Wasteful capitalism

Stuart Varney of Fox Business Network (sorry) and his guest John Lonski were railing about a Fox News Poll where 34% of respondents think the rich do not pay enough taxes.

At some point Lonski said:

".....if you start taxing this wealth...may have the unwanted effect of reducing the incentive of people that are very talented and very rich to go ahead, expand their businesses, and make jobs and drive the economy higher."

My snarky comment:

But those very talented poor people... they're just pigeon poop on the sidewalk. There's no benefit to incentivizing them to work hard to improve their lives and the lives of their families and neighbors.

But I really want to emphasize how wasteful the American economy and culture really is. Amy Goodman interviewed Albert Woodfox a former political prisoner who spent over 43 years in solitary confinement in American jails. Watch and admire the dignity, grace, astonishing strength of this man. During his youth in the United States of America, it was more important to control this young man by locking him up than growing his strengths and talents; talents that could have advanced the nation economically and culturally. We are jailing young people in the prime of their life. Then our current 'Secretary of Education' Betsy DeVos actually claims American schoolchildren may benefit from less investment in their education. 

Now contrast the lack of investment in American youth to little gossip blurbs about Kim Kardashian's kid's lavish birthday party or Beyonce's kid at a fashion show. This encapsulates the problem with the current economy. It's a system that allows the largely poor population go hungry, uneducated and often imprisoned while the rich indulge in luxuries that add no meaningful value to their lives. And rich people are rich because they lie, steal and cheat the wages of the working poor.

So back to tour treatment of young people, I'm reminded of the slogan of the United Negro College Fund: A mind is a terrible thing to waste... we are and have wasted the minds of generations of Americans. We can do better.

Keith Ellison on Democracy Now!

Keith Ellison was interviewed on Democracy Now!

He doesn't frame the problem exactly as I do: concentration of power. But he does link concentration of financial resources to political power and that's rare for a politician. It's worth a viewing.

A bit from it:

These huge corporations that give executive compensation with no bearing, no connection at all, to the people who actually make the products on the ground. 

And this is hurting our economy. And it’s—and you asked where it all ends, Juan. You know what? It doesn’t end well, because what it means is that they use all that extra money to buy political influence in Washington, to try to influence people like me to give them even more benefits.

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.

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!

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

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.

Neo-liberal economics is not a modern phenomena

Abby Martin did a two part Empire files episode on human trafficking of Filipino workers. In part 2, she describes how the historical colonial roots of the modern Filipino labor export economy *and* how American imperialism drove this process. Often, discussions of colonialism focus on political power. Although more often driven by economic imperatives, the financial drivers of imperialism are frequently ignored.

Neo-liberalism, or supply-side-economics 'argues economic growth can be most effectively created by investing in capital and by lowering barriers on the production of goods and services.' In other words, give power of economic decision making to those who own capital... or the rich know best how to make more money. This is the back story to the history of the Philippines as shown in Empire Files: The Roots of the Philippines Trafficking Epidemic. American economic 'leaders' decided the best way to make more money was to steal and colonize other lands so they could exploit their people and natural resources and force those people to buy American goods. Neo-liberalism is just another name for empire building; globalization is another name for colonialism. It's always owners/capitalists/powerful taking from and exploiting workers to enrich themselves. 

Workers are always told they are competing against other workers: POTUS DJT claims immigrant workers are job stealers; Americans compete with workers in low wage countries for manufacturing jobs, etc. What workers need to understand is that this competition was and is created by owners/capitalists/powerful. The two sides of the conflict aren't workers against workers but workers against owners/capitalists/powerful. Meaningful economic reform depends on it.

Growing wealth inequality

This article shows the ever increasing wealth gap caused by modern capitalism. It appears to validate my metaphor of capitalism to predation based food chain. As just as pure simple predator-prey models are bound to crash, capitalism is prone to boom-and-bust cycles. For a more stable economy, professional economists should study the full array of biological interactions in ecosystems and how they evolve new ecological niches for additional opportunities for interactions. We might do well to model our economies after ecosystems.

Capitalism is destroying the economy

Michael Hudson was interviewed at TRNN. He links the incentives of stock market, financialized capitalism to the failure of the American economy to thrive; instead of investing in innovation and workers, owners are feeding off workers through monopoly. It fits into my ideas of how ecosystems are a metaphor/model for economies. Go read/watch/listen. It's very informative. 

My comment:

The key take homes: "Trump's donors were basically the monopolists: the Koch brothers, and the oil and gas industry, and other far-right-wing corporate organizations that are all in favor of monopoly... Both parties have the same donor class and they're trying to get elected by groups in America that they have no intention at all of carrying forth their promises to help their interests." 

Follow the money trail for motive and intent of policy. And know that a major intent of policy and regulation is to hide & control information to make it difficult or illegal to follow the money. 

As I've posted in the past, regulations are tools of power to control information. Secrecy and control of information are enemies of democracy. Without transparency, voters/consumers are choosing between packaging with no clue of what's inside, like choosing between multiple doors in a game show; they could all be hiding the same 'prize'. Increasing transparency through universal whisteblower protection is a good place to start. 

Open Insulin Project

Comment at Truthout interview about Open Insulin Project's attempt to create a cheaper insulin product for diabetes patients:

Regulations [patents] are tools of power [pharma] to control information [assign who gets to profit]. Secrecy and control of information are enemies of democracy. Transparency and informed choice gives power to the voter/buyer, not the candidate/seller.

Anthony DiFranco is attempting to re-generate the information [insulin patents] controlled by large pharma into marketable drugs. He will have the option of secret patents [like pharma] or open patents [any producer can use]. Open patents are more transparent and give consumers more informed choice.

The real enemies

Comment at Truthout:

Governments organize people into large collectives so economic leaders can put them to work and skim the fruits of their labor. [CEOs, major stock holders, central committee members (communist countries), etc don’t actually make a product or service that their companies sell for profit. They take credit for the goods made by their workers and are given the value of the goods as payment.] Wars are the forceful taking of other land *and* workers by governments for their economy. Wars are a way for governments to get more workers from whom they can take labor and gift them to their economic leaders.

The common narrative has always been nations are at war but the stakes of war tell a different story. Workers are at constant, unending conflict to protect them/ourselves from the ravages of economic leaders. It’s time to realize that the real conflict is between workers and economic leaders who concentrate their power by profiting from workers. United we workers stand, indeed.

Worst case climate disruption

New York Magazine has published The Uninhabitable Earth, an article by David Wallace-Wells. Read it.

Gaius Publius at Down with Tyranny has published a commentary. My comment:

(1) Fossil fuels are a substitute for organic labor (humans and animals)... think automobiles vs. walking or horse power; hand tools/assembly vs. power tools/robots; even labor intensive harvesting of wind sailing vs. fuel burning ships. 

(2) Burning fossil fuels was/is en economic issue/problem. The economic argument against mitigating the greenhouse effect has won so far. The solution to climate change must also include an economic solution. 

(3) Ecosystems and environments capable of sustaining human life are the seed corn of all economies. Without ecosystems able to grow food crops, economies cannot and will not exist.

Finally...

...an economists writes about the larger economic costs of information control. My comment at Truthout:

Controlling information and secrecy is pivotal to the imbalance of economic and political power at the root of many of today's problems. Current POTUS hides his tax returns, business relationships and lies at every opportunity. Former POTUSs prosecuted whistleblowers, spied on Americans, and lied to the world about weapons of mass destruction. Big pharma and chemical companies use patents and proprietary information to make enormous profits and hide injurious outcomes/information. Other industries profit from patent licencing and copyright of information. These all have costs to consumers, workers, voters, and citizens in various forms including purchase price, exposure to unknown chemicals, loss of right(s) to contest disputes (against private and public institutions) and loss of right(s) to make informed decisions. 

The greatest reform to our political and economic system can only come about through a massive increase in information transparency at all levels. Markets aren't free because consumers don't buy with full knowledge of the products (pollution controls, worker's rights/safety, social costs, etc). Citizen's aren't free because voters don't vote with full knowledge of candidates (candidates lie, financial support, etc). Whistleblower protect is a good starting point and we should expand from there.

Theories of inequality antecede economic benefits

Comment at Truthout where historian Ibram X. Kendi discusses the root and cures of racism in America:

Dr. Kendi clearly defined the causal relationship: economic benefit precedes racist ideas precedes persistent cultural racism. This relationship applies to *all* manner of division, not just racism. 

Economic benefited class -> 'theory' of inequality -> policy and culture of inequality 

some examples:(1) big Republican donors -> trickle-down/supply-side economics -> 'deregulation' & right to work(2) religious right -> abortion is murder -> post Roe v. Wade abortion restrictions(3) POTUS DJT (and other politicians) -> 'illegal' aliens are criminals -> mass deportation 

The cure for these inequities is not embedded in their theories or policies. Because they are rooted in economic inequality (unequal economic power), their cure is to equalize economic power. And the secret to decentralizing power is information transparency/dissemination. The wealth/power of modern corporations and institutions are derived directly from the information they control or 'own' (patents, copyrights, trademarks, branding, proprietary/trade secrets, 'national security' secrets, etc.). Looser controls on information would increase opportunities for economic competition and, over time, decrease economic disparity.

Need transparent elections

My comment a C&L post decrying legitimacy of elected officials in light of their lack of transparency:

The intent of the first amendment's free speech right is the freedom to speak truth to power without threat of imprisonment. In a democracy, power lies in the voters, so speech directed at voters (press) is free of government intervention. Unfortunately, the Supreme Court has allowed media to lie in supposed news programs. The damage to media credibility is amplified by accusations of liberal bias and fake news. We now have a President whose every word has questionable veracity.

For years I have said the greatest reform to our political and economic system can only come about through a massive increase in transparency. Markets aren't free because consumers don't buy with full knowledge of the products (pollution controls, worker's rights/safety, etc). Citizen's aren't free because voters don't vote with full knowledge of candidates (candidates lie, financial support, etc).

Great post.

Maybe rude is more effective

Not the most diplomatic comment I've ever left. Truthout article titled Greece Has Been a Laboratory on a Way Out of a Capitalist Crisis:

Government austerity sucks the calcium from the bones of workers and sells it off to give 'tax relief' to the rich (depletes worker productivity by reducing healthcare and education/skills). Privatization sucks all the valuable materials out of public infrastructure and sells it for scrap (leaving behind unreliable roads & bridges requiring user fees). Then the power brokers, policy makers, and especially the economists who designed such ponzi-esque schemes get to express their shock and dismay that an economy without productive capacity can't produce. Unfortunately, they profit while the workers pay the price.

Increased inequality

Commentary at Truthout: Now Five Men Own Almost as Much Wealth as Half the World's Population.

Starving the worker tier of the economy is why the next recession will be "the worst crash in our lifetime"... the bulk of the economy (workers) does not have the wherewithal to generate economic activity. We need to reverse the course of economic desertification and the so called leaders are doing the exact opposite.