Category Archives: economy

How the government shut-down will likely end

Before I get to my forecast of how the Great Big US Government Shut-Down of 2013 will end… let’s start with this surprising commentary. Yipe. The following is from Fox News. It is harsh, factual, on-target… and did I mention it’s from Fox, of all places? Could Rupert be asking “what have I done?” and seeking a way out?  —  begin quote:

End-Government-Shutdown“‘Compromise,’ to these demagogues, is to mandate that Democrats scrap President Obama’s signature domestic legislative accomplishment, which was passed by Congress, signed into law by the president, upheld by the Supreme Court and ratified by voters who returned its architect to the White House last November.”

“Senate Democrats, of course, had been begging for a budget compromise for months – ever since the Senate passed its budget last spring. But Republicans rejected this attempt at compromise 18 times, refusing to allow the Senate and House of Representatives to go to a budget conference to hammer out a deal that would have put an end to this cycle of continuing resolutions,” writes Julie Roginsky.

To be clear, what this means is that the House-Senate Conference Committee on the budget was invited to meet 18 times since April and it was always the GOP that refused to attend and negotiate. Every single time. And to be clearer, the House Senate conference committee on the budget is exactly where ALL of this was, is, and always should be thrashed out, as budgets have been across the history of the American republic, instead of via loony threats and shut-downs.

Moreover, the deal that was on the table, ready to be hammered out in the conference committee, was clear, bipartisan and probably what Speaker Boehner will ask for, next week.

(1) An end to the sequester and shutdowns and debt limit threats.
(2) A substantial set of reforms to make entitlement programs more efficient and — in a few ways — more tight-fisted. The big Democrat concession.
(3) Repealing a set of maybe forty outrageous tax breaks for fat cats and specific profitable industries that never needed subsidies (e.g. oil companies) allowing some revenues to rise without raising tax rates.

(4) Perhaps just a smidge of electoral reform? Reducing the tsunami-plague of money in politics?

It is a deal that the vast majority of moderate Americans would back and we know this from huge responses in past opinion polls.  Economists estimate that it might even bring the budget toward balance, at last. Only Tea Partiers who have signed the Norquist Pledge have been so enraged by the thought of increased revenue that they blocked the deal, declaring they do not want to return to the Clinton Era surpluses… what they want is to strangle government in principle.

Hence my ongoing prediction.  When the heat on Republican shenanigens grows too great, the Speaker will abruptly announce that President Obama has “caved” and Democratic Senators have “allowed” the budget conference committee to meet “at last!” And because of that huge democratic “concession,” Boehner will now allow a vote on the continuing resolution on a straight up-down basis instead of under tight party (Tea) discipline, ending the shutdown and the threat of a debt ceiling crash.

And Fox will sigh with relief, then peddle Boehner’s message verbatim… though without the well-deserved and apropos finger-quotes.

Sigh.  Like all forecasts, this one has odds against it.  I merely deem it the topmost possibility. Or am I snagged by wishful thinking, alas?

== Oh how we miss the wisdom of Lincoln ==

LincolnQuoteOld Abe may have said it best in February 1860, while initially running for President. Bear in mind: today’s Republican Party is largely based (regionally and thematically) in regions that were in those days Democratic, and vice versa.  In a speech to New York’s Cooper Union, Abraham Lincoln said:

“Your purpose, then, plainly stated, is that you will destroy the Government, unless you be allowed to construe and enforce the Constitution as you please, on all points in dispute between you and us. You will rule or ruin in all events. […] Under all these circumstances, do you really feel yourselves justified to break up this Government unless such a court decision as yours is, shall be at once submitted to as a conclusive and final rule of political action?”

“But you will not abide the election of a Republican president! In that supposed event, you say, you will destroy the Union; and then, you say, the great crime of having destroyed it will be upon us! That is cool. A highwayman holds a pistol to my ear, and mutters through his teeth, “Stand and deliver, or I shall kill you, and then you will be a murderer!” […]

“A few words now to Republicans. It is exceedingly desirable that all parts of this great Confederacy shall be at peace, and in harmony, one with another. Let us Republicans do our part to have it so. Even though much provoked, let us do nothing through passion and ill temper. “

Now combine this (as I suggested last time) with Lincoln’s later Gettysburg Address, calling on Americans to ensure that “government of the people, by the people, for the people shall not perish from the Earth.”

Roll that over the tongue, and ponder how bitter it must taste to the New Confederates, who recite the Fox Nostrum that “government” is evil in principle, and under all conditions! (Despite having supported it blindly when the blithering incompetents in charge were from their side.)  Men (mostly) who ignore the declining deficit, or the fact that US federal tax rates are at their lowest levels in 70 years. Or that the US Federal government’s current portion of GDP is the lowest since 1940. Or the lesson of 60 centuries that most oppression came not from civil servants but owner-oligarchs. Or that our political maps — made more foul by the vicious crime of gerrymandering — show at a glance that we are mired in another phase of the American Civil War.

Just as a million poor whites marched foolishly (albeit bravely!) to fight and die for their feudal overlords in 1861, so do millions now obey mantras dished out by Rupert and his petri-prince co-owners, despising any class or cadre (e.g. scientists, teachers, civil servants and so on) who might possibly stand in the way of a new feudal order.

Ever since the fall of the outrageously evil-despicable Soviet Empire, I have seen no greater threat to the republic that I love, and the renaissance it helped engender. We need Lincoln. Or at least shall we gird ourselves to be worthy of him?



Filed under economy, politics

Bringing back feudalism — is libertarianism an unwitting tool?

== Those helping feudalism return – unwittingly ==

ElevenQuestionR.J. Eskow – on Salon – offers “11 Questions to see if Libertarians are Hypocrites.”  And yes, most of Eskow’s posers certainly do set up some stark and thought-provoking contradictions – even hypocrisies – in the oft-touted positions held by many who today use the “L-word” to describe themselves. The article is well-worth reading and it does skewer especially those who bow in obeisance to Ayn Rand, the patron saint of resentful ingrates who want desperately to blame society for being  under-achievers. And yet…

…and yet Eskow wound up inciting the contrarian in me, with his blatant straw-manning — setting up the reader to assume that all “libertarians” are lapel-grabbing, solipsistic randians.  Moreover, indeed, he tells flagrant untruths even about randians. Elsewhere I have dissected the Cult of Ayn far more carefully, actually looking carefully at her messages on many levels. Eskow wants only a caricature and a punching bag.

He ignores, for example the randians’ admission that government should retain a monopoly on force and should be involved also in the enforcement of all contracts, not just copyright. Not entire-anarchism, indeed, it retains what’s necessary for the ultimate randian outcome — a return to feudalism — to have real teeth. Eskow should know his enemy better.

(Note that I use Eskow’s method of asking questions in what I hope is a much more neutral and thorough way, in my Questionnaire on Ideology, that encourages folks to re-examine many of their own underlying assumptions; take it if you dare!”)

In fact, Eskow ignores other strands to libertarianism that include the erudite versions of William F. Buckley and Friedrich Hayek, who denounced the randian obsession with demigods as a guaranteed route to feudalism.  Hayek, in particular, extolled a level playing field that maximizes the number of competitors and avoids a narrow ruling-owner caste. Indeed, there are some versions of libertarianism that I consider to be entirely justified  — the moderate versions offered to us by authors who range from Kurt Vonnegut to Adam Smith, from Robert Heinlein to Ray Bradbury, version under which one is willing to negotiate and see a successful State that does good and useful things by general consensus and assent, but always with an emphasis on doing good things that wind up empowering the individual to go his or her own, creative way. In other words, judging state actions (even skeptically) by a standard that is high, but allows us to work together on some valuable things that help us to then grow as we choose.

I could go on and on about that aspect of things; but instead I will simply offer a link to a far more cogent appraisal of this important thread of human political discourse, one that – alas – has been hijacked by oversimplifying fools who wind up parroting fox-fed nostrums and serve as tools for the very oligarchy that aims to tear down every remnant of freedom. (See: Maps, Models and Visions of Tomorrow.)

DefendingFreeEnterpriseIndeed, the name you’ll never hear randians mention… and alas the same holds true of the oversimplifying straw-manner Eskow… is Adam Smith, whose version of libertarianism adults still look to, from time to time.  A version that admires and promotes individualism and the stunning power of human competition, but also recognizes that competitive-creative markets and democracy and science only achieve their wondrous positive sum games when carefully regulated… the way soccer or football must be, lest the strongest just form one team and stomp every potential rival flat and then gouge out their eyes… which is exactly what winner-owner-oligarch-lords did in every human culture for 6000 years.  Till Adam Smith came along and described how to get the good outcomes without the bad.

The stealing of Adam Smith’s movement by fanatics and cynically manipulative oligarchs is not just a tragedy for the right, and for market capitalism.  It is tragic for civilization.

==  Those seeking feudalism KNOWINGLY —

Here is the fundamental political fact of our times, amid phase three of the American Civil War.  The gulf between the richest 1% of the USA and the rest of the country got to its widest level in history last year.

The top 1% of earners in the U.S. pulled in 19.3% of total household income in 2012, which is their biggest slice of total income in more than 100 years, according to a an analysis by economists at the University of California.

Also, the top 1% of earnings posted 86% real income growth between 1993 and 2000. Meanwhile, the real income growth of the bottom 99% of earnings rose 6.6%.One-Percent-Wealth

The richest Americans haven’t claimed this large of a slice of total wealth since 1927, when the group claimed 18.7%. Just before the Great Crash and Great Depression… so much for the notion that Oligarchy assures prosperity and good management.  In contrast, the flattest American society — just after FDR — featured the longest boom, the most vigorous startup entrepreneurship, the fastest-rising middle class… and all of it with labor unions and high marginal tax rates.

The penultimate irony?  That the ones complaining about this are called “anti-capitalists” when the fair and productive-creative, entrepreneurial capitalism prescribed by Adam Smith is the top VICTIM of wealth and income inequality. Across 6000 years of human history, the enemy of open markets and freedom was always owner-oligarchy. The blame for this can be spread widely! Those liberals who ignore the “first liberal” Adam Smith are almost as foolish as the dullard right wingers who are helping to restore feudalism.

Book-Review-The-Greatest-Generation-by-Tom-BrokawThe greatest irony?  The people who are bringing all of this about claim to adore the “Greatest Generation” – our parents and grandparents who overcame the Depression and crushed Hitler and contained communism and started a hugely successful worldwide boom under protection of the American Pax… and got us to the moon and invented so many cool things that we got rich enough to go on a buying spree that made every export driven nation prosperous.

Funny thing.  That Greatest Generation adored Franklin Delano Roosevelt and the flat-but-dynamically entrepreneurial society that he and they built together.  Oh, but they were the fools and Rupert Murdoch knows so… so much better.

== So what is to be done? ==

BringBackFeudalismLeft-wingers who blame “capitalism” for our recent messes should replace the word with “cheaters.”  At risk of belaboring a point that must be reiterated because people keep blinking past it: I consider healthy “Smithian” capitalism to be one of the top five VICTIMS of the malignantly incompetent rule of the recent US GOP.  There are no outcome metrics of national health under which the Republican Party’s tenure in command did not wreak harm on the people of the United States, especially upon the middle class, upon human civilization and upon healthy capitalism… and the spinning ghosts of Barry Goldwater and William F. Buckley.

So let’s try some simple reforms.  Fierce measures to stop interlocking directorships and the circle-jerk of 5000 golf buddies appointing each other onto each others’ boards, then voting each other staggering “wages” –  it is a criminal conspiracy that not only has stolen billions but runs diametrically opposite to the entire notion of competitive enterprise.

1- If capitalism works, then these high CEO wages should be attracting brilliant talent from elsewhere, till demand meets supply and the wages fall.  They are in effect calling themselves irreplaceable “mutant geniuses” like NBA basketball players… only with this blatant rub. The top NBA players are fiercely measured by statistics!  The mutant-good CEOs are only “good” by the flimsiest of arm-waving by… their pals.

2- Critics of socialism cite Hayek and proclaim that, no matter how smart a set of top-down allocators are, they will be foolish simply because their numbers are few.  Now it happens that I agree! History does show that narrow castes of “allocators” do inevitably perform poorly. (The Chinese have done well… so far… but at spectacular environmental cost and corruption. And we know the inevitable end-game.)

So, how are 5,000 conniving, back-room-dealing, circle-jerking, self-interested golf buddies intrinsically better allocators than say 500,000 skilled, educated, closely-watched and reciprocally competitive civil servants?  Both groups suffer from delusional in-group-think.  But the smaller clade – more secretive, self-serving, inward-looking and uncriticized – is inherently more likely to fail.  Claiming that they are better allocators because they are “private” and secretively collusive is just religious litany, refuted by 6000 years of horrific oligarchic rule.

Return-To-CapitalismWe deserve and should demand a return to a capitalism that is more about creative-new goods and services than manipulation of imaginary financial “assets.” Colluding cartels, like the caste of 5,000 CEO-director golf buddies must be broken up.  If you are a senior officer of a company, you should be disallowed to sit on any boards, anywhere, for anything. And anti-trust laws that served our parents well should resume being enforced.

LawrenceLessigTEDThere are dozens of other possible reforms, especially Lawrence Lessig’s proposals to get the tsunamis of money out of politics and my own judo approaches to getting around gerrymandering.  But above all we need to MINISTER to our libertarian cousins, calmly drawing them away from Mad Ayn and back to Solid Adam, getting them to realise that capitalism is not being helped by the rising oligarchs. It is being killed by them. Libertarians should re-enlist in the League of Adam Smith, and help restore the system to health, lest socialism rise again.  As it surely will, if this goes on.

== The central battleground – the War on Science ==

Adam Frank, a professor of physics and astronomy at the University of Rochester, offers a moving missive about  how his long career never prepared him for a 21st Century in which so many of his fellow citizens are actively hostile to science.  He winds up agreeing with my own conclusion, that his is not normal give and take, but something akin to civil war, and that pro-science part of our civilization must take on the responsibility of militancy against waves of roomy-cynical nostalgia… and not all of it from the mad right.

And… because this is the central battle field of culture war…

== Blues & Greens – waking up and getting active ==

UnknownNext Step in Climate Change Activism, a Cross Country March! Six months from now, 1,000 people will set out from Los Angeles to walk 2,980 miles across America to Washington, DC, on the Great March for Climate Action.  The march will inspire and motivate average people to pressure political and business leaders to act now to address the climate crisis. The GMCA will be the largest coast-to-coast march in U.S. history.

As we celebrate the 50th Anniversary of the March on Washington for Jobs and Freedom we are reminded that all movements must reach a moment of critical mass, when the call for change becomes powerful enough to shift public policy. We believe the size and scope of the Great March for Climate Action will be a vital next step. The March will start in Los Angeles on March 1, 2014, reach Phoenix in early April, Denver in early June, Omaha in late July, Chicago in early September, Pittsburgh in October and Washington DC on November 1. Marchers will walk 14-15 miles per day and camp in a mobile green village which will demonstrate sustainable technologies to feed and provide support services for the marchers.

Hey, we can only accomplish so much wrangling at this extreme intellectual end of things. There comes a point (as the French aristocrats learned after their dismal greed and obstinacy) when this goes down to the countryside.  To the streets.

                    Politics for the Twenty-first Century

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Filed under economy, politics, society

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?


Filed under economy, politics

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

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Filed under economy, politics

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.


Filed under economy, society

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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Filed under economy, politics

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.


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

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