My Take on The Interview

I find myself fairly annoyed when someone says something patently stupid, or absurd, or hurtful (bigoted, misogynistic, racist), and, when called out for it, instead of retreating, apologizing, they double down, shouting 'Free Speech!' “I'm standing up for Freedom of Speech!”

Er, no.

When the First Amendment was penned, they were thinking of protecting the sorts of speech that could be silenced (and often had been, through imprisonment or worse) by those in power: Criticism of actions, Truth (that others wished to remain hidden), Alternative Viewpoints. They realized that a democracy could not long endure if potential candidates could be silenced before elections could take place.

Now, one of our improvements on the original thinking is the growing understanding that power also resides in locations other than our government: Corporations have power, Employers have power, Religions have power, even the Wealthy have power (although the Robert's Court seems intent on willfully ignoring this fact.) Protecting our ability to Speak Truth to Power, of bringing criminal activity to light, has led to a broadening of the sorts of speech that cannot be retaliated against. (Whistle-blower protections are a specific implementation that comes readily to mind.)

All of these thoughts have been rolling around in my mind as I've watched the unfolding brouhaha over the release, retraction, limited re-release of the movie “The Interview”. When Sony retracted the movie, many were shocked, claiming that it was a direct hit to artistic freedom, to free speech. Upon its limited re-release, many of those interviewed have acted like they are some sort of admirable patriot, standing up for freedom. I think they are wrong: Sony's actions vis-a-vis “The Interview” have nothing to do with freedom of speech. They have to do with ethics (or a lack thereof). An ethical person would not have made such a movie.

Have you ever noticed the disclaimer at the start of every work of fiction, or the end of every such movie? “The characters and events portrayed are fictitious, and any resemblance to actual persons or events is entirely coincidental...” By creating a work of fiction, artists are freed to explore actions that are taboo or criminal. By not tying the events or the characters to actual people, specific people are not called out, their reputations neither questioned nor harmed. Plus, there is a big difference between exploring the idea of killing an individual, with its attendant consequences, and writing about killing a specific, actual individual.

Here's where I have a beef with the movie and with the actions of those surrounding it. If someone were to text “I'm going to kill so-and-so”, we would not take that as something to be ignored under the guise of free speech. We would grow concerned, and probably call for a police investigation. If, upon investigation, the police uncovered detailed plans on how the first individual would carry out the deed, we would see that as proof of criminal intent, and call for prosecution.

I know. “The Interview” is not proof of Seth Rogan's intent to kill Kim Jung-un, nor proof that Mr Rogan has murderous thoughts. But, by calling out a specific world-leader, rather than a fictitious entity, Mr. Rogan has made it ambiguous. Those of us who believe assassination to be a criminal act expect any movie exploring such themes to take them seriously, (the upcoming movie American Sniper appears to take this tact), or, if satirized, to at least fictionalize the story enough that we can tell the creator agrees with us.

We certainly wouldn't stand by if, for instance, Bollywood were to release a movie depicting (even comically) an attempted assassination of President Obama. It would be much easier to see that has crossed a line, and is not the sort of movie we would like to see made.

Calling into question the ethics of “The Interview”, even motivating against its release (and hopefully, against anyone who would make such a movie in the future), is not an attack on either free speech nor artistic expression. It is simply indicating that there should be ethics that are adhered to, that there is a gulf between speaking truth to power and depicting (attempted) violence against an actual person.

Agreed: The actions of the hackers were particularly ham-fisted and criminal, and I would like to explore that (and its fall-out) in a little more depth (later). But just because someone acted criminally to call out the stupidity of some speech doesn't make the speech any better, any more legitimate. “The Interview” is still perverse, and not anything that should have been said.

It Only Takes A Few Facts To Refute Paul Ryan

This article by Michael Hiltzik in the LATimes caught my eye. He very carefully lays out the evidence that private charity is not the solution to the widespread problems of the needy, that, in fact (spoiler alert!) giving to private charity falls just when it is needed most. Compounding that, giving to private charity is just as likely to be beneficial to the giver (think of giving to the school your child attends) rather than beneficial to someone less fortunate in society.


Our society built the social safety net when it was needed most due in large part to the failure of private charity to meet the needs of a society facing the worst and most prolonged depression in its history. It appears that we need to be reminded often of our history to avoid destroying our useful institutions and repeating the errors of our ancestors.


And, it is worth noting: men like Paul Ryan, having won the economic lottery, don't care about people in general, nor about maintaining those institutions that support them. Note  how easily Hiltzik refutes Ryan's myths...leaving no doubt that Ryan says what Ryan believes will help Ryan, everyone else be damned.

Freedom vs. Technology

Quick: Which Amendment to the Constitution goes furthest in protecting our freedom?

Of course, there is no clear answer: The First, Fourth and Fifth all play a crucial role in maintaining that which we call freedom. The Fourth (unreasonable searches) and Fifth (self-incrimination) appear to be the most susceptible to changes from technology, and we are constantly forced to re-evaluate our stances and interpretation.

Every time we get an advance in electronic technology, it is easier for law enforcement to think, "Ah, what we could do to ferret out the criminals in our society!" However, there is usually a trade-off involving a loss of privacy for us, and it is these trade-offs that we constantly need to evaluate.

Very interesting article up at The New Yorker this morning concerning Lavabit's (Lavabit is a secure email service) brief to the 4th Circuit of Appeals to allow it to resurrect its secure email service. Lavabit was shut down by its owner and founder after the government asked that it 1) hand over its encryption keys 2) create an easily traceable system wherein every email could be used to identify sender and recipient.

While it is easy to think "but I don't do anything wrong, why should I care?" I think the analogy that the orders "constitute that a city give the police a key to every home in search of one man" places it in perspective. We routinely find criminals without going to such intrusive lengths, why should we trade our privacy? More importantly, we only have much to lose if we do so, with no proven gain to offset the loss.

Another Term?

I had an interesting conversation with a couple of co-workers today. We were discussing the potential for changes to our country's laws to eliminate the discrimination against gays and lesbians with regards to marriage.

Now, I've a long time felt that justice should be blind, and a blind application of our current marriage laws would not even ask the gender of the applicants – just the basics: Are you currently married? Are you of age? Do you consent? (Are you not too closely related?)

However, I've also felt that the term marriage is so embedded in our lexicon, in our society that we will have to continue to use it to describe the exclusive partnership that is two people coming together to share, care for and love each other. We will continue to go to the local government to obtain our Marriage License, we will still have the overseer of our ceremony sign the Marriage Certificate to show to all that we have publicly affirmed the required vows.

What was interesting in my co-workers' view was that the term marriage is not that central to our concepts: They maintained that the majority of America would be willing to jettison the term if it meant creating equality before the law for all. That instead of having marriage and 'skim milk' unions, we could simply (for the purposes of the law) replace 'marriage' with some other term, and re-write our current laws to eliminate the discrimination of asking the applicants if they represent one of each sex.

In this implementation, 'marriage' and 'wedding' would be non-legal terms reserved for use whenever and however people wished, but the set of laws that governed co-ownership, rights of survivorship, divorce, would collectively be referred to under a separate term – we would get a 'Legal Union' License, have a 'Legal Union' Certificate signed by the proper witness.

I find this intriguing for a couple of reasons. Number one, it eliminates the the arguments of many that 'marriage' is something that cannot be defined by our democratic legal system; i.e., if we take 'marriage' out of the legal lexicon and no longer use it to refer to a set of laws, they cannot argue that we have redefined it or dirtied it, etc. Want to use 'marriage' to refer to something specific? Fine. Our laws don't recognize 'marriage' as a legal construct, so use it as you wish.

Second, I find it intriguing simply because I had not considered that it would be a possibility – that Americans were ready to remove the term from our legal system and simply move on. My co-workers give more credit to the ingrained fairness and lack of historical concern to our fellow citizens. So I am curious: Are they correct? Are we ready to just drop this whole affair, rename our laws, restore the veil of blindness to justice, and move on?

One of the unsolved points will be, of course, what terms do we use to refer to the collection of laws that currently govern the union of two individuals? I used 'Legal Union' above as place-holders only, not suggested replacements. One co-worker suggested we appeal to our Latin roots, and use terms such as 'Nodus' (Knot), Ligo (Bind), or perhaps (and our favorite): Caveo (Beware)!

Try them out! Does it work? Imagine our children going to City Hall to get their Nodus License, signing their Ligo Certificate, or perhaps, exchanging their vows in an elaborate Caveo Ceremony (after presenting their license and completing with the solemn signing of the Caveo Certificate.)

Are we ready for that? Is this really a simpler solution to moving forward towards Equality Before The Law with regards to two-person joinings? If we just sweep aside the freighted term, can we achieve the fairness we seek and believe we should give to every member of society?

Stop The Violence Fetish!

Alright. Enough. You are a fool, ethically immoral, and a purveyor of violence if you believe that death is a fair retribution for petty theft. What I don't understand is how many people I formerly thought well of have revealed their heartless, violent tendencies after the awful shooting at Sandy Hook: Those of us who reel at the though of innocent youngsters losing their lives in a pointless act, who believe that one action (of the many) that may counter such future occurrences is reasonable, considered limitations on the types of weapons that may be privately owned are suddenly under a barrage from those who see (and are posting) that violence is the solution to everything, that bigger, more lethal means are their right:
Stop.
We have been attempting for 6000 years of recorded human civilization to reduce violence, to build peaceful means of co-existing, teaching understanding, tolerance, and that the first response should not be to reach for a knife, sword, or gun.
We have attempted to build a judicial system second to none that metes fair punishment for the crimes committed, that accords all individuals equality before the law, that gives every individual the forum to argue their innocence, or at least to explain any mitigating circumstances that their fellow citizens (the jurors) should perhaps take into account when declaring guilt or innocence, that the judge should consider when declaring punishment. All that is taken away when a citizen takes it into their own hands and shoots and kills another - and is an action that we should always inspect carefully and with prejudice towards the shooter until it can be justified as an act of self-preservation.
Granted, we have much work to do: Neither the system nor the means to implement it are perfect - but that is exactly the point: We only can reduce violence in society if we err on the side of withholding our own violent actions, our own violent thoughts, and consider carefully the small (and hopefully diminishing) situations where we would allow violence.
Considered push back if we attempt to define those situations too tightly is welcome, but wholesale glorification of those who use violence inappropriately, glorification of means of inflicting extreme violence, and glorification of vigilantism is wrong and should and will be met with disapproval by the rest of us.
 There is no reason for those who wish a peaceful society to remain silent - your violence fetish needs to be called for what it is: A desire to circumvent the laws and traditions of our land, a lack of respect for your fellow citizens and for the lives of others. Your violence fetish is a desire for the return of vigilantism and an overturn of the institutions we have built in for the goal of creating a fair, just, and non-violent society. We, as the citizens of that society are speaking. Put your gun away, look at the darkness of your heart, shut your mouth, and join us in exploring means to improving the project we have started. 
We are not free when that freedom is tenuously held by the threat of violence: We are free when thoughts of violence are replaced by thoughts of mutual respect, when we move through society secure that the non-violent ideals we hold are held by those around us. We are largely there, and any Faux-Neanderthal that would take us back needs to be reminded of the accomplishments of non-violence, and of the accomplishments of the society we have built, and that the rest of us are not willing to consider a return and are fed up with those who would take us back.

Dear Paul Krugman (from Angry Bear): Please Read This About Social Security

Sometimes President Obama upsets me. Especially when he follows the illegitimate framing of the issues surrounding our budget, deficit, and debt. It is worth noting that Social Security DOES NOT contribute to the deficit, the debt, nor any real (or manufactured) budget/debt crises. If we want  to cut government spending, we need to cut UNFUNDED government spending (which is largely the cuts called out in sequestration: You know, the major cuts to the military and pentagon budgets) not FUNDED spending...

So, I particularly enjoy when real economists take the time to write it up, like this blog by Dale Coberly of Angry Bear writing about Social Security, with the hopes that it will be cross-posted by Paul Krugman who has a much wider audience. A very well supported post that shows that Social Security shouldn't even be in the discussions about budgets and deficits, etc. 

So, read the article here, but in summary (the key points!):

Social Security has nothing to do with the deficit...  

... and therefore should not be part of the "deficit reduction" hysteria.

Social Security is not going broke.

The Trust Fund is NOT Social Security. It does not matter at all when it "runs out."   

The "Eight Trillion Dollar Actuarial Deficit" can be paid for by raising the payroll tax eighty cents per week each year.

Social Security was designed...insisted upon by Roosevelt...to be worker paid: "So that no damn politician can take it away from them." 

One has to only follow the money to see where the "Big Liar's" desire to take SS: Remove it from the public's control (via the government) to private control so that a few can extract (extort) money from the flows into the fund.  

No doubt this will be much wider read if taken up by Mr. Krugman (as Angry Bear hopes!), but I am more than willing to spread the word if I can... 

As Mr Coberly closes:
The Big Lie is that "Social Security is going broke, causing huge deficits that will burden our children."
Tell the people.

Read the article, and please, Spread The Word!   

Time to Change Course, Rebuild Finance and Debate 'What is The Good Life'

Jamie Galbraith is one of my favorites: He speaks clearly and holds nothing back. Elsewhere he has called for the destruction of the Financial System and a clean rebuilding of it. Makes sense, since in its current form it serves us not, and instead extracts the value of our labor and output. Finance should be a utility: Moving money from where it is to where it is needed. However, the reality is that Finance instead preys upon the majority, stripping the value from our assets (via loans and speculation), pocketing money they create akin to Counterfeiting.

As Finance grows and extracts all they can from a particular market, it continually moves on. Currently its intended prey is our public institutions: Social Security, Medicaid, Medicare, and even perhaps our public lands. Through its tools in the House and Senate, they pretend that it is the only way.

But there is a another reasonable way of viewing the current situation. Finance promised us jobs and prosperity if we cut taxes on Capital and High Incomes. We did so in 2003, with dismal job growth and stagnate gains since. It was a loan that didn't pay off. It is time to call it in: If we have learned anything over the past 20 years is that leaving money in the hands of the Finance industry and the excessively wealthy does society no good - and there is no credible argument that the majority of society need to give anything up to pay for the misdeeds of the members of the Finance Industry.

Galbraith here explains the global state of affairs very nicely, and reveals in commonsense terms how what is happening in America is not distinct or separable from what is happening in Europe - that Finance is currently in the advanced stages of destruction of the World Economy. Although speaking to a European Audience, he reveals many things about the global economy, the US Economy, and exactly how and why there are different current outcomes, but that all is not stable...

Galbraith: Change of Direction

Enacting a Pigou Tax

The growing inequality in America is probably one of our greatest problems – from reduced health outcomes to increased violence to reduced beneficial productivity (think of the quants who could have been working on energy or health care but instead were figuring out ever more creative ways to fleece the unsuspecting pension fund of its money), grotesque increases in inequality degrade a society in a multitude of ways. However, an equally difficult problem has been to find a reasonable solution.

Interestingly, British Depression Era Economist Arthur Pigou floated a possible solution to neutralizing undesirable externalities: Tax them! (An economic Externality is a side effect of a transaction that costs a third party – pollution is the most common example.)

In this well-presented essay, Liam C. Malloy and John Case explain more fully the idea, what it would imply, and present even some 'whys' – Why we would want to do this, Why it would help, Why it is reasonable for a society to take this action.

I was particularly struck by the number of topics we've discussed over the past year: The fact that higher taxes do NOT correlate with reduced economic productivity; The fact that CEO's who are paid 300-400 times their average workers are not producing at 300-400 times the average rate (in fact, likely 'earning' their income by lobbying the government for breaks or handouts for their company or sector); The fact that 80% of the productivity growth of America's economy over the last 35 years has gone to the top 1% (as pointed out in the article, if the 90% increase, 2.1% per year had accrued to everyone, today's median household income would be $85,000 instead of the $50,000 that it is.)

The only omission I easily spotted was failing to call to equate income taxes on labor (wages) and capital (capital gains). There is no good reason to give preferential treatment to money earned via investment, and many, many reasons to tax investment income at exactly the same rate as labor income. Left unsaid is that for the Pigou Tax to be most effective, it would have to apply equally to all income, regardless of source. But, that is a change that needs to occur regardless of our enacting a Pigou Tax.

Enjoy, and spread the word! Want to do something positive for America's future? Advocate for those actions (like this) that would reduce the grotesque, almost third-world, levels of inequality currently present. Our country does best when everyone works towards a common goal, and when everyone, even the rich, acknowledge and act like we're all in this together.

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.

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.

The Irony of Ryan's Entrancement with Rand

I did the college thing of reading several of Ayn Rand's works. What struck me most was how much the landscape she was describing resembled nothing like the world I know. However, it seemed pretty obvious that she was working against the landscape she knew: Soviet Russia. Her descriptions of the difficulties for entrepreneurs, of mindless bureaucrats standing in the way, of the waste and inefficiency of a command economy all fit when you realize that is the world she is describing. And, like a school girl caught up in her first crush, Ms. Rand gushes blindly about the wonderfulness of the structure of her chosen country, America.

Although her creed, that acting out of selfishness results in the best outcomes, is neither a description of how we actually act and has been discredited as a proscription for how we should act, she does draw a clear and useful distinction between those who work and produce, and those whose actions are extractive. The bureaucrats of her old world produced nothing of use, worked to expand mini-empires with the command economy, and they were the ones who ended up with the summer homes, the cars, the better life-style, while many faced hardship enduring goods shortages (the images of the breadlines come readily to mind.)

These parasites, the one's who so steadfastly stood in the way of entrepreneurs like John Galt (from Atlas Shrugged), who condemned the working man or woman to a lifetime of ill-spent productivity by their miss-allocation of production (creating both vast waste and shortages as they ill-anticipated the needs and desires of the population); These mindless wasters of both the labor capital and intellectual capital of their countrymen: About them Ayn Rand heaped her derision. Galt's 50+ page speech in Atlas Shrugged is simply a condemnation of a command Economy and its flaws, interspersed with unchecked praise for an American-style Capitalist Economy.

The more we learn about the inner workings of the American Economy, however, places things in a new perspective. Reports about the influences and outcomes of the financial sector; reports about the actual results of applying Private Equity, keep enforcing the idea that we have built a purely extractive layer upon our vaunted production (ideas, manufacturing, services). What the entrepreneurs and laborers of America put in, our financial services (and corporate elite) take out for personal use, trading lobbying power for actual production.

American Capitalism has degenerated into a quasi-Command Economy: The Banking members of the Federal Reserve set the dollar and maintain it high to benefit those who lend (extracting great wealth for themselves along the way); Congress interests itself with passing laws that maintain wealth or provide easy avenues for those with wealth to build more; The massive corporations use their market position and power to squelch new ideas and new innovations (or buy them up and squelch them internally or, after the initial pay-out to the entrepreneur, hoard the future income from the idea for themselves, along with accounting control fraud to extract more from the economy than the production of the idea or product places in.)

Just as this parasitic behavior was detrimental to the well-being and expansion of old Russia, so, too, this parasitic behavior has profound negative consequences for America's future. As labor is squashed, less demand is created for the production of the entrepreneur, curtailing the advancements that can and will be realized. As the benefits of the productive classes flow more and more to the parasitic classes, the velocity of money slows, reducing the opportunities for new ideas to enter the market; as the money available to educate all decreases, the number of fertile minds (and hence the number of innovations) decreases, leaving America a second-(or worse!) class producer and member of the world stage.

The irony arises, then, because all of these self identified acolytes of Rand are members of this parasitic class: From Greenspan to Geithner, from Cantor to Bernanke, from Romney to Ryan: Each is a member of the extractive classes, producing nothing, but extracting greatly. None of them would be heroes in a Rand novel, but rather would be the derided antagonists, standing in the way (and ultimately failing) the onslaught of a true producing giant. I think that Galt would smite them with a snort!

The Real Meaning of the Deficit

I think there is a lot of confusion about the real meaning of the deficit. There is a lot of talk about the need to balance the budget, the need to pay down the deficit, to make the 'hard choices' – but no-one really talks about the why. There is some ambiguous talk about deficit vis a vis the future, but no specifics at what is at stake.

In simple terms, as long as others are willing to purchase and hold U.S. Dollars, thereby funding the deficit (or holding it in terms of bonds), the dollar remains strong, e.g., its purchasing power remains great. However, if conditions were to change, if others' confidence starts to falter, and U.S. Bonds are not seen as the low risk instruments that they are today, it would signal a weakening of the U.S. Dollar, and the purchasing power of the dollar would likewise fall.

A falling dollar translates, here at home, to inflation, as the amount of goods or services that can be purchased with a given amount drops. Everything starts to cost more, from food to clothing, services to labor.

Inflation isn't necessarily good, although it impacts different people differently. To truly understand the demagoguery surrounding the deficit, one needs to ask the question: Who will be most impacted by inflation?

The answer, of course, is lenders. Bankers. Wall Street tycoons. Anyone who lends money and derives their income from the resultant payments sees their income fall. And, if their money is tied up in a long-term, fixed rate instrument (think a 30-year fixed rate loan at 4%), there is a huge risk that such an instrument's yield will drop to near (or possibly, below) zero if inflation climbs high enough – that the payment flow is actually negative.

Now, a debtor or borrower is in almost the opposite position. While there was likely some initial pain as their income dropped relative to the goods and services they wished to purchase, since labor (i.e., wages) are a form of service and hence increase their cost along with inflation, labor typically sees their income keep pace with inflation, and the resultant pain is from the fact that there is no growth in their wages. Conversely, as inflation takes hold, the amount relative to their pay that their long term debts require is dropping, laborers are seeing an actual increase in their standard of living as a greater amount is free to purchase other goods and services!

So, who really cares about the deficit? Not likely you or I. In fact, it has been suggested that one of the best ways forward would be for America to gradually inflate her way out of the problem of a high deficit, and that the consequences are orthogonal to the current horror stories told about a high deficit.

So, the next time someone tells you it is imperative that we balance the budget and begin serious efforts to reduce the deficit, ask them “Why?”

And if the answer isn't because they have substantial money tied up lending to others at low interest rates and a future inflation risk may lower their income, they either have no clue or are lying to you.

And in either case, they have no credibility. So why listen to them?

Do As I Say...(Boy Scouts Edition)

It should be obvious why the Boy Scouts don't allow gays or atheists into their ranks: They don't need the training that scouting has to offer, and their outstanding moral positions would prove to be a humiliating distraction to the rest of the poor boys who struggle with the 12 tenets of the scout law.

For who can demonstrate loyalty better than an atheist, who won't drop you as friend if he learns you worship a different god? Or a gay boy, who won't torment you for liking Sally or Billy, but accepts that liking someone and pledging undying friendship, kindness and love is the height of being human?

Either can demonstrate trustworthiness, thriftiness and cleanliness. And what of reverence? Being gay or atheist is a life lesson in respecting institutions that support connections between people, but rejecting any that smack of bigotry or prejudice. Showing reverence for hate and fear is as wrong as lacking any reverence.

With their extremely tolerant views of others and willingness to offer the freedoms for others to pursue goals as they want the freedom to pursue theirs, the presence of gays and atheists within an intolerant, struggling group of Christian Scouts would prove a constant embarrassment.

(And what of the members of the LDS, who deemed the Book of Mormon insufficient for instilling moral character into their boys, and added the canon of Lord Baden-Powell alongside as the sole youth program for young men? Being bested in the mastery of cheerfulness, helpfulness or bravery by one who didn't consult either text might prove to be a debilitating demoralization!)

Instead of attempting to get in, gays and atheists should rejoice that they have mastered what scouting would teach them. They are the graduates.

And, never-mind that for a boy to fully understand Friendliness (offering his friendship to people of all races and nations, and respecting them even if their beliefs and customs are different from his own.); Kindness (He treats others as he wants to be treated. He does not harm), or many of the other 12 tenets without the inclusion of all people, without leaders and an organization that lives those tenets and shows no prejudice, will, in the end, cripple him and his understanding.

For, obviously, the inclusion of gays and atheists within the ranks of scouting would prove too big a challenge, too great a test for the remainder, and their failure to live up to their tenets would become plain for all to see.

The Devil Is In The Details

Job Creator? Nope. More like pension looter, debt adder, layoff enjoyer.
Nicholas Shaxson gets the credit for this interesting Vanity Fair article looking into the finances (and perhaps moralities) of the man who would be president.

Ireland America's Future If...

...The policies advocated by the Romney campaign are enacted, according to Paul Krugman. Ireland's 14% unemployment (30% youth unemployment) are a direct result of the austerity measures enacted by Ireland's leaders: Low corporate taxes, diminished government spending, etc.

It just seems counter-intuitive to me that high unemployment benefits anyone over the long term. But, it's short-term, "I've got mine, go get your own" thinking that underlies so many of the difficulties we face today, I guess I shouldn't be surprised.

Privilege and Easter

Last night we watched Cecile DeMille's 1956 classic, “The Ten Commandments”.

The root of this story is the slavery of the Hebrew people at the hands of the Egyptians, and their eventual deliverance into freedom and ultimately nationhood. Their slavery is depicted as cruel and unrelenting; they are basically used and thrown away when no longer able to do the manufacturing demanded of them by their privileged masters. One of the earliest stories in the Christian anthology places a premium on self-determination, on freedom, on the evils of enslavement.

Today I was reading Dylan Ratigan, and he writes (fn1):

“The policy machinations happen on the other side of the Pacific, not just in America. In March 2006, write[sic] Brendan Smith, Tim Costello, and Jeremy Brecher in Asia Times, the Chinese government proposed a new labor law that would have improved working conditions moderately. In response, the American Chamber of Commerce in Shanghai, as well as US corporations such as General Electric, Wal-Mart, and even Google lobbied against the law, and in some cases threatened to leave China for countries such as Pakistan and Thailand if it passed. By December, the Chinese government had revised the draft law to limit workers' rights in the areas of contracts, collective bargaining, and severance, among others.”

He was writing about the nearly intolerable working conditions at many Chinese manufacturing plants, notably those exposed at Foxconn (maker of iPads, iPhones, and iPods and other Apple products). The workers there have been dubbed 'iSlaves', and for all practical purposes, they are slaves: forced to perform a small set of tasks repeatedly for barely more than sustenance living; their work hours controlled by their masters; many falling prey to central nervous system disorders at an early age as a result of the chemicals they use; and then thrown aside without any further compensation from either their company or their government.(fn4)

The eye-opener is that American companies lobbied against an improvement in working conditions: That Americans felt it was their privilege to be the beneficiaries of the exploitation of poor Chinese citizens. We shouldn't be surprised, though: A lowering of labor standards in China, along with preferential trade status, brings about a lowering of labor standards in America, opening the doors to greater exploitation of the American laborer, along with increased profits for the corporate executives and shareholders who employ said laborers.

Today is Easter – the Holiest Day on the Christian calendar, and the celebration of the life of Jesus. Interestingly, in his teachings, Jesus was consistently against privilege: In his Sermon on the Mount he spoke of the blessedness of the merciful, of the evil that awaits he who attempts to serve two masters and store up money on earth; after the last supper he knelt down and washed his disciples' feet, proclaiming “Now that I, your Lord and Teacher, have washed your feet, you also should wash one another's feet. I have set you an example that you should do as I have done for you.” (fn2) Jesus spent his life preaching, teaching, and living against privilege.

And well he should have: For it is privilege, and the seeking of privilege that leads us to acceptance of exploitation and slavery of others; prejudice is our natural defense against the cognitive dissonance that arises when we treat another human as sub- or unworthy.

But, I wonder. Some 70-80 million adults attended Easter Services today in America (fn3). Did they connect the dots? Richard Feynman, the Nobel Physicist, observed that most intelligence is fragile: That information gained in one area or endeavor is seldom transferred to another, even when the situation is an exact transformation. Dr Feynman was renowned for solving problems in chemistry and biology (in addition to his physics), correctly recognizing that the problem was solvable using a transformation of the mathematics and methods he knew.

Jesus spoke against privilege. Moses spoke against slavery. If we connect the line between the two:

Enslavement of the Hebrews was wrong. Enslavement of the Jews (by the Romans) was wrong. Enslavement of the American Negro was wrong. Enslavement of the Chinese Peasantry is wrong. Using the situation of the Chinese peasantry to push the American laborer back towards enslavement is wrong.

How many who attended Easter Services today will wake up tomorrow with a renewed interest in living a life without privilege; will recognize that privilege is what drives them to demand of their leaders (and drives our leaders themselves) to increase exploitation of 'others' around the world; that it is only through the exploitation of those, like the Chinese, that we have all that we have?

Relinquishing privilege can be painful, and leaves us with less material goods, although it strengthens our moral character. Privilege and slavery have been human social constants for most of human civilization. But, humans were not made to toil in poor conditions for the benefit of another; humans were not made to be abused by the whims of a master; each human was made to live a life of free determination, choosing his or her own path, choosing what to do and who to help during his mortal journey, and reaping the rewards thereof. Each should have the ability to work in conditions that are safe, with remuneration above sustenance, without fear of losing their job or their livelihood because some business owners have found a new group of people somewhere to exploit or enslave.

Everywhere and anywhere we see abuse of privilege leading to exploitation of another we must speak out. As the Pharaohs were to the Hebrews, so those today who feel that it is in their power, their privilege to live a life above while at the same time denying freedom to others, especially under the guise of 'employment', must be called out. The executives who would fight to deny a moderate increase in the working conditions of overseas laborers; the executives who would fight to decrease working conditions for their fellow Americans; the lawmakers who allow trade imbalances to continue that make it too easy for Americans to lose sight of the evils of privilege and slavery and so invest their money and talent in exploiting rather than producing; All must made to hear our desire to end both, and to fear our wrath if they do not.

Speaking out against slavery and privilege occupy a place in our oldest writings; We've understood for more than 3000 years that such a relationship is against our very moral fiber. Sadly, our work constructing a society built on a more positive relationship is still very much nascent, constantly thwarted by the powerful and our own innate desire to have more than our neighbor; and our unwillingness, once we find ourselves privileged, to move to strike such thinking from our minds and hearts and promote ideas that are fair to all.

Not the easy road, but if one lesson can be gleaned from today, it is that the correct path is not the easy one. Imagine for just a moment how the difficulties facing us might appear differently if we were to strike privilege and prejudice (and the acceptance of exploitation) from our thinking, from our doing, from the very structure of our society. 

(fn1) Dylan Ratigan. “Greedy Bastards” Loc 995, Kindle Edition, 2011.

(fn2) Jesus washes disciples feet. John 13, v14-15. NIV

(fn3) Estimated Easter Christian Attendance – 70-80 million adults (approximately 1/3 of the nation) - pulled from Wikipedia, Pew Research (59 million average Sunday attendance, Easter approx. 33% higher)

(fn4) No, I am not picking on Apple. I was chagrined to learn that my Kindle was most likely made either there or at an equivalent factory - and that much of what we purchase with the 'Made In China' sticker has aspects of that, although electronics are likely the worst.

The More Things Change....(Iran Edition)

'W. E. B. DuBois – Biography of a Race' closes in 1919 with DuBois touring Europe in the aftermath of its Civil War of 1914-1918. He is hopeful that Europe will cast off its African Colonies and allow them to become self-governing, and in so doing, light the way for America to reduce, and ultimately eliminate its own suppression of the Negro in its midst.

What interestingly escapes DuBois until much later in his life is that wars are fought not to free secondary or oppressed people: Wars are fought between the powerful to consolidate or expand the power, territory, and citizenry under their control. Just as territorial control was a driver in Europe's Civil War, so was land and territorial control a major driver in America's Civil War 65 years earlier. Sure, both wars were dressed up in ideology at the time and in our kinder remembrances of them, but the expansion of power was at the root of both.

Reading history is an interesting exercise: One continually has to confront the truth of the observation that things now are in many ways, and almost completely in the ways that matter, little different from what has gone before. I read with heavy heart of the high cost of war, the destruction of property, technology, agriculture (and the ability to feed a populace), and the tragic loss of life. The book is closed, I surface in the now, and hear the drumbeats leading to another war, this one potentially modern. Sure, the pundits claim that the loss of life will be minimal, the damage contained, etc.

But, it will be war. Our folks will be killing their folks, our boys (and girls) killing their boys and girls, and being killed in turn. Our resources and energy will be diverted from educating our young, building our commons, researching for cures to the diseases that ail (and sometimes plague) us to building weapons, creating means of destruction rather than means of construction, and strengthening the warrior hierarchy of our society.

We just fought two wars under the mistaken notion that we could do so without cost, that the benefits would overcome them: Instead, we've plunged our country deeper into debt, increasing our vulnerability to economic sabotage by those who might wish to do so, weakened our children's future and neglected items we formerly took great pride in. Now, we worry that we cannot afford to provide for our elderly, either in money to live on or health care to live by; we decree that higher education must be put further out of reach, and standard education must be crippled; that maintaining the previous standards of our society must be forsaken, and we must all accept the gradual diminishing of our way of life.

So, for those who believe that we need to engage Iran, I have but a single question: What will you personally relinquish so that we can do so? Will you pay more in taxes to support the war effort in the hopes that the investment in containing Iran will accrue to you in future years? (Taxes you currently do not pay and could not escape through any loophole, but a new tax that you will bear above your current tax load.) Will you accept a loss of income increases at your job for the duration of the war, and perhaps for several years after until America regains her feet and pays down her wartime debt? Or, will you personally put your life or the lives of your sons or daughters on the line by going to the front and fighting in Iran to remove whatever threat our leaders believe is there?

For if you are not willing to, in the same breath that you advocate war with Iran, explain how you will share in the burden, then your thoughts are the specious thoughts of a coward. There is one other constant of history that is always present: People are ever willing to advise and admonish others to do some thing, especially when doing that thing will result in a good outcome to the adviser and the cost will settle on the advisee.

Think we need to go to war with Iran? If you are willing to pay some of the cost directly, then, and only then, will I listen to your argument. Otherwise, you can talk to the hand – the hand making the sign of peace.

A Century Ago...

On September 22, 1906 a mob of white people (thousands strong) stormed Atlanta, beating, and sometimes killing, every black person they came across. In his account of the Atlanta riot, David Levering Lewis writes*:

The immediate cause of the terrible Atlanta riot of 1906 had been the newspaper drumfire of alleged assaults upon white women by black men. The underlying cause was to be found in the politics of class conflict among the white people. As cities of the New South like Atlanta filled with poor whites and blacks, the planters and politicians in rural counties mobilized...to brake the power of the urban colossi. Bloodsucking railroads, flint-hearted banks, merciless factories, the loss of white men's jobs to black men, sin corruption, and race mixing -- the rural diatribe ... was shrill and long. ... As [W.E.B.] DuBois wrote in a moving essay in The World Today, the explosion had occurred inevitably after "two years of vituperation and traduction of the Negro race by the most prominent candidates for governorship, together with a bad police system"

 Brought on, one might add, by the strong xenophobia the country had towards the ex-slaves, the Negros in their midst.

Thank goodness that is all behind us: Today we don't exhibit xenophobia towards people who are racially, culturally different; We have no difficulty advancing the cause of liberty to anyone regardless of their views on life; our leaders and newscasters don't spread vituperation via senseless name calling or degrading of those whose views differ from their own; The divisive fire of class warfare is not stoked by the elite nor politicians intent on gaining office. In short, the century that separates us from the riot of 1906 has brought us tolerance and the ability to discuss our different opinions about the country in a 'cool marketplace of ideas'. We should rejoice that we have ascended so far from those events...

What? What was that you said?

Oh.

Nevermind.


* Lewis, David Levering. "W.E.B. DuBois - Biography of a Race 1868-1919" Henry Holt, New York, 1993. p334.