Class Warfare Blog

July 6, 2017

One Used to Be Able to Assume at Least as Good of a Life than One’s Parents …

Science has the unenviable position of coming along and proving what everyone already knows. I remember reading newspaper stories stating amazement that scientists would even bother proving what everyone already knows. Silly creatures.

But “what everybody knows” doesn’t turn out to be correct all of the time. This is why one constantly checks one’s assumptions, as they can turn up to bite you where it hurts.

So, a new study firmly nails down that the lifetime earnings of Americans are in decline. We are producing new generations that will not do as well as prior one’s. And those results stem not from not working hard, but from the usual culprits, largely wage suppression by the plutocrats.

Read it and weep (Lifetime Incomes in the United States over Six Decades)! (The abstract is free, the article $5.)

And regarding the various claims as to who is waging class war, let it be known far and wide: it is those with the most money.

July 3, 2017

NRA Changing Spots?

Filed under: Culture,Morality — Steve Ruis @ 8:01 am
Tags: , ,

In a recent and controversial ad, the National Rifle Association’s spokesman, Dana Loesch accuses “their” ex-president of endorsing “the resistance,” a movement of demonstrators who “smash windows, burn cars, shut down interstates and airports — bully and terrorize the law-abiding.”

I never thought the NRA would turn against the Bundys (Cliven, et. al.) like that. Is there no steadfastness in that organization?

June 24, 2017

We Don’ Need No Regyoolayshuns … Education Edition

Check out “Multi-state investigation alleges Akron-area charter school founder bilked millions from parents, students, taxpayers” (Akron Beacon Journal/Ohio.com).

The “pro choice” education lobby seems to be more of a “pro-corruption” advocacy group as more and more of these scams are popping up. Politicians, paid for by the scammers, insist no public oversight is needed. After all it is just money we are giving them, and the responsibility to teach our children. Nothing to see here, move along.

June 22, 2017

Trumpcare Will Remove Drug Addiction Treatment Because …

According to Nicholas Kristof’s NY Times column today:

A Times investigation published this month estimated that more than 59,000 Americans died in 2016 of drug overdoses, in the largest annual jump in such deaths ever recorded in the U.S. One reason is the spread of fentanyl, a synthetic opioid that is cheap and potent, leading to overdoses.

About as many Americans are expected to die this year of drug overdoses as died in the Vietnam, Iraq and Afghanistan wars combined.”

Read that last sentence again and then line it up with the GOP plan to remove addiction treatment from insurance policy requirements.

Now you know where their hearts are: the GOP is only interested in tax cuts for the wealthy. The rest of us, very, very little.

May 22, 2017

High School Graduation Rates Going Up? Maybe . . .

Filed under: Education — Steve Ruis @ 7:49 am
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The Brookings Institution published a piece on high school graduation rates. According to that piece, studies show high school graduation rates had been higher in the 1970s, for example, but from 1990 to 2007 they had been “stable” in the 71%–75% range, but since then have crept up to 82%. Their point was that the statistics, while being soft, were also unexplained; we don’t know why they declined and we don’t know why they have increased lately.

I don’t know either, but I’d be willing to bet a dollar that the cause is that high school students aren’t leaving high school because they got a good job as much as they used to. The years 2007-2008 were pivotal. That is when the Great Recession began. Since then young people have witnessed the impact of the shitty job market and the wage suppression efforts of the plutocrats’ effects on their parents. The economic uncertainty of those parents trickled down to their children, no matter how hard they tried to shield them from it. So, the pressure to “stay in school” was higher and the opportunities to take a “good job” in lieu of graduating were many fewer. Both could increase the high school graduation rate.

Congratulations economy destroying capitalists!

I graduated high school in 1964 and at that time, not everyone went to college. You didn’t even consider it unless you had B average grades. Many of my classmates went off into the world of work right away. It was “normal.” Now, it seems that the only path forward recommended to high school students is college. Trade apprentice programs, the military, technical schools, all of the alternatives available when I was young seem to be no longer in favor. Granted, community colleges offer certificates in cosmetology and welding and auto mechanics, filling the “trade school” gap somewhat, but children are actively discouraged from going into trades for the most part.

So, apparently my generation has effed up the economy of this country sufficiently that while we were unable to use the “scared straight” approach to stop drug use, we apparently have done a good job of scaring youths straight to high school graduation.

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).

May 18, 2017

GOP Gives Lie to Their “Small Government” Goal

The GOP has clamored for smaller government, mostly at the federal level, for many decades. “Big Government” was a term said only as a slur. In particular, the GOP has advocated that the federal Department of Education should be dispensed with as education was the responsibility of the states. (I do not argue with that point.)

But, well, times have changed. In particular, the GOP is in power and positioned to do almost anything they want to do. So what do we get? According to a press release from the American Association of School Administrators:
“Alexandria, Va. – May 17, 2017 – Legislation pending in Congress would create new opportunities for corporations and successful investors to earn huge profits by transferring public funding to private schools, according to a report released today by AASA, The School Superintendents Association, and the Institute on Taxation and Economic Policy.
“The legislation—the Educational Opportunities Act—would put two new federal voucher tax shelters within reach for many more Americans and lead to an explosion in funding for private schools. It would also keep in place an existing federal loophole that permits savvy taxpayers to benefit from ‘double dipping’ practices, where they receive a federal deduction and state tax credit on the same donation to a private school entity. At present, high-income taxpayers in nine of the 17 states offering voucher tax credits can turn a profit using this technique.

So, apparently, federal meddling in the state’s business of educating the next generations is now okay now, because … money.

May 15, 2017

Economists Fail and Fail and Fail …

I could envision a role for economists in modern society except they continue to be willfully blind. They are blind because they have their heads so far up their asses.

Follow me now. Before the Great Depression, economists were only interested in small economic exchanges. But the misery of the Great Depression created the impetus to look at the economies of entire countries, even regions. Macroeconomics was born. (The goal was to prevent depressions, even recessions from ever occurring again.)

Like the “old” economics, microeconomics, certain simplifying assumptions had to be made and like the old economics, the simplifying assumptions lead to completely false conclusions. In microeconomics we ended up with the philosophy that markets were self-correcting and created an optimal economic situation. This dogma is, in truth, a piece of wishful thinking on the part of these academics. They wanted something that seemed directed at keeping the fairy systems they created balanced and whole. This belief that markets are benign and create a natural equilibrium inside of a larger economy still exists today as a political goal of those profiting from that mistaken assumption.

Macroeconomics, not to be out done, also had to make some “simplifying assumptions,” in its quest to understand how to prevent events like large recessions and depressions. In order to make things “doable” they decided to include the role banks play in our national economy but leave out finance. For reasons strange to a casual observer to understand, they also decided to leave out private debt. So, what has been the role of finance in the last 40-50 years in the U.S.? It has been to “financialize” the economy to the point that Wall Street doesn’t serve businesses in the manner you learned in school (by providing capital for businesses to modernize, expand, etc.) but now businesses exist to serve Wall Street. The money generated through finance has created a class of oligarchs who have captured the mechanisms of government and are now running it for their own benefit. They went on to shift governmental burdens off of businesses and onto private citizens, so that private debt has ballooned mightily, leaving citizens with little to buy anything with after ordinary expenses and debt service.

And what do economists have to say? “Move along, nothing to see here,” like all good Stormtroopers. One has to wonder whether the rich of a hundred years ago, having taken such a financial beating in the Great Depression, didn’t guide the creation of modern economic theory as a way for them to get back to the top and stay there. And this time, they are serious about hanging on, no matter what it does to you, me, or the country as a whole.

May 5, 2017

Egad, Economic Uncertainty is Real!

During the recent Democratic administration, Republicans often ranted about “uncertainty” with regard to investment. You see, the economy tanked in 2008 and the recovery was feeble (still is). Banks were given huge amounts of money at zero interest with the hope they would loan that money, cheaply but profitably, to businesses looking to expand. The key word was “hope” in that the government attached no strings to those zero interest loans. Consequently the banks bought securities with the money, causing the stock market to “recover” rapidly but no one else. When upbraided about this anti-social behavior, the Republicans countered with there was “too much uncertainty” in the market for business to expand. They rather should have stated there is too much bullshit in politics; that would have been closer to the truth.

The real reason businesses did not expand with all that cheap money around, is that they possessed even cheaper money (U.S. businesses had $2+ trillion dollars in cash reserves at one point.) and they weren’t spending that either. The reason? Simple: no demand. This is shockingly self-evident for people who know nothing about economics other than “supply and demand.” If there is no demand, supply is irrelevant (even though some economists tried to claim the opposite—see Say’s law). There was no demand because those business’s customers were broke, still are.

So, when Mr. Trump was elected and the GOP captured both houses of Congress, well … “Happy days are here again, the skies …” uh, no? No. Even though gasoline is quite cheap now, no one is buying much. Retail business are offering lower and lower pricing and still no surge in buying.

People are sitting on the sidelines economically because, well, they are uncertain about the future. When a person’s future is potentially very bad, they hunker down, save their money, and prepare for the worst the best they can.

Mr. Trump’s policies have never been particularly coherent, which was by design. When Mr. Trump claimed he was going to deport 11 million “illegals” from the country, many people translated that into “I will have more job opportunities.” (Right, by picking crops and doing day labor out of the local Wal-Mart?) When Mr. Trump claimed that he was going to transform Obamacare into something better, people applied their own definitions of what “better” meant. But healthcare is a complicated subject (“Who knew?”) and Mr. Trump’s party’s first effort at it was horrifically negative. (Hunker, hunker, hunker,…) Then there was the “tax reform” promised. People thought “my taxes will go down” and “I could use the money.” What they didn’t think of was that rich people’s taxes would go down much more, thus reducing government tax receipts, causing many government programs to be terminated, government programs that ordinary citizens are dependent upon, of course, not the rich. (Hunker, hunker, hunker,…) Then the current administration launches missiles in Syria and threatens nuclear war in North Korea. (Hunker, hunker, hunker,…) and….

The economic uncertainty of businesses as a reason for why they weren’t investing in their own businesses was pure political spin. They were anything but uncertain, in fact they were absolutely sure there was no demand, so no expansions. But the economic uncertainty of individual citizens is palpably real. We are not spending much money right now because we don’t know whether we will have affordable healthcare available, whether Social Security will still exist, or Medicare … all of these have been threatened by the GOP.

All of these threats are coming home to roost. We are in line for another recession, possibly as early as this summer. The ordinary tools used to combat recessions are not available (cut interest rates … why? … how?) and the GOP is dead set against deficit spending (the tool that really works) unless it enriches the rich or the military industrial complex.

Buckle your seat belts, folks. If you think things are uncertain right now, well, winter is coming.

Stop with the Throw Away Lines

Too often now I am seeing lazy writing (too often my own which then needs to be corrected, but that’s another story) in the form of “throw away lines:” President Trump is “good at real estate,” Bill Gates “knows computers,” etc. In truth, Mr. Trump, for example, is involved in real estate deals of a magnitude none of us will ever touch but so what? If you had been given as much startup money as he was, would you have done as well or better? How successful has he been? (You’ll have to consult someone other than Mr. Trump on that; maybe if you could see his tax returns….) What brought this to mind was a line in an article regarding the rage to extract profits from the K-12 education “market.” (Why For-Profit Education Fails by Jonathan A. Knee in the November issue of The Atlantic magazine). This was the line.

“Advocates of for-profit education often understandably emphasize the role that market forces play in improving quality and efficiency.”

Understandably? Market forces improve quality and efficiency? This is a bit generous. Mr. Gates is famous because he captured a rapidly expanding new market. His big idea? That you should pay substantial amounts for the software needed to make the software that you actually want to run on your computer work. (Reasonably, we should have expected that to be free with the price of a computer and upgraded for free). Then he made marginal improvements in his product and charged more and more for every “upgrade.” Some of these “improvements” actually made his product worse. Through hardball business tactics, though, he extracted billions of dollars from a captive market (it is very hard for the average computer user to pick up his marbles and go home; if one decides to scrap one’s “operating system,” one incurs a great deal of expense and no little commitment of time, so this is not something to be undertaken lightly … I know I have done it several times).

“The role that market forces play in improving quality and efficiency,” uh, maybe.

Also, there is no acknowledgement of how those “market forces” accomplish those “improvements” when they do occur. Generally they are accomplished by the crushing of opposing companies, costing their investors money and their workers jobs. Currently Amazon.com is “improving the quality and efficiency” of bookstores (and more). Ask any bookstore owner or worker how that is going.

Also, do any of these people consider whether it is appropriate to apply “market forces” to an endeavor in which we desire there to be no failures? Does anyone interview the parents and school kids involved when a charter school shuts down in mid year and those kids need to be placed into another school (with the money to educate them gone in the disaster)?

Has anyone suggested that the military be run this way? Or the education of doctors? (It is so expensive to educate doctors that great efforts are extended to select students who will succeed and then great efforts are made to help them do so.) Should we be applying the same standards to volunteer soldiers that we are recommending for teachers? (Wash 10% out every year and replace them with better ones!)

Stop with the “the role that market forces play in improving quality and efficiency” throw away statements, especially when they are not even close to being true.

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