    Nearly $700 million a year in state income taxes withheld from worker paychecks in 16 states is being used to provide lavish subsidies to corporations rather than paying for vital public services. These diversions have gone to more than 2,700 companies, including major firms such as Sears, Goldman Sachs and General Electric. Few if any of the affected workers are aware, because no state requires they be informed on their pay stubs.

    David Cay Johnston put together this nifty video overviewing how corporations manage to take state taxes out of your paycheck yet pocket the money.

    see video: http://www.economicpopulist.org/content/corporate-welfare-job-blackmail

    • gozounlimited

      “Screw us and watch us multiply” …. .OWS

      • jeff

        Nice gozounlimited I salute you.

  • http://freeskierpov.weebly.com/ Freeskier

    George, do you have an analysis of trust based on the age of the person?

    My experience is that most people under about 50 have zero trust in the US government. However, people over 50 seem more inclined to take what they are told without questioning it.

    As an American I think it is my duty to remind those who want to believe that it is patriotic to support their government to realize that it is not. It is patriotic to support the ideas (most notably the Constitution) on which the country was founded.

    The US government is a tool used by the richest few to take from all others.

  • paul

    80% trust the military, and 70% trust the police? That’s saying that we are prussians, we are ‘good germans’. These are some of the most horrifying numbers I’ve ever seen.

    • Rantly McTirade

      Absolutely!
      Trust must collapse in these 21st century Hessians, and they must be viewed with
      contempt, before any renewal can occur.

  • http://twitter.com/bjaval5 Bernardo Javalquinto

    Dear W as Post

    Your country is not the only one losing their faith, I find fascinating articles written in
    magazines and newspapers around the world about how well our country is doing,
    declarations and conclusions like yours, but let me provide you a very brief
    overview of the political and economic reality of our country. After the
    military regime that governed the country until 1990, Chile has democratically
    elected its presidents and has transitioned to a society where, in appearance,
    democracy prevails. Though this is true in many ways, there is an ever
    increasing resentment by the general public that our authorities from the
    private and public sector, politicians, both those in government, and in the
    opposition, are a well established groups of people that are more interested in
    perpetuating the establishment they have created, than really addressing the
    needs of the more unfortunate ones and the country in general. Over the last
    years the country has witnessed several major scandals related to corruption,
    not only to discover that after major public outcries by the politicians of all
    colors, nothing really happens. Not even mentioning the scandals in the private
    sector like the “La Polar” case. On occasions some lower level civil servant
    may serve some time in jail and some minor changes in legislation may be
    enacted, though they do little to really solve the problems. I think this is
    just one of the areas of the many that need reform. Seeing that there is
    an increasing apathy among the general public towards politics and politicians
    and the financially privileged ones in the private sector, the resentment
    especially among the younger generations is enormous. The issue is that
    is growing a large independent group that can provide a new space to do
    profound changes in how the system works and education is one of them.
    However, as it is the desire of citizens a new way of doing things, free of
    corruption and other bad habits that have become common in our established
    system, thus people search a system fair free from commitments to groups in the
    economy and political powers that run the country, especially if they have not
    evolved to the ethical standards that should prevail in the third millennium.
    Naturally Chile is not alone in the world with this kind of problems. Worth
    mentioning, and in line with the hypothesis that the world is seeking change,
    is the initiative of Nobel Prize winner Prof. Dr. Muhammad Yunus that he is
    promoting worldwide in Social Business as a new paradigm in humanizing society.
    Chile is seeking Economic Justice, fair terms and opportunities to compete in
    the economic system and Human Rights protection to the abuses that the economic
    and political system is creating. Especially, in the issue of fair distribution
    of income. I think you should spend some time down alone to see: that
    oligopolies are not fair, they control most of the economy of the country, the
    balloting system to elect our representatives in congress and presidency does
    not give opportunities to “independent” people that can run for elections. The
    interest rates from banks are consuming people, especially in the agriculture
    sector. There is nothing compared with what is being said and what is really
    going on in the country. The press and the media is controlled, so all you can
    see from outside is great when in reality all we are doing is to exploit
    our natural resources and we do not invest in R&D, Human Capital, health,
    education and so on “a rising tide lifts all boats” used to say John
    F Kennedy. If you look at the members that compose Chile transparency member,
    and all official institutions, all are negotiated political or economic
    positions. We have two Chile`s, one for the rich and one for the poor.

    Most respectfully,

    Dr. Bernardo Javalquinto, Economist, PhD Political Economy SMC University, MBA – UGM thesis directed by Dr. Maital PhD, Sloan School MIT, CUM LAUDE, , BSc Economics, University of Maryland, AA General
    Studies, Montgomery College, Full member Chilean Human Rights Commission,
    National Counselor, Co-Chairman, Escuela de Negocios Sociales
    (ENS), http://www.ensglobal.org, Chairman, http://www.javalquinto.org, http://www.linkedin.com/in/javalquinto

    • Christopher Selvig

      Thanks for your comment!

  • Appstar Financial

    I can feel the smell of Freedom.

  • US Citizen

    I am concerned about the government and the lack of concern about the citizens of our country. The present administration does not have a realistic understanding of what it takes on a day to day basis to pay for what is required to survive. Fuel , food and shelter as well as insurance for home, health and transportation as well as paying the unreasonable taxes for day to day items.

  • US Citizen

    The separation of the classes is encouraged by the Obama administration and any reference to race is seized upon by those in the media who feel that whites have some advantage over all other races. Recently in the DeKalb County Jail in the metro Atlanta area a black prisoner was beaten by a group of black deputies and race was not brought up as an issue. With the constant reminder of slavery in the SOUTH it is not surprising that race was not even discussed in this violent attack. This was a black on black crime that was recorded and the black sheriff was immediately ready to fire one of the black deputies responsible.

  • US Citizen

    Why is it that race is always brought up when discussing the present presidents qualifications. There is more to being a president than what color his skin is. Does anyone realize that Obama has never run a business or actually held a job that was not publically funded? If anyone has actually dealt with the real world requirements of working for a check that is dependent on the results of their work then you might know what I am referring to. If you do not meet deadlines and schedules your job will surely disappear unless you are related to a member of the company or the government. This is what is causing problems in our country and economy today. Either be a responsible employee and or parent and actually perform your duties or be a worthless member of our society. The worthless members of our society have outnumbered those of us who actually work for a living and are responsible for what we do.

    • Obama fan. Not.

      Yes, Obama is the lowest of the low and beyond worthless, as he hates America and seeks her downfall.

  • Jongo Jim

    They used to tar and feather bankers who fleeced Americans, and run them out of town on a rail. Presently, our country is being fleeced by banks and government. Larger corporations have joined in too. I am not anti-corporation, and I am for a true, free market, but we don’t have that now. Instead, we are forced to work within a market prone to gross manipulation by corporations, unfair laws made to favor the corporation and harm the individual and smaller businesses. There is little accountability at the corporate level, nothing that money can’t fix.

  • dejudicibus

 

 

Twitter