Monday, March 28, 2011

Pointless Killing

One of the events that shaped the life of Howard Zinn was a bombing run he participated in near the end of WWII. He later learned that many hundreds of people were killed in that attack and that it was unnecessary three weeks prior to the end of the war. Military commanders would have known that there was no military need for the attack, but ordered it anyway, possibly for career advancement.

I think Barack Obama at this stage in the Afghan War may be justifiably accused of acting similarly. The war there is widely regarded as unwinnable. The situation is about as bleak as it has ever been in terms of the likelihood of winning a military victory. I am not in the know on such questions. Maybe that assessment is wrong. But if anybody would know it would be Barack Obama. If it's true, what to make of the massive death that the Afghans are being subjected to? Here's a horrifying story about a kill team in Afghanistan that frequently looked for isolated unarmed Afghan civilians to murder. In photos now public these soldiers are shown posing with a 15 year old boy they murdered in cold blood as if he were some sort of hunting trophy. These are isolated incidents to be sure and I know that many of our soldiers do their best to do what is right, but this is the kind of thing that will happen in a war zone. For it to continue under conditions where the leadership knew it was all pointless would be an enormous tragedy.

The American people overwhelmingly oppose this war. Atrocities against Afghans are rampant, as they are in all wars. I personally am unaware of a rationale for the violence in any case. Why do we want to overthrow the Taliban? They didn't attack us. And according to many experts, including RNC Chair Michael Steele, ex CIA officials, the President of the EU (revealed via Wikileaks), Congressman Jim Moran, and others, this war is not winnable. Sustaining a pointless and unwinnable war is nothing short of an outrage.

God Told Noah to Not Worry About Global Warming

It would be one thing if religionists in some obscure country believed that their god would protect them from environmental destruction. But instead it's members of the US Congress and the US is so powerful it may have the fate of the species in its hands.

John Shimkus is a member of the House Committee on Energy and Commerce. There's no reason to fret about global warming, he tells us, because God promised never again to destroy the earth with a flood. Well that's a relief. I suppose when Jesus returns and the stars fall to the earth and the moon turns to blood we'll have more to deal with than excess CO2.

These people aren't cynics. They are true believers. They really think it's all a liberal hoax. They are our elected representatives. I think every new tea party candidate in Congress is a global warming denier. And as I continue to talk with Christians I continue to confirm my fears. They really don't care because they really think Jesus will bail them out.

Friday, March 25, 2011

At What Point Do You Call It Tyranny?

When your government is not at all constrained by laws that's tyranny. We all know that wars are to be authorized by Congress. Obama didn't even bother to ask them as he attacked Libya.

Rights of habeus corpus go back hundreds of years, to the Magna Charta. In cases where our government doesn't want to abide by them though these days they are out. What about cruel and unusual punishment? Bradley Manning is being subjected to mind destroying isolation and isn't even convicted yet.

Bush has admitted torturing, which violates laws that are on our books. It's not merely international law that he violated. Seems it doesn't matter. The rules don't apply to top governmental officials. At what point do you call it tyranny?

Sharia Law OK Sometimes

At least 13 states apparently don't have the blinders on. They've introduce bills to ban Sharia Law. Of course it's a huge problem in places like Utah and Wyoming where these Muslims are just taking over. You just know that if the right wing started to talk constantly about the looming threat of big purple dinosaurs we'd immediately see frightened Midwestern residents taking action to stop Barney.

The CIA though is grateful for Sharia Law though because it allowed Raymond Davis to escape justice thanks to the clause related to blood money payments to the victim's families. Apparently the victim's families are headed to America.

Tuesday, March 22, 2011

Haiti - Neoliberal Paradise

Haiti is one of the poorest nations in the world and also one where neoliberal programs have been in full swing for a long time. This is something that some want to deny, but I don't know how it can be denied.

In December of 1990 the top two candidates for President in Haiti were a former World Bank official, Marc Bazin, and Jean Bertrand-Aristide. Bazin was the US favored candidate because the World Bank and IMF are the primary implementers of neoliberal policies, the implementation of which is frequently referred to by the term Washington Consensus. Bazin's plans are simple. Cut import restrictions beyond their already non-existent level, reduce tariff's, and variously do all the other things favored by business. These supposedly will be a tremendous benefit for the poor.

Aristide is basically a progressive. He wants to do the very opposite. Rebuild Haiti's industries to where they can be self sufficient again. This means tariffs, taxes, and government that provides services to the poor. Make companies pay social security taxes. Increase minimum wage. There is some info on his policies here.

The assumption was that Bazin would win. He had all the money and all the power. But Haiti shocked the world. Aristide earned 67% of the vote and Bazin got 14%.

But that didn't matter. Haiti's first ever excursion into democracy would be brief. Aristide was immediately overthrown in a coup and Bazin was appointed acting Prime Minister. The US, while verbally objecting, did what it took to give the coup regime legitimacy and sustain it.

In 1994 Clinton allowed Aristide to return, but on conditions. He had to accept the harsh neoliberal regime of the defeated Bazin. Aristide had no choice but to comply, and did so.

The results were predictable. What happened was not unlike what happened to Haitian pig farmers when USAID mandated that they destroy all of their pigs and replace them with Iowa pigs in the early 80's. Haitian rice farmers were pretty efficient and the industry is important to the peasants, just as the Haitian pig industry was a backbone of the economy for many of the nation's poor. But how can they compete with American rice? Haitian rice production languishes as it has been doing for a while. A condition of IMF loans in the 80's was reduction in tariffs on rice and other agricultural products. US subsidized rice imports continue to rise. Peasants are driven off their land and into sweatshops near the slums. This makes sense because they are pursuing their comparative advantage. They need to be in the factories, not producing rice. That's more efficient.

The same is true of poultry. Tyson chicken floods the market with dark meat, which is not wanted by US consumers. Most other countries have functional governments that block that garbage. So Tyson first tried to dump it in Mexico and Canada, but since they have functional governments they were able to prevent it. Not Haiti, with it's non-existent governmental agencies. This destroyed the native Haitian chicken production. It's interesting that even Clinton, who comes out of Arkansas, which is where Tyson headquarters is, has admitted the destructive nature of these policies on Haiti. He doesn't mention Tyson, but only "Arkansas farmers."

All kinds of additional cause and effect relationships related to neoliberal policies within Haiti are discussed here. Ultimately Aristide was removed from power again in 2004 because he did not implement the neoliberal policies fast enough. Today his political party is banned from participating in the elections.

The results are of course a catastrophe. People on the very edge of subsistence. And the poverty exacerbates all the other problems. When an earthquake hits Cuba or Chile there may be a few deaths. When it happens in Haiti it's hundreds of thousands dead. As food prices rise the first riots are in Haiti. Just as the many millions killed in China due to Mao were not necessarily killed because Mao intended it but because he enacted policies that lead to their deaths, so Haitians die due to economic policies imposed on them by force by people, like Clinton, that for some reason don't recognize the destructive nature of these policies until it is too late.

This is neoliberalism. Good for short term profits which benefit the already wealthy. Good even for Americans that can buy really cheap clothes at Wal-Mart. Really bad and really cruel towards the millions of peasants in Haiti that have been denied self determination.

Income for Fully Employed Males Down Compared to 1970

It's true that the median family income has been rising pretty consistently, though it's rising at a slower rate since the 70's. But how much of that is merely due to the fact that women are entering the workforce?

Elizabeth Warren has the data and it's fitting the pattern of the post Bretton Woods stagnation. She offered a lecture called "The Coming Collapse of the Middle Class" and she compiles some extremely informative data. I wish I could find the slides themselves and can't seem to, but I'll provide a time stamped link to the portion in the Youtube clip that shows one of the slides in the video.

And here it is. Median income for married couples and also for fully employed males from 1970 to 2005. Family income is up. But the median fully employed male is actually earning $800 less than his father did a generation ago. That despite the staggering gains in productivity that have occurred since that time.

Here's another interesting fact. What are Americans doing with the extra money that they have with the two income earners? Buying fancy clothes? Buying expensive cars and homes? Buying all kinds of cool electronics? The savings rate is down dramatically. Revolving debt (basically credit card debt) is up. Is it because Americans are irresponsible?

The data is surprising. Americans are spending 32% less on clothes. Food, including eating out, bottled water, etc is down 18%. Appliances? Down 52%. Per car costs? Down 24%. Electronics spending is up of course. A mere $300/yr it went up, which is not a lot. On net typical consumption went down. A few things went up. Dog food. Alcohol. But overall in terms of ordinary consumption costs are dropping.

So what's going on? Where is spending rising? Take an ordinary 3 bedroom 1 bath house. 76% more expensive today. Mortgage rates are down, but housing costs were up. The median house grew. From 5.8 rooms to 6.1 rooms. And the median family did pick up either a second bathroom or a third bedroom, but not both. That's counter intuitive because we've all seen the new houses being built. They are huge. But what that tells you is the new housing market had shifted in service to more wealthy people, not entry level earners.

What about health insurance? Warren looked specifically at healthy families with an employer provided health insurance plan. So this is skewed towards the more fortunate people but it allows an apples to apples comparison. The family pays 74% more.

Car costs are up 52%. Per car costs are down, but the median family has gone from being 1 income to 2 income and thus has gone from being a 1 car family to a 2 car family.

Child care is a new expense picked up by the two income family that wasn't there before, so that's a large addition.

Finally the tax rate has gone up about 25%. We do have progressive taxation, which means the first dollar of the second earner is taxed after the last dollar of the first earner, so that means the tax rate for the family unit has increased.

With regards to these 5 major costs, notice that they are kind of fixed. I mean, you don't have to buy clothes every month, or appliances. You need food but it's possible to eat cheaper if you like. But there's no backing off on a mortgage, health care, day care, taxes, and car payments. Month in and month out it's kind of fixed.

Family income is up. But when this two income family has actually paid down their fixed expenses for the month we reach a startling realization. They actually have less money available than the single income family had in 1970. Why did savings drop from about 11% to about zero? Why is credit card debt up? People have less available in terms of flexible expenditures. That's the deregulated, union busting, tax cutting miracle that we've experienced over the last 35 years.

Monday, March 21, 2011

Solutions for Third World Countries and Neoliberalism

What I would suggest to my right wing friends is that powerful countries and corporations follow a particular pattern of profit maximization in third world nations that sustains those nations in an impoverished condition. That strategy is as follows.

First you displace local production with cheap products, often produced with state subsidy. So an example would be Mexican corn growers. These farmers were fairly efficient, but they can't compete with US subsidized agri-business. Flood the market with cheap corn and the farmers go out of business.

Bankrupt farmers are easily driven off their land and into slums in large cities. In those cities you set up US owned production facilities. The labor pool, which has ballooned due to the displacement and includes desperate people that are near starvation, will produce excellent low labor rates.

Further work with the government to retain weak labor laws. This means safety or minimum wage laws are constructed so as to maximize profit. Unionization is easily resisted with extremely desperate and weak people. Again, this maximizes profits.

Now that the conditions are right, talk about how free trade is great. Talk about how it would be immoral to take the private property of others. Talk about rugged individualism and standing on your own. It's wrong to take what you haven't earned. The owners of the Panasonic factory (stockholders) worked hard, saved their money, bought the stock, and so now you must prove your value to them if you expect to get additional compensation. Want more wages? Do more work.

There's nothing free market about this methodology until you get to the very final stages. The factory relies on automation and mass production techniques developed for WWII by state subsidy. The shipping methods (delivering the product from Mexico to the US) was likewise developed for the war. The shipping occurs on an interstate highway system that was developed and financed by the public. Of course computers are used to design the product as were the factory tools. Computer development was funded by the state in the early R&D stages. The corn used to drive the farmers off the land was subsidized by the state. Now we're at the final stages of this process that maximizes profits for Panasonic and in comes the moralizing. Private property must be respected. Your wage must be set by the market. If you want to improve your condition you must do it yourself.

Free markets may or may not be great. We'll never know because they've never been tried and probably never will be tried. What we are faced with in places like Mexico and Haiti is so called free markets are very selectively applied, and they've created unimaginable poverty.

So my question is, what is the solution for Haiti today? Imagine that someone was able to do to you what our government has done to Haitians. Suppose they take everything of value that you have. Suppose somehow they could wipe your brain and take away your education, which for most of us in the US is the primary resource we use to earn a living. When they had done that to you and most of everyone else they told you that you could compete with others to be a servant in their mansion. Millions of starving people would drive the price of that work down. The rest are left with nothing. How is it possible to make this situation right?

Free trade at the very end in this scenario would not help us. What would help is violation of certain assertions about the sanctity of private property rights. That would be obvious to us as we stood outside the owner's mansions and tried to scrape enough food together to feed our families. Listening to the owners moralize and talk about theoretically possible solutions that have no chance of being implemented would do nothing but distract from the serious nature of the present problem.

Thursday, March 17, 2011

The War on Democracy

An absolutely must see documentary on US foreign policy is "The War on Democracy." It streams instantly at Netflix but is also available on Youtube. Via Greenwald there's a few segments compiled of an interview with a CIA operative that quickly captures the essence of neocon thought.

Wednesday, March 16, 2011

Raymond Davis Released

CIA operative Raymond Davis has been released by the Pakistani government after a blood money payment to his victims. So he will be spared a trial and is now free despite what might in fact be murder.

Incidentally I eagerly await the release of Glenn Greenwald's new book "With Liberty and Justice for Some: How the Law Is Used to Destroy Equality and Protect the Powerful".

The Myth of the "Sub Prime" Crisis

Dr. Prabhat Patnaik, Economics Professor at Jawaharlal Nehru University in New Delhi, explains how the shifting of blame to Fannie and Freddie is a myth.

The basic argument about ''sub-prime'' lending causing the crisis however was a flawed one. The banks had given loans to the so-called ''sub-prime borrowers'' against the security of the houses they had bought with these loans. If the values of the houses collapsed then banks’ asset values collapsed relative to their liabilities, precipitating a financial crisis. The cause of the crisis therefore lay not in the identity of the borrowers, the fact of their being ''sub-prime'', but in the collapse of the asset values, which in turn was because asset markets in a capitalist economy are dominated by speculators whose behaviour produces asset-price bubbles that are prone to collapse. Indeed when the banks were giving loans against houses to the so-called ''sub-prime borrowers'', they too were essentially speculating in the asset markets, using the ''sub-prime borrowers'' only as instruments, or as mere intermediaries in the process.

To attribute the crisis to sub-prime lending therefore amounted to shifting attention from the immanent nature of the system, the fact that it is characterized by asset markets, which are intrinsically prone to being dominated by speculators whose behaviour produces asset-price bubbles that necessarily must collapse, to a mere aberration, a misjudgement on the part of the financial institutions that made them lend to the ''wrong people''. It was a deft ideological manoeuvre. The identity of the people who borrowed, whether they were in rags or drove limousines, was actually irrelevant to the cause of the crisis, but it was presented as the cause. The blame for the crisis was put falsely on ''sub-prime lending''; and a fabrication, a complete myth, called the ''sub-prime crisis'' was sold to the world, quite successfully.

Tuesday, March 15, 2011

ML King on Vietnam

Last month I watched a movie regarding the war in Iraq that showed a young Iraqi girl driven from her home at the point of a gun and I did some screen captures. It happens that the video is also in a youtube clip with some comments from Martin Luther King Jr in regards to the war in Vietnam.

Latest on Public Support for War in Afghanistan

Albert Einstein on Private Concentrations of Wealth

Private capital tends to become concentrated in few hands, partly because of competition among the capitalists, and partly because technological development and the increasing division of labor encourage the formation of larger units of production at the expense of the smaller ones. The result of these developments is an oligarchy of private capital the enormous power of which cannot be effectively checked even by a democratically organized political society. This is true since the members of legislative bodies are selected by political parties, largely financed or otherwise influenced by private capitalists who, for all practical purposes, separate the electorate from the legislature. The consequence is that the representatives of the people do not in fact sufficiently protect the interests of the underprivileged sections of the population. Moreover, under existing conditions, private capitalists inevitably control, directly or indirectly, the main sources of information (press, radio, education). It is thus extremely difficult, and indeed in most cases quite impossible, for the individual citizen to come to objective conclusions and to make intelligent use of his political rights.

Albert Einstein in his essay Why Socialism?

Monday, March 14, 2011

Obama Illusions Fading with Torture of Bradley Manning

For expressing some mild criticism of the treatment of Bradley Manning by the military, treatment which amounts to mind destroying torture and for which Amnesty International is calling for protests, State spokesman PJ Crowley has essentially been fired by Obama. This seems to be a turning point for many on the left. Many of Obama's supporters can no longer stomach this. Obama's support now is largely on the right.

I tried to explain this to Bob Dutko on the air. Why do you pretend Obama is such an awful person? He's surveilling us without any restraint. Assassinating US citizens with no judicial oversight. Expanding wars. Torturing people. He's a dream come true for Dutko. You don't like that he's pro-choice. Fine. But beyond that, what more do you want? He's as violent and dictatorial as you could ask for.

Denis Prager on Israel/Palestine

Here's Denis Prager "explaining" the very non-complex dispute between Israel and the Palestinians. He's right that it's not complex. And he's right on a number of other points. The problem is that half truths are just as bad as untruths in many cases.

In 1947 Israel did barely manage a 2/3 majority that granted them portions of Palestine and granted Arabs other portions. But when it passed Israel was already expelling Arabs not only from the areas designated as Israeli, but also from areas designated as Palestinian. The Arab armies did enter, but the fighting occurred almost exclusively in territory designated as Palestinian. As I understand it was largely a land grab by the other Arab states, especially Jordan. Also presumably it was an effort to keep Israel within the designated UN borders. But that didn't happen. Israel acquired territory beyond what it was offered and created 750,000 refugees.

Prager says that Israel accepted the UN partition and the Arabs didn't, as if it's somehow a slight on Arabs that they don't agree that they should just give up their homes because the UN says so. That was based on a vote that passed with barely the 2/3 needed for passage. Since then the UN has repeatedly voted on a peaceful settlement at the '67 borders. This is granting Israel much more territory than it was granted in 1947. The Arabs all accept it. In fact virtually the whole world accepts it. It's not a matter of a mere 2/3 accepting it. So for instance last I knew it had passed 164-7. Israel and the US reject it. Almost everyone else accepts it.

Prager says that every poll shows that Palestinians don't believe Israel should exist. That's probably true, but so what? Though they may not think their land was legitimately taken from them in 1948 they are willing to face the fact that yes, Israel is a state, it's not going anywhere, the land is gone, so though it was taken illegitimately it's something we have to live with and are willing to live with. Ghandi said he didn't think Pakistan should exist. But he also said that it was a reality he had no choice but to live with.

He asserts that the Arab armies were going to attack in 1967, but US intelligence and the Johnson administration says that they don't believe they were. They said that if the Arab armies did attack Israel would destroy them in something like 7-10 days. Israel attacked anyway and won in 6 days.

Then he pretends that Israel is very magnanimous in that it ceded back to Egypt the land it had acquired in 1967. See? They're willing to bring peace.

The facts are these. Egypt offered in 1971 a full peace agreement with Israel if only Israel would return to them the territory that they had taken. Israel ignored them. So Egypt, after repeated warnings that they must return the territory, attacked in October 1973 and put on a pretty good showing. So Israel realized that Egypt wasn't a basket case and decided they needed to do something. So they managed to convince the US to buy them off and they returned the disputed territory. All of this could have been accomplished without war and a perpetual US buy off if Israel had merely accepted the terms offered in 1971. So that was a total disaster.

Prager is shocked that hostility towards Jews is routinely expressed by Arabs. But that's what happens when you invade countries routinely and kill tens of thousands of people. Take the 1982 invasion of Lebanon. Something like 17,000 civilians killed. No credible pretexts. Or the more recent bloodbath in Gaza. Again, based on no credible pretext Israel invaded and killed 1,400 residents, who really should be described as prisoners. They also crushed chicken coups, destroyed mills to prevent them from being able to create food. And it wasn't a war. There were no battles. These people have almost nothing. They can't fight Israel with their chemical bombs falling from F-16's.

Why weren't people talking about a Palestinian state prior to the existence of Israel? Because they've been getting crapped on for a long time, including by other Arabs. So what? It doesn't matter that Jordan treated the residents of Palestine poorly in the past. What matters is that in 1948 Israel simply took land and homes from the indigenous people of the region and herded them in to what today amounts to concentration camps. That's not right even if Jordan has made past mistakes.

Prager says that if only the Arabs would drop their weapons we'd have immediate peace. That's just plain nonsense. The only reason Israel doesn't attack Egypt is because they have some deterrence capacity. Israel routinely invades and occupies foreign countries. Why should anybody think that life would be wonderful if only the Arabs would drop their weapons? The Palestinians have almost nothing in terms of weapons. Hamas was rewarded at the end of 2008 with an invasion after they had abided by the terms of the cease fire that had been implemented. That's just entirely fictional thinking.

Sunday, March 13, 2011

The Significance of Bretton Woods

One of the reasons I think the dismantling of Bretton Woods and consequent neo-liberalism have been so destructive is because from what I can see Bretton Woods was in fact established to prevent the kinds of deteriorating economic conditions that have been observed world wide since the mid 70's. Predictive capacity is the mark of a good scientific theory. Noam Chomsky explains the insights of John Maynard Keynes, one of the core framers of the Bretton Woods system.

After World War II, the victors established a global economic order, the Bretton Woods system: Britain was represented by John Maynard Keynes, the US by Harry Dexter White. A core principle was constraints on capital. Governments were permitted to control capital flight, a principle that still is in the IMF rules, though ignored. And currencies were regulated within a narrow band. The motives were twofold. The first was economic: Keynes and White believed that these measures would stimulate economic growth and trade. The second was sociopolitical: both understood that unless governments are able to regulate capital, they will not be able to carry out social democratic (welfare state) measures. These had enormous support among populations that had been radicalized by the Great Depression and the anti-fascist war (World War II).

The basis for the sociopolitical motive is straightforward. Free capital movement establishes what international economists have called a "virtual parliament" of investors and lenders, who carry out a "moment-by-moment referendum" on government policies. The "virtual parliaments" can "vote" against these policies if it considers them irrational: enacted for the benefit of people, rather than profit for concentrated private power. They can "vote" by capital flight, attacks on currencies, and other devices offered by financial liberalization. Keynes considered the most important achievement of Bretton Woods to be establishment of the right of governments to restrict capital movement.

Keynes regarded speculation as destructive. His basic insight is well described by Indian economist Prabhat Patnaik, at the UN conference of October 30 on the global financial crisis. Patnaik explains that Keynes "had located the fundamental defect of the free market system in its incapacity to distinguish between `speculation' and `enterprise.' Hence, it had a tendency to be dominated by speculators, interested not in the long-term yield on assets but only in the short-term appreciation in asset values. Their whims and caprices, causing sharp swings in asset prices, determined the magnitude of productive investment and, therefore, the level of aggregate demand, employment and output in the economy. The real lives of millions of people were determined by the whims of 'a bunch of speculators' under the free market system." The replacement of governmental "demand management" by "bubble booms" created by speculators is a prime cause of the current financial crisis, Patnaik argues plausibly, supporting Keynes's analysis.

The whole interview is worth a read.

Saturday, March 12, 2011

It Was Quite A Shock

Quote of the Day
I grew up in a communist country. From my experience, nobody around me ever believed in the state propaganda - nobody said anything about it in public, but we all made fun of it in private. At the time, we were also envious of the free countries like America.

It took me a while to find out that in America, people do believe the state propaganda. It was quite a shock.
Marcel at David Friedman's blog.

Friday, March 11, 2011

Bob Dutko Falsities on Behalf of Wealth Exposed

Today I called Bob out on his massive propaganda on behalf of wealth and privilege and gave a little bit of voice to the poor and middle class with regards to the Wisconsin union struggle. Click below to hear or download here.

I routinely follow up in the body of these posts with some sources on Bob's various false claims, and this post will be no different. He's wrong on the average teacher salary in Wisconsin as I document here. He's also wrong about the amount of taxes paid by the rich as I document here.

But I have to concede an error as well. I said that for the bottom 80% of the population wages over the last 30 years are flat to declining. That may be true when you account for the increase in working hours, but it's not true overall. Wages are up slightly for the bottom sectors, but the growth is far slower now than it was before the mid 70's. And it's certainly true that the income gains since 1980 have been heavily skewed to the wealthy.

What the Rich Pay in Taxes

The right wing has a tendency to portray the present tax situation in the US as if it's a tremendous burden for the rich. I was recently told by a friend that the top 10% of income earners pay 90% of all the taxes. That sounds pretty surprising and rather bogus. When I challenged my friend he withdrew the claim and revised it. Then the claim was the top 1% pay more than the bottom 90%. Well, that's also bogus. Where do they get this stuff?

My friend got the revised claim from the Koch brothers owned Tax Foundation and you can get it here. They aren't lying. What they are doing is omitting important information that caused my friend to misrepresent the claim.

I knew that Warren Buffet was paying less than his secretary, so I knew that the right wasn't showing the full picture. So I took some time to understand things. Here's what I came up with.

The Congressional Budget Office has great data here. It's only up to 2006, but still good. The Koch brothers want to talk about income taxes. Those are progressive, so focusing on them highlights the suffering of the rich. What they don't want to talk about is the payroll tax because that's regressive and highlights the contributions of the poor. And the payroll tax is now an enormous portion of the total federal revenue. They don't really want to look at capital gains either. That's a major source of wealth for the uber rich and is taxed at a lower rate. CBO looks at it all, include corporate taxes, which it divies up mostly to the rich because of course the rich own most of everything. So they are getting their credit for corporate taxes as well.

What's the end result? The top 1% pay 28.3% of all federal taxes. In 2007 they accounted for 23% of all the income. And they likewise have about 50% of the stocks, bonds, and mutual funds. Seen in that light it doesn't seem like 28.3% is all that outrageous. And if we were able to find data regarding the top 0.1% I suspect we'd find, as their income becomes more and more heavily skewed towards capital gains, that Warren Buffet's claim makes sense. They aren't even paying a share proportionate to their income, let alone their wealth. That's what's really outrageous.

How to Improve the Unemployment Situation

Just for my own reference somewhere in a comment stream I'd provided a link to a CBO report which evaluated different methods of reducing unemployment. I couldn't find the comment, so I'm just putting it here so I have access to it in the future. Right wingers take the trickle down approach. "We need tax breaks for the wealthy. They create the jobs. I've never been hired by a poor person."

That sounds plausible, but the flip side is that if you give poor people more money they are more likely to spend it and that also creates jobs. Which force is more powerful? The CBO says that getting money into the hands of the unemployed is VASTLY superior. Reduction of income taxes was the least cost effective method dollar for dollar. Increasing unemployment benefits was the most cost effective.

It's Bad In Michigan

Thursday, March 10, 2011

Chomsky, Greenwald, and Goodman On One Stage

I'm pumped because I'll be seeing the three of them at this event. I love Chomsky as everyone knows. Greenwald is my favorite blogger/journalist. And Goodman is nothing but a straight out hero as I described here. I couldn't ask for a better lineup. I'm in Michigan but I've been looking for an excuse to go to New York. I went in high school and it was great. I haven't been back since. Also I've never been to Niagara Falls, so we'll stop there.

Monday, March 7, 2011

To Be Muslim In America

I know a lot of Muslims. They're scared. I'm sad to say that I don't blame them. Watch this video and experience what they go through. Greenwald has the background info for this.

Looks like the video is now being suppressed. See here.

Info on Wisconsin Teacher Salaries

I caught just a few minutes of some financial planner guy on Christian radio near me by the name of Russ Jalbert. His advertisements regularly appear on the Dutko show. It appears to be non-stop class warfare at WMUZ as he tells us that teachers in Wisconsin make $89K/year. Well that sounds pretty high, right? Scott Waker is being really fair, right?

Where is this figure coming from? I'd seen a pretty reasonable presentation of teacher salaries here. Quite a bit different from Jalbert's claim.

So I was curious where this $89K figure was coming from. Perhaps it was Rand Paul on Lettermen. You can see why he's mistaken here.

I'm sure Jalbert just didn't know. But it's interesting that the frequent errors on WMUZ always serve the interest of the wealthy owners and advertisers.

Update: 3/10/11

Today Bob Dutko in the first hour pointed out that total compensation for Wisconsin teachers in Milwaukee was more than $100K. He referred to this PolitiFact review which deemed this claim to be accurate. This same page refers to the above Rand Paul error. Total average compensation for teachers, according to PolitiFact and the link I have above is $74,843. $49,093 in salary and $25,750 in benefits.

In the 3:00 hour though Bob went off on teachers again. He said that the AVERAGE TEACHER COMPENSATION in Wisconsin was slated to be $101,091 next year. Now, he knows that's false. If he read the PolitiFact article he knows that this is unique to Milwaukee, which apparently is an outlier. But he used this assertion to hammer away at the teachers again expecting them to make concessions.

Wednesday, March 2, 2011

Are the Rich Doing the World a Service?

Right wing theory is that free markets are best for economic growth. Especially when it comes to capital, when you allow the money to flow freely it can quickly find an efficient use. For instance if an entrepreneur develops a new product that is superior to the competition we need capital to flow towards that product quickly because when the superior displaces the inferior the whole world ends up being a better place. And the entrepreneur gets rich as do the investors. As we all know in the case of hedge fund managers they can get staggeringly rich. But so what? If this makes everyone better off, what's the problem?

And so what if this staggering wealth caused inequality to grow? If one individual in a group of 100 suddenly becomes extremely rich, this doesn't in itself harm the other 99. If their standard of living is still the same, or perhaps has gone up a bit, then there's no problem. Being rich isn't in itself bad.

As always I think the key in exposing right wing error is to look to the real world facts as opposed to the plausible sounding theories. Can we do that in this case? Maybe to some degree.

Capital flows became much more free after 1971 when Nixon dismantled the Bretton-Woods financial framework, which placed restrictions on capital movement. What might be informative is looking at economic growth before and after that event. I thought I'd try looking at GDP. I know GDP isn't necessarily a great measure. If you build a bridge then blow it up and rebuild it that induces a higher GDP than if you'd just left it alone. But, granting the limitations of this measure I'm not sure of a better measure, so let's look and just see what it tells us.

And maybe I'm just not good with Google, but I was actually having a hard time finding the data and plots that I was looking for. So what I present here are my own plots in Excel which are based on data from here. Below is a plot of Real GDP by year from 1950 to today. You can click all of these graphs to enlarge them by the way.

That's a pretty choppy graph, so I thought I'd make another plot showing the 3 year moving average. So for the data point at 2009 you are looking at the average of 2007-2009. Below is that plot.

Since about the mid-70's we've seen a huge expansion in income and wealth between the rich and poor. Maybe that's acceptable if we also experience a huge economic growth rate. But are we seeing that? I don't see it in these graphs. Let me break out the data into a few different categories. Here it is by presidential administration.

AdministrationYearGrowth Rate
Bush II2001-20082.08%
Bush I1989-19922.15%

By decade:


By policy:

PolicyGrowth Rate
Before Bretton Woods (1950-1971)4.09%
After Bretton Woods (1972-2010)2.88%
Before Deregulation (1950-1980)3.83%
After Deregulation (1981-2010)2.79%

Hedge fund managers are making billions of dollars in a year. That's the price you pay for amazing growth. But as we look at the data it doesn't appear it is panning out. If anything not only are we expanding the gap between rich and poor, in fact we don't even have the growth to show for it. That's pretty astounding. The more regulated world is more egalitarian AND higher growth.

Well OK. The right wing is sometimes recognizing this. The low tax, low regulated, financialized world in fact has reduced growth AND created inequality, but you know what? That's just in the US. Our loss is a gain for poor foreigners in third world countries. Are we to deprive the poor in foreign countries of a decent life for the benefit of a handful of Americans? We're just so good that we can't allow that. We want to pull the poor Chinese up into the middle class. You racist progressives obviously have a problem with the poor in other countries improving their lives. We're doing it for them. We just have such big hearts. That seems to be HP's position as he appeals to this article. Here's an excerpt HP cites approvingly.
The good news—and the bad news—for America is that the nation’s own super-elite is rapidly adjusting to this more global perspective. The U.S.-based CEO of one of the world’s largest hedge funds told me that his firm’s investment committee often discusses the question of who wins and who loses in today’s economy. In a recent internal debate, he said, one of his senior colleagues had argued that the hollowing-out of the American middle class didn’t really matter. “His point was that if the transformation of the world economy lifts four people in China and India out of poverty and into the middle class, and meanwhile means one American drops out of the middle class, that’s not such a bad trade,” the CEO recalled.
The overall article is actually not bad. The author talks about the human tendency to rationalize and she points out questions with regards to whether or not these people are in fact pulling the poor up out of misery. For instance here is a citation from the article.
Critiques of the super-elite are becoming more common even at gatherings of the super-elite. At a Wall Street Journal conference in December 2009, Paul Volcker, the legendary former head of the Federal Reserve, argued that Wall Street’s claims of wealth creation were without any real basis. “I wish someone,” he said, “would give me one shred of neutral evidence that financial innovation has led to economic growth—one shred of evidence.”
My thoughts exactly. It's not enough to say that many in China are doing better. The world economy is almost always improving. The question is, what is the rate of economic growth. Is this system that we presently have, which creates many billionaires on Wall St and expands the gap between the rich and poor, actually retarding growth that would otherwise be there in a more regulated setup? Because for every China there's a Mexico, Haiti, or even a US, the latter of course not poor, but not growing at the rates they were before and suffering increases in inequality.

Economist Brad DeLong has made efforts to determine world wide production as measured by Gross Word Product. The date he presents is available here. I took that data and made another plot of growth, once again starting at 1950. Here it is.

GDP and GWP does not tell the whole story. But where is the evidence that globalization is better than the alternative? It's true that many in China and India are much better off. But in India for every new millionaire, how many suicides are there? In Mexico NAFTA has helped produce one of the richest humans alive. But also a country that descends into chaos with violence due to poverty.

Some rich are doing the world a service. People like Steve Jobs bring innovations that change many lives. But as far as the Wall St billionaires, I see no evidence that we owe them a debt of gratitude, as some right wingers seem to think.

Tuesday, March 1, 2011

How Stalin Funded the Tea Party Movement

Champions of the free market Charles and David Koch can thank Stalin for sparing their father from the ravages of the free market and allowing them to be the billionaires they are today. Lassaiez faire capitalism initially crushed their father's efforts to implement his superior oil refining developments. Fred Koch turned to Stalin, who commissioned him to build 15 oil refineries for the Soviet dictatorship. The details can be read here. Here are a few excerpts from the link:

the family’s initial wealth was not created by the harsh, creative forces of unfettered capitalism, but by the grace of the centrally-planned economy of the Soviet Union. This deserves repeating: The Koch family, America’s biggest pushers of the free-market Tea Party revolution, would not be the billionaires they are today were it not for the whim of one of Stalin’s comrades....

[Young Fred Koch and a classmate were] quickly developing and patenting a novel process to refine gasoline from crude oil that had a highe-yield than anything on the market. It was shaping up to be an American success story, where anything was possible with a bit of elbow grease and good ol’ ingenuity.

The sky was the limit—until the free market rained on Fred’s parade.

See, Fred was living through the Roaring Twenties, a time of big business, heavy speculation and zero government regulation. Much like today, cartels were free to form and free to fix—and so they did. Sensing a threat to their royalty-revenue stream from Winkler-Koch’s superior refining technology, the reigning oil cartel moved in to teach the young Koch how the laissez-faire business model worked in the real world.

“[W]hen he tried to market his invention, the major oil companies sued him for patent infringement. Koch eventually won the lawsuits (after 15 years in court), but the controversy made it tough to attract many US customers,” according to Hoover’s Company Records service. Just like that, Winkler-Koch Engineering found itself squeezed out of the American market. They had a superior product at a cheaper price, but no one to sell it to.

Luckily, there was one market where opportunity beckoned—and innovation was rewarded: the Soviet Union.

Fred would make millions. Today the Koch brothers rail against the same anti-market forces that permitted them to have success. It's free markets and tough love for you. Government intervention and nanny state for me. The tea partyers need to learn to recognize the pattern.

Fox News Lies

Watch this hilarious video of Fox News reporter Mike Tobin dealing with Wisconsin protesters. They're holding signs that say things like "Bill O'Reilly is a Sexual Predator" and "Walker is a Koch Whore." Awesome. In another interview the "Fox News Lies" chants start again. During this interview he tells us "Somebody hit me." Those violent union thugs!!

So Fox News is now spending lots of time talking about the violence Tobin has been subjected to. This is being repeated by the right wing flak machine. I heard Dutko talking about it yesterday. He's pretty outraged. One thing they don't do is show us any footage of Tobin being hit.

Turns out there is some footage. Here it is. Looks more like a tap on the shoulder to me. For Fox this is an attack. Fox does this kind of thing regularly because Fox News Lies.

They've gone to court to defend their right to lie. And they've won. When investigative reporters Steve Wilson and Jane Akre did some digging on Monsanto they discovered that there were serious health risks associated with their Bovine Growth Hormone. They intended to produce a 4 part series on the story. Fox directed them to alter their story by adding what Wilson and Akre knew was false information coming from Monsanto representatives. For refusing to run the false story they were fired. They sued. Fox didn't dispute that they were directed to lie. What they argued is that they have the right to direct their employees to lie.

Canada has laws preventing this sort of news. I suppose Canada won't be getting Fox News any time soon. Or right wing radio.

But they can continue to lie here. Here they are altering footage to make it appear that Ron Paul was booed after winning the recent straw poll at CPAC. Their goal is deception, which is their legal right. Keeping people ignorant is profitable for some, but it makes democracy tough.