Government

People Distrust Government -- Conservative Mission Accomplished

Dave Johnson — Wed, 26 Oct 2011 10:30:07 -0400

The corporate/conservative plan for decades has been to turn people against government and democracy. Because when people stop accepting the idea of We, the People making decisions, guess who gets to make the decisions instead? Last month a retiring GOP staffer explained how it works, this month a new poll show how well it works.

Distrust

NY Times today: New Poll Finds a Deep Distrust of Government,

Not only do 89 percent of Americans say they distrust government to do the right thing, but 74 percent say the country is on the wrong track and 84 percent disapprove of Congress — warnings for Democrats and Republicans alike.

... A remarkable sense of pessimism and skepticism was apparent in question after question in the survey, which found that Congressional approval has reached a new low at 9 percent.

The Gameplan

At the beginning of September a Republican Senate staffer retired, and wrote a widely-read "confession" that laid bare the conservative gameplan: turn people against government and democracy. In Goodbye to All That: Reflections of a GOP Operative Who Left the Cult, retiring Republican Congressional staffer Mike Lofgren wrote,

Far from being a rarity, virtually every bill, every nominee for Senate confirmation and every routine procedural motion is now subject to a Republican filibuster. Under the circumstances, it is no wonder that Washington is gridlocked: legislating has now become war minus the shooting, something one could have observed 80 years ago in the Reichstag of the Weimar Republic. As Hannah Arendt observed, a disciplined minority of totalitarians can use the instruments of democratic government to undermine democracy itself.

[. . .] A couple of years ago, a Republican committee staff director told me candidly (and proudly) what the method was to all this obstruction and disruption. Should Republicans succeed in obstructing the Senate from doing its job, it would further lower Congress's generic favorability rating among the American people. By sabotaging the reputation of an institution of government, the party that is programmatically against government would come out the relative winner.

A deeply cynical tactic, to be sure, but a psychologically insightful one that plays on the weaknesses both of the voting public and the news media. There are tens of millions of low-information voters who hardly know which party controls which branch of government, let alone which party is pursuing a particular legislative tactic. These voters' confusion over who did what allows them to form the conclusion that "they are all crooks," and that "government is no good," further leading them to think, "a plague on both your houses" and "the parties are like two kids in a school yard." This ill-informed public cynicism, in its turn, further intensifies the long-term decline in public trust in government that has been taking place since the early 1960s - a distrust that has been stoked by Republican rhetoric at every turn ("Government is the problem," declared Ronald Reagan in 1980).

Please read the whole piece. This Republican, writing from the inside, explains that they are doing it on purpose. They are making the government dysfunctional on purpose. They are making people hate government on purpose. They are working to turn people against democracy and put themselves and their corporate sponsors in power in its place.

#occupy Brings Signs Of Hope

There are signs of hope in the poll. Even with a dearth of media coverage (compare to the well-funded, billionaire-backed Tea Party!!!) the #occupywallstreet movement has changed the national conversation. From the NYTimes article,

Almost half of the public thinks the sentiment at the root of the Occupy movement generally reflects the views of most Americans.

With nearly all Americans remaining fearful that the economy is stagnating or deteriorating further, two-thirds of the public said that wealth should be distributed more evenly in the country. Seven in 10 Americans think the policies of Congressional Republicans favor the rich. Two-thirds object to tax cuts for corporations and a similar number prefer increasing income taxes on millionaires.

[. . .] With the nation’s unemployment rate at 9.1 percent, income inequality remains a palpable issue for Americans. Nearly 9 in 10 Democrats, two-thirds of independents and just over one-third of all Republicans say that the distribution of wealth in the country should be more equitable, even as a majority of Republicans said they think it is fair.

There is hope. The public is not stupid, and can at least sense what is going on.

How Is British Austerity Working Out?

Dave Johnson — Thu, 14 Jul 2011 03:43:53 -0400

The conservative government in England is trying austerity. They are using the shock-doctrine tactic of drumming up public hysteria over bad news - in this case the financial collapse and resulting downturn - and using the panic as cover to quickly impose radical anti-democracy changes before the public has time to react. How is that working out?

OK, I won’t keep you in suspense. The conservative government in England is cutting back on the things government does for the people, and the result is that they economy is shrinking, causing a decline in tax revenue and business confidence, thereby undermining the justification for the austerity. And the long-term damage from cutting back on investment in infrastructure, education and the common good is yet to be measured.

Democracy "Takes Money Out Of The Economy?"

Conservatives believe that government and democracy are “in the way.” They believe government “interferes” with the economy, that government spending “takes money out of the economy” and government borrowing “crowds out” private borrowing. They believe that “austerity” – cutting back on the things we (government) do for each other – will give businesses “confidence” and when businesses are finally confident that government is out of the way they will invest and expand which will grow the economy.

Progressives believe that democracy drives prosperity. The basic logic is that instead of concentrating the income and wealth at the top, more people having more money to spend creates demand that drives hiring and growth in a consumer-driven economy. Progressives believe that more, smaller businesses provide more opportunity for more people. They believe that a strictly regulated business playing field that forces large businesses to compete in markets instead of succeeding by using their size and power to kill competition lets new startups thrive and innovate.

Progressives believe in shared prosperity -- wealth and power spread among the many is better for all of us than wealth and power concentrated among a few. Just as we believe that more people doing better helps us all, we believe that more smaller businesses doing better also helps us all.

On spending and deficits, progressives believe that growing the economy adjusts the ratio of public to private sectors, thus keeping it in balance. In other words, investment pays off, so putting money into infrastructure and education and services creates a positive business environment that keeps the private sector larger in relation to public sector than cutting back does, thus benefiting both.

Democracy Reacts To Austerity

The public in England is unhappy about the austerity. Time, from March: Anti-Cuts "March for the Alternative" Draws 500,000 Protesters in London,

The March for the Alternative—organized by Britain's Trades Unions Congress (T.U.C.)—brought central London to a standstill as teachers, nurses, pensioners and assorted public sector workers marched from Victoria Embankment, along the western bank of the Thames, one mile west to Hyde Park. Some came dressed as monks, others as clowns; the former was a clever play on the country's impending austerity, the latter on the perceived madness of government-backed measures.

This is from Birmingham, Birmingham Against Austerity - Second City On The March:

Religious leaders weigh in: Anglican Leader Slams British Austerity Budget,

Archbishop of Canterbury Rowan Williams has touched off a fury by accusing the British government of causing widespread "anxiety and anger" with its new austerity budget.

The leader of the world's 77 million Anglicans crossed swords with the government of Prime Minister David Cameron over his "radical, long-term policies for which no one voted."

The Numbers

Conservatives are finding out that taking government spending out of the economy "takes money out of the economy" and the economy is slowing and declining. The justification for austerity is breaking down. (Of course, the justification is just a front, providing cover for the real agenda of concentration public wealth into a few private hands...)

BBC, Manufacturing confidence 'slides',

The UK economy is recovering too slowly and more support needs to be provided for private sector firms, the British Chambers of Commerce has said.

The group's survey for April to June was more positive than the previous three months, but the BCC said that the UK economy was "fragile".

Another survey suggested confidence among UK manufacturing firms had fallen to its lowest level in two years.

Accountants BDO blamed the fall on weak demand domestically and from overseas.

Telegraph,A third of finance directors believes UK economy will double-dip,

One-in-three finance directors now believes the economy will fall back into recession, according to the survey of FTSE 100 and 250 companies by Deloitte.

Their concerns come as economists have moved swiftly to downgrade their growth forecasts following poor figures on construction and manufacturing late last week. Citigroup is among those forecasters now predicting the economy shrank by 0.2pc in the second quarter. The respected National Institute has warned growth will be just 0.1pc, following the previous six months of economic stagnation.

The predictions will put pressure on the Treasury to rethink its austerity measures and consider ways to stimulate the economy.

Confidence slumps in UK marketing,

Nearly a quarter of UK companies cut their advertising budget to protect profits in a sign they overestimated the strength of the recovery, according to the latest quarterly Bellwether report.

... Confidence amongst the companies surveyed about their own sector's prospects also slumped, with a third of respondents saying they felt the outlook had worsened compared with the previous three months.

MP Chuka Umunna writes in, The Lifeblood of the Economy, (emphasis added)

"The British economy is indeed recovering...economic growth is now strong" and "it will become stronger" as a result of the work the Government is doing. This was the Business Secretary Vince Cable speaking in the House of Commons on 13 January.

The reality was somewhat different. Two weeks after Cable's claims the Office for National Statistics told us GDP had decreased by 0.5% in the last quarter of 2010; in April they told us GDP had increased by just 0.5% in the first quarter of 2011. So the economy flatlined under Cable's watch.

Second quarter figures for 2011 are due on 26 July. The highly respected NIESR expects GDP growth of just 0.1% for this period. If correct, that would mean GDP growth of 0.1% in 9 months suggesting that Cable is living on a different planet.

The Implications For Us

Even as the UK economy sinks conservatives in the US are demanding austerity here -- cutbacks in the things We, the People do for each other and for our economy. We should see the roadmap in front of us: cuts cause declining economic growth and reduced revenue to the government, greater concentration of wealth and power into fewer and fewer hands and a public further demoralized by the feeling they have no say. Of course, to conservatives these last two are the point: concentration of wealth and power and a demoralized, compliant public.

Government Getting People Working On Better Buildings

Dave Johnson — Tue, 05 Jul 2011 12:35:30 -0400

For years people have been asking why we don’t launch a national effort to save energy and create jobs by retrofitting buildings to be more energy-efficient. Last week I wrote that even simple things, like painting roofs white can save energy and employ a lot of people. Finally a green-buildings effort effort is getting underway. Government can work, we can save energy, people can be employed and things can start getting better.

Last week at the Clinton Global Initiative (CGI) - America, Energy Sec Chu announced the Better Buildings Challenge that will begin in three cities – Seattle, Chicago and Atlanta. This is a partnership between government and business to begin retrofitting buildings to be more energy efficient. Saving money and energy while improving the economy, the effort will directly create as many as 114,000 obs.

Sec. Chu said that energy efficiency is “the lowest hanging fruit” in fighting global warming, the country will save money making proper investments.

Some facts:

Commercial buildings use about 20% of our country’s energy. Add in residential and government, buildings use 40% through heating, cooling, lighting, etc.
The Better Buildings initiative will attempt to make buildings 22% more efficient.
This is a huge energy savings.
This will bring direct creation of jobs.
Businesses can then reinvest the energy savings back into their businesses, which will save companies about $40 billion a year.
The pilot program for this initiative will create more than 114,000 jobs.

Several companies have signed up for this first round, and $500 million financing is coming from Citi.

According to the representative from Citi at the press conference, they will devote $250 million aggregated energy finance. This will be an aggregation of energy efficiency in bridge to capital markets. He made of point of saying that while this is very small financing for Citi, he wants to stress while that they do most of their business outside US they still see US as important. So it is good for us, then, that Citi still thinks the US is important and is still willing to make a very small investment.

The Republican Economic Anti-Government Argument

Dave Johnson — Thu, 30 Jun 2011 09:37:49 -0400

Haley Barbour articulated Republican economic thinking yesterday, saying "government sucks money out of the economy." Apparently he thinks it puts tax money under a big mattress.

During yesterday's Clinton Global Initiative (CGI) -- America, Mississippi Governor and former Chair of the Republican National Committee participated in the opening plenary session. Stepping outside of the normal protocol for this event, Barbour took advantage of his position on the stage to lecture the audience, saying, first, responding to President Clinton talking about creating jobs, "...don’t raise taxes, improve quality of workforce, tort reform."

And then more lengthy comments, (approx., from notes.) (Some in the crowd applauded.)

... the private sector creates jobs government doesn’t. Government's role is to have an environment in which the private sector creates jobs. But a bigger government means a smaller economy. Government sucks money out of economy, 25% of GDP goes to the federal government. This is a huge barrier to employment. When businesses are told they are going to raise taxes on employers, or a health insurance mandate, running deficits, all these are impediments to main street and whole economy.

This is not some kook who hasn't been taking his meds. This is a "serious" person -- a Governor and former Chair of the Republican Party!

We hear this position stated from a number of Republicans, basically saying "taxes take money out of the economy." This is a variation of the "rich people create jobs" argument, basically saying that if wealthy people have more money, it will trickle down to the rest of us. According to Ayn Randian "producer" ideology "rich people create jobs" for the rest of us, and therefore should receive most of the benefits of our economy.

Republican Speaker of the House John Boehner, another "serious" person, said just yesterday, "tax hikes destroy jobs." Previously he has talked about "job creators." See his press release, Speaker Boehner Highlights Plan for America’s Job Creators

Government, democracy, taxes and basic economics used to be well understood, but over time understanding of these concepts has eroded. So instead of just mocking Barbour's ridiculous statement, it is better to understand its roots and counter it in some detail.

When Barbour says "Government sucks money out of economy, 25% of GDP goes to the federal government," he is actually misstating the fact that government is a percentage of the GDP, but wording it in a way that might trick less-informed people into thinking this means it is a drain on that GDP. The public sector provides the infrastructure that enables us to have businesses. Laws, courts, schools, roads, ports, police, firefighters and scientific research all play a role in that and add up to a fairly significant component of the national economy.

When Republicans advocate cutting back on the schools, police, firefighters, etc that make up the government's share of the economy, they are actually advocating the removal of the public-funded education, research, law-enforcement, regulatory apparatus etc. that enable us to start businesses, thereby providing an advantage to already-existing large businesses that have secured a lock on a segment of the economy. They are advocating cutbacks in the ability of We, the People to compete with these wealthy, powerful forces.

The fact is that government is We, the People. In a democracy our government enables We, the People to all have the opportunity to start businesses and complete in the economy. It is We, the People making the decisions to have a clean environment, good wages, safety and dignity on the job. Cutting back on government means cutting back on those benefits of democracy, and instead letting the wealthy and powerful control what we do.

Here is the full video from yesterday's opening plenary session at CGI-America:

Watch live streaming video from cgi_plenary at livestream.com

P.S. Go to OurFuture.org/SharedSacrifice to demand your House and Senate representatives draw a firm line in the sand: for every dollar cut on services for all, a dollar in higher taxes on the richest Americans.

Use Coin Seigniorage Now!

Joseph M. Firestone — Tue, 05 Apr 2011 19:13:31 -0400

(Author's Note: Most of this diary was previously published back in January; but I've revised it slightly for these reasons. First, a Government shutdown is now upon us, even though the debt ceiling issue isn't quite at the forefront yet. Second, I'd like more comments and discussion on this proposal, because, at a minimum, it would give the Treasury the wherewithal to pay Social Security interest and benefits without relying in any way on new Congressional appropriations, or on raising the debt ceiling. And third, I'd like to get these ideas through to the Administration somehow, in hopes that, if pushed into a corner by the House, they might use them. Perhaps this is a vain hope, however, since, as wonky as the reputation of some in the Administration is, no one has been able to come up with original proposals that can get around the tea-party drive to cut the heart out of most Government social programs.)

All eyes now are on the 2011 appropriations conflicts and the continuing resolutions the Republicans are using to extract greater and greater spending cuts from the appropriations process. We're on the eve of a possible Government shutdown, as the tea-partiers in Congress insist on the cuts they favor, and the more mainstream right-wing Republicans go along “reluctantly” with them, and push the more “moderate” Democrats into a corner where they have “no choice” but to begin decimating the social safety net.

However, this round turns out, however, and whether or not the Government shuts down, there will be a new shutdown threat, now predicted for May, when the Government reaches the Federal debt ceiling, and the Republicans in the House are asked to pass an extension of that ceiling. If they don't do so, then they'll be forcing both a Government shut-down, and also a possible US default in paying its debt obligations to its creditors. Republicans see this as yet another opportunity to force spending cuts and “entitlement reform” out of the Democrats and the Obama Administration.

There is an effective response the President ought to make to the threat of a refusal to raise the debt limit, which would allow him to avoid the “forced” spending cut scenario. In fact, he ought to preempt the impending threat, right now, way before there is a Congressional vote on the debt ceiling. The basis for the preemptive move I'm referring to is given in a post by Beowulf, called “Coin Seigniorage and the Irrelevance of the Debt Limit,” and, was also discussed in a post by myself called: “Will He Say He Has No Choice or Will He Use Seigniorage?”

You should read both of these posts, if you're interested in getting into some of the details on coin seigniorage, or getting more deeply into the political context of the whole issue. But to summarize the main point on seigniorage, the Treasury, which the US Mint is part of, could order the mint to produce special very large face value Platinum coins (e.g. each coin might have a face value of 500 Billion USD or more), and to deposit those coins in the Mint's account at the Fed. The Fed could not refuse the coins or fail to credit their face value because they are legal tender. Since the Federal Reserve Banks (though not the Board of Governors and the FOMC) are legally in the private private sector, acceptance by them of a deposit in the form of the jumbo coins, resulting in their markup of the Mint's Account by the face value of the coins, from an accounting point of view, gets recorded as a sale of the coins to the private sector. The portion of the receipts from the “sale” representing the Mint's seigniorage profit, after the costs of minting the coins are subtracted, may then be periodically swept into the Treasury General Account, and would go into the category of “miscellaneous receipts” to the Treasury, lifting the Treasury's revenue total.

Enough jumbo coins could erase the annual deficit, and since part of government expenditures in any year involves paying off interest and principal on the national debt, enough of them would also erase the national debt over a decade or more. There would be no national debt to leave to our grandchildren, and also there would be a continuously declining debt-to-GDP ratio. Technically, there would also be no more deficit spending, even though in most years, Government spending would continue to exceed tax revenues.

The impact of coin seigniorage in eliminating deficits, the national debt, and bringing the debt-to-GDP ratio to zero isn't very important economically, since the size of these numbers doesn't create any solvency risk, or impair the Government's ability to sustain future fiscal activity. But that impact is very important politically and psychologically, because arguments about deficits and the national debt will end, and we'll be free to concentrate on what's really important for our grandchildren, namely leaving them more real wealth and a better life than we have.

So, coin seigniorage looks like a solution to the debt ceiling crisis and also to Congress's requirement, which is the cause of our having a national debt, that the Treasury must issue new debt when it plans to deficit spend. To meet the coming debt ceiling crisis, I think the President ought to use it to preempt the Republican House by doing the following.

-- Direct the mint to create a jumbo platinum coin with face value $500 Brillion.

-- Direct the mint to deposit the coin in its account at the New York Federal Reserve.

-- Direct the Treasury to “sweep” the mint's account to collect profits from coinage (this would result in marking up Treasury's account at the New York Fed by $500 Billion).

-- Inform Congress and the public that the previous actions were taken to head off any possibility of default or Government shutdown due to the House's possible refusal to raise the debt limit. The President should also mention that increasing the size of Treasury's account balance at the Federal Reserve will not be inflationary because Government spending will remain exactly the same as it would have been if the coin had not been minted.

-- Wait for reactions to this move. The ensuing uproar from many quarters including the business community, many economists, and the Federal Reserve, will focus on fears of inflation, and it's likely that top economists, and some Federal Reserve officials such as Ben Bernanke will claim that spending without issuing debt to absorb the new money placed into the private economy is inflationary, because the quantity of money in the economy will increase. It's likely that this view will create quite a stir in the media, and even that the value of the dollar will go down in international markets briefly, because the expectations of people will be affected by this argument.

-- Respond to this reaction by pointing out that it was forced on the Administration, which could not stand idly by while the full faith and credit of the United States was threatened by irresponsible Congressional partisans whose purpose was to take the economy hostage to force an agreement on spending cuts that are against the wishes of the American people, as indicated by every public opinion poll appearing in recent weeks. The President should also point out, that even though he doesn't believe that the minting of jumbo coins to pay for spending is inflationary, for reasons he previously stated, he is willing to work with Congresspeople who think there's a possibility of inflation enduring beyond the initial psychological reaction to minting jumbo coins, and then he can suggest two proposals that Congress may want to consider to remove the need for the Executive Branch to issue jumbo coins to meet debt ceiling crises.

First, Congress could eliminate the debt ceiling so that the US has no more crises of this sort again. Congress can still cut/control spending through the appropriations process, even in the absence of a debt ceiling, and this is the appropriate way for Congress to do it so that individual Congresspeople must go on record for any cuts in Federal programs they want to make.

Second, Congress could eliminate the requirement that Federal deficit spending must be matched by issuance of new debt dollar-for-dollar. The President could emphasize here that if this was done, not only would there be no more debt ceiling crises, but the Federal Government could pay off most of the national debt, except for very long-term instruments, within ten years, because the only thing that is maintaining that debt is Congress's requirement that new debt be issued in response to deficit spending.

He can also point out here that he doesn't think that the rollover of Federal Government debt is any problem for the long run because of the way the US's fiat currency system works. But for those who do think it is either a short or long-term problem, then this option will eliminate the problem because it will eliminate the national debt which we will not then have to hand on to our grandchildren. He can then add that he knows that many will react to this proposal by saying that it will be inflationary to try to eliminate the national debt this way. But he thinks that since the amount of Government spending won't change if we implement this proposal; he doesn't think so. But if it should turn out that inflation results from this effort to pay off the national debt; then the Treasury will simply begin to issue debt again to drain off the excess money supply.

-- The President, after making these proposals, should add that the $500 Billion in revenue from coin seigniorage will probably take the Government through August or September without its having to issue new debt, and that if Congress can't come to agreement on what to do about the debt ceiling before then, he will issue a new jumbo coin, this time one having $1.5 Trillion in face value, and that he will use the new coin for program spending and also to pay off $1 Trillion of the national debt. He can also say that he hopes he doesn't have to do that, but like institutions in the private sector, the Government can't operate well in an atmosphere of psychological uncertainty. Government workers have to know that their work and family lives will not be placed under stress by partisan conflict in Washington. In addition, private sector businesses and workers are greatly impacted by any freeze in Government spending caused by attempts at hostage-taking by Congress.

I think that Mr. Obama is a winner in the scenario I've outlined. He will be much more popular than he is now by virtue of rendering the debt ceiling threat impotent, and because he will be perceived as acting strongly and cleverly to get around the Republican House to avoid a shut-down of the Government and the possibility of default.

The Republicans will come back for another bite at the shut-down apple when they take up the Omnibus spending bill. But here they will find that they won't be able to use the ballooning deficit/national debt rationalization to justify their attempts to hold the Government hostage to get cuts in discretionary spending and the social safety net. President Obama will have, by then, demonstrated that by using seigniorage he can take the deficit and debt issues completely off the table, and that Congress can't simply force Government to shut down by hostage-taking as long as coin seigniorage is there.

This lesson won't be as clear in the case of the $500 Billion coin, even though some of that money will be used to pay off debt. But, once people see that the national debt doesn't need to rise if seigniorage is used; it will be easy to explain that if it is used more, the national debt can actually be paid down or paid off. Of course, if the President ends up having to use the $1.5 Trillion coin, then there will be a very graphic demonstration that having a national debt is a matter of a policy choice which Congress is now making, not a matter of necessity.

After that, objections to Government spending based on the idea that it will increase the deficit and the debt will be “off the table.” And then we can move on to handle the many real problems of the American people without worrying about the purely political and psychological, but non-financial and no-economic, problems of the debt, and the deficit.

(Cross-posted at All Life Is Problem Solving and Fiscal Sustainability).

George Will's Problem With Government By We, the People

Dave Johnson — Thu, 20 Jan 2011 10:52:09 -0500

In a column today, Hubris heading for a fall, George Will lays out his problem with America's system of decision-making by We, the People.

The idea that America's problem of governance is one of inadequate resources misses this lesson of the last half-century: No amount of resources can prevent [decision-making by We, the People] from performing poorly when it tries to perform too many tasks, or particular tasks for which it is inherently unsuited.*

Will continues, saying that the problem with democracy is "the bell-shaped curve." He says we should be ruled by the class of people who "achieve eminence" by superior performance, like surgeons, and not the regular people currently allowed to vote.

Actually, [decision-making by We, the People] is not sufficiently demoralized. The hubris that is the occupational hazard and defining trait of the political class continues to cause [decision-making by We, the People] to overpromise and underperform. This class blithely considers itself exempt from the tyranny of the bell-shaped curve - the fact that in most occupations a few people are excellent, a few are awful, and most are average.

In fact, the bell curve is particularly pertinent to government. Surgeons achieve eminence by what they do "in office" - in operating rooms, performing surgery. Politicians achieve eminence simply by securing office - by winning elections, a skill often related loosely, if at all, to their performance in office.

Will goes on to complain about the "pathologies" of expanded decision-making by We, the People, saying that public-sector jobs like teaching, nursing, the performing arts are inferior because they are labor-intensive and inherently do not increase their productivity, and are thus "stagnant" with rising relative costs. He says We, the People should not provide these services to people.

I vote for democracy. But, if Will has his way I won't be able to vote.

* I substituted "decision-making by We, the People" for Will's use of the word "government."

On Rugged Individualism, Or, Meet The Ghost Of Government Past

fake consultant — Sun, 16 Jan 2011 00:00:01 -0500

It is about time for the 112th House to come back into session, and the first thing on the agenda appears to be an effort to take away any healthcare reform that have been passed by this Administration.

Next comes an effort to slash Social Security and Medicare, an effort to reverse financial reforms, and proposals to “slash” spending—but only on domestic discretionary items.

If the House majority had its way there would be no restrictions on offshore drilling, no rules designed to prevent climate change—in fact, few if any environmental protections at all...and all of this is intended to bring to life the philosophy that government, for all intents and purposes, should just go away and leave us all alone.

I don’t buy into that kind of thinking—not even a little bit—and today we’re going to look around the world and see if we can’t figure out why.

There is an unalterable rightness about the best Florentine paintings of the period. It is wholly lacking from the late works of Tintoretto. In the schoolmasterly phase, even his greatest pictures could be improved. Only it would need another Tintoretto to do the improving.

--From “Old Masters: Great Artists In Old Age”, by Dr. Thomas Dormandy, RSM

So when it becomes tougher and tougher for old folks to get by on whatever the national pension system can provide...what do you suppose they do?

As it turns out, they turn to crime to supplement their incomes—and they’re doing it all over the world.

In the UK, local officials in Croyden saw a 15% jump in elderly crime in 2008-2009, Japan has had a multi-year elderly shoplifting problem that tripled in size from 1999 to 2008 (nearly 50,000 elderly Japanese were arrested that year—and a third of them were repeat offenders). Even in Germany, about three times as many elderly people are charged with committing crimes as report that they are the victims of crimes.

Then there’s Elizabeth Grube, 70, and her sister, Elaine Volkert, 65, both of Stroudsburg, Pa, who had been dealing about $10,000 worth of heroin a week when they were busted.

What happens when you give up on urban planning, and you empower the market to decide where people should build their homes?

Well...how about Bhopal?

Nobody should have been allowed to build homes next to a chemical plant—but in India, there’s not really a lot of control over that sort of thing...so the poor folks built around the plant, and one night, at least 3700 people died from a toxic leak.

In Haiti, lots of “empowerment” combined with lots of poverty has led to so much deforestation that it is possible, from space, to easily discern Haiti’s border with the Dominican Republic...because the Dominicans have trees. As often happens, however, the market addresses imbalances, and now the Haitians have a surplus of a new natural resource that the Dominicans don’t: landslides.

Building codes are such a pain, aren’t they?

Not so much in China, where, in one survey, nearly half of apartment dwellers said they fear the buildings they live in might fall over or something...which they sometimes do. Poor school construction kills Chinese schoolchildren, too—by the thousands—which even the Chinese Government now acknowledges.

Now all of this is theoretical and much of it takes place overseas...but what about right here in the USA?

Consider Detroit: there is a lot less of it these days, for a variety of reasons both economic and social, and what with giving another $4 trillion in tax cuts to the rich...well, there’s just not much money available to help Detroit out.

As a result, the city is considering something that sounds like the prequel to “Robocop”: withdrawing services from about 25% of “Old Detroit”, tearing down thousands of abandoned buildings, and turning the open space into a sort of “urban prairie”.

In fact, “undevelopment” has become so bad that, within the city, wildlife is now abundant: pheasants roam the streets, a coyote was “arrested” inside the Federal Courthouse, and Glemie Dean Beasley makes a fair bit of money selling raccoon (fur or meat, take your choice) to Detroit’s chapeau and soul food connoisseurs.

And finally, a few words about the Second Amendment:

There are those among us who wish to advance the concept that anyone can own any weapon they choose, and that, if you carry it to the right political event, it makes the perfect “accessory of intimidation”.

To them I would say: “There are lots of examples, already, of countries where that is a part of the culture...and those countries are Somalia, and Afghanistan, and Yemen, and Columbia...and if I’m looking for examples of what I want my own country to be like...it ain’t Afghanistan, or Yemen, or Somalia, or Columbia.”

I believe in the necessity of Government, just as Thomas Paine did...because it’s just plain Common Sense...and I do not believe that “this is my land, and all that matters is me and mine...” is going to work as a substitute for a United States of America...and if you believe in a vision of this country that looks like mine, you’re going to have to stand up for it, right now, as this Congress gets its crazy on, and make it real clear to those folks that extremism in the defense of liberty, misdirected, is not only a vice—but a good way to lose your liberty altogether.

Those of you who are discouraged are going to have to get up off the proverbial floor and start over, those of you who think you can’t win a political fight anymore are going to have to constantly remind themselves that we can and do win in this environment...and those of you who think the only thing left is to grab your guns, hunker down in the bunker, and wait for Jesus to save you...you need to have a cookie.

Or go play in the snow.

Or spend some time fingerpainting with the kids.

Or maybe you just need to knit something.

Whatever it is, do something that reminds you that we’re all OK here, and that things aren’t really that desperate, and that all that snow, and the yarn, and the kids and the fingerpaints...that is Jesus, right here on Earth, saving you right this very second, and if you’re not enjoying it every day for all it’s worth, then you will have missed out on your real Earthly reward...and your Heavenly one as well.

Businesses Do Not Create Jobs

Dave Johnson — Thu, 11 Nov 2010 13:08:39 -0500

Businesses do not create jobs. In fact, the way our economy is structured the incentive is for businesses to get rid of as many jobs as they can.

Demand Creates Jobs

A job is created when demand for goods or services is greater than the existing ability to provide them. When there is a demand, people will see the need and fill it. Either someone will start filling the demand alone, or form a new business to fill it or an existing provider of the good or service will add employees as needed. (Actually a job can be created by a business, a government, a non-profit organization or just a person doing the job, depending on the nature of the good or service that is required.)

So a demand creates a job. A person who sees that houses on a block need their lawns mowed might go door to door and say they will mow the lawn for $10. When houses start saying "Yes, I need my lawn mowed" a job has been created!

Demand also creates businesses. The person who is filling demand by mowing lawns for people might after a while have a regular circuit of houses that want their lawns mowed every week, and will buy a truck and a new mower and hire someone to help. A business is born!

Businesses Want To Kill Jobs, Not Create Them

Many people wrongly think that businesses create jobs. They see that a job is usually at a business, so they think that therefore the business "created" the job. This thinking leads to wrongheaded ideas like the current one that giving tax cuts to businesses will create jobs, because the businesses will have more money. But an efficiently-run business will already have the right number of employees. When a business sees that more people are coming in the door (demand) than there are employees to serve them, they hire people to serve the customers. When a business sees that not enough people are coming in the door and employees are sitting around reading the newspaper, they lay people off. Businesses want customers, not tax cuts.

Businesses have more incentives to eliminate jobs than to create them. Businesses in our economy exist to create profits, not jobs. This means the incentive is for a business to create as few jobs as possible at the lowest possible cost. They also constantly strive to reduce the number of people they employ by bringing in machines, outsourcing or finding other ways to reduce the payroll. This is called "cutting costs" which leads to higher profits. The same incentive also pushes the business to pay as little as possible when they do hire. (It also pushes businesses to cut worker safety protections, cut product quality, cut customer service, "externalize" costs by polluting, etc.)

This obviously works against the interests of the larger society, which wants lots of good jobs with good pay. And businesses, while working to cut jobs and pay less, need other businesses to hire lots of people and pay well, because that is what creates the demand that makes all the businesses work.

Government To The Rescue

This is where government comes in. Government is We, the People, working for that larger societal interest. In our current system -- when it works -- we use government to come up with ways to balance the effects of the profit motive -- which pushes for fewer jobs at lower pay -- with our larger need for more jobs at higher pay for us, and for the good of all the businesses. We, through our government, create and regulate the "playing field" on which businesses operate. We set minimum wages, limits on working hours, worker safety rules and other rules designed to keep that balance between profit incentive and demand, and that playing field level. (We also provide the infrastructure of roads, schools, courts, etc. that is what makes our businesses competetive with businesses in other countries. The individual interest in paying less taxes for this has to be balanced with the larger interest that we all pay more for this, but that is another post, titled, "Tax Cuts Are Theft.")

Corrupted

Obviously businesses in our system must be kept from having any ability whatsoever to influence government decision-making in any way, or the system breaks down. When businesses are able to influence government, they will influence government in ways that provide themselves - and only themselves - with more profits, meaning lower costs, meaning fewer jobs at worse pay and not protecting workers, the environment or other businesses. And, they will fight to keep their ability to influence government, using the resulting wealth gains to increase their power over the government which increases their wealth which increases their power over the government which increases their wealth which increases their power over the government which increases their wealth which increases their power over the government which increases their wealth which increases their power over the government ...

Unfortunately this is the system as it is today.

Do We Need A Democracy Tariff?

Dave Johnson — Tue, 03 Aug 2010 13:30:38 -0400

We need a "democracy tariff," imposed at the border on goods that are brought in from countries where the people have not been able to build a strong democracy that protects their workers, wages and environment.

Yesterday in Exporting Jobs Is Not “Trade.” It Evades Democracy's Protections I wrote that ... well ... exporting jobs is not "trade." Packing up a factory here to send the jobs there, and then bringing the same goods that factory was making back here to sell is done for one and only one reason. It is done to get around the wage, safety and environmental protections that We, the People fought to build.

We formed this country and we fought to build protections that brought us a reasonably good life, and a middle class, and some security - social security - so we don't always have to be struggling and living on the edge of a cliff, surviving only at the whim of a wealthy few with all the power. We fought a revolution against government by a wealthy and powerful few, and we fought again and again to keep and protect government of the people, by the people and for the people.

Our wage, safety and environmental protections are the result of our democracy. We, the People fought and built a government to empower and protect us, to provide good wages and provide some security and that involves rules that limit what the owners of companies can do -- regulations. We build up a system of public structures like courts, laws, schools, roads, bridges -- spending -- that enable commerce to prosper. And we ask those who benefit from that commerce we enabled to share the return on our investment with us -- taxes and wages.

Democracy, government, regulations, spending, taxes. The stronger each of these are, the better We, the People do. The weaker they are, the worse off we are.

Lately wealthy corporate owners -- who benefit from the commerce that our democracy, government, regulations, spending and taxes enabled -- have found another way to get around these protections that We, the People built for ourselves. They move manufacturing and jobs to countries where the people have not been able to build strong democracies to protect their interests, and then bring the goods made by the exploited workers there back here to sell. They call that "trade" when really it is just a way to get around the borders that we are able to protect. As I wrote yesterday,

These workers make the same products that had been made here, sell them in the same stores here, but make them outside of the boundaries of our democratically-won protections. And to make things worse, the companies then demand wage and benefit cuts from the workers who are still here, claiming that "globalization" means they now have to compete with workers with no rights, so they must accept less.

There is a solution to this problem. These protections that we built brought us prosperity. And that means we have a strong market. Everyone in the world wants to be able to sell to us, and we can use that power to set the rules for access to our markets.

A Democracy Tariff

We should not let exploitation of workers and the environment be a competitive advantage that is used against the democratic protections we have built for ourselves. We can and should set a "democracy tariff" on goods that come from countries that do not protect their workers and/or environment. This tariff should be enough to offset the competitive advantage that comes from exploiting workers and the environment. If those countries do not change we can use the revenue from the tariff to build our infrastructure and strengthen our competitive position. If those countries do change, all the better, because as democracy strengthens there, the people will prosper and can trade fairly with us to buy things we make here. Everyone is better off when trade is free and fair.

There are degrees of democracy and there can be degrees of democracy tariff. For example, some countries might protect workers but not the environment. The tariff on goods from those countries should be enough to offset the advantage gained from exploiting the environment but not as high as for countries that exploit both workers and the environment. Other countries might have some degree of protections but not allow unionization. The tariff should be enough to offset whatever degree of exploitation is at work.

If a democracy tariff is called "protectionism" so be it. We have learned the hard way that democracy is fragile and must be protected.

We must not allow exploitation of workers and the environment to be a "comparative advantage" used against our democracy -- government of the people, by the people and for the people -- and the protections and prosperity it has brought us.

Who Said We Want Less Government Protecting And Empowering Us?

Dave Johnson — Tue, 13 Jul 2010 12:00:09 -0400

Cut spending? Wait - where did that terrible idea come from? Government is We, the People and its job is to protect and empower us. Why in the world would we want to cut back on that?

WSJ today, The Bush Tax Cuts and the Deficit Myth, "Runaway government spending, not declining tax revenues, is the reason the U.S. faces dramatic budget shortfalls for years to come."

Wait a minute. Back up. Where did this come from? Who, anywhere, any time agreed to cut government? Why do We, the People allow these anti-government zealots to pre-frame the budget deficit as a problem of government doing too much for us? Which government function is the "too much" part? Reigning in runaway corporations? Consumer protection? Worker safety inspections? Food safety inspections? Maintaining and modernizing our infrastructure? Educating people? The courts? Keeping the water and air clean? There is a long list of things our government does for us. Why would we want less of that?

Imagine if Democrats voted to just put $500 billion a year in rockets and shot the rockets at the moon, and spent the next 30 years demanding that the conservatives do their part and raise taxes to pay for that. Do you think the top 1% would just say, "OH, OK, let's do that." Of course they wouldn't.

But under anti-government conservatives all of these things that our government does to protect and empower us were cut to the bone or just ended, resulting in mine disasters, bank meltdowns, predatory corporations scamming all of us, and the BP oil spill. We, the people got poorer and less secure while the rich got really, really richer.

Why would anyone in their right mind think that was a good idea?

Conservatives cut taxes on the rich, resulting in the greatest concentration of wealth ever. The entire economy turned into an everything-to-the-top vacuum cleaner scheme, filled with scams shaking down and fleecing We, the People of everything we have and delivering it to a few wealthy corporation-owners. And then we get this bamboozlement that "the deficit" is out of control, so we have to cut back on anything that remains of government working for We, the People? I don't think so.

Think about the level of bamboozlement that is going on here. Conservatives cut taxes on the rich, and then spend the next 30 years saying, "OK, now you have to do your part and cut the things government does for the people." The whole thing was a scheme to deliver power to a few at the top. In Reagan Revolution Home To Roost: America Drowning In Debt you can see the step-by-step outline of the plan, in their own words. The deficit plan was right there for everyone to see:

Step 1: Cut taxes to "cut the allowance" of government so that it can't function on the side of We, the People. Intentionally force the government into greater and greater debt.
Step 2: Use the debt as a reason to cut the things government does for We, the People. When the resulting deficits pile up scare people that the government is "going bankrupt" so they'll let you sell off the people's assets and "privatize" the functions of government. Of course, insist that putting taxes back where they were will "harm the economy."
Step 3: Blame liberals for the disastrous effects of spending cutbacks.

So when did We, the People agree to this one-way bargain, cut taxes for the rich and cut what government does for us? We didn't, and we should stop acting like we did.

Every single one of us knows that the deficits are the result of tax cuts for the rich and huge military spending increases. If we want to fix the deficit problem we know exactly what to do.