Class Warfare Blog

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.)

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December 25, 2018

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

Filed under: Culture,Economics,Politics — Steve Ruis @ 12:35 pm
Tags: , , , , ,

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.

 

 

September 8, 2018

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.)

August 12, 2017

I Don’t Get It

If you look at the updated somewhat notorious graph below, you can see that worker productivity has been detached from worker wages starting in the 1970’s. This was the result of a concerted campaign by the very wealthy to suppress wages by suppressing labor unions, getting tax code changes in their favor which transfer tax liabilities off of them and onto other Americans, even by suppressing voting.

This has created a great deal of economic distress in the bottom 90% of economic Americans and will result in a backlash. What I do not understand is the strategy. Going from astonishingly rich to fucking rich changes the lifestyles of those rich people exactly how? Is it just getting their way, at least for the while until the backlash, that makes this worth doing?

Even Henry Ford understood that if you paid better wages, you would get much of that back through one’s employees becoming one’s customers. Hell, these rich people invented the company store, where laborer’s wages got sucked back to the employer through required purchasing of the goods to survive. Those stores are no longer allowed, but Henry Ford knew that his employees, once they had the wherewithal to purchase a car, were going to buy one of his because of loyalty generated through his paying better than normal wages to his workers. (It is called gratitude.)

But, the current crop of rich bastards would rather strip away the ability to buy the goods their companies produce and, what, sell those goods overseas? When the pitchforks and torches finally end up circling their gated communities, will the plutocrats wonder why their employees aren’t more loyal to them? Are they that stupid? Do they think we do not see what they are doing?

February 26, 2017

The Real Danger from Association with Steve Bannon

Steve Bannon is a close advisor to President Trump. He has a very impressive résumé and he is clearly “one of the smartest guys in the room,” any room. Lately he has been characterized as being all kinds of things: a while supremacist, an anti-Semite, etc. All of these characterizations miss the point. Mr. Bannon does pose a threat, but not in the ways these authors propose. It stems from Mr. Bannon’s idée fixe that Western Civilization is facing an ideological showdown, including war … with Islam.

It is unfortunate that also on Mr. Bannon’s team are the likes of Betsy DeVos, who along with Ted Cruz’s father and host of others, have the idea that the best way to forestall such a future is to marry Christianity with our government. Those of us who think that secularism and assimilation are desirable are, I guess, just wrong-headed. These people like to claim that this is the only way to head off Sharia law and Islamism building up in our society. I guess those Muslims are following the same playbook the Irish followed when they took over the U.S. in the 1800’s. The same plan was followed by the Germans, and then the Chinese and the Japanese and then Hispanics. It is a tried and true approach to subversion of the country. Move in and then take over. Apparently these “Christian nation” people don’t have enough faith in the corrupting power of Coca-Cola, blue jeans, and iPhones.

But Mr. Bannon is truly dangerous. He, like many others of his ilk, is focused on external enemies. Those “others” are easy to characterize as “bad guys.” Consider ISIS/ISIL. This group is absolutely no threat to the U.S. but people are running around screaming “We have to do something; we have to do something!” because any bad guy is too precious of an opportunity to waste.

The problem with these external threats is they ignore the greatest threat to our democracy, greater than all of the external threats combined: the total capture of the reins of government by plutocrats, basically the rich, corporate and otherwise.

By the time Islam gets around to storming our borders, the pickings will be nonexistent because the plutocrats have picked over the carcass of the Great American Experiment in democracy until it is almost clean. Both major political parties represent only the interests of the rich. As do the courts and the military, which doesn’t seem to have a mission but to protect the plutocrats foreign economic interests. The Islamist invading forces will have to storm the tax havens to get at the wealth of Americans as the plutocrats will have almost all of it.

I wonder if the conservatives opposition to alternative energy sources simply stems from the fact that if we kick our addiction to oil, what use will we then have for the military.

February 22, 2016

The New Slavery

The goal of the plutocrats now running U.S. society, including our governments, is now abundantly clear: they endeavor to institute a new age of slavery. This was made evident in an editorial in today’s N.Y. Times with the compelling title of “A Rising Call to Promote STEM Education and Cut Liberal Arts Funding” By Patricia Cohen (Feb. 21, 2016).

Wait, that doesn’t sound so radical, does it? It does if you know a few facts. For one there is no reason to favor STEM education over any other. There is no shortage of qualified applicants for STEM (Science, Technology, Engineering, Mathematics) jobs. The unemployment statistics show this in the numbers of recent graduates who cannot get jobs in their fields as does the basic fact of economics that if there is a shortage of workers of a particular type, their wages increase (to attract the few that are available). Wages in this field are changing no faster than the others. The “shortage” of STEM job candidates and STEM college graduates was cooked up by plutocrats to support their demands for more visas to allow STEM foreign workers into the U.S. Recently Disney was caught laying off 20 of its I.T. employees to be replaced by foreigners on work visas, for example. There was no “shortage” other than the one created by the firing of the current workers who, by the way, were earning performance bonuses so it is hard to argue they were substandard.

The plutocrats really like these workers on visas, as they work for less, which drives down wages for all of the other workers in their category and they don’t complain, because if they lose their job they lose their visa and “bye-bye U.S.”

“Welcome to the new slavery. The chains are invisible but real. Sit down and shut the fuck up.”

What is telling are the arguments being used, basically “STEM good, humanities bad.” They argue that public money shouldn’t be spent on students who would be working at the lower paying jobs that a humanities education affords. (I hear echoes of “effing hippies” from the 60’s.) This argument is, of course, bogus. Currently humanities college graduates in the U.S. have starting salaries that are roughly equal to the median salary of all Americans. This means those humanities grads, all things being roughly the same as they have been in the past, will be earning above average wages for the rest of their lives, which means they will pay above average taxes and the taxes in excess of the average amount repay the public for the education expenditure several times over. So, guarding the public coffers is a bogus argument.

Also, the plutocrats are basically saying that we should use data regarding what people are making now to focus our attention regarding what is important in an education. This makes no sense in an economy in which people’s jobs are changing so fast that the average worker can expect to have seven different jobs in their working life, many of which have not yet been invented. (If you used the job description “social media consultant” ten years ago, what would people have thought?)

It is clear the kind of future the plutocrats plan. They expect citizens to “sit down and shut the fuck up” while they run the country however they wish. If citizens are to have choices of political candidates it is only ever between candidates that offer no threat to the status quo. If a candidate does offer a threat, say recommending free education and higher taxes on the rich (Go, Bernie!), he is to be quashed as strongly as possible by a candidate propped up by the plutocrats.

To enforce this vision of the future, the plutocrats are using chains of debt. For example, many political upheavals in this country have been supported by college students. A few changes in the tax code and voilà now total college student debt exceeds total credit card debt (think about that). A student looking at a mountain of debt that needs to be paid off cannot afford to blemish his ability to get a good paying job with an arrest record, etc. so, college students have been defanged.

Additionally, teachers and teachers unions have opposed plutocrats (even to the point of voting for Democrats), so now they are demonized and beleaguered on all sides and are no longer a political force.

Welcome to the new slavery. The chains are invisible but real. Sit down and shut the fuck up.

March 29, 2014

RIP—Political Parties

This weekend marks the beginning of the end of the political parties as we knew them. In the past, any potential political candidate had to solicit the help of one of the political parties to have any chance of success. The usual path for a candidate was to run for local office and make him- or herself known to the local political party officials. Then additional offices were attempted forming a ladder to higher office with closer and closer involvement with the party and more and more support from the party. Party officials introduced “up and coming,” promising new candidates to the various power brokers in the party. They arranged for fundraisers and provided funds from general accounts. They provided expertise that would have otherwise cost a candidate a great deal to purchase.

All of that is now on the edge of being gone.

Good riddance you say? Also going with the party is any influence the parties had over candidates to form their platforms or, really, anything else.

Replacing all of that will be the private “political conventions” put on by billionaires. This weekend in Las Vegas, most of the major Republican players in the 2016 presidential sweepstakes are meeting with billionaire casino magnate Sheldon Adelson. In the 2012 election cycle Mr. Adelson spend a pittance, a mere $90 million on presidential candidates (less than 0.5% of his wealth I am told). That kind of money will take a candidate as far as they want to go in any election. So, gone is the influence of the parties to get candidates to “toe the party line” only to be replaced by whatever it is the billionaires want as a “return on their investment.” And I do not believe the American Plutocrats will be publishing their “platform,” that is the list of the things they want of their candidate gets elected.

Candidates for sale! Candidates for sale! Git yer candidate!

February 17, 2014

When You Have More Money, You are More Secure . . . Right?

When people have more money, they are said to be more economically secure. But are they more secure or less? Do they feel secure? Recently we read that there has been a substantial increase in what is called “guard labor.” This includes private security guards (which now outnumber all high school teachers), but also police officers, members of the armed forces, prison and court officials, civilian employees of the military, and those producing weapons: a total of 5.2 million workers in 2011. That is a far larger number than we have of teachers at all levels.

Last week Noam Chomsky participated in a question and answer session via Skype with a group of students that might shed some light about this phenomenon. (Hint It isn’t just about all of the Scrooge McDucks fortifying their vaults against the Beastie Boys.) Here’s the transcript from just one of the questions (This might sound kind of random, but I would really like to ask your opinion on why you think there’s this preoccupation with the apocalypse and with zombies right now in our culture.):

Noam Chomsky
I’ve never seen a real study, but my guess is that it’s a reflection of fear and desperation. It’s a very frightened country. The United States is an unusually frightened country. And in such circumstances, people concoct either for escape or maybe out of relief, fears that terrible things happen.

Actually, the fear of the United States is a pretty interesting cultural phenomenon. It actually goes back to the colonies. There are some good studies out there. A very interesting book by a regular literary critic, Bruce Franklin. It’s called War Stars. You might want to take a look at it. It’s a study of popular literature, the kind of literature that most people read from the earliest days to the present. When it gets to the present it switches to television, things like that. Just kind of popular culture.

There are a couple of themes that run through it that are pretty striking. For one thing, one major theme in popular literature is that we are about to face destruction from some terrible, awesome enemy. And at the last minute we are saved by a superhero or a super weapon, or in recent years high school kids going to the hills to chase away the Russians, things like that. That’s one theme that runs through constantly. And there’s a sub-theme. It turns out this enemy, this horrible enemy that’s about to destroy us, is somebody we’re crushing.

So you go back to the early years, the terrible enemy was the Indians, who were going to destroy us. The colonists were, of course, invaders. They were invading the continent. Whatever you think about the Indians, they were defending their own territory. There’s a scene in the Declaration of Independence, people read it every July 4th, but not many people pay attention to what they’re reading. It’s kind of like a prayer book, you move on somewhere else. But if you read it and pay attention, there are some pretty remarkable passages. So one passage is a list of a bill of indictment against King George the Third of England explaining why the colonists were revolting. One of them is “He unleashed against us the merciless Indian savages, whose known way of warfare is torture and destruction” and so on. Well, Thomas Jefferson, who wrote that and is a very great thinker of the Enlightenment, knew perfectly well that it was the merciless English savages whose known way of warfare was destruction and murder and were taking over the country and driving out or exterminating the natives. But it’s switched in the Declaration of Independence and nobody comments on it for years. That’s another sign of the same concern.

After that it became the slaves. There was going to be a slave revolt, a terrible slave revolt, and the slave population, the black population was going to rise up and kill all the men, rape all the women, destroy the country, something like that. Then it goes on through the centuries. It becomes modern times, Hispanic narco-traffickers are going to come in and destroy the society. One thing after another. And these are real fears.

That’s a lot of what lies behind the extremely unusual gun culture in the United States. It’s quite unique. Homicides, deaths by guns in the United States are way outside—there’s a kind of hysteria about having guns. A large part of the population believes they just have to have them to protect themselves. From who? From the United Nations. Or from the federal government. From aliens. Maybe from zombies. Whoever it is. We just have to have guns to protect ourselves. That’s not known elsewhere in the world. Maybe in, say, Syria, a country that’s warring you might find something like that. But in a country that’s not only at peace but has an unusual security and a great degree of freedom, that’s quite remarkable.

I suspect that what you’re bringing up is part of that. I think it’s, much of it is kind of just a recognition, at some level of the psyche, that if you’ve got your boot on somebody’s neck, there’s something wrong. And that the people you’re oppressing may rise up and defend themselves, and then you’re in trouble. And another is strange properties the country has always had of fear of invented dangers. There is a kind of paranoid streak in the culture that’s pretty unusual.

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