Class Warfare Blog

November 28, 2017

Why Republicans are Republicans and Democrats are Democrats

When this country was created “of the people, by the people, and for the people,” it was created by a fairly elite group of men. They made sure that a stable society and government was provided for by making sure that Indians, slaves, and women did not get to vote, nor did poorish men. You needed land to qualify to vote, meaning you had to be an elite or near-elite member of society to cast a ballot.

The Founders felt that the very best people to run the government were people just like themselves: well-educated, wealthy men who had the leisure time to reflect on the issues of the day and didn’t have to devote every waking moment to find food and shelter.

They were worried about the affect of wealth on their new government, so this reinforced their suitability for leadership as they were already wealthy and would, therefore be hard to bribe. (Ha! Just raises the price in my estimation.) They were concerned that the “middling” sorts (merchants, tradesmen,, craftsmen, etc.) would get involved and that they could be bought. (They would be proud to know that Congress is literally stuffed with millionaires now!)

In other words they were elitists. They created a government “of the elites, by the elites, and for the elites,” no question.

Those of a conservative bent ended up forming political parties (the Whigs, the Republicans, etc.) that wanted to preserve society’s institutions and hence ensure a stable, secure society. They, like the Founders, thought that this would be achieved by the wealthy being wealthy and the poor being poor, and as long as everyone accepted his lot in life, all would be well. Since the poor were poor and had very few needs, they focused on serving the wealthy as their needs were so much greater. The wealthy needed a court of law and a set of laws to govern their business contracts. They needed trade laws and other laws of commerce. They needed government regulations of banks and markets. The poor made no such demands.

The Democrats had to necessarily differentiate themselves from these conservatives, so they had to adopt stances less favorable to the elites and more egalitarian, just to be different enough to attract votes.

Now I know that this is much more complicated, that there are and were cliques, and factors, and movements, oh my! But at the core, this is what the two major parties in this country stand for. (Or stood for, before the Democrats began selling out to wealthy interests.) If you look at any issue now, you can parse it for these stances. Take the current “Net Neutrality” issue. Current the Internet is quite egalitarian, on a first-come, first-serve basis. There is a movement afoot, to drop this policy so that certain streams of information can be favored while others disfavored. (Guess who gets to choose!). The people behind this are the wealthy leaders of the giant telecom industries. The people against are net rights activists, aka the Internet masses.

So, now that I have given you this information, which party is against net neutrality, in your opinion? If you guessed the GOP, you got it in one! Another way to look at this is, if the GOP is for it, it serves to maintain the elite in their current, or even elevated, status. The elites are the business owners, not its workers.

The founders believed in providence, that is if they were wealthy it was because they were superior to the others and the cause was divine providence. (God controls all things and wouldn’t make an asshole wealthy, now would he?) Today’s elites still have this belief: their wealth identifies them superior (even when they inherit it!) and if they are superior, who better to run things?

The secular and religious elites promote only programs/legislation that enhances their status and positions as elites. They are able to con ordinary folks into voting with them by advancing dishonest campaigns (They want to take away your guns! They are baby murderers! There is a war on Christmas!).

Consider the current administration’s “tax reform” plan. They started out saying they were going to simplify the tax structure and then offered a plan that made it more complex and, by all accounts, advantages the wealthy. (If the GOP is for it … duh.) Plus, they are willing to lie and cheat to get the bill passed, which the elites have always been willing to do, because, well, they know better what is needed.

So, pick any particular issue you want: if the GOP is in favor, then it favors the elites; if the Democrats are in favor, it disfavors the elites. It is that simple because the core motivations are that simple. This is changing as I write this as more and more Democrats are captured by the wealthy class to serve their interests. If the elites capture the Dems, then we might as well carve “of the elites, by the elites, and for the elites” in stone in the capital and have done with it.

 

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November 21, 2017

We’re No. 1 … We’re No. 21! Wait … WTF?

The new 2017 Credit Suisse Global Wealth Report helpfully calculates median net worths of countries. Switzerland and Australia top the global list. (Reminder: a median is the value in the middle, not an arithmetic average.) The median Swiss adult has a net worth of $229,000. The typical Australian, $195,400. And the typical American? A mere $55,876. Twenty nations in all have higher median adult net worths than the United States. So, we are No. 21.

Wait, we’re the richest country in the world, how come we are 21st in median wealth?

The really rich, those with at least $50 million in net worth, have multiplied five-fold since the year 2000 globally. About half of these, 49 percent, reside today in the United States. Credit Suisse counts 72,000 of these ultra-rich Americans. In context: China, the host to the world’s second-highest collection of $50 million-and-up personal fortunes, has only 18,100. The United States hosts more ultra-rich individual fortunes than the nations with next nine highest ultra-rich totals combined.

So, here in the U.S. the rich are getting richer, but the rest of us are falling very far behind.

Let’s consider the Australians, as we have a bit in common.

Australians used to see their nation as a relatively equal society. They don’t anymore. Rising inequality has become a major Australian political issue. But Australia remains far more equal a society than the United States. The top 1 percent in Australia only holds an estimated 15 percent of the nation’s wealth. (In the US, it is 38.6%.) So we are the wealthiest country in the world but we don’t have the wealthiest citizens as most of the wealth has flown into the pockets of a very few people.

And this is not a matter of that they are wealthy, it is what they do with the wealth they have accumulated. Basically, they don’t spend it. Poor people spend all of their money. Middle class people spend almost all of their money. That money goes to buying things from companies who provide jobs for people. The rich don’t spend anywhere near as much of their income. If they buy anything, it is investments which increase their wealth even more. None of that activity positively affects the economy.

November 5, 2017

None So Blind As He Who Will Not See

Note This is a very long post, you may need to read it in stages. Sorry. Steve

At this point in my life, I am an old man. For over 60 years I have been studying history, mostly on my own. I remember reading H.G. Wells A Short History of the World when in high school, for fun. (I was what was then called “a reader” but an otherwise ordinary boy.) In college I read Will and Ariel Durant’s The Story of Civilization, for fun (and The Story of Philosophy and The Lessons of History). I read books about Egyptian History, the history of science, World War 2, the Russian Revolution, and on and on. I have been reading lately about the history of the Christian church (a real hair raiser if there was one).

And in all of those histories my eyes ran over the words but they didn’t quite come together. All of those Russian peasants, the serfs of Europe, the subjects of Egyptian and Persian god-kings, the Christian mobs running competitors out of town, all of those slaves and I never put together the fact that the vast majority of all human beings have been slaves since the advent of civilization.

I have written before about how I thought small groups of human beings ended up with shamans, shamans being members of the tribe who weren’t particularly skilled at hunting or any other valuable skill, yet who craved status and hence claimed to be able to negotiate with all of the gods that abounded in the minds of people. Since we knew no better, we assumed that everything had a voice in it like we had in our heads, so there was a god of the brook, of a tree, of a mountain, of the animals they hunted. All of our gods started with the animistic gods of primitive humans as precursors. This is where the idea of a god came from. But those gods were right there to observe in the form of the tree, or the spring, or the antelope. They weren’t far away gods and they certainly weren’t all-powerful.

When people started to gather in larger groups (larger than a small family), that is up to 100-125 in a troop (about the maximum size before splitting into smaller groups apparently), there was likely more than one shaman and they either had to compete or cooperate and since they were cunning they realized that they would be better off together than in competition. In order to cooperate, they had to get their stories together, so they were making the same claims and exhibiting the same “powers.” This is how a covey of shamans started religions. As the size of groups expanded, more cooperation between and among shamans was necessitated.

I have come to the conclusion that “organized” religion is simply a people control mechanism that was enabled by civilization. To live in cities, a great deal of labor needed to be coerced (because no one wanted to work that hard) and religion proved to be the tool to do just that. (“Kings” didn’t show up until about 1500 years after the first cities, which were always run by religious elites.) For the religious, the city was a gravy train. Other people toiled to provide them food and clothing and luxuries and all they had to do was perform some rituals from time to time and, of course, claim to have some power over those damned gods who would kick our asses at the drop of a hat. This was the creation of first wealth and the first full-time leisure.

I assume there were some true believers but they were always co-opted by the power mongers who took their imaginative creations and used them to make people obey.

The people closest to the class of elites wanted in on the scam (no different today) and didn’t want to be coerced into doing the work to support all of the freeloaders, so since the idea of capturing people from other tribes already existed, the idea of acquiring manpower from elsewhere came readily to mind. Men and women to work, women of child-bearing age to have more babies, even children were valuable. So, the elites, in essence, invented large scale slave raids, which were the nascent versions of what would end up as wars.

This is also why religions make no sense at all because we are looking at them in the wrong way. Religions are uneasy partners with political/military leaders to supply psychological and, if needed, physical force to keep people in line. In rare cases religion gets co-opted to support the general populace, but eventually they fall back in line as partners to maintain the status quo for the elites. The religions then, of course, use those instances as indicators of their true natures, like in the U.S. where religious leaders became anti-slavery, when there is no scripture whatsoever that supported their position.

Just like the shamans who saw they were better off as allies than competitors in the tribes, the religious elites saw the martial elites as natural allies. This took a little while to work out. The first “kings” were battle leaders under the control of the religious elites, but soon the warriors saw that they could whip the assess of those girly-men priests and didn’t think they should be taking orders from them anymore. You need to look no farther than The Epic of Gilgamesh for an example of such a conflict.

This alliance of elites has always had it ups and downs. The political elites eliminated the priest’s influence in the Russian Revolution, for example. (You will notice the priests are back, somewhat cowed, but religion is too good of a tool of oppression to waste. Ask Mr. Putin.) Henry the VIII of England created his own church when the one he had wouldn’t do his bidding. The Church of Rome threw much of the young male nobility of Europe into the meat grinder of the crusades to capture and control Jerusalem (a hardly useful task, but just making them do it reinforced their power over the nobles). There are many examples, but almost always the two religious and secular powers end up hand in hand.

Just ask yourself, which of the two American political parties is most covetous of political power? You will also notice that they are also the most overtly religious, even trying to change the law that prevents clergy from haranguing their congregations on politics. Which party are the religious supporting the most? (Surprise!) There are many more examples that can be made.

The bottom line is that religion was invented to control your behavior for the benefit of an elite few. Civilization was a tipping point in scale. And because of this there has been untold misery inflicted on other humans who were enslaved or coerced into work they didn’t want.

We know civilization was a tipping point because there was so much resistance to it. The first cities rose and died very quickly. There were structural problems, problems of getting resources delivered to the elites (water transport was good, land transport was awful), there were problems coercing “the flock.” The were problems in the high concentrations of food created and stored and shipped drew vermin like magnets, and as the populations increased, the numbers of people and animals were high enough to support disease epidemics.

All of the “civilizations” were initially surrounded by “barbarians.” These were actually the free people … well free, unless they were captured and enslaved by the “civilized” people. The barbarians were hunter-gatherers, or pastoralists, or semi-sedentary groups of people who lived the old way, the easy way, the healthy way.

Because the “barbarians” had very varied diets, they were quite disease resistant. The grew taller, stronger, and had less gum and other diseases. (We know this; this is not just a guess.) The “civilized” people were the exact opposite, but also got a narrow diet (consider the Chinese diet of rice for breakfast, rice for lunch, and rice for dinner … if they were lucky) and got to work longer hours at work not of their choosing. Yes, I know hunter-gatherers had to gather and hunt to eat, but they didn’t have someone telling them to do just one thing all of a day. They didn’t have anyone telling them what to do at all. They would go looking for things good to eat and what they did depended on what was available, and there was widespread availability of many different foodstuffs which was shared fairly egalitarianly … until the civilized people confiscated the land by force and used it for the elite’s purposes.

The barbarians opposed the civilized people because the civilized people opposed them. And sometimes the barbarians won. But in the end, the free people succumbed to the diseases and predation of the “civilized” people. (Consider the fate of the millions of people living in what was to become the United States, when the Europeans showed up with their “white, god-given privilege.)

But, you say, that was a long, long time ago and now the benefits of civilization are shared by one and all. (This claim is followed by a long list of the benefits of civilization, most of which are valid but many are quite dubious. Protection from communicable diseases with vaccines that people never got before being herded into large groups has to be considered a push. Being able to fly thousands of miles overnight is of debatable value. But that is not my main point. My point is “at what cost?” Civilization is still a pattern in which the elites coerce labor from the vast majority for their benefit alone. To make this obvious, here are a few things to consider:

  • Do you pay a tithe or give to a church? Do you know what your money goes for?
  • After the 2008 financial collapse that caused a worldwide economic recession, which people were made whole first?
  • Would you vote for an atheist were they better qualified in all other ways than their opponents in an election?

These are just a few questions to stimulate your thinking. Most people have no idea where the funds their churches collect go, for example. Even if their church publishes a financial statement, few read it. Most of the funds go to what is called “overhead” in business (salaries, utilities, maintenance of buildings, etc.) almost none goes to charity. This is basically a business which has overhead but no product other than what it’s customers imagine.

We all are aware that banks and stockholders got bailed out after the 2008 debacle, that none of the miscreants went to jail. That ordinary folks whose home mortgages were rigged so they appeared to be affordable, got very little, most nothing. The elites were taken care of first, as they always are.

And polls show that the vast majority of Americans wouldn’t vote for an avowed atheist under any circumstances. (Donald Trump lied about his religiosity, which should surprise no one.) Now that is control! If you want public office, believe what we tell you or at least pretend to.

While the mechanisms of coercion are now much more subtle (they are in essence, baked into the system—capitalism is one of them), ordinary people work very, very hard, and the surpluses they create go to the wealthy, powerful elite, and not themselves or their families. You have seen this graph before, no?

Many people have expressed surprise that evangelical Christians supported the candidacy of Donald Trump. If one takes a step back and looks at what is going on without the rose-colored glasses we are told we must wear (by the propaganda of the elites) the evangelicals voted for Mr. Trump in spite of his personal failings and attitudes and lack of belief but because of his willingness to pursue their political agenda. All of the dogma, scripture, etc. of the various churches is just window dressing, window dressing to be ignored when it gets in the way of the real agenda, which is maintaining and expanding the power of the religious and wealthy secular elites.

If you do not believe this, consider the following Christian scriptures:
Matthew 6:19-20 (“Do not store up treasures for yourself on the earth”)
Luke 6:24-25 (“But alas for you who are rich, for you have your comfort”)
James 5:1-6 (“Come now, you who are rich, weep, howling out at the miseries that are coming for you”).
As one writer put it “While there are always clergy members and theologians swift to assure us that the New Testament condemns not wealth but its abuse, not a single verse (unless subjected to absurdly forced readings) confirms the claim.”

So much for the prosperity gospel and the churches support for the wealthy. Never will scripture get in the way of their pact with the secular elites, who use money more than strong arms now to coerce the behavior they desire.

Just as there is no support for an anti-slavery position in the Christian churches, American religious elites point to the actions of churches to get slavery disallowed in this country. If one steps back and looks at that in an unfiltered way, it was just another coalition formed to create a political end and it had nothing to do with Christianity and everything to do with taking care of the elites. The elites expanded slavery to vast numbers to support civilization and is more than willing to abandon the practice, if it is to their benefit. (You will note that even though “freed” the situation of most Black Americans changed very little.

What has hit me and hit me hard is that civilization has been a source of coercion and misery quite likely for a majority of human beings since its inception. We even talk about how the workers who built the pyramids weren’t slaves, they were volunteers. Right, our god-king “asked” us to do this task, this dangerous, absurd task that creates no food, no wealth, and is back breaking labor and we volunteered enthusiastically. If someone walked up to you on the street and offered you this “job” for no pay (other than room and board), would you take it … or would you need to be forced to take it?

If you look at every “socialist” country in existence today (outside of the democratic socialist countries but possibly even including them), can you really say that the “means of production” are owned by “the people”? Do you think that the recent Chinese Communist Party meeting was comprised of representatives of “the people” or possibly even made up of ordinary Chinese citizens, aka “the people”? In every case I have looked at, the socialism is window dressing for rule by a powerful elite. The “rulers” are always wealthy, able to take care of their families with positions in the elite structure, and represent themselves rather than the needs of the people. The people are directed in such a way as to create wealth and power for the elites. Period.

The United States is supposed to be a grand experiment in “self-rule.” The founders were elitists and were dismayed when people of the “middling sort” (tradesmen and craftsmen, oh my) got involved in politics. They thought government would be in better hands if those hands had the leisure time to devote to contemplation. Right.

Is there any support for the idea that the U.S. is not being controlled by the wealthy (Wall Street, the Koch brothers, etc.) for the benefit of the elites at this point? What did it take? A couple of hundred years to find out that our version of civilization is just like everyone else’s?

And what has me hammered flat at this point in my life is the sheer amount of pain and misery that has been authorized under the guise of civilization. One of the best estimates I have seen of the number of humans (Homo sapiens) indicates that about 107 billion of us have been born. Of that number maybe 100 billion have been around at the same time as “civilization” (civilization allowing for a vast expansion of the population … of slaves). The estimate that in the year 1800, 75% of all people were in some form of slavery, indicates the vast amount of coercion and oppression that has been created and is still being created under the mantle of civilization, mostly for the benefit of wealthy elites.

It is staggeringly heartbreaking to consider the families broken by slavery, the backs broken by “voluntary slavery” moving rocks the size of Volkswagens to make a pretty pile, the whippings, the diseases, the starvation, the sexual and physical rape, the forced breeding of humans like cattle … it is a well of sadness we should be drowning in. But if we were to succumb to this feeling, the propaganda machine of the elites would kick in to perk us up, I am sure. Sad workers aren’t as productive as happy ones.

Have you seen the “tax reform” plan of the Trump administration? Do you still doubt my analysis?

August 9, 2017

A Modern Quandary

I have been reading “Sociology is a Martial Art: Political Writings by Pierre Bourdieu.” This is puzzling to me because I haven’t been having any trouble sleeping, so why would I want to read a sociology text? (Sorry, old joke.)

In a context different from the one I will address in this post ( his was the impact of television), Professor Bourdieu wrote “How can I reconcile the exigency of ‘purity’ inherent in scientific and intellectual work, which necessarily leads to esotericism, with the democratic interest in making these achievements available to the greatest number?” His concern was that the primary function of television seemingly was to dumb down even simple discussions. Here I want to address the topic of the anti-evolution crowd and the anti-climate change crowd.

Without specialized training, it is hard to follow the science in these fields. I have a graduate degree in chemistry and I am not versed in the nuances of either subject (although I guess I could create a small summary of each). So, without esoteric training, how are the citizens in a democracy supposed to assess the validity of such concepts.

We could start with having better basic education, explaining that a scientific theory is a mechanism that explains a great many facts as well as makes predictions available to expand out knowledge. Currently people use the word theory as a synonym for “wild ass guess.” “I have a theory about that …” they will say. No, they don’t. At best they have an hypothesis and more likely they have a guess that is poorly substantiated at best. To say one has a “theory” makes one sound better than to say “I have a guess as to….”

It also does not help that each topic has a cadre of sociopolitical opponents. If the Theory of Evolution is correct, all of fundamentalist Christianity and most of doctrinaire Christianity is off to a rubbish heap somewhere. Basically, if God didn’t created humanity magically, we couldn’t have “rebelled” against his authority, so there was no original sin, and hence nothing for the human sacrifice that was Jesus to absolve. (Bye, bye!)

Climate change has political opponents who have economic stakes at risk. The Koch brothers fund anti-climate change efforts to protect their oil refining, oil pipeline, and other industries, while David Koch supports NOVA science education programs on PBS, including programs on climate change (possibly as a suppressing maneuver?).

So, ordinary citizens are left to evaluate what appears to them to be a propaganda war. “Scientists” have lied to them before as have businessmen, so it is hard to decide which side of either of these debates is trustworthy.

I find the argument that climate change was invented for scientists to be able to secure grants for their work (It is a hoax!). Whoever invented this red herring obviously has never interacted with scientists, each of which has a big ego, and the first of them to discover such a plot would gleefully expose his colleagues to shame and humiliation for participating in it. Most scientists minored in gloating in college.

So, what’s a citizen to do?

I think part of the problem has to do with the evidence not being on display. I hear Christian apologists often ask the question: Where are the transitional fossils? This questions goes back to the time of Charles Darwin when there was a very sparse fossil record. The key facts that the public needs to know is that fossils do not form all that often, so are passably rare and that with regard to transitional fossils, fossils that show one species transitioning to another, there are large numbers of them available. Maybe a video (to reach the masses) needs to me made of the amount of evidence underlying the Theory of Evolution. The amount of evidence, from many, many different and unrelated fields of science is incredibly vast. Just a list of peer-reviewed articles supporting the theory scrolling on like the credits of a Hollywood movie (like they do on TV, at super high speeds) would take hours. Flashing photos of all of the fossils that apply to animals no longer in existence but which fit into the evolutionary family tree of Earth, would also take quite a long time (blink, blink, blink, maybe a running counter would help: 1, 2, 3, …, 3008, 3009, …).

The same could be true for Climate Change. We could run publicity shots of the smiling faces of the scientists in the field who support the tentative conclusion that humanity is contributing to the current round of climate change (blink, blink, blink, maybe a running counter would help: 1, 2, 3, …, 178, 179, …). Then the photos of those reputable scientists who oppose the current consensus on climate change could have their photos flashed (blink, blink, blink).

There is no way ordinary citizens could be brought up to speed on these topics through educating them, because even with the head start in such training I have, I do not want to put in the effort. Instead, I trust the scientists in their field to represent their findings correctly (to the best of their ability) and I trust the egos of their colleagues to prick any intellectual bubbles that are flimsy or unfounded.

Another route might be to create an independent evaluation board to provide basic explanations of science topics to legislators and citizens. The Town of Brisbane, Australia did this a while back (don’t know whether they still do) when they created the office of Town Scientist whose job it was to explain scientific topics to the town governing board and citizens of the Town of Brisbane. For the longest time the State of California had an independent political official whose job was to explain issues voters needed to address and that office was never politicized or demeaned, and it worked really well for quite some time (don’t know whether it still does).

This is a modern problem, because back when “governance” was by autocrats/monarchs, they didn’t give a fig about whether the people understood or not. Ironically, it was the advent of merchants (aka business people) who accumulated wealth (aka power) enough to make it important that a wider swath of a country’s population be made to understand governmental decisions. With the advent of modern democracy, issues are now submitted to the ballot and candidates for office are voted upon, too. We need to figure out how to “reconcile the exigency of ‘purity’ inherent in scientific and intellectual work, which necessarily leads to esotericism, with the democratic interest in making these achievements available to the greatest number” and we need to do it fast. Life ain’t gonna get simpler.

August 6, 2017

The Invisible Lesson of Martin Shkreli

The New Yorker described Mr. Shkreli as “A former hedge-fund entrepreneur and drug-company C.E.O., Shkreli came to prominence while he was running a company called Turing Pharmaceuticals. During his tenure, Turing bought a drug called Daraprim, which is used to treat rare but serious parasitic infections in AIDS patients, and Shkreli raised the price per pill from thirteen dollars and fifty cents to seven hundred and fifty dollars, sparking public condemnation and outrage.”

That guy. He just lost a lawsuit, brought by the government, that accused him of fraud.

What’s missing here is something you should not mistake. In all of the current discussions regarding freedom, religious freedom, political freedom, campaign finance freedom, etc., Mr. Shkreli’s was the freedom they were talking about, not your idea of freedom.

The plutocratic cabal, now in charge of our governments, by and large wants the freedom to pursue their interests (primarily involving getting as rich as they may) without collective opposition. They do not want laws being passed, or movements recognized, or any group activity whatsoever being recognized. They want labor unions gone, they want government limited to very basic basics, they want their right to do business as they see fit unfettered. If indentured servitude were to be promoted now, they would not be opposed.

According to them, Mr. Shkreli’s freedom to change the price of a pill from $13.50 to $750 is his and his alone and everybody else should butt out. For some of this, I tend to agree. I do not think people should be sent to jail for being assholes (too expensive, would need to build too many prisons, etc.) but capitalism is and has been our problem for a very long time. Unregulated, capitalism leads to doom, just like any other economic ideology (communism, socialism, etc.). The people collectively need to confine ideas that have this much scope and reach.

The idiots promoting this “freedom” think that competition is an absolute good, yet they do not really believe this, otherwise their children would be thrown into the public schools to compete and excel and survive and not sent to “country day” schools and then Harvard and then given a lofty position in their family’s company.

The plutocrats are definitely in a “this is good for us but not you” cadre and they need to be restrained from harming the rest of us. Instead they have gotten the upper hand in restraining us from causing them any harm. Look to see Mr. Shkreli’s verdict overturned in a higher court. (The plutocrats own the Supreme Court and a few of the federal circuit courts at this point.)

August 2, 2017

Shareholder Value Supremacy … Put a Fork in It

In this article over at Naked Capitalism, Michael Olenick devastates the idea of corporations functioning with the sole goal of increasing shareholder value, arguing that social responsibilities play a role as they have in the past.

I love Naked Capitalism (Yves Smith)!

May 20, 2017

An Argument for a Minimum Wage

There have been myriad studies about the impact of having a minimum wage. Some indicate that there is no particularly strong linkage between creating a higher wage for low wage workers and some indicate that a rise in the min wage causes unemployment.

The politicians arguing against a min wage use a very simplified argument: namely that if employers have to pay their workers more, they will only be able to hire so many workers, mostly fewer. This is way too simple in thinking this. For one, if people are paid more money, they then spend more money (what goes around, comes around) which is good for business. There are many more facets to this issue.

If labor costs go up, and they have myriad times due to labor contracts, etc. how, oh how, do companies cope? (Yes, I am being sarcastic.) The amount of money that goes to labor in any company is not a fixed amount or even a fixed percentage of the company’s budget. There are many, many ways that those increased labor costs can be offset. For one, you can raise prices for the goods created. You could decrease profits. You could find other ways to reduce operating costs (reduce energy costs by going solar, etc.).

Knee jerk responses to these actions abound, of course. “If we raise prices, we will reduce sales!” Really? Companies never raise prices, then? C’mon, get real. Just raising prices alone, of course, is the lazy way to deal with increased labor costs; a combination of actions would be better.

Most of these minimum wage discussions are shallow and politically motivated. Basically, the opponents of min wage increases give minimal arguments and only add to them if we don’t accept (aka we reject vehemently) their overly simplistic argument.

Let me explain a real reason for min wage increases. Minimum wage increases are justified for the simple reason is that business interests (aka the plutocrats) have conspired to suppress wages for a long, long time. This involves bribing politicians to undermine union powers and privileges, delaying minimum wage increases, changing the laws in favor of employers over employees, etc. They have been particularly effective over the past 40 years (see the chart below as to the effectiveness of wage suppression over the past 40 years). The only power source of ordinary people to oppose these powerful business interests is government. The cabal wants wages low (too low) and so government must set a floor on wages. It is not simple but at least that is the political dynamic.

If you want to see this playing out right now, consider the current stance of the GOP. The GOP has been the champion of local rights for a long time. Education, for example, should not be a federal issue, but should reside in the states, with the states deferring to local communities and their school boards. So, what has been the GOP response to cities who have enacted their own min wage increases? GOP dominated states are passing laws to roll back those democratically achieved minimum wage increases and to bar such local increases in the future. Local control doesn’t mean a fig when the GOP’s paymasters issue directives (You will keep wages down, or else).

March 13, 2017

We Have Met the Enemy … and It Isn’t Us

We have met the enemy and it is … our corporations. Consider first a couple of examples:

You have heard, I am sure, of the so-called “skills gap,” which is that American workers just do not have the skills needed for “today’s marketplace,” so we need to issue more foreign worker visas to fill the necessary jobs. One of the fields clamoring for more of these visas has been Information Technology (IT). IBM, a quintessential American IT company, hid the facts for many years but now it is clear. Between 2003 and 2010, IBM fired so many American IT professionals and hired so many engineers and computer programmers in India that the workforce of IBM India is now larger than that of IBM USA. IBM India had a mere 6,000 workers in 2003 but by 2010 had somewhere in the range of 100,000-130,000 workers. How did IBM manage this into the teeth of the worst global recession ever? It did it by firing over 30,000 workers here in the U.S.

IBM calls this “cross border job shifting,” which sounds ever so much more like a transfer than people getting fired here and others getting hired there. And IBM is not alone in doing this, so how can there be a shortage of IT workers in the US when there are so many Americans who used to hold the very same jobs that are claimed are “going wanting?” What is the real rationale for the demand to be issuing more visas for foreign workers? There is no shortage of highly qualified IT workers. This is simply a classic wage-suppression tactic. Bring in foreign workers and pay them less than you would American workers with the same qualifications. This makes it very much harder for Americans to get wage increases here and also harder to form unions that would look into such practices. Foreign workers do not want to anger their employers because if they lose their job, they lose their job sponsor, and it is back to India for them. They will not join a union, period.

Now, consider another quintessential American company, Ford. Can there be a more American story involving business that the creation of the Ford Motor Company from scratch? But in the late 1990’s, Alex Trotman, Ford’s then CEO, admitted “Ford isn’t even an American company, strictly speaking; we’re global.”

And if American companies like these do not consider themselves “American companies,” how much can we expect them to act on our behalf? When I was a young man, many corporations had multiple stakeholders. These corporations considered their customers to be one, along with their workers as another, and their communities, too. And, of course, also their shareholders. Modern business practices, spurred along by quack economists like Milton Friedman, had reduced the number of corporate stakeholders to one: the shareholders. Well, just one stakeholder if you do not count the executive’s self-interest in their own remuneration, which has skyrocketed while worker wages have been experiencing trickle-up growth.

As a union officer in the 1980’s and 90’s I participated in an experiment with management of our enterprise ($150 million annual budget) on creating a more cooperative governance structure. Part of that effort was coming to an understanding of relationships between and among the two groups. One facet of that learning was that “workers” (we all worked for the company) we all tended to imbue our work relationship with trust, that is we put our trust into our employer to some extent. This was not earned trust but, basically, we trusted our employer because we wanted to have a job in which we could trust our employer. This wishful thinking trust usually had no repercussions, but when something happen that a worker or workers did not like, they felt betrayed by someone they had trusted (trusted to do what was never specific, usually it was “the right thing”). Such “betrayals” existed in collective memory for decades. (I know this as when I was hired into this company I heard “stories” from other employees. I found out later that some of them were almost 30 years old.)

We are making that mistake now. We are told by representatives of these “American companies” that we should “trust the marketplace” and “trust them.” But their actions indicate that not only are they untrustworthy but they are not even American companies. Imagine how you would feel if a foreign company, say from China, wanted to come into your community and build a plant, one with a bit of pollution associated with it. Then think how you would view that intention were is an American company? Would your response be the same? Yet, these American companies no longer consider themselves to be American, and have acted accordingly for decades now, but we still “trust” them more than we do others.

These companies have no issue with firing you and hiring a replacement from overseas and ask you to train your cheaper replacement (happens all the time, happened to my ex-wife). These companies have no problem with going through bankruptcy to eliminate their obligation to pay into their worker’s pensions. These companies have no problem with manipulating our tax laws so that they pay no taxes, with the burden to make up the difference shifted to you and me. These companies have no problem in bribing our public officials to do their bidding instead of the people’s. And if you want to know why our recovery from the Mother of all Recessions was so weak, with employment struggling to get back to anything approximating normal, realize that business leaders see every crisis as an opportunity and in this crisis they used the opportunity to outsource even more jobs. They were hiring, just not in the U.S. That is how much loyalty they have to their bottom line and how much they have to you and me.

Ironically, we have just elected a corporate businessman President to fix this mess (drain the swamp). If this were not so ironic, so funny, I would be crying. When are we going to wake up? When are we going to invest our passion and our votes in organizations, like labor unions, that have proven track records for countering these un-American corporate interests?

Wake up people! It is very close to “too late.”

March 7, 2017

The GOP on the Move!

Slow to begin, the GOP legislative onslaught is picking up steam. Here is a partial list of some of their coming hits:

HR 610 Vouchers for Public Education — (The bill also repeals basic nutrition standards for the national school lunch and breakfast programs.)
HR 899 Terminate the Department of Education
HR 785 National Right to Work (aimed at ending unions, including teacher unions)
HR 861 Terminate the Environmental Protection Agency
HJR 69 Repeal Rule Protecting Wildlife
HR 370 Repeal Affordable Care Act
HR 354 Defund Planned Parenthood
HR 83 Mobilizing Against Sanctuary Cities Bill
HR 147 Criminalizing Abortion (“Prenatal Nondiscrimination Act”)
HR 808 Sanctions against Iran

Actually, I can get behind the HR 899 effort. The Federal Department of Education has been either an embarrassment or a front for the privatization of public education (Arnie Duncan!). So this is no great loss. But what do the other bills have in common? Oh, if the GOP is suggesting it, it favors the rich!

HR 610 Vouchers for Public Education The rich have been trying for decades to get the private religious school educations they provide their children and currently pay for out of pocket to be paid for by the public. That and they also want to send their kids to lily white schools, preferably one with Country Day School in its name. And even the little touches are precious: with the repeal of the basic nutrition standards for school meals, ketchup is finally a vegetable again.
If the GOP is suggesting it, it favors the rich!

HR 785 National Right to Work This is famously anti-union legislation. The GOP is financed by corporate employers who wish to suppress worker’s wages. They have been doing a fabulous job of just that for the past 40 years, but still any opposition to their wage suppression scams is not to be countenanced. The plutocrats have pulled the fabulous rhetorical trick of getting their white, working class base to hate unions, the sole power player that can help them against the tyranny of the corporations.
If the GOP is suggesting it, it favors the rich!

HR 861 Terminate the Environmental Protection Agency Who needs the EPA? Clearly businesses do. When Ronald Reagan called in William Ruckelshaus to tame the EPA’s burgeoning bureaucracy, Mr. Ruckelshaus was astonished to receive encouragement to strengthen the EPA from none other than several chemical industry chief executives. Their message was that “the public, they told me, was spooked about the turmoil at E.P.A. Americans didn’t believe anything was being done to protect their health and the environment. They didn’t believe the E.P.A., and they didn’t believe the chemical industry. These executives had concluded that they needed a confident, fair and independent E.P.A. They knew that an environmental agency trusted by the public to do its job gave their businesses a public license to operate.” But the GOP just can’t help themselves, can they? All of those burdensome regulations hinder the American genius for making money (for plutocrats). Who needs air to breath and water to drink, we need jobs! (Remember the Goose That Laid the Golden Eggs?)
If the GOP is suggesting it, it favors the rich!

HJR 69 Repeal Rule Protecting Wildlife Hey, they have tooth and claw and don’t they have their own law about those? Let ‘em protect themselves. Under other new GOP legislation they will be allowed to buy firearms with no background checks, just like everybody else.
If the GOP is suggesting it, it favors the rich!

HR 370 Repeal Affordable Care Act The rich get a tax cut, the poor get early graves, a “win-win” situation for the GOP.
If the GOP is suggesting it, it favors the rich!

HR 354 Defund Planned Parenthood First they complain that people of color are having too many babies, now they want to make it so they have to have them. Don’t expect any consistency here. This was a campaign promise (not of Donald Trump’s) and a promise is a promise, even if the Planned Parenthood “issue” is another straw dog, like “Acorn.”
If the GOP is suggesting it, it favors the rich!

HR 83 Mobilizing Against Sanctuary Cities Bill Hey, we said “state’s rights” not “cities’ rights.” Local control? Nope, not while the local control guys are in power.
If the GOP is suggesting it, it favors the rich!

HR 147 Criminalizing Abortion “Doctors, lock ‘em up!” According to the GOP, those babies must be born before they can be abused and legally executed. It is a matter of the rule of law.
If the GOP is suggesting it, it favors the rich!

HR 808 Sanctions against Iran The GOP cannot help itself, it has to “poke the bear.” The Big Bear is Russia but Iran is an ally of Russia, so close enough. The neocons and apocalyptic proselytizers (Steve Bannon, et. all.) want war now because it will only get harder to wipe out those enemies of Christ as time goes on and the MIC says “There are no profits like war profits.”
Oh, and, if the GOP is suggesting it, it favors the rich!

 

March 3, 2017

The Utter Failure of Economics and Politics to Prevent the Ravaging of the Rich

I ran across this rather incredible graph recently:

20-year-annualized-productivty-growth-in-the-uk

The data are from the UK so I looked to see if I could find any similarities to data from the US, and yes, they are there.

The graph shows the growth of worker productivity from the years 1800 to 2010. Since all of the values are positive, productivity has trended upward in general. But you can see four distinct trends on this graph: first there is a strong increase in productivity from 1800 to about 1870, then a general decline in the rate from 1870 to about 1900 (while still being positive, the amount of increase dropped period by period). Then there is another long period of productivity increase improvements from roughly 1900 to the mid 1970’s, followed by another decline in the rate of increase from 1970’s to the present.

What do these periods in which productivity changes steadily decline in magnitude correlate with? Ah, the period 1870-1900 is often referred to as the “Gilded Age.” And the mid-1970’s to the present started with Reganism/Thatcherism and is the second great period of wealth transference to the few in this entire time period.

We have been told over and over that the accumulation of wealth by the few in our society is a good thing. The wealthy are the “job creators,” the movers and shakers who get things done. But the reality is exactly the opposite. The people who have been telling us that wealth inequality is a standard feature of capitalism and a “good thing” are just the PR men for the wealthy, trying to avoid pitchforks and torches showing up in the gated communities of their rich paymasters. That so many of these flacks are economists should be appalling to the intellectual community. (Maybe we should disbar them and transfer academic economic departments to become part of the marketing programs of schools of business.)

All of the data show that periods of extreme wealth accumulation by the few devastate economies instead of facilitating them. The steepest upward portion of this graph takes place between the end of World War 2 and the arrival of Reganism/Thatcherism and anti-unionism. Productivity grows the fastest when the wealth is shared more fairly.

Please note that there were rich people during this post-war period. There were many people getting rich for the first time. They weren’t, however, getting filthy rich by distorting the political systems in their favor. Becoming rich through your own skills is one thing. Becoming obscenely rich by hook or crook, though, hurts all of us.

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