Class Warfare Blog

May 20, 2018

Stupid, Stupid, Stupid

I read a comment the other day that set my head spinning. The comment pointed out that up until around 1970, the only way to increase agricultural output significantly was to put more arable land into production. Basically that had been done to all effective extents by well before 1970. We now note how people are trying to put very marginal lands into production with predictable disastrous results. (Hey, let’s cut down that jungle and raise crops! … jungles have notoriously poor soils.)

But right about that time came the Agricultural Revolution, sometimes called the Green Revolution. We managed to increase crop yields for our staple grains (rice, wheat, corn, barley) by the simple expedient of growing these grains on shorter stalks. Shorter stalks are stronger and they can support heaver seed heads without falling over from being too top heavy. We practically doubled our yields per acre of these grains.

This I already knew. What the comment pointed out that the old “acreage limited” model of agriculture, which took about 10,000 years to run out, supported a global population of about three and a half billion people. The Green Revolution doubled our grain supplies and, if you are not aware, those grains also feed our cattle and other livestock, so represent fairly well the entire food supply of the world. (You will find grain of some type in 90% of the foods you can find in a local market.)

So, we doubled our food supply starting in 1970 or so and now the world population is about seven billion people. It is an axiom of population biology that organisms expand their populations up to the limits of their food supplies. The fact that our doubled food supply (from 1970 levels) matches our now doubled population (3.5 to 7 billion) supports the idea that we are at the end of the effects of the Green Revolution.  This second phase took less than 50 years. (Think about it! Three and a half billion more people in just fifty years.)

So, what is next?

Since there is no intelligence in charge of humanity, it is likely that corporations that are exploring the genetic engineering of food crops will work up a solution. I have written before that these shortcuts to different organisms have more risks associated with them than the procedures used before (up to and including the green Revolution). But let’s say they whip up something that works and it again doubles the yields of these grains, what then?

Well, history and biology indicate that we will double our population again, this time to 14 billion people. Imagine the impact on food distribution and electricity distribution networks, on transportation systems (cars and roads, subways, air travel, on the lives of us all.

What is really scary is that the reliance on the plants created under the Green Revolution has shrunk the number of species under cultivation to a very small number. When there is a much wider diversity of crops, crop failures are not widely catastrophic, but when they are but a few kinds of crops being depended upon, well, think of the Irish Potato Famine.

Nobody predicted the Bubonic Plague, otherwise know as the Black Death. This disease killed over a quarter of the population of Europe. So, what happens if some new agricultural blight, on the order of a plague, wipes out rice or wheat. Since there are only a few types of rice or wheat under cultivation it means that such a blight may wipe out all of the rice or all the wheat or very large fractions of those crops. The repercussions would not be pretty: massive famines, food riots, insurrections, whole countries destabilized, etc. (Take a look at what is happening in Venezuela currently, being a manifestation of just bad management.)

I guess my question is not “what is next?” so much as “to what end?” We haven’t developed enough political maturity to determine a fair and equitable distribution of resources. We still operate on a “get what you can” basis. (Exhibit No. 1 President Donald Trump) Is there any upside to doubling our food supply again, other than corporate profits for Big Ag Science corporations? Do we need another seven billion people on this planet? Are we prepared to handle the changes associated with such an event?

All of the answers to these questions are, of course, no. Herds of lemmings running off of cliffs is a societal meme we created. Lemmings are not so stupid as to do that. So, basically we, as a people, are projecting that behavior onto those animals. And, we seem quite capable from doing just that.

Stupid, stupid, stupid.

Note The word stupid is used as a pejorative meaning lacking in intelligence. Rather, it means “slow” as in “slow on the uptake” or slow to learn (it has roots similar to those of stupor). Really bright people can distract themselves in sophisticated ways so that what is glaringly obvious gets missed for a long, long time. That stupid, that’s the one I mean.

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May 18, 2018

Good Guys with Guns … Missing!

Filed under: Business,Culture — Steve Ruis @ 11:26 am
Tags:

At least eight people were killed, and others were injured, in a shooting on Friday morning at Santa Fe High School in Santa Fe, Tex., according to law enforcement officials. (Sound familiar?)

But where were the Texicans, the good’uns with their shooting irons? Surely Texas is NRA country and some of those good folks should have jumped into the fray, slapped leather, and saved those lives. Plus shootin’ the miscreant woulda saved the cost of a trial and a hanging.

Or, maybe, the NRA is just a bunch of people who are “all hat and no cattle.”

May 7, 2018

Economic Apologetics

It seems that economists, some not all, behave much like Christian apologists. When challenged they respond with what sound like well-constructed arguments but which are just narratives with no evidence (or mixed evidence at best). Take, for example, this narrative:

“… most Americans subscribe to the view that market-determined gaps between rich and poor should be softened by government. The rich should be taxed, and the poor should be helped. But how much should government intervene? One common argument is that there is a trade-off between efficiency and fairness. If the rich are taxed and the poor helped through transfers, the hard work of the rich is punished and the idleness of the poor is rewarded. The rich cut back on their effort—for example, by not opening a new business—while the poor use their windfall to support their leisure, for example, by not taking an available job. The result, say the critics of income redistribution, is that society squanders much more than the $1 of income for each $1 of government help that actually reaches the poor. Redistribution, they believe, should be severely limited, used to address only the most extreme problems of poverty and hunger.” (Source: The Price of Civilization by Jeffrey D. Sachs)

This argument is quite popular right now amongst neoliberal politicians and most of the people in the Republican Party. (I’m shocked, shocked, I tell you.) But does this “narrative” hold water? Is there anything supporting it?

One need only go back into recent history to find that it does not. Take, for example, the rich. Back in the 1950’s and 1960’s the federal government had marginal income tax rates as high as 91%. Did this level of “confiscation” deter the rich from doing what they do? Let’s use the example of Fred Koch, the father of the Koch brothers. Since Fred died in 1967, his final two decades were under the federal tax rates indicated. Having worked for both Stalin and Hitler, he established much of his wealth before WW2. He died a very rich man, passing on his private companies to his son, Charles, to run. Was their any slacking of his pursuit of wealth because of the very high personal income taxes? The answer is no. The same holds for all of the other “titans of industry” of that time.

In that postwar period, the pursuit of the trappings of wealth for immediate gratification focused less on salary (much of which would have just been funneled off into federal coffers) and more on perquisites. Many CEOs had lush offices decorated with expensive art (the company owned them, the CEO didn’t). The company also owned the apartment the CEO lived in, the company limousine, the private jet, etc. For long term wealth, the rich bought and ran companies to increase their value. Since they owned their companies and did not sell them, the increase in the value of those companies did not get taxed. Basically they developed assets to constitute their wealth; they didn’t take it in the form of salary or profits.

Do you know of anyone who made an immense amount of money, north of say 100 million dollars, who stopped working completely? Most of those people just started working on their next hundred million. Billionaires want another billion, etc. Some, like Bill Gates, create a new job they enjoy more than their old one, in Gate’s case, one of being manager of a very large and very well endowed foundation.

Now let us consider the other end of the spectrum. Let’s take Ben Carson. Dr. Carson started out in a very poor family. He is now quite wealthy as a retired neurosurgeon and Cabinet Secretary. Did he stop when he had enough money to cover a nice lifestyle? Did he kick back and put his feet up? No? If you look at any of the rich who have published their stories and select out the ones who started poor (not Mitt Romney or the Walton heirs), every man Jack of them blew right on through any easy living stopping point. Nobody does, except maybe big lottery winners and that situation is quite different. The “poor use their windfall to support their leisure” just doesn’t show up anywhere except in the stories these people tell one another. The majority of the poor work, many work multiple jobs. If their salaries were to be doubled tomorrow, do you think all of those people would be satisfied with their lives at that point and work no harder than they had been or, as is implied, work less? I suspect this would only happen with the people who are working so much now, just to get by, that it is ruining their health, their relationships, and families … but they would keep working.

This “narrative” regarding “income distribution” is a story the well-to-do tell themselves to make them feel as if there is justification for their viewpoint, a viewpoint totally unsupported in reality. So, where do they get this viewpoint? I suggest, in the case of the U.S., that it comes from their religion, not the religion of their scriptures, but the one they hold too now, the one adapted by the religious and secular elites (the rich) to serve their needs. While scriptures clearly talk about things like “how you treat the least of us, you treat me (Jesus)” the current religion talks about the poor being shiftless and lazy and unworthy and … I think you have the picture. I am sure some racial animosity is stirred in here, but that also serves the interests of the religious and secular elites, so they do not discourage it.

Just as with the bullshit arguments of religious apologists, we need to challenge the bullshit narratives of the priests of the new order, the economists.

April 30, 2018

Cynicism Comes Naturally Now

Filed under: Business,Morality — Steve Ruis @ 9:48 pm
Tags: , , ,

 

As I was perusing The Guardian this morning, I saw the following headline: “Big Bang: An oil refinery exploded in Wisconsin, forcing thousands to evacuate.”

My immediate thought was “Hmm, gas prices must be trending into the “too low” zone.” This thought stems from the U.S. oil community’s common practice of taking a refinery off line for “maintenance” or “service” and because we have a deliberate paucity of refining capacity (no refineries have been built in the last 40 years or so), every time a refinery goes “off line,” supplies of refined petroleum products, e.g. gasoline/petrol, go down and prices go up.

The industry often talks about how difficult it is to get a new refinery approved for construction (Aw, c’mon, even in Texas?) and how important regularly scheduled maintenance is, but these “problems” always seem to happen fairly shortly before the summer driving season, when prices are expected to be higher anyway. By making these “changes” a fair bit before the summer driving season, by the time motorists are filling their tanks in the summer, they will have forgotten the “issue” that “caused” the price increase.

Possibly there have been too many arbitrary “maintenance” breaks or possibly the site was in dire need of retrofitting and the company felt the insurance company should pay for a substantial part of it. I just have a feel that it “weren’t no accident.”

I used to view cynicism to be negative, but now I consider it to be a rational approach to the common behaviors of corporations, politicians, etc.

April 17, 2018

Taxing the Rich: A Good Idea or Not?

To those whom much is given, much is required.

The standard narratives regarding not taxing the rich are quite bankrupt but are still used, much like the tired old arguments of religious apologists (there is always a new audience to whom these arguments make sense). The usual thing touted is that the rich are the job creators and if you tax them (at all?) they won’t take risks and start new companies which hire workers and we all suffer thereby.

As a counter narrative consider the story of Toys R Us, a huge entrepreneurial success story, which ended in a financial meltdown. The company, however, made its owner rich when individual and corporate taxes were ever so much higher and met its demise in a time when those taxes became ever so much lower.

Read this fascinating story here.

The “standard narrative” of the rich about the rich is they made their money “themselves,” so they “deserve” the rewards. But in reality, does anyone make it themselves? Or is it like personal gifts one is born with and developed, in which we deserve some credit for the development but much of what happens to us and because of us depends upon things like genetics, luck, externalities (like available electricity and good roads provided to all), circumstances of birth (being born into a rich family is a strong marker for “becoming” rich)?

March 1, 2018

The Tax Cut Was for the Rich? Really?

If you are in the U.S. you should have gotten your tax cut by now. This is in the form of revised withholding tax based upon new tables. Since taxes will be lower, then less needs to be withheld from your paychecks each month and the withholding tables were adjusted beginning in the month of February.

I checked my withholding and voila … I had $164.88 less withheld last month. Multiply by twelve and that means I have $1978.56 more money available for the coming year. Now, I do not trust these calculations. That is just what is being withheld, it is not the actual tax which I will not learn about until a month or so into 2019, so I am squirreling away some of that windfall just in case.

So, my taxes, presumably, are being cut almost $2000. I wonder how well some of the rich folks did?

Warren Buffet, of Berkshire-Hathaway fame, reports that his company made $29 billion dollars the same way, wait … twenty-nine fucking billion dollars!

Okay, well that is a very wealthy company, how does that stack up against its earnings otherwise? The company’s annual statement declares:

“But 2017 was far from standard: A large portion of our gain did not come from anything we accomplished at Berkshire. The $65 billion gain is nonetheless real — rest assured of that. But only $36 billion came from Berkshire’s operations. The remaining $29 billion was delivered to us in December when Congress rewrote the U.S. Tax Code.”

So, this very successful company made $36 billion dollars through its own efforts … and then $29 billion more in the form of a GOP handout. But, we can be sure that B-H will spend all of that money to boost the economy … or maybe issue bonuses to its few employees … or maybe raise the wages of those few employees. But wait, B-H owns a whole bunch of companies and, in toto, they have 367,700 employees. With that $29 billion they could give each of them $7887, but my guess is that that won’t happen. I won’t be holding my breath for any such miracle as large corporations are doing exactly what they did the last time they got a tax cut. They are buying back their own stock, which raises the price of said stock, which benefits shareholders (84% of all common stock is owned by members of the top 10%), especially a subgroup of shareholders called “corporation executives.” Yep, the people who directly benefit from this action are the people deciding on that action. Anyone surprised at this needs to get a reality check done.

Oh, and the GOP is expecting the “tax cut” to win them the next election. Ha ha ha ha ha … I guess that could happen if the opposition were total morons … oh, wait …

 

 

 

February 16, 2018

The “Right-to-Try” Scam

There seems to be a movement to disrupt or remove “regulations” on pharmaceuticals. I mean why should those poor companies have to jump through all of those hoops to get a drug to market? This is called the “right-to-try” movement. Even President Trump has heard of it (ergo Fox (sic) News reported on it).

So, would people who are in need of some medical help be given the right to try unproven pharmaceuticals? This has been on option for richer citizens for quite some time. At the peak of the AIDS epidemic, people who could afford the effort were heading for Asia and Mexico to try all kinds of “therapies” to save their lives. I am unaware if any of these proved a source of drugs that ended up actually helping people so afflicted.

Or, is this just a cynical scam of “let’s try out drugs on desperate poor people?”

I’ll guess I’ll believe it when these assholes suggesting this shortcut to the clinical trials needed to verify a drug’s effectiveness line up to test out those drugs themselves. I suggest that what they see in this future is unproven pharmaceuticals are “tried” and then anecdotal evidence of cures is available (or fabricated) and sales soar through the roof. When problems occur (ineffectiveness, horrific side effects, deaths, etc.), the companies can pleas “How could we have known? They had a “right-to-try” and exercised it. We thought it would work. It is sad; our thoughts an prayers go out to the afflicted.” Typical of plutocrats it is: heads I win, tails you lose.

Assholes.

(Try a key word search for thalidomide.)

 

 

January 12, 2018

Oh, If Someone Else Will Pay For It, Sure

Walmart, the nation’s largest private employer, said on Thursday that it would raise its starting wages, give bonuses to some employees and vastly expand maternity and parental leave benefits for its army of more than one million hourly workers. The retailer said that it would use some of the money it expects to save under the recently passed Republican tax bill to pay for the raises and enhanced benefits.

Walmart said it would increase its starting hourly wage from $9 to $11, and provide one-time cash bonuses of up $1,000 to hourly workers, depending on how long they have been with the company. The wage increase brings Walmart in line with some of its other retail-industry rivals amid a tightening labor market. Target raised its base pay to $11/hr last fall.

So, Walmart is struggling to keep up with Target? WTF?

Within hours of its self-serving announcement, Walmart undercut its triumphal message when news leaked that it was closing 63 of its Sam’s Club stores.

So, was the wage increase a smoke screen? Some “good news” to cover the “bad news” to follow? Otherwise why make the announcements on the heels of one another?

And, since Walmart is using its “tax cut” to pay for some of these employee benefit increases, how much of it we do not know, are they saying “Gee, now we can afford it?” Walmart has made huge profits for its owners and investors for decades, large enough that they could have been a leader in how to treat their employees. But no, Walmart would rather their primaries get to become billionaires than their workers to have a living wage.

And if anyone claims that Walmart is paying the “market price” for its labor, I will scream! The “market” is not magic, in fact it is a political construct that has been manipulated to create the lowest possible labor costs for its participating companies. The “market” is something that is a lousy guide for any endeavor. Worse are “free markets.” Any decent economist can tell you that unregulated markets doom the sectors they serve. In fact markets cannot thrive without regulation. So, why is one of our major political parties campaigning on a “regulations are bad, we must get rid of them” plank? Ask the people who are paying for those opinions to be espoused and actions taken. (Hint: it ain’t you or me.)

As to who will actually pay for those raises, look forward shortly to the Repubs to cut benefits to poor people. Why? Because the tax jiggering they have pull off is going to lower federal tax receipts and “we won’t have the money” to pay for such frivolous expenditures. Look for Walmart employees, a class of workers who benefit from the government programs lined up for haircuts by the GOP, even with their raises and bonuses to be less well off a year from now than they are now.

Three Billion = Not Enough

Today, Carrier, the profitable heating/ventilation/air conditioning company, owned by United Technologies Corporation, a federal contractor whose climate, controls, and security division, of which Carrier is a part, reported three billion dollars in operating profit in 2016—is letting go of more than two hundred employees in its second and final wave of Indiana-based layoffs, which began last July. In total, the company will be laying off more than five hundred employees as it moves manufacturing jobs to Monterrey, Mexico. Many of those employees voted for Donald Trump, who made saving Carrier’s “big, beautiful plant” one of his most repeated campaign promises. It was part of his broader pre-election claim that “A Trump Administration will stop the jobs from leaving America.”

Do realize that careful analyses of such moves often show the savings are minimal. Because the jobs are no longer near the U.S.-based managers, another level of managers has to be hired. Then there is transportation costs, and…. One thing you can be sure will be affected is their stock price. “Shareholders” love these moves, why no one knows. I suspect it is the choir praising the minister as both managers and shareholders belong to the same church, the Church of Greed.

Three billion dollars in profits in just one year and a sterling reputation for quality and … oh, we have to move to save the company? WTF?

January 8, 2018

Pigs at the Private Trough

I have written before about CEO compensation, mainly that it is being manipulated by the CEOs themselves and their hand-picked boards of governors (often made up of other CEOs). This largess isn’t supported by history in this country and now a major study by Bloomberg researchers has driven a stake into any argument that these overpaid CEO’s are worth what they are paid. A post on OurFuture.org stated: “The Bloomberg researchers looked worldwide at major corporations of similar size and heft. In all, the researchers examined corporate pay records in 22 nations. In not one of these nations, Bloomberg found, do the executives of top-line firms make anything close to the paychecks of America’s corporate execs.

“In fact, America’s top corporate executives are taking home, on average, quadruple the average CEO pay that comparable top execs in the rest of the world are making.

“If this huge pay difference simply reflected a “marketplace” judgment on the sheer talent of America’s top execs, top U.S. corporations would be totally dominating global markets, outselling their foreign rivals by wide margins in everything from cars to computers.

“U.S. corporations are doing no such thing, of course. In one key global market sector after another, foreign corporations that pay their CEOs much less than U.S. CEOs are running neck and neck with their U.S. counterparts — and often leading the pack.”

CEOs and their cohort (business executives) are the largest growing segment of the 1% and are major drivers in the efforts to establish even greater wealth and pay inequality through manipulations of the government. If they were insects we would not hesitate to spray them out of existence for the pests they are.

I have suggested a way to dial back these bloated CEO salaries. It is relatively simple. If you like your current CEO, renegotiate his contract around a salary 50% of whatever they are currently making. If they say that they will “take their ball and go home,” say “fine.” Go to the Vice-CEO and offer them the job at 50% of what you were paying your current CEO. In all likelihood they will jump at the opportunity to improve their resume, but if they do not, go to the next most senior executive and offer him/her the job. You will find a taker and your company will not suffer much if at all. If you are in favor of a “kinder, gentler” process, you can make the reduction to 75% or whatever you deem appropriate. If the subordinates to your current CEO are also making bloated salaries, the same process should be applied to them. We certainly would not want the top executives making less than their subordinates! (Hey, the top guys used this to ratchet their salaries up, we can use it to ratchet the others’ salaries down.)

The fact the foreign companies that are doing as well or better than our companies are “getting by” with CEO pay one fourth of what we are paying says something. Heck, if you can’t find anyone in your corp who will take the job at 50% of current CEO pay, offer it to one of those foreign executives. To them the job will come with a pay raise.

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