Category Archives: economy

The Contradiction of Capital Markets…and more

An important question: Can companies really gain investment capital via the stock market? 

GuidedAllocationElsewhere I have commented on how easily capitalist/entrepreneurial markets can and do get warped by cheating and parasitism.  Some of it is inherent, as Adam Smith described way back in 1776. What could be  more natural for human beings to do – for example – than insider trading?  We set up rules, and then lay patches on cracks that inevitably open in the rules, then bandaids on the patches….

Across 6000 years, no civilization ever tried so hard to create fair and open arenas within which humans can engage in creatively cooperative and creatively competitive positive-sum games.  Those who claim that markets are “natural” are romantics who know no human history and who have never even cracked open Smith’s classic, Wealth of Nations. Markets are far from natural!  They are marvelous, wealth generating machines. Human inventions that need constant tuning, tweaking and re-adjusting.  Especially since cheaters (in other words humans) are all over the place, looking for ways to exploit those cracks. If they must, they will use camouflage and call themselves socialists… or oligarchs… or champions of enterprise, — whatever garb will let them garb themselves in the sanctimony of their environs.  But pay less attention to the polemics than to outcomes.

Witness how the emphasis in the U.S. economy has shifted, since the 1940s, away from goods and services to finance. Companies once founded by innovators start to fail when taken over by “business majors.” The clade of parasitical meddlers has an endless supply of rationalizations, such as those concocted by the HST or High Speed Trading industry, claiming that – by leaping to suck away the intermediate value between buyers and sellers – they are somehow doing both parties a service, by helping markets to settle on the “proper (intermediate) market price.”  This catechism-incantation allows them to shrug aside the blatant fact that they benefit while producing nothing, and the buyers and sellers and produces of goods and services languish and fade.

(Aside: one reflex will be to to accuse me at this point of “socialism” – even though every word of mine so far has been in praise of honest trade and competitive market forces, in a capitalism free of what biologists and disease experts call “parasitic-burden.”)

== The “mutant” CEO ==

DefendingFreeEnterpriseElsewhere I have also discussed the flawed reasoning that defends today’s outrageous compensation packages for CEOs and other managers who create no product or service whatsoever. Think, market forces are supposed to correct imbalances!  Hence, by the very logic of capitalism, high CEO salaries should attract new talent to the field of corporate management until the supply of brilliant corporate managers outstrips demand and the prices fall. That is capitalism!

It is the absolute core catechism of their faith… completely ignored when convenient. Members of the collusive CEO caste never ever, ever mention this — that the system they claim to admire should result in a smooth and natural limitation on these French Royalty level compensations. And the failure of a correction to appear is essential proof of a collusive market distortion.

The one excuse I’ve heard is that the very best managers are mutant-level good. They are like tall, fast NBA players, nonlinear and by far worth any price! But there’s a rub.  NBA mutants can prove they are worth it by clear statistical performance measures and ticket sales! In contrast, there is famously almost no correlation between CEO compensation and company health.  Rather, studies have shown a near-perfect correlation with how many members of a very small clade of 5,000 or so you play golf with.

== The myth that equity markets efficiently raise capital ==

But let’s go back to the stock markets. You can step back and question the fundamental rationale for equities trading, altogether! Oh, sure, people should be able to sell their shares to others who deem the company has better prospects. But for the most part it is a gambling den that is justified by the claim that companies use the NYSE and NASDAQ and other exchanges as “capital markets,” to fund their R&D and the building of productive plants and equipment. (Ironically, much of their catechism on this goes back to Karl Marx!)

The whole notion that a company benefits very much, when its stock price rises, is absurd.  This only happens when the price rises AND the company’s board issues new shares to sell at that higher price. That will, indeed raise capital. Current stockholder value is diluted, but presumably it rises back up as a result of  new activities and products that the fresh capital allows.  To do this requires sober calculation and convincing existing stockholders that the dilution will prove beneficial.  And it just doesn’t happen that much.  Nowhere near enough to justify the 99% of trading that is pure speculation, gambling and manipulation.

(Note: current stock-owners should be able to trade, fine, but let’s stop pretending the companies benefit from any but the tiniest fraction of NYSE activity. To the contrary, managers are terrorized by stock value fluctuations into making rapid, short-term decisions that can prove short-sighted, even catastrophic.  Secondary note: none of this applies to commodities markets, though those have their own problems.)

NewSharesIn any event, that cycle of ownership dilution and re-investment via new share issuance is the activity that should be tax favored, and NOT the passive clipping of gambling profits from the trading of old shares. Re-stating that again… the issuance of new shares – the proceeds of which go to new products, capital equipment and so on – should be tax-favored, and not (gambling) dividends and capital gains that benefit competitive capitalism not… one… iota.

1- The favored flows would go directly to the company-> investment -> productive capacity and competitive activities.

2- The result of new issuance would be a steady decline in the power of large bloc stockholders as dilution spreads ownership ever-wider.  In order to hold onto control, large-bloc owners would have to keep plowing dividends back into buying new shares.  So, either the ownership becomes more broadly spread (resembling democracy), or else the “kings” are forced to be hands-on, involved and committed to the firm.  Either way, vigorously competitive investment in new goods and services would be the favored outcome.

React viscerally.  Call this “socialism.”  In fact, there is not one molecule of socialism in this proposal.  Just anti-parasitism, plus a will and eagerness to see so-called “capital markets” actually function as advertised, for a healthy version of capitalism.

ContradictionCapitalMarketsLet me swivel now and point my finger in the opposite direction: left-wingers who blame “capitalism” for our recent messes should replace the word with “cheaters.”  I consider healthy “Smithian” capitalism to be one of the top five victims of the malignantly incompetent rule of the recent U.S. GOP.  There are no outcome metrics of national health under which the Republican Party’s tenure in command did not wreak harm upon the people of the United States, on human civilization, and upon healthy capitalism… and upon the spinning ghosts of Barry Goldwater and William F. Buckley.

Okay.  It’s been said.

More… anon… Meanwhile… and just to clear the decks… here are some political miscellany.

== Who won the Iraq War? ==

WhoWonTheIraqWar“We lost out,” said Michael Makovsky, a former Defense Department official in the Bush administration who worked on Iraq oil policy. “The Chinese had nothing to do with the war, but from an economic standpoint they are benefiting from it, and our Fifth Fleet and air forces are helping to assure their supply.”

Not to mention that Iraq is now largely a satrapy of Iran.  What a great idea that pair of trillion dollars was.  And you would even consider trusting those goofballs with a burnt match, let alone any role in political life?

== Political-News ==

An infographic rates countries based on the state of freedom of the press. Many criteria are used, including violence against journalists to legislative measures to curb press freedoms.

An interesting look at how unusual it is to see the Republican Party without a clear next front-runner.  “For decades, the party has drawn from a small pool. There was a Bush or a Dole on every national ticket from 1976 through 2004. For 20 years before that, Richard Nixon was on the ballot in every election but one.”

EnergyGapTracking progress toward US energy independence: a handy chart, from Popular Science.

A provocative essay, Radical Centrism and the Return of Ricardo, reminds us that Adam Smith was not the only founder of enlightenment economics. Ricardo also played a major role. I cite both of them in that they knew what most “free market” economists have forgotten, that economic distortions will always be generated by toxically massive accumulations of wealth. A healthy market system – like an ecosystem – needs recycling, not just for “liberal” reasons of justice and equity and outcomes, but for the very health of the system itself, so that competition remains a real, vibrantly creative force, with a maximum number of empowered participants on a relatively flat playing field.  This proposal for a radically altered tax and property system has no chance of ever being implemented outside of a sci fi novel. And I only agree with half of the aspects.  Still it shows real thought.

See statistical proof that obstruction of appointments has skyrocketed under the Tea Party House of Representatives.

How 1% of 1% dominate U.S. elections.  Yes it is Mother Jones and I don’t always agree with their polemics.  But unlike Fox, they use actual facts. And they show where all of this will head, so long as the agenda of The Insatiables is the re-establishment of feudalism.

It would be one thing if — as I portray in Existence — the re-emerging oligarchy took seriously their need to be intelligent rulers. It is another thing to blithely assume they are smart while undermining every institution and enlightenment system that brought them all they own. Do they actually plan to ignore where history says that this will lead?

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Things only a zillionaire could do to save America

Mention George Soros anywhere on the far-right and you’ll get fulminations.  To Republicans, Soros is an aristocratic mastermind who swore to “spend whatever it takes” to end the Bush-Neocons’ grip on political power in America… a vile plutocrat, striving to trample the will of plain-folks, along with the populist GOP that protects them. Glenn Beck railed to his audience, calling Soros the “Great Oligarch” and a master manipulator “who toppled eight foreign governments.” (The one thing Beck never mentioned, and that – tellingly and symptomatically – not one member of Beck’s vast following ever asked, was “which eight foreign governments did George Soros help to topple?” Tune in at the very end for the amazing answer.)

1101970901_400Okay, after wiping away tears of ironic laughter, one is left wondering.  If George Soros – and other rich liberals – are so potent and determined, why have they accomplished so little?

On the right, you see plenty of men and women who have proved ruthlessly effective at translating money into power, directing vast resources toward politically effective ends. There’s Rupert Murdoch, controlling — along with his Saudi co-owners — much of the world’s mass media, from Fox News to the Wall Street Journal. His deep-pocket interests have been highly effective, funding everything from “Swift Boat Veterans for Truth” (remember them?), to Carl Rove’s Super-PAC empire, to the war on science.

Forbes_cover122412David and Charles Koch, a pair of wealthy and politically radical brothers have leveraged millions from likeminded investors, to wrest control over most of the nation’s voting machines and funded (with several hundred million dollars) the campaign to delay, obfuscate and render impotent any determined action to mitigate global climate change.  Not to mention foreign commodities moguls who have used deep fingers of influence to fare best of all, in recent years.  The list goes on and on.

Now, mind you, I am less enraged by all of this than you might think, simply because I view such behavior as the most natural thing imaginable!  We’ve had at least a million years in which human reproductive success was partly determined by males jockeying for status in tribal settings… followed by 6000 years in which 99% of all agricultural societies wound up being dominated by inheritance oligarchies, who strove above all to keep the masses in their place, ensuring that their sons would own other peoples’ daughters and sons.  The chief outcome — suppression of competition and free-flowing criticism — resulted in the litany of horrifically awful statecraft that we call “history.” Adam Smith and the American founders decried the toxic effects of oligarchyoligarchy, which has always been the chief enemy of markets, enterprise, science, truly-competitive capitalism and freedom. Populist or elected “government” – in sharp contrast – has almost no track record at actually harming those things.

Nevertheless, it is easy to see why we’re attracted to tales about kings and wizards and such, and why so many of the rich strive to re-create feudalism. Isn’t it what you’d do?

We are, indeed, all descended from the harems of guys who pulled off that trick.  We carry their genes. Wanting all of that is the most natural thing in the world.

No, to me the amazing thing is what a high fraction of the new billionaires actually “get” the enlightenment… the modern civilization that gave them all of their opportunities and to which they owe absolutely everything.  Maybe 50% of them — the Musk-Gates-Buffett-Bezos-Page-Brin-Soros-types — grasp the enormous goodness and clever dynamics, based upon relative-equality of opportunity, that brought them their great fortune! Half of them seem to get it; this is wonderful.  It gives me hope there’ll be an ambitiously accomplished and exciting civilization for our grand-kids.

Can the Good Billionaires be as effective as the would-be lords? 

I explore this on the pages of Existence, wherein you attend a gathering of rich clans in the year 2048 and view them weighing how much of their gratification to defer, in order not to kill the golden-egg-laying goose.

All right, it’s hard to envision Steven Spielberg pulling shenanigans anywhere as effective — in the short term — as the Foxite war on science.  His films are designed to provoke thoughtful conversations, not reinforce bilious hatred of your neighbors.  It’s a more wholesome endeavor, but those seeds take time to germinate. The Fox-approach is quicker.

Of course, the top endeavor for a rich person who wants to change the world for the better is simple.  Keep getting rich by delivering excellent goods and services. And when you’ve reached a certain, sane level of satiability with wealth itself, you can either give a lot of it away (your kids will never starve) — or else start investing in new endeavors that are risky!  Then riskier still.

givingpledgeFor example, several of the tech-wave billionaires have invested heavily in the privatization of space exploration. Prime examples include Richard Branson’s Virgin Galactic, Elon Musk’s SpaceX, Jeff Bezos’s mysterious Blue Origin project, Paul Allen’s Stratolaunch System, and Sergey Brin’s Space Adventures. Recently, Peter Diamandis, Larry Page and Eric Schmidt and others have teamed up to launch Planetary Resources aiming to mine resources from asteroids… a topic I happen to know a thing or two about.

Yes, that’s the top thing they can do. Innovation.  Risky entrepreneurship.  That and setting an example with real philanthropy, by signing the Gates Pledge.  Nevertheless, given that so much of our future depends upon the political process, can we afford to leave that arena to be meddled in by just the New Feudalists?

Do Friendly Billionaires Matter in Politics?

Let’s be clear.  Our present electoral divide won’t depend on the whim of a few  moguls.  Nor is Culture War all about “rich vs poor” – not yet. Historically, most nations were wracked by class struggle – and we may yet revert to that age-old pattern – which could become an especially dangerous schism, when the poor will be technologically empowered.  (It’s an IQ test for the uber-wealthy: do you actually believe you can rebuild lordship in the coming era, when the prols will have smart drones and desktop bio labs and all that stuff? Really?) But such times may be averted.  Indeed, many of today’s affluent are loyal to the mobile, competitive, egalitarian and rather-flat society our parents made, after World War II.  One that rewarded innovative commerce, without entrenching permanent castes.

So, let’s suppose there are a lot of wealthy, frustrated enlightenment fans out there.  With so much hanging in the balance, what’s a rich dude to do? Heck one great option would be to start a competing company to, say, make honest voting machines. Surely you can get that ready in time to win some contracts for 2016? Or else, organizations that perform poll watching and electoral process-checking could absorb large donations, in time to do a lot of good.  Though these groups are officially neutral, we know who would benefit, if elections proceed transparently and fair.

Likewise, the political caste will never rouse itself to do anything about gerrymandering. But a privately funded campaign against that foul practice, even as little as 20 million dollars, could start an avalanche of public anger over this blatant crime. In the short term, this would help both parties to back away from radicalization and elect more rational pragmatists. Kill gerrymandering and you will be well-remembered as a dragon-slayer.

philanthropyBut it’s my role to look in directions that are more, well, unconventional.  So let me bring up one idea, from a general compilation of Concepts for Billionaires: Horizons and Hope: The Future of Philanthropy, that’s been in circulation for some time.

A Henchman’s Prize

I’ve long wondered why some billionaire who is worried about our open society doesn’t pony-up and offer truly substantial  whistleblower rewards. One action that could be especially well-targeted, during the next month or so — while having immense publicity value — would be to announce a great big prize for proof of massive cheating or dirty tricks, in time for the evidence to matter, before the next round of elections.

For best effectiveness, one would couch the idea in nonpartisan terms.  Offer a million dollars to any conspirator who turns coat and steps forward with – say – solid evidence that either party has engaged in a systematic effort to deny the vote to a thousand or more people in any political constituency.  Plus five million if the evidence leads to rapid, public plea bargains or convictions.

Yes, five million dollars is a lot of money.  But note that the larger sum is paid upon conviction, in which case it’s a small amout to buy a scandal-tumult of huge proportions. Perhaps big enough to transform politics in America.

Sure, people will see through couching it in nonpartisan terms.  (Though a Republican co-sponsor could be found.)  But even that implication would be useful, highlighting what everybody knows — where that kind of cheating is coming from.

Why emphasize “conspirator”?

HENCHMENThis is where the word henchman comes in.  Those most likely to have the goods — real evidence — will be people already deep inside.  Ironically, a henchman is probably venal and psychologically primed to jump ship, if offered the right combination of inducements — both cash and introduction to people who can offer some immunity.  (Rep. Henry Waxman has been responsible for recent strengthening of whistleblower protections, for example.)  This qualifier also keeps out a flood of mere rumor-mongers, who have other places to go.

There are many other possible whistleblower prizes.

But there’s a catch.  Any such program must be carefully phrased. A billionaire will have to fight past his or her own attorneys, in order to do something like this.  One doesn’t want to be held liable for enticing unproved or false allegations, or slander.  (There might be a discreet application process and a committee to vet claims, while police and prosecutors are given their full due.)

Still this sort of thing has one advantage — it could be set up and unleashed quickly.  And it appeals to the avaricious spirit that has driven so many dirty tricks operatives, ever since the days of Nixon and Donald Segretti.  Remember, tempting rats to betray each other ought to be easy, if you use the right cheese.

And all it might take is just one.

===============================================================

FOLLOWUP:  Have you guessed yet (or looked up) the eight foreign governments that master-mogul-manipulator George Soros “toppled”? How telling that (to my knowledge) none of Glenn Beck’s viewers or listeners even roused themselves with God’s greatest gift – curiosity – to ask which governments those were.  But you know, by now, what those toppled governments were, right? They were…

… the communist dictatorship of Poland … the communist dictatorship of Czechoslovakia … the communist dictatorship of Soros’s birthplace Hungary … the communist dictatorship of Lithuania … the communist dictatorship of  Estonia … the communist dictatorship of  Latvia … the communist dictatorship of Romania … the communist dictatorship of  Bulgaria…

… and that’s erring on the low side. Some credit Soros with having major effects in Yugoslavia, Belarus, Ukraine….  Yep.  It is pretty clear why Glenn Beck never likes to get specific.  Facts kind of interfere with the narrative.

This is a heavily revised version of a posting from  roughly 2004.

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The end of ID and credit card safety? Must e-commerce be destroyed?

Want a scary story about the near future of you and your money on the internet… and the future of e-commerce? Try this from Mark Anderson, one of the top tech business pundits around, in the newsletter of the Strategic News Service:

Another level of chaos has come to us through the use of credit cards on the Net, linked to our digital IDs. At first, everything was great: the system worked, fraud was present but offset by fees, and the world had a new payments system. That was yesterday. Today, ID theft and card fraud are apparently out of control….

 Not long ago, I was told by a gas pump to check with personnel inside; I had driven my little sports car too quickly from the last gas station, and the system had rejected my card because it didn’t think I could be me. Soon after that, the anti-fraud system on a different card allowed me to fly to Washington, DC, and charge something there, but not to charge something in New York, where I often travel. When I called the issuing bank, the implication was that I had failed the burden of duty of calling to inform the card company.

 I am used to informing these folks when I travel internationally, but -  “Do you mean I now have to call you every time I move from state to state?” I asked. “Because I am definitely going to shred the card before that ever happens.” 

 A friend reported having had her card fraudulently used, so she canceled it and had another issued from the same New York bank. That, too, came back soon with fraudulent charges. My response: she wasn’t a victim of ID theft; she was a victim of a bank that was lying to her about having been penetrated, with the thief getting card data access. Someone else at the table had also had bad charges on a card from the same bank.

 “Simple,” I suggested. “Don’t change cards; change banks.” Can a whole bank be neutralized by a single attacker?  You bet.

Scary stuff from a fellow who knows.  But nothing compared to other items in Mark’s highly respected newsletter: like when he gives us all chills, explaining about the back doors that have been designed into most chips originating in Taiwan, allowing outsiders who have a secret key to simply walk into your system. Those chips are everywhere, including all U.S. defense machinery. Now what could those back doors be for?

== The end of credit cards and passwords? ==

endMark Anderson paints a daunting picture of our future Internet, fraught with viruses, worms, moles, backdoors and a bestiary of other ways that our secrets — from passwords to credit cards to life histories — can and will be betrayed.  The “cypherpunk” dream is to prevent all of this by encrypting everything behind  layers of shrouds — the biological analogue: fighting viruses by thickening your cell walls and making them less permeable.  One can only take that so far before the cells become incapable of interacting with each other. And then die.

Despite an admitted romantic allure, such cypher methods can never be verified, they defy auditing, and they can be suborned or backdoor penetrated by elites. Indeed, the system’s opacity makes it hard to detect or repair mistakes. All of which I detailed in The Transparent Society: Will Technology Force us to choose between Privacy and Freedom?

Face it, we in the Western Enlightenment will never excel at skulking and shrouds and games of deceit.  Oh, I’m sure our paid protectors have done many clever things: perhaps those “backdoors” that exist in Taiwanese chips and codes contain DOUBLE back doors, that were counter-scammed by the NSA. Our spymasters doubtless have many layers and ingenious processes afoot… and so do some of the “anonymous” hackers… and it will all be for naught over the long run, as education and sheer numbers bring our adversaries (national, corporate, criminal etc) into greater technological parity.  At which point their cultural comfort with such cryptic games will turn to their advantage.

marketsAs I’ve sad in places like The Transparent Society, there is another way.  We in the Western Enlightenment have a tool that suits our cultural leanings, our talents and our creative bent.  That tool is light… openness.  The transparency that for 200 years turned competition into the greatest creative force ever seen.  Markets, democracy and science all work better in light, when the participants (voters, customers, researchers) can make informed- Hayekian decisions.  These arenas clog, choke and start to die when secrecy reigns.

I’m not proclaiming we should drop all efforts in the skulking war of worms and counter worms.  In fact, the looming failure of password-based systems (credit cards etc) can be solved with new, transparency-based methods.  Google plans to emphasize the obvious – biomentrics – but there are other techniques even simpler and great business models that could be built from them.

This cyber-era replicates a billion years of evolution, when parasites ravaged, then reached balance with the immune systems of metazoan life forms. We are replicating all of that in a few dozen years, praying we can fine tune our info-immune systems in time.  Fine, let’s invest.

But over the long run, what ambient conditions favor our kind of society?  A future that grows steadily less secret and more light-filled is the only one that inherently advantages the Enlightenment West, whose very name contains the key ingredient.  All of our adversaries are allergic to such conditions.  In an open world, they will have to become more like us, not less.

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Why a Transaction Fee Matters to You

Elsewhere I’ve long pushed the idea of a financial transactions fee to rebalance the playing field in securities markets, so they will no longer lean so hard in favor of giant Wall Street brokerage houses, now running a scandalous scam called commission-free High Frequency Trading (HFT).  Extremely modest in scale, the transaction fee would not even slightly inconvenience normal traders, like you and me. But it could prevent disastrous bubbles and other calamities.

Indeed, recent months have shown dramatic moves toward this metric of sanity. Eleven Eurozone members, including France and Germany, will use it to discourage speculative trading. Also known as a Tobin tax after the economist who originally came up with it 40 years ago – the fee will charge 0.1% of any trade in shares or bonds, and 0.01% of any financial derivative contract.

SolutionNow, following the Europeans’ lead, Senator Tom Harkin of Iowa  and Rep. Peter DeFazip of Oregon have introduced a bill to institute a U.S. version of the transaction fee.  By raw extrapolation, this zero-point-zero-three-percent (o.03%) fee  could raise a whopping deficit-curbing $352 BILLION dollars in ten years, while helping capital markets to settle down, avoid bubbles and computer runaway-meltdowns, while returning to both individuals and regular companies a fighting chance to participate in capital markets on an equal footing.

Question: at three cents for every $100 traded, who among us would notice?  Only those who pour billions each year into shaving off microseconds in computerized systems that sense when any of us are about to make a buy or sell order and pounce before we can act. And pounce hundreds or thousands of times per second. These predatory HFT trades now constitute the vast majority of transactions on today’s exchanges. How did that happen?

Only the fact that they are participants in a cartel — “seated members” of exchanges like the the NYSE or NASDAQ — lets them get away with an activity that none of the rest of us could engage in.  Even a savvy billionaire would soon be wiped out by commissions if he or she tried to do HFT from outside the cartel — a blatant case of insider manipulation and restraint of fair competition that ought rightfully to be broken up under anti-trust laws.  (In this computerized day and age, why not have a hundred times as many “seats” or exchange members competing with each other? Indeed, though it be blasphemy, let me ask: why have “seats” at all?)

Have a look at  the vast amounts of data now handled by huge, fantastically well-funded HFT systems (they recently laid their own fiber cable across the Atlantic, to shave a few more milliseconds), making NASA’s space probe data crunching look pale in comparison.

== Why you should want – and help – this to happen ==

A couple of points:  First – all right – we would not actually get $320 billion; because the fee would succeed in its goal of reducing volatility.  Still, lots of income would come in from those who caused the Near Depression and seem bent on provoking another. At minimum, the new fee would pay all costs of running the SEC and other agencies charged with maintaining transparency and accountability in Wall Street, removing those burdens from the taxpayers. It could also serve as an alternative funding source for the bond rating agencies, like Standard & Poors, freeing them from the present incestuous conflict of interest — rating the bonds of those who pay their wages.

Note that under Harkin’s bill,  initial stock offerings  – the “best” and most truly useful trades – would be exempt, along with other exceptions, like the first hundred trades you and I make any year, to ensure that HFT speculation will carry the main load.

TransactionFeeTerminateIf you talk to a “quant” — one of the high-IQ dopes who have done the boffin work for High Frequency Trading — you will hear them howl that HFT serves a valuable function toward “efficiently finding correct prices” and eliminating the differential between perceived value of buyers and sellers.  They actually believe this promotes market health, despite the sickness that has pervaded the capital markets ever since they took us down this road. Even though it can be proved, under basic thermodynamic and biological principles, that this incantatory premise of theirs is completely insane, a self-hypnosis mantra that’s diametrically opposite to true.  (Engines and organisms and markets operate healthfully upon gradients, which HFT happily and eagerly and parasitically eliminate.) They need to go back to math and physics, where nature corrects delusion.

As the author of The Transparent Society, I like the way a Tobin fee would create a continuing open-audit of the giant banks and brokerage houses, a side benefit, letting us all see what they are doing. (Do you trust them, after decades of cheating and outrageously stupid behavior?)

Of course, wearing my other hat as a science fiction author, I have my own “terminator” reasons for wanting to see the Tobin enacted.  But you’ll have to follow your curiosity to this older article: A Transaction Fee might save Capital Markets and protect us from the Terminator… in order to find wry/scary amusement in a “far-fetched” danger that could be very real.  One that only a sci fi author would think of! (That too is where you’ll find the “thermodynamics” arguments explained.)

FindRepresentativeNow it’s your turn. Please, despite its dry tech-speak, this reform really, really matters. If you can get up out of Facebook torpor enough to take the effort, write to your congress-critters and news-sites in support of Sen. Harkin and the Tobin Fee proposal!  You should have all the email addresses already on hand and ready for messages like this one, right?  If you don’t, pause now to create a little file containing your standard opening and closing, plus the email addresses of both senators, your representative, the president and favorite media.   (Check the website: Find Your Representative. ) A little work this time… will empower you to speak up easy and quick, the next time some issue raises your ire.

Or the next time I ask it of you! ;-)

== Political-economic Miscellany ==

Compiled at last: Brin articles about emergency readiness, civil defense, citizen resilience — how to make yourself – and civilization – more robust against the dangers and inevitable calamities that will strike us in this century.

chasing_ice_xlgWatch this excerpt from “Chasing Ice” - an amazing documentary of time-lapse photographers tracking the retreat of the world’s glaciers. Watch a mass the size of Manhattan break off Greenland and flip with staggering violence! Then watch the whole film. Take your crazy uncles along.  The images are convincing.

A secretive funding organization in the United States that guarantees anonymity for its billionaire donors has emerged as a major operator in the climate “counter movement” to undermine the science of global warming,  The Donors Trust, along with its sister group Donors Capital Fund, based in Alexandria, Virginia, is funneling millions of dollars into the effort to cast doubt on climate change without revealing the identities of its wealthy backers or that they have links to the fossil fuel industry. However, an audit trail reveals that Donors is being indirectly supported by the American billionaire Charles Koch who, with his brother David, jointly owns a majority stake in Koch Industries, a large oil, gas and chemicals conglomerate based in Kansas.  Millions of dollars has been paid to Donors through a third-party organisation, called the Knowledge and Progress Fund, with is operated by the Koch family but does not advertise its Koch connections.

Now some context. A cool interactive site lets you sift and explore the world’s top billionaires and sort them by self-made vs inherited or by gender or nationality.

David Ignatius on why America and Europe are seeing good reasons to start cheering up. That is… if we keep confidently investing in our strengths.

The rise of volunteerism in Russia is seen by folks-like-us as a hopeful sign. of an optimistic, can-do culture beginning to ferment in a land long dominated by dour cynicism. Alas, the older tradition is fighting back, as the powers-that-be have been clamping down hard on nonprofits and volunteer groups, even those with no political agenda at all.

Speaking of which… While the global nature of cyber-crime means the criminals can be anywhere, we tend to think of Eastern Europe and Russia as the hotbed of criminal activity. Trend Micro believes criminals will increasingly shift their operations over to Africa in 2013. 

WeThePeopleNow and then we see proposals to remove tax exemption from churches. A measure came close to passing in Colorado some years ago. And now comes this We The People petition to the White House. I’ve long held that such proposals should offer a “floor” exemption. Say $100 per parishioner and ten sq ft per member, also the first $40K of pastor wages, all of it baseline tax-free. This would safeguard all poor churches and clearly distinguish basic from lavish. True charitable work would also be exempt. It would also make the measure one that might actually pass, someday, while a complete removal of tax-exemption won’t.

The blanket exemption has been justified by the expression “the power to tax is the power to destroy.” But nobody is out to destroy churches and the tax-free floor that I propose would end such talk and would remove that justification, allowing us to say: “you use our roads and cops and defense, same as anybody. Please help pay for them.”

David Brin

http://www.davidbrin.com

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Part of the “Fiscal Cliff” Solution: the Best Tax Simplification Proposal

With the 2012 elections over and a political landscape remade, the stage is set for our next U.S. drama, a tussle over how to prevent the budget and economy from tumbling over a “fiscal cliff.” From the tone of preliminary discussions, it’s looking hopeful that all parties (save a few Tea Party holdouts) have taken their “act-like-an-adult” pills. Investment wizard John Mauldin may turn out to be right, after all – that grownups will act in the nick of time, transforming the deficit from an all-destroying monster into a mere-worrisome beast.

That is, if President Obama can get Congress to swiftly do the very first thing, the immediate top priority: pass legislation guaranteeing tax stability at current levels for the Middle Class, so that markets won’t panic on January first. All else can be thrashed out in an “outline” for the next Congress to finalize by March.

That is, if Speaker Boehner can herd enough Republicans into accepting more revenue from the rich. And if their masters on-high grumble but accept what the election’s Super-Pac Collapse showed, that the oligarchic putsch is waning. With tax rates near their lowest in 70 years and with Federal revenue as a share of GDP at its lowest since the end of WWII, it’s time to ignore those imbeciles maniacally preaching hatred of our own government, blaming it for all things. And time for the uber-rich to accept what the First Estate foolishly refused in 1789 France – that it’s time to pay a bit for being members of a civilization.

Oh, but liberals will have to give, as well! This can all happen if the President delivers sincere counter moves on entitlements: the easiest being simply to tell Americans  the truth. “Hey, you live a lot longer than your parents did, so you can work just a tad longer… and 70 is the new 50 anyway.” If he does that, in exchange for an end to Bushite supply-side voodoo largesse for aristocrats, then our children will be saved at a single stroke.

The rest of the deficit? Well, as I explained elsewhere, half of the causes of our current mess should dissipate, once the other half come under control, and now that we are safe from our house being ruined again by the same fools who bulldozed it over a cliff from 2001 to 2009.

== The Role of the Tax Code in All This ==

Now, Let’s be clear; the deal that emerges may have some twists to it.  Republicans will be seeking a face-saving way to increase inflows from the rich — an approach validated not only by the electorate but also a report from the Congressional Research Service declaring that Supply Side mythology is, was, and always will be hokum. That incantation worked far too long, hypnotizing a generation on the right, but it’s over and good riddance. (Adam Smith himself said that most aristocrats do not invest any sudden largesse into innovative capital. That was a fantasy.)

While admitting the inevitable, GOP politicians are eager not to explicitly violate their “no new taxes” pledge to Grover Norquist, who still has some clout despite his star fading, at long last. Desperate for a fig leaf, Republican legislators tout a semantic distinction between “augmenting revenues” and “raising tax rates.”

The leading proposal on the table right now appears to be eliminating the ability of the rich to evade taxes through deductions, a suggestion offered briefly, during the many policy gyres of GOP presidential nominee Mitt Romney.  By eliminating a wide range of deductions, or else capping all deductions at – say – $25,000 per person/year, a large flow of revenue could be tapped while allowing the actual marginal rates of income taxation to remain at Bush Cut levels. (Not enough, according to Treasury Secretary Geithner, but a good start.)

Another approach would be to raise – or even eliminate – the regressive cap on the payroll tax that feeds social security and Medicare. If that were also applied to capital gains and dividend income, so much new revenue would be generated that the rate of the payroll tax would have to be reduced, lest serious damage occur! (That mere fact shows just how skewed our values have become – that honest work is taxed harsher than what Adam Smith derided as “rent-seeking” – the lowest form of economic activity, according to Smith.)

Any of these approaches might work. I am partial to the elimination of whole deductions if only for one reason, that it would contribute to another long term project, simplifying the Tax Code.

As a matter of fact, there is a way to do that, and minimize the amount of kicking or screaming or obstruction.  It seems worth doing on its own merits! Some of you have read my proposal before and I’ve been encouraged to keep pushing by folks who work in this very field.  It ought to work.

== The Goal of Simplification ==

Just after being elected in 2008, President Obama said he would seek a reform of the U.S. tax code, calling the current system is a “10,000-page monstrosity.” But that promise has been made by others before and every proposed change ran up against a wall. Every “simplification” would gore someone’s ox. The more code-trimming you do, the more people will scream.

I know a simple way around this. The sheer bulk of the tax code — its complexity, in numbers of rules, words or exceptions — could be trimmed without much political pain or obstructionism! Because the method is designed to be mostly politically neutral. It does not aim at some utopian fantasy (like the Flat Taxers rave about.) It gores only a few sacred cows. It would be cheap and easy to implement. Only accountants should hate it for the effects on their lucrative business. Yet, to the best of my knowledge, this method has never been tried, alas.

(Note: an earlier version of this article ran some years ago and is still available at my web site.)

== How can I promise such a thing? ==

There is nothing on Earth like the U.S. tax code, an extremely complex system that no one understands well. But unique in that it’s complexity is perfectly replicated by the MATHEMATICAL MODEL of the system. Because the mathematical model is the system.

One could put the entire US tax code into a spare computer somewhere, try a myriad inputs and tweak every parameter to see how outputs change. There are agencies who already do this, daily, in response to congressional queries. Alterations of the model must be tested under a wide range of boundary conditions (sample taxpayers). But if you are thorough, the results of the model will be the results of the system.

Now. I’m told (by people who know about such things) that it should be easy enough to create a program that will take the tax code and cybernetically experiment with zeroing-out dozens, hundreds of provisions while sliding others upward and then showing, on a spreadsheet, how these simplifications would affect, say, one-hundred representative types of taxpayers. As I’ve said, this is done all the time. A member of Congress has some particular tax breaks she despises and asks the CBO for figures on the effect, should those breaks be eliminated. Alas, as soon as word gets out, her proposal faces a firestorm from powerful interests fighting like hell to keep from losing millions.

Hence, although American corn-ahol subsidies propel high food prices and hunger around the world while doing little for the environment, nothing is done to end the wasteful program that costs more net energy than it delivers. There are thousands of other special interest groups that each wish the budget to be balanced… on someone else’s back. How to get past this?

A key innovation: program in boundary conditions to the experiment, so there are no losers.

Let the program seek and find the simplest version of a refined tax code that leaves all 100 taxpayer clades largely unhurt. If one group loses a favorite tax dodge, the system would seek a rebalancing of others to compensate. No mere human being could accomplish this, but I have been assured by experts that a computer could do it in a snap.

Here’s the key point: If such an iterative search finds a new, much simpler tax structure that leaves none of the 100 groups more than 5% worse off than they currently are, then who is going to scream?

Oh, well, I suppose a lot of people will. Cheaters will holler of course, and those who benefit from the cloud of obscurity allowed by an overly complex tax code. Even if farmers are guaranteed adjustments in other areas, they will reflexively protest over the end of Roosevelt-era subsidies. In fact, everybody will complain! But…

…but a lot of the HEAT will be taken out of their complaints, if they see that their own bottom line is completely unchanged. And that is the secret. To remove enough heat so that people can calmly re-assess, negotiate, and accept pragmatic simplification that’s good for all.

== Will “no-losers” really leave everyone unaffected? ==

Nope. One hundred sample-type American taxpayers won’t cover everyone, especially at the upper end. Some in the aristocracy have tax laws that were enacted specifically to benefit them! They will hit the roof. But if enough of the rich are included in “no-losers” they might tip the balance, canceling out the final obstructors, for the sake of a new simplicity. And a new patriotism.

Will this method solve all tax-related problems? Of course not! Complexity is not the only thing wrong with the Tax Code. After simplification must come some genuine tax policy shifts that do advantage some and disadvantage others. Like all of you, I have my favorite injustices I’d love to see redressed, behaviors disincentivized, business ventures stimulated… and so on

But, by starting with “no-losers,” you can use politically neutral optimization routines to find a much simpler system. Industrial concerns like auto companies already do this sort of thing, trimming and slimming machinery to use the fewest parts, while achieving similar output. We could similarly refine the machine that is the Tax Code. Then, and only then, will it make sense to argue about steering the vehicle in new directions.

==

Sign the #NoLosersTax petition to have the CBO perform an open, computerized, impartial mathematical model of the tax code, with 100-500 example tax payers, and zeroing out provisions, or changing credits and exemptions, and establishing boundary conditions, the most paramount being “No Losers!”, to attempt to find a simplified tax code that would not impact any tax payer (below $200,000/yr earnings) more than 5%. Then make the results public.

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Last Minute “Big Picture” Political Snips & Snarks

For my second-to-last pre-election post, let’s offer up a potpourri of potent political snippets and graphics for the undecided, before I return on Monday to sum up the case for our Periclean Enlightenment.

But first a reminder of these earlier, devastatingly fact-full, Big Picture overviews of the main issues.

Democrats & Republicans differ at defense and waging war.” Gone viral! In harsh times, compare who does defense well.

The Eight Top Causes of the Deficit “Fiscal Cliff,” One party was solely responsible for five out of the eight main causes of red ink. The other three were bipartisan. With tax rates near their lowest in 70 years, what’s the beef?

Will cheating be a factor in this election?  A warning to “henchmen.” Those pulling vote-count scams may want a Plan B. Tell any henchmen you know.

Politics and the Fermi Paradox: why the U.S. elections may help explain the absence of intelligent life in the universe.  The biggest possible Big Picture!

“Which party stands up for science?”  The most devastating of all.

— Speaking of science: Bill Nye (my friend and President of the Planetary Society) takes on Rep. Paul Broun (R-Ga) chairman of the United States House of Representatives Committee on Science, Space and Technology, whose most recent (of many) anti science tirades include this videotaped gem. Broun called what he had been taught about evolution and embryology and the Big Bang theory “all lies straight from the pit of Hell,” intended to “keep me and all the folks who were taught that from understanding that they need a savior.” That’s the chairman. Of the Science Committee. Of the House of Representatives. Of the United States of America.

Seriously, after watching a flood of other appalling statements by Rep. Todd Akin (R-Mo), Richard Mourdock, and so many other Republicans from the new-radicalism movement… do you think that this is still about “politics” anymore? Is there a reason why President Obama mentioned the word “science” fourteen separate times in the debates? We who believe in the western renaissance are fighting for our lives.

== Snippets that cut deep ==

The extinction of the “moderate republican” is clear in a fantastic graphic from xkcd, showing how the GOP has become the most tightly disciplined and partisan political force in US history, marshalled and commanded by one man… Roger Ailes.

Consider plus-plus vs minus-minus.  For 20 years the GOP blocked efforts to increase car mileage standards in the US. Their surface reason? “Saving the US auto industry.” The under-reason? Pressure from big oil, because no other measure could do as much to reduce U.S. dependance. So what eventually happened?

Over GOP objections, the dems both raised the mileage standards and saved Detroit. Now? US automakers are booming and we get rapidly rising mileage. And you’d vote for dolts who obstructed that, with all their might?

If you admit the GOP’s gone mad, but can’t bring yourself to vote for a democrat, then look up Gary Johnson. The best libertarian candidate ever, he may change party politics in America! You could help make it happen.

== Romney is Bush III ==

Can you imagine a party running for office on the platform “Ignore everything we ever did in the past!” Have you heard Romney or Ryan refer to past GOP governance (a majority of the last 30 years) at all?  Ever? Or mention the name of the previous GOP president?  Once? The only thing more stunningly unbelievable is that the dems don’t pounce on it.

But while never mentioning the name George W. Bush and pretending the GOP record is of no relevance — shaking a clean slate — Mitt has nevertheless surrounded himself with advisers and would-be appointees “about two-thirds of whom are veterans of the Bush Administration.” In fact, 17 of his 24 top advisers served under Bush.

That matters. You aren’t just having vote with a man, you are having vote with his  entire party and with every corrupt/incompetent official who helped to make it a toxic mess that poisoned America, with a record so awful that they themselves never, ever mention it. Like herpes. An electionally transmitted disease.

Gary Brecher makes my point about War more glibly in Obama’s Wars - Good Fighter, Can’t Cheerlead Worth A Damn.

My distilled challenge to sincere and decent Republicans: “Name one clear, direct and good-for-America outcome from the GOP ‘s long tenure in power since 1988. Even One!” When a party has a record of unalloyedly perfect damage to the republic and no accomplishments of any positive nature to point to, they are a threat to our childrens’ chances of inheriting the stars.

== Abandoning a Sinking Ship ==

David Stockman – yes, Ronald Reagan’s budget director and top economic advisor, who now helps lead a rising movement to take back conservatism from the monstrous path it has been taken by Rupert Murdoch, shows how – from an entirely conservative perspective – Paul Ryan’s so-called budget-balancing plan, that has the backing of the entire GOP, is loopy to the point of jibbering incoherence.

I don’t agree with all of Stockman’s counter recommendations… he is, after all, a Reagan Conservative and I would argue with him over many of his proposals.

But I acknowledge them to be sane conservative  proposals worth discussion by adults.  Of the  sort that Barry Goldwater or William F. Buckley might have made.  Back when top conservatives believed in intellect, in science and facts. And negotiating like adults.

== R.I.P. “supply side economics” ==

Only… in that context take this proof of what I’ve long held. The blatant fact that Supply Side economics has never been true. In a November 1 report we learn that Senate Republicans applied pressure on the nonpartisan Congressional Research Service (CRS) in September to withdraw a report finding that lowering marginal tax rates for the wealthiest Americans had no effect on economic growth or job creation.

“The pressure applied to the research service comes amid a broader Republican effort to raise questions about research and statistics that were once trusted as nonpartisan and apolitical,” the Times reported. Democrats in Congress resurfaced the report. Republicans objected that it underminded the governing fiscal philosophy of the party, that tax cuts for the wealthy will spur growth and benefit everybody.

Changes over 65 years in top marginal tax and capital gains rates do not correlate with economic growth. Reduction in top rates appears to be uncorrelated with saving, investment, and productivity growth. Top rate reductions do associate with increasing divergence of national income going to the top 0.1%.

(Note: CRS is one of the last nonpartisan, professional services that used to report to Congress about matters of fact and outcome.  Most, including the Office of Technology Assessment and other groups that advised Congress impartially from the 1940s through 1998, were banished  under Newt Gingrich for the crime of pestering dogmatists with inconveniences called facts.)

This clear determination about Supply Side is important… and was always obvious.  Even in 1776, Adam Smith described what most rich folks actually do with sudden cash infusions. They put the new wealth to work in “passive rent seeking” and only rarely into capital equipment or risky new products and services. (Risk taking entrepreneurship can be rewarded in better ways than simply flooding most of society’s wealth into oligarch pockets.)

Moreover, that cash flow to the rich reduces the velocity of money. If there were ever a time not to do that, it is during a recession! When we want high money velocity, put cash in middle class pockets! (In fairness, there are times, e.g. runaway inflation, when largesse to the rich – reducing money velocity – actually makes some sense.)

George H.W. Bush called Supply Side “voodoo economics.” It was and is and always will be.

== Should the recovery have been faster? ==

Those who condemn our gradual (though steady and accelerating) rate of recovery from the Bush Collapse… the worst U.S. economic crisis since the Great Depression… imply that is should have happened faster, somehow.

But appraisal of past crashes makes very clear – recovery is always slow and painful.

In fact, the Obama Recovery scores high for its speed and effectiveness.  So effective that one wonders what Mitt Romney would do differently. He won’t say much, except calling for the same Supply Side prescriptions pushed by Bush.

Indeed, consider this.  In no other recession/depression did the nation face six hundred trillion dollars in toxic Wall Street gambles on its books.  If not handled right, that poison pill might have killed the economy dead! Instead, the Economist in London recently lauded President Obama. “U.S. Banks are now the healthiest in the world, in far better shape than dismal European banks, and poised to lead the world out of this mess.”

In fact?  There are dozens of aspects to the last four years I can criticize!  Like Timothy Geithner’s giving a free ride to Goldmann Sachs and the choice to use a light hand on the banks we rescued, who have been slow to lend out the cash WE lent to bail them out.  But these are quibbles compared to recognizing what that toxic 600 $Trillion could have done to us… but did not!  Because the Bushites were replaced by basically (roughly) sensible people.

== More from Mark Anderson ==

“Romney’s unprecedented refusal to disclose multiple past-year tax statements has to be an almost-disqualifying issue for careful voters. Given that he required 10 years’ worth of statements from his VP candidate, it is also hypocritical: obviously, he understands and believes in the importance of past tax filings in judging a candidate’s suitability for the highest office.”

Mitt Romney’s Tax Dodge: A guide to how the multimillionaire twists the law to hide his massive fortune – and avoid paying his fair share in taxes. Including profiting from supposed gifts to his own church. Yipe, it is a long long loooooong list!  Your ostrich uncle could wave away one or two.  If he waves away twenty?  Then he’s the sort who would have sided with King George in the Revolution.

Who bought the candidate? Identify top corporate donors in house and senate races… but remember, this excludes PACs!

Mitt Romney’s Real Agenda: This hard-hitting, fact-filled article is poorly named but important reading. “Mitt Romney’s real agenda” says very little about Romney’s actual plans for governance since, indeed, he has been beyond-miserly with specifics.  Instead, the article lays out the long series of bills and declarations by the 2010 Republican House of Representatives, which is undeniably the most radical Congressional House in more than a hundred years.  Led largely by Romney’s VP choice, Rep. Paul Ryan, the House has indeed created a vast record of declared goals that any American voter, of whatever political leanings, ought to read most carefully.  Ignore the reporter’s sometimes whiney commentary.  The facts speak for themselves, and chillingly remind me of 1789 France.

Alas, by concentrating on the GOP led House, he ignores the Senate, where the democrats have been able to block insane House bills… but the Senate faced utter gridlock as the GOP senate minority has thrown – in just two years - more filibusters than in the entire previous history of the United States of America. Is that the precedent they want to set?

If Romney wins, does he want that behavior turned back on him?

== More stuff! ==

Cuba has accused the United States of helping Cuban dissidents access the internet as part of a campaign to undermine the communist government.  I know Hillary Clinton’s “Worldwide Net-Tech” guy and this is part and parcel of her strategy to spread internet access all over the world, that can let people side-step around their tyrannical governments.  

It is 22 days since Mitt answered a single question from the press.  Does that courage impress you?

Maybe he’s too busy debating himself!  See this video of contradictions.

== And finally ==

The dems are Big Spenders?  See this graphic showing the rates of increase of domestic discretionary spending increase, showing that, for the GOP to tar the dems with that brush is the grossest hypocrisy.

Meanwhile, for the GOP and Fox to focus on the recent tragedy in Benghazi is utter (if painful) hilarity, alas.  See the rates of attacks on US diplomatic missions, which plummeted under Bill Clinton, increased under W and are now very low.

Compare Benghazi to miring us in decade-long, multi-trillion-dollar quagmire wars of attrition and “nation building” in Asia that left thousands of American boys and girls killed or maimed… for what? To create new satrapies for Iran?

Compare the number of U.S. citizens to die of terror on each president’s watch.  Compare the rates at which the terror networks have been punished, with Al Qaeda losing more top leaders in any one year – under Obama – than under all the Bush years (Junior and Senior) combined.

Please.  Compare.

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Attention henchmen! Voting machines and other flawed conspiracies

After some introduction, my remarks this time will swerve specifically toward a special set of individuals out there called “henchmen.” But the rest of you may find it interesting. 

Will the 2012 election be stolen?  And if it is… can the theft be reversed?

Given the abysmal reputation that President George W. Bush earned — even among conservatives — there is no doubt that most Americans would send a warning back in time, to prevent the theft of the election of 2000, if only they could.  (If you demur, please answer my 6 year challenge: Name one unambiguous metric of US national health that improved across the span of 2011-2009 GOP rule; nearly all such measures of health plummeted.) Even if the likely outcome would have been President McCain or President Jeb Bush in 2004.

Another squeaker, nail-biter election will be upon us in a week. The contest is not so much between Obama and Romney, or left vs. right, or Democrats vs Republicans, or even Red America against Blue America in Phase Three of the U.S. Civil War. It is, rather, a crucial stage in the latest oligarchic putsch to reverse a 250 year experiment. And possibly a return to the way of life known by 99% of human societies.

What will happen if the outcome teeters close, as it did in 2000?  Can we expect sudden, surprising shifts in vote counts from crucial precincts, as happened in that fateful year? Shifts that coincidentally always err in one direction? Or weird anomalies from the early-voting tallies?  Or from absentee ballots?

Of course we can.  Other writers have analyzed the potential for fraud that has been building for years, whether through voter roll purging, vote suppression or direct shenanigens by the companies who own and operate most of the nation’s electronic voting machines.  I urge you to get educated about these incredibly brazen campaigns to outright cheat the process we rely upon as citizens and heirs of the Founders, who counted on us to carry forward their Great Experiment. 

== The blatant examples are one-sided ==

I will only offer one detail here, though it screams out the situation in bald terms.  In most blue states (e.g. California) the voting machines are either fed a hand-marked paper ballot to read, or else they provide a printed receipt that the voter can inspect and drop into a separate box. Either way, all votes made in that precinct can be audited.  No matter how many back doors and cheats might be built secretly into the machines or their programs, no one will dare pull a major electronic switcheroo, if enough precincts will be randomly hand-counted and audited.

The same is not true in many red states, where GOP-run legislatures gave voting machine contracts to a trio of companies alll of whom have strong Republican Party connections. (The address of one of those companies?  ES&S: 11208 John Galt Blvd. Omaha, NE   I kid you not.  John Galt Blvd.)

Moreover, in most red states that use electronic voting machines, the process does not involve a separate box of auditable paper ballots. No way for anyone on Earth to catch a glitch or falsified result.  Now why… one might ask… would they do that? Why would anyone do that, except in deliberate furtherance of fraud?

This potential theft will be exacerbated by the fact that news organizations and polling firms are cutting down on exit polls, this year.  Exit polling has proved to be a major deterrent to cheating, because of its high degree of accuracy.  In precincts that are neither exit-polled nor auditable by paper receipts anything — including skullduggery and cheating — can happen.  And many folks expect that cheating will happen… say in Virginia or Florida… if the election is tight.

Now, at a macro level, this says an awful lot about the deep and growing difference in philosophy and psychology in Blue viz Red America. An attitude of win-at-any-cost prevails as a way of life in one realm, while the other moves deliberately in the opposite direction, toward accountability and adult behavior.  Want backup for that assertion?  Only in blue states have citizen revolts ended the foul practice of gerrymandering, returning a meaningful choice to voters.  In California, for example, districts are now compact, reasonable, and are much more competitive, giving citizens some real leverage, for a change. Even if you are a republican living in a largely democratic district, as the Berman-Sherman run-off shows, you now have a chance to be heard and heeded, as never before, because gerrymandering, a blatant crime, is gone in California.

No red state has done this.  The picture is complete; and I will say it even more starkly, below.

But first… I must now stop talking to the majority of you and address the bulk of message to a very small subset. (The rest of you are welcome to listen in! This involves you too.)

== Henchmen, pay attention ==

* There is an old saying. 

When you’re playing poker, if it’s not immediately evident who the patsy is…

…the patsy is you. *

I have something to say to a very special audience.  Those of you out there who are actually involved in endeavors to game or cheat the electoral process.

Yes, I am talking to you guys — the henchmen (because that really is the word) of those conniving Blofeld types who plan to manipulate voting machine results, or who are purging voter rolls or arranging for “accidental” losses of ballots or biased disqualifications or any of the other shenanigens at issue here.

You know that we know it’s going on. And despite that, you’ve already decided on your path. Perhaps you’ve let Roger Ailes convince you that your fellow citizens cannot be trusted with a decision this vital. Or that we have a muslim, commie, satanist-usurper in the White House and you are cheating for the nation’s good. Or else you are being very well paid! Or you’re being blackmailed. Or some combination of the above. You know that, in this day and age, it is vital to keep conspiracies small, but have you ever sat down and thought about why?

(Elsewhere I’ve made clear that I’m an equal opportunity skeptic. I stiffly opposed the USSR’s evil empire and I frequently inveigh against some of the idolatries and stupidities we sometimes see emerging from the extreme left, such as “Loose Change” conspiracy theories about the tragedy of 9/11.  Stupidities so awful that across any year they equal as much as a whole day‘s worth of the spew we get from Fox. Yes, that bad.)

I discuss the difficult situation of henchmen in both my novel EARTH and in my nonfiction book The Transparent Society: Will Technology Make Us Choose Between Privacy and Freedom?  For in this modern era, with cameras and recording devices getting ever smaller, the chances that you’ll get caught with firm evidence showing you committing illegal acts will grow with every passing day.

Indeed, if you have held meetings with co-conspirators in details of the scheme were discussed, you had better assume the other fellow was recording you, and stashing the record somewhere, in case he ever needs it.  To blackmail you.  Or to offer in a plea bargain.

Moreover, if you have not already done this — recorded your compatriots in secret, in case you will ever need leverage — then you have proved you are the patsy, the stupid one, the pawn who will be sacrificed, if things ever fall apart.

This lesson applies to all conspiracies, not just to present efforts aimed at stealing the U.S. elections.  If you are a henchman, but do not want to be sacrificed like the hundreds who die for the villain in every Bond film, then you had better prepare a little blackmail of your own.

== The henchman’s dilemma ==

If you are going to play these games, you really need to read up. Be knowledgeable, an intellectual henchman. Because you’re doomed otherwise.  Read up about positive sum versus zero sum games.  And especially about the type of “game” that fascinates scientists today, called “Prisoner’s Dilemma.” To save time, I’ll let you do a first-cursory wiki on that, before coming back here.  Go ahead, I’ll wait. (Later, read about it in detail and really understand what it means! Because it applies to you.)

You are in a prisoner’s dilemma with other members of the conspiracy. So long as the cabal stays very small and is richly motivated, there’s a chance that everyone will hold together. But consider… what if someone breaks?

Suppose some news reporter, or FBI agent, or unhappy spouse or younger brother, gets wind of the conspiracy well enough to start bugging the meetings?  Or to threaten one of your comrades and get him to turn states’ evidence?  Or someone decides they are sick of being blackmailed that that it’s time to be a man. Or suppose there’s a counter-offer on the table that’s hard to refuse?  (I’ll talk about just such an offer, in a bit!)

What’s to stop one of your colleagues from blabbing? Consider the tradeoffs.

Whoever blabs first will get:

-  Amnesty or a pardon.  Or else (at worst) a wrist slap.

-  A big fat book deal.

-  Aappearances on a hundred talk shows.

-  A top “security” job with one of the California tech billionaires who hate Roger Ailes.

- A new identity, if you want one.  (But it won’t be needed.)

- Admiration and adoration from grateful fellow citizens, plus positive mention in history books.

-  To be on the inevitable winning side.

All the other members of the Cabal will go to prison. For conniving to steal elections, they will be reviled and their names cursed, not only in this generation, but in tones now used for John Wilkes Booth and Benedict Arnold.

Oh, some of the top folks may have insulated themselves.  They are the ones who have already recorded you making incriminating statements and actions, but have been careful, themselves. They already have contingency plans and know who the patsies are, who will be tossed to the wolves if anything goes wrong. Be assured, you are one of them.

In fact, I believe these top fellows are wrong about their own insulated safety, this time. Transparency is likely to skewer them like bugs, when the light starts shining. But that’s a future thing, driven by coming technologies. I admit that, in past times, Blofeld often got away.

He did so by sacrificing pawns. And that’s your role in Plan B. Furthermore consider this. The very best way to sacrifice a pawn is to make sure that the pawn both takes the blame and is dead, so he can’t squeal. What? You think they wouldn’t do that to you? Gosh, there’s one born every minute.

== Happy with the position you are in? ==

Oh, but if I have planted uncomfortable thoughts, you can still shrug it all off.

 “Brin wants me to be the squealer.  He’s trying to talk me into being a whistle blower, so that he can help that Blue America filled with scientists and intellectuals and city folks and evil muslim-satanic-commie presidents!”

Go ahead and rationalize all you want.  But the fundamentals of what I’ve said here apply, no matter who is saying it, and you know that’s true.  They apply to all conspiracies. And yes even to good ones! Those that are working against tyranny.

Well, except for the part about book deals and talk shows and being a hero and getting to party with starlets and the rest. That will only happen if you blow the whistle on nasty stuff. And the public will call your cabal of vote stealers nasty. Sooner or later, even a century from now, they will hate you.

Oh, there’s one more thing.  I know some of those tech billionaires.  And take my word for it - they will match whatever you are currently getting from the conspirators!  If you spill the beans convincingly on a nasty cabal that is stealing elections — or anything similar — you will be paid at least as much as the Blofelds are paying you to help them cheat. And Blofeld can’t offer you the book deal, talk shows and starlets.

In fact, I am letting a cat out of the bag. (I have permission to say this much.) If we see a repeat of 2000, with weird electoral veers in suspicious precincts that stink to high heaven, those billionaires will go public with their offer! Millions in exchange for proof that is iron-clad and solid. 

Now look at your co-henchmen in the conspiracy. Consider that they have already recorded you. They have such proof, stocked and hidden away. While you twiddled your thumbs. They are positioned to take advantage of such offers, while you are not. And only the first one to blab will get the bonanza.

I’d get busy, if I were you.

== Other ways of stealing the election ==

Enough talking to henchmen. Now back to you regular readers.  

Of course, the problem is about more than electoral cheating. This putsch is being waged across a broad front. By far the biggest part is the tsunami of money, the insane degree to which our democracy is being bought.  The very same Supreme Court that gave us George W. Bush and the plummet of America that followed, has opened the floodgates of private cash — and even secret foreign lucre — to inundate our electoral process.

Who bought your candidate? See the top corporate donors for each candidate for the house and senate… and remember, we don’t get any of this info re the real graft… the super-PACS. Are you happy with this?

Not only are corporations people, but the tradition of One-Person-One-Vote will be replaced by Wallstreet-style “corporate democracy” in which votes are tallied according to the number of shares that you own.

Make no mistake, that is the objective.  Every “social” issue from abortion to religion to flag waving… all of those things are secondary. Mere ways to marshall emotion from Red America. The way slave-owners marshaled a million poor whites to march and die for the oligarchs’ privileges, during the first phase of the American Civil War.

== The Chief Result: an America that no longer negotiates ==

The utter demise of the species “moderate republican” is best illustrated in this fantastic graphic from the XKCD online series. It demonstrates how the GOP has become the most tightly disciplined and partisan political force in US history, marshalled and commanded by one man… Roger Ailes.

== What can the rest of us do? ==

Send emails to the news networks and polling firms, demanding that they beef up exit polling this year, instead of letting it decline.

Volunteer to do poll watching and/or get-out-the-vote.  And tell your friendswho despise both major parties to look at Gary Johnson.

Write about this online and maybe viral this posting you are reading now.

Start talking to others about the notion of a “henchman’s prize” to accomplish much the same good work that is being done by whistle blower laws.

Tell especially any henchmen you know!

Talk about how angry you will be, if 2000 is repeated, and how vigorously you will resist, if the election is stolen.  And — if it is — come back here.  I’ll have suggestions.

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Filed under economy, politics, psychology

The “Tytler” Insult — Is Democracy Hopeless?

Well… it’s back.  One of the best examples of a mass-hypnotic pseudo-wisdom that helps to lobotomize politics in American life.

“A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse over loose fiscal policy, (which is) always followed by a dictatorship.” 

This widely-circulated nostrum is called the “Tytler Calumny” and it is the great example of what has gone wrong with the mental processes of our friends on the right, who used to be represented in sage debate by great minds like Barry Goldwater and Friedrich Hayek and William F. Buckley…  but who are now reduced to slinging around aphorisms and fact-free fox-assertions.

(In fairness, after watching Bill O’Reilly hold his own with Jon Stewart in the great 2012 Rumble in the Air-Conditioned Auditorium, I have to admit, there are still islands of sort-of almost Goldwater-style adult-honesty on that side, though lamentably rare, as this missive will show you.)

First off, although named for a 19th Century Englishman Alexander Tytler, there is no actual evidence that Tytler actually said it! This aphorism is also often attributed falsely to historian Arnold Toynbee or Lord Thomas Macauley, or even Alexis de Tocqueville, although recent scholarship appears to follow a trail leading to a 1943 speech by one Henning Webb Prentis, Jr., President of the Armstrong Cork Company.

It is often accompanied by another feat of cynicism called the Fatal Sequence.

“Great nations rise and fall in a 200 year cycle. The people go from bondage to spiritual truth, to great courage, from courage to liberty, from liberty to abundance, from abundance to selfishness, from selfishness to complacency, from complacency to apathy, from apathy to dependence, from dependence back again to bondage.”

Now, as one who had the chance to “channel” the great science-fiction psychohistorian Hari Seldon, I admit to sharing the soft spot that many SF fans feel toward the central notion of Isaac Asimov’s Foundation Series — that the arc of history can be somehow easily be tracked, patterns-perceived, predictions made. And indeed, there certainly are some patterns!  Such as the dominance, in 99% of human societies, of small cabals of owner oligarchs, who passed on their property-based power to sons who never did a thing to earn it. The persistent-feudal pattern that Adam Smith and the American Founders strove so hard to break. Yes, I see the pattern-seeking allure.

But I’ve learned to be wary of glib nostrums that seem just too convenient to be true.

== Stroking the ego, starving the intellect ==

Consider how the Tytler Calumny appeals to the vanity of the one repeating it.  The sad cynicism of someone who considers himself above the hoi polloi of the mere “people.”  It is a blithe dismissal of even the possibility that a democracy can maintain itself. This despite the fact that — if you include the vigorous colonial legislatures — we in the U.S. have three centuries of ever-ripening success, on this continent alone, becoming steadily mightier at the same pace that we’ve grown more inclusive.

The calumny draws believers, despite the fact that our democracy has accomplished more prodigious feats, more wonders and more improvements to human happiness and knowledge than all of humanity’s other nations and cultures combined.  By far.  By orders of magnitude.

The Tytler nostrum (appraised here on Snopes) sounds “logical” in its smug contempt for the masses… except that it runs contrary to actual fact.  For example, when the citizens of Athens voted against distributing the windfall from new silver mines to every citizen, and instead asked Thucydides to invest it in their future.  Would most kings have done that?

All through the 1990s, Bill Clinton allied himself with fiscal moderates of both parties to stave off efforts by the supply-siders to raid the budget surplus and give it all — not to the People — but to the rich.  Clinton and Senators Tsongas (D) and Rudman (R) and others in the moderate middle were able to accomplish that because they were backed up by the public! By opinion polls showing that the middle class overwhelmingly wanted the budget surplus spent on paying down debt. And not on tax cuts for themselves. 

Should we be surprised? Indeed, who is more likely to have the habit of weighing the consequences of debt? Middle class citizens who must wrestle with tradeoffs, stanching their impulses and appetites every day, in favor of budgeting tightly for the future?  Or aristocrats who are accustomed to indulging whims out of copious coffers, knowing that there are always more coppers, pennies, pfennigs etc to be squeezed from those below them on the pyramid?

Both before and after 2001, those who were demanding that all the surplus be “given back to us, right now” were aristocrats. The same caste that bankrupted most past societies.

== The Fiscal Cliff Is Born ==

DeficitFiscalCliffWhen Clinton left office, there was no one left to block the raiders — who swarmed in to vote themselves “largesse” from the public treasury.  Largesse in the form of giga-tax cuts for the uber-oligarchy, declaring that the red ink would be paid back within a year, by supply-side miracles.  Yes, that was what they promised. It is explicitly what they vowed would be the direct result.

Ah. Pity that not one prediction ever made by Supply Siders ever came even remotely close to coming true. And that is ever. The oligarchs did not spend their tax-cut largesse on productive enterprises or risky capital formation.  They spent it on dividend-rent-seeking securities and hedge speculations that withdrew cash from circulation but boosted an asset bubble, leading to staggering deficits and the Second Great Depression.

Dig this well, so that the Tytler Calumny can die its deserved death.  

The middle class demanded debt pay-down.  The aristocracy demanded short-sighted greed.  Exactly as they did in 1789 France, when the First Estate refused to help pay for the nation that benefited them… and thus signed their own fates.

The 1789 lords’ rationalization – that they needed all the money to invest in their own duchies and estates and in jobs for their tenants – was precisely the same as the supply siders and “job-creators” use today. Flat out lies for which they later paid their lives.)

== Conservatives Who Can See ==

Now, not everyone on today’s American right has been lobotomized by Fox. Some of the heirs of Barry Goldwater have taken notice. For example, Mike Lofgren, in The American Conservative  (one of the few journals of the right that today would be considered sane by Goldwater and Buckley) has penned a scathing denunciation of how a worldwide caste of uber-wealthy appears to be seceding from the nations and peoples they increasingly control. In “Revolt of the Rich,” Lofgren shows how this process – bringing us toward wealth disparities like those of 1789 France – threaten the very fabric of our western/american social contract.

“It is no coincidence that as the Supreme Court has been removing the last constraints on the legalized corruption of politicians, the American standard of living has been falling at the fastest rate in decades. According to the Federal Reserve Board’s report of June 2012, the median net worth of families plummeted almost 40 percent between 2007 and 2010.”

Here is another snippet:

“If a morally acceptable American conservatism is ever to extricate itself from a pseudo-scientific inverted Marxist economic theory, it must grasp that order, tradition, and stability are not coterminous with an uncritical worship of the Almighty Dollar, nor with obeisance to the demands of the super wealthy. Conservatives need to think about the world they want: do they really desire a social Darwinist dystopia?

Look across the last 6000 years, the spendthrift aristocracy that ran nearly every kingdom, empire or feudal region typified Tytler’s quotation, far more than the primly puritan democrats of Athens, Florence, Venice, the medieval guilds, or Britain or America. Committing horrors of statecraft, blundering and crushing freedom and repressing markets, the lords were the enemies of liberty in 99% of human cultures… the enemies of market capitalism who were most denounced by Adam Smith.

In sharp contrast — and reiterating because it bears repeating — middle class folk understand debt, better than anybody.  They walk its minefields every single day. Unlike the poor, they have skills and have options and practice dealing with those choices. They mostly manage to use debt as a tool… one not to be indulged excessively.  Unlike the rich, they have no illusions that you can manipulate your way out of any jam, privatizing profits and socializing costs.  Railing against government, then suckling at its teat.  The middle class — the citizens who make democracy work — don’t have that luxury.  That delusion.

== The Paradox of “Deciders and Allocators” ==

Hypocrites who adore rule-by-oligarchy violate the fundamental principles of Adam Smith, Friedrich Hayek and the entire conservative wing of mainstream economics, who all maintain that economic decisions are best made when we maximize the number of participants who get to know and participate in a basically flat and fair and open market.  (And the same competitive-accountability principle applies in democracy and science.)

Does it surprise you to learn that I think Hayek and Smith were absolutely right about this?  All humans are delusional, but the greater the number in-the-know and applying reciprocal accountability, the more likely each delusion is to be caught by somebody.

Oh, have you listened to those who decry that top-down decisions should not be made by the “limited number” of say 100,000 accountable and skilled and unbiased civil servants?  Sure, they have a point.

Only these loud critics then – without an eyeblink of irony – swerve and excuse secret, self-interested and conniving “picking winners and losers” when it is done by less than 3,000 elite-oligarch golf buddies in the CEO/billionaire caste. Praising that closed cabal as smart and accountable-enough, they dare to call that “capitalism.”

It is not capitalism! It is the age-old enemy of capitalism. Ask Adam Smith.

== What is the crux?  ==

What do I aim to accomplish here? I want you all to recognize and be able to name the Tytler Calumny, the next time your favorite ostrich or grouchy uncle starts reciting this poisonously treasonable and noxiously lying nostrum, bemoaning the impossibility that democracy can possibly survive the inherent contradictions of human nature.

In fact, I agree that Human Nature contains the seeds of downfall for our Enlightenment Experiment.  But the pattern we must fight is not some mystical 200 year “cycle” of decadence that has no known examples from history to back it up!

Rather, the truly ubiquitous pattern that has proved ruinous to human civilization is the very one that spoilt 99% of other societies, leading small clades of delusional lords to evade criticism and to rule by owner-right, making endless errors of statecraft that we now call “history.” (And no, I don’t prefer idiotic socialism! What I’ll fight for is our pragmatic, wide-open renaissance.)

Those who keep repeating the Tytler Calumny seem eager to deride our Great Experiment, chopping away at its ankles, at its morale, implying that democracy is inherently doomed, and that we must return to the pattern that ruled other human cultures.  A pattern with a far worse, mostly vapid and stupid track record of misgovernment.

Whose tune are they parroting, when these fools demean democracy and extoll aristocracy? The lyrics come from Fox News, co-owned by billionaire media mogul Rupert Murdoch and a couple of coal baron pals and by the Sa’udi Royal House.

Huh.  Some coincidence. Lords preaching the inevitability of a return to lordship. The biggest reason not to heed them is that they clearly are too dumb to suss out where this leads.

Allons enfants de la Patrie, le jour de gloire est arrivé…

—-David Brin

http://www.davidbrin.com

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Filed under economy

American Exceptionalism… versus what has made America exceptional

At their convention, the Republicans chose their theme. The coordinated message from two-thirds of their speakers would be American Exceptionalism.

Unable to gain leverage by using the economy – which is slowly but clearly recovering from their own train wreck depression – and with the GOP suffering from devastating credibility gaps on everything from the deficit to medicare to taxes to women’s rights to skyrocketing wealth disparity, they decided to fall back upon…

…patriotism.  Waving the flag and hoping that the left wing of liberals would react with sneers.  (Post convention note: the dems did not fall for the trap.) 

Was this a case of using patriotism as a “last refuge”?

Let me surprise you by saying that, when it comes to many of the surface statements, I side with the Republicans!

The United States of America has been the most exceptional thing ever to happen to humanity. I say this not out of reflex triumphalism or chauvinism, but as a simple matter of outcomes appraisal. Indeed, I bet that in the grand context of time, the American Experiment will turn out to have been one of the major reasons, if we wind up succeeding as a species and even reaching for the stars.

Alas, in a supreme irony, those who most fervently push this overall viewpoint in fevered generalities have also been the same folks responsible for severely damaging the American republic, far more than any enemy has in 150 years.

== First – the case for exceptionalism ==

Most moderns have no idea how stunning the American Revolution seemed, to onlookers around the world.  Especially the example of “Cincinnatus” George Washington, who turned his back on power not once but three times.  Or Abraham Lincoln, whose legend penetrated all the way to tribes deep in the Caucuses, as told by none other than Leo Tolstoy.

If Britain and France had listened to U.S. President Woodrow Wilson in 1919, and imposed a gentle peace on Germany, there would have been no Weimar Depression, no seething resentment leading to Hitler.

Later, in 1945, when America stood as the world’s behemoth, men like George Marshall, Dean Acheson, Harry Truman and Dwight Eisenhower had their chance to impose structure on the world, an imperial peace or “pax,” as had Rome, China, Babylon and Britain in their day.  The long (comparative) peace that ensued – Pax Americana – was deeply flawed in many ways. But compared to all other “pax” eras — and especially to the lawless times in between — it was the gentlest ever known.

Certainly it was beloved by those we defeated in war. Today the U.S. has no better friends than those former foes who benefited from the plan of the 20th Century’s greatest man.

Marshall aimed to avoid a core mistake of every previous pax empire.  All the others – even Britain – set up mercantilist trade patterns that sucked fortune out of distant satrapies and fed gold back to the central kingdom, fostering poverty and resentment everywhere else, making inevitable a later collapse.

In contrast, the counter-mercantilist pattern imposed by Marshall’s unusual Pax Americana favored transferring low level, labor intensive industries (e.g. textiles) en masse to poor regions around the globe in a cascade sequence that uplifted, successively, Germany and Japan, then Korea and Taiwan, then Malaysia and Singapore and so on, until right now this program of “foreign aid via WalMart” is raising up more than a billion people in China and India at the same time.

The core of modern development, this innovation is the number one reason that two thirds of children on this planet live in clean homes with electricity and sanitation, never hungry, and go to school every day. A program fueled in large measure by the American consumer, thanks to wise patterns enacted a lifetime ago. Patterns unique in the long and lamentable history of human empires.

(An aside: How did we manage for seventy years to pay for such a program – shipping low level jobs overseas in return for cheap products? It was financed by the rapid advance of new technologies, from jets to rockets, satellites, transistors, computers, telecom, pharmaceuticals and so on, created largely by American engineering and science. A joint effort of government, companies and individuals, that none could have accomplished alone… but that’s another story.)

== Have I made you angry? ==

Do I have the liberals out there shaking their heads and the leftists seething with purple wrath, by now? Stammering with eagerness to remind us of Pax Americana’s crimes?

Hey, I said I was aware of how many times this century’s “empire” lapsed in its ideals, was hijacked to ill ends or just did bad things, from banana republic invasions to Vietnam to realpolitik nasties committed during the long slog to achieve another part of Marshall’s plan — “containing” the crazy Soviet empire till its fever finally broke. I never denied the flawed fallibility that emerges whenever barely-uplifted cavemen get their hands on tremendous power.

What I ask you liberals out there to notice (the lefties are hopeless) is that your reaction – shared by millions of fellow citizens — is unique in the history of nations on Earth.  You grew up in a place where most people are brought up never to be satisfied with things as they are, even when the situation is far better than our ancestors ever knew. Pax Americana clearly committed a higher ratio of good deeds to crimes than any ten other top nations in the history of the world. Just look at how little-hated it is! But you focus on the mistakes, the faults…

…in hope of improving things, eliminating errors, re-charting a course that is even better!  An imperative of which I wholly approve. I believe your willingness to criticize the nation that you love is far more sane than the reflexive, blithering “exceptionalism” that we witnessed in Tampa a few weeks ago.

Yours is the true patriotism… if only you would recognize and admit it.

== The true exeptionalism ==

Those amazing accomplishments — creating the world’s longest best peace, along with the spectacular rise of billions out of poverty, plus the driving of racism and sexism and other ancient traditional obscenities into ill repute — these weren’t accomplishments of jingoist flag-waving but of relentless, day-to-day creativity, good-natured progress and lots of self-critique by every generation of new Americans.

The true exceptionalism is that habit of self-critique! And for that reason liberals (not leftists) are far more responsible for the accomplishments of America — and Pax Americana — than the manipulative “Yew Ess Hay!” rants of Sean Hannity and the puppet stringery of Rupert Murdoch.

But — oh, liberals — you do harm when you fail to take in that context. So I ask that you go over my core point, a second time.

You are critical because your society taught you to be! It is a wholesome reflex to cry out “we could be even better!”  Criticism is the only known antidote to error and you serve your nation by zeroing in on mistakes. In so doing, you are America’s truest children…

… though, like teenagers, sometimes many of you forget the context. You forget to openly avow that the thing you want to make even better was already the best thing the world has ever seen.  The nation of Lincoln and both Roosevelts, that took humanity to the moon and kept the longest, greatest peace the world has ever known, allowing a higher fraction of people to live violence free lives than any other time in the history of the race.

You forget that other societies, which you hold up as deserving tolerance and understanding, would never have said the same in reverse. They did not tolerate, or even encourage, the habit of us-criticism from their subjects, that we relish from citizens like you.

You gain credibility when you admit that context.  When you admit that yours is a nation worthy of your love.  When you accept that flaws are inevitable, but that you are part of that nation’s healthy immune response against those flaws! That you are a product of that nation’s upbringing, a reservoir of its hope for positive change.

A symptom of its health and youthful vigor and readiness to grow.

== Don’t give fools a monopoly on patriotism ==

Their version is jingoism, a dullard thing seen in all cultures.  A kind of masturbation to the clan’s tribal symbols, similar to what occurred in any and every nation across time, when the Romans or Assyrians or Pax Britons cheered their flags and called themselves “exceptional” each in their turn, and then – with their aversion to criticism – proved themselves wrong.

Can I tell you a secret? By sniffing and rolling your eyes at patriotic symbolism, you are spurning real allies. The men and women of our military, for example, who may be straitlaced and ramrod-backed… but who also happen to be the third best-educated clade in American life. The officers know that democratic presidents listen to advice when it comes time for war, and democrats keep those wars tiny, surgical and professional, like Bosnia and Libya and the hunt for bin Laden.  The generals and admirals remember – in sharp contrast – what was done to our forces by George W. Bush, who plunged us into huge, garish, endless quagmires of attrition “nation-building” in Asia, a president who many of those flag officers deem the worst in living memory.

Sure, you don’t like talk of war. You strive to end it altogether. Terrific. But amid your eager looking ahead, to a much desired time without conflict, stop!  Pause. Look back across 6000 years and know that it won’t happen overnight.

Realize and admit that it is impressive progress that we have changed the definition and meaning of war.  Recent struggles look more like intense SWAT team action than the indiscriminate rolling thunder of times past. And it’s been proved that violence on Planet Earth has plummeted each decade in the era since 1945.  The era of Pax Americana.

If we are stuck having some war for a while longer, be proud of the nation that tries, each generation, to do it with incrementally more care. A little more like rough cops — more closely watched, each generation — and less like barbarian hordes. Go ahead and nag for that progression to move faster; that’s your job!  But also shudder over what the world would be like, if anybody else had the power that we’ve wielded with a (relatively/comparably) light hand.

Liberals, you must learn to do jiu jitsu. Don’t spurn American Exceptionalism, and thus leave the scoundrels with their last refuge unchallenged.  Challenge them even over patriotism!

They whose warped version of a once proud conservative movement has harmed this country – more than any enemy has in 150 years – should not be left with that refuge, the refuge of a flag they relentlessly harm.

Like Washington and Lincoln and both Roosevelts and Ike, who saved the experiment and made it a beacon to the world… wear the blue of our revolution.  Wear it proudly.

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Filed under economy, politics, society

No Record to Run on?

Let’s start with a simple wager.  During this election please count the number of times that Republican candidates actually run on their party’s record.

How often do they speak of their periods in power, which were far more extensive than the Democrats’?  Any statistically measurable accomplishments or proved positive effects?  Shouldn’t effective leaders brag about their past effectiveness?

Over the last twenty years, the Republicans often controlled all three branches of government. During that time the dems never controlled more than two branches — and that for only four years, total. True, the dems did a lot in those short intervals and their record is a legitimate topic.

But isn’t the Republican actual record also fair game?  How often do you hear them mention the name George W. Bush?  As Peter Beinart points out in Newsweek, “Romney has tried to handle the Bush legacy the same way McCain did: by ignoring it.”

Ask your adamant-ostrich friends to name one unambiguous statistical metric of national health that went up as a direct result of Republican rule. They cannot. So, what is the GOP sales pitch? It amounts to ” Okay we’re terrible! Insane and corrupt. But Democrats are worse! So hire us again, no matter how awful we were!”

Only parts of that pitch are at all true.  But it is one heckuvan interesting sales campaign.

== The story that statistics tell ==

We’ve become a people driven by assertions and truisms.  For example, the oft-spread notion that Democrats are squishy-compassionate, and therefore:

(1) they are naive and inept at running a Pax Americana that can be agile and win at international realpolitik, and

(2) those “socialists” must do badly at encouraging growth in an entrepreneurial-competitive capitalist economy.

Would it surprise you that these truisms run diametrically opposite to fact?  I will deal with canard #1 in a week or two, by comparing the vastly different (like day and night) ways that democrats and republicans wage war or enhance Pax Americana influence.

But let’s start with some basic comparisons of how markets, GDP and all that do under the two parties. I have asserted that the capitalist economy of the United States nearly always does better under Democratic presidencies and congresses than it does under Republican ones.  This flies into the face of the common propaganda nostrums credited by Fox viewers.  But see for yourself. Start with the statistics Bill Clinton cited:

Since 1960, Republicans have controlled the White House 28 years, and the Democrats 24. And in those years, Democratic administrations have created 42 million jobs, and Republican ones 24 million jobs. This, according to a Bloomberg analysis of BLS data, is accurate and true. It’s a devastating set of numbers–and by the way, the stock market has performed better during Democratic tenures as well, as another Bloomberg analysis showed that returns on investment under Democrats have done about nine times better than under Republicans).

But let’s assume you folks are members of that dying race, wonk-citizens who are moved by facts.  Try this explication of economic growth vs debt under the two parties.  Do you still believe (against ALL evidence) that the GOP is the way to fight the deficit?

Or employment. In modern times every Democratic presidential administration left office with a lower unemployment rate than when they took office. The same would be true of Obama today. But only one Republican Administration has managed this accomplishment.  That fact is basic.  Devastating.  Absolutely verified and true.

And here is a more comprehensive “presidential economics” review, though dated (2004, but I hardly think GWB 2005-2009 offer much of a counterpoint) — and the author pledges to update the data before election night. He looks at some other social categories too, and the verdict is almost unanimous, across the charts of indicators.

== So what does the GOP really want? ==

Not the health of competitive entrepreneural markets, that’s for sure.  No level playing field for startups. (Startup businesses always do better under dems.) But this should be no surprise!  Long ago, Adam Smith recognized that the great foe of freedom and competition across the millennia was owner-oligarchy. The American Revolution was against feudalism, remember? Wealth is GREAT at enticing lively business competition. I have a little and I want to earn more. But like all good things (e.g. water, food, oxygen) it can become toxic if too narrowly concentrated.  Smith knew this.  Gaze across 6000 years and tell me you really think otherwise!

Discussing the return of oligarchy, several new books have focused on this phenomenon, with a mix of depressing and suprisingly hopeful insights.  These books, Inequality and Instability. By James K. Galbraith, and Affluence & Influence. By Martin Gilens, were reviewed by Pacific Standard:

“(Galbraith suggests that) we seem to have forgotten how to grow the economy except by increasing inequality. The result has been a series of bubbles, and bubbles always cause damage when they pop. Galbraith also trains his lens on Europe, and finds that the common assumption that Europe is “more equal” than the U.S. is untrue; precise measurements reveal that, aside from the handful of northern European social democracies, the opposite is true.”

The other book is more pessimistic “Surveying a 40-year period, he finds that legislative outcomes almost never correspond to the public opinion preferences of the poor (at least when their expressed interests differ from those of the rich), whereas they much more frequently match the policy preferences of the wealthiest 10 percent.”

There’s a lot in the review and even more in the books.  Get concerned.  And realize that when GOP rule always benefits the very top oligarchy and never benefits entrepreneurial or level-playing-field capitalism, perhaps sincere libertarians and conservatives should go dust off their copy of Wealth of Nations and read the actual words of the founder of the modern, Anglo-American Enlightenment that so transformed the world.

“All for ourselves and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind. As soon, therefore, as they could find a method of consuming the whole value of their rents themselves, they had no disposition to share them with any other persons.”  – Adam Smith

 == Ostrich Bait ==

The AIG bail-out has returned a profit to the US government. All $182 billion the government invested in AIG has been repaid and the government still has a 22% stake in the company to sell. And the auto industry is repaying it all, as well.  And there are many other cases.The alleged multi-trillion-dollar cost of the various bailouts is actually south of $100 billion.

Indeed, had Timothy Geithner not made his one huge mistake — failing to extort stock from Goldmann-Sachs in exchange for saving their asses — the whole bailout thing would be completely in the black.  Obama’s share, that is.  Not Bush’s. Which was, like the whole Iraq War, viewed as a way to channel billions to family friends.

== And now political potpourri ==

Climate scientists in the U.S. are now facing ferocious and organized harrassment campaigns.

As Mr. Transparency, I am always worried about growing technological empowerments that help our elites see better than we do.  Mind you, noting will stop elites from seeing!  So what’s the solution?  To demandsousveillance… an ever-incresing ability to look-back and supervise and watch the watchers.  For example, I do not mind the FBI’s new face recognition database. (Do you have a way to stop it?)  What I mind is the glacial pace of our new, sousveillance rights and powers.

For those who care about the health and well-being of our children, the low-point of the Republican convention was surely this line by Romney — and the response it got from the audience:  “President Obama promised to slow the rise of the oceans — [bites lip and pauses for audience laughter(!)] — and to heal the planet. MY promise is to help you and your family.”

HOW he plans to help your families?  Vague and unsaid.  But judging from the GOP’s track record… oops!  Did I say track record? See the first part of this posting, above.

Want contrast? Have a look at the moderate and reasonable Republican Party Platform for Dwight Eisenhower’s re-election campaign in 1956. Or Ike’s dry-but-inspiring acceptance speech. Show it to your favorite ostrich-conservative, who is in deep denial over how spectacularly his movement has changed. My God.  I would vote for that sensible man, in a shot.

How changed is today’s GOP?  Texas judge warns of possible ‘civil war’ if President Obama is re-elected…   “He’s going to try to hand over the sovereignty of the United States to the U.N., and what is going to happen when that happens?,” Head asked. “I’m thinking the worst. Civil unrest, civil disobedience, civil war maybe. And we’re not just talking a few riots here and demonstrations, we’re talking Lexington, Concord, take up arms and get rid of the guy.”

Stark… jibbering… loony.   And yes, there are loonies on the left, as well! They occupy a few soft studies departments on some college campuses and have no influence.  They provide anecdotes for Hannity & co. But they don’t run a complete political party, nor have a track record of running the nation off a cliff. Nor are they judges, congressmen, or senate candidates for a major party.

I do agree with Judge Head about one thing, though.  This is Civil War.  The sides are the same. And now a leading pundit, Andrew Sullivan, seems to have either picked up on my allegory or come up with it on his own.

The fashion statement for Blue America, should the Bushites return to power?  The civil war Union soldier’s cap.

===================

* Addendum for those of you with “ostrich” republican relatives. Look up Gary Johnson, the best candidate ever fronted by the  Libertarian Party.   If your Republican friends admit their movement has been hijacked by monsters, but cannot bring themselves to vote for a democrat, show them Johnson. Get him to the debates.  At least some one will speak up against the crazy Drug War.  And your ostrich friends will have a place to free from the insanity.

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