Class Warfare Blog

July 11, 2018

It Figures

When the Trump tax cuts were imposed (you remember don’t you: the small temporary tax cuts for us and the large permanent tax cuts for corporations and the wealthy) it was claimed by the Repubs that the money saved by the corporations would end up spurring growth, even result in raises for workers. (Right, those results were to be delivered via unicorn, I believe.)

It was pointed out that the last time such a tax cut was implemented, corporations spent the bulk of the savings in buying back shares of their own companies. Well, surprise, surprise, the same thing happened this time. (Who’d have known it could be this complicated?) In a post on the Naked Capitalism web site (Michael Olenick: Update Confirms That Share Buybacks Are Still Corporate Suicide) extensive studies on the effects of such buybacks show that “not only do buybacks not lead to growth in a company’s market value, they are strongly correlated to a declining market value.”

In other words, the effect of their behaviors is not to “grow” the companies but actually to “shrink” them! To quote from the piece:

Corporate executives and directors are apparently bereft of ideas and the confidence to make long-term investments. Rather than using record profits, and record amounts of borrowed money, to invest in new plants and equipment, develop new products, improve service, lower prices or raise the wages and skills of their employees, they are “returning” that money to shareholders. Corporate America, in effect, has transformed itself into one giant leveraged buyout….

And since “everyone” is doing it …

The most significant and troubling aspect of this buyback boom, however, is that despite record corporate profits and cash flow, at least a third of the shares are being repurchased with borrowed money, bringing the corporate debt to an all-time high, not only in an absolute sense but also in relation to profits, assets and the overall size of the economy.

This not only burdens those corporations, but also drags down the entire economy.

So, if these buybacks are not what anyone might call the best use of those tax savings, why are they being done?

Okay, boys and girls, whenever anything political happens what are we supposed to do? (Follow the money!) That’s right! So, who benefits from these buybacks the most? It turns out that … wait for it … it is the corporation executives who actually benefit the most. You see the buybacks inflate the prices for the corporation’s stock. CEO’s and their ilk are now being remunerated largely via stock options. And, corporation executives constitute the largest segment of the 0.1% of “earners.” And that class of “earners” is the one making the bulk of political contributions currently. Does the picture now come together for you?

Think of the corporation executives as sort of modern pirates. (Can you see the eye patches and hear the “aaaarghs”?) These executives started out as treasure ship captains but, well the temptation was too great, and they stole their own ships. Well what is the government’s politicians to do? When they sailed into action to recapture the ill gotten gains, they received handsome “gifts” from the pirates to the extent that they have become dependent upon those “gifts” and now seek to facilitate the pirate’s behaviors. The government stopped pursuing the pirates for taxes and actually invited them to submit their ideas on how the government could be run better.

And all of the rich assholes lived happily ever after.

When are we going to wake up? Stock buybacks should be illegal or strictly regulated (as they used to be). They are tools to manipulate the stock market by insiders, for Pete’s sake! But when we ask our politicians what the intend to do all we get is “Arrgh!” and a wink from under an uplifted eye patch.

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July 9, 2018

The Truth About Tariffs

Filed under: Economics,Politics — Steve Ruis @ 1:27 pm
Tags: , , , ,

I ran across a Wisconsin cheese maker (Jim Sartori, chief executive of Sartori Cheese) making this comment recently:
“I’m not an expert but I have never found an example where tariffs have been used as an effective trade policy.”

Yep, he is not an expert.

Now, please note at the start, I am not supporting President Trump’s trade tariffs, quite the contrary. Throwing tariffs around like a drunken sailor, imposing them on former enemies, long time allies, and random other countries makes no sense at all. There is no defense for his actions whatsoever. The supposed justification, that we are being played like chumps surrounding trade, is ludicrous on the surface and ludicrous all of the way down. If anything, we have been the trade bullies extraordinaire (in our historical time). Ask Hawaii about being a trade bully. The U.S. government got behind some rapacious pineapple farmers and staged a coup to make their business efforts more successful. Hawaii was a sovereign nation, and then we “annexed” it. (That is government speak for invaded and overthrew the rightful government.)

But “tariffs as an effective trade policy” Holy moly! Tariffs have been the primary positive factor in creating all of the major global economies existent. I can’t think of a country’s economy that got to any size without a strong program of tariffs.

Mainstream economists, you know the deluded kind, have pushed the “law of comparative advantage” for ages. According to this law, an undeveloped country is better off selling a developed country its raw materials and then buying back the goods manufactured by the more developed country, paid for from the receipts from the sale of their natural resources. Everyone sticks to what they are good at. Sounds sensible, doesn’t it? Of course, the economists don’t point out that using their own concepts, the “value added” to the raw materials makes the manufactured goods more expensive than the raw materials and the less developed country cannot afford much of the good stuff. It also means that the less developed countries will never have the capacity to make their own stuff as the other countries are always better at what they need done. This is exactly the way the developed economies want it; no more competition please. All of you undeveloped stay just the way you are, please.

Take, as an example, the Japanese car industry. Japan makes as many cars now as any other country does (save China I believe) and is notorious for their quality. But right after World War 2, they had hardly any industrial capacity at all, because most of what they had had been bombed into dust. If they had taken the economists advice, they never would have gotten their car companies going because other countries made them better and more efficiently than they could right after World War 2. But the Japanese were smart, they realized that all great economies developed from protected roots and they protected their nascent car companies until they could stand on their own feet. Now they are preeminent, all because of the protects of tariffs.

An Aside I have to mention that when the Japanese started making a dent in our car market, we imposed tariffs on them. When we put a tariff on the prices of the cars, they shipped a zillion inexpensive, yet good quality cars in and they sold like hot cakes. Then we imposed a limit on the number of cars they could import here, and they instead started selling luxury cars in large numbers and making huge profits. It is ad it the U.S. didn’t learn anything from the soviets regarding running a controlled economy. End of Aside

Sometimes the Japanese protected native industries like rice growing because they do not want to be dependent upon others for this important staple. Other times their tariffs were to protect growing industries, just like everyone else.

Pay attention, people, every country does this! It is only sensible. It should be standard economic theory, except that the economists and the economics curriculum has been bought and paid for by plutocrats.

Still, what Trump is doing is incoherent, a wailing against the wind, and will be shown to be very ineffective … and then Trump will blame Obama. If he had a better thought out plan, the Wisconsin cheese makers wouldn’t be quaking in their boots right now as the tariffs being imposed upon us are not in the same areas that Trump’s tariffs are: they are in areas very sensitive to Mr. Trump’s base, so mainstream America, brace for the impact of Mr. Trump’s tariffs; they won’t be felt by Mr. Trump but they will be felt by you.

 

June 16, 2018

Lies, Damned Lies, and Economics

Apologies to Mark Twain for stealing his phrase and twisting it to make my title. (His line was that their were “lies, damned lies, and statistics.”

Here are a couple of paragraphs from a recent post over at Naked Capitalism:

“A standard recommendation given to late-industrializing economies by the economic advisors of the World Bank and the International Monetary Fund has been to refrain from imposing regulations on the labor market, or if such regulations are already in place, to abolish them.”

“In this view, labor rights and labor protection are more likely to create additional unemployment and informal-sector under-employment, particularly of unskilled workers or labor force entrants, than lead to higher wages and better working conditions. Right? So, esteemed policymaker, what you should do is simple: reduce already existing employment protection, resist those siren’s calls to higher minimum wages, and curb regulation. Later, once your economy has developed, you can bring back some of those “European-style” luxuries. After all, they are good for social peace.”

“Well, this story is as wrong as it is ubiquitous.”

If you want to learn more see Who Says Labor Laws Are “Luxuries”?

If you want to know who economists serve today, I urge you to follow the political dictum: Follow the Money. As to who the World Bank and the IMF serve, well that has been apparent from the get-go. They are like the charter schools who are saying they are serving minority children when all they are really doing is lining their pockets.

Oh, and while the WB and IMF are prattling their twaddle about the dispensability of labor protections, you might want to take notice that that is the program being executed here in the U.S. for the past 50 years. The abolishing of labor protections is not just for “late-industrializing economies,” it is good for all! Follow the money. The money going into the pockets of economists is coming primarily from one source: those who already have a great deal of money and for whom that is not enough and are willing to step on the necks of anyone in their way to even greater wealth.

 

 

June 5, 2018

The Bizarro World of Credit Ratings

Filed under: Economics,Reason — Steve Ruis @ 1:09 pm
Tags:

I monitor my credit rating because, well, it is free and it might just catch an identity thief. I was rather taken aback a couple of days ago when my FICO credit rating dropped 11 points from the last rating. I had been involved in no credit deals, nor had my credit card balances gone up, nor … WTF? So, I went to the reporting site and looked at the “event” that caused such a significant drop in my credit rating. It took some finding but eventually I found out that the problem was that I had paid off my car loan. I didn’t pay it off early or anything special, I just made the final payment on a four year deal.

There was nothing else.

So, the successful completion of a credit transaction with no black marks associated with it, proving that I was a responsible user of credit, that I met my obligations, that I was trustworthy … was a negative. And now that I no longer had a $300+ dollar car payment every month, I had that much more disposable income to engage in other transactions, if I were truly worthy, which I was not in the eyes of the people creating the algorithms of these rating services.

Welcome to the bizarro world of credit reporting and ratings. And we have given over power to these idiots to rule over whether or not we “qualify” for a credit transaction.

Keeping us enslaved in debt is part of the control mechanism that coerces our labor to serve the interests of the elites. Apparently making credit ratings incoherent is also part of the plan.

May 31, 2018

The Insidiousness of Neoliberalism

aka The Empire Strikes Back

It may end up being a great irony but the grand American Experiment, the first major attempt at modern self-government (We don’t need no stinkin’ royalty.”), may end up having been created under a misapprehension.

When the U.S. Constitution was created the “founders/drafters” assumed (there’s that word again) that the “people” in power, running the government for “the People,” would be folks just like them: wealthy landowners who had the education and the time to apply their experience and powers of thought to the enterprise. I imagine that it was quite a shock to them when in short order, the propertied, wealthy (male) class was eschewed for politicians of the “middling” sort (merchants, craftsmen, you know “middling” types). I love the sheer disdain embedded in the term middling.

Well, never mind, the natural superiority of the wealthy class will win out, plus there was money to make in expanding the borders of the country and reaping the harvest provided by their god. Just clear off the Indians and bring in the salves and voila! When that was fairly well done, the wealthy got back to wealth accumulation in the forms of gold and property resulting ultimately in the Gilded Age of the late 1880’s–1890’s. Labor was oppressed, racism was rampant, women were subdued, and technology was creating opportunities to make money hand over fist. There were so many immigrants seeking work that wages were so low that the wealthy had servants galore. Gosh, can it get any better than this?

A small hiccough fell into the process of elevating the rich, and keeping them elevated, in the form of the Great Depression and World War II, the aftermath being a common understanding in ordinary Americans that “we were all in this together” and paying attention to the common good as opposed to solely individual rights was “a good thing.” That couldn’t be allowed to continue, of course, as that attitude was blocking the return of the rich to their rightful place of guiding society (for their own benefit, of course). The New Deal had to be remade into the “No Deal” of Donald Trump.

Then along came neoliberalism (beginning slowly in the early twentieth century, a horse the rich could ride where they wanted to go (back to the top). Neoliberalism exalted the individual, eschewed any kind of collective action by citizens save the military and police (to protect wealth from theft) and courts (to protect contracts). Free markets were the mechanism that would deliberate societal concerns, those and the innate actions of individuals as economic actors with free will (and greed). Think Ayn Rand here. Think the Koch brothers.

“Realize that the neoliberals are not working toward their ideal world, they are putting the finishing touches on it right now.”

Neoliberalism involves the elevation of individuals and the diminishment (or elimination) of collective action and any responsibility to the environment, the future (our children), the body politic, or people in general. Corporations that used to have major goals like “to be good citizens in their communities,” now are guided solely by the goal of increasing shareholder value, a concept that is bogus in the first place but serves the goals of neoliberalism, so it was elevated.

This is becoming hardwired into our culture. While I am very grateful for all that has been done to make my life what it is, via a quite inexpensive education down to a system of roads that encourages me to travel, the idea of gratitude is being reduced to “acknowledgement of a debt,” something only losers would acknowledge. The idea of debt forgiveness has been eliminated from many branches of our culture, especially Christianity (a long term effort). Consider the Lord’s Prayer. The specific variants I address are those which say “and forgive us our debts” versus those who say “and forgive us our trespasses.” In the ancient world debt jubilees were quite common, a period at the end of which all debts had to be settled or forgiven. It was hard-wired into Judaism but struggles to find any footing in Christianity or the modern world. Debt forgiveness was eliminated along the way in favor of debtor’s prisons and “pounds of flesh” and the IMF.

Neoliberals prefer the version of the Lord’s Prayer that uses the word “trespasses” (surprise, surprise), but I remember my mother saying the prayer in church, using the word “debts.” A 2000 year old argument that neoliberals have come down on one side of.

Since individuals are paramount, only the “deserving” warrant government help and there are very few of those in neoliberal minds. Blacks are shiftless and dangerous “takers.” Hispanics are lazy and untrustworthy, etc. Both breed too much.

In neoliberalism capitalism is exalted while removing all obligation of capitalists to the larger society (via the cult of shareholder value) as mentioned. “Free markets” and “competition” are promoted but the neoliberals really prefer market capture (think of Microsoft in its boom days, not quite a monopoly but close enough, and all of its anti-competitive actions) with government protection thrown in (think of the bank bailouts of 2008-9).

The foot shoulders of this movement have primarily been Republicans, you know, the “Family Values” proponents. To them, though, a family is lead by an individual, a man of course, making the family an extension of an individual. All of their “family values” stem from there … well as long as the individual men acknowledge the authority of a higher power, for whom the wealthy are a stand in and for whom all of the major religions work.

“The neolibs claim to want to shrink big government, yet they never actually do it. Governmental power is how they will enforce their will over the masses. They do not want less of it, no matter what they say.”

Privatization of public enterprises (schools, post offices, military, etc.) were initially lauded because “government = bad” but when that argument didn’t fly, they carried the water on this effort claiming the government was inefficient, that private ownership and competition would make for a more efficient effort. They ignored the fact that competition creates winners and losers and when it came to our children and delivering the mail, we didn’t want winners and losers. All of the data, so far, have shown the efforts to privatize schools have been less than successful, more costly, and worse, rife with corruption, so evidence is being ignored over ideology (and campaign contributions). The point of strategies like privatization, though, are not just about a preference for the private sector over the public sector, the goal of these strategies is to radically alter power relations, weakening pro-public forces and enhancing the lobbying power and commitment of the corporations that take over public services and resources, thus advancing the plans to dismantle democracy and make way for a return to oligarchy. The majority will be held captive so that the wealthy can finally be free to do as they please, no matter how destructive.

Neoliberalism is, at its core, anti-democratic.

And if you want to see the world as these oligarchs see it, all you need do is open your eyes. When Black citizens in Missouri protested police brutality, they were met with riot police and tear gas and arrests and dogs and prosecutions. But when white supremacists staged a protest rally, the police attacked those opposing the protest. Neoliberals definitely see things in black and white terms. Similarly there are myriad examples of polls of voters identifying things like laws requiring universal background checks to buy guns, but on which Congress still acts to benefit their donors, like the NRA lobbyists. The chances of getting legislation passed that was requested by poor people is zero and by rich people, near 100%. But realize that the neoliberals are not working toward their ideal world, they are putting the finishing touches on it right now.

As additional proof, look at state power being used to reduce state power. If the Republicans are in charge, they use the federal government’s power to restrict the state’s powers and the state’s powers to restrict local government’s power. In Oklahoma, fracking was causing hundreds if not thousands of earthquakes. Several local governments passed rules that limited the rights of frackers in their municipalities until the science of the earthquakes could be pinned down and fixed. The response? The Oklahoma legislature (and Texas, and …) passed a law forbidding the local governments from intervening and the frackers kept working. Localities pass a $15 minimum wage and some states respond by withdrawing the power of the munis to do that.

Neoliberalism is a-n-t-i-d-e-m-o-c-r-a-t-i-c, boys and girls.

The neolibs claim to want to shrink big government, yet they never actually do it. Reagan didn’t do it. G.W. didn’t do it and D.T. won’t do it. Governmental power is how they will enforce their will over the masses. They do not want less of it, no matter what they say.

If I may quote a recent book author:

The United States is now at one of those historic forks in the road whose outcome will prove as fateful as those of the 1860s, the 1930s, and the 1960s,” writes Duke Historian Nancy MacLean. “To value liberty for the wealthy minority above all else and enshrine it in the nation’s governing rules, as Calhoun and Buchanan both called for and the Koch network is achieving, play by play, is to consent to an oligarchy in all but the outer husk of representative form.

Neoliberalism is a cult of the individual in a collective enterprise (one man, one vote, no?). It is no surprise that those who advocate “we each go it alone” are those best equipped to do so (the wealthy). The bigger question is: will we let them get away with it? We have so far.

May 29, 2018

GMO Skepticism

A recent research effort showed than in some areas, anti-science attitudes are strongly correlated with religion (surprise, surprise). In other areas, there were correlations with science knowledge or rather the lack thereof, supporting those who think that science education is an effective way to combat anti-science attitudes.

One such example of the latter involved the safety of genetically modified organisms, or GMOs. The researchers found that those who possessed more science knowledge favored GMOs and those with less science knowledge did not.

I have a fair amount of science knowledge and I do not favor GMOs … currently. My attitude was bolstered by the release … finally …. of studies that show that, once again, Monsanto Corporation is bilking the public. Monsanto created “Roundup” a weed killer that actually worked. The problem with Roundup is that if you spray it on a weed and accidentally spray a patch of lawn, it dies too. Roundup is a vegetation killer. So, Monsanto created GMO crops (corn, wheat, potatoes, whatever) that would resist the effects of Roundup, boosting the sales of Roundup as a weed-control agent for farmers and by creating a massive market in their new Roundup resistant seeds.

Monsanto promised increased yields using the new seed and Roundup weed control. So, is that what happened. Well, the study is now in and the difference between Monsanto-focussed fields and control fields is zero, zip, nada. Gosh, you spend that much more money and you’d think it just has to be better. well, it is … better for Monsanto’s bottom line.

Now I will not argue that GMOs do not have benefits, that would be silly. I would argue that we need to look carefully at the benefits and the costs, especially the potential costs. In the Roundup study, the costs were high and the benefits almost nonexistant.

When I first became aware of GMOs, the big “product” was a more “machine harvestable” tomato that had better eating properties. The way this was achieved was to splice into the tomato’s genome some DNA contributed by a trout, yes, a fish. My argument to “go slow” on GMOs goes like this:

We have been genetically modifying crops since the beginning of agriculture. We did this first by choosing to use the seed from plants that gave the best harvest or the best quality of produce and eschewing using seed from lesser plants. Further down the road, we learned how plants propagate and learned how to cross breed plants to make sturdier hybrids. (This is how we pulled off the Green Revolution; we made “dwarf” versions of wheat and rice that had shorter, stronger stalks that could support heavier grain heads, then we used chemical fertilizers up the whazoo to boost the seed cluster sizes (and as a side effect, we have polluted our waterways with these chemicals creating dead zones in our seas the size of small planetoids).)

These “traditional” processes allow nature to have veto power over anything we try. Each stage of a hybridization either produces a viable plant or not. If not, it produces no seed and that possibility is vetoed. It is a little like breeding horses. If horses are bred to horses, the offspring are viable and can breed. If horses are bred to donkeys, you get mules which are viable but cannot breed (end of the road). If horses are bred with cats … ? No one has ever tried this you say. Hmm,  I wonder why?

In the modern GMO process, the genetic material itself is changed directly and nature only has a say as to whether the end product is viable. The result has not been vetted by nature other than in this manner.

So, how do you cross breed a tomato and a trout? If you thought a horse-cat hybrid was crazy, what the hell do you think of a tomato-trout hybrid?

Just because you can do something, doesn’t mean you should. What happens to the trout genes in the tomato when the tomato’s genome gets out and interacts with the world at large? But, but, but farmers are used to hybrids that can’t reproduce, you argue. You should take it up with the farmers who are in court suing their neighbors who said the GMO crops they planted couldn’t possibly “get out” and start growing in their neighbor’s fields. (They did.)

Plus, hybridized crops do breed, they just don’t “breed true,” meaning you are much more likely to get the parent stock sprouting than the hybrid stock. I remember my father gathering up the tomato plants that sprouted in our compost heap each spring, replanting them, culling the “bad” ones, but then harvesting “heritage tomatoes” before that term was made common. They breed, just not true.

More info here.

May 26, 2018

Very Civilized Don’t You Think?

When we say someone or something is “very civilized,” that sounds like a complement, no? If we look at it objectively, however, such a thing is comparable to saying someone is oppressed. I will explain.

If the venue of major disagreements between scientists and theists, it is biology (actually just evolution) and cosmology that take the brunt of theist’s complaints. The theists apparently have no qualms with chemistry, or physics, or Wi-Fi, per se. But where science disagrees with scripture, there is intense apologetic efforts to either reject the science, or to harmonize it with scripture. There is even a branch of these apologetics called “theistic evolution.” (I am reminded of the old joke of the Russian claiming “we inwented it” for ever scientific discovery. Theists claim every positive scrap of science that supports their viewpoint and claims “God did it.”) The source of these disagreements is the “special nature” of human beings. Apologists don’t have a problem with evolution, full blown evolution, addressing the subject of slime molds or “lower animals,” but when they get to human beings, whoa there, you cannot make human beings subject to basic physical laws (haven’t you heard, we are special!).

In the U.S. our culture is steeped in this “special sauce.” Not only are human beings created in their god’s image (old man, burning bush, pillar of fire, whirlwind?) but, by God, Americans are exceptional among human beings! This general belief has lead to a general belief in the inevitability of civilization (our civilization, of course), I contend. We were destined to end up here, with all of this stuff, behaving the way we do. It was inevitable … and a damned good thing!

When one takes a look back at the historic path of civilization, it is littered with human misery for the majority of us. This, of course, is spun as being due to the sinful nature of man (and the superiority of the white race, and … ), but if you just look dispassionately, it is evidently not so.

We have lived collectively since hominids first evolved (2-4 million years ago). We traveled in family groups, being social mammals, but primarily for safety. (There is safety in numbers, still.) When families became tribes, sometimes the tribes got a little too large and they had to split up. This was because we were hunting and gathering which most people think means we wandered aimlessly. But we did not wander aimlessly, we followed a normal route. Whether this was like the migrations of butterflies or birds or reindeer or something we cogitated, we moved from site to site, harvesting what food there was and moved on to the next stop. When tribes got too large, they stripped too much food from the land and when they came around again, there wasn’t enough food that had regrown to support the group, hence the splits. When the groups were small enough, they could harvest food for many months in some locals, so they tended to build shelters and hunker down for a while and voila, villages were born. As we became quasi-sedentary, we also became open to the idea of agriculture because we were going to be there to harvest what we planted. Thus the seeds of civilization were born. Civilization began when we decided that a large permanent village was in order, a city. But the problem with cities is that there must be some way to store food to get a larger number of people through the rough patches between harvests. It is no surprise then, that the first civilizations happened when the conditions supporting the growing of grain were prevalent. (Grain could be stored by the simple expedient of drying it in the sun.) These conditions were: fertile soil (usually alluvial), a constant source of fresh water (a large stream or river) and bountiful sunshine. There were usually harvestable animals migrating over land and down the river, too.

The fly in the ointment was that agriculture took a lot more work than hunting and gathering. Evidence shows that people did not want this more arduous life and had to be coerced into that labor. The tools of coercion? Physical force and intimidation (“We’ll stay here and ‘guard’ your children while you go out and work in the fields.”) and religion. Since in the early days a hunting and gathering lifestyle was a short walk away, it appears that a great many “early farmers” took this route (they voted with their feet). This lead to more coercion and more defections and eventually to slavery. If you are going to coerce labor, might as well go whole hog and adopt a slave society. Neighboring villages to cities became sources of manpower (and breeding females).

It should not shock you that all of the early cities failed in short order (in nowhere near 100 years of existence) and that new cities were built atop the ruins of the previous one (Remember all of the Troy’s that Heinrich Schliemann found?). Since all of the factors needed to be there for a city, building elsewhere was silly.

The basic concept of “civilization,” that is living in cities, is that the labor of the many provided a surplus that the elite few could live off of … and not have to work as the many did. This “free time” created through the coerced labor of the many allowed the few to write poetry, paint paintings, sculpt sculptures, etc. but mostly they counted their wealth and worried excessively about slave revolts and how to keep them from getting uppity. (The racial resentment against Blacks in this country is based upon this residual fear, in my opinion.)

So, they expanded and fortified their “soldiers” and their “religions” all directed at controlling the system preserving them at the top. As things progressed, soldiers were needed to protect cities from the soldiers from other cities. So, war became possible because of the resources and needs of civilization. In each city, of course, the religious elites told the secular elites that their gods were on their side.

Science now tells us that when agriculture became prominent, “farmers” became physically shorter, weaker, less tall, and more disease ridden. So, what was in it for the “masses?” In a word, misery was what they could expect for most of their lives. I read one estimate that claimed that as late as the year 1800, half of all human beings were in some state of slavery.

But all of this was long ago, surely being “civilized” now is far, far different, you say. Is it? Most of the controls of the elites are now cultural. In this country, if you suggest that capitalism is not the best economic system for us, you will be shouted down or vilified or both. (Damned socialist! Communist! Heathen!) Capitalism is a system which codifies the coercion of labor of the masses to benefit the secular and religious elites. We use terms like “the one percent” and “the 0.1%” now but they really are just the wealthy elites. Our “democratic” government serves the rich and ignores the will of the people on such a regular basis that it has become “normal.” We talk about “wealth inequality” and do not do anything about it. Our system (Capitalism–US Brand™), is designed specifically to concentrate wealth and that is what it does. For short stints “reformers” can get power over the reins of government and roll back some of the systems in place, but by and large the rich use their money to buy power and use their power to get more rich. You may note that this is a positive feedback loop that always ends up in disaster for the masses (investors get bailed out, homeowners do not).

So, when a plutocrat describes something or someone as “being civilized” they are commending that thing or person as being in their “proper place,” either amongst the elites, taking advantage of the situation, or among the masses, whose “surplus labor” is making the elites richer and more powerful. Think of Sméagol saying “Yes, master, good master!” And while we may harbor evil thoughts against the masters, as long as we do not act on them, well, then we are “very civilized, don’t you think?”

 

May 24, 2018

Socialism … Bad

We are hearing incredibly bad stories about what is going on in Venezuela, a nominally socialist state. Comments extend about as far as “Socialism … bad!” When anyone brings up the option of socialism as a governing structure in general, opponents bring up the USSR, another failed state. This is clearly propaganda.

Whenever capitalist states experience chaos, no one in this country says “Ah ha, capitalism … bad!” One has to ask whether Venezuela’s current woes are because of socialism or in spite of socialism. I suggest that they are due to bad management, just as our ups and downs are created.

None of socialism’s detractors claim that Venezuela’s fate will soon come to the democratic socialist states in Scandinavia, as in “As goes Venezuela, so goes Denmark!” Socialism has become a “failed ideology” … in the minds of capitalist cheerleaders, aka the wealthy. Neither capitalism nor socialism is a political system complete; they are barely economic systems. Once you get past the basic definitions, disagreements abound. The arguments pro and con rarely get beyond the No True Scotsman Fallacy. The successful socialist states are claimed to have governments that are “not true socialism.” Only the failing or failed states are “real socialism,” according to the dyed in the wool capitalists.

This propaganda campaign is visceral and aimed at making sure that the masses are unaware of any acceptable alternative political systems. It also provides a handy shortcut to smear anything unappreciated by the rich. Whenever Bernie Sanders recommends policy, it is quickly labeled “socialist” so that it receives at least as much negative attention as positive. Well. I hate to tell you, but the post office is socialist, Medicare is socialist, the public schools are socialist, and the military is socialist. The “people” own “the means of production” in each case. Of course, the hidebound anti-socialists don’t hammer away at these things as being socialist, instead they decry “guvmint” as being unfit to operate such enterprises and urge their privatization (for a profit, of course). This is what it comes down to. The capitalists are profiting from almost every possible endeavor, including the acts of people getting sick and dying. They cannot abide the idea that no one (ahem, them) is making a profit from teaching our kids to be good citizens, or from our soldiers making war around the world.

In the case of war making it is “enough profit is not enough.” Even with the excessive billions spent on war making every year, including providing the profits of war materiel manufacturers, think about how much profit could be made if soldiering were contracted out! My favorite example was the contractors for kitchen services in Iraq during our invasion of that country. In one report, the contractors billed twenty dollars a day for a cook’s aide to peel potatoes and whatnot, a job previously done by soldiers, and the contractor hired a local to do the job for a few dollars per day and pocketed the rest. Now think of that kind of practice applied to the entire effort. The opportunity for god-fearing profits boggles the mind! And all of those profits are going to waste because of our commitment to a socialist army!

I look upon the democratic socialist states in northern Europe with envy. I was taught in grade school that our political system was the best of all possible systems. I learned as an adult, that the political parties are “opponents” in name only and that both compete for campaign donations from the wealthy conservatives who provide the bulk of all donations to politicians. Consequently we have a center right political party and a far right political party contesting for the donations from conservative donors. Both parties ignore the desires of the population at large and serve the interests of the wealthy only. I just do not see this as “the best of all possible systems” unless you qualify it as “the best of all possible systems for the wealthy.”

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.

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.

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