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.)

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But Who Is the Magician?

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’.

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

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.

 

 

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

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.

 

The Rich, They Are Not Like Us

The Republicans like to frame the rich as “job creators.” Well, one of the very rich, Alice Walton, reclaimed the crown as the richest woman in the world, as her fortune leapt from $33.8 billion to $46 billion over the past year. In September 2016, she was reported to own over US $11 billion in WalMart shares alone.

So, did she earn that money? Did she make that money? What did she contribute to society that so much money came to her? Is she creating jobs?

Owning stocks and investing in stocks has been shown to be the sham it really is. We are taught in school that selling stock is a way for businesses to finance their growth. This is clearly poppycock. Stocks are purely speculative instruments. The Apple corporation acquired $95 million in its initial stock offering. It hasn’t issued stock or gotten money from a new sale since. It has paid out billions to its stock holders in dividends. Imagine a bank load for $95 million that required billions of dollars to be paid back and the loan is still out!

Alice’s father, Sam Walton (founder of WalMart) made the money, she has simply played money games to expand the quantity.

The Founding Fathers comment often and long, as have many other prominent Americans since, that allowing accumulated wealth to accumulate by inheritance is un-American and counter to democratic principles. Yet, our inheritance taxes have been reduced to pure vapor under the guidance of bribes from rich people to Republican and Democrat politicians. This is what the rich like to call a “good investment.” They offer bribes of a few hundred thousand dollars here and there and they benefit by the many millions, if not billions.

Did you notice that Alice Walton’s net worth went up $12.2 billion in just one year? The Republican tax cuts played a big part in that. And, in case you are wondering, to spend that additional $12,200,000,000 in one year, she would have to spend $6,500,000 every hour of every work day of the year! How much money is enough? Apparently in a capitalist system there is no upper limit.

The Mass Media Are Giving Capitalism a Bad Name

Last night on television, one could watch a couple of documentaries. One was The Clinton Affair, an account of a presidential impeachment from 20 years ago. The other was an MSNBC “special” called Betrayal, The Plot That Won the White House, an act of treason by a GOP candidate for president from 50 years ago. Apparently we now have red and blue entertainments.

Other than treason being a mainstay in GOP national politics, both of these seem to be aimed at making money off of our political divide. There are enough Clinton haters to acquire a substantial audience for the first and enough Nixon haters to acquire a similar audience for the second.

This, of course, is as we are undergoing a major challenge to our fundamental system of government and there are topics galore that the public needs to become informed about. I do not see what benefit rehashing either of these stories has for people now. Nixon’s treason was undermining the Vietnam peace talks as a private citizen, is of a pattern. Ronald Reagan committed his treason in the Sandinista Affair and earlier in undermining Jimmy Carter’s negotiations to free our captives in Iran (in order to get elected). The details of Mr. Trump’s treason(s) have not been elucidated as yet. (I also have my suspicions about G.W. but that is another story. None of these have stopped or even slowed down people voting for these or other candidates from that party.

And, clearly, the more our “mass media” are asked to conform to the “standards” of capitalism, the more they become rootless seekers of profit. At one time the head of CBS News said something alike to “The news division doesn’t need to make a profit; I have I Love Lucy for that.” Today’s “news media” are scrambling for “revenue streams” to stay afloat and under such conditions will succumb to the dictates of survival of the profitable. Pandering to “red” and “blue” audiences comes natural as does ignoring the role a free press plays in holding our leaders to account. (Doing it after they are dead is a tad late.)

Sometimes You Don’t Have to Even Read the Book! Part 3

Subtitle: Making My Point For Me

Yet another Amazon listing provides all one needs to know about a book without reading it, this time with a nod to one of my main theses. The book is Straight to Hell by John LeFevre. Here’s the blurb:

“Straight to Hell pulls back the curtain on a world that is both hated and envied, taking readers from the trading floors and roadshows to private planes and after-hours overindulgence. Full of shocking lawlessness, boyish antics, and win-at-all-costs schemes, this is the definitive take on the deviant, dysfunctional, and absolutely excessive world of finance.

“‘LeFevre’s workplace anecdotes include tales of nastiness, sabotage, favoritism, sexism, racism, expense-account padding, and legally questionable collusion.”’ —The New Yorker”

This book is a collection of stories focused on the bad behaviors of the Masters of the Universe-types, you know, Wall Street money grubbers.

The book’s title tells you about the main role religion has in America, that of forestalling any action against such miscreants. These bad boys are going straight to Hell, so what do we need do now … nothing, of course. Anything we could do pales in comparison to what is going to happen to them in the Afterlife™. It is all taken care of, don’t bother getting up from your Barcalounger.

That would be quite reassuring if the whole afterlife punishment scenario were not a fairy tale.

 

 

How Do We Know Drugs are Overpriced in the U.S.?

“Hundreds of millions of dollars flow to lobbyists and politicians on Capitol Hill each year to shape laws and policies that keep drug company profits growing. The pharmaceutical industry, which has about two lobbyists for every member of Congress, spent $152m on influencing legislation in 2016, according to the Center for Responsive Politics. Drug companies also contributed more than $20m directly to political campaigns last year. About 60% went to Republicans. Paul Ryan, the speaker of the House of Representatives, was the single largest beneficiary, with donations from the industry totaling $228,670.” (Source: How Big Pharma’s Money – And Its Politicians – Feed The US Opioid Crisis by Chris McGreal in The Guardian)

“Drugmakers have poured close to $2.5bn into lobbying and funding members of Congress over the past decade.” (Source: same article)

Obviously the pharmaceutical corporations don’t need those dollars for profits or running their businesses, they represent just the cost of maintaining a system in which drugs are always more expensive for Americans than they are anywhere else in the world (you will find the same drugs, with the same licenses, but with lower prices everywhere else). The return on that $2,500,000,000 investment in U.S. politicians is quite healthy. We are obviously being charged that two and a half billion, over ten years, more than is necessary and since they are unlikely to spend that amount only to make that amount more than they would otherwise, I think it is safe to say that the amount we are being overcharged is far more than that.

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.”

 

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.