30 April 2011

Spassibo - the Capitalist Effect in Russia

Back in 2009, TIME magazine declared that capitalism had taken root in Russia.  This dramatic conclusion was based on the fact that Premier Putin earned 11% more than President Medvedev.

Back in 2005, the New York Times insinuated that the Russia had finally broken through the transitional doldrums and earned its Capitalist wings as the World Bank declared poverty lessening in the former Soviet Union and income equality growing.   

As one person sitting behind a computer I officially declare the dawn of CAPITALISM on Russia.  This story comes directly from Moscow where the Capitalist Effect has settled in to a stark and harsh new reality.  In the past eight years, the homeless population has risen by 8%.  According to Gazeta.ru, multitudes of people are being evicted from their homes by court order, reported ombudsman Aleksander Muzikantcki (омбудсмен Александр Музыкантский).  "Citizens are being completely denied the right to housing, although they committed no culpable action."

According to the story, people who have been living in and paying for homes for years are losing them because the law allows property to be seized by the legal owner.  The other reason is that changes in housing legislation has negated some spaces for living that are currently being occupied as residential property.  So people are being kicked out of their homes and not provided any other means of accommodation.  As a result of these policies, the streets of Moscow are slowly flooding with vagrants.  The homeless rate has been steadily climbing.

If this situation in Russia sounds eerily familiar, it should.  For the past year, the journal sentinel has reported on Central States Mortgage Co. and the deceptive practices of its founder Richard Jungen.  Central States was back in the news this week because it failed to properly handle the refinancing of a Milwaukee resident.  This Milwaukee resident actually had his house sold at a Sheriff's auction even though he was perfectly compliant with what he thought was his only loan.  Unfortunately what he thought was one mortgage being refinanced with a lower interest rate, it was essentially two loans.  The second loan was intended to buy out the first mortgage.  However, Central States and their affiliate Interim Funding LLC failed to buyout the previous loan, instead paying off other debts.

Whether the picture is of Russian homemakers kicked out into the street or working class people in Milwaukee whose locks get changed while at work, the resulting loss of shelter is a Capitalist Effect.  People have grown utterly devoid of compassion and driven by one thing, profit.

The real problem with the drive to accumulate wealth is in the sacrifice of everything else.  The republican State legislature is bent on building a surplus in the state of Wisconsin.  Most people like the idea of a surplus.  But the idea of building a surplus at the expense of the citizens is not right.  Wisconsinites should not accept it.  Gov. Walker can bandy about his ideas about a surplus but what he should be honest about is that his use of the word surplus is an euphemism for what really amounts to harsh losses for working families.

Just as in Russia where average citizens are being thrown into the street because there is no plan for them once they are out of their homes, Walker has no plan for the future.  How will the State government address the need for health insurance when the hundreds of thousands lose the coverage currently provided by Badger Care and Badger Care Plus?

How will the republicans accept the repercussions that will inevitably be attached to allowing the largest public school district in the State to effectively operate without being fully funded?

This new breed of republicanism spurred on by the zealous tea partyers has no intention on reneging their promise to bring in spending and cut costs all at the expense of the citizens.  Losing teachers and cutting funding for schools will not be felt immediately but will be felt eventually.  The effect of improperly investing in education is revealed a few years down the road as students move through the system with the new changes in place.  What will be the effects on a school like the Milwaukee German Immersion School, which is consistently placed in the upper bracket of successful Wisconsin schools?  According to the Principal, the German Immersion School will lose six people the Phy Ed, Music, and Art teachers, a classroom teacher and two aides because of the cuts in Gov. Walker's budget.  There is no way these cuts won't be damaging.

What Wisconsinites should demand to know is this: how are we all tightening our belts? Is the prestigious Brookfield Academy losing teachers?

The Capitalist Effect creates gaping holes not only in the class structure but in reason.  It allows one group of people to profit while a larger group suffers.  It allows decision to be made on the sole grounds of how much money can be earned.  Russia is waking up to the reality that capitalism is no better than communism and in some ways it is far worse.  There is no space in capitalism for welfare unless the government demands it through  intervention, i.e. regulation.  Whereas the Soviet Union did function as a welfare state, the Russian Federation functions more like a business.  The world is watching our government now as capitalism could see another casualty unless the US can get its house in order.  We could very easily end up like Portugal.
According to the World Factbook, the CIA ranks Russia 52 of 136 countries for distribution of family incomes, the Gini index.  The higher the Gini index, the higher the income disparity in the country.  Russia's Gini index is 42.2.  The US Gini index is 45.0.  The 136th country - the country with the lowest Gini index is Sweden.  Its Gini index is 23.0.
Read about Market Reform in Russia: http://users.polisci.wisc.edu/hendley/PS%20633/Lecture%20PPTs/April%205,%202011.pdf
Read more about Russia's rural poor: http://www.ucis.pitt.edu/nceeer/2003-816-14g-5-Wegren.pdf
The "New" Poverty of Russia: http://www.soclabo.org/UserFiles/Journal/2010.02/Art_pdf/11_eng.pdf
Read Sergei Shelin: http://www.gazeta.ru/column/shelin/3589305.shtml
Politics of anti-poverty policy: http://www.psa.ac.uk/journals/pdf/5/2008/Mussorov.pdf
Globalisation and the Development of Capitalism in Russia

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