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Offensive Language and the 2012 Election

June 25, 2012

If language offends you, you might want to skip this essay.

The issues involved in the 2012 presidential election are many and varied. The economy, immigration, education, religion, experience levels and what kinds of experience are involved, all of these play a part.

But at heart, all the Republican contenders have played to the right wing base.

That right wing, or conservative, base includes evangelicals.

You’d think that they might remember Jimmy Carter; a good man, very religious, but ineffectual as president. There was nothing like the rabid push to get Carter out of office. That happened, but not with the anger that the conservatives show now. Carter, still a good religious man, has been an excellent ex-president. Compare him to Bill Clinton, a womanizer, a liar, impeached but not convicted, and still Clinton served two terms. He benefited during his time in office from policies and trends that occurred during previous administrations. The economy boomed. He’s also an excellent ex-president.

And then there was George W Bush. By any standard of reckoning, the worst president in modern times. Two terms. Two signature domestic accomplishments, No Child Left Behind and the Bush Tax Cuts. Since these were passed, education has continued to decline in quality and has now become essentially a national embarrassment. The tax strategy has gutted the middle class while funneling money to the elites and has contributed to the Great Recession which occurred during the final years of the GWB presidency. In foreign policy, Bush started two wars, at least one of which was rationalized by false intelligence interpretations on the part of Bush and his advisers; the intelligence community recommended other interpretations of WMD intelligence, but Bush overruled them. And then he and his principal advisers, Cheney and Rumsfeld, mismanaged the Iraq War. At least in part, the mismanagement was to protect the Bush Tax Cuts; the war was financed by borrowing.

Never mind; the failed policies of the GWB administrations concerning the economy are virtually identical to the ones currently adopted by Republicans, including Mitt Romney. In matters of religion, he’s possibly more religious than Barack Obama, but both are family men. Romney provides more financial support to his church than does Obama. Neither is a Clinton or a Carter in terms of family values and religious belief.

And yet, there’s a sense of fury behind the Republican campaigns. And they dare not offend the conservative base. Being more conservative meant a better chance of being elected.

Why? Didn’t the last Democrat president, Clinton, have a better domestic record? And isn’t the economy steadily improving after 3+ years under the current Democrat? Hasn’t he moved decisively against terrorists and begun the process of disengagement from the wars that Bush started?

Why is he so hated by the Conservatives?

I think it comes down to one overriding aim, one goal: get the nigger out of the White House.

Is it simple racism? Some of it is. Some of it also comes from the fear among White working-class people that their political and social dominance is under threat.
Immigrants and mixed-race children and even Muslims are moving in. The old majority is being squeezed politically and in religious terms. Economically they’re also under attack; they were once the middle class that fueled the national economy.

But those things can be addressed. Accommodation can be found. There’s no anger here, although there might be some subconscious fear.

But the presence of a Black, even a half-Black, president in the White House? That strikes at the heart of their feeling of racial superiority. And so the one goal that Obama can’t address, the one aim that nothing he does will deflect:

Get the nigger out of the White House.

It’s increasingly common to see once-forbidden words used in mixed conversations. Fuck…you can say that. Even motherfucker. Once taboo.

But not nigger. It’s there; now it’s called the n-word, as if that somehow hides the word while permitting the concept. Nigger…shocking, isn’t it? Go back and change what Mark Twain wrote, as if he’d been a racist of the first order. He wasn’t, but he used the now-forbidden word. Nigger.

It’s time we confronted this. How can we discuss the concept, the anger that I think is at bottom from the most conservative, if we’re afraid to even mention the word? Two syllables. Forbidden, but not the concept. It’s alright to believe in racism, to vote that way, but don’t write down the word.

Are you offended?

I am…but perhaps not for the same reason you are. The word doesn’t bother me. I’ve heard it before. I am offended that 70 years after the Tuskegee Airmen, after MLK Jr and the Civil Rights Movement, after Brown vs Board of Education, we’re still rooting out the vestiges of this failed philosophy.

And if saying nigger allows us to confront that, it’s worth it to me.

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A Critique of Both Presidential Candidates, and a Suggested Tax Solution

June 22, 2012

There’s a point behind some of Romney’s criticism.
While Obama had Congressional power, he worked to get the Affordable Health Care Act passed. That took much of his political capital. Attempting to also get immigration reform, education reform, any number of other issues addressed, would simply have meant that nothing got passed, given the obstructionist aims of Republicans.
But Obama allowed Congress to work through most of this without risking his own political status. This is not the action of a strong president.
He also didn’t risk that status by attempting to address any other hot-button issue such as immigration reform.
That weakness or unwillingness is now coming around. He’s been a weak president. Put into context, that’s understandable. He’s the first Black president. A serious mistake can set back 70 years of progress in a nation that has had a history of enslavement of Blacks and oppression of minorities in general. For a lot of the Republican base, Mr Obama’s skin color trumps all of the other issues. Racism is not an issue that Republicans address; there’s a reason for that. Put simply, Republicans can count on the racist vote.
Not that I think Romney is an improvement over Obama. The policies he apparently favors, as much as any outsider can determine his real opinions regarding education, budget, the safety net, and the economy, are a disaster in the making.
He would ‘encourage private enterprise.’ I hope he has a better idea than his predecessor in the Republican Party. Encouragement then was to simply shovel enormous amounts of public money to financial firms, who were then suitably ‘encouraged’ to sit on some of that money as a cushion for future losses, skim off some of it as shareholder dividends and executive bonuses, and use some of it to acquire competitors. Supposedly, they were to loan the money in the hope that this would stimulate the economy; not being fools, they used it in ways that seemed most profitable to themselves.
That, BTW, is how you encourage industry: you decide what you want them to do, and via a carrot-stick approach (tax breaks, tax penalties) you encourage them to do that. They’re in it for the money, after all; so use that to encourage them to act in the national interest.
A Value-Added Tax, to replace the current corporate tax system, works. Say you dump the tax rate that only the foolish pay and the savvy avoid; replace it with a VAT, but suspend a portion of that tax for any product produced domestically using domestic labor. No loopholes. Set this at a nominal 15% (vice the current rate, the one that Apple and GE and Big Oil doesn’t pay), and put in a mechanism that automatically raises or lowers this depending on our international balance-of-trade. Work to keep trade within a narrow range, + or – 1% of balance for example. Trade will still happen, but not based on cost; instead, it would be based on quality. Better quality always wins out in international trade.  Nations that want to sell us goods and services would thereby be encouraged to purchase our goods and services or see that VAT rise.
In this way, everyone who has access to the US market pays for that, and those who bring goods in as imports will pay more than those who produce goods domestically.  Want to export a lot of goods to us, then buy our domestically produced goods.  If you don’t want to buy from us, then don’t plan to sell to us.  Balance of trade can easily be determined quarterly; indeed, such information is currently published in The Economist.  And the automatic adjustment mechanism (needed to take the matter out of the hands of a Congress that is far too easily bought by special interests) can take effect as soon as this information is obtained, certainly within the following quarter.
What about planning on the part of managers who might want reassurance of tax rates before they produce goods?  So long as those goods are produced domestically, the manufacturers can be sure their products won’t be undercut in price by imports.
Simple. And it encourages domestic companies to act in the national interest, not their own financial interest. That’s the kind of ‘encouragement’ that they understand.

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Economic Malaise, Simplified

June 20, 2012

This essay was written in response to a column by Thomas Friedman in the New York Times, edition of June 20 2012.

Friedman like so many others misses the point, I think. He has some good recommendations, but they won’t solve the economy’s long term problems.

Put simply, in simple and easy-to understand steps:
We have a surplus of workers. Half our workforce can produce all we require in goods and services. The relentless push for more efficiency has gotten just that, and efficient economic processes need fewer workers. Machines have taken the place of men.

If those workers are to be employed, then they must be employed in activities that bring in external revenue. They must serve tourists or manufacture goods for sale offshore, and in both cases what they sell must be something that others want to buy and can afford to buy. For a time, we produced commodities that people needed: oil and coal, metals, foodstuffs. Ultimately the minerals become depleted, the few remaining become too expensive to extract and sell, and other nations could extract minerals cheaper and could begin producing excess foodstuffs using the mechanization and efficiency developed here. Manufacturing, e.g. value addition, and tourism are what is left. And that need to produce competitive pricing means that our unrestrained capitalism must be controlled. Unions demand more, executives demand more, finance demands more, taxation demands more…but when the demands price the US economy out of the market, no one wins. Union workers are laid off, management sees the company decline toward bankruptcy, finance loses what it invested, there is nothing left to tax. The inflated manufacturing sector drags the economy down with it. Only by requiring readjustment of currencies (i.e., a cheaper dollar vs the euro and yen and renminbi) can this adjustment realistically be made. It’s not unilateral; those other currencies and the nations that issue them are involved, and so this is a government issue that only governments can address.  And a consideration to be factored in is that those who hold dollars will see their holdings decline in value.  Governments and banks will take major losses if there’s a decline in value of the dollar.  What helps our economy harms them.

Currency adjustment affects balance of trade. That trade cited above is the basis for a functional economy that employs those excess workers and that can support a large middle class. Our government is now controlled by a few who are positioned to exploit niches and extract riches from the status quo. But that status quo is unsustainable; it’s destroying the very economy it depends on. Those who once manufactured goods for external sale are now importers and salesmen; few goods go out, many come in. Foreign competitors have been joined by Americans who do the same thing those competitors do, compete with the domestic economy.  And money flows FROM the economy, not into it. Instead of employing our surplus labor making goods for export, we now employ foreign workers in foreign nations to do the work and bring the results of that work here. Economically, this is no different from firing American workers and replacing them in our plants with cheap foreign labor. It’s the problem that people cite when they oppose unchecked immigration; but the real job loss is not here, it’s THERE, when the job itself is exported. Exported jobs destroy the middle class.  Pressure on the middle class comes not solely from foreign competitors but also now from our own upper classes who have joined the foreigners in putting pressure on rather than sustaining that middle class.  The Walton family, despite claiming American citizenship and measuring their billions in dollars, have economically become Chinese.  Their economic activity benefits China at least as much as it benefits the US; and of course, it benefits them financially.

The other thing affecting trade balance is the concept of ‘free trade’. This type of agreement effectively removes government from trade and turns all trade decisions over to for-profit entities. In so doing, our inflated economy produces goods that foreigners can’t afford to buy and floods our markets with cheap goods that we can’t compete with on a pure price basis domestically; again, it’s that inflated economy that makes this happen. Regulation of trade is a government function; it’s done by imposing taxes or tariffs on imported goods to slow down the flood of imports that saturates the American market.  But no one in government is prepared to do anything except press for more ‘free trade’, without realizing that this means free imports without corresponding exports.  We freely buy but cannot freely sell.

Only a robust middle class can support our government. That government has been squeezed and faces further pressure. Middle class people can’t afford private schools for their children, they can’t afford to provide for themselves after they’re unable to work, they can’t afford to pay for expensive healthcare. Our middle class lifestyle actually is subsidized by the government we’ve built. That government needs income to provide these things. That income must ultimately rest on taxation. Borrowing is a short-term solution that is ultimately unsustainable. We are currently approaching that limit of sustainability.

The middle class is being squeezed ever smaller; the upperclass now controls the government that has the power to save that middle class. The mechanisms that provided education and housing and health care and retirement are being destroyed, even as the government that provided them is being destroyed. All wealth now flows not into the middle and underclasses but only to the wealthy, who become wealthier thereby.  Government policy protects that wealth.

And so we’ve rebuilt a system of nobles and serfs. The nobles profit by rents, from lands and properties occasionally, but mostly from renting out the money they’ve extracted. They live well not by producing more, but by extracting wealth from rents. They remain wealthy because they ARE wealthy.

It’s not sustainable. Never has been, never will be. The traditional solution is violence, the kind of violence that pushed the American Revolution and the later French one. At some point, the level of unsustainability will reach that tipping point. It’s not here yet, but it appears certain to come.

If I can figure this out, why can’t our elected leaders? Why are they so unwilling to act before a crisis overtakes us, a crisis that we can’t recover from?

And why do we keep putting the venal and stupid and uncaring in positions to control our lives?

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Is It Time For a New Constitutional Convention?

January 13, 2012

It has become clear that politicians no longer serve the voters.
A number of things have made this obvious, not least the unwillingness of the House to consider tax reform, to consider elimination of the sweetheart tax exemptions, the anti-competitive deals that favor drug makers, such questions as the practice of attaching amendments to bills that have nothing to do with the bill itself but only with pork for the legislator’s district. And legislators simply refuse to address any of these issues; they assert sovereignty in the way they do their business, forgetting that they are OUR employees, not the new royalty.
What we need is a public initiative. A mechanism whereby we, the people, can send a bill to Congress that they must consider in a timely manner. A bill that cannot be modified by amendment, not be tabled by a committee chairman, a bill that each lawmaker must publicly vote on to make his stand for or against obvious, and something that may cause his recall.
And that’s the other thing. Public recall. People from a district may elect a representative; but when it’s payday, they get their money from all of us. They work for us, for the national interest, not just for the people who voted for them. It’s time for a system of recall whereby we, the people, may make our voices heard. A time when elected officials need to remember who they work for.
And in a time when Congress can’t get the job done, it’s a time for total recall. There’s nothing to say that the next Congress will be any more responsible or responsive than this latest disgrace has been. This is not what the founders of the Republic had in mind.
These things, initiative and recall, won’t happen without an overhaul of the Constitution. And for that, nothing short of a new Constitutional Convention may serve.
Times have changed. We have fewer external threats, but the internal threat is greater than it has ever been, I think. The OWS protests, indeed world-wide protests, are a symptom of that. Around the world, people have lost confidence in their leaders, have acted to overthrow despots. Our own despots consist of professional politicians, corporate elites, the army of lobbyists who keep the two connected through money.
You may think the nation isn’t ready for major change. OK. But keep this idea in mind. Dust it off if things don’t improve.

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Politics, the Political Elite, and their Relationship to the Corporate Elites

January 12, 2012

I’ve been mulling the things I think are wrong with American politics. Clearly, there’s something wrong; rotten, if you will. We continue to elect people who are often fools, are venal, immoral, silly, and even stupid. And once we, the poorly informed and too-often intellectually lazy, elect them, they gain entry to an elite group. That membership may well last for a lifetime. Once elected to office, the politician now immediately forms a reelection committee and begins campaigning for the next election; few ask what he/she has done to deserve reelection. Most, despite their claims to ‘leadership’ will vote 95% or more of the time with their party. Their concerns are reelection, gaining or maintaining party members in power, and whether some proposed course of action is likely to personally favor them. If there’s concern for the nation, it’s not apparent. Polls may show that a majority of citizens favor a certain course of action; politicians routinely ignore such. For example, at this time a majority of Americans favor raising taxes on the wealthy; the leadership of the House ignores this and continues to claim that the wealthy are ‘job creators’. This, despite ten years of lowered taxes for the wealthiest that have provided the nation with underemployed or unemployed workers in excess of 15%.

The party system grew from custom, not from something that the Constitution handed to us. It hasn’t served us well. Party procedures and policies are designed to let their members gain and then hold political power. Just that. Power is for winning elections, not governing. Even should a party achieve a supermajority, such that the party that’s out of power cannot act to control or even influence legislation, the party in power acts to minimize the chances that the next election cycle will see them turned out of office. Cooperation between members of opposite parties is rare. No one party has a monopoly of ideas, but it’s-not-our-idea rules. Even when the opposition favors a course of action that might be in the best interests of the nation, it’s suppressed; good ideas can cost votes for the party that didn’t initiate those ideas.

There’s a constant shuffling of primary election dates, all designed to focus national attention on the voters of one state or another. There are often rules that ensure that all the electoral votes of a state go to one candidate, effectively disenfranchising all those voters who voted for the second, third, or fourth candidate. This maximizes the state’s political power by giving more electoral votes to a candidate than he/she honestly earned. It’s quite possible that the candidate who got the most votes in the general election will not get the most electoral votes, thereby electing a candidate that most Americans didn’t want.

The Electoral College process is itself designed so that a candidate who’s considered ‘not worthy’ can fail to be elected, despite carrying a majority of a state’s popular votes. Many scholars feel that the nation’s founders, those who drew up and then voted for the Constitution when it was ratified, deliberately set up the Electoral College in order to ensure that a member of the elite class of that time would always be elected.

Once elected, candidates are there for the term of office. It’s difficult or impossible for voters to decide they’ve made a mistake and recall the elected official. Even if the candidate is turned out of office after one term, nothing stops that candidate from moving across the street and becoming a lobbyist, using money, knowledge, and contacts to cause legislation that favors moneyed special interests to be passed into law.

We elect candidates most often on the basis of party membership. The party sets the ‘platform’, those policies and objectives they would like to see enacted into law. If we set out to hire someone for a job, we wouldn’t allow them to campaign for that job by presenting prepared, rehearsed, well-vetted speeches to groups who are also examined for their party loyalty. Candidates don’t like crowds that disagree with them, and they don’t like to answer questions unless their campaign leaders have had time to carefully examine the question for any possible political harm that might ensue. So audiences are too often carefully selected. Consequently, we get candidates we don’t know, front men or women for a group of people who work in the background, whose views we never get to examine but who are in virtual control of their candidate. This can be expected to continue in the future; the candidate who’s elected by this system will hire many of his supporters to become his staff in Washington. These, in turn, are the contacts for lobbyists who feed money and ideas to the politician, even to providing fully-written documents that the officeholder is expected to submit to the Congress so that the document begins the process of becoming law. We elect officeholders and expect them to write the laws that will be considered by the Congress; too often, the lawmaker submits, even votes on a proposed bill that he/she has never even read.

Once elected, the national candidate becomes part of a system of ruling elites.

In my view, there are two groups of such. One is made up of elected officials. The other consists of the corporate elites who control them through money. Corporate elites don’t run for office, as a usual thing. Often their background would render the elites unelectable. But they can still cause political control to be used to benefit themselves and their corporations. Campaign contributions buys access to the officeholder. Officeholders are quick to point out that the elites who hold out the cash don’t buy their vote, they only buy access, a chance to talk to the official and present his case. Unsaid is that the officeholder only allows access to the ones who bring money.

So there are the two groups. They interact with members of their own group, and with members of the other group. Unless you have money, you’re not a part of either group; and they interact only in defined ways.

The corporate elites interact through business activity. They sell you a product. Often they do so through an intermediary, agents or advertisers. Such interaction is one-way. Politicians interact rarely except when involved in a reelection campaign, and then the interaction is limited as outlined earlier. If you are present at the candidate’s appearance, you get a handshake, a request for a vote or occasionally for a campaign contribution. The candidate presents a well-rehearsed, sanitized speech which is always long on promises, never on specific acts the candidate will take. The result is very limited access from those on the lower socioeconomic strata to those in the upper groups, the political elite and the corporate elite.

Some of the politicians last long enough to make elected office a lifetime project. They serve until they’re no longer able to serve; but even then, they maintain contacts with the other elites.

So this is what our politics have become. It’s not what the framers of the Constitution intended.

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A Vision for a Better America

September 1, 2011

Without regard to Huntsman, who like all presidents has to deal with congress to enact his ‘promises’, lets look at his plan.
Tax reform, yes. Urgently needed, and wiping out the special advantages for wealthy individuals and multinational corporations would help. Lowering the corporate tax rate as a part of this is good, so long as the special deals are eliminated at the same time.
But free trade without some kind of parity agreement is foolish. We’ve had that. We freely buy, but can’t freely sell, because we’re selling to nations (China, and now India) who have huge populations who can’t afford our products, but must work at whatever poor wages are offered there under whatever conditions employers impose. No ‘regulations’ to deal with, such as those that keep workers safe and provide for their well-being. Think sweatshops. Corporations are happy with this, because it increases their profit margin, lowers taxes, allows huge paychecks for the managerial elite. The real effect is to force a machinist in Ypsilanti or Cleveland to compete with one in China or India for his job, and if they can work for less and survive, then that American worker will have to do the same or watch his job outsourced. We’ve seen this happening now for years.
Free trade…but only between nations that are approximately equal in per-capita income. The only good reason for importing manufactured goods is if the quality is higher than what’s produced at home. Trying to produce goods cheaper is a game a developed nation can’t win.
I propose a gross receipts tax for all goods sold in the American market. American firms could offset this by the amount paid as corporate taxes in America. But if you don’t pay those corporate taxes, then the gross receipts tax kicks in, and it should be adjusted to provide price parity between imports and domestic production.
I also propose a tax increase on all fuels except those used for agriculture. All other fuels, no exceptions. Begin with a $.25 increase (a quarter), increase that annually by another quarter every year, until prices for gasoline are at least an additional dollar per gallon. The money raised goes to the government to build infrastructure and possibly reduce the national debt. Meantime, you can cancel the phony ‘fleet MPG average’ and let the market work. If you’re paying $100 to fill up your gas guzzler, fine; but a lot of people won’t want to do that. Hello electric vehicles. Automotive stimulus, parts stimulus, all sorts of benefits.
Reform immigration; go to a single-payer medical system, something the bastardized Obama plan wanted but couldn’t get. Take that burden off the jobs creators. Reform banking, and put in a special tax rate for the highest income people. Don’t reward excessive greed. Make it easier to earn money by creating things that contribute to the national wealth than by manipulating money, which creates nothing but excessive pay for the very few at the top. Reform the interlocked boards of directors who control the economy for the benefit not of the workers or the nation, but for the benefit of the managerial elite class.
Reform education. Make schools a place for education rather than a place for social reform experiments. Clear out the deadwood, teachers, administrators, and students. If they can’t teach, fire them. Make principals and school boards responsible for the results achieved by their education system. Teachers have very little power to cause change; put the responsibility on those who have the authority. If a student has reached the maximum benefit from public education, as shown by inability to pass standardized exams, then dismiss him. The idea that a student must stay in school a prescribed number of years is foolish and outdated. At the same time, provide alternatives such as remedial classes (for a limited time) and non-college training or apprenticeships so that a student leaving the public education system can immediately qualify for a job. Allow those who can qualify, by grades and demonstrated ability to continue to benefit from education, to continue with the public paying most of the costs. Possibly not for all career fields; if you want to be a lawyer or psychologist, then pay for it yourself. But engineers and scientists and business managers and entrepreneurs should have our assistance, because the investment pays off in later years.
If I can think of these things, why can’t our elected ‘leaders’ in government?
The answer is that they are more concerned with getting reelected, seeing their party in power, and personal advantage or power. We need term limits to reduce the accumulation of power, and development of a multi-party system that reduces the power of the majority parties. That is something we must do, as a voting electorate. We can’t blame this on congress. And they won’t take action unless we force them to do it.
I have a vision; it’s there above. Where is Mr. Boehner’s vision? Where is Ms. Pelosi’s vision. Where’s Mr Obama’s vision? I can be specific because I’m not afraid I might lose a vote or two; they’re all fearful, as is everyone in the government.
The above? That’s a real change you can believe in. Not that it’ll happen. See the concerns they have in the paragraph above. Feel free to share this with anyone you want. Copyright hereby renounced.

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The Economy, Politics, Social Contracts, Taxes, and International Relationships

August 15, 2011

This is excerpted from the International Mensa Forums; I posted it there on August 15, 2011.  It contains my thoughts on current affairs regarding taxation, contracts between government and the citizenry, politics, and the effects of all these on the world.

US taxes need to be reformed. There’s a huge potential there for national income, and I was thinking about this just last evening. The television news program was “60 Minutes”, and it includes numerous interviews with business people and a political figure from Switzerland; not just the newscaster’s opinion, in other words.

The program made the point that the US taxes corporations at the second-highest rate among developed nations. As a result, US corporations are moving their headquarters offshore and keeping their funds out of the US so as to avoid taxes. This is also related to offshoring and outsourcing that has removed manufacturing jobs from the US. As a result of this, I’ve come to believe that the US economic recovery may be delayed for years. It has to do with taxation and how the taxes are used; Americans see the waste and selfishness of politicians and have no vehicle to correct this because of the control that the two major parties exercise over American politics. So their only vehicle for complaint is to withhold taxes, and voters do this.

As an aside, another reason for the recovery to be delayed is that many of the ‘spenders’ in the economy had large credit card debt when the recession began. It’s only foolish in hindsight; banks, merchants, a constant blitz of advertising urged people to buy now, pay later. Many did. If you had a good job, a nice house, a salary that included raises in pay every two or three years, why not plan on paying the cost later when your salary had been increased? But when the economy began to go sour, when the house wasn’t worth what you had paid for it, when layoffs began, all this turned out to be not true. And the ‘spenders’ who had driven the economy had no more disposable income to spend and their credit was stretched to the maximum; so they stopped spending. They won’t spend again until they recover from what they’ve already spent in the past few years.

Back to tax structure: I was thinking that it’s silly to force US citizens and US corporations to be the only ones to benefit from the American economy. Something like a national sales tax or, even better, a gross receipts tax that gets passed on to whoever is selling within America would be helpful. This tax might be offset by whatever federal corporate taxes the company had already paid, so that the result was a tax on economic activity that would be paid by everyone doing business. So long as only native companies pay the taxes, there’s an incentive to be a ‘native’ of Switzerland and just sell your goods here. And that’s why Google and a number of other firms are now headquartered, at least for tax purposes, in Switzerland. In return for raising taxes in this way, corporate tax rates could be reduced and personal income taxes restructured to ensure that all citizens paid at some fair rate. Possibly a ‘flat tax’ could be the way to go here, where all income, from whatever source, is taxed. Currently the wealthiest persons have any number of legal ways to evade paying taxes. That needs to be addressed.

So the US Government is, through unwise tax policy, forced into this policy by citizens who aren’t willing to be taxed and then have their money wasted by venal and corrupt politicians, subsidizing the governments of Ireland and Switzerland and other places. Those tax-evading companies are now headquartered there and happily pay a lower corporate tax than they’d have to pay in the US. Why not? It’s not as if Europe was far away; they’re only a few hours away by airplane. So the executive commutes back and forth from his home to Europe in a corporate jet.

With a more-equitable tax structure, the social contracts made by the government can be funded. Citizens would be happier if they could see that incumbent politicians aren’t using tax money to help get themselves reelected.

I don’t have a practical solution. No politician is going to advocate anything like what I’ve written, because they’d rather keep on pandering to corporations and using tax money for their own purposes and to aid their friends. We need to get the career politicians out, and go back to the time when public service was a duty, a kind of ‘noblesse oblige’. And as for educating the public…fat chance. They mouth the TEA Party’s slogans or whichever propaganda is current, and refuse to think for themselves. It may require a revolution, probably not a bloody guns-and-bodies revolution, but a revolution nonetheless. A powerful third party composed, not of TEA Party or Progressive fringe elements, but of centrists who won’t be the pawn of either extreme element might be able to do it.

I don’t see any good outcome from any of this. Not for the US, not for Europe, not for the world. The stability that depended on the US economy and the US military may be coming to an end.

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On the Elderly and the Economy

July 31, 2011

On The Elderly and the Economy

I read Mr. Robert J. Samuelson’s column entitled Elderly Slowly Sinking the Ship today, July 31 2011. In the article, which deals with his interpretation of what’s harming the US National Economy, he concludes: “It’s the elderly, stupid.”

He couldn’t be more wrong. Allow me my own quote: “It’s the politicians, stupid!” By the end of this document you may judge for yourself.

I’m fairly typical, I suspect, of Americans of my age group (currently 71). I grew up in the ‘40’s and ‘50’s and graduated from high school. I had a very basic education, such as was common to small-town southern high schools back then, no trade of course but I could have attended college and learned enough to embark on a career. Except that I had no money for that. Plus, in those days, a young American male faced the draft. Generally it arrived in your early to mid 20’s, and at that point you left your job and went to serve for two years in the Army. You could, of course, join a branch of the armed services anytime after 18 and once you had served, you wouldn’t have to worry about the draft, short of a war in which you would get recalled but that would happen to everyone anyway.

During the time I worked before my 18th year, I paid income tax and social security. I had no choice; it was the law, a law passed by the US Congress and signed into being by the US President.

This was a part of the legal system of the United States. Congress passed these laws. I mention this because it seems they have forgotten this small fact.

I entered the US Army. I was paid a pittance, as we all were at the time. I got $77.10 per month in 1958. I got room (along with 50 or so others, in the same barracks) and board (3 meals in the Mess Hall; occasionally strange, but supposedly nourishing, unless the ‘cooks’ made a mistake). I also got medical care from the Army’s Medical Services. I paid Social Security Taxes from my salary, involuntarily. It was the law.

I now had become the beneficiary of two promises from the US Government, both of them originating in the US Congress.

In return for my contributions to Social Security, I would, upon reaching a certain age, become eligible for a pension. The money that I, and all the others like me paid into the system, was expected to provide the funds for that. This promise or assumption was already being eroded; more on that a bit later.

The second promise had to do with the draft. It was unpopular, and so the government, in order to reduce the numbers needed to be drafted to maintain the armed forces, offered retirement after 20 or more years with a salary and certain other benefits. Free medical care for myself and my wife, plus any minor children, was one of those promises. There were other, lesser benefits promised, but I want to concentrate on the ‘free medical care’ part.

In time, the government realized that this medical benefit was becoming very expensive. The solution was to simply, over time and involving a number so small steps, legislate it out of existence. Broken promises…but never call it such. It’s “reform’ of ‘entitlements’. Those entitlements were earned, part of a contract between myself and others who served until retirement, but don’t call it a contract which has now been broken by half the contracting party, the US Government, after the other half (the veterans) have done their part. Call it ‘entitlements’; it sounds so much better than breach of contract.

Meantime, the second promise, that of Social Security Retirement.

The money collected in this way went into a fund. But congress, leery of raising taxes, soon found out that this fund could be raided and the money transferred to the general fund. It was replaced by IOU’s, which of course, unlike other government loans, didn’t require repayment of interest.

Unlike other funds such as those of various state teachers organizations, social security funds didn’t get invested into interest-earning accounts. Also unlike other funds, the beneficiaries of the various insurance policies didn’t diminish in numbers. For every thousand teachers who contribute into the retirement fund, some of them will die. The numbers of those entitled to benefits are not expected to grown without contributing a commensurate amount to the fund. But for social security entitlements, the numbers grow. Disabled retirees retire without contributing fully; children may become entitled because a parent died; and so forth. And the money collected became simply another tax, but without calling it such; there were, after all, those government IOUs to back up the entitlements.

But in theory, if you worked for a certain number of quarter-years, and paid in so much money, you would be entitled to a pension as set by law, e.g. by the congress.

Um…not quite. If you had another pension, say from the Railroad Pension Fund, or from a Teacher Pension Fund (these had exceptions built in so that they could fund their retirees, and so they didn’t pay social security retirement taxes). So there was an ‘offset’. Despite the fact that you might have qualified for a social security pension, you would receive part of what you had earned, or often nothing at all.

Another broken promise by the congress, which believes that only the current congress exists. Whatever was done before, whatever was promised, unless it’s protected by the constitution, any promises or contracts are no more than what congress says they are.

The congresses’ promises are essentially worthless. They can change from one election to the next.

And so, the evolution of one of those entitlements: medical care. Military hospital care became Tricare care, in which you went to a physician or hospital and the bill was paid by Tricare. You could go to a military facility if there was one available, and so many retirees settled near a military base when they retired. No Tricare required. But then this too was deemed too expensive, and so at age 65 the retiree was dumped into Medicare, no longer eligible for military facility care. Medicare subscription fees were to be paid by Tricare as supplemental insurance, and by social security if you were able to get anything from them. No longer free. Just another broken contract, but unlike a contractor, retirees or social security enrollees can’t sue for breach of contract.

Unemployment benefits: these too are on the congressional chopping block. There’s a tax paid by employees and employers which is split by the state and by the national government. But it doesn’t fund unemployment benefits, especially in a recession. The money has already been folded into the general tax fund by one or the other accounting gimmick.

And now we come to 2011. TEA Party people and Republicans want to simply dissolve whatever remains of that contract that past congresses have made, to take the money and airily decide that there was really no contract at all.

And so you can now ask yourself: Is it the seniors and the Military Retirees and the Unemployed, the people who followed the laws as they were then, who fulfilled their part of the contract between themselves and the US Government? Is it the seniors, stupid?

Or is it the politicians who, over generations, have repeatedly broken the contracts after the people fulfilled their part of the bargain?

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March 6, 2011

On American Society; Why We’re No Longer Number One.

I’ve written on a number of topics in the past, for everyday readers and also for Mensa International in their online Forum. I think it’s time I extended one of those topics to American Society. I have been influenced in this decision by Mr. Fareed Zakaria’s writings in Time and by his on-air comments that he airs on CNN.

Time’s edition of the week of March 5 2011 has some of his writing and also a counter argument from another writer; both are well worth reading.

But I have argued in the past that there are three things that American Schools and American Society fail to teach, and the lack of this teaching is what really hampers student progress. After listening to Mr. Zakaria, I realized that the same three characteristics are what is hampering American Society. And if we ever plan on turning society around, we need to start with these three things. A good place to start would be in the education system, although that has now been so compromised by politics that I don’t expect to see any improvement in my lifetime.

There are people in our society who have acquired these qualities. At the same time, there are millions who have not done so.

But to the three lacks:
The first of these is discipline. Discipline may be defined for the purpose of this writing as willing cooperation with the aims of society. Discipline allows an individual to pursue goals without becoming distracted. While there are disciplined individuals, I think it is fair to say that American Society has become undisciplined. Along with this lack of discipline, there is found the second great lack: we no longer have the quality of self-responsibility. It’s far too easy to expect that someone else will provide for our well being or care for us when we haven’t made provisions to care for ourselves. And the third lack is a sense of ethics.

There is little doubt that ‘recreational’ drugs are an evil. And yet, millions of persons will, despite the best efforts of educators and leaders and law enforcement entities, use drugs each year. It’s well known that these drugs are addictive, but this won’t deter new users. There is no sense of discipline, no responsibility, no ethics that will prevent this.

American Society is at least overweight, at worst obese. We tend to blame restaurants for serving too much, or vendors of prepared foods for using too much fat or salt or preparing high-calorie foods, or advertisers who constantly urge us to buy more, consume more, eat more prepared foods. But in the end it comes down to choice; we make bad choices through a lack of discipline and then blame our bad choices on others because we lack self-responsibility.

We as a society want everything, and we want it now. There isn’t the discipline to wait until we’ve earned those things or to say “no!” to the relentless barrage of advertising. We want the newest iPad or a new, expensive car, or smartphone, or a lifestyle that our own efforts can’t buy. There’s always plastic; so we in our undisciplined rush to have it all turn to credit and buy-buy-buy. And rather than call it undisciplined, we call it a disease. In this way we can push responsibility onto someone or something else. There are indeed personalities that are prone to addiction; but they all start somewhere, and it’s a lack of discipline and a lack of self-responsibility that enables that first small step that leads to addiction. But there’s always rehab; blame someone else, then expect someone else to get you out of the trouble that your own behavior has gotten you into.

I’ve spent less time discussing ethics in this paper, but the lack of ethics underlies many problems of society. It’s not ethical to push people to consume more, to make choices that are known to be bad by the person who urges us to make those choices, and yet this is done. It’s not ethical to urge bad choices on financial markets, and then, via hedge funds, bet against those choices…but it happens. It’s not ethical to use the mechanism of government to enrich one’s private accounts, but that happens all the time. It’s not ethical to take money from a contributor for a political campaign and then repay the contributor with public money or political favors; and it isn’t ethical to contribute money in expectation that public funds or favors will be forthcoming. And yet, these are the ways that we select our public servants. It’s not ethical to make bad business decisions and it’s not self-reliant to expect government to bail us out…but that’s what has happened.

So…number one? I don’t think so. We’re dependent on a remnant of a society where discipline, self-reliance, and ethics built something that was the envy of the world. But we’ve squandered most of our capital and little by little we’re losing what that earlier society built. The evidence is all about us. Virtually all our political leaders are corrupt to one extent or another. We follow the antics of ‘celebrities’ while realizing that these persons have little or nothing to contribute to society that’s more beneficial than short-term gratification. Who are our entrepreneurs or scientists or educators or physicians? But of course, we know all about sports figures or entertainers, if only because we’re horrified by their behavior.

Nations rise, and then they fall. I think we’re seeing the early stages of that fall. We have, in the past, responded well to challenges. I just don’t see the ability remaining in American Society to respond to the challenges we’re seeing now.

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