> From time to time, I wonder how America and the world would have evolved had Jimmy Carter won a second term. The Reagan revolution wouldn't have occurred, and Bush Sr might have had two unrevolutionary terms followed by a couple of Clinton terms.
> Policies and programs to address world overpopulation and reproductive health wouldn't have been interrupted by a gag rule. More manufacturing and middle-class jobs would still be in the US. More of our citizens would have assets, savings and comfortable retirements. Less wealth would be concentrated in a plutocracy and gambled in hedge funds, collateralized debt obligations and credit default swaps. More banks would be solvent.
> Most of our electricity would be from solar and wind energy, and more of our transportation would be electrically powered. Energy efficiency/conservation would be advanced. Our trade imbalance would be much smaller, so less of the US would be foreign owned. Our government debt would be far less than the 13 trillion that now makes us vulnerable to mistakes or blackmail by foreign governments or sovereign wealth funds.
> In summary, our policies would reflect common sense rather than Reaganomic myths and slogans.
Monday, November 24, 2008
Monday, November 10, 2008
Unpatriotic Reaganomics
* A mature and intelligent person inquired of my bumper sticker, "No more Republican/Reaganomic Kool Aid". I discovered that most people don't realize that the economic paradigm under which we struggle is a contrivance of Ronald Reagan and Margaret Thatcher beginning after 1980, an economic experiment with a dubious rationale, not the natural order.
* The pillars of Reaganomics are: 1) deregulation to unleash commercial activity; 2) globalization to combat inflation; 3) tax cuts for the rich to stimulate investment; 4) faith in market forces to provide what society needs; 5) privatization of basic services for better efficiency and incentives. Each of these pillars might be helpful in small doses, but suicidal in large doses.
* Swallowed whole they translate to environmental degradation, resource depletion, loss of American jobs, Walmartization, idle mill towns, blighted cities, broken rungs on the economic ladder, anemic middle class, diffuse disaffection, transfer of wealth to foreign corporations and sovereign wealth funds, sequestration of wealth among corporate executives and Wall Street paper pushers, large and relentless government budget deficits hence rapid expansion of government debt now equal to the gross national product, epidemic corporate and personal bankruptcies, over-expansion of the military-industrial complex, toxic self-righteousness among those who compete successfully, neglect of infrastructure and utter failure to prepare for future inevitabilities.
* Reaganomics seems unpatriotic.
* The pillars of Reaganomics are: 1) deregulation to unleash commercial activity; 2) globalization to combat inflation; 3) tax cuts for the rich to stimulate investment; 4) faith in market forces to provide what society needs; 5) privatization of basic services for better efficiency and incentives. Each of these pillars might be helpful in small doses, but suicidal in large doses.
* Swallowed whole they translate to environmental degradation, resource depletion, loss of American jobs, Walmartization, idle mill towns, blighted cities, broken rungs on the economic ladder, anemic middle class, diffuse disaffection, transfer of wealth to foreign corporations and sovereign wealth funds, sequestration of wealth among corporate executives and Wall Street paper pushers, large and relentless government budget deficits hence rapid expansion of government debt now equal to the gross national product, epidemic corporate and personal bankruptcies, over-expansion of the military-industrial complex, toxic self-righteousness among those who compete successfully, neglect of infrastructure and utter failure to prepare for future inevitabilities.
* Reaganomics seems unpatriotic.
Saturday, November 8, 2008
Obama & Robert Reich
* Since 1980, I've suspected that Reaganomics (tax cuts for the rich, globalization, deregulation, faith in market forces, privatization) would decimate our middle class, bankrupt the nation, deplete essential resources and pollute the world's support systems. We're 'bout there.
* Since 1980, corporate bankruptcies have been rampant, oceans and air are irreparably polluted, the lower rungs of the economic ladder are missing and the national debt has increased 10 fold, doubling under Bush II and now equaling the gross national product. Owing to corrupt election financing, our government has subsidized many industries that didn't need it and failed to incentivize industries essential for the nation's survival, specifically solar and hydrogen energy.
* Now joblessness and homelessness are at or near 50-year highs. With so many of us in this together, perhaps there will be fewer people groveling in self-righteousness.
* Sadly, Obama seems to accept much of the Reaganomic paradigm. It was somewhat encouraging to see Robert Reich among his economic advisers. He is best suited to steer our economy back to something widely satisfactory and sustainable.
* Since 1980, corporate bankruptcies have been rampant, oceans and air are irreparably polluted, the lower rungs of the economic ladder are missing and the national debt has increased 10 fold, doubling under Bush II and now equaling the gross national product. Owing to corrupt election financing, our government has subsidized many industries that didn't need it and failed to incentivize industries essential for the nation's survival, specifically solar and hydrogen energy.
* Now joblessness and homelessness are at or near 50-year highs. With so many of us in this together, perhaps there will be fewer people groveling in self-righteousness.
* Sadly, Obama seems to accept much of the Reaganomic paradigm. It was somewhat encouraging to see Robert Reich among his economic advisers. He is best suited to steer our economy back to something widely satisfactory and sustainable.
Thursday, October 30, 2008
Stuff and Happiness
* After many years of subversive columns, Cal Thomas finally said something worth considering: that today's economic mess may be due in part to our excessive use of debt to acquire stuff in vain quest for happiness. As a child of the depression, raised during WWII, of parents raised during WWI, I embrace this thought. Scientific studies show that happiness increases with prosperity up to the point where comfort and convenience are secured; but, beyond that, it depends more on spiritual matters, such as interpersonal relations, inclination for gratitude, sense of meaning, cultural participation, reconciliation with circumstances, intellectual stimulation, ie factors requiring little stuff. Some of us are too restless to achieve nirvana regardless of these factors.
* The earth cannot durably support America's appetite for stuff, so our stuff acquisition will diminish regardless of desires and policies. This trend is accelerating as large eastern populations gain wealth at our expense, owing to our choice to get stuff we don't produce. A worldwide consensus for responsible reproduction could moderate these trends.
* Today our capacity to produce stuff (& deplete & pollute) greatly exceeds our need for it, so the Reaganomic myth that investment will solve our socio-economic problems was false on it's face and is now proven so by collapse of many corporations since 1980.
* We could have all the stuff we need, and wealth would be better distributed, if everyone worked no more than 20 hours per week. Of course that wouldn't be sustainable in a global economy unless there were a world-wide consensus for it, as the French are learning.
* With these thoughts in mind, I promote various happiness-engendering activities that require little stuff, and I support every NGO that encourages responsible reproduction anywhere.
* The earth cannot durably support America's appetite for stuff, so our stuff acquisition will diminish regardless of desires and policies. This trend is accelerating as large eastern populations gain wealth at our expense, owing to our choice to get stuff we don't produce. A worldwide consensus for responsible reproduction could moderate these trends.
* Today our capacity to produce stuff (& deplete & pollute) greatly exceeds our need for it, so the Reaganomic myth that investment will solve our socio-economic problems was false on it's face and is now proven so by collapse of many corporations since 1980.
* We could have all the stuff we need, and wealth would be better distributed, if everyone worked no more than 20 hours per week. Of course that wouldn't be sustainable in a global economy unless there were a world-wide consensus for it, as the French are learning.
* With these thoughts in mind, I promote various happiness-engendering activities that require little stuff, and I support every NGO that encourages responsible reproduction anywhere.
Friday, October 3, 2008
Economic Crisis
Almost a decade ago, it seemed clear to me that a great deal of sadness would issue form home loans exceeding home values and homeowners using such loans to support unearned lifestyles. Home buyers were cynically encouraged to speculate with borrowed money, governments welcomed this phony contribution to economic activity, and the whole economy became more brittle.
I did not predict how contagious foreclosures would be, each foreclosure resulting in devaluation of neighboring homes hence foreclosures there and so on. Banks now hold massive numbers of foreclosed and devalued properties vulnerable to destruction by copper thieves.
Banks and governments should have recognized this epidemic at least three years ago and formed a plan to nip it in the bud. Up front, they might have outlawed variable-rate loans, liar loans and greater-than-value loans, they might have restricted loans for new construction, they might have regulated mortgage backed securities, etc.
When defaults started increasing, delinquent homeowners should have immediately been offered restructured loans according to an industry-wide agreed-upon formula arranged by government. For example, each delinquent loan might be converted to a 30-year mortgage with principal and interest appropriate for the time of the original purchase, then with interest adjusted annually in proportion to the change of property value since that time. That would reduce the bank's income for a few years, until housing inventory is brought into balance, but bank's principal would be salvaged. This is a modest, more flexible variation of the THDA plan, which is coming too late.
I did not predict how contagious foreclosures would be, each foreclosure resulting in devaluation of neighboring homes hence foreclosures there and so on. Banks now hold massive numbers of foreclosed and devalued properties vulnerable to destruction by copper thieves.
Banks and governments should have recognized this epidemic at least three years ago and formed a plan to nip it in the bud. Up front, they might have outlawed variable-rate loans, liar loans and greater-than-value loans, they might have restricted loans for new construction, they might have regulated mortgage backed securities, etc.
When defaults started increasing, delinquent homeowners should have immediately been offered restructured loans according to an industry-wide agreed-upon formula arranged by government. For example, each delinquent loan might be converted to a 30-year mortgage with principal and interest appropriate for the time of the original purchase, then with interest adjusted annually in proportion to the change of property value since that time. That would reduce the bank's income for a few years, until housing inventory is brought into balance, but bank's principal would be salvaged. This is a modest, more flexible variation of the THDA plan, which is coming too late.
Friday, September 19, 2008
Reaganomic Debt
Reaganomics (tax cuts for rich, deregulation, globalization) has increased government debt 10 fold during 1/10 of our nation's existence, despite two world wars and several other wars during the other 9/10 of our existence. Thus, Reaganomics has increased the rate of debt accumulation to almost 100 times the previous average, with little to show for it.
I wonder who celebrates the economic trajectory that we are on, a vortex in which debt service is a large, growing and self-augmenting line item of the federal budget--this accompanied by the largest redistribution of wealth in history, from workers to wealthy.
Now we see that Reagan's deregulation and globalization were bad not only for Main Street but also for Wall Street. Record-breaking bankruptcies and bailouts are now commonplace. Business-friendly governance kills businesses.
We are flirting with bankruptcy, selling production assets, property and debt paper to sovereign wealth funds etc to finance ongoing operations of both government and business.
We may have already drunk too much Republican Cool Aid; but, with Sarah Palin in the race, chances are we'll elect to drink some more. We wouldn't be in this shape if a rag-tag bunch of Iranian students hadn't held our embassy personnel hostage back in the late 70s, thereby weakening Carter's image. Chaos theory is not just for butterflies any more.
I wonder who celebrates the economic trajectory that we are on, a vortex in which debt service is a large, growing and self-augmenting line item of the federal budget--this accompanied by the largest redistribution of wealth in history, from workers to wealthy.
Now we see that Reagan's deregulation and globalization were bad not only for Main Street but also for Wall Street. Record-breaking bankruptcies and bailouts are now commonplace. Business-friendly governance kills businesses.
We are flirting with bankruptcy, selling production assets, property and debt paper to sovereign wealth funds etc to finance ongoing operations of both government and business.
We may have already drunk too much Republican Cool Aid; but, with Sarah Palin in the race, chances are we'll elect to drink some more. We wouldn't be in this shape if a rag-tag bunch of Iranian students hadn't held our embassy personnel hostage back in the late 70s, thereby weakening Carter's image. Chaos theory is not just for butterflies any more.
Sunday, September 7, 2008
Election 2008
Concerning Thomas Sowell's Sept 3 column, "Obama's idea of change is recycling FDR's disastrous policies", I wonder what kind of America he wishes for.
Without presenting evidence, he claims that FDR's recovery programs extended the Great Depression. Americans should be thankful for Social Security, the Securities Exchange Commission, the Tennessee Valley Authority, as well as infrastructure produced by the CCC and WPA, all of which benefit Americans to this day.
The effectiveness of the New Deal must be judged in relation to available alternatives. The Great Depression was a child of three consecutive Republican administrations. What does Sowell know that a fourth Republican administration would have done to shorten their Great Depression more effectively than did the New Deal?
To characterize Obama's campaign as class war is a cynical lie, and Sowell should be ashamed of repeating it. America is hemorrhaging, headed for bankruptcy, owing to neglect of our true interests over 28 years of Reaganism. We (rich, poor, business, labor, black, white, all in it together) are facing an existential fiscal threat. Republican think tanks whose doctrines steered us toward this shoal are still intact, so it is unlikely that another Republican administration will make the needed course correction.
Obama will incentivize infrastructure transformations to employ people quickly and stop the bleeding, resulting in century-long benefits for all Americans.
Without presenting evidence, he claims that FDR's recovery programs extended the Great Depression. Americans should be thankful for Social Security, the Securities Exchange Commission, the Tennessee Valley Authority, as well as infrastructure produced by the CCC and WPA, all of which benefit Americans to this day.
The effectiveness of the New Deal must be judged in relation to available alternatives. The Great Depression was a child of three consecutive Republican administrations. What does Sowell know that a fourth Republican administration would have done to shorten their Great Depression more effectively than did the New Deal?
To characterize Obama's campaign as class war is a cynical lie, and Sowell should be ashamed of repeating it. America is hemorrhaging, headed for bankruptcy, owing to neglect of our true interests over 28 years of Reaganism. We (rich, poor, business, labor, black, white, all in it together) are facing an existential fiscal threat. Republican think tanks whose doctrines steered us toward this shoal are still intact, so it is unlikely that another Republican administration will make the needed course correction.
Obama will incentivize infrastructure transformations to employ people quickly and stop the bleeding, resulting in century-long benefits for all Americans.
Wednesday, September 3, 2008
Tax Cuts
The promise of tax cuts contributed significantly to Reagan's victory in 1980 and Bush II's victory in 2000. I opposed most initiatives of these two administrations because they eroded opportunities for many Americans and planted seeds of America's eventual decline, so I bristle at the tax-cut mantra now adopted also by Democrats.
Moreover, I was suspicious of the intellectual underpinnings of the tax cuts, the Laffer Curve (google: Laffer Curve past present future). According to Laffer, taxing an economic activity steers people away from that activity, so reducing the tax rate will increase the activity; and, if the tax rate is above optimal, then the increased economic activity will outweigh the reduced tax rate, so tax revenue will increase. Reductions of tax rate below optimal will reduce revenue as expected. This implies an arch-shaped dependence of revenue on rate.
While this theory is unimpeachable, I doubt that tax cuts of Reagan and Bush II were justified by Laffer's theory, and I suspect that those cuts were harmful. The dependence of economic activity on tax rate is inherently insensitive, since ordinary workers and most entrepreneurs do not avoid or diminish their efforts because their earnings are taxed. Investor choices may be more sensitive to tax environment but still constrained by market realities. On the other hand, globalization makes investor choice more sensitive to taxes.
Some of the modern examples cited by Laffer, as demonstrating effects of tax cuts to increase tax revenues, seem questionable. First, increases of revenue following tax cuts were similar regardless of starting point, not as expected of an arch-shaped dependence. Second, the increases of revenue might be attributed to concomitant increases of federal spending, some of which would bounce back directly as income tax on recipients, some of which would come from economic activity initiated by the recipients. How else could the deficit rise when revenue increased? Ninety percent of the federal debt has accumulated since Reagan cut taxes. Also, economic activity following tax cuts may have been influenced by Federal Reserve actions, new technologies, new business strategies and new investment vehicles.
I wonder whether the changes of economic activity following tax cuts have been subjected to sensitivity analysis based on a model that includes factors mentioned above and others not mentioned. I also wonder whether Laffer approves of the economic trajectory that we are on, essentially a Reaganomic trajectory.
Moreover, I was suspicious of the intellectual underpinnings of the tax cuts, the Laffer Curve (google: Laffer Curve past present future). According to Laffer, taxing an economic activity steers people away from that activity, so reducing the tax rate will increase the activity; and, if the tax rate is above optimal, then the increased economic activity will outweigh the reduced tax rate, so tax revenue will increase. Reductions of tax rate below optimal will reduce revenue as expected. This implies an arch-shaped dependence of revenue on rate.
While this theory is unimpeachable, I doubt that tax cuts of Reagan and Bush II were justified by Laffer's theory, and I suspect that those cuts were harmful. The dependence of economic activity on tax rate is inherently insensitive, since ordinary workers and most entrepreneurs do not avoid or diminish their efforts because their earnings are taxed. Investor choices may be more sensitive to tax environment but still constrained by market realities. On the other hand, globalization makes investor choice more sensitive to taxes.
Some of the modern examples cited by Laffer, as demonstrating effects of tax cuts to increase tax revenues, seem questionable. First, increases of revenue following tax cuts were similar regardless of starting point, not as expected of an arch-shaped dependence. Second, the increases of revenue might be attributed to concomitant increases of federal spending, some of which would bounce back directly as income tax on recipients, some of which would come from economic activity initiated by the recipients. How else could the deficit rise when revenue increased? Ninety percent of the federal debt has accumulated since Reagan cut taxes. Also, economic activity following tax cuts may have been influenced by Federal Reserve actions, new technologies, new business strategies and new investment vehicles.
I wonder whether the changes of economic activity following tax cuts have been subjected to sensitivity analysis based on a model that includes factors mentioned above and others not mentioned. I also wonder whether Laffer approves of the economic trajectory that we are on, essentially a Reaganomic trajectory.
Talk Radio
Almost from its beginning and especially since 9/11, AM1430 Public Radio has been the sound track of my retirement (that punctuated by episodes of recreational music making). I like its objective, almost academic, presentation of current events, history, ideas, science, policy implications, etc. Public Radio helps with my inner debate about what policies might enable the US and the world to be happier and more peaceful for a longer time.
Occasionally Public Radio addresses a pop-culture topic, so I dial AM1510 Fox News, to see what's eating them. Its hosts and callers praise Republicans obsequiously and vilify Democrats hatefully--this despite growing prosperity under Clinton and deterioration under Bush. Their attacks on Barack Obama seem libelous. Fox News behaves as an arm of the Republican party, tasked with distracting listeners with trivia so they will vote against their own interests.
A few more years of unbridled budget deficits, labor outsourcing, offshore banking, offshore incorporation, deregulation, unnecessary wars, profligate lifestyles, neglect of family planning and neglect of renewable energy will bankrupt the nation. That's a high price to pay for the agendas of Fox News, George Will, Cal Thomas & Phil Valentine. An influential Republican thinktanker, Grover Norquist, desires national bankruptcy. Do you?
Occasionally Public Radio addresses a pop-culture topic, so I dial AM1510 Fox News, to see what's eating them. Its hosts and callers praise Republicans obsequiously and vilify Democrats hatefully--this despite growing prosperity under Clinton and deterioration under Bush. Their attacks on Barack Obama seem libelous. Fox News behaves as an arm of the Republican party, tasked with distracting listeners with trivia so they will vote against their own interests.
A few more years of unbridled budget deficits, labor outsourcing, offshore banking, offshore incorporation, deregulation, unnecessary wars, profligate lifestyles, neglect of family planning and neglect of renewable energy will bankrupt the nation. That's a high price to pay for the agendas of Fox News, George Will, Cal Thomas & Phil Valentine. An influential Republican thinktanker, Grover Norquist, desires national bankruptcy. Do you?
Wednesday, July 23, 2008
Off-shore drilling
The Tennessean has published letters and columns maligning Democrats for resisting off-shore and ANWR drilling. These writers (David Denny, Richard Knight, Phil Valentine) seem to be missing their prefrontal lobes or are afflicted with terminal selfishness.
It would make sense for our generation to exploit and exhaust our last oil reserves only if a virus, meteorite or atomic war is expected to destroy the US in the foreseeable future. Otherwise it is ethical to leave those reserves for distant future generations to use in applications for which there is no substitute for oil. Likewise for coal and gas.
Our generation's duty is to deploy solar-thermal generators and wind turbines as fast as possible, by incentives to corporations if effective or as a TVA-like program if necessary--this in addition to much more energy-sensitive building codes, land use planning, transportation standards, and policies to encourage responsible reproduction worldwide.
The resources squandered on our unjust aggression in Iraq could have payed for this conversion to clean and sustainable energy production. Should my generation of Americans be proud or ashamed of its choices?
It would make sense for our generation to exploit and exhaust our last oil reserves only if a virus, meteorite or atomic war is expected to destroy the US in the foreseeable future. Otherwise it is ethical to leave those reserves for distant future generations to use in applications for which there is no substitute for oil. Likewise for coal and gas.
Our generation's duty is to deploy solar-thermal generators and wind turbines as fast as possible, by incentives to corporations if effective or as a TVA-like program if necessary--this in addition to much more energy-sensitive building codes, land use planning, transportation standards, and policies to encourage responsible reproduction worldwide.
The resources squandered on our unjust aggression in Iraq could have payed for this conversion to clean and sustainable energy production. Should my generation of Americans be proud or ashamed of its choices?
Thursday, January 24, 2008
Iraq War Cost
* I've been thinking recently of the one trillion dollars already spent on the unjust invasion and occupation of Iraq.
* That quantity ($1,000,000,000,000) divided by 300,000,000 US citizens yields $3,333.33 per citizen that could be used toward a solar panel for each of us, to slow the exploitation of nonrenewable fuels and the emissions of climate-warming carbon-dioxide along with several pollutants. I wonder how many wind turbines could be incentivized by one trillion dollars.
* One trillion dollars divided by 3,000,000,000 people living in countries having insufficient fresh water, fuel, tillable land, etc, yields $333.33 per miserable person to purchase family-planning services and supplies and help get populations more in balance with natural support systems.
* One trillion dollars multiplied by 5% per year yields 50 billion dollars added to our federal budget as interest on the added debt, as we were not taxed to pay for this elective war. Since we do not earn money in foreign trade (we lose 1/2 trillion dollars per year in foreign trade and borrow that amount from foreign-trade winners), that 50 billion added to the budget in fact goes to foreign countries, exacerbating the trade deficit with nothing to show for it.
* That quantity ($1,000,000,000,000) divided by 300,000,000 US citizens yields $3,333.33 per citizen that could be used toward a solar panel for each of us, to slow the exploitation of nonrenewable fuels and the emissions of climate-warming carbon-dioxide along with several pollutants. I wonder how many wind turbines could be incentivized by one trillion dollars.
* One trillion dollars divided by 3,000,000,000 people living in countries having insufficient fresh water, fuel, tillable land, etc, yields $333.33 per miserable person to purchase family-planning services and supplies and help get populations more in balance with natural support systems.
* One trillion dollars multiplied by 5% per year yields 50 billion dollars added to our federal budget as interest on the added debt, as we were not taxed to pay for this elective war. Since we do not earn money in foreign trade (we lose 1/2 trillion dollars per year in foreign trade and borrow that amount from foreign-trade winners), that 50 billion added to the budget in fact goes to foreign countries, exacerbating the trade deficit with nothing to show for it.
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