Posts tagged ‘economic inequality’

Surprise!

North Korea is not a surprise, yet it captured the news yesterday, whether true or not. Sooner or later they were going to get there and like Trump the President, who they are is no surprise from who they have been. China and the United States, the two parties that could have solved this together, have failed to, looking to their own selfish needs and kicking the can down the road. The can has now arrived. No more road to kick down. And North Korea is no Soviet Union of old. Mutually Assured Destruction (MAD) may not force people to be rational. I have argued for years that North Korea is a living hell on earth and that China and the United States could not or would not force regime change was a political and moral failure. Now we have saber rattling with a moron for President.

Make no mistake, the United States could not solve this without China. And China in its own self-serving needs for trade and a firm border to keep immigrants out and buffer to US backed South Korea, could not bring itself to deal with a painful problem. And too many times we have thrown our hands up and just said well, maybe the government will fall. In North Korea, falling means taking everyone with you. That is the critical understanding we have failed to understand. So now we have entered very dangerous times because we refused to do the hard things when we needed to. Now the hard thing is unimaginable. And we have a moron for President.

Oh, and global warming is happening faster and may be more drastic than anticipated. Surprise! Not. We have known about global warming since the 1980’s. We have seen our impact on the planet, not just its weather, but its species for hundreds of years and we do nothing. Oh there are little movements around the edges, but business must come first. Now we are faced with the reality of once again kicking the can down the road, and the road is coming to an end. No more kicking. But like the North Korea problem, we have a moron for a President (not to mention a whole Party in charge of the country whose litmus test is not believing in science).

There has been some debate about whether the latest government report on the rapid increase in the impacts of global warming might force the moron President to change his stance. Sometimes I wonder what planet these people are on. Donald Trump got here illegally by laundering money for the Russians and he certainly colluded with them in the election. The investigation is tightening and he needs his base to terrify Republicans into not impeaching him when the other shoe drops, as it most certainly will. So he is not going to change on global warming, and we are going to see it it full force, and like the Korean thing, the outcome will be disastrous.

Meanwhile in the world of economic inequality, the inequality grows. And sooner or later the markets will come crashing down because the part of the pie that goes to the majority of consumers will be too small to sustain it. The markets are at record highs this week, believing that our moron President will cut regulations and taxes so they can further increase their profits with no concern for the damage they are doing. We have legitimized economic inequality by believing a high tide lifts all boats, except it hasn’t, and we have also kicked this can down the road, and sooner, rather than later, the market is going to crash.

Are you sensing a trend here? We Americans, who can do anything, have done nothing. When things got hard, we went looking for easy simple answers that ignore reality. Enter the Republican Party, facilitated by the Democrats, who know how to pander to Americans looking for the easy answer. Ronald Reagan, the prince of government is the problem, told us to be selfish and seek out gains for ourselves and everyone would prosper. Kiss “ask not what your country can do for you, but what you can do for your country” goodbye. We got tax cuts pay for themselves and the private sector will solve all problems. Driven our roads lately? We are starting to look third world. But don’t forget their main message, investing in government through taxes is a waste of money. Now look at us.

We are reaching a point where ignorance is considered a virtue (remember the rural wisdom of Sarah Palin?),where the ignorance of the base chose a leader that could finally push us over a cliff. We are approaching a critical turning point in the history of our world, conservatism has run its course and almost destroyed us, and we have a moron for President. I don’t think we can wait four years. If Trump continues his “fire and fury” (remember how well shock and awe worked out?) rhetoric, we may not have to worry about global warming as the aftermath of a nuclear war could be much worse. But if we somehow get through this, will we have learned our lesson? Or will we go looking for the next easy answer and not doing the hard things that make life and our country great? I am not optimistic after watching the last 50 years.

America really does have some amazingly hard working and smart individuals and we could solve these problems if we had a leader that made Americans aware of their failures and showed us a path forward.  Even the mindless base of Donald Trump might be led out of the wilderness of ignorance if they understood the challenges before us and a leader who inspires sacrifice.  But where is he/she?  Right now the one we got thinks the solution to jobs is to bring back coal which is never coming back and backed up by a pack or sience and reality deniers.  Hey! Bring on the fire and fury! All we need is a leader who can one again inspire us with, “Ask not what your country can do for you, but what you can do for your country,” and get on with it.  So far we got the moron President and his scared shitless Party.

Saturday, Healthcare, Economic Conservatives, and The Village Idiot

Let’s start with healthcare and I can make this really, really simple for you.  Either you believe healthcare is right or you do not.  If you want a system where everyone has affordable healthcare, that would be the rest of the world, then you enroll everyone in the program, you do smart things like preventative care, reducing drug prices by allowing the government to negotiate with drug companies, you reward for good outcomes, not more treatment,  you have a single payer system, and you will have affordable healthcare.  In my mind the most cost effective system is a single payer where healthcare providers (as separate from insurance companies) compete for your coverage. See Kaiser or other HMO providers.

On the other hand if you don’t believe in universal care, go with the Republican plan.  The problem is that even if you benefit initially from possible rate cuts, if you get sick, really sick, you will probably go bankrupt.  Oh, and don’t give me that crap about we have universal healthcare and poor people can visit the emergency room.  It is a death sentence because when they get sick enough to go, their care will be very expensive, and they die.  If you are fabulously wealthy you are fine.  If you are young and healthy, you are fine, but sooner or later you too will have a pre-existing condition.  Then what?

So what we are watching with the Senate Bill is a Kabuki Dance.  All they are doing is trying to find a way to cut cost so they can fund tax cuts.  Until we finally say, healthcare is a right, we are wasting our time.  Then we can debate about how to best do that and control costs, but that is the only solution.  Now if we get serious about a single payer plan you will hear the R-word, rationing.  We do it now by ability to pay.  Maybe that new heart should go to a twenty something instead of an 80 year old smoker.  We will have to make a lot of tough decisions, but until you accept that we are all in this together and you are going to help pay for somebody else’s healthcare until you get sick and then they pay for yours, we go nowhere and it just gets worse and worse as we try to find market place insurance solutions that don’t exist.

Okay, now on economic conservatives, those are really the majority out there.  They are usually socially liberal, but economically conservative.  So you ask, what does that mean, the economically conservative?  I find most of the answers are we should balance our books and pay for what we want, and there is that element of distrust about our fellow man.  If you give them free stuff they will gorge (or not appreciate it).  First let’s take on the debt thing (balance the books).  There is an irrational fear of debt based upon the home budget analogy. I go into great detail in my three part blog The Economy.  But suffice to say, a country is not a home budget.  It doesn’t have to pay off its debts to retire.  It keeps having new kids and it has to make investments for their future. It just has to keep the debt at manageable size.  See the debt we had after WWII, and we didn’t really pay it off, we grew our GDP so it was only a small percentage of our earnings.  Think about that.

Manageable size has two indicators, interest rates and inflation.  So according to most economic conservatives, the debt today is out of control and yet interest rates are at all time low and inflation is also too low to encourage those hanging on to their dollars to invest in things that don’t lose value as fast as money.  The thing that economic conservatives have a hard time with is borrowing and yet that is what every company does to invest in their future.  And so do we in our home budget analogy, but at some point we have to pay off our debt to retire.  Countries don’t retire.  So the real issue is how much debt is okay and what are investments that make sense.  If we can get by the fear of debt and understand it is a normal thing and is quite manageable if kept at certain levels compared to our GDP, we could start to really discuss what are our most important investments in the future that will give the biggest return on investment, and then get on with it.  Until we do that we are stuck and the Republicans use this to continue to push their economic agenda which is really a transfer of wealth to the wealthy,

The real issue facing us is economic inequality, too much of the pie is going to too few people.  The way to fix that is to change the rules on how our economy works.  Sure there needs to be adequate reward for taking risks, but we are out of control.  So make the tax code fair and bring back tax rates we saw in the 60’s when growth was large.  Change the rules about intellectual property so that after a short time innovations are given back to the people to use  to innovate something new.  And what to do with that money?  Well that would be the really interesting debates.  One thing off the table would be tax cuts for the wealthy. Maybe infrastructure, education, healthcare, you know, the stuff that gives our economy the natural resources to compete.  That is the future, I just wish it was now.  Note that we can debate how much, to whom, etc., but then we would be debating about a way forward.  As it is now the Republicans are trying to take us on a way backward.

One last thing, and what blog would not be worth its weight in hot air if I did not comment on the Village Idiot in Chief/Liar in Chief (VicLic).  He gave another interview and you had to be appalled.  First he told us almost everyone agrees that there is no collusion between the Russians and his administration, except that was just him being Liar in Chief.  Nobody knows because we have not seen the results of the investigation yet.  Then he tells us the Mueller-Comey friendship is bothersome.  So is the Trump-Putin love fest, but at least we are trying to find out the facts, no trying to delegitimize the investigation. Then when asked why he tweeted there might be tapes, “He said Comey’s “story may have changed” after he tweeted about the existence of tapes.”  Umm?  Is that obstruction of justice.  Of course Comey’s story never changed and he was trying to intimidate, but it backfired.

The smart play as pundits tell us is to say nothing other than Special Counsel Mueller is investigating and we will get to the truth. And yes that would be the smart play if you were not afraid they were going to find something very bad (follow the money).  They will and eventually it will come out, so the game you are seeing played is one of delegitimizing (at least in the eyes of his base) the source of the evidence against him.  As I have opined before, it will be leaked out as he attacks our most important institutions (justice, intelligence, courts) and people who see the evidence will not cover it up.

In all of this, the one salient fact that keeps you awake at night is that the Russians did hack our election.  They are a true threat to the future integrity of our democratic process, and the VicLic does not care.  He questions whether they actually hacked our election, has not to our knowledge asked for detail briefing on it, or has any plan to counter it.    We now know that President Obama failed to use his implanted electronic bombs to retaliate, but left the decision to the VicLic, and he has done nothing.  Only an apprentice to the village idiot in charge (his base) would not think that something is very rotten in Denmark.

Our Brains Are Being Fried

Have you noticed that if you listen to the daily news on the cable shows, they keep trying to justify what Cheeto-Head does as somehow crafty or intentional to keep everyone off balance.  Then you watch (if you watch MSNBC) Rachel, Lawrence, or Joy take it apart and show it for what it is, irrational floundering.  The latest is that UN Ambassador Nikki Haley is being taking to task for not staying on message with the State Department, meanwhile Cheeto-Head threatens war on the Korean Peninsula.  Say what?  And the media legitimizes this by saying no one really believes his bluster anymore so it is okay.  Really?

Today he said he found the presidency surprisingly hard.  Again, really?  He wanted to be king or maybe James T. Kirk (although Kirk had way more humanity than Cheeto-Head) saying, “Make it so Scotty.”  The wall has to be built —sometime.  NAFTA must be repealed and now it just needs to be renegotiated (that could be good or bad).  China is a currency manipulator and now no they are not.  Now with all this back tracking, would you think his followers would be upset?  Nope.

Republicans claim they are going to reform healthcare to make it more affordable and keep the good stuff, and then they propose marketplace solutions that basically guts required coverage, and will raise rates for those who need it most, not mention the 20 or so million who will lose health care altogether.  Then Cheeto-Head promises tax reform and then floats a 1-page plan that is basically a massive tax cut for the wealthy.  Would you now think his followers would be upset? Nope.

So the first thing you can say is that his followers brains already are fried*.  Oh, he is down today in Atlanta talking to the NRA.  Yep, we need more guns and a federal concealed carry law that will let some nut job from a red state carry into your state.  He needs their cheers and applause while he legitimizes killing thousands each year.  But much of our press and pundits have fried brains also.  They keep allowing people who try to rationalize what is going on talk as though they are making sense, and when he does even modestly normal things, they say he is learning the job.  The fact that he governs on the basis of fake news and ignorance is just normal now, hence our own brains are being fried.

What scares me the most is that we were moving toward a global society.  The European Union was the model, with an excellent safety net and the freedom to move beyond borders for jobs, culture, and change.  It had its problems, especially in the Euro.  But our diversity was considered a strength instead of a threat.  And tolerance was a virtue.  “The world is going America’s way,” Fareed Zakaria wrote in 2008. “Countries are becoming more open, market friendly and democratic.”  What I think happened was economic inequality that created a whole class that did not see any of the benefits and were ripe for withdrawing into themselves. The elites in both parties were benefiting and the many only saw stagnation. As R.R. Reno wrote today in a gigantic attempt to legitimize Cheeto-Head which is basically change terrifies us and we must withdraw:

Most commentators struggle to explain Mr. Trump’s electoral success, because they assume he has no coherent political philosophy.  This is myopic [or insightful].  As a public figure, Mr. Trump has articulated a consistent message that speaks to a fundamental political challenge facing the 21st-century West:  We must affirm nationalism and fight globalism.

Read nationalism as intolerance.  R.R. Reno is trying to legitimize Cheeto-Head as the new Republican instead of the demagogue he is.  The responses (comments) to this nonsense were priceless. But he and another writer today, Pankaj Mishra both pointed out something Democrats should be aware of in their failure this election. Pankaj called it:

Extravagant promises by ruling elites, and their unexamined assumptions, are at least partly to blame for this moral breakdown in the world’s most powerful country. In 2011, for instance, Mr. Obama had claimed, “We are perfectly poised to make the 21st century again the American Century.” But such onward-and-upward narratives seemed to mock the suffering, despair and frustration exposed in different ways by Black Lives Matter or the white Rust-Belt proletariat. Mr. Obama, who recently accepted a very lucrative speaking engagement on Wall Street, now looks like just one of the fortunate members of historically depressed minorities who mistake their own upward mobility for collective advance.

R.R. Reno called it thusly: “Globalism poses a threat to the future of democracy because it disenfranchises the vast majority and empowers a technocratic elite.”  Reno and Mishra called out the elite that I would call the establishment that has not recognized the real problem, economic inequality and are too tied to the status quo. Reno actually thinks Cheeto-Head represents the future of the Republican Party in recognizing the need to withdraw as an answer to stagnation caused by all the benefits going to a few.  I think he is full of shit. But they both nailed that the elites who did run our country were totally out of touch with the real malaise in the country that was not getting better.

Cheeto-Head just became the person who could manipulate badly misinformed and ignorant people.  I do not sympathize with middle America as many journalists want us to by “understanding their plight”.  Their choice was moronic.  I strongly recommend that you read these two editorials and especially the comments.  My recommendation is to select the reader choices on the comments.  I will leave you with two that deal Reno’s op-ed and with Cheeto-Head’s voters.  Reno’s Op-Ed:

Stop justifying Trump. Please stop. Also please stop justifying xenophobic response to your fears of being left behind in a progressive world. “Patriotic Solidarity” is one of the dumbest euphemisms for nationalism. Tell me one period of history where nationalism ended well vs global openness.

You can’t because it doesn’t.  The world is constantly changing – Buckley (unintellectual hack- if you cut through his affected manner and vocabulary you get vapid thoughts) and conservatives can’t deal with change- it frightens you.

“Why can’t we keep doing the same thing instead of being bothered by the fight for equal rights by women, people of color, gays, and foreigners?”

Suck it up and realize your ideas are being left behind – sorry, it’s called progress – it’s what created vaccines, airplanes, and the iPhone. Every time you benefit from technology realize conservative thought would have never imagined changing from the squalid state humanity has been in for most of history.

On Trump voters (he nailed it):

“John Q. Public is not stupid.” As a gross generalization, this is probably correct. But the quintessential Trump voter – the beaten-down, marginalized, fatalistic, repeatedly-conned, non-urban, usually white, working class voter – is frequently incurious, gullible, defiantly ignorant, or under-informed (or two or more of the foregoing). This tends to produce the same results — in terms of who gets elected and the poor quality of resulting public policy — as actual “stupidity.” Am I an “elitist” for pointing this out? I suppose that I am.

Yeah, me too, but nobody has fried my brain yet.

Unaffordable Cities

I want to sell my vineyard and house and move into the city to simplify my life.  It is not happening.  I live on almost 22 acres of Sierra Forrest with 3 acres cleared for vineyards.  I sit on the top of a hill and can see the costal range from my patio.  The house itself is beautiful.  For what I can probably sell my house for, I can’t afford anything but a box in most cities in neighborhoods I want to live in.  The outrageous price of housing fueled by those who have bided up the market, leaves me out.  But forget me, what about all the people who must work in a city to make it work.  What do they do?  You know, teachers, policemen, firemen, waiters, cooks, sales people, government workers, you name it.  They commute.  They can’t afford the city either. Well that or they live stacked 5 to a room.

Remember when New Orleans Lower Ninth Ward flooded (Hurricane Katrina, 2005)?  That was where the working people had established homes they could afford, many passed down from their relatives.  Then came the “Republican” rebuild which was tax breaks and credits to developers.  To maximize profits, they did not rebuild affordable homes, they went after the super rich.  I am trying to make a point here and that point is that if you believe in Economics 101 and don’t consider how economic inequality has skewed the outcomes, you continue to craft solutions that feeds more economic inequality and that economic inequality pushes Econ 101 models further off the rails.

Enter the Republican Party.  The Republican Party believes in Econ 101 (James Kwak’s Economism) as though it were the revealed truth of God.  That theology goes something like this:

Both individuals and firms possess useful things of value, and they trade with each other in a “market” to get other useful things. Because nobody is ever forced to make a trade (in theory, at least), a transaction occurs only if it makes both parties better off. Under these conditions, prices naturally adjust until supply equals demand. The resulting set of prices makes everyone as well-off as possible. In other words, markets produce the best of all possible worlds.  In a competitive economy, prices automatically direct effort and investment where they can do the most good— a feat that no government agency can match.  Private property, production for profit and by private ownership, and regulation by a free competitive economy brings not only maximum prosperity, but also maximum freedom.”*

Many times you hear Republicans simply state that if you are going to restrict trade with regulation and taxes, you simply don’t understand Econ 101.  But this is perversion of Econ 101 taking perfect models into an imperfect world.  Oh, and it thrives because it serves the interest of a powerful interest group, Conservatives:

And while superficial economic arguments can serve multiple purposes, in today’s world they most often justify the existing social order— and the inequality that it generates— while explaining the futility of trying to do anything about it.

So they promulgate free market solutions for everything.  But real markets are very complex and the basic assumptions of the model, that “all suppliers offer the same product— there are no differences in features, quality, or anything else, and that each company is so small that its behavior has no effect on overall supply”, simply don’t exist.  And if these assumptions do not hold, assumptions “such as in the market for cell phone service, or air travel, or automobiles, or books, or almost anything— then supply and demand do not necessarily produce the optimal price, and the allocation of resources may be distorted.

My favorite example is global warming.  The solution is rules on CO2 emissions and a carbon tax to make less carbon producing products more cost effective in markets.  But we don’t feel global warming yet, or are just beginning too.  Markets don’t react because there is no demand.  Conservatives are against rules and taxes because it stifles the market place.  So government must come in and take appropriate measures to change the dynamics of the market place to deal with the future threat.  Conservatives respond by denying science.  So here is a case where unless government intervenes, markets look for the cheap solutions, coal and other carbon producing products, short term solutions that could have disastrous impacts on our future.

And my point here is that the demand is not homogeneous either.  As economic inequality increases, the wealthy create market places the bottom 99% cannot participate in.  What may only be worth $20 to an average citizen (the amount they are will to pay for say a tee-shirt) could be bid up by the wealthy who are willing to pay $100.  That is exactly what has happened in our cities.  And we are going to kill them because the people who make cities work, can’t afford to live there anymore.

Now if you look at the healthcare bill the Republicans are proposing that is full of “market-based solutions,” what you find is a bill that transfer wealth to the wealthy**.  In other words, these simple minded free market solutions don’t work as advertised, generally just benefit the wealthy, and in doing so increases economic inequality.  And this economic inequality further fractures Economism models the Republican push as gospel.

Economic inequality is the issue of our times.  Conservatives spout Economism to justify everything, and nobody challenges them***.  Even our media has swallowed this belief in markets whole.  Markets do the best job when they are properly controlled and regulated.  Economism argues against this regulation and makes the wealthy wealthier which is why they promulgate it.  But markets do operate on rules, that includes property, copyrights, contracts, disputes, and on and on.  The rules in effect today favor wealth accumulation for the few and what few mean by freeing the market place is to keep their rules.  Isn’t time we started to address this before we have a “Let them eat cake moment”?

*Most of this discussion and all the quotes comes from Kwak, James. Economism: Bad Economics and the Rise of Inequality. Knopf Doubleday Publishing Group. Kindle Edition.

**As I have argued before, healthcare is not even close to a normal commodity and if President Cheeto-Head was going to cover everyone, as he promised, that simply eleminates free market solutions given the reality of economic inequality and the fact that young consumers are completely different from either older consumers or people with pre-existing conditions.  And one other thing to note in the world of double speak.  When conservatives change cover everyone to everyone will have access, that is totally different.  I have access to the best healthcare in the world.  I simply can’t afford it.

***See my blog Challenging Republican BS

What’s It All About (Alfie)

I guess I could write about Meryl Streep’s standing up to Trump and his bullying or the hypocrisy of Mitch McConnell and the hearings, with the inane introduction of Senator Sessions for Attorney General by Susan Collins, but then we are focusing too much on the tactical and not on the strategic.  In order for Democrats and dare I say it, social justice, to prevail, we have to step back and wonder what it is Democrats stand for.  I have been writing about how Democrats have lost their way, and yet we have never really talked about what the way is.  Well, I have, but as a party the Democrats still seem to be wandering in the forest. Again I am going to steal ideas (maybe some words too) from two authors and thinkers, James Kwak and Thomas Frank.

James was writing about we (Democrats (and maybe with a small d too)) lost the election and he pointed out that there were a lot of causal factors but that people who think their financial situation is worse than four years ago voted for Trump by an astounding 78-19 margin.  So then he raises the question, what is the Democrat’s economic message, and he gives us this insight:

The Republican Party’s economic vision can be expressed in two words: free markets. Beginning in the 1950s, Milton Friedman and other prominent economists transformed the abstract models of Economics 101—in which competitive markets, driven by supply and demand, produce the best of all possible worlds—into a universal framework for interpreting social reality. This worldview, which I call economism, became the default economic handbook for the conservative movement and the Republican Party. It brilliantly fulfilled the crucial role of any ideology: it made the interests of a class—businesses and the wealthy—appear identical to the interests of society as a whole.

He then goes on to show how Democrats from Clinton on became Republican Lite.  That we too bought into the idea that markets solve all problems, but with just some controls to take the edge off:

The rhetoric of economism (Kwak’s term for Republican markets solve everything) is simple and compelling: competitive markets maximize social welfare, so well-meaning government policies—welfare, regulation, even Social Security—only make people worse off. (And, if you don’t agree, you just don’t understand economics.) The solution to any problem is to unleash the forces of free enterprise and innovation. By comparison, the Democrats’ economic vision was an unsatisfying jumble of social insurance, industrial policy, consumer protection, welfare, and fiscal stimulus.

He then describes how Bill Clinton took us on the free market journey by being the “other free market party”, including the reducing budget deficits, ratifying NAFTA, enacting welfare reform, cutting capital gains taxes, repealing the Glass-Steagall Act, and signing off on the non-regulation of derivatives. This has effectively been carried through the Obama years as an ineffective “me too” policy with caveats:

We also love markets, only we want to make them work even better by correcting for “market failures.” One story is simple: freedom and competition create prosperity; government intervention kills jobs. The other is complicated: government programs are necessary to fix market imperfections.

And then he notes where we are today in that this pursuit of free markets has not made the world safe for everyone:

After two decades of promising that markets (properly regulated) will take care of everyone, it is little wonder that Democrats have lost credit with people who feel worse off in the age of globalization and technology.

Now let’s leave Mr. Kwak for a few moments and hear out Mr. Frank (Listen, Liberals).  Mr. Frank takes a chapter of his book to look around for where liberals (Democrats) are in control, complete control, and asks the question what is their economic model?  He settles on Massachusetts (but he could have used California) which is entirely Blue and then describes how that model has become about innovation:

that economic justice only comes about through economic growth, and therefore the primary duty of anyone who wants to tackle inequality is “to create a nurturing environment where business leaders and entrepreneurs want to locate and expandThis is the city (Boston) that virtually invented the blue-state economic model, in which prosperity arises from higher education and the knowledge-based industries that surround it.

Then he points out that fifty miles away from this hotbed of innovation and technology lies the town of Fall River that has fallen on hard times:

Fifty miles away, Boston is a roaring success, but the doctrine of prosperity that you see on every corner in Boston also serves to explain away the failure you see on every corner in Fall River. This is a place where affluence never returns—not because affluence for Fall River is impossible or unimaginable, but because our country’s leaders have blandly accepted a social order that constantly bids down the wages of people like these while bidding up the rewards for innovators, creatives, and professionals.

The problem arises when we enshrine innovation as a public philosophy—when we look to it as the solution to our economic ills and understand it as the guide for how economies ought to parcel out rewards. To put it bluntly, it is not clear that cheering for innovation in the bombastic way we see in the blue states actually improves the economic well-being of average citizens. For example, the last fifteen years have been a golden age of financial and software innovation, but they have been feeble in terms of GDP growth. In ideological terms, however, innovation definitely works: as a way of excusing soaring inequality and explaining the exalted status of the rich, it is the best we’ve got.

That is where we are today.  That is why Democrats lost.  Their message did not resonate with hope for all, and what Democrats have been about is what Mr. Frank described above.  Let’s face it, most of us have bought into it and my education and skills have let me profit from it.  But it leaves too many behind and justifies it just as the Republicans use being lazy to blame the poor.

Okay, Hillary offered lots of fixes, but not anything in a coherent message about what Democrats were about, just more tinkering at the basic markets solve all problems with just a few restrictions.  In other words leaving the innovative entrepreneurs to reinvent the world and create.  The financial sector is not the problem but part of the solution.  The systems just needs to work better.  People need to be better educated.  Tell that to the people of Falls River who “like similar places, the town is up to its eyeballs in wrathful bitterness against public workers. As in, Why do they deserve a decent life when the rest of us have no chance at all? It’s every man for himself here in a ‘competition for crumbs’, as a Fall River friend puts it.”

So what is our model?  What should the “Party of the People” put forward as what we are about?  What’s it all about Alfie?  Certainly innovation, technology, and education can produce prosperity for some, but as we have seen, it also creates a justification for inequality and we should be about decreasing inequality.  Now I will take you back to Mr. Kwak who turns to our past to answer this question:

Democrats need to reach back to their forefathers, past John Kennedy—who famously said that “a rising tide lifts all boats”—to Franklin Roosevelt. It was Roosevelt, in the “Four Freedoms” speech, who recognized that the strength of our democracy depends on its ability to fulfill citizens’ basic expectations, including: “equality of opportunity for youths and others; jobs for those who can work; security for those who need it; [and] the ending of special privilege for the few.”…The genius of economism is to disguise a political ideology—shrink government, deregulate markets, and let the chips fall where they may—as an abstract, value-neutral description of the world. If Democrats want to reclaim their heritage as the party of working men and women, they need an alternative economic vision, one centered on jobs, security, and fairness—not smoothly humming markets that will magically make everyone better off.

Note that is where the God of education and innovation leads also (let the chips fall where they may).  It allows us Democrats to also justify leaving so many behind.  It would seem that we need to turn back to FDR to once again find our roots.  Bernie is the closest politician we have had to addressing this, but labeled socialist for his policies on “securities for those who need it”.

I believe James has hit upon the answer to where we should be going. As he noted we do not mean the end of free markets and competition, which do produce progress and jobs, but in a context that does not leave people hopelessly behind. Think about it.  Equality of opportunity for youths and others is partially about access to education, good education.  Jobs for those who can work is about rebuilding our infrastructure and making sure they earn a living wage.  Security for those who need it is about Social Security and health insurance for everyone.  A real safety net.  And ending special privilege for the few could start with the tax code.  OMG!  That requires an active government, not one that gets out of the way of markets.

I believe James, through FDR has given us the framework for going forward.  Economic and social inequality is the issue and we have built a system that justifies it and increases it on both sides of the aisle.  That does not mean that going forward we don’t reward those who achieve, it simply means that some of that reward which is now going to the very few has to be used to secure the Four Freedoms of FDR.  How we do that best (policies) should be our challenge for the future.  That puts everything in context. That’s what it is about Alfie.

*Note Mr. Kwak has written a book about this  that I can not wait to get my hands on.  The question we have to ask is where besides the blogs and books of some really smart people like Mr. Kwak and Mr. Frank is the organizing focus of the Democratic party to incorporate these ideas into their unifying party message?  So far we have Bernie and the establishment tank his drive for President.  Democrats have to get more organized than that and move the party as the Republicans have done since Goldwater.  I hope in what time is left to me on this earth, I see that movement.  We really are all in this together.

Let’s Not Reinvent History – Cuba

Fidel Castro was a tyrant and a communist who denied basic rights and imprisoned many people, some killed.  On the other hand did you know that prior to the reign of Fidel, the country was under the leadership of Fulgencio Batista:

Batista suspended the 1940 Constitution and revoked most political liberties, including the right to strike. He then aligned with the wealthiest landowners who owned the largest sugar plantations, and presided over a stagnating economy that widened the gap between rich and poor Cubans. Batista’s increasingly corrupt and repressive government then began to systematically profit from the exploitation of Cuba’s commercial interests, by negotiating lucrative relationships with the American Mafia, who controlled the drug, gambling, and prostitution businesses in Havana, and with large US-based multinationals who were awarded lucrative contracts. To quell the growing discontent amongst the populace—which was subsequently displayed through frequent student riots and demonstrations—Batista established tighter censorship of the media, while also utilizing his Bureau for the Repression of Communist Activities to carry out wide-scale violence, torture and public executions; ultimately killing anywhere from hundreds to 20,000 people. For several years until 1959, the Batista government received financial, military, and logistical support from the United States.

It was economic inequality run wild and corrupt business interests and the United States was propping it up.  I guess flow down did not work then either.  So along comes Fidel who sees corruption everywhere and has had enough of that kind of capitalism.  I also believe he believed in communism as an answer to helping all the people.  But like all leaders, somewhere along the way he got lost in ego and power and did not let Cuba evolve.  But in the meantime Cuba did some things you don’t hear much about. Here is from Guardian:

Thanks to universal and free education and healthcare, however, Cuba boasts first-world levels of literacy and life expectancy. The comandante made sure the state reached the poorest, a commitment denied to many slum-dwellers across Latin America.

Idealism sparkles in places such as Havana’s institute for the blind where Lisbet, a young doctor, works marathon shifts. “We see every single one of the patients. It’s our job and how we contribute to the revolution and humankind.”

And from the Daily News about Fidel’s absolute dedication to racial equality:

The South African racial justice hero Nelson Mandela, who was released from prison and went on to become the country’s first black leader, traveled to Cuba in 1991 to personally thank Fidel Castro and the Cuban people for their support in fighting apartheid and colonialism. Through the turning of the last century, Cuba remained a significant presence in Africa, providing medical assistance and trying to strengthen diplomatic bonds.

Did you know that more Cuban doctors responded to the Ebola crisis than from any other country? The downside was  material scarcity. For ordinary Cubans things tend to be either in short supply, such as transport, housing and food, or prohibitively expensive, such as soap, books and clothes. Castro blamed the hardship on the US embargo, a longstanding, vindictive stranglehold which cost the economy billions. However, most analysts and many Cubans say botched central planning and stifling controls were even more ruinous.

Despite overtures to the United States and encouragement of micro businesses since then, the state still controls the lion’s share of the economy and pays an average monthly wage of less than $20. This has forced many to hustle extra income however they can, including prostitution and low-level corruption. The lucky ones earn hard currency through tourism jobs or receive dollars from relatives in Florida. (Most of this was borrowed from the Guardian although I cut and pasted from different sections of the article).

So as we celebrate Fidel’s demise, remember that he rescued people from the grips of out of control cronyism aided and abetted by the United States and he tried to find a better way.  There is an analogy to our country today where economic inequality is also getting out of control, the wealthy have been put in charge, their man in the White House, and they refuse to evolve their politics to deal with reality.  Instead of turning to communism we are turning to extreme capitalism.  Of course no one will admit there is an analogy to Cuba only on the capitalism side here.

The most amazing thing to me is not to see the lessons here, that good government for the people is a balance of the two, each controlling and balancing the other so merit still works, and people have an honest chance to be recognized for their merit.  But all that will be swept aside as we pay attention to Florida Cubans who many are descendants of the wealthy that benefited from Batista and got out just in time.  My guess is not much will change till Raul, Fidel’s brother dies and then leadership transfers out of the family hands.  It is anybody’s guess what Trump will do.  Probably build another hotel and reinstitute the good times (for rich mobsters) when Batista was alive.

Living and Working

I could rant about politics today.  But like many of you, I am totally disgusted with the media.  While we have a pathological liar and crook running for office, and yesterday (or was it the day before) he and his daughter gave a speech on child care that was a total lie and everyone ate it up.  First he/she said nobody had really thought deeply about how to provide child care help.  Really?  How many times have Republicans blocked Democratic proposals for child care?  Remember when universal child care came up in a State of the Union. Then the media told us it would be “politically” unfeasible because, you guessed it, Republicans.  Second he just lied and said Hillary did not have a plan.  Of course she does and all you have to do is go to her website.

Finally, he said his plan would give a tax credit for child care.  That would be good if it were true, but his website says tax deduction.  Note tax deductions only help those who itemize deductions (the wealthy) and a tax credit helps everyone (and if you read my link, Obama proposed one back in 2015 only to be killed by Republicans).  But I get distracted with what is the most abysmal media coverage of an election in the history of our country.  Let’s beat up on Hillary while the most corrupt and deceitful, and oh should I say it, deplorable man in the history of our elections mostly gets a free ride.  And yes, as a matter of fact and data, most of his followers are deplorable too.

But I digress.  What I really want to talk about is a good job and affordable housing.  Generally they don’t exist.  I read two related articles this morning, one in the NYT and the other on Vox that kind of makes the point that we may be constructing a society that does not work.  Said another way, only the executives can live in the cities and all the people who actually make it a great place to live can’t afford to live there.  My own personal experience is that I live on 21+ acres of steep Sierra foothills in the middle of a forest.  I have planted about 3 acres of vineyards around my house.  I live in one beautiful place, in a beautiful 3-bedroom home, detached garage and office above. But I am getting on in age and I have cancer which someday will be my demise.  So I would like to simplify.  I love it up here, but I have to face realities.  For me the perfect move would be down into Sacramento (San Diego but you can forget that) in a nice two bedroom cottage in a nice part of town.  I can’t afford it.  Yikes.

The first article it is about how young techies in San Diego are all migrating to San Francisco.  Basically, they all want to live where the action is in downtown San Diego and the tech companies are all located inland away from downtown where they can afford the rents.  The second article closes the loop and is the story of a young techie who moved to SF to chase his dream, but cost of living drove him to Arizona.  He married and had a 3-month old child when he got his dream job back in SF working for Facebook.  He loved it and was making a six-figure salary but they could not afford to live there and after 5-years left to go back to Arizona. He made the point several times that raising a family on one bread-winner was just about impossible unless you wanted to live in a seedy area or commute for hours.

Now take a step back a minute and think about cooks, cleaners, SCHOOL TEACHERS, cops, firemen, waitresses, sales personnel, and it goes on and on.  If you are young and willing to bunk 4 to a room, fine.  But in the end, you want a family and that is no longer viable.  That was the amazing thing about New Orleans, many of the poor owned land there, but after Katrina, they did not have the funds to rebuild (nor could they get loans) and, well, the rich did fine.  Here is the ultimate story about economic inequality and what it is doing to us.  If school teachers, and university professors can’t afford to live near their schools they move on.  In SF this is becoming a crisis.  Going to a good school is only for the rich.

What to do about the inflationary spiral of housing?  It really is what to do about the inflationary spiral of economic inequality.  Some need to earn more, some less.  We need to more equitably share our productivity gains and really, athletes don’t need $100m salaries.  We can’t afford to go see them.  What something costs is relative to how much we make.  Bernie Sanders gave us a way forward.  And back to politics, Trump is showing us the way to more inequality.  Hillary is going to fight Bernie’s fight.  So the choice is yours.  If you think we just need fewer regulations and lower taxes and we will all get great jobs, you have not been paying attention for about the last hundred and fifty years or so.  The lessons are out there, we just seem to be ignorant of them.

Brexit, Bernie, Hillary, and the Donald

Well let’s start with the Donald:

Trump seemed particularly annoyed that the United States feels the need to act lawfully. “We have laws; they don’t have laws,” the GOP candidate said last night in Ohio, adding, “Their laws say you can do anything you want and the more vicious you are the better.”

From there, Trump transitioned to emphasizing his support for barbarism. “You have to fight fire with fire,” he declared. “We have to be so strong. We have to fight so viciously. And violently because we’re dealing with violent people viciously.”

Trump added, “Can you imagine [ISIS members] sitting around the table or wherever they’re eating their dinner, talking about the Americans don’t do waterboarding and yet we chop off heads? They probably think we’re weak, we’re stupid, we don’t know what we’re doing, we have no leadership. You know, you have to fight fire with fire.”

In a CNN interview, Trump went on to say he intends to “change our law on, you know, the waterboarding thing” in order to “be able to fight at least on an almost equal basis.”

I think he already uses torture, but on us.  I guess all the people who really know something about the efficacy of torture and brutal tactics, and how it creates more enemies than we can find, the Generals in the Pentagon who actually have fought these wars, are just flat wrong.  Donald, after all, has been quite successful at financially and mentally torturing those who work for him.  Apparently Atilla the Hun is a role model for how to fight wars.  I think Donald has no idea that most of these wars are about ideas not tactics, and it is the ideas where we really haven’t engaged yet.

Okay on to Brexit.  Angela Merkel said what I said yesterday, that there is not going to be a golden parachute for Britain leaving the EU.  “They would not enjoy the benefits of membership — like access to Europe’s single market — while sloughing off its burdens.”  I really wonder if they are going to do it, leave that is.  In reality Parliament must vote and while David Cameron said, “I am sorry we lost the referendum but you have to accept the result of the British people, you have to accept the verdict, I’m a democrat,” in actuality they are a representative democracy. That is supposed to be a firewall to the rampaging masses. Cooler heads in Parliament could do the smart thing, but that would take political courage and I don’t see that happening.

Of course what happens if Scotland’s parliament has to give it’s consent and won’t?  I see all kinds of legal problems here. I believe the morning after their anger binge with no thoughts to the consequences is the worst hangover they have ever had.  Sure there are problems with the EU, but like the Donald in America, this particular cure is worse than the disease.  Oh, and in case you are wondering, immigration while a much bigger issue in Europe than here, was never the issue.  Economic inequality and the results of austerity were the cause of all the malaise.

Hillary and Bernie.  Let’s start with Hillary.  She is having a field day because all she has to do is wait for the Donald (see above) to open his mouth, and she can eat him alive.  The problem is that while there is no question Hillary would be a fine commander-in-chief for foreign affairs, that is not the issue.  The Donald is all over immigration, and ISIS, and Muslims, and Trade Agreements, and that is not the issue.  The issue is economic inequality and austerity, just like in Britain and Europe.  All the rest are reactions or fears, but at their heart is the economic malaise felt by working class people.  All the rest are targets of displacement. (Note even Tom Friedman gets this one).

Bernie wrote an op-ed today in the NYT called Democrats Need to Wake Up .  It spoke directly to the causes of the malaise and anger, but was short on specifics and mechanics of fixes*.  Hillary on the other hand notes the anger, but her specifics don’t really go after a restructuring of the economic system (incrementalism).  Trade is a good example.  Both are now against the TPP (Trans Pacific Partnership).  Many think Hillary is pandering since Barack will probably have it in place prior to her taking office.  Bernie and the Donald are just against it.  But as always the devil is in the details.  As Thomas Friedman pointed out about the Brexit, it gets dumbed down to a binary argument, thumbs up or thumbs down.  It is not that simple (TTP Again?).  The test should be are its benefits shared by all our stakeholders or just the 1%?  Then fix it appropriately.

Finally, let me comment on the bombing in Ankara. It’s tragic. Let’s have a moment of silence.  Okay I am being trite, hypocritical, and callous.  But it is like coverage of a car wreck, over and over again.  So I kind of turn it off as I expect most Americans do.  We are all about the mechanics of the wreck (bombing) and the suffering and we little or nothing about the war of ideas.  Sadly, if we took that on, while it might intensify the war in the short term (they would be mad as hell), it is the long term strategy to ending radical islam’s pull on dead enders.

Okay, off to the Padres ball game.  Beer, sun, and the boys of summer.  Everyone should enjoy these moments.

*Both the Roosevelt Institute and the Economic Policy Institute have laid out specific economic plans to deal with economic inequality and restructure our economy to work for all of us.  Hillary argues that it is not politically realistic and her way of incrementalism will get us there.  People in Britain and in America, I believe, aren’t buying that anymore.  That is what Donald, Bernie, and Brexit is telling us.  They are saying stand up and fight for change because we don’t believe in the system anymore.  Hillary needs to not only adjust her message, but really embrace those messages if she wants to be one of the greatest President we have ever had.  She can do it quite frankly, I am just not sure establishment Democrats quite get it yet.

Connecting the Dots

Fareed Zakaria on CNN was having a panel discussion about Brexit (two against, one for) and he was interviewing Zanny Minton Beddoes who is the Editor-in-Chief of the Economist (and quite British) and this is what followed:

Fareed: Zanny is there a solution to that issue (free movement of people in the European Union) because at the heart of the Common market as you point out is the free movement of people.  There are hundreds of thousands of East Europeans living and working in London and paying taxes.  Is there a way to get the benefits of economic globalization without this free movement of people?

Zanny:  Well I think there is going to be a conversation within this country and Europe about what limits you might put on the free movement of people or how you can have the principle like perhaps to prevent the really extreme surges, but I think it is important to think about this is people, a lot of people as you said in your introduction, who are voting against this.  It is not that they don’t care about economics, they just don’t feel that they benefited from the economic boom.  

They have had a very very tough time in the past few years since the financial crisis.  Their living standards have gone down and I think in many ways this is much as it is in America, a protest of anger against stagnant living standards and the feeling that those metropolitan elites in London, you know, the establishment, don’t understand what life is like in the rest of Britain and I think this begs the question, of what, for those of us who believe in globalization, who believe in the benefits of liberalism and nationalism, what, what can we do to shore up support for that, and I think demands a kind of progressive agenda that ensures that enough of those people see gains that they are willing to retain some openness, and I think it is incumbent on everybody who wants to get those gains to come up with a much better response.  

In this country remember we have had years of austerity, and the reason people were cross, it is not that some people were xenophobic, but a lot of people who voted to leave were not at all xenophobic, but they’re worried about how to get a doctor’s appointment, overcrowded school rooms, rising house prices, very real problems and challenges they face, that are frankly the result of insufficient investment in the UK, and in some sense the result of austerity politics.

Okay let me unpack this because there is a ton in there for us to pay attention to.  While xenophobia was a driving force, the real root cause was economic dissatisfaction throughout the country.  If you were college educated, you were mostly for staying in.  If you weren’t you wanted to leave.  That tells a fairly definitive story about who the economy is working for.  Now there are two things here, income inequality and austerity.  Let’s start with austerity.

The Brits and the conservative government of Prime Minister David Cameron pursued austerity as an answer to their economic woes and as Paul Krugman and the rest of Europe has shown us, austerity does not help the economy in a recession, it just makes it worse.  The data is massive.  Austerity in an already depressed economy simply contracts the economy more. No, it does not create confidence, it bankrupts the little people. Cameron is like many in the Republican Party, believes austerity is a prudent economic step to stay within budget, when facts, data, and history tells us it just further contracts the economy and makes it worse in a recession.

Second, Cameron promised a vote on membership in the EU back in 2013 as a promise to those in his own party who were pushing for Brexit as a ploy to stay in power and get re-elected.  So I guess we have two things going on here,  Not learning the lesson of austerity politics, and unwise political pandering for short-term gains.  See any parallels in this country?

Now comes the second lesson, economic inequality.  None of people outside the metropolitan areas were sharing in the recovery.  Again, sound familiar?  As economic inequality grew, flow down  (rich get richer but invest their new money in jobs and industries that benefit us all) did not exist.  So what Zanny is arguing is very simple.  If economic globalization and its benefits are going to be pursued, we have to find ways to make sure that everyone benefits.  Oh, and dare I say it, she recommends progressive policies to do just that.  The free movement of people, capital, and enterprise has been a boon, but for only a select few, and we have to restructure the system to make sure everyone is included.

The Brits voted to withdraw from the Global Economy.  The less connected we are, the more likely we will come into conflict, fighting for limit resources and gain, and we reinvent pre-WWII Europe.  The Right is on the rise and xenophobia is being stoked.  But immigration is the scape goat.  The British economy has actually benefited from immigration.  It is not the cause of their economic problems, that would be economic inequality and the impacts of austerity on the Middle Class.

Okay to further connect the dots, Andrew Solomon, Professor of Clinical Psychology at Columbia University was also on Fareed talking about his wide ranging observations having traveled and written about the world.  It is a wonderful interview, but here is what he said on the collapse of Libya:

I made the mistake of thinking that if they got rid of that system (the Gadhafi Government in Libya) that was so awful, that something better would have to rise in its place, and what happen instead is that it went into a state of complete chaos, and even the patriotic Libyans I met when I was there have mostly tried to flee it if they possibly can.

Many people make the mistake of thinking that democracy and justice are the natural default states and if you move all the impediments to those qualities, that is what will rise up, and what I learned as a personal lesson in dealing with Libya having argued that we should support the attacks against Gadhafi is that the natural state to which people default is not democracy and is not order, but is a terrifying violate brutal chaos.

What does that say to Liberalism and Conservatives who think government should be emasculated?  Right now, the Brits think they want to withdraw from a European government so they can be more in control of their own fate.  But are they not unleashing the very forces of intolerance and selfishness that is the first sign of the breakdown of society?

Professor Solomon makes us stop and think what makes up democracy and how do we build and maintain it.  It doesn’t grow freely in “free” societies. Conservatives and Libertarians want to tear it down in the belief that the natural state will be full rights and freedom.  Brits want to reject the EU (and with some justification), but their solution is the same as the Libertarians and Conservatives, less government.  You might want to rethink that as your economy crumbles.  There are dots here to be connected as I am sure Fareed intended, but will we?

Oh, and one other thought:  I wonder if the writers of Mr. Robot have considered Professor Solomon’s observations as the hackers free us from our financial tyranny.  It is one thing to bring the system down, it is another to establish order and justice.

“An Ugly jobs report stirs slowdown fears”

To me it is just amazing that we don’t get it.  We are not in your father’s economy anymore.  The poor Fed may have to put off raising rates to quell a non-existant inflation fear.  YOU CAN’T HAVE INFLATION WITHOUT SUFFICENT DEMAND YOU NINNIES!  The jobless rate went down because more people left the labor force (actively seeking jobs), BECAUSE THERE AREN’T ANY GOOD JOBS!  We live in an economy where because of economic inequality and global markets, demand is insufficent in the good old U.S.A.  Nothing has changed and we keep doing the same things and can’t figure out why it doesn’t get better.

The answer, of course, has always been there, but Republicans with their fear the debt that even roped in the Democrats, stopped any investment in infrastructure and R&D that would create good jobs and get the economy going again.  So here it is again it simple terms so you economic genius can get it:  

  • Economic inequality puts all the gains in growth in GDP in the hands of very few people.  They don’t spend it creating good jobs and it does not flow down.  
  • We have an economic system that rewards accumulation of wealth and with a global economy, off-shoring those gains in cheaper labor and rules (which try to protect our quality of life).  In essence we have a race to the bottom and it is self-defeating because as money accumulates at the top and the best investments are financial instruments, domestic demand whithers along with our quality of life.

There is only one way out of this and it will require massive investment by, wait for it, THE GOVERNMENT!  Not only does it create good paying jobs that will then fuel demand in our economy, but it rebuilds the infrastructure and invests in research and development business deem too risky that will be the life blood of our economy in the future.  Another no-Duh moment brought to you by this blogger and yet we never get it.  “Be afraid of debt and why oh why won’t the economy take off.  It must be because we have a black president or are thinking about a woman, a woman for God’s sake, for president.  Wait! Maybe God is punishing us for being tolerant and kind to gay’s and others. Protect our restrooms!”

If you want to really understand how far off the mark conservatives are on this one consider who they just nominated for President, a guy who made his fame exaggerating his wealth accumulation and hollering, YOU ARE FIRED!  What the country needs is someone who says, you are hired.  It really is that simple.

That is why we are sinking into the sunset.  If I can figure this out, surely this can’t be too hard for the rest of you.