Class Warfare Blog

April 30, 2013

Do You Feel a Draft? No? You Should!

Filed under: Politics — Steve Ruis @ 8:17 am
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We have drafted soldiers. We draft football players. We draft baseball players. We draft basketball players. But we don’t draft candidates for political office. We wait until they volunteer. Then we make them compete in a money contest called a “primary election.” Then we are allowed to choose which of the survivors we want in all of the various elected offices we vote for.

Through this process we have ended up with a large number of incredibly, stultifyingly stupid politicians. (I don’t want to pick on Texas, but sheesh!) Some of these people I wouldn’t let into my house to clean my carpets. But often they are the only candidate offered.

But we always have a choice between two candidates, no?

No.

There are a great many Congressional districts, for example, that are considered “safe,” thanks to clever computers programmed by Republicans after the last Census. (Why we can’t program computers to decide on electoral districts and get the damned parties out of it, I do not know.) Candidates running in “safe districts” know that all they have to do is win their primary and they will automatically win the general election because the Republican (or the Democrat) always wins in that district. And too often a knuckle dragging moron gets elected.

We need more capable candidates and we need a draft to select them. Then if we can eliminate or reduce the role that campaign finance plays, we may have real choices between capable candidates. And wouldn’t that be refreshing.

Miranda Rights and Wrongs

Filed under: The Law — Steve Ruis @ 8:13 am
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More than a few pundits and politicians are bemoaning the fact that the Boston Marathon Bombing suspect was read his Miranda Rights. If they only had delayed in doing that, they could have interrogated him more effectively, they say.

These people seem to think that these rights are something one doesn’t have until they are spoken to them after the commission of a crime. In actuality, the rights exist whether they are spoken or not. Only the suspect’s ignorance would lead him to talk when he doesn’t have to. And, if the popularity of shows like CSI and all of the other “police procedurals” are any evidence, I don’t see how anyone could not be aware of this.

So why are our politicians ignorant of this fact or are they just duplicitous?

I Just Don’t Get It

Filed under: Economics,Politics — Steve Ruis @ 8:10 am
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It should be clear to one and all at this point that the über-rich are getting über-richer at the expense of the rest of us. The costs associated by this surge in their wealth are huge: families destroyed by malignant unemployment, middle class lives degraded by stagnant wages (proving to us that no matter how hard we work, we won’t get ahead, which leads to “Why should I work so hard?”), political gridlock, people foregoing medical care because it is priced out of their ability to pay, faith in the justice and political systems degraded because the rich get special treatment, retired folks are being pressured to give back what little they have earned through government retirement programs, and there is a great deal more.

The rich have increased their share of the nation’s income from about 8% to near 25% in the last few decades. Their share of the nation’s wealth has grown proportionately as they minimize their tax burden by shifting it to lower economic strata.

But why? The Koch brothers don’t have enough money? They have billions and billions. That is not enough? Think about it. I have about 20 years left to live. If I had a billion dollars, I would have to spend $1400 per day for the rest of my live to spend it all. It is a huge amount of money. And the Koch brothers and their ilk are still accumulating. Why?

Is it so important that their ideas get promoted? That we deny what the vast majority of climate scientists are saying about the environment, so they can make even more money? Some say that the tipping point for climate change has already been reached and there is nothing we can do from this point onward. Our chance to act was in the last 30-40 years which they have blocked. My area, the Midwest, has one thing in its climate future: drought. And the Midwest and California feed this country and many others. What happens when people start getting hungry? Will the über-rich stand up and say “My bad.” I don’t think so.

Just what is so fucking important about these assholes acquiring a few more billions from the rest of us? Explain this to me.

April 29, 2013

Dump the Homeowner’s Exemption

Filed under: The Law — Steve Ruis @ 3:13 pm
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Before you dismiss me as a crank, let me explain.

The homeowner’s tax exemption is bogus and we should be rid of it for a couple of reasons. For one, it is the opposite of progressive. The more expensive of a house you buy, the bigger your deduction. Which means rich people get far bigger deductions than do poorer home buyers. Second, it does not, in any way, help people buy a house. All it does is make realtors fees bigger, nothing else.

Consider this scenario. You are out house hunting and you looking at a number of houses you like that cost $180,000. But there is no homeowner’s interest tax deduction. Then, voila!, the government passes a law saying that there will now be such a deduction. “Wow, that is so cool,” you think. But what really happened is your realtor did a little math and figured out that you could now afford the monthly payments on a $200,000 house because of that deduction. Again, you thought, “Cool, we might just be able to buy a nicer house that we thought.” But when you go looking, you find that the houses you were looking at before, that were for $180,000, are now priced $200,000 because their realtors did a little math and explained that with the new law, people who could afford to buy a $180,000 house can now buy a $200,000 house. So, you got a $200,000 house, but it was not different from the $180,000 you could have gotten without the deduction.

Obviously this didn’t happen like this, but the same thing did happen. The only people to benefit were the house sellers who got a bump just after the law passed and then after the market “adjusted” (house prices are determined by what people are willing and able to pay, nothing else) the only people to benefit were realtors as their commissions were now based on artificially inflated prices. Oh, well, the bankers got a bump, too, as there was more interest on those larger loans, but once the adjustment took place, there was no more benefit. So, the federal government is subsidizing realtor commissions and not much else.

But, But, If . . .
Now, if we do decide to forego this deduction, I want all current mortgage holders to be grandfathered in, but new mortgage holders will not be. All new house sales will be depressed somewhat as the market adjusts, so people currently trying to sell would suffer a tad, but housing prices have been clobbered by the recession and another couple of percent aren’t going to matter much.

Also, tax tables will need to be adjusted to account for the newly vacated deductions. This isn’t exactly difficult, any actuary could do it.

In the future, it would be nice if policy makers were to look at the real impact of laws before cementing them in place. Would you have been for a federal subsidy of realtor commissions? No, but a homeowner interest deduction sounds good.

It would be cool to go back and look at who was lobbying for this law when it was passed. On Wikipedia it says “Prior to the Tax Reform Act of 1986 (TRA86), the interest on all personal loans (including credit card debt) was deductible. TRA86 eliminated that broad deduction, but created the narrower home mortgage interest deduction under the theory that it would encourage home ownership. A New York Times article notes that, in 1913, when interest deductions started, Congress “certainly wasn’t thinking of the interest deduction as a stepping-stone to middle-class homeownership, because the tax excluded the first $3,000 (or for married couples, $4,000) of income; less than 1 percent of the population earned more than that;” moreover, during that era, most people who purchased homes paid upfront rather than taking out a mortgage. Rather, the reason for the deduction was that in a nation of small proprietors, it was more difficult to separate business and personal expenses, and so it was simpler to just allow deduction of all interest.

So, in 1913 the only people to benefit from the interest deduction on their home was basically the top 1%, ah, now it is starting to make sense.

The comment “but created the narrower home mortgage interest deduction under the theory that it would encourage home ownership” shows there wasn’t so much of a theory as a supposition. Again, very little thinking involved in policy making.

Misplaced Trust

Filed under: Economics,Politics,The Law — Steve Ruis @ 2:41 pm
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We all throw our trust around in often unwarranted fashions. Many people trust their employers way more that they have any evidence to support. We also trust our local politicians, even if we have had nothing to do with them. Basically, I see this as we all want to live in a world in which people and institutions are trustworthy, so we extend trust even though we have no real basis for doing so, a form of wish fulfillment.

This trust only extends so far, though. The farther one distances oneself, the less trust there is granted. We also suffer from what psychologists call “the halo effect,” which is if we like somebody or something, we like everything about them or it, whether there is any support or not. I once shared an office with a professor of mathematics. She was very good at her job. Her student evaluations were uniformly high, including on the question about the use of humor in her classroom. She basically got an “A” on this question although her class was virtually humorless. They just liked the fact that she was a really good teacher who made math learnable, but not fun. They weren’t expecting fun, but she got props for it anyway.

Which brings me back to the West, Texas fertilizer explosion disaster. As far as I am concerned, there should be criminal charges coming out of the investigation. The primary culprits, though, won’t even get its hand slapped—the chemical industry. Texas Governor Perry went out of his way to get federal responsibility for Texas fertilizer plants to be transferred from the EPA to the Department of Homeland Security. Now the EPA is the agency with the wherewithal to do a good job of oversight . . . Homeland Security, not so much. I don’t imagine Governor Perry got this idea out of the foam on the top of a beer one day. It was specifically requested by . . . the industries involved. They thought HS would be easier to manipulate that the EPA. The request, I am sure, was accompanied by a check to the Governor’s campaign fund.

Now, Texans aren’t particularly angry with the owners of the fertilizer plant. They say “they didn’t want that plant to blow up.” This is true, but if they had been following regulations, it could not have blown up fire or not. The owners lied on federal reports, lied to their community and created a situation, not allowed by law, that resulted in 14 dead and a huge amount of property destroyed.

Now a few Texans take umbrage at us “outsiders” chiming in. Their motto is “Don’t Mess with Texas.” I understand that, too. But those of us who want these people strung up are speaking up, so that these titans of industry don’t do this again or, if they do, it is much less often. And we are part of the same tribe; we are all Americans. We are all neighbors when it come to this stuff.

Yes, the people running the plant didn’t want that to happen. If they were taking orders from above, they should be shamed and let go. (Shamed because they didn’t protect their neighbors.) The real culprits are the people who ordered the skirting of what everybody now can see are reasonable regulations. And behind them are the also culpable chemical industries who have been lobbying state and federal governments to loosen the reins on them, so they can be more “efficient” and “productive,” providing good jobs for the community.

I think they need to take a look at what’s left after the explosion. No jobs there. Not a one . . . now.

And they are still doing it. A letter was sent to the President from some Congressmen, asking for oversight for these plants not be giving to the EPA because they were likely to be too zealous. This letter was also signed by agents of two of the chemical companies.

April 26, 2013

The Rich are Paying their Fair Share? Hardly!

On right-wing media sources you will hear them pounding the drum about how the rich are paying the bulk of “the taxes.” But this is an example of cherry-picking data, plus the data are always relatives (percents) and not absolutes. Let me show you why and how they do this.

For example, in 2005 the top 10 percent of households in the U.S. paid 45.1 percent of all income taxes (both personal income and payroll taxes combined) in the country. This was the highest of any developed country.

This is true, but . . . wait, don’t the bottom 47% of American households pay no income tax (the infamous “47%”)? So only the top half of household incomes are paying income taxes at all. So, this makes it much easier to build up a large percent of taxes paid by the top whatever. Basically the top 50% are paying all (100%) of the federal income taxes.

“The conservative holy grail of a flat tax has been achieved! We no longer have a progressive tax system.”

Note Please realize that this situation was brought about in a bipartisan manner as a way of supporting young families. It was not a nefarious plot by the poor and their myriad lobbyists.

And, what about Payroll Taxes? What about sales and property taxes?

Apparently when you take all of such taxes into account, the effective tax rate (including personal income taxes, payroll taxes, sales taxes, property taxes, etc.) everyone pays (rich, poor and in between) is about 20% of their income.

The conservative holy grail of a flat tax has been achieved! We no longer have a progressive tax system. Oh, it looks like one, but it ain’t.

Oh, and About Those Corporations . . .

Not only have the conservatives gotten households into a flat tax situation, look at what they have done with corporate tax receipts. Here are the data (source provided and please note these are actual receipts as a % of GDP so they are adjusted for growth in the economy):

Receipts by Source as Percentages

of Gross Domestic Product: 1934-2017

   

Fiscal Year

Individual Income Taxes

Corporation Income Taxes

1934

0.7

0.6

1935

0.8

0.8

1936

0.9

0.9

1937

1.2

1.2

1938

1.4

1.4

1939

1.2

1.3

1940

0.9

1.2

1941

1.2

1.9

1942

2.3

3.3

1943

3.6

5.3

1944

9.4

7.1

1945

8.3

7.2

1946

7.2

5.3

1947

7.7

3.7

1948

7.5

3.8

1949

5.7

4.1

1950

5.8

3.8

1960

7.8

4.1

1970

8.9

3.2

1980

9.0

2.4

1990

8.1

1.6

2000

10.2

2.1

2010

6.3

1.3

2011

7.3

1.2

Source: Office of Management and Budget, Historical Tables,
Table 2.3; http://www.whitehouse.gov/omb/budget/Historicals/
(Last accessed, April 13, 2012).

Start by noting that initially corporations and individuals paid at about the same rate (1934-1941). This continued until World War II when both individual and corporate rates jumped substantially (to pay for the war). But after the war, beginning in 1946, there was substantial downward pressure on corporate income taxes, but not individual income taxes. So, from being low and about the same to being higher and about the same, we end up with individual income taxes being six times higher than corporate taxes in 2011, and the individual taxes (in total, not just income taxes) have become non-progressive.

Shift the taxes off of corporations and onto individuals. Shift the taxes off of wealthy individuals and onto the poor and middle class.

Sound like a plan to you?

And they are still whining about how high corporate taxes and income taxes on the wealthy are! They aren’t done!

April 24, 2013

Motivated by Religious Fervor

The disclosure that the Boston Marathon Bombers were “motivated by religious fervor” possibly doesn’t surprise anyone and it shouldn’t. But can you imagine that they had been motivated by atheistic fervor? That they were really mad at all of the religious and wanted them to suffer? It is really hard to imagine. Has it ever been the case? I don’t think so.

Atheists are under represented in terrorist cells and prisons, yet the religious tell us that without religion, gasp, without religion we would be amoral, we would be no better than ravening beasts.

Once again, fear motivates people and not well at all. The Christian religion teaches that our own motivations are untrustworthy, only those guided by their priests and ministers are. Gosh, that couldn’t be just a self serving statement could it?

Around the globe the data are pouring in—the more religious a country or state is, the more violence one can expect.

The not so charming aspect of faith, is it is impervious to reality checks.

Plus all the religious can just tsk, tsk, and say “Their religion is the bad one.” It is interesting that Muslims think the same of the Christians in this country who mutilate their holy scripture as an expression of free speech.

I tend to agree with them . . . both of them.

The Dismal Science . . . Really!

Apparently the study of economics (formerly named “political economy”) has been called “the dismal science” since the mid-1800’s. The phrase was invented by historian Thomas Carlyle. At the time, the skills required for writing poetry were referred to as the “gay science,” so Carlyle decided to call economics the “dismal science” as a clever turn of phrase.

It takes some time, apparently, to grow into one’s name, but economics has done so: economics is the dismal science because as a science it is dreadful, quite dismal.

I am reading “Econned” by Yves Smith in includes a history of the transition of economics from a narrative-based discipline to a mathematically-based, science-like endeavor and it is quite appalling. The dominant trend in economics, neoclassical economics, has come up with the following “truisms”: markets are efficient, financial innovation transfers risk to those best able to bear it, self-regulation works best, and government intervention is ineffective and harmful. Do any of these sound familiar?

We have gotten to this situation through a number of effects. One is that economists have decided to put on airs, namely that their discipline is something approximating a “hard science,” like physics. All of that math rally does add an assurance that what they are calculating must be true, no? Another is that they have ignored the lessons learned in the other sciences (what you don’t know can affect you).

One such gaffe is an economic hypothesis that economies naturally reach an “equilibrium” as their natural state. Here is a simplistic example: a producer of widgets tries to sell them at price P, but that price is too high for most buyers, so demand is low. The producer, recognizing this cuts the prices and the demand picks up. If he sets the price too low, the widgets literally fly off the shelves and the producer can’t keep up the demand, so he realizes that he can raise the price, does so, and the demand slackens until he can keep up with it. This is “self-correcting behavior” and it is typical of equilibrium systems.

There is only one problem: despite the “self-correcting behavior” of the widget pricing scenario, economic systems are not naturally equilibrium systems and any “hard” scientist could have told them that. Since I am a chemist, I will use a chemical example. Let us take two chemicals and mix them: hydrogen and oxygen. These chemicals do react with one another quite well (in essence hydrogen burns).

2 H2 + 1 O2 → 2 H2O + heat

But if we were to put them in a sealed container, a different sort of situation occurs: namely that the reaction will not finish; you will be left with a mixture of all three chemicals when it “stops.” The reason is that when the atoms of hydrogen and the atoms of oxygen separate in order to form water molecules all of the atoms needed to remake the molecules of hydrogen and oxygen (H2 + O2) are still in the container (now in the form of water molecules). The atoms are immortal and are just rearranged into new combinations in a chemical reaction. The only thing needed to turn water back into hydrogen and oxygen is heat and the heat given off by the reaction is still in the container, so the reverse reaction becomes viable.

2 H2O + heat → 2 H2 + 1 O2

These two reactions cannot stop happening because all of the things necessary for them to occur are present. So what you end up with is called a “dynamic equilibrium” in which the two reactions continue forever, eventually reaching a situation where the total amounts of all three chemicals become constant. The reason for this constancy is that in the beginning only the reaction of hydrogen and oxygen to make water can occur because there is no water. As that reaction goes on there is less and less hydrogen and oxygen and more and more water. Consequently the first reaction must slow down as the chemicals diminish in concentration and the reverse reaction (water becoming hydrogen and oxygen) speeds up as more and more water and heat become present. The slowing down reaction must reach a point where its speed is the same as the speeding up reaction and then all appearance of anything happening ceases.

Now, what chemists know and economists do not, apparently, is that it is very, very hard to create such perfectly closed containers. If the heat in the above system were to leak out, the initial reaction would not be affected, but the reverse reaction would be as the heat is needed to make the transformation, so the “forward reaction” would continue and the “reverse reaction” would slow down. This is the basis for the self-correcting behaviors of equilibrium (or near-equilibrium) systems. But it is bloody hard (essentially impossible) to wall off a part of the universe and prevent heat from moving in or out. Look how hard it is to insulate your house, for example.

So, most systems are “open” and do not end up at some equilibrium point with opposing forces/transformations reaching a balance. Some systems, even an open container, can approximate a closed system but only for very short periods of time. For example, for just a few seconds, little heat can leave a container, neither can much liquid evaporate, etc. But this quasi-equilibrium is a very short term behavior.

The economist claiming that “all economies naturally seek equilibrium” didn’t even try to establish that an economy approximates a closed system (it does not); he just made the assertion and didn’t even indicate for how long this condition would last! From that assertion many “consequences” have been deduced. But if the initial assertion is wrong, none of the rest of it can be right, either.

These pseudo-scientific approaches, wrapped in impressive mathematics, have influenced some policy makers. Let me see: markets are efficient, financial innovation transfers risk to those best able to bear it, self-regulation works best, and government intervention is ineffective and harmful . . . hmm, I’m guessing Republicans (Hi, Paul Ryan!).

The only problem with these “principles” is that they are wrong . . . which any “hard scientist” could have told them, had they asked.

The sad thing is that economists have some standing in our politics. But if you had a room full of them and asked them to predict the future, you would get myriad answers. But once the future has happened, all of them, being proud academics, will say “I knew that would happen” and be able to give you complex explanations for why their particular pet (but wrong) theory predicts it to be that way. Explaining the past is often a route to predicting the future, but not if that is the only thing you do.

The European economists who are claiming that austerity will lead to new heights in Europe, contrary to mainstream economic thought, are seeing their economies tanking, just like mainstream theory would predict. Is this changing any of their minds? No, because reality doesn’t hold the same sway over economists as it does chemists and physicists. There is an old joke that says “you can lay 100 economist end to end and they still won’t reach a conclusion” but once they have taken a position they stick to it like glue, possible because they aren’t used to correcting their thinking when getting bitch slapped by reality, or maybe it is just ego driven.

When a “hard” scientist offers a new theory, it might receive some initial criticism (hopefully constructive) about its internal consistency, but the proof of the pudding is in how well it describes nature, so the testing begins: nature says this, the theory says that, do they match? This happens over and over until either the theory is discredited or folded into the mix of pre-existing theories. The approach is to try to prove the theory wrong and if we fail then maybe, just maybe, it is right. This doesn’t seem to happen much in economics. Consequently their theories are pretty but lack any real substance.

At predicting, economists are little better than priests. Priests insist that their god has a plan, but they haven’t the foggiest notion of what that plan is. How they can be so sure a plan even exists is part of the mystery, I am sure, but economists are pretending there is no mystery.

Economics is not the dismal science, at this point, it should be called the shameful science.

April 23, 2013

The Right to Bear Arms, not Guns

The Second Amendment whackos seem to think that the Bill of Rights gives them unfettered access to modern firearms. The strict interpreters of the Constitution know that this is not so. The right that is not to be infringed is to bear arms.

So, if you are one of those who beats a Constitutional drum for “original intent” or are a strict constructionist, then you are defending the right to bear: spears, halberds, polearms, bows and arrows, axes, crossbows, billhooks, pikes, lances, and, of course, knives and swords, and slings, and shields, etc. Oh, and catapults and trebuchets, and all those kinds of siege weapons.

Now this may sound ridiculous, it was meant to, but the Second Amendment does protect your right to bear these weapons.

I am sure the whackos would chime in at this point and say that during the Revolutionary period there were firearms (muskets, rifles, pistols, cannon, mortars, etc.) and these would have been included.

To be sure, s’truth, but does the Second Amendment allow you to own and fire cannon and mortars? What caliber? How much payload? What, you need a permit to own a cannon? You do not have unfettered access to tanks and recoilless rifles and Vulcan cannons? Government tyranny!

Strictly speaking all of those muskets, rifles, pistols, cannon, mortars, and so on were single shot weapons, meaning they had to be reloaded after firing a single shot. So, the original intent of the framers was that we have access to single shot firearms. Only somebody trying to re-interpret the original intent of the framers would think otherwise.

And the NRA still hasn’t addressed the issues regarding the recently defeated “gun bill,” specifically why it is legal and appropriate that federally licensed gun dealers be required to do a background check on each and every sale, but tyrannical to require ole’ Bubba selling guns over at the swap meet at the VFW do so.

Are you listening NRA? (I didn’t think so, listening isn’t their strong suit.)

Republicans Against Immigration Reform? Nah, They Just Talk That Way

Many Republicans and their right-wing media machine are doing back flips to avoid having to do anything to fix the immigration system. The latest claim is that the Boston Marathon Bombers are just the latest indicator that our immigration system is broken. We need to ban all immigrants from Muslim dominated countries! We need to rethink immigration reform . . . blah, blah, blah!

In their mad rush to simultaneously placate potential Hispanic voters and their xenophobic base they kind of miss on a few facts . . . like the family in question (the Tsarnaevs) didn’t come through the immigration system; they sought political asylum and were granted it by the State Department.

Somebody needs to throw these Republicans an intellectual life preserver but, considering their track record they would probably eat it.

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