Are You a Free Market Advocate?

It has been tried.

https://mitchellglennfrommichigan.medium.com/free-market-economics-is-a-disaster-just-ask-a-chilean-629e9c10d270

It was a unmitigated disaster.

Then, why are these ideologies still being preached here? Well, in Chile, some billionaires got everso much richer. Pssst . . . follow the money.

Why Are We Working So Hard?

It seems indisputable that Americans work harder now than ever before. Questions abound such as “why do we allow this?” and “what is it about our culture that makes this a positive?” and yada, yada, yada.

I remember reading an article in Scientific American quite some time +ago along the lines of “labor saving devices don’t” . . . don’t save labor, that is. When household appliances came around, like the electric vacuum cleaner, we ended up vacuuming more than we ever swept the same floors with a broom. The authors believe they identified the culprit: our standards changed. In the case of the vacuum cleaner our standards of cleanliness changed when a new level became available without large amounts of labor to pull it off. In that case, we were the cause of the additional labor. In this case. . . ?

Economists looked at post-war America and claimed that productivity gains would result in workers dropping from a 40-hour workweek to as low as a 15-hour workweek, well before now.

Well, what happened?

Greed happened.

For that prediction to have come to be, productivity gains had to be large, and they were. Check. Then those gains need to have been credited to the workers and their hours reduced at the same pay. Uh, that didn’t happen. What happened is the increases in income from the increases in productivity were pocketed by executives and owners. Call it the “Trickle Up Effect.”

Why any reputable economist would think that workers would benefit by their hours being reduced at the same pay is quite beyond me. In the after-war period, worker’s wages went up in lock step with worker’s productivity, but that was because labor unions fought tooth and nail to get those pay increases. There were more strikes post-war than I could count. But the oligarchs saw what was happening and bribed our politicians and judges to disempower unions, and as the number of strikes fell, so too did the pay increases. Those pay increases actually fell to almost zero (when corrected for inflation). And since you are probably not as old as I am, you probably don’t remember that pay increase came in pairs. One part was called a “cost of living adjustment” which corrected salaries for lost purchasing power due to inflation, and the other part were actual pay increases, aka “raises,” often based on productivity increases or flat out company performance.

And, it wasn’t enough that the fat cats took all of the wealth created by those productivity increases, they also chiseled workers wages, including outright wage theft, chiseled numbers of jobs, pushed jobs that lacked union coverage (by replacing union workers with contract workers), and then doubled down with the Big Kahuna of tax scams. They transferred tax burdens from corporations and the wealthy onto the middle class. Ronald Reagan bragged about pulling off a major tax increase without negative press in the form of “Social Security withholding.” We got a small tax cut (the fat cats got a bigger one) and at the same time we ended up paying that back and more as increases in SS taxes.

The US ranks near the bottom in taxes paid as a percentage of corporate income. Oh, and corporate profits are at an all-time high, setting new records every year if not every month for the past decade or so.

The lesson is clear. We can have our piece of the pie, but only if we are willing to fight for it. If we stay passive, it all slides uphill, against gravity, into the pockets of the already wealthy.

The FED Fights Inflation by Making Illegal “Loans” to Big Investment Banks

Read it and weep.

https://www.nakedcapitalism.com/2022/01/michael-hudson-what-is-causing-so-much-inflation.html

“But the Fed isn’t saving the real economy. It’s saving the gamblers.”

Government is No Replacement for Religion (Thank God!)

All evidence to the contrary, there are people who espouse the idea in this piece’s title. In an online article entitled “We Must Stop the Progressive Doctrine of More Government and Less Religion!” by Star Parker on Dec 29, 2021, the author says the following: “One great mystery is the persistent refusal of those on the left to abandon what is clearly not true. That is, that the means for reducing the burden of poverty is more government spending.”

Silly progressives!

She goes on to say “As Americans allow themselves to be convinced that government is the answer to their lives, they become more likely to abandon faith and religion, which provide the light and principles for individuals to take control of their own lives.”

Basically she is saying government (all of us acting as one) is no substitute for religion when it comes to poverty (and every other social aspect of our society).

WTF?

Hey, you don’t need permission, if your religion can provide the antidote to poverty, fire away. Do it. What are you waiting for? Why whine that bad, old government is undermining your religious beliefs when your religion has all of the answers? Hey, put up or shut up. If religion has the answer to poverty or any other social ill, they should execute their plan and do away with it. Then there would be no need for government intervention, right?

This sounds much like the Catholics whittling away at the contraceptive coverage in Obamacare because they couldn’t enforce their ban on contraception in their own church’s memberships.

The religious are oh, so quick to use government power when it is in their favor and then decry the influence of “big (bad) government” when it is not.

If you can solve these problems, do it. If not, how about shutting up while we try to find something that actually works.

I hate whining.

We Need to Fix Capitalism . . . Now!

Capitalism is quite flawed, but so are all of the other economic/political systems. Some countries have been good at reining capitalism’s excesses . . . this country isn’t one of those.

As I have said, often enough, capitalism’s Achilles’ Heel is that it doesn’t place any limits whatsoever upon greed. I suggest that a good start at reining in the greed woven into the warp and woof of capitalism is to eliminate speculation. There is no inherent good associated with speculation, although there are many associated evils in it; for example, people try over and over to manipulate prices, markets, whatever to make their speculations pay off, legally and illegally. Those are not what might be classified as productive labors.

We need to eliminate speculation as something that doesn’t contribute anything to our society, nor does it contribute anything to individuals. It is a form of gambling, pure and simple.

There is something called the “futures markets” in which prices are set now for sales that will take place in the future for various commodities. The buyers are hoping the prices go up and they will get a deal when that sale is triggered and the sellers are hoping the prices are going to go down, so they will get a fatter price for their goods. In an ideal world this process helps to moderate price changes, but in the world we live in, it is just another form of gambling.

The stock markets are dominated by secondary sales, making the story about the role of such markets in our economy we are taught in school to be a very, very minor form of providing capital for businesses. Instead these markets are very close to just being casinos where rich people gamble.

Let me explain how these capitalistic devices have taken over. If you go to the store and buy, say, a shirt in most states you will pay a sales tax, up to almost 10% of the price of the item (although a small number of states charge nothing, but I think there are just five of those). But if you buy a share of stock, what “sales tax” to you pay? The answer is nada, zip, zilch, no tax at all. Some items, such as alcoholic beverages, include what used to be called “sin taxes.” Extra taxes are levied upon alcoholic beverages to discourage their consumption (Get behind me, Demon Rum!). We do the same for gasoline in which there are substantial taxes, both federal and state, paid and then sales taxes added on top of those! We could do the same for stock transactions. This would discourage speculation, certainly the practice of buying a stock and selling in when its price went up a few cents, often just seconds or minutes after the buying transaction. (Amazing what you can do with computers!) If the profits from the sale didn’t cover the sales taxes, those sales wouldn’t be made.

Plus people who buy and sale and trade stocks contribute nothing to our society. Extensive studies show that stock markets are actually a drag on our economy (they extract funds from the economy without producing anything in exchange). We, at least, need to slow their roll.

Currently we have a patent system, a flawed system but it works . . . kind of, sort of. Drug companies have become adept at acquiring patents and then jacking up the prices for the goods produced under those patents. A current example is insulin. One vial of insulin lispro (Humalog), which used to cost $21 in 1999, costs $332 in 2019, reflecting a price increase of more than 1000%. The cost of manufacturing that drug has barely changed over that same time period. We could change patent laws to prevent such abuses. “What the market will bear” is not a limit upon greed. These same pharmaceutical companies have also taken to making very, very (very!) minor changes in their drug’s formulations to apply for new patents, extending their “right” to make as much money as they want. Patents were supposed to, were designed to, expire so that those things end up belonging to the commonweal. Often the public has already paid to research that drug in the first place through public universities and federal institutions and research funding. The same thing is woven into our copyright laws with written works and others eventually ending up in the public domain.

We have tools to rein in greed in capitalism but the current greedy class has acquired so much wealth that they are blocking access to the political gears of government to make such reforms. If we do not act soon, it will be too late. The only result of extreme wealth inequality is armed strife.

Conservative Business People, Listen Up

You’all have been claiming that the U.S. government, aka guvmint, should be run like a business and I have a case study for you in which I agree.

What would you think about one of the divisions of your corporation which has not met a goal in twenty years, run up huge overruns on their budget, and recently failed an external audit because they couldn’t even perform an internal audit. They could not account for billions of company dollars that they spent, they think.

It is time for that underperforming sinkhole of profits to go, no?

I am talking about the Pentagon here, which needs a name change to Penta-gone.

We have been fighting a so-called “War on Terror” for easily twenty years and, well, help me count the victories: #1 We assassinated Osama Bin Laden, uh #2 . . . uh, #2 . . . well, there aren’t any other victories major or minor.

Okay, this nonperformance resulted in budget cuts, right? Let’s see, the Pentagon’s budget for the year 2000 was 378 billion U.S. dollars, about 3.5% of our GDP. In 2020, the Pentagon’s budget was 738 billion U.S. dollars. What? All of that abject failure to meet any military goals and the Pentagon’s budget doubled? Doubled!

What business principle is it that a woefully performing governmental division gets its budget doubled and nobody loses their job?

Are these the business practices you are recommending? Yes or no—don’t wait for the translation—yes or no?

Driving the GOP into an Early Grave

The navigator-in-chief of the Republican Party sure seems to be Donald J. Trump. Let’s see how he has prompted the growth of the GOP since his elevation into that position.

• The GOP has gotten tied ever more closely to Evangelical Christianity.
  • The GOP has become more anti-science based.
  • The GOP has become tied to alternative facts that they just make up
  • The GOP has become tied to news media that are estranged from decent journalism
  • The GOP has sought out voter suppression instead of expanding their base
  • etc.

There are some consequences to this. Here are just a few:
• Since 2006, white evangelical Protestants have experienced the most precipitous drop in affiliation, shrinking from 23% of Americans in 2006 to 14% in 2020. That proportion has generally held steady since 2017 (15% in 2017, 2018, and 2019). There are some that argue that the politicization of churches has accelerated this drop in evangelicalism.
• But supporting anti-vaccination and anti-mask fringe groups, the GOP has put more of its members at risk, especially since currently the GOP constituency is quite old. These policies are disproportionally resulting in Republicans getting sick and/or dying. The GOP is killing off its own members.
• By refusing to expand their bases and focusing on voter suppression more, the GOP is undermining their future. As their membership gets older, whiter, and less connected with reality, joining the GOP seems more and more like joining a cult, so they are losing traction with young people.
• By undermining trust in societies institutions, the GOP is undermining their own ideology. And is members are trusting their doctors, teachers, local officials, etc. less and less, creating more and more disharmony.

As I watched this unfold, I thought Mr. Trump was driving the GOP into a ditch. Now it looks as if, by doubling down, he is driving the GOP into an early grave,

R.I.P. GOP.

They Just Don’t Seem to Want to Work

The pandemic has made it obvious and clear that there is a whole stratum of our society composed of individuals who just don’t want to work.

Yes, I am talking about the idle rich.

The idle rich, living on unearned income/capital gains don’t produce anything, and therefore do not contribute to society. Instead they leech off of those of us doing meaningful work.

We need to curtail these sources of unearned income, so that the “job creators” will get back to work producing jobs and goods and services the American people value. Speculative market activities need to be reduced through transaction taxes or some such mechanism to reduce the speculations that are at the core of the incomes of the idle rich. About 100 years ago there was a sentiment that unearned income needed to be taxed at greater rates than income earned via the sweat of one’s brow. That sentiment has been reversed though the machinations of the idle rich by their bribing of politicians to make rule changes on their behalf. These changes need to be rolled back, and unearned income needs to be taxed at higher rates, so the idle rich aren’t being induced to waste their talents outside of the world of work.

Now, I am not going to draw conclusions about the idle rich regarding their behaviors, although some have, calling them lazy and slugabeds. But they have been seduced by easy unearned money and for the good of their souls and our society, that has to be stopped, and the sooner the better.

Is the U.S. a Meritocracy?

A couple of episodes ago, Ben Shapiro was on the Bill Maher show, Real Time. (For the life of me why people listen to Ben Shapiro is quite beyond my comprehension. He is a bigger blowhard than I am.)

Mr. Shapiro claimed in that show, and I assume elsewhere, that the U.S. was a “meritocracy” and had been since its inception. A meritocracy sounds like a good deal, people being rewarded on their merits, by Mr. Shapiro’s co-guest wasn’t having any of it. That person, I forget his name, was African-American and, according to him, his great-grandfather was a slave. It should be obvious that slaves were not allowed to participate in any meritocracy, if it indeed existed. And, it is fairly easy to prove that slaves created most of the wealth of the early colonies and the early U.S.

The claim that the U.S. is a meritocracy and has been, is ludicrous from the get-go. This is the claim that is made by people who have accumulated wealth, or personal esteem, or recognition in society, as a way to establish the righteousness of their rewards. They are wealthy because of their great talents, don’t you know. They are valued because of their merits as a whatever.

The classic case I can remember is Mitch Romney, when running for president, claiming that he was a self-made man, that he amassed his wealth on his own. He skipped over the two million dollars his father gave him as seed money to get started in business and the access to his father’s Rolodex, filled with contacts for the rich and famous galore. To put this in context, since Mr. Romney and I are roughly contemporaneous, I made in just less than forty years, as a college professor, about two million dollars. Mr. Romney was given an amount equivalent to my career earnings to “get started.” This is typical of the wealthy, whose parents were often also wealthy and who benefited from private schools, the best colleges, costly vacations, travel, etc. to get a head start on their “competitors.” (My family went on our first vacation when I was nine years old (and I was the “baby” of three children). We went camping in national parks using borrowed camping gear.)

Studies show that Americans rarely transcend the socioeconomic stratum they were born into. We love stories of folks who went from rags to riches and that does happen, just not very often.

You may have many good personal merits, but if others don’t get to see them, then they are hardly going to be rewarded. The aphorism is “it is not what you know, but who you know” . . . still stands. Sometimes it can be the case that impersonal rules affect your outcome. Consider children’s sports in which competitions are stratified by age groups, to provide “fair competition.” Often these groups are two year spans and the placement of kids into the groups is by setting a fixed date and using the child’s age at that date as the placing stat. But there is a problem with this. Kids who have birthdays shortly after the chosen date, will be placed as if they were a year younger and children with a birthday just before the date will be placed as if they were a year older. The kid who turns twelve the day after the placing date and the kid who turned eleven just before the placing date will both be placed as eleven-year olds, except that one has just turned eleven and the other is just turning twelve and is, effectively a year older.

Oh, pish-posh and tish-tosh you say, what effect can that have? A study of professional European soccer league players showed that close to all of them had birthdays just after the placing date and were effectively labeled as being a year younger than they were when participating in youth soccer play. The older kids are more physically developed, had superior skills and received more attention from coaches, more acclaim, more positive feedback, etc. There is even a name for the phenomenon, the Relative Age Effect; you can look it up.

Meritocracy, my ass.

John Ralston Saul has something to say on whether a meritocracy is even something to desire, in his 2001 book, “On Equilibrium:” (p. 7 of the paperback edition) “A meritocracy, on the other hand, is so busy concentrating on efficiently identifying who is best and pushing him to the fore that it shuts down its confidence in the rest of us – those of us turning our door handles and willing to contribute, each in her own way and at her own level. The whole idea of a society of winners – a place known above all for its best – leads with surprising speed to a narrow pyramidal social structure. And then to division and widespread passivity. That in turn leads to false populism and mediocrity; to a world obsessed by bread and circuses, Heroes and the need for leadership.”

So, do you see why the very rich assholes and their front men, like Ben Shapiro, like the idea that we are a meritocracy? It reinforces the very polarized structure they have already created. The one that has them on top of the pyramid.

They have waged a class war . . . and won. Now what do we do?

New Name for Facebook? Suggestions Anyone?

How about:
Fuckface
Face the Music
AboutFace
AssholesAnonymous
Neverland
FuckZuck
Faceplant
Facepalm
WeAreSellingYou!
GWOT (for Giant Waste of Time)

And you?