American Principles or ?

I am finally getting around to reading Gordon W. Prange’s wonderful history of the attack on Pearl Harbor in December of 1941 (At Dawn We Slept: The Untold Story of Pearl Harbor). There is an incredible amount of detail in this book, less than was actually available as the book was written for a lay audience.

One detail jumped out at me regarding a meeting between Cordell Hull, our Secretary of State and the new Japanese ambassador, Adm. Kichisaburo Nomura. The plans for the attack on Pearl Harbor were well under way but the Ambassador was ignorant of that fact as he could have been a security leak. Japan was, however, very aggressively pursuing a larger sphere of influence and had its eye on the oil and other resources of Southeast Asia. The two men decided to meet informally to see if they could improve the relationship between Japan and the U.S.

On April 16, 1941, Hull presented Nomura with a set of principles that Hull felt had to underlie any such negotiations. Here are those points:

1. Respect for the territorial integrity and sovereignty of each and all nations;
   2. Support of the principle of noninterference in the internal affairs of other countries;
   3. Support for the principle of equality, including equality of commercial opportunity;
   4. Nondisturbance of the status quo in the Pacific except as the status quo may be altered by peaceful means.

When I read those points, they seemed an innocuous set of points, a definition of how a free democratic state should behave … and then I realized that I couldn’t recall any point in our history in which we ourselves exhibited those behaviors.

We are constantly using economic and military force to meddle in other country’s affairs. We put the Shah of Iran back on his throne in 1953 after destabilizing the government of a democratically-elected progressive president of Iran. We have assassinated politicians all over South and Central America. We trumped up a reason for war in Viet Nam (The Gulf of Tonkin episode) and trumped up a reason for war with Spain in Cuba (Remember the Maine!). We are currently pursuing a global assassination campaign using drone aircraft (Thanks, President Obama!) and we wage economic warfare almost continuously.

The irony of these “negotiating points,” is I read them in a book centered on events in Hawaii, an independent country that we took over based upon phony claims by wealthy businessmen, for whom the coup would be financially very beneficial. The overthrow of the legitimate government of Hawaii violated all four of the principles, laid down by Secretary Hull.

Is that what the U.S. stands for? Bullshit and smokescreens for doing whatever the Hell we want? Seems like it is. President Trump is not an anomaly in this case.

Call Them Scum and See them Flock to Your State!

Who said “ye shall reap what ye sow?” (That particular phrase is not in the Bible, but equivalent phrases are, many times.)

Republicans have been beating on teachers for years, calling them “pigs at the public trough,” and undermining their collective bargaining rights, as well as blaming them for all of the ills of our public schools. (The last complaint is like blaming auto workers for the bad designs of General Motors cars in the late twentieth century.)

The law of unintended consequences applies, though, and Nevada, a leading Republican bastion, is facing a 22% shortage (!), that’s one in five, in qualified teachers in their schools (see here). Who needs ‘em, you ask? Ask the kids in classes that have one of the bodies plugged into place in their stead. The qualifications for teachers were not established by teachers, they were established by democratically-elected school boards and democratically-elect law makers to set minimum standards of competence for teachers. What does it say when your schools boast of having one of five teachers not up to minimum standards?

But then, many in the GOP are in favor of doing away with democratically-elected school boards anyway. Replace them with corporate boards. They are much more responsible to their communities needs.

Missing in all of this is the reason the GOP and their conservative backers have gone after unions: basically teachers tend to vote democratic and had the temerity to form unions which not only work for better benefits and rights for teachers, but also advocate for students. Them students should learn to sit down and shut up and be happy with whatever paycheck they end up with.

Too much democracy is not a good thing. This is also why GOP state governments are disempowered local jurisdictions (cities, counties, etc.) wholesale.

This is not “alt-right” stuff but alternate universe stuff. Sheesh!

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.

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).

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.

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.

Twenty Questions—Plus Four

Remember the game of 20 Questions? Here are twenty-four commonsensical questions about our stance in the world that, if answered, would clarify our relationships with all other nations greatly.

I strongly recommend you read “Andrew Bacevich: What Obsessing About Trump Causes Us To Miss”.

Negotiating 101: Big Budget Victory? Hah!

Scientific American magazine crowed with an article title “Science Wins Reprieve in U.S. Budget Deal.” They, of course, used the word “win” more than once, e.g. “The biggest winner is the National Institutes of Health (NIH)….”

Winners, right …

It is a standard negotiating ploy to threaten to take something away and then elicit concessions to be allowed to keep that thing. This is a no cost ploy as nothing needs to be traded for those concessions, only threats need be made (and, boy, are they cheap).

Was any progress made? Was any action taken against Climate Change, or the infant mortality rate, or any action taken for any scientific effort?

No.

Not a victory, folks.

For you science-types out there, it is called Round 1.

 

 

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.

Please Stop with the “Trump This …” and the Trump That …”

Recent articles have crowed about the GOP cave-in on the budget by talking down Mr. Trump’s vaunted “negotiation skills,” as if the President actually negotiated budget agreements (none do). These headlines are part of a long series of headlines claiming the source of this or that activity by “Trump …” when clearly they are not Mr. Trump’s ideas or initiatives.

To wit: can you name one idea that is Mr. Trump’s and Mr. Trump’s alone? The Wall? Remember John McCain’s campaign stop in Arizona at “the Wall?” Heck, it was being built before Mr. Trump even mentioned it. How about tax reform? (Please, this is as common as there are people with tax axes to grind.) Money for the military? Get tough on NATO … the Chinese (currency manipulators?) … the Russians? All pre-existing ideas.

Can you name one initiative of the GOP that Mr. Trump has tried to husband through? (Hint: There is only one.) The GOP health care initiative? (Got it in one! Good job!). Mr. Trump actually picked up the phone and called some fence-sitting legislators about this one, but clearly this was not Mr. Trump’s plan, it was a mishmash of whatever the GOP thought it could get away with and call it “health insurance reform” or rather “The Repeal of Obamacare!” Mr. Trump did blurt out that he was releasing a tax reform plan within a week, which resulted in that bizarre one page memo that was anything but. Where is the vaunted organizational skills of the GOP on display. Can’t they enroll their usual allies in the Think Tank World to crank out some of these plans, on topics they know they want to address? How could they not come up with a decent tax reform plan? (I can understand the health care miasma (It’s complicated; who knew?), but tax reform is low hanging political fruit.)

I know it is traditional to put the president’s name on all initiatives of his administration, but this is giving our president too much of what he clearly craves: attention. If he deserves it, fire away. Otherwise direct your comments where they belong, at the people leading the charge.

I can’t wait for some foreign leader, when asked to respond to one of Mr. Trump’s tweets or one page memos, to say: “Mr. Trump says many things. We will wait until he actually does something to comment.”

What he has done so far can be described as “a number of things done in the last administration have been undone.”