Class Warfare Blog

May 19, 2019

We Are Using the Wrong Economic Indicators

Filed under: Economics,Politics — Steve Ruis @ 12:08 pm
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Currently our “news media” (whatever the heck that is now) are trumpeting things like the US GDP (Gross Domestic Product), unemployment statistics, average wages, and Dow Jones stock index levels as indicators of the “health” of the economy. And, boy is the economy strong!

Wrong, wrong, wrong, wrong.

These indicators were chosen by the elites to serve the elites.

Consider the Gross Domestic Product, a measure of how much we produce in goods and services. How does that reflect on the welfare of the nation’s citizens? It doesn’t. It indicates how “productive” the economy was . . . but in service to whom? If all of the nation’s output was shipped overseas, the GDP wouldn’t change, but the indicator would indicate how well we were serving overseas customers, not Americans. Shouldn’t economic indicators indicate how well our economy is serving our citizens? (We the people, etc.)

Maybe a Gross Consumption Index would be a better measure. No matter how much we are producing, Americans won’t buy things when they are feeling economically insecure. So, it is more important how much Americans are consuming than they are producing. Is there such an index? If so, you couldn’t tell from the news organizations.

And don’t get me started about unemployment statistics. The number of full-time jobs with benefits is still shrinking, only to be replaced by part-time jobs with no benefits and shit wages. But unemployment is at a record low! Oh, and we don’t count people who have officially stopped looking for a job.

Average wages? Give me a break! Median wages, the wage at the exact middle of the wage spectrum has been decreasing! This means that there are more people making less and just a few making much, much more than that number.

The whole purpose of these misleading “economic indicators” is to convince us that the politicians are doing their jobs. Unfortunately, they are doing it for only the wealthiest among us.

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May 8, 2019

The Bullshit Scam that Are FICO Scores

We have all been told that FICO credit assessment scores are important. There are even services that will help you improve your FICO score, so you will have more credit opportunities.

It is all bullshit and a scam on the public.

I am a responsible person (IMHO of course). I pay my bills on time with rare exceptions, usually based upon forgetfulness. In any case, I have run up quite a bit of credit card debt, not unlike many Americans. But I was paying them down assiduously. I paid off one card and closed the account, a sign of a good faith borrower, I thought . . . and then my FICO score went . . . down. WTF? I still have plenty of accounts, but if I close one I am less credit worthy? WTF? How does that make sense?

I then paid off a car loan! Woo hoo, I paid off my car and I owned it free and clear . . . and my FICO score went . . . down! Again, WTF?

All of the signs of being an honorable borrower cause my credit score to be decreased?! So, I kept my head down and just paid down what I owed. I paid more than the minimum payment on my credit cards every month, and my FICO score climbed up to 700 and beyond! I was so proud!

But, I wasn’t making enough progress on reducing my credit card dept, so I applied to my Savings and Loan for a signature loan (that had a lower interest rate than my credit cards) and paid off my all of my credit cards (Balance = $0)! Note that I replaced my CC debt with an unsecured loan debt of the exact same amount in this process, so my indebtedness did not change even $1. So what happened?

My FICO score soared from ca. 700 to ca. 800! I was now much more credit worthy than I was before, even though my indebtedness was exactly the same! Also, I did not prove my ability to pay off loaned funds at all! But, now I was an “excellent” credit risk where before I was only a “good” credit risk.

Ironically, my S&L checked my FICO score to assess whether I was worthy of the signature loan (aka no collateral loan) when they processed my loan application.

So, what do I conclude from all of this?

I conclude we have been conned. FICO scores (created by a private credit scoring concern . . . I wonder what their corporate values are?) are part of an institutional effort to make sure we are indebted to the system to the max. They are designed to make sure that we can borrow much more than we are prepared to repay in any one year or even one decade. They are a tool of the lending institutions and the financial elites who are now running the whole fucking show!

That Donald Trump is one of their minions doesn’t help one fucking bit. I feel I want to go around the world apologizing to people in all of the countries of the planet for electing the abomination who is Donald Trump and for supporting an American system that oppresses so many people, including our own.

 

April 28, 2019

The Purpose of Religion: A Follow-up

Filed under: Culture,Politics,Religion — Steve Ruis @ 8:03 am
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Salon.com recently re-published an article that originally appeared on Raw Story. Here is a taste of that article:

Scientists establish a link between religious fundamentalism and brain damage
Religious beliefs differ from empirical beliefs, which are based on how the world appears to be
by Bobby Azarian

study published in the journal Neuropsychologia has shown that religious fundamentalism is, in part, the result of a functional impairment in a brain region known as the prefrontal cortex. The findings suggest that damage to particular areas of the prefrontal cortex indirectly promotes religious fundamentalism by diminishing cognitive flexibility and openness—a psychology term that describes a personality trait which involves dimensions like curiosity, creativity, and open-mindedness.

Religious beliefs can be thought of as socially transmitted mental representations that consist of supernatural events and entities assumed to be real. Religious beliefs differ from empirical beliefs, which are based on how the world appears to be and are updated as new evidence accumulates or when new theories with better predictive power emerge. On the other hand, religious beliefs are not usually updated in response to new evidence or scientific explanations, and are therefore strongly associated with conservatism. They are fixed and rigid, which helps promote predictability and coherence to the rules of society among individuals within the group.

Now, before all of you snarkmeisters (My people, my people!) jump on the obvious points, the point I want to address is not that. It is “They are fixed and rigid, which helps promote predictability and coherence to the rules of society among individuals within the group.” And it is not the “fixed and rigid” part but the “promote predictability and coherence to the rules of society among individuals within the group” part.

When humans gathered together into larger than family groups, society was formed in a process I am sure took some time to hammer out. In all herd animals there are behaviors of both the individual and the group that promote survival. Sometimes they clash but if they clash too much, neither the herd nor the individuals survive. We are not herd animals but we are social animals. “Society” exists to get us to conform to rules that result in greater survivability of both us as a group and us as individuals. Once a society is formed, it is not hard to see that it can be hijacked by individuals who mold society more to their advantage, survivability be damned. Books and movies are rife with such scenarios, where groups are betrayed by individuals to their benefit. These betrayals can be direct or through changing the societal rules to benefit just themselves.

Currently there is a subset of very wealthy U.S. individuals who are reshaping our society for their benefit and their benefit alone, the rest of society left to suck eggs. Religion is a major tool in creating and maintaining a “stable” society. It has lost much of its power in this country over the years and since a power vacuum doesn’t exist long, that power has been sucked up, in this case by wealthy financial types with their own priesthood (economists).

In any society there are those who produce the needs for direct survival (food, water supply, housing, transportation, etc.) and those who produce “other things” (art, politics, music, books, etc.). Those who produce the food, etc. need to have the respect of those who do not and vice versa. In this country, this mutual respect has been lost (not by accident, mind you) as it has been elsewhere around the world. In powerful church hierarchies, the elites offer little in the way of respect for the masses as they “manage their brands” and, they think, husband their power. The same goes on in centers of political power. Studies indicate that a prerequisite for getting any idea through Congress is being rich. If you are poor or middle class your ideas and opinions will be ignored. (Polls? What polls? Polls are “fake news.”) And, monumental issues like climate change are ignored because the wealthy do not want to accept any uncertainty in their wealth accumulation schemes (business opportunities my ass!).

As a consequence, ordinary people, who are engaged in serving the needs of these elites are in various states of rebellion. They are attending church services less. They are voting less. They are paying less attention to those who pay no attention to them or they are attending but responding with anger and resentment.

I thought if we could revive labor unions that they could apply some leverage in the interests of ordinary people, but unions have powerful opponents who have shut that door.

So, what is the way out of this existential problem?

Really, do you see a way out?

April 5, 2019

AOC Derangement Syndrome

Alexandria Ocasio-Cortez, or AOC as she is referred to, is a new member of the House of Representatives. Since she stands for all things abhorrent to the status-quo loving GOP she is the target of amazing stretches of logic. Take, for example, this cartoon:

In the Great Depression, World War II, and the Cold War, what was the greatest economy mobilizing force? That would be the American government, not capitalism. In the Great Depression, the business types (the Capitalists) insisted that it was a normal “business cycle” and that things would recover by themselves and that we should do nothing to help the struggling people.

This is what Democratic Socialism is all about, the government as representatives of the people, in control of the economy. Control in the sense of setting the rules, not running it as in totalitarian socialism. Currently, the capitalists have captured the government and are running the economy for their benefit and screw the rest of us. That is what capitalism offers unless it is restrained by government by the people … or a divine king if you want to try that again. (Donald Trump has volunteered for the position.)

April 2, 2019

And Forgive Us Our Debts

Michael Hudson is writing a series of books on the topic of debt forgiveness as a necessary component for capitalism to work. This topic evoked in me a memory of a conversation I had with my mother when I was a lad. She commented in church that the original version of the Lord’s Prayer included the phrase “… and forgive us our debts as we also have forgiven our debtors” but this was not approved of by the wealthy so it was transformed into “… and forgive us our trespasses as we also have forgiven our trespassers.” (By sixteenth century Anglicans?) There are a number of variations of these “translations,” but whatever was come up with (trespasses, sins, etc.), it was to get debt forgiveness (part of Mosaic law) out of that prayer.

A bit of this history is to be had at Naked Capitalism in the form of:

The Delphic Oracle Was Their Davos: A Four-Part Interview With Michael Hudson About His Forthcoming Book The Collapse of Antiquity (Part 1)

Highly recommended.

Some Enticing Teasers:
• “Rome was turned into an oligarchy, an autocracy of the senatorial families. Their “liberty” was an early example of Orwellian Doublethink. It was to destroy everybody else’s liberty so they could grab whatever they could, enslave the debtors and create the polarized society that Rome became.”
• “That’s why you don’t have any history of economic thought taught anymore in the United States. Because then you’d see that Adam Smith, John Stuart Mill and the “Ricardian socialists” and indeed most of the 19th century had a completely opposite idea of what constituted a free market … (o)pposite from the neoliberal idea that freedom means freedom for the wealthy to indebt and destroy the economy. Opposite from the liberty of Brutus to overthrow the Roman kings and establish an autocratic oligarchy.”

February 7, 2019

Finding Meaning in Life

Many theists argue that without their god(s) life would have no meaning. This, of course, belies the efforts of many to establish their bona fides in their lives for themselves.

The current era of plutocracy in the U.S. shows the wealthy over and over acting upon the belief that they are rich for a reason, that their wealth makes them worthy, worthy of providing guidance (by funding philanthropic endeavors … of their choice, of course), and in funding political movements, e.g. the Koch brothers, because they know what is best for us.

All of these efforts bring to mind a quotation from a giant of social commentary: “The fortunate man is seldom satisfied with the fact of being fortunate. Beyond this, he needs to know that he has a right to his good fortune. He wants to be convinced that he ‘deserves’ it, and above all, that he deserves it in comparison with others … good fortune thus wants to be legitimate fortune.” (Max Weber, 1915)

In this I am reminded that for those “fortunate” enough to make over one billion dollars per year (there have been as many as over a dozen in recent years) that making a billion dollars of income in one year equates to making $532,000 per hour for every working hour of the year. This means one of these “worthies” made more in one afternoon than I did in almost 40 years as a college professor. I do not think of this as compensated labor as no one’s labor is worth that much. The only way one can “make” such an income is by scamming the system. If we need a name, we could call it “legitimized theft.”

So, if the theists are right and the meaning of our lives is granted by their god, why are these plutocrats scurrying around “cementing their legacies” or “managing their brand” or all of the myriad things they are doing to legitimize their wealth? These legitimized businessmen all claim that capitalism is based upon competition, but have acted to reduce the amount of competition in their area of business like beavers (think Bill Gates and all of his European monopoly law suits). I guess saying one thing while doing the opposite comes easy to those “of wealth” which is what they seem to have in common with the theists who support them.

January 10, 2019

They Want It Both Ways

A common trope among the vocal rich is that handing out money to the “poor” will make them lazy. “Handing out” and “handouts” refer to welfare, food stamps, a higher minimum wage, you name it. On the flip side, they also claim that “redistributing” money from the rich to other where through higher progressive taxation will remove all of the incentive to invest and innovate.

So, at one end of the spectrum, allowing the poor to keep more of what they make or bumping their wages up to a bare subsistence level will result in them opting out of their jobs (more money = laziness) but allowing the rich to keep more of their income will encourage them to work harder, innovate more (more money = initiative).

Obviously this is merely a reflection of the class disdain the rich have for the poor. The poor are poor because of character flaws, moral weakness, lack of intelligence. The rich are rich because of their sterling character, moral strength, and brilliance. (Donald Trump … uh, is the exception that proves the rule?)

Also, is there any indication either of these “narratives” has any merit?

There is a well known phenomenon in business that as businesses grow and become larger, they tend to grow stagnant. They innovate less and their managers become more interested in milking the cow they have rather than finding new cows. In the recent tax giveaway to businesses, were the billions saved in taxes used to innovate, used to upgrade production, used to compensate workers, any of the things it was claimed it would do? Apparently, the funds were mostly used to buy back stock, which drives up the price of the stock, enriching shareholders and executives with stock options (you do get what you pay for).

Another economic “natural experiment” was the 1950’s and 1960’s economies. Marginal tax rates were sky high from the necessity to acquire funds to pursue World War 2. President Eisenhower refused to lower them, even in the peacetime following. Unions were empowered and laws were passed to provide some leveling of the playing field between labor and capital. So, were people enjoying the good times on welfare? Was there any laziness to be observed? Was innovation stifled because the rich were starved of the funds they needed to fuel the innovations? I think you know the answers to all of these (no, no, no).

So, what is with these narratives?

They aren’t new, they have been around for a century or more. They are, like religious apologies, arguments that sound reasonable but have no basis in reality. They have become memes among the rich folks, repeated often enough to be transferred from generation to generation. They are even sold to ordinary working people because they do sound reasonable and are repeated over and over. The rich are the job creators! Bah, customers create demand, demand creates jobs, and demand in our economy is mostly domestic demand which is stifled due to wage suppression activities on behalf of the rich.

The code word in use is “redistribution,” by which they mean that the rich are taxed and that money is “given” to the poor. The fact that much of the wealth the rich have accumulated is due to “redistribution” through other means is never mentioned. (Look up the history of the oil depletion allowance to see where the majority of the oil barons in this country came from.) The rich are in the business of bribing their politicians (not ours, we can’t afford them) to pass laws that benefit them. Our “representatives” do favors for the rich and nothing for the poor. For example, President Trump’s lackeys rolled back Obama-era regulations that prohibited coal companies from dumping toxic waste into the streams and rivers we draw our drinking water from, redistributing the consequences from the coal company executives to ordinary people. (1. Don’t get sick. 2. Die quickly.)

January 7, 2019

But Who Is the Magician?

Filed under: Politics — Steve Ruis @ 10:57 am
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Most people know that performing magicians use gestures with one hand to attract attention from their other hand which is busy doing the trick. In national politics, Donald Trump is the Distracter in Chief, the waving hand that draws our attention away from the Republican machine which is doing its best to eliminate environmental regulations, consumer protections in the law, health insurance coverage for those with pre-existing conditions, miscellaneous favors for the rich, and many of the other gains made by the people over the past forty years or so. Mitch McConnell is doing his best to pack the federal court system with people who are not representative of the people (very, very conservative white guys).

So, if Mr. Trump is the distracting hand, and the GOP usual suspects are doing the tricks, just who is the magician? (Ignore than man behind the curtain!)

Just askin’.

December 25, 2018

Plutocrats! You Have to be Really Dense to Not Understand This!

Filed under: Culture,Economics,Politics — Steve Ruis @ 12:35 pm
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Happy holidays, y’all! This is my gift to you on this Christmas day!

I have lauded Sam Pizzagati’s book “The Rich Don’t Always Win” already and have a fuller comment to make based upon things found in that book (highly recommended by me!).

Basically, what needs to be done is rather simple, but the plutocrats don’t see it this way. Here are a couple of quotes to get the ball rolling: “The outstanding faults of the economic society in which we live are its failure to provide for full employment and its arbitrary and inequitable distribution of wealth and income.”

I am sure the plutocrats would label this speaker as a communist if not a socialist. I am willing to bet that all of the plutocrats think that capitalism is the best economic system known/available/possible and are committed to it 100%. I also believe that almost all of these people believe in a “pay as you go” society. People should work, earn money, and pay for all that they need or want that way. Period.

Given those two beliefs allow me to state my second quote “Let us suppose that 1 percent of the population were to receive 95% of our entire national income, with the remaining 5 percent spread among the rest of us. Could our system—any system—work on that basis? One percent of the people couldn’t possible consume 95 percent of all of the goods and services which the rest of us could produce.” And failing to consume all of that output “they would have no reason to use their savings to produce more and more goods that they couldn’t consume either.” In such an unequal, unbalanced economy we would never see enough jobs for people to pay as they go, a consequence that “demonstrates the nonsense of the contention that the way our national income is divided among us has nothing to do with how much we produce or how many of us have jobs.”

Not to keep you on pins and needles, the first quote is from John Maynard Keynes, a mainstream economist … in 1936 … and the second was from Chester Bowles, a wealthy business man … in 1946.

Now, the plutocrats will counter argue that people paid “too much” according to their lights will become shiftless and lazy. Let’s see if that happened. After World War II, the American middle class burgeoned. More people had more disposable income than ever before. More owned houses, etc. Did you notice anyone buying hammocks for the long haul? Was there a run on foot stools for people to put their feet up? I was alive then and I didn’t see any of that. It always shocks me that plutocrats assume that when “ordinary people” get enough to live on they will become lazy and stop working. Of course, this is coming from a class of people who thought when they made their first million dollars, “How am I going to make the second?” This disdain for the motivations of ordinary people is larded throughout their positions.

Plutocrats also argue against equal distribution of wealth and income, saying that do not have enough wealth to make everyone rich. This is being willfully obtuse. The word “equal” should only be used with opportunity. In the 1950’s did you see people rioting or striking because they were not getting “equal” incomes to those of rich people? The idea is ludicrous. What is wanted is a fair distribution of the wealth created. Nobody is advocating equal distribution of wealth or income, so this is a straw dog argument.

The so-called “Great Compression” occurred after WW2 due to high marginal tax rates on the most wealthy and union power, and governmental power improving the lot of those at the bottom (hence the compression—economic forces applied downward from on top, upward from the bottom). This was fought tooth and nail by the rich and, after WW1, the plutocrats managed to reverse all of the “similar corrections” made to the system during that war. But after WW2 the plutocrats didn’t succeed in rolling back all of the New Deal and other wealth redistribution mechanisms (they do, however and after all of these years, still speak scornfully of the New Deal as a marker of their social class). Why was that? Simply put, the plutocrats were scared stiff with regards to the communistic “workers’ revolts” in Russia and elsewhere. If keeping an underclass under their thumbs could lead to that kind of revolt, well…. So, they were inclined to live with high marginal income tax rates and with unions. (But not the U.S. Socialist and Communist political parties. After WW1 they were decimated over and over and then obliterated after WW2 by using Red Scare tactics.)

That was then, this is now. The problem is endemic as we are back where we started  at the beginning of the twentieth century (Thanks capitalism!) and we may have to find another way to deal with plutocrats. They get Donald Trump in the White House and the biggest item on their agenda is a huge tax cut, that they claimed would help ordinary people but by and large went into the pockets of the plutocrats. (I’m shocked, shocked I tell you! Have I mentioned that their tax cuts are permanent and our, much smaller, ones are temporary?)

This is so incredibly stupid that I am flabbergasted. These people are making so much money that they are giving it away or promising to give it away when they die. So, why do they so desperately need it while they are alive? They can’t spend but a fraction of it on themselves or their families. Were they to increase the wages of the workers they employ they would reap many benefits, help create a world they feel is the best (a “pay as you go” capitalistic society), and be appreciated far more than they are now. Why do they continuously rig the rules of the game to favor themselves and make sure that the bulk of new wealth flows into their pockets? The only answer that comes to mind involves dogs and mangers.

 

 

December 21, 2018

More on GMO’s (Gosh, What Could Go Wrong?)

Filed under: Science,Technology — Steve Ruis @ 8:46 am
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I have written about GMOs (genetically modified organisms) from the position that these genetic modifications, unlike the ones our artificial selection processes have been created, skip over steps that may produce non-viable results and, therefore aren’t “vetted” by nature. In John Hively’s blog is a report on one case of “what could go wrong” by the generic engineer inventor himself. I think this is must reading for anyone concerned about GMOs, bees, our future survival, corporate bad behavior, etc.

GMO Potato Scientific Founder Says GMO Potato’s are a Pandora’s Box of Troubles

PS I am not saying we shouldn’t investigate GMOs; I am saying we should go slow because the safety protocols needed are immediately obvious.

 

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