The War with the Parasite Class

Another important post over at Ian Welsh’s website is well worth reading:

How Over-Priced Is the US Housing Market?

Here is just a taste of the tone of the article:

“Parasitical economies, and most developed countries have one, exist by immiserating people.

“This is the real reason for the current push for basic income: the parasite class is scared they may be about to kill the host, and want a government infusion to keep the poor and the (reduced) middle class stumbling on.

“I don’t oppose a basic income, but understand that billionaires aren’t supporting it out of the goodness of their hearts. They expect to take every cent the government gives you.”

 

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A Failure to Communicate

I read just now the following:

“Alexandria Ocasio-Cortez … was on Jake Tapper’s show on CNN the other day, the host grilled her about how she would come up with the forty trillion dollars needed to fund Medicare for all, housing as a federal right, a federal jobs guarantee, tuition-free public college, and canceling all student loan debt.”

She apparently could not answer the question … <sigh>.

Let me just address funding “Medicare for All (MFA)” for the nonce. Currently, the average family of four pays in excess of $16,000 per year for their health insurance. Mostly this goes unnoticed because these payments are made by their employers as part of their compensation. How much do you think the actual value of that insurance is? If you compare it with costs in other developed countries and look at how inflated the costs are and consider that the insurance companies providing the “insurance” are quite an unnecessary layer of bureaucracy (Medicare has a 3% overhead. If private insurance companies likewise have a 3% overhead, where do all of the handsome profits those companies make come from?). Basically that $16,000 represents a quite unnecessarily inflated cost. Let’s say, for the sake of argument, the actual cost is $9,000 for that family of four. If MFA is invoked, the employers will be required to pay that $16,000 directly to the family and then that family will pay, say $10,000 in taxes (a bit more than their own costs to be able to cover the unemployed, etc.) and pocket the other $6000! (Note: these are not the actual numbers, but even if $100 ends up in your pocket, you would be making money on the deal.)

Once we have Medicare for All, we also have group buying of pharmaceuticals, something Big Pharma has spent billions to avoid (why they are opposed to such a system is it would squeeze its profits down from the astronomical to merely lavish). This will reduce the cost of medicinals, at least to what other countries are paying (for the same drugs from the same companies … yes, they are gouging the Rich Gringos because they can). Similarly there are a multitude of large cost savings that can be wrung out of the system (e.g. there would be only one billing process, not hundreds, for doctors and hospitals to contend with).

Currently the US spends about double what any other rich nation spends on health care per capita. This means we could spend 10%, 20%, or even 30% less and still be spending more than any other country on health care. If you remove the costs of private health insurance companies, we can save even more.

Conservative pundits always focus on the cost/taxes and never mention the cost savings. Ms. Ocasio-Cortez should be better prepared if she is going to go on camera to defend our ideas.

PS The Federal Reserve “printed” several trillion dollars to bail out the banks and Wall Street firms during the Great Recession and these same pundits didn’t blink. Plus that “forty trillion dollars” is not for just one year and they are careful not to mention that.

Our Great Response to the Great Recession

Note The title I wanted and could not create is “Our Great Awful Response to the Great Recession” (mostly due to all of the recent “pat on the back” looks back at our response to the financial collapse).

On the Naked Capitalism website there is a great interview of Michael Hudson in which he simply and clearly points out that our economy is currently still in the tank because of decisions made to bail out political donors and screw average Americans, mostly by President Obama (a corporate Democrat), which were unnecessary and counter to what has worked in the past.

Check it out:

Michael Hudson: 10 Years Since Lehman Brothers Bankruptcy – Did the Economy Really Recover?

 

Artificial Intelligence—The Promise

I am a big fan of digital technology and someone who is hopeful of the future. It is harder and harder for me to maintain that stance, however.

Currently there seems to be a widespread debate regarding the development of Artificial Intelligence (AI). Since we know so little the positions staked out are quite broad. At one end is a new future where machines take over dangerous and boring jobs and human beings have more leisure. At the other end, autonomous drones are the first step toward Skynet (the “bad guy” in the Terminator movies) and the extermination of human beings by intelligent killing machines.

There seems also to be many opinions in between the two extremes.

Something I do know is that it will not be the machines that determine the outcome. In every case of new technology impactful enough to change the course of history, the tech has been used to coerce and oppress the labor of the masses to serve the interests of the elites.

Consider the following photograph.

This is an Amazon warehouse. Amazon is a tech company. So, how do those who work in Amazon’s warehouses fare? Amazon uses personal monitoring algorithms to make sure that its employees do not waste time taking short breaks to catch their breath or go to the bathroom. They are to stay on task as long as Amazon wants them to … or else.

Jeff Bezos, creator of Amazon, makes huge profits by paying his warehouse employees wages that are so inadequate that many of them need public assistance just to get by. Thousands of Amazon workers are forced to rely on food stamps, Medicaid, and public housing because they can’t survive on the wages they receive. Meanwhile, Jeff Bezos is now worth $158 billion, and his wealth increases by leaps and bounds. (And who pays for the public assistance subsidizing Mr. Bezos’ wealth? You and I do, of course.)

If you think back to the first powered looms to make cloth, it was the workers who had to get along with the machinery, not the other way around. Same was true with the assembly line to make automobiles, etc.

I do not argue that there were no benefits from technology that actually accrue to ordinary people. Henry Ford, no friend of workers, paid more than anyone else as a daily wage to pursue his dominance of the auto market. But that was then and now, wage suppression is the favorite tool of the captains of industry. Much of the advanced tech of today is not available to us because, well it is very simple, we cannot afford to pay for it. We don’t make enough money.

As much as people will squander $1000 on a new iPhone, the really impactful tech, such as a liver transplant, is not available to you … unless you can afford to pay for health insurance and many, many people cannot.

So, AI in and of itself will not necessary oppress ordinary people, coercing our labor for the benefit of the elites, but if rich people have any say in the future, my bet is that a sizable amount of AI will be used for just that purpose. (Jeff Bezos has already begun the application.)

CEO Pay Growing Faster than Yours … Still

A recent report of CEO pay shows that the gulf between CEO pay and the pay of average workers in their companies has grown wider. I am shocked, shocked I tell you!

Articles are asking “How could this have happened?” As I have said over and over, this did not “just happen,” it was managed by the CEO’s. These people sit on each others boards of trustees to make sure that their pay increases will never be threatened. They have lobbied Congress and state houses to get tax cuts and tax provisions that favor them. We call such tax regulations “loopholes,” but loopholes are laws meant for one purpose that are used for another. These laws were passed for the purpose of increasing CEO power and wealth, period.

Take for example, Bill Clinton’s legislation to rein in the growth of “executive pay.” The situation was CEOs, through “golden parachutes” and other nonsense, were getting extravagant compensation for lackluster, even terrible, performances. So, the Clinton administration decided that CEO pay should be tied to CEO performance, an idea not so bad. But instead of tying CEO pay to some standard measure of business performance (income, profit, 5-year profit average, average wages in the company, customer satisfaction, etc.), they tied it to the value of the company’s stock, and therefore to the stock market. CEO’s rapidly took advantage of this and began getting more and more of their compensation in the form of stock options. They also started manipulating their own company’s stock price for their own gain. (I’m shocked, shocked I tell you!)

The most recent iteration of this practice is having the company borrowing money to “buy back” stock in the company. This has the effect of raising the price of the stock that remains and burdening the company with debt. The only people who benefit are stockholders and, oh, CEOs and other execs. This practice (stock buy backs) used to be illegal but as part of the package deal, it was made legal in the same era that started this binge of stock manipulation.

Who in a company is better positioned to manipulate the price of the company’s stock? Gosh, I believe it would be the CEO.

Can you spell insider trading, boys and girls? And it is legal. And it is making CEOs rich beyond their wildest dreams. And that wealth is being applied to our legislative and court processes to make them even wealthier and more powerful.

And, it all “just happened.” If you believe that, I have some lovely prime building land in Florida you may be interested in … but you might have to drain the swamp first.

Why Are We So Afraid?

On Quora, this question was posed: Why are so many Americans “tough on crime”?

One of the answers started this way:

“Americans are terrified.

“The United States of America is a nation of the coward, by the coward, and for the coward. Americans are the most frightened people you will find anywhere in the world.

“We are scared of everything. We’re scared of terrorists. We’re scared of immigrants. We’re scared of criminals. We’re scared of GM food. We’re scared of Muslims. We’re scared of brown people. If you come from any other industrialized country, and you’ve never lived in the US, it’s hard to understand the pervasive sense of fear that Americans live in.

“Americans are frightened, and this fear makes us cruel and mean.”

I immediately thought of the campaign to criminalize being a Black male (not just “driving while Black,” but existing while Black). As Jim Crow laws lost their footing in this country, some way had to be created to control Black people, especially Black men (just had to). After emancipation, one strategy was to criminalize the state Black people found themselves in. Vagrancy laws alone caused a great many Black men to be incarcerated and because they were poor and couldn’t pay their fine, they had to work off their fine … and room and board in the county jail. Voila, de facto slavery all over again. When these laws because unacceptable to society at large, the approach became “lock them up” on a much larger scale. Crimes that Blacks might commit had much longer penalties than if whites committed them. (Remember the crack cocaine sentences that were ten times longer than if powdered cocaine were involved? Guess which “possession crime” Blacks were more likely to be caught for.)

It has become our habit, through long exposure, to motivate ourselves to do anything politically by using fear. The message is “we must change because, if we don’t, something really bad will happen.”

Consider education: the report A Nation at Risk, claimed (erroneously) that our poor education system was dooming our country to second tier status … gasp, or worse! Also in education, the fear that girls were falling behind boys in math was promoted heavily at the exact moment at which girl’s math test scores had become equal to those of boy’s. (No mention was made of boy’s English language scores being much lower than girls, that was just “boys being boys.”)

The early environmental movement went to inflated extremes to gain attention. We were told we needed to “save the planet” as if it were at risk and not us.

Our “news media” haven’t helped one bit. They are not in the business of putting things in perspective, rather they are in the business of selling their wares. And the wares that sell are often the most alarming, most lurid, and most outlandish of stories.

Fear mongering is a booming business in this country.

And we are all paying for this by having fear dominate our lives. Donald Trump’s presidential campaign was based solely upon fear. The slogan “Make America Great Again” implies we were great once, but are no longer …. but we could be again, just vote for me. Was there any analysis of this opinion? If a survey of world citizens were to ask the question “Which nation is the most powerful currently?” do you not think the USA would be voted to the top? (And if you didn’t so vote, would you expect to be invaded?)

When was the last time something was done politically because it was the right thing to do, rather than via a fear mongering campaign? Obamacare? The opposition to it was loaded with fear mongering, e.g. Death Panels! The national debt will skyrocket! The “safety net” will become a hammock! If not that, what?

If we insist that we will not do anything unless we are terrified, then all we are doing is waging a terror campaign upon ourselves. We are also letting the fear mongers and those who control the message in our news media to lead us around by the nose.

Welcome to the Twenty-first Century!

 

 

 

 

 

 

 

 

 

 

The Deliberate Mischaracterization of the National Debt

Republicans and even a few Democrats are fond of characterizing the National Debt as if it were akin to your household debt and claiming that the size of that debt is a big, big problem.

And I respond with: how do you know when a politician is lying about the National Debt? Answer: when his lips are moving.

Most of the “debt” incurred by the federal government is in the form of Treasury bonds. If one thinks of this as a piece of paper (rather than the electrons they are made of now) printed by the government, it is in effect a promise to pay. If the nominal value of the Treasury bond is $1000, the promise to pay is that $1000 and a smaller amount more. Easy peasy. This is, in effect, the government printing money. What would be the difference between this procedure and the government printing that $1000+ in the form of currency? Answer: there is no difference.

But, but the government has to pay off that debt, doesn’t it? Sure, it issues a new series of bonds and pays off the old bonds with the sale proceeds from the new ones.

But, but … that’s something we cannot do as individuals. Yep, that is why what we have is called a sovereign currency. As a sovereign country we can make as much or little of it as we want.

Consider this, in 1964, the year I graduated high school, the national debt was $312 billion, which constituted 46% of GDP. What do you think people would have said then that in 2018 it would be $21.5 trillion and 108% of GDP? I am sure some would have set their hair on fire and run about, claiming this was disastrous, that the American economy would be in a “failing third world country” state with rapid inflation and that we would be in a severe decline economically. Have you noticed any of this? No? (There are a great many things I do not like about our current economy; that is not my point, my point is that we are not now a banana republic because of our yuge national debt.)

Oh, by way of creating a little perspective, the National Debt in 1946, my birth year, just 18 years earlier, the debt was $216 billion, which was a whopping 119% of GDP.

As another point to ponder, realize that the U.S. Federal Reserve, aka “the Fed,” created $2 trillion out of thin air to fund its purchases of stock and creation of bank “reserves” and whatnot to “save the economy” during the recent Great Recession. Did you notice all of the inflation created by the injection of that much “new money” into the economy? No? Neither did I. Inflation was virtually nonexistent. In fact, many were worried about deflation. So much for the claim that printing money causes inflation. Printing money can cause inflation, but it doesn’t have to.

The country’s budget is not like a household budget, not even close. The country’s debt is not like a household’s debt, not even close. If the National Debt really bothers you, the government could print $21 trillion in currency (now done with electrons, not paper) and pay it off entirely. This is not desirable for many reasons; I won’t go into them now. (Whew, I had you worried, didn’t I? But just a teaser … would you make war on someone who owed you a lot of money?)

In an era of “fake news” the claim of there being a “big, big problem with the national debt” is among the fakiest of bits of news. Of course, there is no such thing as fake news, we have had lies in the news since the beginning of the country; those lies are still news. Think of the news as a court transcript; people lie in court all of the time and the transcripts can be used to convict them of that; they are not automatically true, just a record of who said what, just like “the news.” This is why lawyers tell their clients to shut up and not talk about their cases, something President Trump would be wise to do.

This claim of a “big, big problem with the National Debt” is pure propaganda, playing on the general public’s ignorance of national economics to push political agendas that have no good basis otherwise. For example, if you look back in history, if you had a large problem with debt, the last thing you would do is … cut taxes. Think of a corporation which is struggling with a large amount of debt, the last thing they would want is a reduction in income such as you would get if you cut prices. Cutting taxes creates a large reduction in income for the government. If spending stays near the same, a larger amount of debt is created. Have you known of any administration, Republican or Democrat, which has reduced spending? No? Neither have I. This is why Republicans can cut taxes dramatically and not worry. No matter what happens, it will not affect what they want to do. Reagan, Bush 1 and Bush 2, and Trump spent/spend more money than they took/take in, which was fine by them as long as their wealthy sponsors got wealthier, their prime objective. After all, these are the people that claim that they want to “get the government off of the people’s backs” and then create legislation pushing the government into our private lives ever deeper. Pay no attention to what they say, watch what they do.

The Problem with Bases

No this is not about baseball. It is about our two main political parties and their “bases.”

The Republicans have sold their souls to the Religious Right, neoliberals, and reactionaries of the fringe of the right wing of American politics to get and stay elected, no matter the damage done. They haven’t dumped the rich as a core base element for who else would they serve? The Democrats have dumped their historic base of labor (working class people), minorities, and the less wealthy for the professional class, only to find out there aren’t enough of those to win them elections.

When I was young (I first showed an interest in politics when Eisenhower was president.) Republicans were stabilizers. They supported the institutions that kept out society stable (in their HO, of course). They supported the schools, the police, the military, the government (Right or Wrong!), the church, law and the courts, and so on. The complained when political or judicial opinions went the other way, but they didn’t threaten to take their ball and go home.

When I was young, the Democrats stood for fairness, helping the poor, balanced taxation, labor unions, and they were far from anti-war (both Kennedy and Johnson expanded the Vietnam War tremendously on specious grounds at best).

Neither party was worth a damn when it came to international relations. There was a small fringe who complained loudly about foreign aid, which has always been a spit in the bucket financially. (Somewhere along the line instead of giving technical aid and money to other countries, we now give them discounts on buy the weapons of war. Apparently as far as the U.S. goes peace and freedom don’t go together.)

Politically there was as much corruption then as is the standard now, but the stakes were smaller as were the amounts grafted by our politicians. But each party had some principled actors who kept the others in line. Often the “line” was racist or sexist, but there were lines and you could, as ordinary citizens, see them and attack them or try to move them.

Now, what I see is cowardice and incompetence (to he left of me, to the right of me, …) in our political bodies. Leadership? Not to be found? Intelligence? So little that the political class cannot evaluate whether their intelligence experts are to be trusted. Political astuteness? I can’t even find a politician who can define it. Deft policy drafters? Give me a break.

If we were to have a parliamentary system as has been suggested, these two parties would dwindle away to nothing and newer, more robust, more coherent parties would take their places. But as I have posted before, our political system is rigged. As much as the Founders feared political parties, they created a system that allowed two of those parties to hijack the system. (Our winner take all elections doom us to having just two dominant parties.) And, it is clear that the Founders feared true democracy, so they structured the Constitution against that.

I am absolutely gob smacked that the “press” still posts articles addressing the public will. They tell us, for example, that the Roe v. Wade SCOTUS decision has never been so popular. So? Since when has public opinion been a determining factor in anything governmental? Large majorities of citizens want background checks for all firearms sales; does that matter? A large majority of people want corporations to pay more in taxes; does that matter? If you are poor or middle class you have zero chance of affecting legislation. If you are rich and a campaign donor, then you have some chance. If you are a rich corporate lobbyist and have donated large sums, then you have not only a chance to affect the outcome, you may be invited in to help write (or write completely) the text of the bill.

If the Republican Party of my youth or the Democratic Party of my youth were still in existence, I could vote for the kinds of candidates either party proffered. As they are now, I cannot vote for either party as they both are embarrassments and anti-democratic and need to go.

The Monty Pythonesque Administration

Comments have been flying fast and furious regarding the meeting between President Donald Trump and Russian President Vladimir Putin.

Comments ranges from:

“One of the most disgraceful performances by an American president in memory,” Sen. John McCain’s description of the news conference.

to:

“(What) the American people saw is that President Donald Trump will always put the prosperity and security of America first.” (VP Mike Pence)

That the two polarities, including the ones evinced here, are coming from Republicans; well at least this is new.

I am reminded of a Monty Python sketch, “Argument Clinic” from Monty Python’s Flying Circus, written by John Cleese and Graham Chapman. Graham Chapman enters the office of the Argument Clinic looking for a good argument. John Cleese complies but no matter what is said to him, his response is “No, it is not.” or “No, you didn’t. (I am working from memory here, so if I am off on the details, no problem, it is the gist of the sketch I am getting at.)

Finally the paying customer complains that they were not having a proper argument as Cleese was just gainsaying everything sent his way. Cleese’s response was “No, I’m not.” No resolution occurs because they run out of their allotted time.

This, apparently, is the Republican strategy to run the Oval Office. No matter what anyone says, the answer is “No. it is not.” or “You are wrong.” If someone quotes sources, the response is “Fake news!” No matter what happens, the first things out of their mouths are outrageous lies.

Backing all of this up is Fox (sic) News propaganda machine and the various Internet “news” sites who back Trump’s version of reality. As a consequence, we have a significant portion of the American polity who believe Mr. Trump’s version of reality. Hell, quite a few of them even believe Mr. Trump is a Christian, all evidence to the contrary. (Jesus said it is okay to grab women by the pussy, if you are famous. Two Corinthians 6:66)

Then the talking heads lump it all together as us being a “Divided Nation,” as if we were the cause and not the lying, mealy mouthed politicians.

Mr. Trump is transforming American politics … and you are not going to like what you get. Whoever is in power just has to tell “the people” things that back up their performance (e.g. “The GDP has doubled on my watch.” DJT … when it has gone up 6% at most.) and then their propaganda machine goes into action to back it up or muddy the waters to make it seem that opinion is divided on the truth of that statement. (“After all, they will say anything to “prove” their point.” (stated by both sides).)

So, okay, conservatives. You have seen the way the Republicans have acted when they got back into power (and even before, refusing to address the nomination of a Supreme Court justice, for over a year). What will the country be like when the liberals get into power (the pendulum always swings back) … if they follow the same play book? Are you going to like it? Are you?

Or would you rather have the old, dull, grind it out politics that served us fairly well for quite some time. You know, the one in which if someone were caught in a massive lie they were expected to resign. (Compare Richard Nixon (then) and the still Senator David Vitter (now). You know Senator Vitter, the family values Republican who was a frequent client of the D.C. Madam’s whorehouse.)

We Can Trust Corporations … Right?

I often heard the trope from the Republihooligans that “we can trust the corporations, that they wouldn’t do anything illegal or immoral as that would affect their reputation which would ultimately hurt profits.”

I haven’t heard that line repeated much lately, especially since there has been a conga-line of disclosures of corporate wrong doing and illegality that has been unending before, during, and after that line was fed to us.

The latest example of corporate abuse involves a court case lost by Johnson & Johnson over one of their flagship products: baby powder. Surely J & J would never include a chemical in any of their products that would knowingly harm its customers (baby customers!), why that might damage their reputation. So would a $4.7 billion dollar award against them.

“Thursday’s massive verdict was handed down in the Circuit Court of the City of St. Louis. It was comprised of $550 million in compensatory damages and $4.14 billion in punitive damages.

“The women and their families said decades-long use of baby powder and other cosmetic talc products caused their diseases. They allege the company knew its talc was contaminated with asbestos since at least the 1970s but failed to warn consumers about the risks.”

OMG, do you think corporations could do such things?

Asbestos. Gosh, we all have know that asbestos is a health hazard for decades now. We have watched TV shows where house remodelers have to call in hazardous waste disposal teams to remove asbestos products before they can remodel their homes. Our public buildings have had to have “asbestos abatement” services in to make expensive extractions of the stuff.

Gosh, could J & J have not known? The judge who issued the $4,700,000,000 award thought not.

And what about the “we can trust the corporations” bullshit purveyors? I say, identify them and get them out of office and out of power, if for no other reason than gross stupidity but more likely because of political and moral corruption.