Archive for the ‘The Economy’ Category.

Just a Footnote

I am on a post-truth kick, trying to understand why people, when presented with the facts, ignore them. But here is one from yesterday. You know those tax and spend Democrats who the majority of voters think are bad on the economy and the debt? Well the numbers say it ain’t so and has not ever been. The latest tax cut enacted by the Republicans should wake you up to that. But here are the numbers relative to our deficit:

Now what does that tell you? But we don’t care because we “feel” like the Democrats are the worst stewards. But reality is a bitch and voting on our feeling has consequences when you ignore the facts. More on our post-truth, a.k.a., the Trump Administration and Republicans, in a bit.

*Note the big climb in debt was the crash brought to us by deregulation of the banks and their crash, the bailout, giant jump in safety net spending as people lost their jobs, and the stimulation bill that save us from a bigger crisis. Note how it back down as the economy healed under Obama. Oh, that couldn’t be could it….

It’s the Economy Stupid

Basically much of America is brain-dead. No, they are not like zombies, but definitely mesmerized by conservative propaganda. One writer gave us this yesterday about their favorite source of news:

Fox News continues to market itself as a legitimate news operation, but legitimate news operations don’t spew conspiracy theories, attack African American athletes, mimic President Trump’s fake facts and malicious attacks, ignore actual news when it is not favorable to Trump or fan the flames of xenophobia. It is increasingly difficult to understand why advertisers want their products associated with an outlet that does more to polarize Americans and wage war on objective reality than Fox.

But it makes no difference to point out all this, their eyes glaze over and we get the disruption defense. “President DFF is a different kind of leader and he leads with disruption. Change, ain’t it great?” But as I have opined here before, conservative ideas are failed ideas and once it hits them in their pocketbook, there will be a wake up call. Sadly with a brain-dead Middle America (See Roseanne for the classic example), all that talks, and maybe all that has ever talked is money. Well the money is about to talk.

In an op-ed by Robert Leonard about what is happening in Iowa, he pointed out how pocketbooks in Middle America are starting to feel the pinch from the Disruptor in Chief.

Donald Trump won over 60 percent of the 2016 vote in rural Iowa, where I live, and I haven’t heard much concern from Republicans over the president’s alleged infidelities with a porn actress, his ties to Russia or Jared Kushner’s real estate shenanigans.

Or, for that matter, much concern about the administration scandals about wife beaters, Saudi princes, Ben Carson’s table or Scott Pruitt’s soundproof room. Many people don’t even know these scandals exist — they generally don’t lead in Sean Hannity’s or Tucker Carlson’s world.

Sure, there is a little rumbling about the increased deficit, but not much. Besides, it’s the fault of Congress, in particular the Democrats.

But then it gets interesting:

But people here — Republicans and Democrats alike — are paying great attention to what President Trump is doing economically, especially since he started in on tariffs. We have a strong manufacturing base in our county; when tariffs on aluminum and steel were announced, local manufacturing leaders tried to be diplomatic, praising the Trump tax cuts but saying the steel and aluminum tariffs would hurt their businesses by driving costs up.

One smaller manufacturer — a Trump voter — told me that his costs to produce his product nearly doubled overnight, and that his business has already been hurt by the tariffs. Prices didn’t rise only after the tariffs were announced; they started rising when Mr. Trump floated the idea.

But it’s the farm economy that rural Iowans are paying particular attention to. When the president first proposed a 20 percent import tax on Mexico to pay for his wall, Iowans objected: Mexico is our second-largest export partner after Canada.

Mr. Trump has waffled on the renewable fuel standard before — ethanol is big around here — and Iowa’s entire congressional delegation and the governor’s office pressured him to renew it. We know he will waffle again, and potentially end it.

Most recently, when Mr. Trump imposed $60 billion in tariffs and sanctions against China, the Iowa Soybean Association said his action “poses an immediate and grave threat to their industry and Iowa agriculture.”

And guess what, the Chinese are now raising tariffs on pigs! Iowa is the largest pig raising state in the nation. They are so screwed. The author goes on to opine that this could just be the impetus to turn some Republican heads toward impeachment. I think there is a much larger lesson here.

First and foremost, how do you ignore all that was President DFF when he was a candidate and he said he was going to do exactly what he is doing? My answer here is that the devil is in the details and most Middle America conservatives don’t want to look in the details for fear of what they will find, hence the need for Fox News to either change the subject, or create whole new “facts” so reality can be ignored (in the short-term).

Second is to understand how empathy, or lack thereof, plays a major role in how Republicans are Republicans. They easily shut out the rest of the world, and even their fellow citizens if they are doing fine. Then they define the rest as part of the problem so they do not have to examine those pesky details. I find it interesting, as Mr. Leonard pointed out, they still blame Democrats when they hold everything in government. It is classic denial.

I think empathy or the lack thereof is innate. We are born that way. I think if you really want to understand the real politics behind Republicans and Democrats, it is about empathy. Democrats say, “There but for the grace of God go I.” Republicans say, “I deserved what I have, and look at all those lazy slugs around me that want something for free.” There was an interesting piece the other day about the fact that maybe gratitude may be a virtue highly underrated. Well, in Republican land, grateful hell! I earned it! Or God chose me. If you are suffering either you deserve it or God did not anoint you. Explains a lot about Evangelical support of Trump and rejection of real Christian virtues

Maybe that explains the fearfulness studies that show that conservatives tend to be more fearful. There is them and there is us. Lack of empathy is critical to the them part, and a belief that you are in a state of grace and have earned everything you have, allows you to see everyone us as them. I have been struggling to understand my conservative friends fo years and this is what I have witnessed. The most interesting part of all this is that they can have empathy if they experience some of the injustice they deny first hand. But it is very selective and focused on their experience.

So are we lost because they are all born this way*, helped along by Fox and all the right wing noise that  fills their 24/7? Nope. Back to the start of this blog. It is about the money. And President DFF is on his way to wrecking the economy. And changing him out with Mike Pence won’t change much. So sooner or later they are going to vote their pocketbooks. Democrats have to give them a reason to select the other team. That means directly addressing some of Middle America’s economic woes with something better than zones of entrepreneurship. It means Democrats have to throw off the clothes they were robed in by Right Wing noise. We have to make them understand that we understand that if we are going to prosper, they have to prosper to.

No, we are not probably ever going to cure their lack of empathy for their fellowman. Some people are just selfish to the core. But if we can make them start to realize that we are all in this together, and cutting out winners and losers results in losers for all of us, then it really will be a new day. Hope on a Monday.

*There have been some studies that show that if we were a more integrated society and had more first hand experience with “others”, some of our prejudices evaporate. See conservatives who have gay children. It is that personal experience I described above. Liberals don’t seem to need this as much as conservatives do. In many ways we got this experience when we lived in a more egalitarian society rubbing elbows with “others”, and read widely (getting the experiences of a world we could only imagine). But our trends today are away from reading, and growing economic inequality, segregating and isolating us as a society. Then the inmate tendencies run wild.

Another “Things” Morning

You know how you are on a list that sends you emails of breaking news? Well I am on a lot of them. But here are the the ones I think we should think about instead of Stormy Danielles (who did not know President DFF was a pig?). The first came from a headline from my local paper, The Sacramento Bee, about the shooting of an unarmed black man (Stephon Clark) by police which I blogged about the other day. Here is the headline:

“Black Leaders Demand Criminal Chargers Against Police Officers Who Shot Stephon Clark”

Now I read this and thought, understandable, but counterproductive. In a way almost total pandering bound to go nowhere. The law on this is fairly clear, although wrong-headed. In case-law there are two parts to this, did the police officers fear for their lives and was it reasonable. The cases piling up where outrageous police shootings are acquitted is telling us that it is almost impossible to judge this and benefit of the doubt always goes to the police officers. In other words, charges will not be brought. It is grandstanding by black leaders instead of focusing on the real problem, the law itself and better police training. Maybe this is a several step process, but I can’t help feel that somehow this demand is pandering to the family and black community instead of taking on the real problem.

UPDATE: Erika D, Smith from the Sacramento Bee gave us this today:

What happened to Clark most certainly should be a crime, but it’s probably not one. Not under the straitjacket of two U.S. Supreme Court rulings that make it all but impossible to charge and convict officers for shooting suspects in the line of duty.

Tennessee v. Garner allows that it’s OK to shoot a fleeing suspect when “the officer has probable cause to believe that the suspect poses a threat of serious physical harm, either to the officer or to others.” And Graham v. Connor states that “the reasonableness of a particular use of force must be judged from the perspective of a reasonable officer on the scene, rather than with the 20/20 vision of hindsight.”

These rulings are, in part, why this week Louisiana’s attorney general declined to charge two white officers for shooting Alton Sterling outside a convenience store in 2016 — and why so many other officers in so many other cases haven’t been charged or convicted either.

Complicating matters is California’s own use-of-force statute, which states any “officer who has reasonable cause to believe that the person to be arrested has committed a public offense may use reasonable force to effect an arrest, to prevent escape or to overcome resistance.”

,,,Instead of giving people in Sacramento false hope and raising expectations for Schubert to file charges that likely will never come, why don’t we talk about how to change state law so it’s easier to hold officers accountable for their actions? Because it’s possible.

…None of this will bring Stephon Clark back. And perhaps none of it will ease the pain felt by his brother, Stevante. But protests alone aren’t the answer either. It’s time to channel all that anger.

Next up is this one:

“After Stormy Daniels, Republicans Face a Referendum on Trump’s Conduct”

This one actually makes me laugh. Republicans do not face a referendum on Trump’s conduct, but their own conduct in response to his. Because they won’t act, President DFF will face a referendum in 2020 unless Mr. Mueller drops a bomb, which the Republicans are doing everything they can to defuse it. That defusing along with policies like tax cuts for the wealthy, tariffs, and wild spending without raising taxes is what is going to cause a referendum on Republicans. Conservative ideas don’t really play anymore and when the average American who does not watch what is really going on feels it in their pocket book, they will vote them out. The fact that they fell in line behind Trump, not his conduct, is why they will be given the heave ho.

In the March on gun violence and the continuing discussion of what the problem is, the kids seem to have it figured out. It is too many guns. But one father of a slain young woman is a favorite of the media because he does not want to rock the political boat, just make schools safe. So he does not want to talk about getting rid of military grade weapons, or other gun restriction laws, just what we can do to make our schools safe. It is a fool’s errand. Think about not changing anything with access to guns, and then making schools safe. They would look like prisons with guards armed with AR-15s. And whether a teacher or a trained SWAT police officer is armed, what happens if he gets taken down first and they are all trapped in there?

Retired Supreme Court Justice John Paul Stevens gave us his thoughts here this morning when he gave a short summary of how until the Roberts court, there was not an unfettered access to guns, and suggested the obvious, repeal the 2nd amendment as it has no relevance in our 21st century life. Amen to that. The kids get it. If you want to fix something you go for root causes, not some political white wash that does not solve anything and has its own bad consequences. People love their weapons. They are wrong. It is as simple as that.

Finally, I would like to leave you with some wisdom from Paul Krugman of the NYT. I know I have seemed crazy when I say all Republicans are evil. I am not and Paul has come to the same conclusion demonstrating that they have all been elected with the big con:

…the success of people like Blankenship [a known crook] — or Trump — was an inevitable consequence of the political strategy Republicans have followed for decades. For the simple truth is that ever since Reagan, Republicans have basically played a con game on American voters.

Their sustained, invariant agenda has been upward redistribution of income: cutting taxes on the rich while weakening the social safety net. This agenda is unpopular: Only a small minority of Americans wants to see tax cuts for the wealthy, and an even smaller minority wants cuts to major social programs. Yet Republicans have won elections partly by denying the reality of their policy agenda, but mainly by posing as defenders of traditional social values — above all, that greatest of American traditions, racism.

And this sustained reliance on the big con has, over time, exerted a strong selection effect both on the party’s leadership and on its base. G.O.P. politicians tend disproportionately to be con men (and in some cases, con women), because playing the party’s political game requires both a willingness to and a talent for saying one thing while doing another. And the party’s base consists disproportionately of the easily conned — those who are easily fooled by claims that Those People are the problem and don’t notice how much the true Republican agenda hurts them.

…there will be no redemption from within. Principled, ethical politicians won’t reclaim the party from the likes of Trump, because they’re not what the base wants: The modern G.O.P. is no country for honest men. Con artists will continue to rule until or unless the party loses big, repeatedly, and spends years in the political wilderness.

And he leaves us with they may get thrown out as people wake up, or they are such criminals that they will have no problem rigging the vote through tactics we have already seen. It really is up to Americans to get out and vote.

Universal Basic Income

Need a break from Stormy, President DFF, lie dectors, idiot cabinet members, Republicans equivocating?  Okay, lets discuss what is becoming more and more popular, the Universal Basic Income (UBI).  A UBI is an unconditional cash payment given at regular intervals by the government to all residents. Holly sh*t you moron, there will be hammocks everywhere.  We wouldn’t have enough trees! Well, that is traditional conservative thinking, but we need to get outside the box.  Sure you will be able to find the anecdotal surfer who uses his food stamps for lobster, but the reality is most people want to work and there is a growing economic inequality that cannot be justified.  There are also estimates that in the next 20 years automation could displace 1/3 of American workers.  Couple that with fact that we have all these various and sometimes very inefficient programs to help those who are poor and unemployed, and you start to say, okay what’s the best way forward?

This has gotten some press because Facebook co-founder, Chris Hughes, made a pitch for it in SXSW last week.  He made what might be sacrilege for Republicans, the obvious, that the economy is unfair, economic inequality is getting out of control, and he is there with his billions based on luck.  Most of us Democrats or Progressives know this.  That is why we operate on leveling the playing field, not pretending poor people deserve their fate.  Or as Chris Hughes put it:

It is such a fundamental idea behind America that if you work hard, you can get ahead — and you certainly don’t live in poverty. But that isn’t true today, and it hasn’t been true in the country for decades…

My own experience shines a light on how the tie between work and wealth in America has frayed. I was a scholarship kid who worked hard to get to Harvard, and I’m proud of the work I did to make Facebook successful in its early years.

But the fact that I was able to earn nearly half a billion dollars for three years of work is indicative of how unfair the American economy has become. Few people recognize that the same forces that enable the outsized “success” of many Internet entrepreneurs are also making it harder for everyone else to make ends meet.

So what we can agree on is that we are facing some real changes in the future and let’s get real, a lot of people are not going to go back to school and become programmers or whatever the new world needs (Think coal works or steel workers in their 50-60s).  But profits keep rolling in so how do we share that more equitably (and creat demand with spending)?  Now I offered my solution which was an economy that guaranteed education, retirement, and healthcare so that as jobs change, we have the freedom to retrain and evolve (grow).  Oh and a government that creates good jobs by upgrading infrastructure. But that does not answer what happens when there are no jobs to train for or to train for realistically.  Should they starve?

Now if you discount the sky is falling Republicans who see a nanny state, we are all going to die, and I do because most of us want a better life than a minimum wage, and most of us find our meaning in work, then what are the pluses and minuses of doing this?  Let’s look at Hughes’ proposal to give $500/month to every working adult whose family makes less than $50,000.  Now the first problem I find for this is “working adult”.  What if there are no jobs?  Is the government (like with food stamps and Medicaid) just subsidizing low wage jobs, allowing corporations to force down their costs in labor?

Now on the plus side, first we get rid of a ton of overlapping and complex programs.  Second we take away the incentive not to work because they might lose those benefits.  Okay, okay, okay.  Here are the pros and cons I found on the internet:

  • Pro:  Reduces income inequality, poverty, and improves health
  • Con:  Takes money from the poor and gives it to everyone (this assumes you don’t decide on a maximum income to provide support to)
  • Pro:  Leads to job growth (grows the economy by increasing buying power) and lowers school dropout rates
  • Con:  Decreases the incentive to work, adversely affecting the economy and leading to a labor and skills shortage (So wages are going up and no one will work???, What happened to Econ 101?)
  • Pro:  UBI guarantees income for non-working parents and caregivers, thus empowering important unpaid roles, especially for women
  • Con:  UBI is too expensive (aren’t we spending it anyway and not taxing wealthy to distribute some of the economic inequality? Oh and we also already do it to some extent in the Earned Income Credit, not to mention Alaska and their handout program)

Well you get the drift, the argument is really on ideological grounds.  I found two articles (CNBC and NYT) about the experiment in Finland and they came to two different conclusions. But context is everything, how do you design it?  And we have to deal with the fact that one in three workers could be out of work in a short 15-20 years because of automation.  So what is your plan?

Here you have the demonstration of the massive difference between conservatives and Progressives.  We Progressives want to think about the future and try something new.  Conservative pooh-pooh it on ideology.  Maybe it won’t work, but once again we are facing a crisis, what is your idea, a gated community?  That is the real difference between Conservatives and Progressives.  Come on people, engage.  All you have to lose is the chains conservatives have put on mind.

 

 

Our Economic Way Forward and Other Miscellaneous Topics

I have argued that Democrats need a plan for our future that provides a stark contrast to Republicans’, you are on your own, justice comes to good people (and those that already have money). So once again, I will try to explain what the way forward is, and why.

But before I get there, I would like to comment on the coverage of the pedestrian bridge that failed yesterday in Florida. I have been reading the stories hungrily looking for what caused it. Well of course they don’t know yet, but for a structural engineer, there would be hints. Yet the coverage provides none of the clues one would need because the reporters are clueless about structural engineering. I would want to know if it was a post-tensioned structure, had it been post-tensioned, did it use high-early concrete, was it, as I saw in one artist rendition, a cable suspended final structure? Even a close up of the structure would tell me what the reinforcement looked like.

Now all of those would give a hint about possible failure modes but the focus is on the deaths, who the company is, and the PR for building the bridge. The only reason I raise this is because it is about logic. Knowing how many died and who built it is certainly headline news, but tells you nothing about a possible failure modes, hints to a root cause, or a fix going forward. Now draw the line between that and how we report on many issues that affect our lives. Enough said.

In order to come up with an economic plan for our future, it helps to look at our past, but not too hard as Republicans do. You can’t recreate the past. Here are some of my assumptions. America as a country outpaced the rest of the world because we had built the engine of capitalism and it was ready to roar. And while trade was important, domestic demand really drove our economy. We did have fewer regulations, but let’s not forget the Robber Barron’s or the anti-trust work of Teddy Roosevelt. So there were problems. Who can forget the Great Depression. We had this amazing pent-up demand after WWII with an amazing industrial machine that could be turned to peace time building. Innovation was amazing and remember when all Japanese products were considered cheap?  Many blue color jobs were lifetime, with good benefits and retirement.  But the economy changed.

First we have been on probably a 60-year trend of more and more of the income going to fewer and fewer.  Markets changed and capital became king.  As domestic demand feel, market places were expanded to a world economy, and with the focus on Corporate profits, labor costs were suppressed or moved overseas.  Lower wages equal lower demand. We are still in that world with mechanization changing the jobs that will remain.  Tech companies have taken off benefiting the educated younger class who can code while the old blue and white-collar jobs are taking hits.  Oh, and we are depleting resources on the planet at an accelerated rate. So what to do?

Well, first do not throw out the baby with the bath water.   Capitalism is what drove our miracle, and is driving giant leaps in the undeveloped countries, but it is also wreaking havoc with those left behind and our biosphere.  In its present form it is not sustainable. So what to do?  Enter the conservatives, you work hard and you will get ahead, losers lose, and the poor are responsible for their plight.  It is the I got mine crowd working with the whatever I got, I am not going to share crowd.  It only works for the I got mine crowd and does not work in our economy as more and more hard-working people find themselves left behind.  The latest is pandering, bring back jobs that are never coming back, and tariffs to protect us. And as what was just seen in the last special election in Pennsylvania, that may not be selling anymore.  One reason is that it simply doesn’t work.  Those jobs aren’t coming back and people know it.

So enter the Democrats who have always been the party of the softer, kinder, gentler Republicans.  They have been labeled the tax and spend, big government, bust the budget Party (note that that common belief is not supported by how deficits and the economy actually do under Democrats).  Whatever solutions could be implemented,gvoernment just get is the way is the conservative line.  But more and more people are coming to the realization that the market place has no answers for them, tax cuts don’t flow down, and tariffs are taking an ax to brain surgery. Democrats see innovation and education as the way forward, but tell that to the 60-year old iron worker without healthcare. He voted for President DFF because he was tired of the status quo, but found out it was the same old tired ideas on steroids.  Yesterday is not coming back.

Okay, that sets the table.  Capitalism is the best tool to allocate capital for investments in future jobs.  It has also become one of the worst, because it is controlled by those who profit from the status quo.  It is short-term profits driven, and its basic mentality is winners and losers. So we are not  throwing out capitalism, just making it work for everyone, not just the few.  Don’t kid yourself about “free markets”.  They are not free and the rules they operate by right now are set by conservatives who have set it up to benefit themselves.  So step one is to “Rewrite the Rules.”  The good news is that we don’t have to make this up on the fly .  Economists like Joseph Stiglitz, Dean Baker, and others have already done this and made some great recommendations.  Now when running a campaign, getting into these kinds of details usually puts people to sleep, so what Democrats have to do is get behind and sell it as changing the rules to make capitalism work for all of us.  Here is a short summary:

  • Bring back competition to force the system to change and evolve.  Start limiting rents and intellectual property to allow the system to evolve.
  • Fixed the Financial Sector so that the high risks with big gains is limited where it can destroy the economy (remember 2008?).
  • Incentivize Long-Term Growth, and more importantly, sustainable businesses.
  • Rebalance the Tax and Transfer System.  Return the profits to the people in terms of security, and investment in our future
  • Reform Labor Markets to ensure that everyone benefits.
  • Expand Access to Labor Markets for everyone (that is equal rights, education, equal pay for equal work, etc.)

Now there are all kinds of sub-policies to get this stuff working for the rest of us including negotiating trade agreements that do not promote growing economic inequality.  But that brings me to the second part of this that you heard and hear from Bernie and a few other Progressives, but considered too left-wing for the status quo.  Probably not anymore.  We don’t know where markets are going in the future or what the next big idea is.  Government should not be deciding those kinds of things (really bad at it) except to put their thumb on the scale to ensure it recognizes our long-term interests like alternate reliable energy, sustainable growth, and the environment and global warming.  But what is it that makes markets thrive and gives us an advantage.  Hint:  Take a lesson from the 1950s.

  1. Well educated workforce
  2. Strong infrastruction and workforce
  3. Freedom to innovate

And the amazing thing is we already have the tools to do all this.  Here is what is required:

  1. A strong investment in our infrastructure, transportation, and communications systems so that people, capital, and ideas can easily flow to where they are required.  That would be government people, and investment in infrastructure, communications systems, and transportation.  The data is overwhelming that this creates an upwardly mobile workforce with increasing wages because they can move to where better jobs are and train for them.
  2. A strong education system that allows for all those able, to learn and continue to learn throughout their lives.  That would be government again in working to improve our education system (pay teachers more), improve curriculums (less testing), and make advanced education affordable, not a loan program to support tax cuts for the wealthy.
  3. A strong retirement system (It’s called Social Security), so that all of us can afford to retire and if we supplement it, retire well.  Once again, government.   Seen how business have thrown off that responsibility as too costly and dependence on the stock market has wiped people out when they need it most?
  4. A strong single payer healthcare system that allows us to quit worrying about not leaving a job, or how we are going to afford healthcare.

Note thatall of them been accomplished in other countries and unlike what conservatives want you to believe, it does not create a hammock for the lazy, it reduces risk for changing jobs and innovating.  Once again the data is unequivocal, but conservative know that will upset their status quo apple cart.  That is what Bernie was pushing when Hillary said it was unrealistic.  That is what the Progressive model should be, rewrite the rules and create the environment for a strong innovative economy.  Sure it will cost a lot in taxes.  But it is being done in other countries and unless you haven’t noticed, things are not going swimmingly here.  Second, yes there will be rules that get in the way of profits and innovation.  But those rules consider the long-term benefit, not the short-term one, and consider everyone’s children.

That is the future if we want to embrace it.  Or we can stay with what we got and most people will find their place in the economic world eroding.  On the way, we are going to have to have many intermediate steps, and some redirection as we see that one approach does not work.  But that is progress.  That is what made America great.  If we can get it back, where everyone has a fair chance at a future, then we will be great again.  The road President DFF and his supporters have us on is a quick ride to oblivion.

 

 

 

Trade, Tariffs, and North Korea

I have watched the events with President DFF with mixed emotions. Yes there has been steel dumping and there are barriers to trade in many countries, but as many more experience hands have put it, there are better ways than starting a trade war, which of course “will be easy to win.” I guess on a general outlook, world trade and a world economy is where we are and thinking in terms of us versus them no longer applies. We have to find agreements that are win-win, not win-lose or lose-lose which is what happens in a trade war.

But one of the things that struck me in all of this is the union leaders, and not in a good way. Now I believe in unions to balance the power of large companies so labor gets their fair share of productivity gains. But these guys were really out-of-bounds with their parochial focus on their win, everyone elses loss. While they could list how many had lost their jobs, do they really think they are coming back? If steel and aluminum make a come-back in the U.S. it will be in mechanized plants that don’t require those levels of employees. That is just a fact. Aluminum is energy (electricity) driven so it is always going to migrate where cost of electricity is cheap.

The union leaders did what I hate in any discussion, interrupt and talk over the opponent that were raising these issues. They are one issue people who think we can reinvent the 1970s. For most of the rust belt, this will be a big yawn, just like moves to bring back coal. Other means and methods are making coal both obsolete, and not labor intensive so jobs are not coming back. Certainly we should be negotiating trade agreements that help protect and save jobs in the United States, but it is a balancing act. Using a hatchet will just make things worse. For the rust belt, it is time to negotiate agreements both in the U.S. and with foreign trade partners that create new jobs for the future, not old jobs that will just be mechanized to reduce costs.

Union leaders like to raise the national defense argument, what happens if we let these industries go overseas and then they cut us off.  Who would that be again, because a trade war will hurt even China.  There thinking is really last century and not in the real world or looking forward.  Remember TPP (Trans Pacific Partnership)?  I and many others were against it because it reinforce the status quo of growing economic inequality.  But it was the right idea and we need to just fix it, not junk it.  Trade and tariffs are complicated and we have to do what is best for the world economy (while demanding sustainable and environmentally safe practices) if we want to do what is best for us.  That is lost on President DFF who see everything in winners and losers.

Okay, North Korea.  What to make of Kim’s meeting with the President?  Well, in a perfect world it could be good.  However Kim is a tyrant and a murder.  He has starved his people in nation that could be described as a living hell.  He executed his uncle with an anti-aircraft gun.  So now he wants to negotiate.  And we have win-lose President DFF meeting with him.  Now I think the first thing you do is decide what Kim might give up.  I simply don’t believe he will give up his nukes for a promise of no interference in his country.  His nukes are what keeps him safe from a pre-emptive strike.  I could be wrong.  Maybe his nuke program has hit a loggerhead and he needs cash.  But the testing he has done does not indicate that.  So what is there let to negotiate?  What does he want from us and what is he will to give up?  You think President DFF in gathering experts to determine that?

What you really need to worry about is President DFF’s need for a win as reality, the Mueller investigation, and maybe a Blue Wave is coming in November.  Will he do something incredibly stupid.  Quite likely.  These are very dangerous times and I do not believe Kim wants to be Mr. Nice guy.  I hope I am wrong.  If North Korea would give up their nukes, it would be good for the world.  I just don’t think that is what is happening and I don’t think President DFF is smart enough to be at the table.

Capitalism is the Problem

If I look at our greatest problems, economic inequality, global warming, and President DFF, they all have one root cause, capitalism. Now I am sure you are going to say what about equal pay for equal work, or systemic racism, or rust belt myopia, or immigration, or failing infrastructure. I would say these are all symptoms of economic inequality, as well as global warming and President DFF. And the root cause of all of this is unbridled capitalism. I would also argue that capitalism has brought us many things and improved the living conditions of many in the world, but then the problems start to show up.

I am not the only one. Remember Bernie. Remember the howling from even Hillary on this was not possible. All Bernie was trying to do was level the playing field. But in an interesting op-ed this morning by Elizabeth Bruenig, she made some points we seem to want to ignore. She started by pointing out that Liberals are in a funk:

This assumption is reflected in the blindsided, startled unease of liberals in the era of President Trump: “There are moments when everything I have come to believe in — reasoned deliberation, mutual toleration, liberal democracy, free speech, honesty, decency, and moderation — seem as if they are in eclipse,” Andrew Sullivan recently lamented in New York magazine. “For the foreseeable future, nationalism is likely to remain a defining political force,” Yascha Mounk fretted this weekend in the New York Times; “liberals should strive to make nationalism as inclusive as possible,” he warned.

Ha! Liberalism incorporating nationalism is what Democrats have done over and over to their failure, incorporating failed ideas to try to out Republican Republicans, Republicans with a softer edge. It’s a journey to nowhere. Ms. Bruenig’s description of capitalism is in fact its problem for those of us who want a level playing field and social justice. She has what I call the “Bernie moment” when she realizes that moving the chairs around on the Titanic as most “liberals” do is a waste of time:

I don’t think business-as-usual but better is enough to fix what’s broken here. I think the problem lies at the root of the thing, with capitalism itself…Americans appear to be isolated, viciously competitive, suspicious of one another and spiritually shallow; and that we are anxiously looking for some kind of attachment to something real and profound in an age of decreasing trust and regard — seem to be emblematic of capitalism, which encourages and requires fierce individualism, self-interested disregard for the other, and resentment of arrangements into which one deposits more than he or she withdraws. (As a business-savvy friend once remarked: Nobody gets rich off of bilateral transactions where everybody knows what they’re doing.) Capitalism is an ideology that is far more encompassing than it admits, and one that turns every relationship into a calculable exchange. Bodies, time, energy, creativity, love — all become commodities to be priced and sold. Alienation reigns. There is no room for sustained contemplation and little interest in public morality; everything collapses down to the level of the atomized individual.

That capitalism is inimical to the best of liberalism isn’t a new concern: It’s a long-standing critique, present in early socialist thought. That both capitalism and liberal governance have changed since those days without displacing the criticism suggests that it’s true in a foundational way.

Not to be confused for a totalitarian nostalgist, I would support a kind of socialism that would be democratic and aimed primarily at decommodifying labor, reducing the vast inequality brought about by capitalism, and breaking capital’s stranglehold over politics and culture.

Welcome to the Progressive wing of the Democratic Party. Well, I hate to say the Democratic Party because the establishment still does not get it and even rejected a Progressive in the Houston primary as, well, too progressive. But they are asleep to what happened in the last election when Americans rejected status quo. Hillary got the nomination because the establishment wanted her and shunned Bernie. Republicans got their radical and he won. The urge for change is stronger than ever and the Democratic Party is trying to calibrate between moderate Republicans and moderate Democrats (read moderate Republicans in 1980) and it is a failed policy. Maybe not at an intellectual level yet, but at a gut one, most of us feel capitalism is failing us. And the reality as Thomas Piketty (Capital in the Twenty First Century) showed us, unrestrained capitalism gives us growing economic inequality.

I do have to laugh though. Ms. Bruenig in her last quote above is pining for “kind of socialism that would be democratic and aimed primarily at decommodifying labor, reducing the vast inequality brought about by capitalism, and breaking capital’s stranglehold over politics and culture.” Would that not be European social democracy as they have in say Finland or Norway or Sweden. Oh, and it works.

We have grown a culture and attitude about policy that reinforces unrestrained capitalism. We learned to hate taxes, regulations, and big government. It has been beaten into our heads by Republicans, But it isn’t working. I see massive deterioration of our infrastructure which is key to our future, and our hate for taxes keeps us from doing anything. Global Warming is already impacting us and yet we turn a blind eye to it because that would be big government and regulations. Oh, and it would upset the apple carts of who benefits by ignoring it.  Economic inequality grows by leaps and bounds and so does the concentration of political power and again we can do nothing because that would require rewriting the rules, regulation, and taxation. And yet the majority of us know it is not working. We got President DFF because Americans rejected the status quo, but he is a mindless moron who is still a creature of the 1980s.

As Ms. Bruenig points out, it is time for a different approach. I hate to keep repeating this, but Republicans, all of them have to go. So do most moderate Democrats who have the same conservative ideas only kinder and gentler. Conservatism has run its course and has proved defunct. If we want change, if we want to do something about economic inequality that touches all inequality, if we want to attack our problems with solutions that work, it is time to throw off the old mantle of unrestrained capitalism. This won’t happen with Republicans because they have become radicals of the me, me, me, and captured creatures of the monied. It is time for a new approach, and the only ones who are going to get us there are today’s new progressives.

Two Things

I guess you could say two things that I think really count. I could write about the chaos in the White House where we find nepotism gone awry, but that is being adequately covered. I could write about “white lies” (Hope Hicks) and her failure to answer questions that the Republicans will just blow over and now her sudden departure.  But the media is all over those items.  Guns are getting crazy, but the kids from Parkland may be taking them on and it is spreading, and guns are just the tip of the iceberg. We may have reached a tipping point and not just in global warming. See where Dick’s Sporting Goods saw the light? Walmart is now right in there. So I am going to write about two of my favorite not so headline issues, the economy and religion, and note that both issues are fraught with hidden bias.

Let’s start with the easier one, economics. Paul Krugman wrote a blog (NYT took over his blog as I guess they want to own everything he says) about what we all know to be true, the tax cut was is not a flow down to workers. That effect is negligible, most of the money is being used for stock buybacks, not investment in capital, and was as we knew it was, a big corporate give away.

The numbers we have so far show that the much-hyped bonuses are trivial – less than $6 billion, or 0.03% of GDP – while stock buybacks have been more than $170 billion. And many of those bonuses would probably have happened anyway, whereas stock buybacks are running far above historical levels.

But he made a very easy to follow (which for economists is rare) argument about how the economy works with tax cuts and the simplified model goes like this:

Whatever the number [salary increases], however, it’s about the long run. It requires a chain of events: lower taxes -> higher investment -> higher stock of capital -> higher demand for labor -> higher wages. And this chain of events should take a number of years, probably decades, to fully work itself through. Even in the most favorable analyses, there is no reason to expect any wage gains in the first few months after a tax cut.

And note this caveat: “How much of a trickle-down effect depends on a bunch of technical factors: what share of corporate profits represents monopoly rents rather than returns to capital, how responsive inflows of foreign capital are to the U.S. rate of return, what share of the capital stock is even affected by the corporate tax rate.” So why am I boring you with all this economic talk?

Well Paul, a much smarter man than I, has it right, but does not put enough emphasis on the statement “what share of corporate profits represents monopoly rents…“. Rents in economic speak are profits derived from a product that you do not improve on (no further capital investment) but makes more profit because you have cornered the market. Profits on a monopoly. Think real estate. It gets scarcer, you can raise the rent making more money by no additional investment by you. In the corporate world that means no new jobs. You are extracting money from the economy with no investment in capital or labor to create anything.

What is happening I believe, which is changing economics, is that monopoly rents, whether it be Facebook, Microsoft, or big Pharma (just examples) is where we are going and driving more and more economic inequality. That coupled with finding ways to reduce labor costs and mechanize to maximize share holder earnings (profits) dooms any tax cut to corporations to help wages or spark capital investment. My point is simple. The basic models still function, but some of the variables in that market have changed and have more impact than in the past.  The old ideas about cause and effect may have been changed so that all roads leads to more economic inequality no  matter how much you believe in your ideology and maybe it is time to change the rules.

Okay, so much for economics, what about religion? Monday I used other’s writings to slam Ross Douthat’s position on hating liberals  (make no mistake, his passive aggressive writing about liberals should not be misinterpreted) and their allegiance to humanistic secular approach to science and data.  Well today New York Editor, David Leonhardt took me on (figuratively since I am nobody in particular). It went like this:

The benefits of faith. In his Sunday column this week, Ross Douthat issued something of a challenge to secular liberals. They think of themselves as empiricists, Ross wrote, but they’re actually close-minded about several powerful forces for good, starting with religion.

“When people and societies are genuinely curious,” he continued, “they are very reasonably curious about everything, including things happening in their bodies and their consciousness and more speculative realms.”

The column reminded me of a pattern that, as a secular liberal myself, I’ve long found inconvenient: Religion is correlated with a lot of healthy behaviors and positive outcomes. All else equal, religious people have higher educational attainment, earn more money, use drugs and alcohol less and commit fewer crimes, according to a long line of social-science studies (that have frequently been done by secular liberals).

The question about these findings is the old correlation-causation question: Does religious faith lead to these healthy behaviors? Or is something else, independent of faith, causing them?

He then goes on to describe a study where 15 weeks of classes were given to more than 6,000 very poor Filipinos, some of whom received a version that combined religious teachings with advice on health and employment and others received only the nonreligious parts. By comparing the different batches of students, the economists hoped to isolate the effect of religion. After some time the religious groups were doing better. So religion is good right?

No study is definitive. But I do find the overall evidence of religion’s ancillary benefits to be strong. That evidence hasn’t made me personally religious. I’m still quite comfortable with my secularism. But the evidence has made me more humble and open-minded about how the world can go about solving some of its problems.

I found the avowed secular liberal to be illogical. First did he read Socrate’s listing of some of the other things religion has brought us in pain, suffering, and blocking progress? If you are burned at the stake for your heresy you might not be so sanguine about religion. Certainly religion does have beneficial effects. The belief that Jesus is your savior and he will forgive you and give you strength has helped untold thousands redeem their lives. It has also created a moral certitude that has tortured or killed untold millions. I would not argue that a belief can not give you strength and comfort, but a belief is not a truth.

The other problem here is define religion. Is that a belief in some mystical fairy godfather who you should thank for your home runs, praise when you are not drowned in a flood, but nor held responsible for others who did die, or is religion really more about an adherence to a strict moral code? That last one defies explanation when you consider Trump and Evangelical Christians.

I believe that one could argue that during the development of mankind, religion was a necessary part of socializing and allowing people to live together. But science has undone many of the mystical fantasy beliefs that explained what was at that time unexplainable. It has raised real questions about some of the moral and ethical values of religious writings. What is left, I believe, is something that for our future is the only path forward, not a religion with its moral certitude and cruelty (whose God, whose truth), but a moral philosophy open to the testing of its truths, and change when they don’t stand up. Oh, if only Muslims could evolve like many religions have in the modern world. No, their religion is designed so it is almost impossible. Well for that matter, oh could Evangelicals just evolve although there are some cracks when they have friends who are gay and start wondering how they are so evil. You know, that reality thing instead of God’s law defined by who again?

Discussing religion with the majority of people is a loosing battle because indoctrination from birth provides biases that can live in deep denial. Maybe there is some Supreme Being, but that raises the question where did he come from, and who is his god. And of course the one thing we know is empirically, good people die sad deaths and bad people live on. See Trump in the White House. Good or bad is up to us, not some Supreme Being.

I would argue that if the study were done again and the religious training were substituted with a moral philosophy that included the belief that we are all in this together, kindness and charity is the guiding principle, and we are connected and give one another strength (Yo! This could be any number of religions, especially Christianity without Jesus), you would get the same result. Science, data, and rational thought guide our moral beliefs, and inform our philosophy. Maybe there is a force out there, but to assume that religion is the only path to a better society, well that is just not science or rational thinking. I would also argue that even we atheists can and do have a moral philosophy that allows us to be way more Christian than most of the Christians I see in Washington today.  Just saying.

What Republican Party?

There was an interesting discussion on Joy Reid about what has happened to the Republican Party. One Republican woman panelist, conservative columnist Mona Charen, was on stage at CPAC and she took on the Republican Party on their treatment of women pointing out they endorsed a credibly accused child molester and President DFF’s behavior with women. She also took on their hosting of Marechal-Le Pen who represents racism and Nazism in Europe that Europe rejected. She had to be escorted out of the hall for her safety. The Joy Reid’s panel of either ex-Republicans or Republicans still in denial (David Frum (conservative columnist for the Atlantic), Michelle Bernard (Independent), Jennifer Rubin (? Conservative columnist for the NYT), and Elise Jordan (Still Republican/commentator for MSNBC?) took what has become of the Republican Party. Rubin said it best in that CPAC used to be an extreme edge of the Republican mainstream and is now what the Republican Party is. Most telling was when Jordan said that this is the manifestation of the Republican Party under President DFF, as though if they got rid of him, it would be redeemable. Rubin has the same sense I do. They have to start over. The Party has become an ideological cesspool, beyond redemption. They have co-opted their values and their own integrity beyond redemption.

So what is the conservatism/Republican Party Frum, Bernard, Rubin, and Jordan pine for? I believe it is fairly simple, small government, fiscal conservatism, little regulation, low taxes, and an unregulated market place. I believe they are open to rational discussions of all of these items, but they see the Republican Party of their dreams as the shinning example of moral principles and integrity in all the above. Any objective observer would agree with the panel that the Republican Party of today is none of the above. Rubin and I are agreement that today’s Republican Party has become so toxic, that those with these beliefs must start over and reject the Republican Party as dead.

I listened to Mona Charen above and it was clear she was a true conservative who is not afraid of facts. We could have some interesting debates. I would argue that many conservative ideas, while operative in simpler times, are not operative today. Environmental laws have to be national or one state pollutes another. Solutions to global warming have to have a national focus to be effective. That by definition defines what they would call big government. They want a free market place where innovation is not restricted by regulation, forgetting that there is no free market place, it operates under a set of rules right now that favor the wealthy, hence the ever growing economic inequality. Conservatives believe in self-discipline and not rewarding slackers. So do I, but the playing field is not level and the poor are not necessarily slackers.

I could go on and on. But they have their points. Regulations do stifle business and innovation. Some are dumb. Some save lives. Government bureaucracy can be slow and dumb. It can also provide nationwide solutions and standards that pull us all up. Fiscal conservatism is a good idea. But debt is inevitable if we want to invest in our future, so that says two things, how much debt, and how big should our taxes be. Small taxes are great, but we really have to pay for what makes this country great. I personally think this is what Paul Krugman identified the other day, the role of government in our lives:

What I’d argue is that our lethal inaction on guns, but also on cars, reflects the same spirit that’s causing us to neglect infrastructure and privatize prisons, the spirit that wants to dismantle public education and turn Medicare into a voucher system rather than a guarantee of essential care. For whatever reason, there’s a faction in our country that sees public action for the public good, no matter how justified, as part of a conspiracy to destroy our freedom.

This paranoia strikes both deep and wide. Does anyone remember George Will declaring that liberals like trains, not because they make sense for urban transport, but because they serve the “goal of diminishing Americans’ individualism in order to make them more amenable to collectivism”? And it goes along with basically infantile fantasies about individual action — the “good guy with a gun” — taking the place of such fundamentally public functions as policing.

I would say in a world economy where individual actions now impact almost everything and everyone around us, government playing a major role in making the world fair and safe is inevitable. The idea of small government must be replaced with the idea of smart government. When things don’t work, we need to be able to change them and not stuck in an ideological box. Innovation may be more driven by a good safety net that allows people to take risks, instead of an unregulated market place. These are the arguments we should be having based upon facts, data, and science. There is an up and down side to everything. But the Republican Party has gone of the rails and until it is finally rejected totally, the day of rational debate is over.

WTF Friday

As we normalized President DFF, it is also how we normalize WTF moments. In fact they just become news tidbits among all the news tidbits. But still we have them. The biggest one is those fiscal conservative Republicans just passed a massive spending bill that raises our debt massively. If you are not confused by the propaganda machine you will note that that has been their modus operandi since Ronald Reagan. It is kind of hard to be the party of big military spending, tax cuts, and the magical supply side economics and do anything but blow up the budget. Not sure how they got the reputation of fiscal hawks other than they cried loudest about deficit spending but did the most to ensure it.

The next WTF moment will come when we hit the debt ceiling, the amount we have agreed is the debt we will pay for (we already spent it, see above). We will see if the hypocrisy reins supreme if they start pounding their chests on this one. This is one of those things we should have changed a long time ago, if you authorized the spending then you authorized the raising of the debt ceiling to pay our bills. I have argued before that Republican’s fixation on debt and trying to make the micro economy the same as the macroeconomy of our economy equal is disingenuous, but there is an element of truth to it in the details:

As we learned from John Maynard Keynes, deficit spending should be countercyclical. When economic growth goes down, deficits should go up, and vice versa. The idea is that the government can pick up the slack when private demand lags (as was the case back in 2009).”

But they are doing just the opposite here. Here is the thing. In a economy we should be raising taxes right now if we really need all this spending. Now I am all for a strong military, but President DFF and his cohorts confuse a strong military with a strong country as if bullying is the only tactic of power. We are becoming weakened in the world, not because we got the biggest baddest weapons, but because we are becoming economically and ethically weak under President DFF and his boys. Note he now wants a military parade to show off our shiny weapons while we withdraw from the stage of economic deals to strengthen our power and influence in the rest of the world.

And here is really a WTF moment for conservatives if they want to admit it. Here in California under the leadership of a very pragmatic liberal, Jerry Brown, we are putting money away for a rainy day.  Yes there are Californians who don’t like the gas tax or the higher taxes, but they are the next wave of fools that vote Republican, and they are a minority.  When things got better we did not “give the money back to all those hard working rich people,” we started putting it away for when the economy turns south as it may be doing now. It is because Democrats have always been the party of more careful budgeting. The best way to talk about debt is a percentage of GDP and here are the facts:

Republican presidents after Eisenhower have increased the federal debt as a percentage of gross domestic product by a total of 60%. Democratic presidents have reduced the debt as a percentage of GDP by a total of 9%.

President Obama is the only Democratic President during whose time in office the debt has risen relative to GDP. The data extends to the end of FY2014 (September 2014). President Obama’s bar will almost certainly drop by the end of his presidency, as GDP growth is relatively high and the deficit is relatively low. 2/5ths of the increase during President Obama’s presidency occurred during the first year while the country was still in the midst of the Great Recession.

Of course President Obama inherited a failed economy in 2009 and safety net, stimulus, and war spending (from the Bush War) did not help. But the bottom line when you look at numbers and you care about debt and deficits, you are better off under Democrats.

We need to be raising taxes right now, not cutting them. Gas tax should go up to pay for improvements to our transportation systems. The recent tax cut should be repealed so that the wealthy pay their fair share, and we should be investing in infrastructure improvements. In fact, there is a bigger picture here if we are willing to look at it. Economic inequality. We need to more fairly share our gains so our citizens have the buying power to keep our economy self sustaining. But I am spitting into the wind. People who believe in sounder budgets vote for Republicans because they make the most noise about it, but never deliver. WTF.

Well we will have another disaster like the Bush years and then Democrats will regain power. Hopefully this time they won’t think the answer is to reach across the aisle to find middle ground solutions that fail and put the fools back in power. They should just turn away from that approach and leave them in the dust of history’s failed lessons. I can hope.