Wednesday, November 9, 2011
Tuesday, November 8, 2011
Top Ten: Things On My Bucket List
10. Break dance on Ronald Reagan’s grave
9. Win a major award, and accept it while wearing jeans and a hoody
8. Eat an endangered animal (or just part of a large one)
7. Have sex in a church, again
6. Stinkpalm the Pope
5. Give away a billion dollars
4. Have a case against me go before the Supreme Court
3. Drop acid with Stephen Hawking
2. Give Scarlett Johansson a [purely medical] breast exam, orally
1. Write a book that is banned from a school library in the South or Midwest
9. Win a major award, and accept it while wearing jeans and a hoody
8. Eat an endangered animal (or just part of a large one)
7. Have sex in a church, again
6. Stinkpalm the Pope
5. Give away a billion dollars
4. Have a case against me go before the Supreme Court
3. Drop acid with Stephen Hawking
2. Give Scarlett Johansson a [purely medical] breast exam, orally
1. Write a book that is banned from a school library in the South or Midwest
Monday, November 7, 2011
Monday Rule: Eliminate the Electoral College
Presidents should be elected based on each American getting one vote that actually counts.
Sunday, November 6, 2011
Saturday, November 5, 2011
Saturday Reflection #54
I don’t like to see “man’s nature” described as if it were some sort of virtuous ideal. After rejecting religion, I have seen many atheists (sometimes under the guise of “secular humanism”) cling to a vicious fallacy: that deep down, we’re all inherently good. I’m not suggesting that we are evil at our core. We are not born immoral, we are born amoral, and in order for us to become socially acceptable people, it takes quite a bit of explanation, persuasion, trial and error, contemplation, a varying degree of effort, and even luck of circumstance. What has made us great as a species is not our nature, it has been our ability to surpass our nature.
Friday, November 4, 2011
How Democratic Economic Policies Have Failed
The post right before this one explains in detail how conservative and regressive economic policies have failed, and while Democrats (Obama especially) are guilty of making many of the same errors, I won’t be rehashing them here. In other words, when a Democrat keeps tax rates on the wealthy low (Obama), it’s wrong; when a Democrat cuts spending on essential services for the poor (Clinton and Obama), it’s wrong; when a Democrat engages in frivolous wars (Kennedy/Johnson), it’s wrong.
While Republicans may have been able to squander America’s full potential all on their own, I think they needed the help of the Democrats to get us where we are now. With Democrats, their mistakes can be explained as one of two things: either they adopted Republican policies that don’t work, or they applied proven solutions to the wrong problem. Democrats have killed American manufacturing with shortsighted trade policy, skewed labor markets and caused inflation by raising the minimum wage, and complicated the tax code for the benefit of wealthy donors.
The signing of NAFTA by Bill Clinton in 1994 was the official beginning of the end of American manufacturing. It became not only easy, but almost necessary in certain industries to move production to another country, one where not only are workers paid a fraction of the wages, but factory construction and sometimes even maintenance are covered by the host country. It became a no-brainer to move manufacturing across the border. With all tariffs and other trade barriers out of the way, businesses fled the US, with more following the first wave in order to compete.
The trend quickly became finding the cheapest nation to exploit, where not only were workers (sometimes children or the elderly) made to work long hours for pennies a day, but other restrictions such as environmental or worker safety laws were lax, or completely non-existent. I’ve heard more than one Democrat callously remark, “Well, they wouldn’t work that job if it wasn’t the best job they could get,” or “Obviously they need the money.” I guess it’s more important to have cheap plastic crap than give a second thought to child laborers being exposed to lead, mercury, and a world that sees them as a labor commodity and nothing more. As least you have your Air Jordans, right massa?
But I can’t blame companies, because they have been over-paying minimum wage workers for a while now. The minimum wage is a good thing, it’s a guard against predatory labor practices, but the problem is, since the 90’s, Democrats have tried to use the minimum wage to close the income gap, and that doesn’t make any sense. The only reason to raise the minimum wage is if minimum wage workers are being underpaid. You can’t prop up the faltering middle class by doing anything with the minimum wage, but you can cause inflation, discourage low-level hiring, and raise the price of goods.
There is a class of workers in America who is being abused, namely undocumented workers. They are paid well below minimum wage, and they work hard labor that takes a toll on the body. The problem is… raising the minimum wage won’t help these people, either. In fact, it just discourages them from ever becoming documented, because if they have to start earning minimum wage, they would be fired for an undocumented worker who will do the same work for a fraction of the price. The way to combat this type of exploitation might require its own essay, but the long and the short of it is: you need to eliminate barriers of entry into the US, grant full citizenship to anyone who comes to our borders, and keep people honest from day one. This whole sneaking-across-the-border-and-working-while-undocumented thing is all part of a culture of deception that needs to end, for the benefit of everyone involved.
I guess I can’t talk about Democrats and the minimum wage without mentioning unions. I think it might shock some people to hear, but I don’t much care for unions. I see their very existence as being a rather shameful indictment of our system. Just to try to show you my perspective, let’s look at what unions do:
Let’s see… some people feel exploited, so they band together, elect people to represent them, and then those representatives fight for the interests of those who elected them. Good job, unions, you invented democracy… except not really.
Unions should be, in my opinion, redundant. The sad thing is, they aren’t. There isn’t anyone in government who represents workers, there aren’t politicians writing legislation that defends the rights of workers. Unions are borne out of the failure of government to actually represent the people. Unions are literally the result of failure, which in my mind, is already a red flag.
The other major problem I have with unions is… they wield power, but I have no control over them. I hate that. Call me an old fashioned, egalitarian kind of guy, but I don’t like it when rich people wield power I have no say over and I don’t like it when working-class people band together to wield power I have no say over. No one in a healthy democracy ought to have power without the express support of the population as a whole. I don’t like it when the Koch brothers have politicians at their beck and call, and I don’t like it when Democrats fawn over the AFL-CIO. Sure, the Koch brothers are just two guys and the AFL-CIO is over 12 million Americans, but America is composed of over 300 million.
This gets into the general idea of special interests, which fits nicely into another problem Democrats have. I read and hear Democrats criticize Republican politicians constantly for how corrupt they are. I have bad news for any Democrats who labor under the illusion that their party of choice is somehow any better: Democrats are as bad, if not worse, than Republicans.
In 2010, 37 large corporations reported multi-million, and sometimes even multi-billion dollar profits, while paying zero taxes. How mind-bogglingly damaging this is might be hard to grasp, because I doubt most Democrats can fathom the implications of it. America has one of the highest corporate tax rates in the world, at 35%. The fact that so many blue-chip companies are not even paying any taxes at all is less important from a tax revenue standpoint than it is from a business standpoint.
Suppose you start a business and you get to a point where you incorporate. There are many financial reasons to do this, most pertaining to personal liability, protection of personal assets, establishing pensions, a desire to sell public shares, establishment of an independent credit rating, or even for tax purposes. The problem is, the tax situation when it comes to businesses is not only inherently complex, it is complicated further by years of extraneous deductions, credits, and loopholes.
As a new business, unless you hire very competent corporate tax lawyers to navigate this legal landscape, you are going to be paying way too much in taxes. What’s more, your business model may not be conducive to the preferential treatment the law provides to pre-established corporations… many of which conveniently lobbied lawmakers for laws which directly benefited them. Put simply, America only has one of the world’s highest corporate tax rates if you are too small to have paid off lawmakers for the exemptions necessary to keep your business nearly tax-free. We have a tax code that benefits large, well-established businesses while being almost punitively cruel to new business ventures.
Personally, I used to think the entire corporate tax scheme should be eliminated. I still flirt with the idea as an ideal, but The Gun Toting Atheist reminded me that without a corporate tax of any kind, the owners will just buy “company cars” and “company homes” which they will then use as their own, bought with tax-free funds and at the expense of the company. In my mind, the whole point of having no corporate tax while having a high tax rate on the wealthy is that a corporate tax just takes money from the pocket of the whole company, when I just want to discourage income inequality. The way to discourage income inequality is by discouraging those at the top from hording all of the profits for themselves, and the way to do that is steep, progressive income tax rates, not corporate taxes.
Essentially, I don’t see the current business tax code to be a problem pertaining to the nation’s deficit, at least not directly. Rather, the current business tax code discourages competition in the free market by stifling start-ups and favoring those who are already successful. Many of the loopholes exploited by large businesses pertain to green initiatives, which seem good on paper, but whose end result is not a cleaner natural environment, but instead a leaner business environment. If you are paying 35% of your profits in taxes, you cannot compete with a company that already has billions of dollars while paying no taxes.
There are established solutions to all of these problems, and many of these problems have multiple solutions. The easiest is likely also the most important right now: in order to undo the damage of free trade policies to the American labor market, America can take two different approaches. Either we need to get off our ass and seriously work to educate our population, both children and adults, in order to produce a workforce that is capable of competing in the economy we have left (namely fields like medicine, electronics, and other science based industries that require skilled labor that cannot be bought for cheap elsewhere), or, if we decide we hate science… we can enact protectionist policies like trade tariffs (which would need to be preceded by negating any free trade agreements). With tariffs raising the price of imported goods, it will cease being profitable to produce most goods outside the US to be imported here, and slowly but surely, jobs will trickle back into the US (but the price of just about everything will go up, sometimes drastically at first, but this does equalize over time in most cases, except when a necessary or unique resource or product cannot be produced domestically).
The solution to the minimum wage being too high is rather simple… lower the minimum wage. Deal with the problems raising the minimum wage was meant to address in a more constructive manner, like increasing taxes on the wealthy.
The most complex problem has to be fixing the tax code. It would be easiest to just scrap what we have and start over, in my opinion; that is the lazy way out, for sure. We have a very burdensome tax code, and I honestly doubt we could come up with a worse one if we started from scratch. Well… I’m sure Republicans could find a way (9-9-9 comes to mind…), but maybe if Democrats showed a little effort and caucused as one, they could stand up to any Republican attempt to do something so idiotic (and even when Democrats fail, something like 9-9-9 could never stand the test of time-time-time).
Cynics will point out that no matter what you do, money will always find a way of weaseling into the halls of congress. I couldn’t agree more. The difference between me and a cynic, however, is that I still see the virtue in trying, because I have witnessed success (only because I cared to look for it, though). I know you cannot stop all corruption, but you can stop enough of it, and I know you can achieve economic success as a nation through a robust capitalist market regulated by a duly elected government. Too many countries have succeeded at doing this for me to just pretend that government will always fail. I guess you could say I have become skeptical of government cynicism.
Someone who is that cynical, who believes government can never do anything right, is not someone speaking the truth. They may honestly believe it, but that doesn’t make them right, it makes them ignorant. The examples are out there, all across Scandinavia and even in far-flung nations like Japan. There is even more than one path to success, but the end result always looks the same: there are rich and there are poor, but those two economic groups are more close together in successful economies than they are in the US today. They more resemble the US post-WWII, in the 50s, 60s and 70s, when marginal tax rates on the rich was at or over 70% for decades, the decades in which this country experienced unprecedented (and thus far unmatched) growth for all Americans.
All you need to know about the fall of America, in my opinion, is to look at the top tax rates under Reagan. In 1980, the year before he took office, the tax on the top income bracket was 70%. When Reagan left office in 1989, it had been decreased to 28%. The rich have been getting astronomically richer ever since.
While Republicans may have been able to squander America’s full potential all on their own, I think they needed the help of the Democrats to get us where we are now. With Democrats, their mistakes can be explained as one of two things: either they adopted Republican policies that don’t work, or they applied proven solutions to the wrong problem. Democrats have killed American manufacturing with shortsighted trade policy, skewed labor markets and caused inflation by raising the minimum wage, and complicated the tax code for the benefit of wealthy donors.
The signing of NAFTA by Bill Clinton in 1994 was the official beginning of the end of American manufacturing. It became not only easy, but almost necessary in certain industries to move production to another country, one where not only are workers paid a fraction of the wages, but factory construction and sometimes even maintenance are covered by the host country. It became a no-brainer to move manufacturing across the border. With all tariffs and other trade barriers out of the way, businesses fled the US, with more following the first wave in order to compete.
The trend quickly became finding the cheapest nation to exploit, where not only were workers (sometimes children or the elderly) made to work long hours for pennies a day, but other restrictions such as environmental or worker safety laws were lax, or completely non-existent. I’ve heard more than one Democrat callously remark, “Well, they wouldn’t work that job if it wasn’t the best job they could get,” or “Obviously they need the money.” I guess it’s more important to have cheap plastic crap than give a second thought to child laborers being exposed to lead, mercury, and a world that sees them as a labor commodity and nothing more. As least you have your Air Jordans, right massa?
But I can’t blame companies, because they have been over-paying minimum wage workers for a while now. The minimum wage is a good thing, it’s a guard against predatory labor practices, but the problem is, since the 90’s, Democrats have tried to use the minimum wage to close the income gap, and that doesn’t make any sense. The only reason to raise the minimum wage is if minimum wage workers are being underpaid. You can’t prop up the faltering middle class by doing anything with the minimum wage, but you can cause inflation, discourage low-level hiring, and raise the price of goods.
There is a class of workers in America who is being abused, namely undocumented workers. They are paid well below minimum wage, and they work hard labor that takes a toll on the body. The problem is… raising the minimum wage won’t help these people, either. In fact, it just discourages them from ever becoming documented, because if they have to start earning minimum wage, they would be fired for an undocumented worker who will do the same work for a fraction of the price. The way to combat this type of exploitation might require its own essay, but the long and the short of it is: you need to eliminate barriers of entry into the US, grant full citizenship to anyone who comes to our borders, and keep people honest from day one. This whole sneaking-across-the-border-and-working-while-undocumented thing is all part of a culture of deception that needs to end, for the benefit of everyone involved.
I guess I can’t talk about Democrats and the minimum wage without mentioning unions. I think it might shock some people to hear, but I don’t much care for unions. I see their very existence as being a rather shameful indictment of our system. Just to try to show you my perspective, let’s look at what unions do:
Let’s see… some people feel exploited, so they band together, elect people to represent them, and then those representatives fight for the interests of those who elected them. Good job, unions, you invented democracy… except not really.
Unions should be, in my opinion, redundant. The sad thing is, they aren’t. There isn’t anyone in government who represents workers, there aren’t politicians writing legislation that defends the rights of workers. Unions are borne out of the failure of government to actually represent the people. Unions are literally the result of failure, which in my mind, is already a red flag.
The other major problem I have with unions is… they wield power, but I have no control over them. I hate that. Call me an old fashioned, egalitarian kind of guy, but I don’t like it when rich people wield power I have no say over and I don’t like it when working-class people band together to wield power I have no say over. No one in a healthy democracy ought to have power without the express support of the population as a whole. I don’t like it when the Koch brothers have politicians at their beck and call, and I don’t like it when Democrats fawn over the AFL-CIO. Sure, the Koch brothers are just two guys and the AFL-CIO is over 12 million Americans, but America is composed of over 300 million.
This gets into the general idea of special interests, which fits nicely into another problem Democrats have. I read and hear Democrats criticize Republican politicians constantly for how corrupt they are. I have bad news for any Democrats who labor under the illusion that their party of choice is somehow any better: Democrats are as bad, if not worse, than Republicans.
In 2010, 37 large corporations reported multi-million, and sometimes even multi-billion dollar profits, while paying zero taxes. How mind-bogglingly damaging this is might be hard to grasp, because I doubt most Democrats can fathom the implications of it. America has one of the highest corporate tax rates in the world, at 35%. The fact that so many blue-chip companies are not even paying any taxes at all is less important from a tax revenue standpoint than it is from a business standpoint.
Suppose you start a business and you get to a point where you incorporate. There are many financial reasons to do this, most pertaining to personal liability, protection of personal assets, establishing pensions, a desire to sell public shares, establishment of an independent credit rating, or even for tax purposes. The problem is, the tax situation when it comes to businesses is not only inherently complex, it is complicated further by years of extraneous deductions, credits, and loopholes.
As a new business, unless you hire very competent corporate tax lawyers to navigate this legal landscape, you are going to be paying way too much in taxes. What’s more, your business model may not be conducive to the preferential treatment the law provides to pre-established corporations… many of which conveniently lobbied lawmakers for laws which directly benefited them. Put simply, America only has one of the world’s highest corporate tax rates if you are too small to have paid off lawmakers for the exemptions necessary to keep your business nearly tax-free. We have a tax code that benefits large, well-established businesses while being almost punitively cruel to new business ventures.
Personally, I used to think the entire corporate tax scheme should be eliminated. I still flirt with the idea as an ideal, but The Gun Toting Atheist reminded me that without a corporate tax of any kind, the owners will just buy “company cars” and “company homes” which they will then use as their own, bought with tax-free funds and at the expense of the company. In my mind, the whole point of having no corporate tax while having a high tax rate on the wealthy is that a corporate tax just takes money from the pocket of the whole company, when I just want to discourage income inequality. The way to discourage income inequality is by discouraging those at the top from hording all of the profits for themselves, and the way to do that is steep, progressive income tax rates, not corporate taxes.
Essentially, I don’t see the current business tax code to be a problem pertaining to the nation’s deficit, at least not directly. Rather, the current business tax code discourages competition in the free market by stifling start-ups and favoring those who are already successful. Many of the loopholes exploited by large businesses pertain to green initiatives, which seem good on paper, but whose end result is not a cleaner natural environment, but instead a leaner business environment. If you are paying 35% of your profits in taxes, you cannot compete with a company that already has billions of dollars while paying no taxes.
There are established solutions to all of these problems, and many of these problems have multiple solutions. The easiest is likely also the most important right now: in order to undo the damage of free trade policies to the American labor market, America can take two different approaches. Either we need to get off our ass and seriously work to educate our population, both children and adults, in order to produce a workforce that is capable of competing in the economy we have left (namely fields like medicine, electronics, and other science based industries that require skilled labor that cannot be bought for cheap elsewhere), or, if we decide we hate science… we can enact protectionist policies like trade tariffs (which would need to be preceded by negating any free trade agreements). With tariffs raising the price of imported goods, it will cease being profitable to produce most goods outside the US to be imported here, and slowly but surely, jobs will trickle back into the US (but the price of just about everything will go up, sometimes drastically at first, but this does equalize over time in most cases, except when a necessary or unique resource or product cannot be produced domestically).
The solution to the minimum wage being too high is rather simple… lower the minimum wage. Deal with the problems raising the minimum wage was meant to address in a more constructive manner, like increasing taxes on the wealthy.
The most complex problem has to be fixing the tax code. It would be easiest to just scrap what we have and start over, in my opinion; that is the lazy way out, for sure. We have a very burdensome tax code, and I honestly doubt we could come up with a worse one if we started from scratch. Well… I’m sure Republicans could find a way (9-9-9 comes to mind…), but maybe if Democrats showed a little effort and caucused as one, they could stand up to any Republican attempt to do something so idiotic (and even when Democrats fail, something like 9-9-9 could never stand the test of time-time-time).
Cynics will point out that no matter what you do, money will always find a way of weaseling into the halls of congress. I couldn’t agree more. The difference between me and a cynic, however, is that I still see the virtue in trying, because I have witnessed success (only because I cared to look for it, though). I know you cannot stop all corruption, but you can stop enough of it, and I know you can achieve economic success as a nation through a robust capitalist market regulated by a duly elected government. Too many countries have succeeded at doing this for me to just pretend that government will always fail. I guess you could say I have become skeptical of government cynicism.
Someone who is that cynical, who believes government can never do anything right, is not someone speaking the truth. They may honestly believe it, but that doesn’t make them right, it makes them ignorant. The examples are out there, all across Scandinavia and even in far-flung nations like Japan. There is even more than one path to success, but the end result always looks the same: there are rich and there are poor, but those two economic groups are more close together in successful economies than they are in the US today. They more resemble the US post-WWII, in the 50s, 60s and 70s, when marginal tax rates on the rich was at or over 70% for decades, the decades in which this country experienced unprecedented (and thus far unmatched) growth for all Americans.
All you need to know about the fall of America, in my opinion, is to look at the top tax rates under Reagan. In 1980, the year before he took office, the tax on the top income bracket was 70%. When Reagan left office in 1989, it had been decreased to 28%. The rich have been getting astronomically richer ever since.
Thursday, November 3, 2011
Why Republican Economics Have Failed
I have started a post like this many times, and after reaching ten or so typed, single-spaced pages, I generally scrap the whole thing and just write something snarky about Republicans. To my credit, Republicans have been wrong on so many things economically, it’s hard to fit it all into a concise, simple blog post. So, armed with these failed drafts as my guide, I will attempt to enumerate the main points I find to be worth sharing.
It’s hard to know where to start, where a good beginning might be, but I think the best place (and person) to open with is Reagan. No Republican president before him more eloquently demonstrates the failure of current Republican economics like Reagan does. It was Reagan who began the Republican war on the poor, pioneered deficit spending, and popularized the idea that government is inherently bad.
Reagan “invented” American homelessness as we know it today. He slashed funding for low-income housing, public job training, legal services for the poor, public transportation, and mental health services for the underprivileged. His policies ensured that the poor could not afford housing, nor were they provided the means of helping themselves. In the 80s, America began its path towards being the only first-world nation to callously turn its back on those who were destitute, a trend Republicans proudly continue to this day.
While Reagan cut services to the poor, he spent astronomical sums in other ways. Piles of money were thrown at the military, businesses, and most notably, the unregulated savings and loan industry received an (at the time) unprecedented $87.9 billion bailout when its predatory practices led to a market meltdown (sound familiar?). Income disparity began to rise under Reagan, with the poor making less and the rich making so much more, the data almost seemed to indicate that America was experiencing prosperity, when in fact a large chunk of the population was worse off after Reagan left office than they were before he was sworn in.
It’s amazing, really, that someone would be able to spend so much government money without helping the poor. This was largely achieved through what was then an emerging idea among Republicans, summarized by Reagan in one of his typically mindless sound bytes: “The nine most terrifying words in the English language are, ‘I’m from the government and I’m here to help.’” With this simple mythology, he cut benefits for the American people while lining the pockets of the already-wealthy. While government got bigger under Reagan, it “felt” smaller, since no one (except the rich) could count on the government for much during or after his presidency.
Reagan aside, Republicans today are finding new and exciting ways to run this country into the ground. After eight years of Bush driving us directly towards to the precipice of disaster, it’s quite sad what is happening with Obama and the Republicans. Obama has emulated Bush in every way possible. The result has been Republicans becoming irate… for some inexplicable reason. Oddly enough, Obama’s faithful adoption of Bush-era economic policies has emboldened Republicans to get even dumber and even more regressive in their economic views.
Republicans have managed to talk out of both sides of their ass since Obama took office. Republicans are insistent that only private industry, not the government, is able to solve the nation’s economic woes. Then again, Republicans are quick to blame the economic crisis on Obama. It’s one or the other, folks, pick a side and stick with it.
I’m of the opinion the president can do quite a lot if he wants, but that it is ultimately up to congress to actually pass economic stimulus. What the president ought to be doing is taking a more pro-active approach to encouraging solutions. He needs to be the salesman for his policies, but so far… it seems like his policies are merely business as usual. This should have Republicans excited… and it does, but for all the wrong reasons.
Perhaps smelling weakness, perhaps out of some need to differentiate themselves from current policy, Republican presidential candidates have doubled-down on stupid. Not all of them, mind you, but most Republican candidates have begun espousing regressive flat taxes, even suggesting a national consumption tax at a time when consumer spending is already stagnant. I see most of this as posturing within the race for the nomination, and the obvious heir apparent (Romney) has largely risen above such nonsense, but the fact remains: Republicans seem to be chomping at the bit for a “flat tax.”
And why wouldn’t they? Republicans hate the poor, and flat taxes always benefit the rich. Consumption taxes especially hit the poor, who are already living paycheck to paycheck (or running up debt just to get by), while the rich will keep a more sizable portion of their fortune (especially if their marginal income tax rate decreases). Sure, the rich will be discouraged through sales tax from ever spending their hard[ly]-earned wealth, but what’s the harm in concentrating wealth in the hands of a few (you know… besides political corruption, loss of innovation, and a poverty epidemic)?
There’s even social reasons for why Republicans would love a flat tax: no tax deductions. Some Republicans labor under the misguided notion that if marriage had no tax deduction, those pesky gays wouldn’t be so gung-ho about asserting their right to have their unions recognized. I mean sure, there’s only just over 1000 (1,049 to be exact) federal statutory provisions which grant benefits, rights and privileges to married couples (not even counting benefits conferred by states)… but I bet that really, gay people just want the tax deduction, right?
I think it comes down to Republicans acknowledging how dumb they are and how dumb they have made America, therefore seeing the need for a more simple tax system any idiot (see also: American) can understand. You can see it elsewhere, like in the Republican opposition to laws that are long and complex (because reading is hard…) or just in the general hostility Republicans display for science, education, teachers, professors, or really anyone who might make them realize how stupid they really are.
Which leads me to the most laughable Republican concept to come out of the erroneous Reagan-era: the Laffer Curve. As someone who likes numbers, I’ve always been upset that I could never find an accurate representation of the Laffer Curve using real life data. As it turns out, this is because the Laffer curve is bullshit.
If you actually plug in real-world data, the Laffer Curve is not an upside-down U, as conservatives insist it logically must be. Instead, it is a U, with the highest tax revenues collected as the highest marginal tax rate increases.
When people point to Reagan and insist his policies demonstrate that lowering taxes increases tax revenue, there is a fundamental lapse in logic. Namely, Reagan used deficit spending to stimulate the economy. In other words, Reagan was a huge Keynesian Socialist. He used more government money that any president before him, more than he even took in through taxes. The rise in revenue was the direct result of his government policies fostering business interests. Arguably, it’s the one thing Reagan almost did right. Rather than leave the market to the invisible hand, Reagan spent like there was no tomorrow, and business flourished.
Except… not everyone felt the “trickle down” he promised, and there’s a simple explanation for why this is.
Imagine you run a company. Let’s say your operating expenses before factoring in your payroll for your workers last year totaled $10 million, and the company earned $15 million, after corporate taxes. In this scenario, you have $5 million dollars to pay your workers, yourself, and to grow your business. Not bad right?
Now, let’s suppose you have 49 workers, and yourself. How do you spend the money?
Here’s how a business owner today would probably handle that: he would pay the base salary of his workers, grow his business to meet any perceived increase in demand within the market (hiring more people, advertising, developing/improving products, etc.), and the rest is a big, fat bonus (and perhaps a raise next year) for yourself. In the current model, there is no incentive to give your workers more money, and there is some incentive to grow our business, but ultimately, the biggest benefactor of a company’s success will occur for the one(s) at the top who are making their paycheck out to themselves.
It’s quite simple as to why this is: there is no exterior force discouraging individual greed among top earners in any given business. Even if the greed of the individuals at the top bankrupts a company, those at the top have no reason to care; they got their share, and they’ll be taken care of. Plus, in the process of taking the company down, the pensions of all the lowly workers actually doing the jobs necessary for making the company run are often pillaged by those at the top. The rich get what they want and they can move on to exploit another group of people in a new company.
I believe in very progressive income taxes. Bare minimum, 60-65% on income over $400k is what is necessary for allowing private industry to redistribute the wealth itself. What do I mean by that?
Suppose you run that company that made $5 million in profit. You pay your 49 workers an average salary of $59,000 (which is well above average, but I factored in benefits like health insurance, and assumed that some people made well above average salaries). That costs you just under $3 million, for 49 people. That leaves you just over $2 million dollars to grow your business and pay yourself.
Now, suppose your salary is $500,000. And why not? Your daddy was rich, he sent you to the best schools where you got the best education money could buy, and his fortune helped you get started in your third business (he also helped in the first two, which tanked). You had every advantage in life, but you worked hard (mostly getting other people to work hard for you, though I digress…). You “cannot be replaced,” unless the company had some ability to vote you out and they would find some other person willing to tell others to work harder for half a million dollars a year [I’m available for 1/10th of that, if anyone is interested].
So, take out your salary, and you have about $1.5 million left to play with. Now… you could hire more people, or give a bonus to your best workers who helped make this such a good year. Or… you could pocket some, most, or even all of it as a bonus. No one is stopping you. In fact, the only barrier to taking in multi-million dollar paychecks and bonuses is your marginal tax rate.
I take for granted that people know what a “marginal tax rate” is. In layman’s terms, it’s just the tax rate on the last dollar you earned. In a progressive tax system, income up to a certain point is usually not taxed at all (in the US, we have a tax of 10% up to $8,500 a year, but most people earning that little are generally exempt from income tax due to deductions), and then each subsequent dollar earned is taxed at an ever increasing rate. In America, our income taxes are divided into quintiles, meaning we have five “tax brackets.” If this is already common knowledge to you, don’t worry, I’m finished with the remedial stuff.
Someone earning $500,000 dollars is taxed 35% on each additional dollar they earn, because the cutoff for the highest tax rate is $379,151. We have incredibly low taxes on the rich, less than hardly any other developed nation on Earth. The rich can keep more of the money they “earn” in America than nearly anywhere else.
Here’s what happens when the tax rates are so low: look around. The poor stay poor, the middle class dries up and does not grow to meet inflation, and the rich get richer… because they can. There is nothing stopping the rich from stifling growth by pocketing the profits earned on the backs of the poor and middle class.
Here’s what happens when the tax rate on high earners is raised: look at Scandinavia, Japan, Germany, and the US in the 1950s-60s. The US in particular had marginal tax rates of 98% on the highest income earners under Eisenhower, and while I wouldn’t personally suggest such a high rate, it helped us pay for World War II and essentially created the middle class.
Rather than pocketing the money for themselves, few people at the top are willing to write checks to themselves for millions of dollars if they are only going to keep 2% of it. It was in the best interests of the rich to reinvest that money in their company, to ensure the company’s success. A rich person used to depend on their company for their yearly income, as opposed to now, when the rich take a lifetime’s worth of wealth over the course of a few years, and then sail away with a golden parachute (often made of the pensions their employees) as the plane goes down in flames.
When fans of Reaganomics discuss “maximizing tax revenues,” they miss the point entirely. The goal of the government is not to maximize profits, like some kind of business. The goal of government is to enact policies for the greater good. Putting aside the fallacy of the Laffer Curve, even if lower taxes could increase the revenues of a government, I wouldn’t support it. It’s far better to cut spending (and let’s start with the military) than it is to try to bleed the country dry of as much money as possible.
The mechanism by which high tax rates on high income earners helps to provide stable growth for a country has nothing to do with tax revenues, but instead has everything to do with encouraging private businesses across the country to “distribute the wealth.” Perhaps the greatest fallacy of Republicanism is the idea that liberals see taxes as “wealth distribution.” Quite the contrary, a proper progressive tax allows private decisions to be made which encourage the growth of the middle class, which is ultimately what is required for sustaining a healthy economy. Private individuals distribute the wealth in a healthy progressive income tax system.
Without a middle class with disposable income, America turns into a nation of haves and have-nots, mostly have-nots. The haves horde their wealth, spending a far lower percentage of their money than middle and low income earners. This decreases consumption, which is the primary driving force in any economy. Without people willing and able to buy your products, there is no production, and in a worldwide economic crisis like we are in now, there is not enough foreign demand to compensate (especially when American deregulation has resulted in so many American products, from cars to food, being literally illegal to purchase in many developed nations).
This is how Republicans have economically ruined America.
It’s hard to know where to start, where a good beginning might be, but I think the best place (and person) to open with is Reagan. No Republican president before him more eloquently demonstrates the failure of current Republican economics like Reagan does. It was Reagan who began the Republican war on the poor, pioneered deficit spending, and popularized the idea that government is inherently bad.
Reagan “invented” American homelessness as we know it today. He slashed funding for low-income housing, public job training, legal services for the poor, public transportation, and mental health services for the underprivileged. His policies ensured that the poor could not afford housing, nor were they provided the means of helping themselves. In the 80s, America began its path towards being the only first-world nation to callously turn its back on those who were destitute, a trend Republicans proudly continue to this day.
While Reagan cut services to the poor, he spent astronomical sums in other ways. Piles of money were thrown at the military, businesses, and most notably, the unregulated savings and loan industry received an (at the time) unprecedented $87.9 billion bailout when its predatory practices led to a market meltdown (sound familiar?). Income disparity began to rise under Reagan, with the poor making less and the rich making so much more, the data almost seemed to indicate that America was experiencing prosperity, when in fact a large chunk of the population was worse off after Reagan left office than they were before he was sworn in.
It’s amazing, really, that someone would be able to spend so much government money without helping the poor. This was largely achieved through what was then an emerging idea among Republicans, summarized by Reagan in one of his typically mindless sound bytes: “The nine most terrifying words in the English language are, ‘I’m from the government and I’m here to help.’” With this simple mythology, he cut benefits for the American people while lining the pockets of the already-wealthy. While government got bigger under Reagan, it “felt” smaller, since no one (except the rich) could count on the government for much during or after his presidency.
Reagan aside, Republicans today are finding new and exciting ways to run this country into the ground. After eight years of Bush driving us directly towards to the precipice of disaster, it’s quite sad what is happening with Obama and the Republicans. Obama has emulated Bush in every way possible. The result has been Republicans becoming irate… for some inexplicable reason. Oddly enough, Obama’s faithful adoption of Bush-era economic policies has emboldened Republicans to get even dumber and even more regressive in their economic views.
Republicans have managed to talk out of both sides of their ass since Obama took office. Republicans are insistent that only private industry, not the government, is able to solve the nation’s economic woes. Then again, Republicans are quick to blame the economic crisis on Obama. It’s one or the other, folks, pick a side and stick with it.
I’m of the opinion the president can do quite a lot if he wants, but that it is ultimately up to congress to actually pass economic stimulus. What the president ought to be doing is taking a more pro-active approach to encouraging solutions. He needs to be the salesman for his policies, but so far… it seems like his policies are merely business as usual. This should have Republicans excited… and it does, but for all the wrong reasons.
Perhaps smelling weakness, perhaps out of some need to differentiate themselves from current policy, Republican presidential candidates have doubled-down on stupid. Not all of them, mind you, but most Republican candidates have begun espousing regressive flat taxes, even suggesting a national consumption tax at a time when consumer spending is already stagnant. I see most of this as posturing within the race for the nomination, and the obvious heir apparent (Romney) has largely risen above such nonsense, but the fact remains: Republicans seem to be chomping at the bit for a “flat tax.”
And why wouldn’t they? Republicans hate the poor, and flat taxes always benefit the rich. Consumption taxes especially hit the poor, who are already living paycheck to paycheck (or running up debt just to get by), while the rich will keep a more sizable portion of their fortune (especially if their marginal income tax rate decreases). Sure, the rich will be discouraged through sales tax from ever spending their hard[ly]-earned wealth, but what’s the harm in concentrating wealth in the hands of a few (you know… besides political corruption, loss of innovation, and a poverty epidemic)?
There’s even social reasons for why Republicans would love a flat tax: no tax deductions. Some Republicans labor under the misguided notion that if marriage had no tax deduction, those pesky gays wouldn’t be so gung-ho about asserting their right to have their unions recognized. I mean sure, there’s only just over 1000 (1,049 to be exact) federal statutory provisions which grant benefits, rights and privileges to married couples (not even counting benefits conferred by states)… but I bet that really, gay people just want the tax deduction, right?
I think it comes down to Republicans acknowledging how dumb they are and how dumb they have made America, therefore seeing the need for a more simple tax system any idiot (see also: American) can understand. You can see it elsewhere, like in the Republican opposition to laws that are long and complex (because reading is hard…) or just in the general hostility Republicans display for science, education, teachers, professors, or really anyone who might make them realize how stupid they really are.
Which leads me to the most laughable Republican concept to come out of the erroneous Reagan-era: the Laffer Curve. As someone who likes numbers, I’ve always been upset that I could never find an accurate representation of the Laffer Curve using real life data. As it turns out, this is because the Laffer curve is bullshit.
If you actually plug in real-world data, the Laffer Curve is not an upside-down U, as conservatives insist it logically must be. Instead, it is a U, with the highest tax revenues collected as the highest marginal tax rate increases.
When people point to Reagan and insist his policies demonstrate that lowering taxes increases tax revenue, there is a fundamental lapse in logic. Namely, Reagan used deficit spending to stimulate the economy. In other words, Reagan was a huge Keynesian Socialist. He used more government money that any president before him, more than he even took in through taxes. The rise in revenue was the direct result of his government policies fostering business interests. Arguably, it’s the one thing Reagan almost did right. Rather than leave the market to the invisible hand, Reagan spent like there was no tomorrow, and business flourished.
Except… not everyone felt the “trickle down” he promised, and there’s a simple explanation for why this is.
Imagine you run a company. Let’s say your operating expenses before factoring in your payroll for your workers last year totaled $10 million, and the company earned $15 million, after corporate taxes. In this scenario, you have $5 million dollars to pay your workers, yourself, and to grow your business. Not bad right?
Now, let’s suppose you have 49 workers, and yourself. How do you spend the money?
Here’s how a business owner today would probably handle that: he would pay the base salary of his workers, grow his business to meet any perceived increase in demand within the market (hiring more people, advertising, developing/improving products, etc.), and the rest is a big, fat bonus (and perhaps a raise next year) for yourself. In the current model, there is no incentive to give your workers more money, and there is some incentive to grow our business, but ultimately, the biggest benefactor of a company’s success will occur for the one(s) at the top who are making their paycheck out to themselves.
It’s quite simple as to why this is: there is no exterior force discouraging individual greed among top earners in any given business. Even if the greed of the individuals at the top bankrupts a company, those at the top have no reason to care; they got their share, and they’ll be taken care of. Plus, in the process of taking the company down, the pensions of all the lowly workers actually doing the jobs necessary for making the company run are often pillaged by those at the top. The rich get what they want and they can move on to exploit another group of people in a new company.
I believe in very progressive income taxes. Bare minimum, 60-65% on income over $400k is what is necessary for allowing private industry to redistribute the wealth itself. What do I mean by that?
Suppose you run that company that made $5 million in profit. You pay your 49 workers an average salary of $59,000 (which is well above average, but I factored in benefits like health insurance, and assumed that some people made well above average salaries). That costs you just under $3 million, for 49 people. That leaves you just over $2 million dollars to grow your business and pay yourself.
Now, suppose your salary is $500,000. And why not? Your daddy was rich, he sent you to the best schools where you got the best education money could buy, and his fortune helped you get started in your third business (he also helped in the first two, which tanked). You had every advantage in life, but you worked hard (mostly getting other people to work hard for you, though I digress…). You “cannot be replaced,” unless the company had some ability to vote you out and they would find some other person willing to tell others to work harder for half a million dollars a year [I’m available for 1/10th of that, if anyone is interested].
So, take out your salary, and you have about $1.5 million left to play with. Now… you could hire more people, or give a bonus to your best workers who helped make this such a good year. Or… you could pocket some, most, or even all of it as a bonus. No one is stopping you. In fact, the only barrier to taking in multi-million dollar paychecks and bonuses is your marginal tax rate.
I take for granted that people know what a “marginal tax rate” is. In layman’s terms, it’s just the tax rate on the last dollar you earned. In a progressive tax system, income up to a certain point is usually not taxed at all (in the US, we have a tax of 10% up to $8,500 a year, but most people earning that little are generally exempt from income tax due to deductions), and then each subsequent dollar earned is taxed at an ever increasing rate. In America, our income taxes are divided into quintiles, meaning we have five “tax brackets.” If this is already common knowledge to you, don’t worry, I’m finished with the remedial stuff.
Someone earning $500,000 dollars is taxed 35% on each additional dollar they earn, because the cutoff for the highest tax rate is $379,151. We have incredibly low taxes on the rich, less than hardly any other developed nation on Earth. The rich can keep more of the money they “earn” in America than nearly anywhere else.
Here’s what happens when the tax rates are so low: look around. The poor stay poor, the middle class dries up and does not grow to meet inflation, and the rich get richer… because they can. There is nothing stopping the rich from stifling growth by pocketing the profits earned on the backs of the poor and middle class.
Here’s what happens when the tax rate on high earners is raised: look at Scandinavia, Japan, Germany, and the US in the 1950s-60s. The US in particular had marginal tax rates of 98% on the highest income earners under Eisenhower, and while I wouldn’t personally suggest such a high rate, it helped us pay for World War II and essentially created the middle class.
Rather than pocketing the money for themselves, few people at the top are willing to write checks to themselves for millions of dollars if they are only going to keep 2% of it. It was in the best interests of the rich to reinvest that money in their company, to ensure the company’s success. A rich person used to depend on their company for their yearly income, as opposed to now, when the rich take a lifetime’s worth of wealth over the course of a few years, and then sail away with a golden parachute (often made of the pensions their employees) as the plane goes down in flames.
When fans of Reaganomics discuss “maximizing tax revenues,” they miss the point entirely. The goal of the government is not to maximize profits, like some kind of business. The goal of government is to enact policies for the greater good. Putting aside the fallacy of the Laffer Curve, even if lower taxes could increase the revenues of a government, I wouldn’t support it. It’s far better to cut spending (and let’s start with the military) than it is to try to bleed the country dry of as much money as possible.
The mechanism by which high tax rates on high income earners helps to provide stable growth for a country has nothing to do with tax revenues, but instead has everything to do with encouraging private businesses across the country to “distribute the wealth.” Perhaps the greatest fallacy of Republicanism is the idea that liberals see taxes as “wealth distribution.” Quite the contrary, a proper progressive tax allows private decisions to be made which encourage the growth of the middle class, which is ultimately what is required for sustaining a healthy economy. Private individuals distribute the wealth in a healthy progressive income tax system.
Without a middle class with disposable income, America turns into a nation of haves and have-nots, mostly have-nots. The haves horde their wealth, spending a far lower percentage of their money than middle and low income earners. This decreases consumption, which is the primary driving force in any economy. Without people willing and able to buy your products, there is no production, and in a worldwide economic crisis like we are in now, there is not enough foreign demand to compensate (especially when American deregulation has resulted in so many American products, from cars to food, being literally illegal to purchase in many developed nations).
This is how Republicans have economically ruined America.
Wednesday, November 2, 2011
Tuesday, November 1, 2011
Disorganized Religion
I don’t know what it is, if I just started coming into contact with different types of Christians over time, if the argument went through a phase of being popular, or if I just remember poorly, but I seem to recall one particular comment being made quite often many years ago that I just read again… for the first time in a long time. Christians I knew in high school always made comments that were disparaging of “organized religion.”
I took it to be what I would now call “dog whistle” tactics. In those days, I would probably call it code or a euphemism. To me, “organized religion” was the Catholic Church, because I went to a Catholic high school, but there were plenty of non-Catholics there. Just as one example (not a representative one), a buddy of mine had a father who thought he was Jesus. He bought a farm in southern Indiana, and this kid would be out of school sometimes for a week or more at a time because his dad “had a feeling” the end of the world was coming.
So anyway, being against “organized religion” essentially meant a small, Protestant off-shoot Christian, or the occasional Buddhist, Wiccan or non-practicing (though pork-free) Jew. Again, this was just my experience, but it seemed that most who directed disdain towards “organized religion” were more moderate or liberal religious people not part of a major church. I guess there were also some self-identifying agnostics who shied away from admitting they were atheists. I think that about covers it…
But I never much heard such a statement made for years until just today. I can see why; it’s a peculiar stance. The assumption is that most people who say “I oppose organized religion” in some fashion are really saying, “My religion isn’t crazy like that one.” Sometimes there is a hint of, “I do my own thing,” or a general dislike for certain larger sects, even a blanket rejection of authority as a whole (I wonder if Quakers say such things…). It’s quite nuanced, and I really need to take the speaker who says it into consideration more than I otherwise might.
But putting that aside, what is the implication of such a view? That religion should be disorganized? That would be the opposite, so if you oppose organized religion, you must prefer disorganized religion… which I guess meets at random times without proper notification, and your donations must get lost occasionally.
I think the term “organized religion” is a serious misnomer. People really mean “group religion,” as opposed to “individual religion.”
Maybe I’m way off, maybe there is something I’m missing completely, but it seems to me like the idea behind the hostility for “organized religion” has more do to with the fact that they function as a club, in all three meanings of the word “club.” Religions are often exclusive groups, a means of finding someone to date, and something to hit others over the head with. Maybe it should be “religious clubs.”
At any rate, organized religion has a very different meaning, in my eyes. How can a religion be valid if it’s not organized? If I’m understanding this properly… these people who are religious but against “organized religion” see what’s so wrong about certain faiths, but they seem to think they’re smart enough to interpret the truth faith better than anyone else. This is assuming, of course, that the individual takes some personal responsibility for their own faith. I am assuming through logic that someone who criticizes organized religion is not, themselves, in an organized religion… even though when dealing with religious people, it’s wise to never assume logical conclusions. The person may just be a hypocrite.
I feel like it’s crazier to believe you have the inside track when it comes to understanding the divine. I reject the Bible as lunacy, but to believe it has some truth behind it, and to think you can interpret it now, in what is probably just a translation, better than millions of experts before you… that takes both ego and insanity, or at the very least, earth-shattering naivety.
And yet, I generally prefer someone like that over someone who is part of an organized religion. Opposing “organized religion” often means not wanting to impose a belief on others. That is certainly something I can support. And make no mistake, those who are not part of an organized religion are usually far less cruel to others regarding their faith, as they lack that “us vs. them” mentality instilled within most organized religions.
One final note, as this whole topic got me thinking about something else I do still hear quite often. If this is the approach one takes, that one chops the world up into “organized religions” and… whatever else there is, then I can start to see how some people see atheism as a religion. If all an “organized religion” is to you is making a donation to a larger group and attending meetings, then I guess there are religious atheists. However, they would prefer to be called “organized atheists,” I imagine.
Top Ten: People Whose Death I Will Celebrate
10. Glenn Beck
9. OJ Simpson
8. Kim Jong-il
7. Chief Justice John Roberts
6. Pat Robertson
5. Either of the Koch Brothers
4. The other Koch Brother
3. Silvio Berlusconi
2. George W. Bush
1. Dick Cheney
9. OJ Simpson
8. Kim Jong-il
7. Chief Justice John Roberts
6. Pat Robertson
5. Either of the Koch Brothers
4. The other Koch Brother
3. Silvio Berlusconi
2. George W. Bush
1. Dick Cheney
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