About Michael Czinkota

Professor of International Marketing, Business and Trade at Georgetown University, Washington, DC, U.S. and University of Kent, Canterbury, UK - http://www.faculty.msb.edu/index.htm http://www.twitter.com/#!/michaelczinkota http://www.facebook.com/169628456631

“AOC, Bernie Sanders confuse inequality with poverty” by Jerry Haar

Published in The Hill (April 27th,2019),”AOC, Bernie Sanders confuse inequality with poverty”

AOC, Bernie Sanders confuse inequality with poverty

Jerry Haar

“Socialism,” anathema to many but a path worth exploring to others, has been packaged nicely as “democratic socialism” (a hilarious oxymoron) by millionaire author Sen. Bernie Sanders (I-Vt.) and proselytized by neophyte Rep. Alexandria Ocasio-Cortez (D-N.Y.) who, like the president, invents statistics extemporaneously.

But in all fairness, neither is a socialist in the true sense of the term, meaning a belief in government ownership of production and the abolition of private property.

Since more than half of Democrats, millennials and minorities hold socialism in higher regard than capitalism, one wonders if these groups truly understand what life is like, say, for the average Cuban. On the other hand, Americans as whole, according to Gallup, prefer capitalism 56 percent to 37 percent.

One can surmise that those who embrace or warm to socialism in reality wish to see a larger, more activist role of government, such as FDR’s New Deal and Lyndon Johnson’s “Great Society,” rather than adherence to socialist economics.

Whatever the case, the progressive wing of the Democrat Party will push its base further leftward; and the one socioeconomic issue they will try to bring along centrist Democrats, independents and even some moderate Republicans on is inequality.

Yet, inequality matters far less than poverty. Culling through the economic literature, one finds little evidence that economic inequality increases poverty; and while redistribution may reduce overall inequality, it is less helpful in lifting people out of poverty.

Economist Branko Milanovic notes that global income inequality fell between 1988 and 2008 for the first time since the Industrial Revolution.

Admittedly, inequality statistics in general are flawed, since they provide only a snapshot of income or wealth distribution at a point in time. Yet, that does not deter celebrity economists of the left, like France’s Thomas Piketty and Joseph Stiglitz to falsely claim that income inequality in the U.S. is at a record high.

They erroneously take as a measure “market income,” but this measure does not take into account taxes or transfer payments or changes in household size or composition.

Their solution? Raise taxes on the rich, despite as noted by French economist Frédéric Bastiat in the early 19th century, it is a disincentive to working harder and taking risks, resulting in lost savings and investment that could generate employment and tax revenue from output and productivity.

Explain that to AOC, whose tax proposal would raise top marginal rates to 70 percent to fight the war against inequality. Like her budget-busting Green New Deal, the massive increase in taxes would wreak havoc on economic growth, employment and capital formation in the U.S.  

Our Canadian neighbors would have to build a wall to keep out the hordes of Americans seeking to flee to a “tax haven” where the average rate is 26 percent.

What about poverty, then? 

Poverty is a serious problem, unquestionably; but it has declined over the last 50 years. The U.S. government has spent over $750 billion on major assistance programs for low-income Americans (including food stamps, Medicaid and housing assistance), none of which is included when calculating the poverty rate.

These safety-net programs helped reduce the number in poverty, especially African Americans, Hispanics, single mothers, and those without a high school diploma. The latest U.S. Census data reveal that poverty rates have declined in 13 of 25 of the most populous metro areas, including New York, Atlanta, Washington, Miami, Chicago and Los Angeles. 

Returning to the issue of inequality, Nobel laureate economist Sir Angus Deaton has found, countries with the greatest degree of inequality are also the countries in which there are significant disparities in opportunity.

Toward that end, the prudent course is not to raise taxes on the producers in society but to expand opportunities, reform occupational licensing and other regulatory barriers to entrepreneurship, reform criminal justice, provide apprentice training and re-training, and child care. 

Poverty alleviation — where we have made great strides — not inequality, should be of paramount importance.

Every semester I have at least one bleeding-heart student who rants about inequality. My response: “If you swap out your moped for a pre-owned Ford Taurus, why should you be concerned if I trade in my new Honda Accord next year for a C-class Mercedes-Benz?” (That usually works.)

Left-wing populism is as insidious as the right-wing variety. Expanding the economic pie, increasing opportunity and continuing to reduce poverty should by top public-policy priorities. Attacking inequality is a futile distraction.

Jerry Haar is a professor of international business at Florida International University and a Global Fellow at the Woodrow Wilson International Center for Scholars in Washington, D.C.

International Marketing & Terrorism

In this video, Prof.Czinkota reminds the public that Terrorism is not  far from us, even more, it is a significant issue in international marketing.  Not only are emerging economies threatened by the rise of terrorism, but developed economies will be affected as well.Terrorism preparedness matters! 

iPhone vs. rule of law

In this video, Professor Czinkota stresses that young generations become increasingly inward-oriented in terms of education, career path, and, more importantly, the attitude towards the rule of law. He then calls public attention to the impacts these changes may have on individuals, corporation, and countries in an international marketing context. In particular, where the young generations will lead us to.

Good Souls Bring Curative Marketing

A good soul promotes quality of humility, empathy, and reflections for human developments at a time when society often perceives business as soulless. Today, concern over the lack of soul in business life creates a fine layer of transparent filigree which negatively shadows and biases public impressions. Eventual fossilization may turn out to be very costly since it influences society’s willingness to allocate, spend, play, and nudge.

People and society generally seek pursuits which advance wealth and good feelings. But nowadays, wealth seems to have won out. Concurrently, technology and artificial intelligence may contribute to further alienate business from the soul. The environment appears to weaken the overall qualities of a soul. Two fatal crashes involving Boeing 737 Max 8 planes have faltered public confidence in the aviation giant. Volkswagen’s teutonic attraction to honesty was deflected by its cheating on the emissions of diesel engines. Church child abuse scandal reveals a faith’s failure to govern human behavior. All these cases may lead to a separation of business and society, where business becomes a mere supply chain member without influence or respect.

The events are not just contemporaneous. More than a century ago, the Chinese Empress Dowager Tz’u-hsi, in order to renovate her summer palace, impounded government funds that had been designated for China’s shipping and its navy. Almost totally isolated from world trade, China missed out on knowledge transfer, the inflow of goods, global innovation and the productivity growth that derive from international trade.

Passage of time may lead to the forgiveness of misdeeds but such mercy does not exempt one from recognizing their responsibility. Curative marketing may well be the upcoming direction to restore the good soul by raising wonderment about the triple helix linkage of business, faith, and society.

Business must look back and accept responsibility for past errors. A more emotionally appealing approach, for example, should have been taken by the Boeing company in recognition of its responsibilities. Merchants should be reliable, trustworthy, and bridge-building partners. For now, American firms, when compared to their global competitors, should strive for a transparent, humble, and discerning leadership.

Since the 1990s, governments again has begun to play a growing role in business. New global regulations and restrictions have emerged because markets don’t always succeed with constraints and self-regulation.

Today, the traditional role and effectiveness of the World Trade Organization are challenged. Multilateral agreements appear to be at a standstill or even in retrenchment. At the same time, the Trump administration’s deregulation brings confidence to the domestic economy. A 2018 survey by the National Association of Manufacturers showed that more than 92 percent of respondents suggested a positive outlook for their firms. Nearly a half-million new manufacturing jobs were created in the past two years.

The new and crucial joint responsibility of humanity, business, and faith can and should be used to humanize behavior, expectations and cultivation. Religious connectivity with commerce has had an important role for ages. There is, for example, the ejection of the money changers from the synagogue by Jesus and the creation of the honorable merchant, developed by the German Hanse Trading Group in the 13th century.

Curative marketing helps overcome past shortcomings and leads to a healthier economy. China, for example, tries to heal past wounds in areas such as food safety, environmental protection, and medical security.

In the preface of my book “In Search for the Soul of International Business”, Dr. Szabo, the Hungarian ambassador to the United States, states that “one of my goals is to strengthen business ties between Hungary and the United States. I would like to see businesses flourish that have multidimensional levels of depth and a natural concern for a good soul so that these connections can be meaningful, long-lasting, and honorable. ”

Good souls should not only point business to an exchange of human development for profit. Curative marketing should be the next step to help create an environment of global responsibility and growth.

Professor Czinkota (czinkotm@georgetown.edu) teaches international marketing and trade at Georgetown University and the University of Kent in Canterbury.

Engage in Global Business in Canterbury this Summer

Scholars typically spend their summers at interesting and learn-worthy organizations. For my summer this year such destination will be the University of Kent in Canterbury, UK. There I will participate in several events. I will be help coordinate a university-wide international business seminar: Global Business in a Dynamic Environment.

The Global Business in a Dynamic Environment course (details found here) provides a comprehensive and up-to-date overview of international business and the institutions involved in the process. Although there is an underlying universality to the basic principles of business administration, it is in the application of these principles that people in international business encounter unique problems. Theory will be emphasized for a normative understanding; practical aspects are designed to show the relation of theory to practice. We will teach each other and learn from each other by the use of analogies, parables, and examples – which will help us understand and remember, which, in an era of the British Exit from the European Union has taken on major significance.

I encourage interested students and scholars to attend those events. It will allow to make lasting connections with students from around the world, studying a range of subjects but sharing personal enthusiasm. Guided by leading professors from around the world such as a large team from the University of Kent, German, and the United States, Mark Casson England, Johannes Harl, Germany, Thomas Cooke, Michael Czinkota, Gary Knight and Charles Skuba of the United States, will enable participants to gain a deeper understanding of other cultures, develop new network, make lifelong friends from a wide variety of backgrounds and benefit from globally-renowned academic excellence. Stay tuned for more information!

The teaching team members are

Prof. Martin Meyer, Kent
Prof. Michael Czinkota , Kent and Georgetown
Prof.Gary Knight, Williamette
Prof. Zaheer Khan, Kent
Prof. Rudiger Kaufmann, Mannheim
Prof. Valbona Zeneli, Marshall Center
Mr. Adam Smith, Kent

The Course schedule

So that’s my summer. How about yours? If you want to join me and a group of distinguished colleagues please contact Floortje Hoette at f.hoette@kent.ac.uk to sign up for the course/seminar or request more detailed information about the summer events.