Risking repetition, I would like to once again recommend this article by famous/controversial economist Joseph Stiglitz in November’s Scientific American. I have been harping on the evils of income inequality for years, although I believe capitalism is an essential part of modern society. The article shows how “unrestrained” (actually, rigged) capitalism contributes to a feedback mechanism that worsens income inequality persistently and iniquitously– how there are two stable equilibria in the basic equations of our capitalism: equal society and grossly unequal (and worseningly so) society.
The problem is not “free markets” but rigging of markets and rules that favor some participants over others, leading to the accumulation of wealth by increasingly powerful entities. Attempts to control this problem began in the late nineteenth century in America with antitrust legislation, famously promoted by Theodore Roosevelt as the “Square Deal.” Repeal of Roosevelt’s innovations led to a maximum inequality in 1929 and probably were a major cause of the stock market crash that led to the Great Depression. Then another Roosevelt, FDR, gave us the “New Deal” that lasted until Nixon’s corrupt dealings brought back rigging of the system. We all know what happened since then: median income has not increased, even as productivity increased, over the last 40 years, and lower strata have actually gotten poorer during this time.
In fact, with additional thought, we can see that the second equilibrium almost inevitably leads to unstable, overall impoverished societies that are prone to revolution, with disastrous results. The examples of Soviet Russia (after Imperial Russia collapsed from inequality) and the People’s Republic of China (after Republican China was destroyed by civil war after their relatively “calm” Republican revolution) in the last century show that when inequality reaches an unsustainable extreme (usually only after a long period of declining productivity and overall impoverishment) violent revolution occurs and unspeakable cruelties are visited upon those who previously benefited from and were protected by government.
The only way to prevent this type of disaster is to end the favoritism that accompanies political power amassed by individuals and giant corporations. For example, the US health system, despite being the most innovative in the world (partly due to capitalism), offers the least bang per buck of all developed societies (all thirty or so countries) in the world. Americans spend the most money per capita (meaning large payments by a few individuals and inadequate resources for the rest) and get the poorest results in life expectancy and quality of life. There are always a few outliers who can live to 100 despite being former slaves, but the money spent by rich people on medical care gives them a pronounced advantage.
This failure of our health care system is directly related to the roughly five hundred million dollars a year and 2732 lobbyists used by medical corporations and groups in lobbying for and against candidates and laws in our government. This is the rigging of the system that causes bad results– yet it seems impossible to remedy once it has developed.
Nothing could be simpler. But to convince yourself of that, you need to read the article– it’s not paywalled.
Here’s a quote from an answer on Quora that I found interesting(I hope he doesn’t mind because he has the bears behind him.) I’ll tell you more about it below.
Kenneth Cochran, Software developer, staunch advocate of the right to arm bears.
Let’s Hope Donald Trump Gets A Shellacking
She continues (again, on the Microsoft News feature version of a NYT article) “They’re not all supportive of Trump, but his language does give them ideas that then circulate online in extremist social media spaces.”
On the subject of “It’s Worse Than You Think”, reality suggests that “It’s Worse Than You Can Imagine.” DJT is either intentionally or willfully stoking the fires of division as hard as he can. He appears to be focused on a strategy of promoting civil war in this country between white and almost everybody else, possibly including Asians and even Native Americans.
Native Americans. People whose distant ancestors made the entire trek from Siberia to Alaska, and on to Tierra del Fuego, on foot, in small groups of fathers, mothers, and children, numbering no more than a thousand at a time, in search of a better land. (does that remind you of any current migrant treks going on in Mexico?)
(image courtesy of pixabay.com and geralt)
editor’s note: for those who bother to read the text below the fold, there will be an attempt to post, on average, once a day, but circumstances may dictate either no post at all or multiple posts and there is no guarantee that the average will asymptotically approach one.)
A piece in the Wall Street Journal explains why people are fleeing El Salvador on foot– in plastic sandals known as “flip-flops”, no less. The short summary is that it has something to do with the murder rate there, which is the highest in the world. Those committing the murders are members of the gangs who control the country: mainly MS-13 and Barrio-18. The minister of justice and security, Mauricio Ramirez Landaverde, said: [the gangs are so pervasive that] “you don’t know where the state ends and the criminal organizations begin.” That is an ominous statement for a country’s minister of justice to make.
Gangs are estimated to control 16% of El Salvador’s GDP, and they are the largest employer in the nation. They have an estimated income of $4 billion a year. More than 60,000 people work for the gangs in some capacity, and almost everyone who lives in the country is subject to their extortion rackets.
Reforming a situation like that would require an invasion and/or the allocation of billions of dollars, not to mention 50,000 soldiers– something only the United States could do. Unfortunately, we have a president who would rather preen and play politics than do anything about the suffering of millions of people in Central America for whom we are ultimately responsible.
We are at fault because Reagan broke El Salvador in the 1980’s. (Look it up on Wikipedia if you have time. I am old enough to remember the civil wars that raged in Central America at Reagan’s instigation with money from sales of missiles to Iran– see also my previous post about how Reagan colluded during the election with revolutionary Iran to coordinate the release of hostages only when he came into power.)
Unfortunately, the Wall Street article is behind a paywall, but you can catch a summary of the article (there is a great deal of detail) if you visit the “Microsoft News” website, which is a feature of Windows 10. Try the “world news” section. Not that I’m recommending it– it has many of the same features which could cause the same problems with which Facebook news feeds are plagued. It is possible that your settings (related to your previous clicks) are such that this article will not appear on your news feed if you try to find it on “Microsoft News” on your computer.
(illustration courtesy of pixabay.com and Public_Domain_Photography)
Michael Tomasky’s opinion piece in today’s New York Times relates a vital job for Democratic strategists: make the party stand for something economically. That something is the burial of supply-side economics. It’s time to go back to the demand-side economics that spurred the remarkable period of real growth for the US from the 1940’s to the 1970’s.
So, what is the problem? Republicans have been deliberately lying about government since the 1970’s and the rise of Ronald Reagan: “government is not the solution, it is the problem.” Here is the problem: rich people who have to pay for benefits given to poor people object to the transfer of funds from rich to poor. This is natural. But it causes problems when we allow rich people to decide how much taxes to pay and who benefits. They are clearly biased.
The rule of rich people has led to the current degraded state of the Republican party: their entire platform consists of lies in the service of lower taxes for rich people. See also Paul Krugman’s column in yesterday’s Times for details on the complete platform of lies.
Roosevelt showed, without having to say so, that government was the solution to the rise of fascism in Germany, Italy, and Japan. So government was allowed to take the reins and there ensued an unprecedented period of prosperity until the 1970’s– when “stagflation” reared its ugly head. The unaccounted-for costs of oil as a propellant and lubricant for the whole of the transportation industry and for the additional environmental costs of the use of coal for electric energy caused severe damage to the economy that went unrecognized– accounted for as the Arab oil embargo oil 1973-4 and the impeachment hearings in the US House of Representatives that preceded Nixon’s resignation in August 1974. Inflation was already increasing and became particularly severe in the early 1980’s.
The election of 1980 was partially engineered by a secret agreement between Reagan and an enemy government, that of revolutionary Iran, which held hostages from the US embassy until Reagan was sworn in. Reagan quickly mastered a brief recession with heavy deficit spending and used Keynesian economics to push GDP growth while preaching “trickle down” policies that directly repudiated Keynes. At the same time, he oversimplified everything and invented “voodoo economics” that made no sense and only improved the incomes of the top 1%.
Since the US has abandoned the economics of infrastructure spending and progressive taxation, GDP growth and productivity growth has not been accompanied by average income growth; the national median income has remained stagnant against inflation for 40 years. Democrats should embrace fair, progressive taxation that provides sufficient government income to take care of our nation’s neediest without stint and promotes GDP growth by wise investment in middle-class jobs and construction. The Republicans are blatantly lying to stir up fear in their base and fool them into continuing to vote for unpopular policies that hurt the very people who vote them in: rural people and poor whites. The Republican policy of tax cuts and deficit spending during an economic growth period will lead to a distorted economy that can only benefit the richest despite full employment.
Another quote from the NY Times Opinion Piece: “Detroit and New Orleans stood out in our survey. A typical water bill in those cities exceeds $1,000 a year, putting this critical service beyond the budgets of low-income households.”
As a result of declining federal funding, local governments have been forced to step in and try to provide water and sewer systems– for a charge, maybe a sales tax, who knows?
Poor people have been squeezed in the middle by increasing local charges for access to water, and many have had their water service cut off for unpaid bills. This is perhaps social Darwinism at its most extreme.
We appeal for a social system in which everyone has access to life-giving resources like water and health care, in particular a free education at least to high-school level and possibly higher if students show aptitude. We reject the Betsy de Vos approach to primary education, i.e. online classes with no supervision other than the mother.
Another issue has been presented in the wrong way to make it sound bad: immigration. Without immigration, the United States would suffer a net loss of population each year because not enough American mothers are having enough children. We can argue about how many should be let in (the Trump administration, through adroit administrative delays, has let in only 20,000 this past year) but if we don’t have immigrants, our country would shrink.
Besides, the young immigrants are a life-saver for Social Security and Medicare– new members who are young and will contribute to our old age funds for many years to come. Those who have the physical strength to walk all the way from Honduras will be particularly motivated to get their start at jobs citizens wouldn’t take. To characterize the caravan of mothers, children, and fathers as an “invasion” is a deliberate lie to stir up Trump’s anti-immigrant base; this movement has more of the character of a pilgrimage.
(photo courtesy of pixabay.com and Free-Photos)
Donald J. Trump stated on his Twitter account at 5:03AM Washington time this morning that “There is great anger in our Country caused in part by inaccurate, and even fraudulent, reporting of the news.” Inaccurate, and even fraudulent. Now, inaccurate could be an opinion based on a point of view– but fraudulent is a crime. It should be objectively possible to determine if the news media is fraudulently reporting (or not reporting) the news.
The charge of fraudulent reporting is just thrown out there without evidence or context. Instead, the President goes on to say that the press “must stop the open & obvious hostility & report the news accurately & fairly.” What is more, he adds the epithet “The True Enemy of the People” for the news media. So this is a thing– open and obvious hostility for Trump from members of the news media? It’s not that numerous members of the Democratic Party as well as many of his rivals for the Republican nomination (at least before the Republican Convention, or after they decided to retire) had some pretty awful things to say about him– and there’s no excuse for the press repeating anything those people said, as it wasn’t newsworthy that patriotic leaders (and war heroes) of the Republican Party came right out and said that he was a con man.
It also has nothing to do with the fact that comedy shows on television give much of their time to satirizing, lampooning, and ridiculing the actions of the Trump administration. The news media can’t help that Trump is a gift to comedians that keeps on giving.
So, no, the charge of fraudulent reporting has no basis in fact. It is purely a strategic political policy taken on by Trump at the outset of his campaign to discredit the news media so that any mistakes he makes or lies he gets caught in repeating will not be taken seriously when they are reported in “main-stream news media”. Trump planned to lie repeatedly to the people and the media, and he planned ahead to take away the public’s faith in the news media so that stories about his bad faith and lying would have less impact.
After all, now that the Washington Post has given up counting his lies and misleading statements at 5,000, who is left to care about the carpet of falsehoods that he treads down thinner and thinner every day?
CBS News poll over the summer, 91 percent of “strong Trump supporters” trust him to provide accurate information; 11 percent said the same about the news media.
Trump Tax Cut Causes Enormous Deficit and Republicans Immediately Demand Entitlement Repeal
The gigantic tax cut given out by the Trump administration caused a momentary increase in the gross domestic product, for one quarter, at the cost of a trillion-dollar deficit this year and 1.5 trillion dollars a year after that as far as the eye can see. This has been a truly wicked plot worked upon the unsuspecting citizens who do not belong to the 0.1% club. It was obvious all along from the structure of the tax cut, and the obvious has taken place: corporate tax collections are down by a third, and individual tax collections are not making up the shortfall. We knew a year ago that if we enacted that “tax reform” that was pressed upon us, that we would see a trillion-dollar deficit– and we did.
See this op-ed in the New York Times by Paul Krugman for the details of the tax scam.
(illustration courtesy of pixabay.com and Alexas_Foto)
