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The United Nations launched the 2011 Human Development Report, entitled Sustainability and Equity: A Better Future for All, with great fanfare on November 2, 2011. Helen Clark, administrator of the largest and perhaps the most unaccountable, ethically-challenged of all UN bureaucratic agencies, the United Nations Development Programme (UNDP), presided over the ceremonies held in Copenhagen, Denmark. She was joined by Helle Thorning-Schmidt, Prime Minister of Denmark.
The UNDP report follows the customary left-wing approach to most problems, which is the UNDP’s calling card: Bash industry. Redistribute wealth through more taxes. And throw in a dig at Western free-market capitalism for good measure.
In its latest version, the report downplays the importance of economic growth, as reflected in rising national incomes, to the achievement of better living standards. It links much of the world’s ills to “environmental hazards” and “deep inequalities within and among nations.”
To support their conclusions, the authors of the report created out of whole cloth what they call an “Inequality-Adjusted Human Development Index,” which is supposed to somehow adjust the UNDP’s more traditional development index measuring economic prosperity, education levels and life expectancy to take account of “internal inequalities in health, education and income.”
The United States, which had ranked #4 (out of 187 countries measured) in the UNDP’s more traditional human development index, dropped to #23 in the “Inequality-Adjusted Human Development Index,” behind such economic heavyweights as Slovenia and Iceland.
The UNDP report’s adjusted inequality index is fallacious on at least two counts. It relies on disparate data sources that vary widely in quality and completeness from country to country. Moreover, it is at best a static snapshot in time that ignores the dynamics of economic mobility.
Nevertheless, in order to reduce the static “inequalities” imperfectly measured by the UNDP report’s authors and to promote “social justice within and amongst nations,” the report takes a top-down, wealth redistributionist approach that relies, in part, on global taxes. The report recommends consideration of an international currency trading tax or even broader financial transaction levies “to fund the fight against climate change and extreme poverty.” The report estimates that an international currency tax alone could raise at least $40 billion a year, while a broader tax on all financial transactions could raise a whopping $650 billion a year globally. This grand wealth redistribution scheme “would allow those who benefit most from globalization to help those who benefit least,” the report argues – a variation of Karl Marx’s anthem “from each according to his ability, to each according to his need.”
The idea for a currency tax was first proposed nearly forty years ago by James Tobin, a Nobel-laureate economist at Yale University, as a way to discourage excessive, short-term speculation in the currency markets. It received little traction until a left-wing transnational group known as The Association for the Taxation of Financial Transactions for the Aid of Citizens (ATTAC) was founded in Paris, France in 1998 and hijacked the idea as a way to advance its anti-capitalist agenda. Ironically, Tobin himself accused ATTAC of misusing his name and said that he did not share ATTAC’s goals. But it was too late.
Progressive, anti-free trade groups like the AFL-CIO latched on to the tax as a redistributionist mechanism, while United Nations bureaucrats saw it as an independent revenue source to fund expanded UN activities. The UNDP has been pushing some sort of global financial tax for at least twenty years.
More recently, looking for ways to spread the pain they are feeling during the current European financial crisis, French President Nicolas Sarkozy and German Chancellor Angela Merkel have rallied around the idea of a financial transaction tax. They hoped to make the tax a major topic of discussion at the G20 summit of advanced economies in Cannes on November 3-4, but those plans were derailed by the mess in Greece.
Progressives in the United States are also pushing hard for a global financial transaction tax. One prominent example is Jeffrey D. Sachs, a Columbia University economist who is a special advisor to United Nations Secretary General Ban Ki-moon and works with the UNDP on the United Nations’ massive global wealth redistribution program known as the Millennium Development Goals. Sachs is urging President Obama to accept and impose a financial transaction tax (FTT). Sachs links the tax to the sentiments behind the Occupy Wall Street movement, which he resoundingly supports:
If President Obama is true to his recent words sympathizing with Occupy Wall Street, he will join Sarkozy and Merkel in supporting the FTT… We keep hoping that Wall Street impunity will finally be ended. Mr. President, this week is your chance to make good on your word. Adopt the FTT at the G20 meeting and bring the fight back to Congress. The American people will support you in the fight to restore democracy for the 99 percent.
Not surprisingly, the United Nations Development Programme agency boss, Helen Clark, is fully on board with instituting a global tax on financial transactions. “A Financial Transaction Tax, for example, now supported in principle by several G20 members, has the potential to raise considerable revenue,” she told a sympathetic audience at the Second World Congress of the International Trade Union Confederation.
“A currency transaction tax has been identified as the most viable of all the sources of innovative financing,” Clark said as she presented the 2011 Human Development Report in Copenhagen.
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