Uncommon Sense

January 20, 2022

Are You a Free Market Advocate?

It has been tried.

https://mitchellglennfrommichigan.medium.com/free-market-economics-is-a-disaster-just-ask-a-chilean-629e9c10d270

It was a unmitigated disaster.

Then, why are these ideologies still being preached here? Well, in Chile, some billionaires got everso much richer. Pssst . . . follow the money.

January 11, 2022

Why Are We Working So Hard?

It seems indisputable that Americans work harder now than ever before. Questions abound such as “why do we allow this?” and “what is it about our culture that makes this a positive?” and yada, yada, yada.

I remember reading an article in Scientific American quite some time +ago along the lines of “labor saving devices don’t” . . . don’t save labor, that is. When household appliances came around, like the electric vacuum cleaner, we ended up vacuuming more than we ever swept the same floors with a broom. The authors believe they identified the culprit: our standards changed. In the case of the vacuum cleaner our standards of cleanliness changed when a new level became available without large amounts of labor to pull it off. In that case, we were the cause of the additional labor. In this case. . . ?

Economists looked at post-war America and claimed that productivity gains would result in workers dropping from a 40-hour workweek to as low as a 15-hour workweek, well before now.

Well, what happened?

Greed happened.

For that prediction to have come to be, productivity gains had to be large, and they were. Check. Then those gains need to have been credited to the workers and their hours reduced at the same pay. Uh, that didn’t happen. What happened is the increases in income from the increases in productivity were pocketed by executives and owners. Call it the “Trickle Up Effect.”

Why any reputable economist would think that workers would benefit by their hours being reduced at the same pay is quite beyond me. In the after-war period, worker’s wages went up in lock step with worker’s productivity, but that was because labor unions fought tooth and nail to get those pay increases. There were more strikes post-war than I could count. But the oligarchs saw what was happening and bribed our politicians and judges to disempower unions, and as the number of strikes fell, so too did the pay increases. Those pay increases actually fell to almost zero (when corrected for inflation). And since you are probably not as old as I am, you probably don’t remember that pay increase came in pairs. One part was called a “cost of living adjustment” which corrected salaries for lost purchasing power due to inflation, and the other part were actual pay increases, aka “raises,” often based on productivity increases or flat out company performance.

And, it wasn’t enough that the fat cats took all of the wealth created by those productivity increases, they also chiseled workers wages, including outright wage theft, chiseled numbers of jobs, pushed jobs that lacked union coverage (by replacing union workers with contract workers), and then doubled down with the Big Kahuna of tax scams. They transferred tax burdens from corporations and the wealthy onto the middle class. Ronald Reagan bragged about pulling off a major tax increase without negative press in the form of “Social Security withholding.” We got a small tax cut (the fat cats got a bigger one) and at the same time we ended up paying that back and more as increases in SS taxes.

The US ranks near the bottom in taxes paid as a percentage of corporate income. Oh, and corporate profits are at an all-time high, setting new records every year if not every month for the past decade or so.

The lesson is clear. We can have our piece of the pie, but only if we are willing to fight for it. If we stay passive, it all slides uphill, against gravity, into the pockets of the already wealthy.

January 10, 2022

The FED Fights Inflation by Making Illegal “Loans” to Big Investment Banks

Filed under: Economics,Politics,The Law — Steve Ruis @ 11:23 am
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Read it and weep.

https://www.nakedcapitalism.com/2022/01/michael-hudson-what-is-causing-so-much-inflation.html

“But the Fed isn’t saving the real economy. It’s saving the gamblers.”

January 6, 2022

Justifying One’s Existence

Filed under: Economics — Steve Ruis @ 10:18 am
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Apparently the U.S. Federal Bank is looking to raise its interest rates to combat inflation. Ho hum, talk about reporting on the obvious. The problem, this time, is that the inflation showing up is in areas like automobiles, energy, and food. Interest rates have no effect on those in these situations. The inflation in the prices of cars is due to a lack of supply to meet the demand. Why the lack of supply? The manufacturers do not have enough computer chips to make the cars as designed. Fed actions have no effect on supplies of computer chips coming from foreign countries. Food shortages are causing inflation but those are COVID related, with respect to man power and distribution woes.

So, why is the U.S. Fed taking action?

Sometimes I think these actions are simply to justify their existence. They say “See, we are doing something.” Even if the something being done will have no effect whatsoever.

December 19, 2021

Ye Shall Reap . . .

Filed under: Business,Culture,Economics,Education,Politics — Steve Ruis @ 9:32 am
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For several decades now, teachers have been demonized as the source of “the problem.” The problem, basically, is why students are not getting better. This problem is rather strange. Why would a, say, new crop of fifth graders do better on a standardized test than the previous group? It is not the same group being retested, it is a new group, being taught much the same way by much the same people. Surely this is a manifestation of the old saw defining sanity as doing the same thing over and over and expecting different results. Makers of sausages, for example, don’t expect each batch to be superior to the previous batch. In fact their quality assurance systems are set up to ensure that each batch is at least as good as the last batch . . . as good, not better. “Better” only comes from research and development and in the case of sausages, test kitchens.

Nonetheless, teachers have not only been targeted as the problem but also not part of the solution, a second insult. Then some states have stripped collective bargaining rights from teachers. Some have hired Teach for America “teachers” rather than fully certified teachers, even in violation of state law. Many places have instituted “charter schools” and “voucher schools” in which the normal labor protections of the state do not apply and unions are blocked.

And then teachers asking for wage increases have been characterized as “greedy” and not caring about “the kids.”

Many of these “movements” have been supported by corporate America and then when the inevitable happens, those same people stand gobsmacked and don’t understand what happened.

What is the inevitable, you ask? Good question.

Well, let’s see. Enrollments of college students in teacher preparation programs have plummeted. Teaching is not being seen as a desirable, or even stable, profession. School districts all over the country are reporting higher rates of “retirements” and teachers just quitting. And many districts are reporting extreme shortages of teachers when trying to hire them.

This is what you get when you piss in someone’s pocket and expect them to thank you for the warm feeling you just shared with them.

November 6, 2021

They Just Don’t Seem to Want to Work

The pandemic has made it obvious and clear that there is a whole stratum of our society composed of individuals who just don’t want to work.

Yes, I am talking about the idle rich.

The idle rich, living on unearned income/capital gains don’t produce anything, and therefore do not contribute to society. Instead they leech off of those of us doing meaningful work.

We need to curtail these sources of unearned income, so that the “job creators” will get back to work producing jobs and goods and services the American people value. Speculative market activities need to be reduced through transaction taxes or some such mechanism to reduce the speculations that are at the core of the incomes of the idle rich. About 100 years ago there was a sentiment that unearned income needed to be taxed at greater rates than income earned via the sweat of one’s brow. That sentiment has been reversed though the machinations of the idle rich by their bribing of politicians to make rule changes on their behalf. These changes need to be rolled back, and unearned income needs to be taxed at higher rates, so the idle rich aren’t being induced to waste their talents outside of the world of work.

Now, I am not going to draw conclusions about the idle rich regarding their behaviors, although some have, calling them lazy and slugabeds. But they have been seduced by easy unearned money and for the good of their souls and our society, that has to be stopped, and the sooner the better.

November 5, 2021

Capitalism Fails Again

Filed under: Economics,Politics,Reason — Steve Ruis @ 8:02 am
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This is a fascinating post on Medium.com about the shipping issues we currently face: I’m A Twenty Year Truck Driver, I Will Tell You Why America’s “Shipping Crisis” Will Not End.

This is another example of capitalism failing badly. When you read this article note that none of the involved players has an incentive to solve their part of the problem and that they are sitting back waiting for “government” to step in and pay for the needed changes.

This is another example of capitalism failing badly.

This is not the first occasion of this happening. Take our electrical grid, for example. Analyses going back decades state that it is a shambles compared to what we need and that it constitutes a strategic weakness, that is a political bad actor, expending little in the way of resources, could bring the grid down for days or weeks, crippling our economy. None of the component parts of the system, however want to pay for upgrading their segment as it will be expensive, so they are sitting back, waiting for federal funding for the needed upgrades.

And, I suppose you haven’t notice the state mobilizing to repair the bridges, roads, and whatnot under their oversight. No? Neither have I.

Investing large amounts of funds in infrastructure is not something any corporation is interested in now, because there are no incentives for doing so.

So, the next time you hear someone extolling the magical benefits of capitalism, you might want to ask them about a few of these “issues” for which capitalism’s only response is to pretend it is socialism.

November 2, 2021

More Brilliance by Ian Welsh

Filed under: Economics,History,Politics — Steve Ruis @ 8:04 am
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I have made this argument before but no where near as well. In you are interested in China, the U.S., or our immediate future, this is a very good read.

China’s Economic “Miracle” Was Normal

October 19, 2021

What is a Corporatist Society?

(Sorry this is so long. It seemed warranted. Steve)

If you live in the U.S., just look around, you are living in such a society right now.

This country was founded as a republic, not a democracy, a republic being a state in which supreme power is held by the people and their elected representatives, and which has an elected or nominated president with powers limited by law rather than a monarch. We created a government in which each of us was no longer the subject of some monarch; we were citizens, not subjects.

That is all fine and well, but we lost all of that a while back. We are now back to being subjects again. While there is no monarch there is a ruling clique of corporatists, meaning that our governments are run for the benefit of those corporations and subject to their desires and whims, rather than our own.

Consider the fact that our national government only pays attention to the needs of what is called “the donor class,” which you and I know as the filthy rich. If you are a substantial donor to a political party, your needs are attended to. If you are middle class or poor, you have zero chance of getting any attention, even from those elected to represent you. And “zero chance” is not hyperbole, that’s what the research showed.

So, the very rich are running the federal government and most of the state governments in the same fashion. So who are these “very rich” people? We used to think of the very rich as those with inherited wealth, but those days are past. Sure, there are a few very wealthy people who inherited their money and they got inheritance taxes reduced to zero so they can pass it all onto their children, but they are a small minority now. The very rich are now typically corporation executives. And they have corporatist mindsets.

A corporatist mindset is believing that corporations are the best structures to govern human activities. Did not a corporation recognize their personal qualities and reward them mightily. How could they be anything but perfect? You will have heard from these people that “government should be run like a business (aka corporation)” and “schools should be run like businesses/corporations,” etc.

These people have gotten the courts they purchased to establish that corporations have the rights of citizens, making the transition from imaginary person for business purposes only to political person in one court ruling. The rights of “corporations” to donate unlimited funds to political campaigns was established recently. Oh, and if you thought that the employees or even the shareholders of a corporation got to determine where its “campaign donations” went, dream on. Those decisions are made by the executives of those corporation, aka the filthy rich.

Now you may be thinking that this is all a bit much, but if you take a step back and look at the life experience of just any old citizen, you will see what is involved. For example, when a child is born, whether their mother got good medical care depended upon whether they had good insurance. Poor pre-natal medical care is part of a pattern that results in skimpy lives for the children. And good insurance is a fringe benefit associated with a shrinking number of jobs and are controlled by the employers (aka corporatists). So, you are born and grow up and then attend school. So, what are you taught in school? Increasingly, and all the way up and down the ladder, that education is focused on acquiring a “good job” when you become an adult. Recently education reformers wanted you to be asked to read more “informational texts” and less classic literature. My home state of California used to have a series of “readers” for each grade level. The works to be read were challenging and included extracts from Mark Twain, the Bible, James Fennimore Cooper, Nathanial Hawthorne, Harriet Beecher Stowe, Richard Henry Dana, Jr., and more of their ilk. Obviously those California State Readers tended be supporters of the status quo, patriotic, and so on but none of them, to my recall, involved a shop manual for a Ford pick-up truck or a treatise on writing contracts. But now that the corporatists are in charge they want to make sure you can fix the department’s printer when it jams. They have no need for humanist texts that allow us to see one another more clearly and see the virtues that make a society that makes for happier and safer citizens, no need at all.

The corporatists now in charge have a Taylorite view of humanity that makes each of us a cog in their mechanism. So, if our growing citizen goes to college they will find that more and more the programs there are tailored, pun intended, to jobs they might get. If you ask students what their goals are, the majority will respond with “to get a good job” or “a job that pays a lot of money.” They are not stupid, they got the message.

So, they graduate, or not, and they seek and acquire a job. Who in that job has the bulk of the power: the employer or the employee? Analyzed economically, there should be a 50:50 power balance there. This is what free markets create, or so say the corporatists. The corporatists absolute hate free markets. But they recognize the propaganda power of the word “free.” The markets they like are those they can manipulate and dominate, and dictate to. A “free market” is a level paying field and only chumps play on a level playing field.

The corporatists used their political power to not only expand their own power but to limit the powers of their opposition. Labor unions, for example, were quite powerful after WW2. Have you notice them lately? No? That is because the corporatists used the political power their money bought to crush them. While the private sector used to have about 33% of its jobs covered by a union contract, that is now about 6%. Crushed. The only remaining institutional power that can oppose the wills of the corporatists is government and the corporatists have bought enough politicians to make that source opposition neutered.

So, who has the power in the employee-employer relationship? The employers. And they use it. They arbitrary transform their employee’s pension plans into plans that cost them much less and pay their employees much less in the process. They change work rules as they see fit. They ship entire factories overseas and if they keep you on as an employee, it is only to train your less expensive replacement.

So, you work and you work, then you are fired so they can hire a cheaper replacement. Corporatists are so addicted to that power that they often fire people critical for their corporations or fire so many support staff that their critical people look for other employment because of that. Basically, if they meet their stock market goals and retire before it all falls apart, corporation executives are good with that. Golden parachutes make for soft landings.

So, you skimp along or are “comfortable” in your retirement and are no longer of interest to the corporatist, other than as a voter. Old people vote, so the corporatists have massive propaganda machines that use fear and other levers to get you to vote in alignment with their interests. They also trump up phony issues to keep you riled up and distracted.

Then you die, your whole life having been dominated by corporate interests. You served “your country” well, were a good provider for “your family,” and a pillar of “your community.” Now replace all of the parentheticals in that sentence with “your corporation(s)” and you will have it about right.

Please do not mistake my intent. I am not claiming there is a cabal of corporations or some Big Brother Corp. running the show. No, it is people with corporate mindsets, acting independently and occasionally in concert who are doing this.

And we let them and continue to let them by buying into the way they see the world.

The COVID pandemic is showing the corporatists what is in their future. People are not returning to the bullshit jobs the corporations created. People are figuring out different ways to live. People are starting their own businesses which are not part of the cabal.

It is a start but a lot more needs to be done.

If you are interested in this topic please read “The Unconscious Civilization” by John Ralston Saul. I dog-eared so many pages that I gave up on a book report. I will just weave what he saw into my writing more and more.

Dollars to Donuts

Filed under: Culture,Economics,language — Steve Ruis @ 7:32 am
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There is a phrase old people use . . . “I’ll bet you dollars to donuts that. . . .” Only old people use this phrase because it is a confidence statement, making a bet where on one one side you are putting up dollars and on the other they are putting up donuts. This was, of course, back in the day when a donut was 10¢ or less.

Now that donuts are close to a dollar a piece, this is not such a daring bet.

Who says inflation has no lasting effects?

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