Do you believe everyone on our planet is our brother? If so, how do we make laws and policies that help our brother? How do we need to change our thinking to lift the boats of all brothers?
Myth #127 Republicans Can Keep Their Old Beliefs and Just Sugar Coat Their Message Republicans did an autopsy of their party's failure in the 2012 elections. They decided they needed to put more feet on the ground and try to appeal to minorities, women, etc. Big Problem.
Sugar coating their message doesn't change their message. For example, 53% of American approve of same-sex marriages by a CBS Poll. A Washington Post-ABC Poll found 58% of Americans in favor of the same. In true Romney style, the republicans explained why the polls are not true. Of course, among the young adults same-sex marriage just seems normal. The Republican platform is clearly against it. 11 million immigrants want a path to citizenship. They have a lot of Hispanic friends and many sympathetic white supporters. Most Americans want there to be a path to citizenship for illegal immigrants. Republicans do not. Republicans think they should be punished for breaking the law even if most of them have a good cause ... helping to support their families back home. Republicans could come up with a plan to base immigration on a policy to bring talent into the U.S. like Australia, Canada and many other wise governments. But, Republicans have nothing. Most Americans like Planned Parenthood which helps prevent abortions via birth control. Republicans do not. Really? Most Americans favor at least background checks on people buying guns. Republicans do not. NRA owns the Republican party and unfortunately many of the Democrats. In this case, what the majority want is not relevant. So, this may not hurt the Republicans since the Democrats are cowards on this issue. Most Americans have a problem with no health insurance being available for those who have a pre-existing condition. So, if the Republicans knock Obamacare, they should come to the table with some plan on that issue. They should come up with something better than the emergency room for treating the common cold for the uninsured. They've got nothing. Again, the majority wants a plan on Health Care. Given no alternatives, they favor Obamacare. So, Republicans are mostly in disagreement with the majority and lacking any real substantive alternatives. They are in denial like they were with the polls that showed Romney losing. In a democracy if you are on the side of the minority on most issues, it is really tough to get the votes. Republicans, you need to change your position away from the far religious right. Holding on to that group will lose you the hispanics, gays, blacks, women, and young voters. But, you may hold on to the old white men -- the group that has a poor record in getting out to the polls. More sugar is not going to fix it this time. Plan B?
Perhaps you know that North Korea has nuclear bombs and ballistic missiles. What we don't know is if they can make their nuclear weapons small enough to fit on their ballistic missiles. The bad news is that the North Korea's are making threats against South Korea, Japan and the United States to use their nuclear weapons in a preemptive first strike.
The United States of course responded with plans to beef up anti-missile missiles on the West Coast and plans will surely follow to beef up defenses in Japan and South Korea. All of course for big bucks to the American taxpayer. But why? If you are Japan or South Korea what would you pay to get anti-missiles installed in your turf to keep North Korea from dropping a nuclear bomb on your head. I am thinking we could even make a handsome profit. Of course, we can stick with the current plan of borrowing money from China, passing the debt on to our children, and pretending like we are rich.
Ryan just came out with a new budget. In his budget that says we will have a balanced budget by 2023 (just in time) he assumes Obamacare will be repealed. REALLY? Lets face it. Obamacare is the law of the land. It has a lot of problems but it is not going away. Assuming that it is going away invalidates everything Ryan is saying. As McEnroe would say, "you've got to be kidding!" If Ryan and the other Republicans want to be taken seriously they will start improving Obamacare with ammendments -- working with democrats that know much needs to be changed to make Obamacare efficient, even functional. But, be real guys.
I grew up taking pride in calling myself a capitalist. At the simplest level it is simply letting individuals and companies freely trade with each other -- but a set of rules has evolved that defines what is fair. The question is, "are the rules fair?". Is there a balance of power between the various groups in our capitalist system? Is our capitalism dominated by special interest groups just like our government? Is it possible to have free and fair trade when the government that governs our capitalism is dominated by special interest groups?
"Free" Capitalism puts a value on everything relative to the value of everything else. There is no other system that works better than this... how many pounds of bread is one pound of steel worth. The Soviet Union didn't know how to do this during their prime. They looked it up in Western newspapers. Really. Of course, if they were having a drought in Society Union and not in the west, the Soviets were using a low value for bread. Capitalism optimizes a system based on the underlying rules and power groups that operate within it. For instance, print more money and capitalism lowers the value of that currency, although there may be a lag. Raise taxes, something painful, and the system adjusts to avoid taxes more. Make business taxes cheaper overseas then business moves overseas to minimize taxes. There are four primary groups in American capitalism, shareholders, customers, government, and workers. All of these groups have power/representation except for the American worker. Unions used to represent the worker, but their power has been minimized; government used to represent the worker, but our pathetic Congress no longer represents anyone but themselves in getting re-elected. There is another huge factor working against the worker, there are seven billion humans on this plant. Capitalism automatically discounts anything that is in excess supply. We are also replacing humans with machines, computers, and technology in general, see Myth#3 There are No Solutions for Unemployment. Also not good for human's value in the capitalistic machine. BUT sadly ... it goes further than this. If capitalism just valued things based on their scarcity, all still might not be too bad for workers. But, the value of all things are adjusted by what I will call the Good Old Boy Club. If one factor of production has the power to adjust its value, for instance, labor unions fifty years ago, then the value of an item is raised or lowered by this power, this leverage. More on this in later posts.
But for now, let me just say our form of Capitalism has been fined tuned by the Good Old Boy Club to optimize things for those in power. And who is in power ... in corporations it is The Board of Directors and Upper Management, and in Government it is the Top Layers of Government and the Military Industrial Complex, see Eisenhower. In companies, it is easy to see how upper management serves on the Board of other corporations who in turn serve on their board. They take care of each other. The Good Old Boy Club has also reached from corporations to the government for decades, but with PAC's from corporations buying elections the connection no longer has to be secretive ... the buying and selling of officials is out in the open. Congress for example has only one mission ... get elected, get re-elected. And a complacent population that does not know history is easy to control. Most companies, like most families, just get by, making a modest profit, paying their bills, putting a little in the bank for a rainy day. But, from time to time companies by the brilliance of their workers or simply being at the right place at the right time make a killing. This is not bad because it means they have met a need or a want extraordinarily well. Government gets their cut via taxes and then the Good Old Boys in Congress spend it for their special interest groups. But who decides where the rest of it goes?
To pick on Apple ... it has $400 billion in cash that has been generated from the combined brains of its workers and management and meeting the need for a great cell phone, the Iphone. Shareholders have also put up cash to get the whole show started. Who is going to decide how this bounty is destributed: hint: a few key shareholders and upper management. The workers gave up their rights to any of this extraordinary bounty the day they signed a pile of papers in the personal office on their first day of work. If they wanted a job, they had no choice. For example, they signed a paper saying any patents they create will belong to the company -- which strangely does not include them in this context. The Good Old Boy in Upper Management will throw them a few crumbs to keep them happy, but they have no legal right to the wealth they helped create. (Apple will take care of their workers better than most companies, but in our present world, they certainly are not expected to.)
How created wealth is distributed/shared is not automatically determined by capitalism. It is a construct that develops by a series of laws and legal decisions and past practice that establishes the rules of capitalism in our country. Of course, recall who writes the laws ... industry usually .. upper management ... the good old boy club. If workers are employed because of their special skills, they do not have final say about matters affecting how money is distributed, or much of anything else.
So, we have developed our flavor of capitalism that very effectively distributes money to the good old boy club ... upper management, the Board of Directors, preferred shareholders (read good old boy club), Congress (good old boy club), etc. BUT NOT THE WORKERS. As jobs become more scarce (End of Work by Jeremy Rifkn), will we as workers and citizens fight over the last scraps or will be informed enough to unite together to change the rules of distribution. Will we unite to set up Term Limits for Congress? Will we even care enough to know what rule changes we want for our form of capitalism, or will we meekly follow the good old boys?
Many of us have heard the tape where the 911 Operator pleads with a nurse to give CPR to a woman who has fallen. The nurse refuses to help the woman in the assisted living home because it is against policy. The woman dies, persumably because no help was given. The initial debate in the media centers on the policy in the assisted living center, but to me the existance of a policy, good or bad, is not the real issue. Does it make sense in a life and death situation that someone has to refer to a policy, to a written manual to know what to do? We have our entire life to learn and study and develop our own moral code. Is this a decision that can be delegated to someone else? Can the nurse, as a person, get off the hook because someone else has decided that letting the woman die was the right thing to do? If the nurse knew she might get sued for trying to help and instead doing CPR wrong, would that change what is right and wrong? Are we our brother's keeper? Let's apply this principle to yesterday's question. Should we be willing to work a shorter work week, make less money, if more unemployed people would now have a jobs? And what would happen to the economy if more people had jobs? Is helping others the path to helping ourselves, the path to helping the economy?
I am reading a book that I read the first edition of about 1980. The book is entitled "The End of Work". It contends that computer technology, robotics, and technology in general are reducing the need for labor. For example it states that steel production in the last twenty years rose from 75 million to 102 million tons while employment in the steel industry fell from 289,0000 to 74,000. The book is filled with such examples from all over the world with some noted exceptions (Africa, parts of South America, etc.) Even China is shedding jobs even as it creates new ones.
Of course, the real unemployment rate in the U.S. is much worse than the offical 8% or so. We do not include people that have stopped looking for work, or people that have never been on the employment roles like high school dropouts that sell drugs or do whatever they can to get by. Neither do they include the 2% of our population that is in prison or the large amount of people that are working but not producing much in government or miliary jobs. And finally, it does not include perhaps 10% or so of our population that is under-employed doing much less than they are capable of doing. Lose your job and if you find a new job it is probably a lower paying job requiring less skills than before. It is estimated, per Jeremy Rifkin the author of this book that by 2050 only 5% of the adult work force will be need to run all of industry, farms, manufactuting, etc. I visited a wall board plant last year that had 27 acres of a factory under roof producing wall board at a rate of many feet per second. The plant was huge and no one was around. Mountains of wall board were being produced and stacked by machines. A lone fork lift operator loaded pallets onto a truck sitting at the dock. A factory full of machines making wall board. A total of 18 people worked in the plant including secretaries and this was for all three shifts combined - including the boss. The few workers sat watching computer screens. I saw one person get up to make an adjustment on a machine when the computer warned it was slightly out of alignment. It really is happening, jobs are vanishing. So how is it that we are doing as good as we are doing. Credit. The housing bubble and the credit pumped into our society kept a lot of people employed. It is estimated that the average American lived on 120% of his salary over the last decade. The government spends about 142% of the revenues / taxes that they bring in. They are crying loudly because they have via the sequester dropped down to 136%. Things are not going to magically fix themselves. We need some short and long time changes to the game book. One simple idea for today, more in later posts. Job Sharing France about a decade ago reduced the work week to 35 hours, most of Europe is down to 37 hours or so. Of course, our industry would cry how impossible it would be to reduce the work week without destroying productivity. Surprisingly, two countries that beat American productivity are France and Belgium who have 35 hour work weeks. However, they have the same spending disease that we have so they turn out to be in worse shape than us. Remember in the elections how we (Obama and Romney) were going to reduce corporate income taxes to improve American competitiveness -- so we at least hold on to more of our jobs. So much for campaign talk. Large companies are sitting on trillions of dollars they are not investing because their plants are running under capacity because their markets are not growing -- because all the workers /consumers are sitting on the couch at home looking for jobs. (Example, Apple has $400 billion in the bank.) So, why couldn't we give cuts in the corporate tax rate to those companies that reduce their work week - a sliding scale. One would assume at some point that to maintain productivity they will hire workers to replace the lost hours from shorter work weeks.
Although this is not an international fix, and lack of jobs is an international problem, we can create jobs in America at the expense of the rest of the world by simply lowering our corporate tax rate and attracting the jobs that are created to American instead of Europe, or even China. America is still a good place to find skilled and dedicated workers. Few companies however are willing to pay our corporate taxes, 35% and often state taxes, for example in Maryland, of 35% also. Pay 70% corporate tax or go to Hong Kong or Ireland, etc. and pay 10%. Duhhh, what should we do.
We as Americans believe we live in the Greatest Country in the World. Is that true? By what standard? Literacy? The number of babies that survive birth? By how safe it is to live in this country? By how well we take care of our sick, our aged, our youth? By how we educate our children? By how hard we work? By how our families stick together? By our success in marriage? Perhaps there is one area. Our military. But even that is suspect for effectiveness. We spend ten times more than China, and more than the next twenty countries put together -- all of which are our allies except for China. Are we any safer than the rest of the world? If so, then what about 911. Our military is the best at spending money the most inefficiently. Do we seriously believe that if China was stupid enough to spend a trillion dollars a year on the military that they would not kick our butt like they do in every other category. My friends in Peru used to say that Americans were good at making money but not good at living life. We no longer have the highest standard of living in the world, we have not for a long time. So, I am afraid my Peruvian friends were wrong, we don't know how to make money or live life. But, we do have more tanks in storage than anyone else. Tanks that the miliary do not want, but Congress likes pork despite the fact that it helping to destroy America.
Is the American Dream becoming a myth? Is Congress part of the problem, or part of the solution?
Everything has consequences. Printing trillions of dollars of new money (printing and debt) to SAVE our Economy will not be done without a huge cost. More dollars representing the same, or even less goods and services, means the dollars are worth less. The other variable is its relative rank versus other currencies. If other countries do the same thing the relative drop in our currency will be less, canceling the effect to some extent. But, no other country is going quite as nuts as us in trying to spend their way out of this situation. Capitalism and free markets are pushing us toward an adjustment in our lifestyle. We as a people and country have been living outside of our means for a long time. The house of cards have fallen-in on themselves. The message we are being sent by the markets is that resources have been and are being irrationally distributed. Credit, far beyond what is rational was used to probe up this irrational distribution for much longer time than a more prudent policy would have allowed. For instance, it is irrational that Fuld from Leman Brothers got $480 million managing a bank that he helped drive into bankrupt. Keeping interest rates abnormally low to keep our economy going while loaning money to people to buy things they could not afford at any rate was an irrational distribution of resources. Obama spending money to stimulate the economy without a real plan to improve things will just lead to inflation. Investing in our economy, our people, our infrastructure, etc. would also stimulate the economy without necessarily causing inflation assuming value was created equal to or greater than the monies spent. The downside of investments is that they take time, usually years, to see the benefits. We as a people have grown weary of working hard and waiting for our investments to bear fruit. So, I suspect we will concentrate on quick fixes and pay for it later with higher inflation.
