A form of Reparations?

There's been more talk of Reparations since Ta-Nehisi Coates' The Case for Reparations was published. In it, he talks about how redlining was used as a tool to essentially steal wealth from black communities. I wondered if there is a way to help reverse the effects of redlining in these communities... currently home mortgages are tied to the original lender; the mortgage taker cannot transfer a mortgage to another home buyer nor can someone who inherits a house continue to honor the terms of the mortgage to pay off the remaining debt. Lending institutions, on the other hand, can trade mortgages left, right, inside-out and upside down. *So* creating a mortgage that can be transferred to the heirs of a home owner would be a way to increase the intergenerational transfer of wealth and make it easier to build wealth over generations. Not reparations but a way to build value over generations.

Unpaid caregiving is another sign of the need for a different economic model

TRRN has a story about the cost of unpaid caregiving to both caregivers (who are primarily women) and the economy overall. The guest said:

They often don’t tell their employer because they’re afraid of being essentially fired if they disclose that they’re caring for—You can’t really hide that you’re caring for children, but you can hide that you’re caring for a disabled spouse...

This goes to two points I always return to...

(1) The current definition of economy and economic activity is focused solely on generating profit. This leads economic (essentially all) public and private policy to measure success (and existence) on ability to produce a profit. But the majority of the economy (the workers) don't prioritize profit; their primary reason to work is self-maintenance and well-being. So a far better definition of economies is: self-organizing and self-sustaining systems of production, distribution and consumption of goods and services that promote the well-being of all participants. Such a definition would rule aspects of offensive war-making to be anti-economic (major reduction in status) and personal caregiving services would increase in status; after all, caregiving adds almost immeasurably to human well-being.

(2) The power elite establish and maintain their status by controlling information by a number of means. I've written about state secrecy (so called 'national security interests') and intellectual property. The above quote is another way to control information - self-censorship for the sake of job security. This has also crept a little into cultural embarrassment... needy family members are a sign of weakness so caregiving is not often mentioned. 

The solution to information control is transparency. But the level of transparency necessary to fully open up an economy cannot be driven only by policy. They must also be a massive cultural shift to social and cultural transparency. It's not easy but these are ideas and concepts that must be mulled and allowed to percolate through individual and societal expectations.

Do robots serve us or do we serve the robots?

Amy Goodman interviewed Shoshana Zuboff who wrote: “The Age of Surveillance Capitalism: The Fight for a Human Future at the New Frontier of Power”. Her premise is that the frontier of capitalistic innovation is capitalizing prediction of individual (and likely) group behavior. These themes have explored in science fiction and coming to fruition in reality. We need to decide if we serve the interests of our (collective human) creations or do the controllers of these creations control our destinies?

Part 2 of this interview emphasizes the role of information control/secrecy in these developments... a theme I've been writing about for years.

Destroying the Myths of Market Fundamentalism

TRNN has posted a video series of a forum organized by Ralph Nader called 'Destroying the Myths of Market Fundamentalism'. Worth a listen.


My comment on Ralph Nader's introduction:

Market fundamentalism has its flaws, no thinking person would question that. However, the system evolved into its current state through regulatory capture. Arguing for alternate regulatory capture is analogous to replacing a despotic ruler with a benign ruler. In the short term, conditions can improve but the state mechanisms enable reversion are present and calling for turnover.

My comment on Damon Silvers talk:

“Markets are product of government.”“Markets not fundamental but created.”Markets are part of economies (economies can be broadly divided into production & markets). Economies form in any human community, regardless of government (refugee settlements have economies with markets)… thus economies (and markets) *are* fundamental. When communities/economies grow sufficiently large/complex, governments emerge as a property of complex systems.---“How to shape markets and to what end?”“How to shape markets for long term wealth creation for all Americans. For that matter, all of the world’s population?”Is the market aspect of economies the best area to ‘shape’? Economics is a social science; that is, primarily concerned with relationships between individuals, groups and communities. Market relationships tend to be rather transient: buyers examine sellers’ goods; trade transaction occurs (or not); termination of relationship. In contrast, the relationships on the production side, (employer/employee, supervisor/supervisee, colleagues) tends to be of long duration, both in daily interaction and term of employment. Strong/healthy relationships on the production side of the economy empowers workers to become capable consumers who drive (somewhat transient) market activity.---“Challenge for securities regulation…”Also must consider the damaging effects of concentrating capital on the scale of economic operations. For example, mountain top removal mining is only possible because enormous amounts of capital can be pooled to build the massively expensive equipment. The same is true for most large scale extractive endeavors. While these projects may be profitable in the short term, the resulting environmental damage has incalculable long term financial and ecological costs (climate change for one).“(3)…transparency around key problems…data secret…”Information asymmetry plagues far more than the securities markets. It is the source and driver of power imbalance and economic inequality. In fact, the term ‘free market’ is a misnomer in light of the absence of information symmetry regarding market goods/services (working conditions, environmental impact, costs, etc.).

It's all legal

Comment at Smirking Chimp (it's a quick and worthy read):

The true conflict is not between the U.S. and Russia/China/N.Korea/Syria/Mexico or Saudi Arabia & Yemen or any other nation-vs-nation aggression. The real fight is between the power elite and everyday working people on the planet. Any 'special' interest (such as Jeff Bezos, Koch bothers, Sheldon Adelson, Robert Mercer, big pharma, oil industry, military industrial complex, health insurance industry) that lobbies Congress for policies/laws/rules that increases their profits at the expense of the well being (health/education/standard of living) of their workers and consumers is participating in a long campaign against public interests. 

As every maker knows, the quality of any end product is largely determined by the quality of the starting material. This also hold true for economies; the quality and productivity of an economy is largely determined by education and health of its starting material of workers and consumers. Neo-liberal economics are marketed on the contrary principle that strong foundations are not necessary for strong economies. The Trump tax cut directly depletes economic foundations by removing money from a slowly growing economy - and he tells taxpayers it will grow faster. Unless neo-liberals have cracked the secret of creating something from nothing (aka, Big Bang), our current economic trajectory offers no hope of better conditions to workers.

New value system needed

Good interview at TRNN with climate scientist Will Steffen.


My comment:

"All of these [efforts to mitigate climate change] need to be underpinned by new value systems that value stabilizing the earth's systems as the highest priority that any economy must strive for." 

This should be the take home message of every economics course/lecture from now on. Economics and the values of economics must be defined beyond goods/services and financial return. My preferred definition of economies are self-organizing and self-sustaining systems of production, distribution and consumption of goods and services that promote the well-being of all participants. Capitalism would not be an acceptable primary economic system under this definition because it is not self-sustaining... using fossil fuels will eventually degrade the environment to the point where it cannot sustain human life as we know it. Placing profit and 'economic growth' above all else is the source of climate change, income inequality, health care crisis and many other social ills. But economies are human made social constructs; humans made/make them, humans can reshape them.

It's just the capitalistic way

Digby pointed out the Trump administration is selling American foreign policy for private gain. The Trump cabal sees it as an extension of capitalism - profiting from the sale of a sought after service.

A discussion at TRNN asked if a universal basic income were Progressive or Regressive?

My comment:

"What do you think of this basic income, and is it progressive or is it a regressive tool?" 

Her answer already says it's the wrong question. The right question: does basic income change the balance of power in that a few people become more powerful? The answer is yes; the people charged with the power to collect and distribute these monies become more powerful. Further concentrating power is dangerous because those in control will never give up power and eventually power corrupts their original good intentions... just look at the U.S.... many social problems intended to assist/benefit the needy/low income are under constant assault by politicians of both major parties. Instead of creating (political) solutions to inequality (collect and redistribute money), change the system so capital is distributed more equally in the first place. 

"...the idea is that, if the minimum wage were eliminated, then hiring workers would be less expensive and firms would be more likely to hire them, as opposed to investing in labor-saving technology." 

Robots do not eat food, buy shelter nor wear clothing. No-income people cannot eat food, buy shelter nor wear clothing. How do robots which don't earn money and people without money build a functioning economy which requires movement of money? Mass automation will create a class of people without access to traditional money who survive through an underground economy, likely with a lot of bartering... the implosion of capitalism.

This is a huge error in reasoning on part of the interviewer!

Universal Establishment against the Resistance

At TRNN, Charles Derber talks about the need to universalize the resistance to fight the establishment. My comment:

"...on the one hand, this universalization, but on the other hand, are we becoming more fragmented?... How does that go together, on the one hand the universalization and on the other hand this fragmentation?" 

The establishment, also known as the system, is unified and highly successful in fragmenting the working people of the world. They use identity and social issues to splinter voters into opposing groups so they are disinclined to organize significant resistance. For example, the Republican and Democratic Parties don't particularly care abortion; so long as individual politicians can get the medical care they seek for their families, they aren't concerned if poor women have access to abortion or reproductive care. They care about policies that their donors want. Abortion is useful because it polarizes their electorate and generates a mock conflict between the pro and anti sides (like pro-wrestling) which distracts the real policy intent of the Republican and Democratic Parties which is to always advance the concentration and transfer of power/wealth to their donors. 

The key to resist voter fragmentation is not to ignore the differences but to unify to respect these differences and advocate for each others' rights to those positions. The poor, brown, white, low wage, immigrant, women, LGBT and other groups are not outsiders; they are insiders, part of the group. In this country, they are all known as Americans but workers should not overlook the same systemic pattern of deliberate fragmentation that is also exercised abroad. The system uses competition between native and foreign workers to sow division internationally. The entire point of corporate/trade globalization is to create wage competition to force down production costs. Worker unity must also cross national borders if the establishment/system is to be contained.

Arms 'Marketing'

Short video of William Hartung at TRNN describing how the MIC profits from war and government policy. My comment:

William Hartung hit the nail right square on the head. A popular meme spouted by many pro-capitalist economists is that in free markets, market forces (consumer spending/consumption) drives what gets produced. But somehow, these same economists never examine the 'market forces' of the planned military arms economy (created by governments, especially by the U.S. government). The planned military economy creates forces of lobbyists and special interests who advocate for constant war and continuous arms race. Instead of buying food, childcare, medical care, education and intact ecosystem for our children and grandchildren, American taxpayers are buying updated nuclear weapons and other military hardware, war game exercises, ill-will from hundreds of foreign military bases and global instability from waging and fomenting war. These are economic decisions and American voters need to understand the spending priorities of their government in that light. 

Another useful tool maybe to redefine what economies are. The word 'economy' has Greek roots meaning house or home. The common definition of economy is focused on production/consumption of consumer goods for the purpose of generating profit, a far cry from house/home. A much better definition would be self-organizing and self-sustaining systems of production, distribution and consumption of goods and services that promote the well-being of all participants. This would automatically make some sectors of the modern economy 'uneconomic' because they do not promote well-being... the entire offensive arms/military industrial sector.

Name of piece: Code Pink Conference: The Arms Industry Hides Behind Euphemisms (December 29, 2017)

Working Animals of these United States

A comment of implications of GOP Tax bill at TRNN:

I am reminded of the video of newly hatched male chicks being fed to a shredder and the knowledge that male dairy calves are turned into veal or beef. Federal tax policy now bins Americans like farm animals are binned: useless (no profit to be made) ones are actively destroyed to not 'drain' the system of resources, moderately profitable animals are rushed through the bulking process to quickly turn a profit, and most profitable are mass factory farmed to extract the most profits in the shortest time until their productivity drops into one of the lesser classes. It's clear the elderly and ill are 'useless' (proposed cuts to social programs); children are moderately profitable (school privatization & school-to-prison pipeline); and, finally, prime working age adults are underpaid and work long hours at multiple jobs until they fall ill of stress or exhaustion, at which point, they join the useless class. Working Americans are the farm animals of American capitalists.  

Resist!

Information asymmetry

It has a name! Information asymmetry is the economic term for unequal information which results in a power imbalance. In a market situation, all information asymmetry changes the balance of power; competition between sellers, between buyers and between sellers & buyers is altered. A truly free market hinges on information transparency. See here for links to a deeper discussion.

Looting by any other name

 DWT has a post discussing the effect of the Ryan-Trump Tax Bill on education. My comment:

-Leverage buyout 'investment' (see Mitt Romney a la Bain Capital).-Agriculture caused desertification (Dust Bowl, expanding deserts in Africa, desertification in Latin America).
-Surface mining (includes strip mining, open pit mining and mountain top removal). All forms of looting with specialized knowledge. They are characterized by (1) speed - victims don't have time to realize danger and mount defenses; (2) dirty - function of speed; (3) crude - function of speed; (4) cheap operating costs - minimum investment in workers, capital, safety, etc. The goal is to strip a resource of everything that can be sold for money as quickly and cheaply as possible. The result is rich looters and no resources - businesses without capital to produce; land without water for farming; land without clean water, soil capable of supporting life and contaminated with introduced toxins and mine tailings. The Ryan-Trump Tax Bill loots the public commons by tax policy. Taxes are the resources of a nation; they pay for the public commons of education, healthcare, infrastructure, public services, defense, etc. By reducing the tax payments of the wealthy, this tax plan is effectively looting the public commons. The danger is the destruction will be so deep and thorough, recovery will be nigh impossible.

Economics of pollution

Comment at TRNN where economist Bill Black discusses the economic drivers of pollution:

Excellent piece. Economic considerations rule many if not all areas of public life; therefore it is important to understand and inform the public of the effects and outcomes of economic drivers. 

Bill Black answered the question of why pollution occurs... polluters profit from pollution... and how to prevent pollution... don't let polluters profit (by way of regulation). 

A similar prevention is a better definition of economies: self-organizing and self-sustaining systems of production, distribution and consumption of goods and services that promote the well-being of all participants... Anyone/any institution whose activity is not self-sustaining (in larger context of entire economy) is anti-economic and not allowed to persist.

TRNN: Pollution Kills 9 Million People a Year

Guns are anti-democratic

I written a lot about how the concentration of power is the underlying systemic imbalance in many of today's problems and how the over-sized influence of the powerful skews all policy in their economic favor. Based on my preferred definition of economy (economies are self-organizing and self-sustaining systems of production, distribution and consumption of goods and services that promote the well-being of all participants), I've argued that guns, the military industrial complex and war are all anti-economic...

On that note, guns, the military industrial complex and war are also anti-democratic because they impose the power of the wielders onto those of the oppressed. At the smallest level, a person holding a gun can intimidate everyone in their range from any number of actions including speech and movement. This is the opposite of society where everyone is free to express themselves.

School a la drone

With the appointment of Betsy de Vos as Secretary of Education, I read an article which mentioned that public schools were developed during the industrial revolution to teach children the skills needed by factory owners. 

In the U.S., the notion of citizen elected governance further promoted the need for voters capable of independent reasoning, at least in theory. But the advent of neo-liberal laissez-faire capitalism and government austerity, public policy has been focused on privatization of public schools and de-empowering local and teachers-union control/input into public schools. Much of this is driven by profit through two mechanisms: (1) privatizing schools to allow private school corporations to skim profits from public monies; (2) produce compliant workers and voters who are not intellectually capable of challenging the status quo or any forms of authority, in other words, worker drones.

Down with Tyranny has a post describing many yeshiva schools operated Hasidic Jewish communities which seem to exactly match the eo-liberal laissez-faire vision of public education. My comment:

Deliberately denying children a good education is child abuse analogous to sensory deprivation as torture. Unlike uncontacted people who make a deliberate choice to live isolated from modern technology, the Hasidim live in the heart modern society and hold themselves separate and morally superior while taking full advantage modern infrastructure and technology (medicine for example). Children raised in these restrictive environments never have the opportunity to fully develop their potential, a waste for themselves, personally, and their communities. These children are also taught to behave opposite of their moral code - take from society without contributing to society.

There's an important lesson here for non-Hasidims/secular citizens. Schools that provide a "...very basic English reading and arithmetic, along with minimal levels of English writing..." education produce young people who "...lack the requisite skills to obtain employment with a decent income to support themselves and their (often large) families...". This is a major goal of some powerful economic players and education reformers. They want workers who cannot think critically to challenge the status quo. They want workers who compliantly conform to authority (God, rabbi, employer). But depriving children of education is unpatriotic. A dynamic, vibrant and functioning democracy relies on the participation of informed voters & citizens capable of analytical reasoning. So the Hasidic model described here fails at all levels, from individual development to Constitutional expectations.

Orthodox Economic Theory does not Explain the Economy

Comment at TRNN. Economist Bill Black was discussing union membership in the U.S. and along the way, mentioned conventional economics does not explain today's economy:

"…that's far worse than simple inequality… economists really can't explain with conventional economics how this is occurring... that's of course because their economic theories are falsehoods... They're basically cover stories for laissez-faire..." 

The most important take home message of the segment: orthodox economic theory is wrong. If economists were responsible [social] scientists, they would go back to the drawing board, re-examine the data, develop better models/theories and test them as rigorously as possible.

It's striking how outright wrong economic theory is used to justify government policy that's bad for most people compared to how well validated science (climate change, theory of evolution) is demonized and ignored to the detriment of most people. [Climate change is validated by annual record breaking heat records of the recent 2 decades, increasing droughts & flooding and stronger hurricanes. The Theory of Evolution is supported by a wealth of biological, geological and paleontological data. The success of modern medicine also validates evolution: medicine is based on animal studies which are informative because they are evolutionarily related to humans; otherwise, there would be no way to justify the research.]

Name of segment: Low Rate of Unionization in US Consequence of Deregulation

Economic policy is not based on science

Comment at TRNN:

Trump's plan would mean 'a huge increase in the budget deficit primarily to give tax cuts to the richest people in the country,' says economist Dean Baker. 'I don't think most people would think that sounds like a very good idea'
 That climate change is occurring and caused by human activity is at near universal consensus of climate scientists. And it doesn't take a degree in economics to understand that climate change will have devastating effects on economies. One simple equation: climate change = less food = fewer or hungry people = smaller economy. And yet there are economists who argue climate mitigation to too expensive and bad for the economy. According to economists, science is bad economics.  The tax policy DJT is proposing is based on supply-side-economics and the Laffer curve which has essentially no scientific consensus; the Laffer curve doesn't even have units. According to (some) very influential economists, no science is good economics.   So is economics a science or ideology? I once compared science and religion (ideology): While there are some similarities, they are very important and significant differences. Both science and religion arise from the same social need; in the face of complete uncertainty, people want rules of behavior/conduct to avoid catastrophic outcomes. Religions codify collections of old anecdotes into rules of conduct. For example, biblical strictures against adultery/infidelity likely arise from a tragic outcome of a few adulterous incidents. But not all affairs will end in tragedy. This is akin to associating good fortune to a charm because you happened to be wearing it on the day of a good event (promotion, favorite team winning). Religions use anecdotes to predict the future. Scientific conclusions are based on carefully controlled and precisely collected data (if properly controlled, a set of anecdotes is data). Scientific predictions based on data are restricted to well defined circumstances. For example, science predicts two doses of measles vaccine are 97% effective. When sufficiently complete data is available, science is remarkably accurate in its predictions. 

[Climate] Science predicts coming changes in the climate will cause sea levels to rise, increase storm severity, and increase severity of droughts and floods, all of which will negatively impact economies. Most orthodox [neoliberal] economists pooh-pooh the predictive value of [climate] science in favor of data-free economic theories, more ideology than science.

…DJT’s tax plan is nonsense, like almost all economic policy.

Post title: Trump's Tax Cut Plan Alienates His Base

Fred Magdoff: What Every Environmentalist Should Know About Capitalism

Youtube video of a talk by Fred Magdoff that covers some of the ground I describe in my series. He seems to think an ecologically friendly economy requires more planning than I do but we do seem to see a number of the same problems with capitalism.

Truthout interview with Magdoff. He's more idealistic than I am.

Racism is an economic tactic of division

On Sat., August 12, 2017, there was a white nationalist march in Charlottesville, VA which resulted in the death of counter-protestor Heather Heyer.

On NPR's Codeswitch podcast:

NPR asked: "what you think white nationalists, like the ones in Charlottesville, expect to accomplish in 2017?" 

Answer: "to create a society where the resources of the society funnel into a whites-only space, but that it is propped up and supported by a vast labor pool without rights."

This again confirms racism is a form of economic division. It's similar to anti-feminism, anti-LGBT, anti-abortion, colonialism, etc. divide and conquer tactic of the economically powerful. Unfortunately, they're a particularly well armed movement with no qualms of using violence.