Class Warfare Blog

June 26, 2010

Wayward Christian Soldiers!

Filed under: Religion — Steve Ruis @ 8:02 am
Tags: , ,

If you are puzzled by my title, it is a reach (admittedly so) to the hymn “Onward Christian Soldiers” which was my favorite hymn as a child. Unfortunately what “Christians” are urging today is not what it was when I was a child.

For the past several years I have read and heard quite a few utterances from people who have insisted that this country was founded upon “Christian principles.” None of these claimants deigned to offer an example of such a principle, so maybe they thought such principles were “self-evident.”

Often these folks point to the Ten Commandments as guiding principles, which doesn’t really help as the first four address only the relationship between believers and God (not a basis for a country founded upon a separation of Church and State principle). The rest of the commandments showed up in history all over the place (the Code of Hammurabi, for example) long before they showed up in Jewish texts, which doesn’t exactly impress one as being from a “Christian source.” And the “big 10” commandments are just the tip of the ice berg as there are over 600 more such commandments that are ignored by most Christians, e.g. it is an abomination to eat rabbit.

The other arguments offered by these folks were mostly based upon whether various revolutionary patriots were or were not Christians. Well, there wasn’t a whole lot of choice, because not being a Christian could get you killed. There does seem, though, to be a consensus among historians that there was a range of religious commitments in the folks involved in the creation of our country: from deists to militant Christians to out and out atheists, so how does this support their point? And just what are these Christian principles these folks are referring to? Are they in the Constitution? Are they in the writings of the founding fathers? Certainly they do not refer to the separation of Church and State as such a principle. An eye for an eye, a tooth for a tooth? Let him who is without sin, cast the first stone? The only one such principle I can readily identify that is in both the early Constitution and the Bible is that both endorse slavery, albeit the Constitution’s endorsement is rather tepid.

Is Christianity the source of the “innocent until proven guilty” principle? Actually Christians invented original sin which is the ultimate “guilty until proven innocent” principle. Is Christianity the source of representative democracy? Actually Christianity is a dictatorship; nowhere in the Bible does it say how to countermand even one of God’s dictates. Just what are these principles they are referring to?

The history of American Christianity does offer some “interesting” Christian principles: including that of “if a witch be thrown into a pond and she sinks, then she is innocent” and “do not permit a witch to live” which resulted in the deaths of quite a few innocent women. Then there were the Christians defending slavery by arguing the principle that black people really didn’t have souls and, hence, weren’t really human. And the Christian clergy who argued from the pulpit that women should not have the same rights as men as God had given men dominion over women. Granted, there were clergy advocating the end of slavery and the end of unequal treatment of women, but they had no scripture to back them up. They were freelancing.

These “Christian principles folks” are some of those who also want official, government-sponsored prayer in public schools even though the Bible tells them to pray in private and not ostentatiously. These are the people who want the ten commandments posted in our courthouses even though Commandments #1-4 destroy the separation of church and state and the rest say nothing about slavery but forbid us coveting our neighbor’s donkey. These are the people who want the U.S. declared a “Christian nation” even though they can’t come up with the so-called “principles” that prove it to be so.

What would it say to Jews and Hindus and Buddhists and Muslims living in this country if we were to declare ourselves a “Christian Nation?” What would it mean those who live in other countries? Are they welcome here if they are non-Christian? How can a being a “Christian Nation” work with “freedom of religion” as guaranteed by the Constitution?

What is it these people really want? And why do we pay so much heed to these people who are trying to undermine the foundations of our government? Why do we tolerate such nonsense?

June 22, 2010

The Immorality of A Pure Profit Motive

Filed under: Economics — Steve Ruis @ 4:13 pm
Tags: , , , , , ,

I am puzzled by the concordance between the very right-wing part of this country (the Tea Baggers, etc.) which are simultaneously pro-religion and pro-business, specifically pro-corporation. These folks claim there is no morality without religion and corporations can be trusted to do what is right. Both of these points are quite debatable, but what I want to address here is the second. Our corporations are, by and large, the most amoral institutions on the planet, so why would “morals” believers want to trust them?

Fascinating.

I think one of the biggest problems we have in the U.S. is we have elevated “profit” to being an end in itself, actually we have elevated it to a near divine principle. Making a profit has become a moral principle. Almost all corporations say what is the equivalent of, “well, we have to make a profit,” as an answer to almost any question regarding the business of that corporation. Wall Street bankers defended their actions (the ones that triggered the recent financial meltdown) with “Our job is to do whatever we can to make a profit for the company.” Really?

Chip Conley in a TED presentation took Maslow’s pyramid and remade it so that it applies to businesses instead of individuals. Here it is:

Starting from the bottom, a business needs to earn a profit to survive. That seems obvious. If the business doesn’t survive all questions become moot. Actually I have seen a great many businesses violate this principle in that the founders drew quite nice salaries while on “start-up” money, then limply surrendered when the business didn’t make enough profit to attract more money from venture capitalists. They had “got theirs.” But, by and large, if a business wants to continue as such, they must make a profit. Even Amazon.com, whose business plan famously included “don’t worry about making a profit” for up to eight years needed to make one.

The next step up is “Success.” Nobody wants to be a part of a business that just survives, just limps along. Part of being considered a success in the “world of business” is making healthy profits. CEO’s of businesses making really good money get touted for better jobs, get written up in magazines, sell a lot of books with the title “The Way.” That kind of thing. Even the lowliest workers prefer working in a company that is “successful” as they think it means their jobs are stable. (Might even get a raise, what?)

The highest step “Transformation” is the equivalent of “Self-actualization” for an individual and this is mostly a state of intangibles.

So, trying to make a profit to survive: to meet your payroll, to keep your doors open, to be able to buy the equipment of production, all of that is quite understandable. In this profit is not an end in itself. It is “making a profit to survive.”

Once you get past that point, though, is where the dysfunction arises. Just when did making a profit become an end in itself. Often a company says things like: “Last year we made a 5% profit. This year we have set a goal for 8% profit.” Why? What was wrong with the 5% profit? The answer is typically, “Well, with higher profits, we can expand the business and make even more profit!”

So, let’s say you make the 8% goal, then 11%, then 12%, then 14% . . . so what?

Too often this is done to manage stock holders. If the stock holders think the company is doing better and better and that its dividends get larger and larger, they hang onto to that stock; it gets scarce and the price of that stock goes up. If the company needs extra money, it can then sell some of the stock it possesses to raise those funds.

So? Is this just a giant game? The one with the most profit wins?

I do not think that we can accept profit—in itself—as an end. I think we clearly must insist that it be a means to an end.

The goal of every business must be stated “to make a profit while. . . . ” I accept that a profit needs to be had, but to what end? A number of people have started businesses to provide jobs for their workers. “To make a profit while providing quality jobs for our workers.” That has a nice ring to it. It is prominent in Toyota’s mission, for example. Some companies have been started to make the world a better place. “To make a profit while producing clean, renewable energy to Americans so our children will inherit a cleaner, safer world.” Nice. Some companies have a smaller focus. “To make a profit while providing wholesome bread inexpensively.” Also nice.

I think we need our corporations to explicitly state what their “while” is and when they take actions to increase their profits, they need to make explicit how that affects the “while” part. I imagine it would take several PR firms to help BP come up with “We cut corners and endangered our workers and the entire population of the American Gulf Coast and all of the wildlife therein in a reckless pursuit of profit to . . . to. . . .

I’m waiting to hear from them on this.

June 18, 2010

Republicans Impaled Upon their Own Talking Points

Filed under: Politics — Steve Ruis @ 9:45 pm
Tags: , , , , , ,

Was I the only person who noted that the Republican’s position regarding the recession was that the only way out was by means of tax cuts? Ironically, possibly trying to curry favor with a few Republican legislators, the Democrats included almost $300 Billion in tax cuts in the Recovery Act of 2009. This was not small potatoes, being the largest tax cut in the history of the U.S. Well, the bill still got no Republican votes in the Senate (Got one in the House, though!) and later the Republicans claimed that the Recovery Act didn’t create one new job! If one ignores the fact the hundreds of thousands of police and teaching jobs were saved by the Recovery Act, and a few hundred thousand jobs were pulled out of unemployment for construction projects, you might be able to make that case (those jobs maybe weren’t exactly “new”). But the Republican claim of “total failure” of the Recovery Act skewers their claim that “the only way out of the recession was tax cuts.” Maybe they mean a Republican tax cut, as opposed to a Democrat tax cut?

Next up the Republicans, the party of “no government interference in business” is excoriating the Democrats for not doing enough to create jobs. Brilliant! If only tax cuts will work and the biggest tax cut in U.S. history has had no effect (or so they claim), just what is it the Republicans expect the administration do? Interfere in something? (Gasp!)

Actually these are just asides because the entire plethora of Republican “New Ideas” is bankrupt. Let’s see—they say that government needs to just get out of the way of business and let business do its job. Government regulations can only hurt progress, not help. Taxes need to be cut to the bone. (I think they must mean for the rich because they didn’t seem to think much of the middle class/small business cuts in the Recovery Act.) And, oh, we need to give up many of our personal freedoms for the sake of national security and let the government spy on us. Oh, wait, that was George Bush’s idea. Let’s just say, uh, be tough on immigrants, crime, and terrorists. That about sums it up.

Apparently the Republicans think we are stupid. And I am not even going to mention the mammoth economic crisis of 2008 from which we are still suffering and which was brought about by greed and . . . deregulation. And I am not going to mention the Gulf of Mexico/British Petroleum disaster brought about by deregulation and a complete lack of oversight by the Commerce Department’s Minerals Management Service. Surprised you, huh? (Oh, in passing I can’t refrain from pointing out that the MMS was created in the Reagan administration by then Commerce Secretary James Watt. Remember James Watt? MMS was set up from the beginning so that government and oil companies would have a bed to be together in.)

My point is simpler. All of the Republican proposals and more has already been tried in this country . . . (drum roll, please) in the late 19th century, the period that later came to be called the Gilded Age and which lead quite directly to the Global Depression of 1929-1945. During the late 1800’s, there was little to no government regulation and taxes were low, especially business taxes. Business leaders often called up Governors and even the President to tell them what they were to do. We are talking all of the current Republican talking points/programs/New Ideas, the whole magilla, was in force at this time.

What that American experiment in democracy gave us was an upper class (the rich) and a lower class (the poor—some working, some not), but no appreciable middle class. Rich people had lavish houses and because labor was dirt cheap, they had servants, lots of servants. People living in the cities were surrounded by disease and dangers. Wooden tenements were often packed with people. They also burned down, quite frequently with the people in them. Government did not take responsibility for fire departments. And there were no public health services and not much in the way of building codes. All of these subsequent governmental regulations would be considered superfluous and current Republicans would surely want to rid us of them.

Women and children were exploited in factories doing dangerous work. By 1890, one out of every five children had a job. There were no unions, no child labor laws, no 8-hour day, no OSHA, no government responsibility for education. All of these interfering regulations should probably go, too, as they fit the mold of actions that an overreaching government would take and make government “big” and not “small.”

Immigrants could come to the U.S. but we could herd them into jobs where they were forced to live in poor company housing and required to shop at the company store, getting deeper into debt as they worked. We also could have the police beat them up if they took umbrage and we could exclude them from voting because they didn’t speak English or pay a poll tax. They were able to be exploited as cheap labor, though. That was legal.

In a note of additional irony, it was out the misery of the late 19th century that the U.S.’s fundamentalist Christian movement grew. The abject poverty and misery of everyday life surely must have promised better treatment in Heaven. The irony is that fundamentalist Christians are avid supporters of the Republican agenda. So, they are in the position of trying to recreate the misery they were born out of and are sought to oppose.

Why is it that poor people and fundamentalist Christians support the Party of No (as in no rights for women, no rights for children, and no rights for workers, and no rights to a clean environment, or to a safe workplace, or a union to protect your rights)?

They want their country back, alright—unfortunately it is the U.S. of the Gilded Age.

June 16, 2010

You Want an Energy Plan? I’ve Got an Energy Plan!

Filed under: Economics,Politics — Steve Ruis @ 5:59 pm
Tags: , , , ,

This is not as hard as people think.

Think about the total amount of electricity Americans use every day. Used by every electric tool, light bulb, toaster, hair dryer, TV, computer, cell phone, . . . , everything. If you want numbers, in 2007 it was 783 GW (summer) and 640 GW (winter). (GW is Gigawatts, giga being “tech speak” for “billions of.”) So, do you have that in mind (not the number, the idea of the total amount)? Okay, that’s also the amount of electricity wasted every day by the electric grid, the set of lines used to move our electricity around. We waste half of all electricity we generate, just in the way we distribute it. The companies who jointly share responsibility for the grid are using technology many decades old and haven’t invested much in upgrading this system.

If we were to upgrade “the grid” to current standards, we would need only half of coal and natural gas, etc. we are using today to generate electricity. But there is a better use for that energy. Keeping the amounts of electricity generated the same, how many all-electric cars do you think can be powered by that much electricity? (Keep thinking about the amount that would be made available—the total amount of electrical power we are using now for all purposes would be doubled by just not throwing away half of what we generate.)

The average distance of a car trip is 27 miles. The average range of electric cars is about 160 miles. What this means is that half, actually way over half, of the car trips taken each and every day could be made in all-electric vehicles with no need of recharging until you got back home. This means that close to half of all of the gas and diesel fuel used in vehicles each and every day could be saved! tale that OPEC!

If you aren’t aware, the first cars in the U.S. in the early 1900’s included many all-electric cars. This is old technology which is made even better using current technology (consider the Tesla, for example, all-electric and 160 mph). GM actually made a good electric car in the early 1980’s but recalled all of them and crushed them because they created a new standard in low maintenance, long lifetime vehicles. Interestingly, the Federal Government essentially owns GM at the moment. I wonder if they could dust off those blueprints?

None of this plan involves any dangerous materials. And none of it involves a single extra gram of carbon being released into the air. None of this involves a major expansion of unknown or even new technology. People were begging GM to buy the cars they were recalling and crushing 30 years ago. Many hundreds of thousands will buy them now.

Nationalize “the grid.”

Fix the grid.

Make adequate electric cars for short run drivers and families with more than one car.

That’s the plan.

It doesn’t cover everything but it covers a lot and the benefits continue into the future.

June 9, 2010

But, Surely, That Couldn’t Happen Here, Could It?

Even a cursory examination of the history of Central and South America of the last 60 years or so will show a definite pattern: when a “populist” government gets elected in any country, one of two things tends to happen, either there is a military coup or there is capital flight from the country and the country’s economy collapses.

It is easily demonstrated that U.S. foreign policy involves a great deal of military aid. I used to think this was to help those countries defend themselves from their “enemies.” I now see this in a different light. We not only sell these countries arms (often to a country and their supposed “enemies” at the same time) but there is training as to how to use those weapons, joint military exercises, officer exchanges, educational opportunities at military academies, etc. Certainly, there tends to be good relationships between our military and their military, as that is a stated goal of ours. And, if the secular government gets too “populist,” it is a relatively easy matter to express some displeasure, maybe have the CIA foment a little chaos, and suggest that the country needs a “strong leader” to one of their colonels or generals and, voila, instant coup.

If that doesn’t work, the monied interests in the country are offered spectacular investment opportunities overseas, where they can “weather the storm” and as the capital leaves, the economy collapses and the government is blamed. The monied interests in that country take no real damage, they are still rich, and they “get their country back,” the one where they get to call the shots, and a government wanting to take their money and give it to “the people” is squashed.

“But, surely, that couldn’t happen here,” you say.

Let’s see. Even before Barrack Obama was elected he was being painted as a “dangerous liberal” and a “radical.” After he got elected, the rhetoric was amped up to him being a “socialist,” “Marxist,” and “populist.” (I discount the “Nazi” epithets as being just a variation on “socialist.”) This is quite amazing for a centrist politician. Obama is at the most extreme a center-left politician, and not at all an ideologue, being instead a pragmatist. So, why all of the Marxist-leftist-liberal-socialist labels? And all of the complaints about “taxes being too high” when income taxes are at their lowest level in over 50 years because the Obama administration gave in to Republicans and included $300,000,000,000 of tax cuts in the “stimulus bill”? (Republicans claimed, in the face of all the evidence being contrary, that tax cuts were the “only way” to stimulate the economy. They later claimed that the stimulus package did no good whatsoever, “not one job created,” “not one job saved.” Clearly, their own “tax cut idea” should have had an effect? If you are unaware, it did, just a smaller one for the money spent as tax cuts offer way less “bang for the buck” than do, say, public works projects or even food stamps when it comes to stimulating the economy (food stamps always get spent, tax cuts often go into savings and paying down existing bills).)

The pattern would suggest either a military coup or economic collapse is on its way. A military coup seems very unlikely as the submission of the military to civilian control seems strong.

Economic collapse due to capital flight . . . hmmm. Start with the Republicans doing everything they can to stop any and all programs the Obama administration proposes, especially those that might have some ameliorative effect on the economy. This is not the action of the “loyal opposition” which has the goal of improving the quality of the legislation or program by injecting their own ideas. This is an out and out “dig in the heels and say ‘Whoa!’” strategy, basically it is pure obstructionism. If nothing gets done, the recession will probably drag on and economic woes are the most likely cause for a “change in power.”

Then, there is the fact that the major business banks are back to what brought our economy to the brink of collapse, speculating. Are they making business loans easier to help the economy recover? Uh, no. Are they making loans much at all? Uh, no. These banks have concentrated much of the capital available in the country into their own coffers and no amount of “community banks” are going to be funding new energy technology startups, or any of the other future-oriented business that need to get going right now; they don’t have that much capital to invest. And while these “business banks” (aka Wall Street Investment Firms) have donated what appears to be quite a bit of money to Democrats and to the Obama campaign, that was just “insurance” money. Those donations are to make it appear that they were “supporters” of the administration all along. But their hearts belong to Daddy, aka the Republican Party, their “real” friends. So, they can make good money speculating (in essentially rigged games, it now appears) and they will hold off vigorous lending in the hope that, at least, the Republicans can take control of one of the Houses of the Legislature and bring everything to a halt. Then there would be no more “regulations” which are, as we all know, “anti-business.” Maybe even the White House can be reclaimed by the GOP and business can get back to writing the legislation it needs instead of all of this nonsense to protect “the people.”

Hmmm, sounds like “capital flight” to me. Not investing in the future means not a lot of business will be able to hire folks, which means an anti-incumbent attitude in the voting cadre. And this is all supported by the GOP, the party against limitations and regulations on business and which claims that government shouldn’t do anything to stimulate the economy because it won’t work and can’t work. So, they are desperately trying to prevent the government from doing anything because they think if the economy recovers, the Democrats will stay in power. If they really believed what they claim to believe, they should merely stand by and watch the government try this and try that, it will fail and they will be able to say “Look at what they did! It was entirely ineffective. And we told them so. Elect us.” They obviously don’t believe their own ideology and they and their monied sponsors are actively trying to lay the country low for political gain.

If anything disqualifies the GOP from leadership it is this despicable behavior.

Surely, it can’t happen here . . . Ohmigod, it’s happening!

June 3, 2010

Bill Gates’ Ideas are Better than Yours

Apparently the Congressional Republicans “better ideas” all revolve around tax cuts. Their core argument is that taxpayers know better how to spend their money than government does. Taxpayers will spend their money more wisely, more efficiently, more market empowermently, whatever, than government would. If Republicans actually believed this (I doubt they do as when they are in power, they spend more money, substantially more than their “tax and spend” opponents.) it should apply to businesses, too, shouldn’t it?

I think a fair test of this Republican belief is a tax neutral bill in which a large tax cut is made for poor to middle class folks, paid for entirely by a tax increase on wealthy folks. Now, don’t be repelled by this idea, the rich folks haven’t been repelled by the idea of tax cuts for them coupled to tax increases for us over the last 25 years. Do like they do and keep a stiff upper lip.

I don’t think Republicans would vote for such a bill, even though a great many more people would have more money to spend and, since rich people don’t spend all of their money every year like we do, they would hardly be discomfited. It satisfies their argument: more folks would be making decisions with their money than before.

Maybe this idea is too extreme. How about a bill in which everyone gets a tax cut, except the middle classes get a big one and rich folks get a tiny one? Any Republican votes there? You think not? So do I.

Now if a little voice in the back of your mind is screaming “But that is class warfare!” you are right. But, hey, they started the war over forty years ago and we haven’t even started fighting back, so I am not talking about starting a class war, I am saying “Join the fight . . . or die poor.”

My main point here is that the Republican’s guiding principle that “taxpayers will spend their money more wisely than government” should apply to businesses, too. My example is Bill Gates. Bill Gates donated 100 billion (that’s Billion, not Million) dollars to the Bill and Melinda Gates Foundation, which he runs with his wife. So, where did he get 100 billion dollars to donate? Everyone knows the story, so I won’t repeat it here. The point to be made is that Bill doesn’t need 100 billion dollars that he “earned” to live on. Not to pay his electrical bill, nor his cable bill, nor any other mundane expense. He has enough other money to cover his living expenses lavishly until he dies with some set aside for his kids. So the $100 billion dollars, well, he didn’t really need it.

He accumulated $100 billion dollars he didn’t need . . . how? (I know I am leading you by the hand, but stick with me, okay?) He generated $100 billion he did not need, even to be wealthy, by charging his customers more than he really needed to. If you bought a copy of Microsoft Windows ever (I have a copy of Windows 1.0 in my collection!), you were overcharged. Every copy ever sold was priced way too high. (Bill Gates isn’t the only person to make more money than he could possibly spend from Microsoft. Let’s see, there is Paul Allen, and. . . .) So, what are the consequences? The consequences are that Bill Gates’ ideas are better than yours. He has $100 billion dollars to invest in any idea he thinks is a good one. My ideas don’t count for much, because I don’t have money to invest in them and the task of finding investors is daunting—they all want to make money and Bill’s ideas, the ones he is investing in, aren’t to make money but to make the world a better place but then, so are many of mine.

For those of you who think I am picking on Bill and Melinda, because they are doing such good things for hungry people, for poor people, etc. I say, “So?” (Thanks, Dick Cheney!) According to the Republicans, you and I would do a better job of spending that money than Bill and Melinda are doing. The Gate’s programs are the equivalent of “do gooder” government programs that we also have had no say in supporting. Like the government, Bill and Microsoft took too much money out of our pockets to support programs that we had no say in. And many of these Gates Foundation programs are for people in other countries. Egad, they are the equivalent of foreign aid!

Okay, I will stop picking on Bill and Melinda, a nice if somewhat dorky couple. Let’s look at the dark side. Other “business persons” have accumulated way more money than they could possibly spend and they are using their funds for not so “positive” purposes. Rich conservatives have endowed Washington think tanks from which cushy jobs are offered to disgraced Republicans. Also from these think tanks much questionable “reports” and “research” flows.

Companies in the health insurance field paid $609,000 dollars a day for the first six months of 2009, trying to make sure that any health care reform that was drafted didn’t hurt their bottom lines. Could you scrape up $609,000? Could you scrape up another $609,000 for tomorrow? Where can you get such amounts of money? Where did they get such sums? This is money that was outside of the huge profits paid to shareholders and monies paid to cover overhead and to pay claims, mind you. Do you think, maybe, it was from charging way more for their services than they actually needed?

These are examples of individuals and companies accumulating such vast amounts of money that what they think counts for far more than any one, any hundred, or any million of us think. Our representatives in Congress vote with their corporate sponsors, no matter what their constituents think, and they aren’t even smart enough to cover that fact up.

Allowing huge piles of money to be in the hands of so few people and corporations is anti-democratic. In fact, disparity between the rich and the rest of us in income and property and total wealth are all at all-time highs. If this continues, there will be no democracy, no “one man, one vote.”

So, if you think I am some kind of closet socialist, coming out, think again. This country figured out how to keep the wealthy in line. A line that allowed them every luxury a mind could dream of, just not enough wealth to buy the Congress or small countries. If you want to see what America looks like in such a system, look at the 1960s. The changes of the New Deal and from the stresses of WWII under Franklin Roosevelt’s presidency, given a little time to take effect through the 1950s, produced a balanced country where the rich were rich and the poor were poor but the rich didn’t run things entirely to their betterment. The middle class was large and robust and were the primary customers for American businesses, and if we could recreate such a balanced condition, business would boom (again) and poor people would be less poor and the middle class folks wouldn’t be huddling in fear of bankruptcy.

We did it before, we can do it again. Join the fight . . . or die poor.

Bonuses, Smonuses

Filed under: Economics,Politics — Steve Ruis @ 4:17 pm
Tags: , , ,

There has been much talk about the size of the “bonuses” being doled out to officers of Wall Street banks and brokerage houses. The outrage is real and deserved but their focus is off somewhat.

Performance bonuses are considered an incentive in most people’s minds, incentives to work hard and do well for the company. Unfortunately modern research has shown that such “external rewards,” such as baseball players getting additional compensation if they have “X at bats” or “Y runs batted in,” or students who will receive $50 for each A on their report cards, do work, but only for fairly mechanical tasks and fairly simple ones at that. So paying people so much for the first of 50 simple tasks, but paying them for a higher rate for the next fifty, and even more for the next 50, works quite nicely, thank you. (And, no, I am not building a case for “piece work” pay schemes.) The research goes on to tell us that for more complicated tasks, external reward systems flat out don’t work, in fact they can work in the opposite. (They go on to say that complex tasks are better served by internal rewards, but that is another topic.)

I am sure there is some cognitive dissonance around this, because I felt it when I first heard of the research results. Bonuses actually diminish performance? Hey, it’s why we do the research instead of just guessing. Quite a few things in life are counterintuitive. (This is why the word “counterintuitive” exists.)

My main point here is that “bonuses” paid to Wall Street employees as we are all reading about and decrying, do not work and I can prove this. If these “bonuses” actually provided a real incentive to spur hard work and inventiveness, that is if they actually worked, then all of these bankers and brokers would be quite happy with a standard form of performance bonus, the kind where if the company does better, everyone makes more money, if the company does poorer, everyone makes less money (proportionately, of course, based on the value of each position to the company). If the core idea of such bonuses worked, they would actually be supported and encouraged by these employees. But none of these people actually believe these incentives do or even can work, because every one of them gamed the system so that the “bonuses” are actually structured as a “heads I win, tails you lose” system. As these “bonuses” are structured, if the company does well, the bonuses are augmented; if it doesn’t do well, even if it has horrendous losses, the bonuses are as promised. So, these bonuses are not incentives, they are simply a form of delayed compensation, compensation that can’t be adjusted downward but can be adjusted upward.

You can look at executive compensation in the same manner. If Wall Street executives actually believed that bonuses provided actual incentives, and generated greater performances, why have their own compensation packages been structured so that, no matter what happens, they get paid, to the extent that if they get sacked for non- or even woeful performance, they are still due any “golden parachute” that they negotiated when they got hired. “Yes, you sucked as CEO; you’re fired, and here take this 56 million dollars as a token of a job poorly done.”

And, you can also establish that Boards of Trustees of these companies also believe that these “bonuses” cannot possibly work because they have agreed to the “heads I win, tails you lose” contracts for these CEOs and other executives.

One must ask why if no one, not the workers, not the CEOs, nor Boards of Trustees believe performance bonuses work, and they are backed up by sound psychological research, why are they using the word “bonuses” at all? Those of a suspicious mind might think that this may be a form of protective camouflage. “Hey, gang, if we call ‘em “bonuses” people will think we earned ‘em!” I am someone who thinks “incompetence” nine times before “malice,” so I think these contracts probable drifted into the position they are now in without much thought, well, aside from thoughts of greed, anyway.

So, what can be done? All of these companies insist that they will lose their best workers if they don’t pay them lavishly. Well, that is an interesting proposition. A savvy business person might want to look at it from a cost effectiveness basis. If I get rid of my most expensive employees and replace them with people who are only half as good, but I only have to pay one quarter as much, I will make money on this. (Don’t act shocked, this is a standard business practice when companies are laying off workers, sometimes for no other reason than it is cost effective to do so. If you haven’t read business history, check out how many people actually got fired within a month of the date their pensions were due to be vested.)

If you think so highly of your employees that you couldn’t do without your best producers, you probably think too much of them and yourself. At one point in the last 20 years, the rule of thumb was that once a corporate manager was one and a half years in a position, it was time to look for a new position higher up. And the standard recommendation was that, if there wasn’t a position available in company, it was time to look at other companies. Just how long have these people worked for you? Have they always been top producers? Are they planning to stay? Why are you so willing to stiff the stock holders to pay these employees who aren’t doing such a good job? Maybe the ones who almost brought the entire world’s economy to its knees could be done without. Just a suggestion, mind you.

A fair system would be to pay everybody a base salary pegged to the companies total business (or even a division’s total business). Then a portion of the companies profits could be set aside to be divvied up at the end of the year. If the company does well, workers get their share. If the company loses money, there are no profits, no divvying, and the next year base salaries would be pegged to a smaller number. Now, that would be a real incentive system. (This is not a pipe dream, I worked for 17 years in such a system.) And you could promise shareholders and workers a fixed share of the profits (which they could argue about being appropriate between and among themselves) and if management had a new capital investment plan to move the company into the future, they would need to convince both workers and shareholders of the validity of their plan because everyone would have to sacrifice some of their short-term gains for potential long-term gains. This might be a better basis for making such decisions and it certainly would make for better management evaluations. Management which makes poor recommendations sound like good ones should probably not stay intact.

So, if greed doesn’t work, how about a little democracy?

The Divine Right of Citizens

The existence of the phrase “the divine right of kings” tells you almost everything you need to know of human politics. Tens of thousands of years ago, when we were still separated into small tribes of hunter-gatherers, there were dangers to be faced: dangers from wolves, lions, tigers, and other large predators. (Contrary to the beliefs of some benighted Christians who show dioramas including dinosaurs entering Noah’s ark, the dinosaurs were long dead before even the remotest ancestor of human beings appeared, so we didn’t fear Velociraptors and T-Rexs because none were around to give us nightmares.) And large predators were enough to need a defense for, so the biggest and strongest members of a tribe would try to fend them off with a stick or by throwing rocks. There were also dangers from other humans, too. Because the biggest and strongest often took injuries in defense of the tribe, some deference came their way from the others. It seems obvious where the “job” of warrior came from. It was a natural mate to the job of hunter as both involved weapons, be they so humble as a thrown stone or a sharpened stick.

Some members of the tribe couldn’t compete for status as a warrior because they either didn’t have the physical strength or the skill with weapons to be a “leader of the pack.” If these tribal members were possessed of some cunning, though, they might use knowledge they acquired to create status for themselves. Women generally had the bulk of the gathering of plants and eggs and such, so they had cornered the knowledge base of what was edible and what was not, so the wily males “explained” events in the sky: such as falling stars, eclipses, the ever changing shape of the moon, predicting the seasons and weather, etc. Such men provided some security to the group, even if it were only peace of mind, and logically became shamans, etc.

When we became more social and more sedentary, group size exceeded that of small family groups and supergroups were created: groups of hunters hunting collaboratively, groups of fishers fishing collaboratively, etc. Rituals for burial and other significant punctuating events of group society required teams of officials to perform the rites. Leadership in such groups soon proved to be desirable, simply from the evidence that when someone led a group, it was more successful. Successful group leaders acquired even more status in the larger community.

From these situations our ideas of kings and priests have come. And relatively recently it became apparent to these two groups that they were stronger together than apart. Apart, they may end up contending with one another. Together they reinforced each other’s status and power.

The divine right of kings evolved from the competition of these two groups to dominate the other. Once invented, the divine right of kings meant kings were able to give orders, which if anyone challenged, they could say, “Because God gave me that right.” and the priests would back them up. And the priests would be able to count on the support of the kings because the kings needed “sacred” authority to back up their armed might. Both groups gained power together.

Of course, things got carried away. In medieval Europe and elsewhere people became the property of the warrior class (kings, dukes, barons, etc.) and could be mistreated or even killed with no repercussions. On the other hand, anyone who challenged the religious orders could be arrested and/or tortured, and even killed by the church with the complicity of the ruling class. Popes even sent many thousands of warriors to foreign countries on spiritual tasks (crusades, holy wars, etc.).

I must say it worked out well for the kings and priests, but isn’t it time we reconsidered this system?

Why do we give so much power to our “kings” and “priests?” Granted, we still need protection from enemies, so it seems to do away with the warrior class just yet. And, we seem to have the warrior class under control of civilian authority. And yet, some right-wing commenters still want our “king,” the President, to have the powers of a king, by allowing the government, for example, to take away the power of being a citizen to secure our safety. (And just when we serfs felt we had gotten out from under the heavy hand of a ruling class, these “commentators” are trying to argue that we get put back under!)

An Irish pub keeper was recently asked what to do with Catholic priests who had sexually molested children. He replied, “Take ‘em outside and hang ‘em.” Arguably a sentiment many share. Such an utterance 500 years ago would have gotten that man a noose of his own, so progress is being made. But, still, organized religion of all stripes has way too much power (and wealth) after having outlived much of its usefulness. (If you don’t think religion has much power any more, try running an atheist for President. And recently a group of Republicans wanted to amend the party platform for the state of Maine to include the phrase “freedom of religion does not mean freedom from religion” which harkens back about 200 years where not attending church could get you executed in this country.)

Isn’t it time we re-examined the deals we have brokered with our warrior class and our shamans and ask if they are really doing useful tasks for us? Is it really necessary for the U.S. to have troops stationed in over 100 other countries? Is it really necessary to give tax exemptions to wealthy churches which exist merely to aggrandize their own power?

Isn’t it time we looked into the “divine rights of the citizenry?”

June 2, 2010

Illegal Jobs or Illegal Drugs?

Filed under: Politics — Steve Ruis @ 10:40 am
Tags: , , , , , ,

It has been mentioned that the two most controversial things coming across our border with Mexico have some substantial similarities: illegal drugs and illegal aliens. Both are considered undesirable by the general polity of the U.S. and significant efforts have been made by the Federal Government to prevent the flow of both across the border. Such efforts have been, shall we say, less than successful. Both issues have been treated less than seriously as “political footballs” to kick around to get votes by being “tough” on something or other.

But one has to ask this question: one importation is people who take jobs Americans do not want, the other is drugs which are killing our children, so which is more important? And with regard to the immigration issue, and based on the lack of success of the “War on Drugs,” why do you think that the government will be more successful in a “War on Illegal Immigration”?

The real similarity between the two issues is that they are both driven by demand. It is important to note that business interests are not represented on the anti-illegal immigration side. They have no big lobbying effort or any effort really to address this issue. Since Adam Smith, it has been recognized that business people have always wanted a surplus of labor. Having extra laborers drives down the costs of labor. Whenever there are not enough workers of a particular kind, bidding wars drive up the prices needing to be paid for those worker’s efforts (e.g. the nurse shortages of the 1980’s and 1990’s drove up wages for nurses substantially). So, the right-wing position is fueled not by business interests but by “we don’t want those people becoming citizens because they become Democratic voters.” Yes, send me your poor, your tired, your huddled masses, but only if they have Green Cards and go home after work. Libertarians go so far as to want the 14th Amendment of the Constitution reworked so that the children of illegal immigrants don’t automatically become citizens when they are born here. (They tend to become Democrats, too. This is the same reason why conservatives had it in for Acorn; they organized poor people to vote.)

The demand for drugs and the demand for cheap labor drive both of these traffics. And supply side conservatives can’t see this some how (quite a blind spot, that).

The only solution to the immigration and drug problems is to lower the demand.

It is simple enough to do. The penalties for hiring “undocumented workers” must be more costly that the benefit accrued by hiring them. This is a simple economic fact. (This showed up in the health care debate in the form of an insurance company amendment to the final bill. Do you know what the penalty is for an insurance company denying a valid claim? It is $100 a day. Compared to the many thousands of dollars per day needed to treat some serious illnesses, you can imagine which course the insurance companies will pursue. The penalties must be greater than the benefits for any such counter-incentive to work.) So, significant penalties and swift, sure justice would lower the demand and Mexicans, while they may be desperate for work, are not stupid enough to make the effort to come here when no work is to be had. So, do this and you can tear down the fence and send the National Guard home, they will no longer be needed.

To address the demand for illegal drugs the simple solution is to make some recreational drugs legal. I have long advocated the legalization of certain recreational drugs, but I am not in favor of legalizing marijuana. (Surprised you, no?) The reason for my being anti-pot is the simple fact that smoking pot is no safer than smoking tobacco; neither is to be recommended. Smoking is a poor drug delivery system. I advocate a more enlightened approach, in fact, a market-driven approach! (Aha, surprised you again, no?) I would have the Federal Government conduct a contest, a contest whose task would be to create safe, non-abusable drugs. (Non-abusable drugs are merely drugs which have an optimum dose that is quite low. Raise the dose and the effect is diminished.) The top three drugs that meet all of the criteria (nontoxic, non-abusable, affordability, etc.) would receive government patents for 50 years to exclusively produce the drugs for the market. The taxes on these drugs would be quite high (to pay off the national debt, say) and use and sale of these drugs would be legal in all 50 states. Illegal drug demand would dry up to a small trickle supported only by anti-establishment types and the judicial hammer could be dropped on these miscreants quite heavily. So, people are going to continue to smuggle illegal drugs into a market that isn’t particularly interested in buying them? Uh, no, I don’t think so, too much risk, too little reward.

So, it is time for some “supply-siders” to be transformed into “demand-siders” and solve these problems.

Blog at WordPress.com.