Market Society: What I Thought Michael Sandel Might Have Addressed

When focusing a critical eye on the trends of American politics and economic opportunity, criticism often gets muddled in language that can be mistaken as a culture war being fought from the lower ranks against the top.  The language is couched in “tax the rich” rhetoric and the value of individual responsibility and liberty.

But this is several steps away from the core of the issue.  There is nothing in this debate that should be inherently about the top 1% against the rest.  There is nothing inherently wrong with a top 1% in and of itself.  We can’t all be in the top one percent.  We can’t all be in the top 30%.

Instead the issue begins — but doesn’t end — in the distribution between the spread of power and opportunity in our society.  It is curious to me that both on the left and right, the very top seem to be in the cross hairs, but the squabbles are fought mostly in an increasingly poorly defined and misunderstood middle.  And it all occurs behind the stubborn myth of self-made opportunity.

Self-made opportunity certain defines a great deal of success in the United States, but it isn’t the complete story. If it were, success would be more or less equally distributed across the globe.  The hard working entrepreneur in Somalia or Bangladesh would have his string of grocery and hardware stores across the country selling fruit and wrenches to his grateful neighbors.

It doesn’t work that way, and even a modest intellect probably can understand why.

Still, in this country, we have turned the market economy into a fetish.  That’s the real issue.  The market is supposed to solve everything, including such non-market problems like those of rights and equality.  Even tangible public goods like our physical infrastructure, the environment, education, and safety increasingly are left to the whims of the free market.  This has not turned out well.

Again, I think the root of the problem is the free market fetish.  I wrote a few days ago about reading Michael Sandel and my disappointment that he did not dig into the implications of this fetish.  The drift from a society structured around a market economy to one that is structured around a market society is about more than things being viewed as commodities to be bought and sold, it is about how we think about the very structure of society itself.

On left and right, politicians talk the Market Society rhetoric.  Listening to politicians today you would think small business and corporations cast the votes and the citizen rabble should shut up and hope gratefully for the scraps that will follow from market success.  That’s the problem.

Even worse, Democrats, but especially Republicans, vote for this structure.  Going back to the top 1% fixation.  Condemning wealth, even the most successfully wealthy, is almost taboo.  It is an attack on what we’re told are American values of freedom and responsibility.  In tax debates, the top 20% enjoy the same rhetorical protection.  (Perhaps this happens in part because 35% of Americans think they’re in the t0p 10%, but that’s a rather modest example of cognitive dissonance muddying our politics.)

What happens, I think, is we stop evaluating policy choices at a shared, public level and focus exclusively on individual cost and benefit.  When we fetishize wealth and markets, we give up on the individual.  Again, there is no reason why we should demonize wealth and success, but when the value of the market takes priority over the value of individual and the society, sustaining the fetish of markets becomes one benefits the few at the cost of the majority.

In short, the free markets don’t serve all, the become tools of the minority.  Too many people look away and live with this because they have been misled into thinking markets equal freedom and freedom equals markets.  That is the philosophy of oligarchies and aristocracy if only the elite have access to the markets.

We see this concession everywhere.  The idea  that if you cannot afford it you do not deserve it might be fine if you’re considering a luxury car, but health care?  Education?  Safe streets and a clean environment?

For generations economic opportunity, freedom, and growth thrived with strong government and public investment.  The market economy served the successful quite well while sustaining a healthy middle class.  It’s the transition away from this way of thinking about common investment to one where the market takes priority is one that needs more thought, especially as it affects how we structure our policies around market values before civic ones.

Related articles

• Reading Michael Sandel and Ready to Move On (alittletourinyellow.wordpress.com)
• Michael Sandel: This much I know (guardian.co.uk)
• How the Market Economy Undermines Ethics (tikkun.org)
• A True Free Market (atruefreemarket.wordpress.com)
• How Business Ate My Brain (alittletourinyellow.wordpress.com)

 

Advertising as Evidence of Wealth?

An 1890s advertisement showing model Hilda Clark in formal 19th century attire. The ad is titled Drink Coca-Cola 5¢. (US) (Photo credit: Wikipedia)

Our society is awash in advertising.  It reaches us through all forms of media, old and new, and constantly in public space and discourse.  Advertising even intrudes on our private space via our growing dependence on personal technology, like our phones and computers.  But I wonder how often we stop to think about what this advertising means at a sort of socio-economic level.

I am thinking of it this way.  Let’s roll back time a couple hundred years.  Imagine a feudal society or even the early capitalist systems of mercantilism.  Who thinks a feudal serf or the new urban poor of the early industrial age had much need for advertising?  Or perhaps more to the point, who would think advertising would have much need for the impoverished masses?

It is hard to imagine an advertising industry scheming to promote one product’s advantages over another to people who simply struggled to survive from day to day.  One did not need advertising to tell him what he needed and why.  My guess is the poor pretty much understood this instinctively, just as we all would if we were put into a daily struggle for survival, well-being, and maybe a taste a rare leisure.

So what does that say about us, especially a society that markets so much to rich and poor alike?  For starters, we are not as poor as we were centuries ago.  And that is a good thing.  We still have vast differences in wealth and poverty, however, and that perhaps is not a good thing, especially if we begin to back pedal from more egalitarian economic prosperity, reversing trends of shared socio-economic growth.

Nevertheless, things are different today– life is more prosperous and generous– and this difference exists because of overall economic growth.  Advanced economic societies show signs of prosperity, even among the poor, and life comes with some basic assumptions and expectations about what is just and humane.  An higher economic standard exits for all, a baseline of sorts.

This isn’t uniform throughout the world, of course.  While we seem to be entering an era when literally billions of the world’s poor are now breaking into the middle class, wealthy societies — those that support an increased level of increased and shared wealth — do not reach everyone.   Large parts of the world remain left behind.

I haven’t much more to say about it.  However it seems to me that a very simple way to judge where wealth is becoming a kind of shared prosperity is to follow the money, specifically the money spent on advertising.  The United States in particular has perhaps the longest relationship with a nexus between affluence and advertising.

If there isn’t already, there must be some economic index that follows advertising dollars and reach.  If not, a dissertation might exist here.  What does advertising tell us about our wealth and economic prosperity?

Just thinking out loud again.

Related articles

• Largest Advertising Budgets (creditloan.com)
• The Connection Between a Country’s Wealth and Its Religiosity (patheos.com)
• The World’s Wealth Gap is Shrinking (creditloan.com)
• Advertising for Small Business: Do Print Ads Still Make Sense? (amsterdamprinting.com)

Debunking the Fair Compensation Myth

The very wealthiest 1% in the United States possess more wealth than the bottom 40%, the top 20% possess more than the lost and dying middle class.  (See well-documented report here.)  Any suggestion that policy redistribute this inequality draws cries of anti-American socialism, most loudly from those barely hanging on in the sinking tiers of America wealth.  This is simply a symptom of ignorance.  A full 1/3 of Americans believe they are among the top 10% of American income earners and nearly all still believe the United States is the land of upward mobility and economic security.

Those are problems of understanding and conditions of cognitive dissonance.  But there is another layer to inequality and it resides mostly on the upper tiers of wealth distribution.  It is the idea that the very wealthiest somehow earned and deserve their growing wealth.  This view is supported by the idea that without competitive compensation — as unfair as it might seem — we would be worse off because “talent” would not be attracted to the complicated careers of corporate management and high finance.

There is a simple one word answer to this (although you still sometimes see it written in its more archaic two-word form):  Bullshit.

This is where the obligatory apology and reassurances need to enter any polemic about capitalism and its rewards.  Most people, myself included, do not want to live in a world where people are not awarded for their talents and efforts, we don’t want to take away the benefits of good fortune, but increasingly talents, efforts, and even good fortune play an ancillary role to strategic regulatory and market regulation.  While most of us work hard to earn a living and pay our way, a very elite few employ others to work even harder for them to change the rules that favor their privileged interests.

How else do you explain public policy that gives breaks to high incomes, subsidizes profitable industry (cf. fossil fuels, mercenary wars, industrial agriculture, etc.), and dismantle social structures that distributed opportunity more equally (cf. education, health care, social security).

The fact is, in an era when we invested more of our wealth in our common interests, we all did better, rich and poor alike.  In fact, in the second half of the 20th century right, high-priced talent and corporations produced enormous wealth for this country, indeed for large parts of the world.  American society was the envy of the world,  It was the source of innovation and creativity and we made political decisions to foster those characteristics.

If we returned to those days, does anyone really think a wealthy capitalist — a “job creator” — would stash his wealth in a mattress somewhere in the Cayman Islands?  (That, by the way, is another policy-enabled issue that we should address.)  If the potential for profits exists to be taken, someone will take it.  If today’s titans are unwilling to take risks, others will follow.  Someone on the sidelines today — squeezed out perhaps because of the enormous comparative advantage that those with great wealth enjoy — might be happy to invest for a single-digit margin where today’s robber barons expect double-digit.

Would we be any worse off if that happened?

Eventually money would return to the market.  Think of a reverse auction.  Investors would jump in if they thought opportunities were being usurped.  Likewise, for every CEO unwilling to spare his talents for anything less than tens of millions, there are talented people willing to take the helm.  Perhaps economies of scale enable tremendous compensation, but it need not be this way.  We didn’t pay CEOs 350 times the average compensation of his employees to attract his talent 30 years ago, why is that necessary today?

Today corporate profits rise — dramatically rise, to record levels — and worker compensation lags, even declines, and the trend is for the worst.

The myth of fair high compensation is perpetuated by those who profit from it.  They sustain it to keep complaints away.  Once we believed kings ruled by divine right.  The time to pull back the curtain is long overdue.

Moreover, looking at so-called talent, it isn’t so rare.  What’s the difference between a hot shot hedge manager in New York versus someone with similar talent and ability in Mumbai?  The answer is Wall Street.  One has access, the other does not.  Likewise a kid raised in Manhattan’s wealth stands to gain much more than a kid raised in rural poverty.  We created this wealth, no one did it alone.  One depends on the other.  It is time we put credit where credit is due.

But most importantly, if unrealized opportunity exists, it will be exploited.  It is absurd to think that we need to sustain an economic system that disproportionately favors the few at the expense of the majority.  It isn’t talent that matters, it is access to power that matters.  If our democracy is protected — something which itself is in doubt (cf., Citizens United) — citizens can regain control of that power.

We accomplish by voting wisely, that starts with turning against the regressive Republican Party.  We are not talking socialism, we don’t even need the redistribution that sustained the 50s and 60s in this country.  We simply need parity, both economic and political parity, along with the safety nets — social security, health care, education — that gives a strong society a solid foundation.

The truth is the world is changing.  The economy is changing…rapidly.  It is a global one.  Someday — which is really yesterday — we need to find a way to remain competitive in the global market.  What is happening instead is we are allowing a slim minority of people harvest the capital of generations and make off like bandits.  In the long run, even those of us who are better off will lose in this game.  It is time we wake up and get our accounts in order.

Related articles

• Redistribution of Wealth Inequality in America Video Goes Viral (americanlivewire.com)
• Corporate Profits Have Risen Almost 20 Times Faster Than Workers Income Since 2008 (thinkprogress.org)
• Inequality Is Much Worse Than You Think (huffingtonpost.com)
• Economic Leaders Pay Lip Service to Decreasing Inequality … While Pushing Policies Which INCREASE It (washingtonsblog.com)
• Wealth Inequality Will Keep Growing Unless Workers Demand Better (guardian.co.uk)

Thinking Out Loud: How is Government Like a Family?

While it isn’t doesn’t fit, politicians, especially conservative ones, like to make a false analogy comparing running government with running a business or, even worse, managing a family budget.  These things are quite different in purpose, scope, and process, but regardless of the flaws, let’s go with the analogy for moment.

Let’s use the family analogy.  Let’s pull up around the family kitchen table and talk some common sense.

First let’s ask what managing a family budget means.  What, for example, do keeping a safe and comfortable house, having a car, going on vacations, feeding your family, having a phone, wearing clothes, and all the many other things living the civilized life have in common?

All these things in one way or another cost money.  They also are things people do because they are necessary for survival as well as important for maintaining a comfortable and fruitful quality of life.  Yes, and happiness matters, too.  In terms of well-being happiness is right up there with security.  Hand in glove.

We might not like to spend money, perhaps, but we do these things because we recognize the value of these things.  It is even a matter of pride to do these things right.  Now if a comparison with government is germane, what happens to value and pride when we talk about supporting government?

I suppose we can debate about what it takes to live a safe, comfortable, and productive life, but in many ways we can see that government fails to provide the same level and quality of service toward these ends as it once did.

Instead of a house, car, food, phones, and so forth government provides for things like roads, courts, parks, education, public safety, clean food and water, regulated commerce, banking, and monetary systems, and on and on and on.  Literally, something for everyone, even the most remote misanthrope benefits directly and indirectly from a well-managed, large, and robust government.

At the fundamental level, our shared public investment in public assets supports strong economic growth, a healthy society, and security.  It has made the United States attractive to talent from around the world.

And the presumption that government is inherently bad — the problem, not the solution — is an argument which is completely silly, almost childish, and violates common sense.  It is absurd to the point of being funny if it were not so dangerous.  Government is only the problem when it is set up to fail.

If we do indeed apply the family analogy to government, would we be proud to let our family go to hell in a hand basket?  Probably not.  But we are letting our government go to hell.

Don’t people, rich and poor alike, do better in a secure society?  Don’t you want healthy, educated friends and neighbors?  Whatever happened to civic pride and shared accomplishment?  We all come with a range of talents and interests and a strong social structure enables each to pursue his or her interests best.

The family analogy of course doesn’t apply to government and it really isn’t intended to apply.  It is a misleading trope used to distract people from the real goal of renegade conservatives.  The anti-government people are not trying to save the economy, for example, for the benefit of your children’s future, they just want to gut government.

Certainly not everyone will use the public library, need economic assistance, or enroll in public schools, but you also don’t ride on all the roads in your state either, but most of us use the roads, even if indirectly.  Likewise,  everyone benefits, even if indirectly, from the higher quality of life that a safe, secure, and strong government.  This has value and it doesn’t come free.  We have to pay for it and as any family knows, you cannot cut your way to higher standard of living.

Taxes need to be justified and appropriate, but nothing says we cannot choose to reinvest in our collective future.  It is a choice to do so or not to do so.  It appears that we are making the wrong choices.

This Doesn’t Feel Quaint Anymore

Over thirty years of subsidizing and rewarding the most fortunate while asking the least fortunate to pay more and get by with less hasn’t working.  If all you need to do is ensure that “job creators” have money to invest and jobs will magically appear, we should be seeing job growth.  Instead money is out of service…resting, I suppose…in the enormous portfolios of the very wealthy, a group very skilled at getting benefits from government and evading taxes.

And taxes per se are not bad.  In business, for example, fair and consistent tax policy has little long-run effect on growth compared with tax policy that gives breaks and incentives inconsistently across industries, regions, revenues, and so it.  Taxes in that case can give one business, industry, or region a competitive advantage over another.  And some business types have other demand drivers that outweigh tax issues.  The state’s grocery stores will not all move to South Dakota, for example, if they feel bullied by taxes.  Other things happen…the cost of groceries go up, but grocery stores would compete on an even playing field and survive as long as people demand groceries.  When business cries foul, it usually a reflects a fear of unbalanced competitive advantages that fair tax policy should address.  Nevertheless, that does not mean taxes are necessarily bad and need to be cut.  The politics of anti-tax rhetoric has gone beyond the reality of tax policy outcomes.

In the end, we need to choose what kind of future we want and plan for it.  Part of that planning will include paying for it.  That doesn’t mean we willy-nilly triple tax rates and recklessly expand government.  However we will not restore valuable government services and facilities if we start from the premise that they are inherently bad and without social or economic value.

The one way that government is like a family is simple.  For it to work and thrive, you have to respect it, believe in it.  You have to be ready to support it, even occasionally sacrifice for it.  It is that simple.

Related articles

• Debt Ceiling and Fiscal Hostage Crisis: A better analogy (alittletourinyellow.wordpress.com)
• Starve the beast: Fiscal calamity is the GOP’s plan to shrink government (post-gazette.com)
• Why Eric Cantor Can’t Rescue the GOP’s “Lost” Message (ourfuture.org)
• Another Idea: Analogy Example (english.answers.com)

Why Entitlements Should be Spared.

Let’s forget about the fact that programs like Medicare and Social Security are smart investments, good for people, good for the economy, good for social stability.   Why should these investments — called entitlements — be cut to compensate for a deficit caused by decades of deliberate under funding of government?

It is being said more and more often — and for good reason — we are in a class war.  Plain and simple.  The attack, however, does not come from the needy, resentful left, as conservatives want Americans to believe, it comes from a greedy, myopic right.

Conservatives have gone after government with particular focus and vengeance since the early 1980s.  And they are succeeding.  Today’s conservatives still try to divide us on social issues, but they succeed on economic ones.

We couldn’t even maintain a budget surplus in the post-Clinton years.  We cut and squandered our national treasury.  Then we pushed forward with poorly-conceived tax policy based on failed economic opinions.  The Tweedledum and Tweedledee twins of Republican failure otherwise known as Starve the Beast and Trickle Down Economics.

So when I hear so-called GOP moderates like Representative John Kline whine that entitlements must be cut before Republicans will agree to any deficit plan in the next few weeks, one has to think twice.  Do we really need to cut programs that should be held harmless or is the GOP plan to gut government working?  I will argue that it is the latter.

Entitlements should be spared because they are a social investment, paid for by taxpayers, that are targets of cuts today because the GOP is winning the class war, and not because cuts will strengthen our economic future.  Better management — appropriate and responsible funding — should spare these programs from the Orwellian politics of less-is-more crowd.

The slippery slope is becoming steeper.  Fast.  Time to dig in the heels and hope it isn’t too late.

Related articles

• The Fiscal Cliff Deal Could Destroy Medicare (businessinsider.com)
• Starve the beast:  Fiscal calamity in the GOP’s Plan to shrink government (post-gazette.com)
• Appetite for cutting entitlements not just a Republican thing (tv.msnbc.com)
• The new conservative purity test (salon.com)
• Cliff Deal Spares Retirees — for Now (blogs.marketwatch.com)
• Obama’s Great Society (salon.com)
• 2016 politics already on display (kypost.com)
• Chris Christie, Spare Us Your Anti-GOP Theatrics — You’re Still a Republican (alternet.org)
• GOP Rep:  ”It’s About Time” We Had Another Government Shut Down (thinkprogress.org)

Bulls, not Bull Shit: The Fiscal Cliff Distraction

Bulls, not Bull Shit.

Concern about the Fiscal Cliff is all fine.  We need to get things in order.  But debates and negotiations about the problem seem to amount to little more than opportunities to take up political positions and reinforce political identities.  Everyone gets there fifteen minutes of fame…over and over and over again.  It is frustrating.

The “Fiscal Cliff” is indeed a problem that needs attention, but it looks more and more like a publicity stunt.  First of all, the problem is entirely avoidable.  Secondly, if you look at the overall condition of the economy, the Fiscal Cliff problem is entwined with secondary, not primary, problems tied to our economic crisis.  Moreover, a combination of tax increases and budget cuts won’t resolve our budget and economic crises.  The numbers don’t add up.  But if you listen to politicians, it is both the problem and eventual solution to our economic woes.

Enough of the BS…

What will correct the deficit problem is a growing economy.  Get strong economic growth combined with responsible fiscal management and the problem will be resolved.

Conservatives argue that we need to ensure that “job creators” have money so they will hire workers.  We all agree that jobs is a good thing and critical to economic recovery.  However the so-called job creators have money — top corporations are sitting on huge reserves and recovering relatively well — and we have the tax cuts, but we don’t have the jobs.  I harp on this often here.  Job creators won’t create jobs simply because they have money.  Business doesn’t succeed by being a charity, right?

Until someone can show how giving business more money will create more demand, let’s stop with that failed and unsupportable argument.

Taxpayers, however, can invest in jobs.  Can’t afford it, you say?  Yes we can.  We can also choose to deficit spend….yes, borrow against the future.  But unlike you or I, government faces different economic realities, especially the United States government.  Don’t take my word for it, check with a Nobel Prize-winning economist and others.

Tax increases and budget cuts are feel good solutions to a long-term, systematic problem that tax increases and budget cuts alone won’t resolve.  Drop in the bucket, short-term fix, if it is indeed a fix.  (If our economy tumbles into recession again, it is the opposite of a fix, correct?)

The real issue isn’t the cliff, but rather how we as taxpayers will choose to invest in our future.  The small-government, tax cutting Republicans don’t seem to have our best interests in mind.  What they want, we have…and we have had it through the course of this crisis.  If the conservative answer was the right answer, we should expect things to turn around.  They haven’t.  Better, more sophisticated understanding of the problem needs to address the long term health of our economy.  Demand better.

Related articles

• Raise the Taxes (alittletourinyellow.wordpress.com)
• What’s Wrong With The Republican Fiscal Cliff Counteroffer (bloomberg.com)
• Obama: No deal on ‘fiscal cliff’ without higher tax rates for the wealthy (newsday.com)
• GOP ‘fiscal cliff’ plan echoes failed budget talks (news.yahoo.com)
• The Definition of Insanity Is… (psychologytoday.com)

Raise the Taxes

Two reasons why we should raise taxes.  First, there is little evidence that keeping taxes low will lead to faster economic growth.  Second, we NEED to raise the taxes.

Let’s start with the need.  Over recent decades this country — largely under conservative principles — has managed to under-fund government even as it raised costs (wars, medicare benefits, tax cuts).

Grover Norquist is the news quite a bit recently for his simple-minded anti-tax pledge.  We need to be aware of this.  In the church of small government, Norquist is pope and too many conservatives bend down to kiss his papal ring.

All these so-called independent and intelligent conservatives cower before Norquist.  Impressive.  And it is important to be aware of the pledge, but the goal of the pledge is the real concern.

Lower taxes are not necessarily bad, in fact everyone would agree that lower taxes would be a good thing, if the tax rate were fiscally responsible.  However Grover Norquist’s goal is smaller government for the sake of smaller government.   Conservatives don’t cut government programs because it is a necessary and unfortunate evil, they cut government because less government is their long term goal.

Not Relevant

Why, for example, do Republicans propose raising the age of Medicare benefits qualification?  Because they want less Medicare, if they must have it at all.  (Curious coming from a party that ran against Obama just two months ago warning that Obama would eliminate Medicare!  Truth and facts mean nothing to the misleading political right.   It’s disgraceful.)

So why reduce the taxes?  The argument goes that it will create jobs and growth.  Republicans will tell you that jobs and growth are their long term goal.  If we have growth, tax revenues will increase, and we will be able to pay down our deficit and maintain our government programs.

Republicans are funny.  The anti-intellectual party claims to rely on common sense.  Even here they seem unable to set things straight, however.  Common sense would tell you that the anti-tax, less-is-more approach to economic growth hasn’t worked all that well.

We have the tax cuts which the GOP is fighting to save — we have them RIGHT NOW — and we have had them for years.  Nevertheless we managed to fall into our recession, have struggled to recover from the recession, and job growth remains sluggish.  Ask your favorite GOPer:  If these tax cuts work ,  if more money for “job creators” creates jobs…well, where the hell are the jobs?

Not Relevant

Republicans either know nothing about market demand, the labor market, and the global economy or they are dismal liars.  Sadly, I think the party of the right is both.  They are misleading the public, and in doing so leading us right over the cliff to achieve their anti-government goals.

If you are, in fact, worried about the future for your children and grand children — a politician’s favorite trope — don’t vote for anti-future Republicans.

Let’s apply common sense to the tax cut argument.  First, we see that the tax cuts don’t work, not for the fiscal and economic problem we have now.  Look at what we have with cuts.  Second, look at what higher tax rates did to economic growth in the past.  It didn’t seem to hurt it.  Our most robust years coincide with higher tax rates.  How does that square with GOP rhetoric?

We need to close loopholes, raise some taxes, and find some savings, but all of this alone will not erase our deficit and eliminate our debt.  It won’t alone save the economy.  The numbers don’t add up.  We need growth.  If the economy regains its once-upon-a-time growth, the deficit and debt problems we face will go away rather easily.

Currently the private sector is not supporting the economic growth we need.  Demand for what the private sector can supply is low.  Money needs to circulate again in the consumer markets.

We do, however, need investments in infrastructure, research, education, and other public sector projects that will support future economic growth.  This is government’s role — i.e., our role as the people — to invest in these projects.  It is the derided Keynsian approach to economic stewardship and most economists argue it will have long-term benefit.

Relevant…to the GOP.

So why don’t we do it?  Well, once you get through the misinformation from conservative politicians, it all comes down to what you want government to be.  The right wants less of a government that serves the people.  Government for them is the problem, remember?  It is a problem because they don’t like it.  God, knows why, but I have ideas on this…it is an ideological one, primarily a bastardized theological one, leading with SBC corruption, but that’s another story.  The lemmings are about to go over the cliff, regardless of the ideological influences steer them.

Raise some taxes, but focus on stimulus spending, and we’ll save the future and can even save the misguided.

Related articles

• Conservative Leaders Urge Tough Line on Fiscal Cliff (cnsnews.com)
• Do Tax Cuts Lead to Economic Growth? (nytimes.com)
• Starve The Beast:  Fiscal calamity is the GOP’s plan to shrink government (post-gazette.com)
• Grover Norquist Makes a Fool Out of Himself By Demanding Reagan Era Tax Rates (politicususa.com)
• The Top 4 Whoppers Norquist Tells To Keep Republicans From Defecting (kaystreet.wordpress.com)
• Republicans speak loudly about standing up to Grover Norquist’s pledge, but carry a little stick (dailykos.com)
• Grover Norquist: Beware of a second tea party wave (washingtonpost.com)

Who (Really) is John Galt?

In Ayn Rand’s fiction, John Galt is an exceptionally talented individualist, philosopher, and creator.  He stands for achievement largely by opposing socialism and embracing individual self-interest.

In Atlas Shrugged, Galt is the man behind a strike of industrialists, businessmen, and creators determined to stop the corrupt — because it is socialist — “motor of the world.”  They withhold their skills and production, claiming that they have no practical or moral obligation to help others who cannot help themselves.  They create and achieve to serve their needs only.  Any external benefit…well, you have no right to be thankful, but be thankful anyway.

This stylized philosophy of selfishness increasingly has been embraced by today’s GOP conservatives, including Paul Ryan, the man who wanted to be our country’s vice president.   This is also the party that claims it represents the best interests of all Americans, including working Americans.

How does this square?  Maybe it is time to ask again, Who is John Galt?

Let’s take a  look at this so-called “skills gap.”  Supposedly American business owners would hire if only they could find workers with the skills to do the job.  These complaints come loudly from the country’s dying manufacturing sector, placing blame for job loss on an unskilled American workforce.

John Galt?

Last Sunday, Adam Davidson handled this well in Sunday’s New York Times.  In his story “Skills Don’t Pay The Bills,”  Davidson argues a different point.   The workers are there, he points out, but the wages are not.  Davidson explains how the wages offered for highly-skilled positions don’t adequately compensate the costs of gaining those skills.  Or, they don’t compete with other low-paying jobs, such as managing a shift at a fast food restaurant, which require less costs to obtain.  What would the self-interested skilled worker choose to do?

To further counter the myth of a skills gap, Davidson also quotes Mark Price, a respected labor economist, and Price adds that if there is an inadequate supply of skilled workers, the price of that labor would increase (it is a supply and demand thing, Republicans) and that doesn’t square with the low pay offered to workers or Bureau of Labor statistics.  (An economist?  Statistics?  Empirical evidence?  Bah!)

With more and more wealth concentrated in fewer and fewer firms and individuals, the costs to competitively enter these markets and take advantage of our skilled labor becomes prohibitive.  We end up with almost naive — if not childish — expectations and demands from some job creators.  It is the “less is more” zombie run amok!  Eventually such petulance will cost even the factory owner, unless he sells to someone like Bain and everything goes to a factory in India or Vietnam.

What’s going on?

Perhaps the workers are pulling a John Galt.  Perhaps they don’t want to worker for the elite socialist class, the people at the top expecting something for nothing.  Perhaps the workers want to stop the corrupt motor of the world.  Maybe?

Perhaps not consciously or deliberately, but by refusing unsuitable compensation, aren’t workers saying thanks, but no thanks, John Galt style?  Isn’t this a what’s-in-it-for-me reality?  In Atlas Shrugged, the “job creators” take their marbles and go play with themselves in some mountain enclave of the greedy.  In the United States today the skilled workers take their skills across the street to McDonalds.

John Galt?

How can the United States expect to compete in the future with a trend like that?  (That’s a rhetorical question.)  It makes a thinking person wonder who really cares about our future.  Certainly the ultra-rich will survive our decline, at least for a generation or two, but will the country everyone claims to love survive?

Maybe Ayn Rand wasn’t so batty after all; perhaps she just had her world vision upside down.  You see, when you look at the world through Ayn Rand’s eyes, the workers have every right to not work as the creators, they have the same interests…self interest.

In the end, however, none of us, rich or poor, will do very well in a depressed future.  History, economics, and common sense should be enough to see that self-interest is invested in the interests of others.  There is indeed a sort of collectivism that serves us all.  Perhaps that shared self-interest is the John Galt who matters.

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If American is Really Going to Become Another Greece it’s Thanks to the GOP

Michele Bachmann might still be hiding under a rock somewhere, but her people are running an ad attacking candidate Jim Graves which they base on — surprise, surprise — bad economics and misunderstood numbers.

I think this one is fun! And funny…only because it is true, perhaps?

In her attack, Bachmann claims that each American owes $51,000 on our Federal debt.  Well, no, not really.  Or maybe I should say, not necessarily.  If we elect Republicans this, that number could very well go much higher, for example, but even then it isn’t the case that each American will get a bill for $51,000 — or higher if the GOP prevails in November.

First of all, the number Bachmann uses divides public debt by the number of people in the United States.  Say there 300,000,000 million people live in the United States, there are not 300,000,000 shares of debt equally divvied up.  I’m surprised, in fact, that the GOP doesn’t whine that the rich will pay more and the very poor will pay less.  But never mind…It won’t be paid back this way.

If Democrats wrest control from the regressive right we could  look forward to a growing economy which would make paying the debt easier.  Economic growth — and inflation — would change the debt in real terms.  Twenty years ago we grew out of debt.   Economic growth changes the value of assets and liabilities in real terms.  Think of it Bachmann’s number this way, somewhat in reverse:  If you had $51,000, would it be worth more today or in 1900?

Bachmann also perpetuates the false claim that this debt is the fault of Democrats.  Sorry.  We had a surplus before unfunded wars, tax cuts, subsidies, and Medicare prescription gifts erased the surplus. We don’t have a spending problem in this country as much as we have a funding problem.

Take the classic Republican way of running up our debt, cutting taxes while raising expenses.  George W. Bush’s mistake in Iraq, for example, wasn’t paid for, in fact it came with tax cuts!   Sounds absurd, doesn’t it?

But look at Mitt Romney — another Republican — he is running on a platform of increased defense spending while promising tax cuts. Do you see a pattern? So how do facts — economic growth and surplus under a Democratic leadership — square with GOP rhetoric?  They don’t.

Here in Minnesota, Erik Paulsen, another poorly-informed GOP “numbers guy”, is misleading poorly informed voters with the same disinformation…

And so is aging John Kline, another GOPer…

There’s a pattern here that is repeating across the United States, and often you hear these conservative politicians warn that the United States is on its way to becoming “another Greece” unless they are elected. Obviously facts don’t bother Republicans…Look at Greece, austerity has weekend the Greek economy.  It hasn’t helped it.  You cannot argue with this.

Fortunately, we’re not Greece.  We manage the US Dollar, still the world’s default currency.  This gives the United States a unique advantage and opportunity, one that we are squandering under misguided austerity arguments.  Data and expert analysis, both here and abroad, argue for the opposite of austerity policies.

So why keep pushing the austerity argument?  People like Bachmann, Paulsen, and Kline cannot be that stupid, can they? Well, maybe they can.  At the very least it is called cognitive dissonance.  Even most of the GOP political elite are not among those most favored by GOP policies…unless they’re afraid of gays and foreigners.

All of this stupidity is really simple.  Conservatives have a chance to roll back government, their real goal.  Financial security for the middle and working classes doesn’t interest them.  Why should it?  The interests of the future serve those who need not worry about backward fiscal policy.  That is simply the price that must be paid to destroy a government of the people, by the people, for the people.

How American is that?  Is sounds kind of Greek to me.

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• The Austerity Trap (ypervasi.wordpress.com)
• Romney’s Economic Model (nytimes.com)
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Is Mitt Romney’s Private Sector the Answer?

While debating Medicare during the first presidential debate, President Barak Obama pointed out that Medicare provides medical insurance at lower administrative costs than private insurance.  Mitt Romney, of course, disagreed.

Mitt said,  ”But my experience — my experience the private sector typically is able to provide a better product at a lower cost.”

For once I might agree with Mitt Romney.  Let’s take a look.

First off, he says the private sector “typically is able a better product at a lower cost” and I might say that’s true.  (NB He didn’t say “always.”)

Consider the famous Kitchen Debate between Richard Nixon and Premier Khrushchev.  The free market produced what Khrushchev derided as luxuries and not real needs.  I’ll go with the so-called “luxuries” over the blandness of simply meeting basic needs.  Count me in with Mitt on this one.

Lyndon Johnson Signs the Medicare Bill on July 30, 1965.

So, ok, Mitt has a point…sort of.  The problem is it cannot be universally applied to everything.  You have to be smart about this.  The private sector and free markets is inherently about winners and losers, the private sector inherently is unequal.

Not everyone can live Mitt’s life of luxury, for example.  What the private sector provides to Mitt at a lower cost, probably is out of reach for most Americans.  It is a relative thing, right?  It is a matter of opportunity and wealth and poverty present different opportunities.

To argue that private sector provides more opportunities at lower costs is fine if you’re talking about cars or clothes or trips overseas.  But what about health care?

In a world where the discrepancy between haves and have nots becomes worse, can we really expect the private sector to provide equitable health care services at lower costs?

I don’t mind the idea that some people can afford Cadillacs while others rely on used Fords, but think of that kind of difference in health care.  That troubles me.

We live in a capitalist society.  We have first hand experience with capitalism.  Our lives are shaped by capitalism.  We should be smart enough to understand how it works, we should understand the outcomes.  Why do we seem unable to apply these facts to political discourse?

Our health care system for the most part is a private system and it is failing.  Our health care system is not the envy of the world nor does it provide the best care.  Other leading countries of the world do a better job than we do.  In the United  States do we live with the burden of thinking we cannot do what others do so well?  Is that what American exceptionalism is all about?

Private health care will set up an unequal system of winners and losers.  Romney has suggested that immigrants self-deport.  His spin on health care essentially asks that people self-ration care.  Want to see the proof? Look at what we have today.  It is that simple.  The private sector is not the answer.

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