Romney Will Say Anything

I didn't realize how ripe of a take-down there was awaiting Mitt “Robme” Romney, but it's all out there just waiting for someone to put it all together...

Mr. Romney claims that he will create 12 million jobs during the next 4 years if only we elect him as president. He doesn't say how he'll create the jobs, just elect him, sit back, and find out...

Nail #1: Since he won't specify, we are enabled to speculate. And some big guns have speculated, like those fine folks at Macroeconomic Advisers and Moodys Analytics. Their estimation: The economy, regardless of the president will add 11.8 million jobs over the next four years. So, that's only 200,000 for you?

Mr. Romney has repeated used the meme that he was a job creator while working for Bain Capital, that he knows how to create jobs...

Nail #2: Search for the jobs he created, and you will search in vain. But you will find cogent analysis of his work and methods there, by no less a business standard than Bloomberg:

What’s clear from a review of the public record during his management of the private-equity firm Bain Capital from 1985 to 1999 is that Romney was fabulously successful in generating high returns for its investors. He did so, in large part, through heavy use of tax-deductible debt, usually to finance outsized dividends for the firm’s partners and investors. When some of the investments went bad, workers and creditors felt most of the pain. Romney privatized the gains and socialized the losses.

So, Mr. Romney is willing to mislead on his record, mislead on what he'll actually accomplish while at the helm (if we give it to him). But, he has served in government before, what did he accomplish there? Surely that would give him some bona-fides...

Nail #3: As Governor of Massachusetts, which as candidate Romney he claimed he would initiate a jobs program "second to none in the history of the state.” But, the history, as capably outlined by Jim Kaplan of the Tampa Bay Times: “When Romney's four-year term expired, the job growth rate of 1 percent lagged four points behind the national rate.” So, even though he has promised this particular outcome before, last time he utterly failed.

During the second Presidential Debate, Mr Romney asserted that “Government does not create jobs”.

Which leads us directly to...

Nail #4: Mr. Romney: If the government does not create jobs, how the he** are you going to create jobs as president of the United States? You didn't create jobs when you were in the private sector, you failed to create jobs the last time you were in government, and you are willing to lie to us about what will happen even though, by your own assertion, it is impossible for you to accomplish that! What kind of a man are you?

I believe four nails allows us a roundtrip on this particular coffin. Sleep well, Mr. Romney. I don't believe there is a place in heaven for folks like you. May I suggest you read Neil Gaiman's collection of shorts, “Smoke and Mirrors”. There is a particular story in there about a place where time has no meaning...

Free Will and Democracy

In 1797, the Reverend Timothy Dwight, then president of Yale University, argued “...that if God had decided from all eternity that an individual's fate was to die of smallpox, it was a sin to interfere with the divine plan through a man-made trick like vaccination.”

Sound familiar?

Everyone has their own conception of what a god or God is, how he or she interacts with the world. We cannot possibly address all concepts in a morning essay. However, the line of thinking implicit in Reverend Dwight's argument, and present too in Candidate Mourdock's recent comments on pregnancy resulting from rape, is of a god that influences or guides our behavior.

Probably the most useful image of God in this instance is of the Platonic God: The God represents in his or her divine instance all that is good or perfect. To illuminate our behavior, we have only to ask, “Is my behavior emulating what would be the behavior of one who is perfect, and perfectly good?” If so, the behavior is likely acceptable, if not, one may wish to reconsider.

But that is not the god that Dwight and Mourdock envision. Their god has a plan, and interfering with the plan is the wrong, for the simple reason that we cannot know the plan aforehand, and it is then assumed that what ever occurs is the plan!

Notice, however, that the God of Dwight and Mourdock is indistinguishable from a non-god, indistinguishable from the absence of any god. It is impossible to discern, using their logic, that there is a god in the universe. Saying that a pregnancy resulting from rape is God's will is logically equivalent to saying that a pregnancy resulting from rape is Nature's natural outcome – there is no test that could be administered to determine the difference.

Mourdock's conclusion rhetorically begs the question...

But the line of thinking is more insidious than even that. Implicit in reaching the conclusion that we shouldn't interfere is to deny the concept of Free Will, the concept that we can (and should!) make our decisions and choices upon the best available information currently at hand.

Present at our nation's founding were individuals steeped in Enlightenment ideals, individuals who were willing to place Free Will front and center of our public and political discourse. A Democracy cannot exist without Free Will, and the exercise thereof. Freely we can make arguments for or against our behaviors, for or against laws and policies that may constrain that behavior, and freely we can submit to the conclusions. However, democratic discourse has no place for vacuous appeals to invisible authority, no place for attempts to eliminate the exercise of Free Will from individuals and replace it with one person's concept of what should be.

People who exhibit thinking like Mourdock (we can add Todd Akins as another example) have no place in public office. Their underlying thought processes hew back to the days of predestination, back to unquestioned submission to authority. Their thinking denies Free Will, denies that others have the right to exercise it, denies a foundational cornerstone of Democracy.

In so doing, they reveal that they are unfit for public office in our Democracy.

An Alternate Universe

In our world, it is hard to run a large corporation. You have to constantly keep your sales up and your costs down, all because the leeches at the big, bad government will tax you into oblivion. You have to always be watchful: Since you have to pay your taxes first, before you pay your employees, before you invest in R&D, before you pay the depreciation on your equipment, before you pay your subcontractors, before pay your CEO and your accountant, any loss of revenue will force you to cut jobs so that you don't end up short at the end of the year – debtor's prison is hell. If you are lucky, after taxes and then your expenses, you may have enough to put aside for a rainy day or to create a new job – because that's what corporations do: They take any money left over after taxes and then expenses and they hire, but that is becoming rarer and rarer...

I think often of an alternate universe where the tax laws are reversed. Where a company gets to pay its employees first, and deduct that from earnings, thus lowering their tax bill. Where they can also deduct the money they pay into their employee's pension, 401k retirements, and health care premiums. Where things like capital depreciation count against revenue before profit is calculated, where the CEO can be paid his/her worth with positive tax implications (shoot, let's overpay them and let the company lower their tax bill!); Where even modest amounts of R&D are allowed to be deducted before the taxable amount (and the tax liability) calculated.

I know: My alternate universe is completely untenable. It would set up a horrible conflict between the government and the investors, because once profit was calculated, an increase in the money going to one would be a decrease in the money going to the other. It would be unfortunate, too: Since as soon as investors get a reasonable amount of money together they hire someone to do something, and if there is nothing to do, they create a job out of thin-air, because employing people is what they do. Conversely, of course, once a government gets money from taxation it just sits on it, unproductively, never thinking about how to spend it, accumulating all those taxes so that Presidents can feel rich. If only the government would employ people with the money it collects, if only it would invest in things like roads and airports and parks and open space, if only it would ensure that everyone had access to health care so that the corporations could have healthy employees..

I wish I knew how to make a government do that. Perhaps it would, in my alternate universe.

Charter Schools are Ordinary At Best...

I just wanted to do a quick highlight of this article:

Charter Schools Fail the Math Test in Battleground Chicago

Basically, as Yves Smith adroitly writes: "The public wants a pony: higher quality education while demonizing teachers and cutting their pay."

I find it a little disheartening that so often we want the best but aren't willing to pay for it: Especially if it is fellow middle class Americans who will benefit by providing the goods or services we want. Our exploitation mentality has grown to where we are no long content just exploiting people in far-away lands, now we want to do it here at home.

Read Yves' article, and the Jarosvky if you are so inclined. Our public schools are pretty darn good, and instead of sucking them dry to transfer the money from the teachers and educators who are willing to grow and guide our children, to the already rich for whom too much is not enough, we should rethink our approach and reinvest in those who can and do make a difference. 

2012 Election - Work Will Remain After The Voting

When a friend asked if I would like to provide an essay for her blog about the election, I quickly agreed. It didn't seem like it would be too difficult: I have strong opinions, I've written about them for some time: How hard could it be?

It turned out to be much harder than I anticipated. This election is presenting me with some challenges that I just don't recall any previous election presenting. I know who I am going to vote for, but it seems woefully inadequate, woefully irrelevant. Let me explain:

I find the big social issues to be a continued source of disbelief: You mean, after the Civil War, Woman's suffrage, the passage of the 14^th Amendment (with its Equal Protection Clause) and the 15^th amendment on voting, we STILL insist on attempting to segregate people from general equality based upon some aspect of their lives? We STILL insist on attempting to force conformity to one particular set of religious beliefs, even as those beliefs are undergoing internal revision themselves and don't speak for all of us? Bah.

So, it has been easy for me to vote against the party that continually comes down on the discriminatory side of things – that somehow eschews calls for equality and advocates against women frequently, against a gender-blind definition of marriage. Add to that their almost fanatical support for increasing the means to inflict violence, and its a no-brain-er.

2008 was exciting. Here we had an articulate black man who voiced concern for those who don't get a fair shake; concern for those who face injustice and inequality; and who, more than anything else for me, was willing to advocate for a restructuring of our out-moded and poor system of health care that costs all of us too much and denies coverage to many, specifically many who need it.

He did exactly that, too. Once President, Barack Obama continued pushing to reform the system of health delivery, striking bargains to make the result palatable to Republicans, Democrats, the Insurance and the Health Care Industries.

Of course, what we got represents all sorts of compromises, and in a spectacular play against the nation and for the furthering of their own interests, members of the Republican Party unanimously voted against it – voted against a remodeling that looked surprisingly like plans put forth by their own party 30 years previously; a plan that strongly resembled a successful State Plan enacted in the previous decade.

In the intervening time since then, President Obama has come out in favor of Gay Marriage, and has allowed the Pentagon to repeal their nefarious 'Don't Ask; Don't Tell' policy.

So, here we are in 2012. There is a new gorilla in the room, but nobody is talking about it. Neither Republican candidate Mitt Romney, nor re-nominated Democratic candidate Barack Obama. Both, in fact, seem bent on side-stepping THE major issue of this election (and perhaps our lifetime and more), turning the whole processes into a frustrating side-show of irrelevancies.

Mr. Romney, following his party (actually, almost re-inventing himself to be crueler and more prejudiced against practically anyone who isn't wealthy and white and male than was evident during his tenure as Governor) has brought up the old, tired drudges about taxes and spending and jobs, as though we won't see through it again. His running mate, true to form, has sponsored a non-sense budget that panders exclusively to those who extract rent from the economy, and imposes austerity on those who work.

The gorilla, of course, is the outsized (over 40% of our economy!), enormously detrimental Financial Sector with its reckless debt creation, speculation, and extractive activities that drove us to the brink of ruin four years ago, and its continued existence in current form which will only repeat the cycle. The financial sector has driven debt creation, both private (which we, as a nation, are wallowing in), and public (as the falsely strong dollar elicits large trade deficits, piling on government debt as foreign traders recycle their American dollars in Bonds).

I want a champion who will go to Washington and take on the FIRE (Finance, Insurance, Real Estate) sector without concern for re-election, without concern for the opposition by the malefactors who daily steal the real productivity of the masses. I want a hero who will advocate a return to a true, classical economy, where debt is used to finance manufacturing expansion, where the unearned, 'free lunch' asset appreciation gains (Capital Gains) don't drive the economy nor contribute to outlandish awards to some.

I want a Neil Barofsky, or an Elizabeth Warren, or a Bill Black to go. Each has shown the fortitude to stand tall on this issue; each has worked in their way to raise awareness or to gain a foothold to battle it. Each has clearly demonstrated that they understand both what is happening, which of many possible solutions might give the best outcome, and the urgency with which this is needed.

Alas, outside of Warren who is running for the Senate, the others are not on the ballot. So, that leaves:

Mr. Romney, of course, who earned his fabulous wealth through this very means, borrowing and then saddling others to pay it off, while extracting a fortune from that very same debt. It is inconceivable that a Romney administration would promote the dismantling of the outsized banks and a return to a stable economy based upon real labor, real production, where real people perform real tasks to earn a real living.

President Obama, who has shown only a superficial awareness of this issue, and has so far backed away from any real attempts to address it or even communicate that he is considering it.

Hence, the lackluster feelings I have for this election. I will cast my vote for Obama, recognizing that my political participation will have only just begun at that point. That in order for us to gain any leverage, for us to stave off the austerity measures that the financial elite are cooking up for us, we will have to continue to participate, continue to advocate, continue to Occupy the public spaces.

How To Curb The Power Of Democracy

You have to admit it: Democracy is messy. Everyone gets a say in all matters, even the poor and uneducated. We toss and turn in the sea of public opinion, some informed, some ill-formed, some completely uninformed. What the masses want is not always the desire of those in power, or those with wealth. If you wanted to control or diminish the power of Democracy, what could you do?

First, I think you would posit something called a Free Market. You would imbue it with the power of a god – make it all encompassing, pure, and always correct. Posit that the God Market perfectly rewards those who work hard, and likewise punishes those who are negligent in their production or attention. Posit that the God Market is Strongly Efficient: the values It determines, whether they be salaries or prices or rewards of any sort, they are exactly the correct salaries or prices or rewards.

Now you have the perfect tool to curtail the power of The People. If they advocate for higher wages, you can simply beat them back: Their wages are exactly the wages God The Market has determined should accrue to one who does what they do. Paying them other than what the God Market has chosen is an affront, and will have many negative consequences.

Perhaps they would use their democratic powers to move something from the realm of the private into the realm of the public with the desire that the fruits of society should benefit all of its members. Again,

remind them that public entities are fraught with inefficiency and corruption – you know, because God The Market has informed you, and It has no interest in rewarding any who would not strive alone to better themselves.

You can even use it to bruise their ego. Observably, the masses are poor, and since the God Market is purely efficient and correct, ergo, they deserve their lot in life. Who would dare go against what is pure and true? Those who have succeeded, by definition, are those who have worked harder, dared more, and received the bounty of the God Market! Repeat often, and perhaps they will learn the error of choosing Democracy, and stop attempting to use their votes and some pathetic egalitarian ideal to oppose that which is natural and pure and good, and just go and toil for the God Market.

For surely, you can point to your own success, and recognize that it is of course the result of a mighty struggle that has received the beneficence of God The Free Market, and you now have the perfect tool with which to flay Democracy: Indeed, you can point to your own neutrality! Do The People want clean air and plentiful, pure water? It is not for you or they to decide: The God Market will provide those as needed and when needed, and if they are not as clean as some want, well, who are they to go against the providence of the God Market?

Use the tool often and with energy, and perhaps this desire for messy interference with the natural order of things, this desire to make society better for all, this desire to diminish the injustices of previous generations can be caused to wither, perhaps die. Those who would choose their fellow citizen over personal gain can see the error of their ways. For once this arrogant wrongness, this affront, this virtual heresy that is Democracy is banished, then all can turn towards the God Market and have its splendor and perfection shine upon their faces, and the world can become Its perfect reflection.

In Mitt's Defense (Or, What We Should Be Talking About)

Everyone is talking about Mr. Romney's latest gaffe: His statements to the effect that those who don't pay federal income tax are part of a poor, taker group that mooches off the rest and will vote to keep it that way.

Of course, the pundits rush in to provide the backstop facts: It truly is a much smaller group than Romney claimed who are actually free from federal income tax (most the elderly), and no, those in the lower half of the national income don't predominately vote for only one party, nor are they moochers in any real sense: They have jobs!

But what Mitt inadvertently cast a light upon is something that we should be talking about: namely, the large gap between the median income in the country and the average, and the impacts that has upon our society.

The median income in the U.S. is roughly $40,000 per year* – that is the point at which half the earners earn more, and half earn less. (I am going to use the per worker median rather than the household median ($50,000) to illuminate the individual's position within the workforce.)

Our Gross National Product (GNP) for 2011 was $15 trillion dollars – the sum of all productive activity in the nation for the year. Our workforce was 142 million people (fn1) – which works out to an average production per worker of approximately $100,000 annually.

This is a large difference: The average is significantly right skewed – in fact, earning upwards of $100,000 per year would place you in the top 16% of the nation's earners (and the top 20% of the nation's households.)

This shows that the fruits of our labor are accruing not across society, but predominately to a small percentage of the individuals. Now, while it is reasonable to believe that many are much more productive than others, it is hard to make a case that the distribution of productive ability shouldn't be a normal Bell Curve or standard distribution where the median and the average are closely in alignment.

There is a natural phenomenon behind some of this skewing: The time-value property of capital vs the ephemeral or transient property of labor. What any labor makes today doesn't compound into higher production tomorrow: Another unit must be produced with new labor tomorrow. However, money, through compounding, can earn more tomorrow than it earned today.

But what should concern us is the rest of the structure of society that places a premium on capital and capital earnings and forces this skewing to the the extreme level we see in our country. The structure of our economy is largely ours to choose: The laws that govern contracts, employment, money flows (taxes, tariffs), the formation of corporations, all provide this structure and hence impact the resulting distribution.

We should be talking about how we restructure so that all workers (and I'm talking the workers here, not those who choose to freeload) share equitably in the production of the nation. What changes do we need to make to restore the median worker's salary closer to where it should be near the average? What changes to our views of capital and labor do we need to foster to allow us to hold the worker in esteem, to perceive and accept the liberating effects of equality?

For surely many would willingly pay more federal taxes if their position in society was both monetarily richer and more esteemed, with the positive effect of an increase in commitment to the shared goals of our nation. There has been much research that has shown that gross inequality is a detriment to a society in both decreases in individual happiness and increases in civil unrest and a tearing of the social fabric that binds people to one another.

That is as far as a defense of Mr. Romney's comments I can make. Although we can thank him for bringing to light the problems of having a large financially extractive class by being a member of that class and forcing the research revealing the destructive nature of Private Equity, his comments are/were atrocious. They reveal a shallow individual with neither empathy nor moral compassion who has been thoroughly corrupted by the accumulation of ill-gotten money. There is nothing likable about a mindset that would deprive workers of the ability to make a modest and fair wage and then condemn them for not being rich enough to afford to pay taxes.

But, he has opened the door. We must have the discussion. Changing the structure so that everyone shares from the ground (or labor-hour) up is truly the way to progressive societal equality, for with the equality comes opportunity, and with opportunity comes the increases in productive capability and our living standard. This is exactly the progressive attitude towards wealth redistribution – not through taxes to correct an unfair system (although a progressive system is likely always needed to overcome the effects of chance), but structural changes to promote an equitable sharing of the productive capacity of all.

* I'm drawing all my data from stats.oecd.org

fn1: If you count our 14 million unemployed, our workforce is 156 million. I'm splitting the difference in my average calculation because I can see strong reasons to use either figure.