Category: economics

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Capitalist Socialism

A company produces a product that causes permanent damage to the environment.  In a free enterprise-capitalist economy, that should be no problem: the shareholders of this company, who stand to profit from the sales of the product, obviously have to pay the cost of manufacturing the product as well.   If the product cannot be produced in a profitable manner after these costs are included, in our free enterprise-capitalist economy, the investor money goes elsewhere.

Because it would be utterly contrary to the principles of Free Enterprise to assign to taxpayers and citizens the costs of environmental damage caused by the process of manufacturing ring a product that produces profits for private individuals who have invested in a corporation.  That is a subsidy.  That is the government putting its finger on the scale.  That is socialistic.

That is what we are sold: free enterprise.  But what we are sold is far from the truth.  As innocently described here as something almost reasonable, corporations that wish to make a profit by eliminating the cost of cleaning up the mess they produce while taking our money want taxpayers to cover part of the cost of production.  Don’t forget that tax cuts to high-income earners is almost always part of the package of governance advocated by the politicians who support this scam.  “Tax breaks” are invariably camouflage for “government subsidy”.  If you are buying a car for $40,000 and the dealership gives you a “price break” of $10,000 so that you only pay $30,000, it is exactly the same as if he had given you $10,000 cash and you paid him $40,000.  They are both “hand-outs”.

But it’s clever.  In the same sense, most Americans probably really have no clue what a “marginal” tax rate is.  They assume that once you cross a certain threshold, like $100,000 of income, the higher tax rate applies to the entire $100,000.  Can’t have that.  Vote Trump.  (The marginal tax rate only applies to the income above the threshold.)

Working class individuals subsidize the investment returns of the rich investors and fund managers.  Cleverly camouflaged as “tax breaks”, your politicians– your congressmen and senators and presidents– are diligently working to transfer your money to rich people, one way or another.   Since 1980, the trend has been perfectly obvious: the investor class has received fabulous returns on their investments; the worker class has been trapped in ever decreasing buying power and discretionary income.

And Thomas Friedman of the New York Times wants you to be very alarmed because Bernie Sanders would actually do what Obama and Clinton promised but never even dared to consider: stop the government from exclusively serving the interests of the rich.

The sense of panic in the Democratic Party establishment is palpable.

And no surprise that in the face of overwhelming evidence that the New York Times really, fundamentally, supports the established capitalist order, Trump supporters will continue to regard it as a bastion of unfettered progressive socialism.

Because it was never about the politics; it was about you people think you’re smarter than me, don’t you?  You look down on me.  You think I don’t get it.

You don’t.

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Until it Stinks

Sir Joseph Bazalgette may have saved more English lives in Victorian England than any other single man.  I bet you never heard of him.

You need to know about Joseph Bazalgette because, perhaps in the future, a new Bazalgette will be remembered in the same way that he is, for saving us from global warming.  For the same reason: because the stink has become overwhelming.

There are profound similarities between Victorian-era London and the entire world today.  Victorian-era London had a major problem: it had millions of people living in close quarters who were all generating a lot of shit.  They were enjoying the convenience of not having to take any expensive measures to deal with their shit.  They just dumped it into the city drains and the drains dumped it into the Thames and from the Thames it came back.  Yes it did.  The tides and the variations in the flow of the Thames caused all that excrement to wash back up onto the shoreline where it splashed about and eventually worked its way into the drinking water and food and into the mouths of children.

This was not merely distasteful: it was poisonous.  People died of cholera and other diseases, and the smell was absolutely terrible.

Think about the government of that city.  When did it finally think that it might not be such a good idea to dump all of their shit into the river?  The truth is they always knew it was a bad idea.   They just didn’t have the courage to make the tough decisions required to do otherwise, including raising taxes to pay for what was needed.

What was needed was a massive complex system of pumps and reservoirs that took all the human waste and channeled it further out into the river at low tide.  It’s never been clear to me why this didn’t backfire as well, but it didn’t, and the system worked pretty well until they finally figured out a way to dump it into the North Sea.  Joseph Bazalgette designed and built that system.  I hope there is a statue of him somewhere in London.

You may wonder whether dumping it all into the North Sea was much of an improvement.  Well, it was for the people of London.

In any case, the similarities to climate change are uncanny.  And the lesson learned is simple.  People are too stupid to make modest measures in time to save themselves from having to take drastic measures when it is almost too late.  As the Marshall Islands sink into the sunset we can only wish that it would produce a stink that would envelop Wall Street and Washington.

Unlike London’s shit, climate change may not be so forgiving.  There is no way to take the carbon and dump it further out from the earth’s atmosphere.

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Sharepoint, Sharepunt

Here’s what astounds me: Sharepoint is Microsoft’s fasting (sic) growing business ever. Faster than windows or office. It’s also a source of 1 bil+ revenue a year. YET, comments from 40+ educated people who know technology very well cannot explain its purpose or real value.   From Here

So what is it you do here?

If you have seen the movie “Office Space”, you will immediately recognize the query from a pair of consultants– the “two Bobs”–  hired to optimize the business operations of some hi-tech company that writes banking software (consequentially using only two digits for the dates).    They interview all of the staff and are sometimes perplexed at the role played by a particular individual.  They look at him, indulgent, perhaps, and open-minded, at least at first, and ask: what is it, exactly, that you do here?  One employee, desperately trying to justify his position, gets angrier and angrier as he explains that he takes the specifications from the customer and brings them to the development team.  The consultants repeat:  Yes… but what is it you do?

The truth is that “Office Space” is one of those movies that I like in spite of the fact that it really isn’t very good, on any artistic level.  The acting, script, and direction are pedestrian at best.  But it hit on an area of human life neglected by Hollywood: work.  And it’s amateurishness works in its favor there in the way it tries to show you something about working relationships that you won’t see elsewhere.  Like:  “PC Load Letter?!  What the fuck does that mean?”

In this case, the employee, Tom Smykowski, could have given an answer more in line with “I develop strategies for customer relationship development to enhance corporate branding” or something like that.  What he says instead is that he brings the specifications from the customer to the developer.  He “deals with” customers, which is actually more of a real job than what most managerial employees do.

So, in trying to inform myself about Sharepoint– what is it exactly that you do? — I found this guy.  Oh good, I thought.  He doesn’t look too corporate.  He’s sitting in a car.  Maybe, at last, I can get a real explanation of what Sharepoint does exactly.  So I watched.  He blathered on about how great it is, how fabulous, how foundational, and how it …. it….  it….

All right.   In spite of the car setting and the lack of a suit, he sounds like a shill for a consultancy group that sells Microsoft services and support.  When we need collaboration, when we need workflow… communications: few to many…  the many to many conversations crossing teams… applications … granular security… think Sharepoint.  And there’s teams: teams is where we’re doing things because we converse and we’re working on different things… where we meet and share files and the other aspects of what we do as a team…   Enhance employee engagement….  Yammer are those large  topic-focused typically self-serviced type conversational groups… teams!  Teams are where I do my work and get it done. …   They actually work together in a synergistic fashion and usage will vary from org to org depending on their own requirements.

Yes, but what is it you do?

That last line– my God!  You really hit on something there!   “Synergistic fashion”.  Something so profound and specific it will make the hairs on the backs of the necks of every high-priced consultant in North America tingle.

But what is it you do?

I think of Sharepoint, at this stage, like the layer of management just below the CEO at most organizations.  There are people who do real work at any organization, institution, or company.   When an organization starts out, that’s all anybody does, though there are always people with real power among them: the owners or appointed positions with the authority attached to them by the owners (it’s really always the owners who have the real power).  Then the organization grows and gets more money.  The appointed leaders promote themselves.  The last thing they really want to do every day is real work, so they crate new categories of “work”: management.   But even management can involve real work, like supervision, scheduling, processing time sheets, coordination, and so on.  So, as the organization gets bigger and bigger, they appoint other people to do the real management while they attend training seminars, retreats, and leadership conferences.  Eventually, they stop working altogether: their entire job consists of coming up with phrases like “synergistic fashion” and “topic-focused typically self-serviced type conversational groups” and “enhance employee engagement” to justify paying themselves more than the people who actually produce things of value for the organization.  Way more.

It provides you with an “intuitive” experience, so he says.  That’s not what “intuitive” means, really.  The experience is what you get to.  The skills required to navigate to this result are not intuitive, and real-world experience shows over and over again that Microsoft does a very poor job of making interfaces that allow users to “intuit” how to do something, like set up an international meeting via the internet with white board, powerpoint presentations, and video-conferencing.

“Your employees can create sites to share documents and information with colleagues, partners, and customers”.  Yes, it sounds like the internet.

Or listen to this (from here, an otherwise fine article):

Yammer the startup had a vision. It was to make the world of work more transparent and connected, to break open the rigid structures in corporations and to let information travel freely for the good of more collaboration, innovation and responsiveness. Yammer the platform was the conduit, the trojan-horse so to speak, to achieve such an ambitious social change agenda.

Is there any world in which you can imagine that any of this can take place without the actual work of collaboration being performed by smart, engaged, well-compensated employees?  Now, is there any world in which you can imagine that all these good things would not have happened anyway, without the expensive technological framework being sold to you by Microsoft?  There’s not a thing that Office 365 does that could not be done by Groupwise, Thunderbird, ExpressionWeb, WhatsApp, or Google.  The biggest obstacle this this process is not addressed by any software: stupid leaders who are more afraid of being exposed as the useless appendages that they are than they care about productivity and efficiency and rational management strategies.

 

 

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The 2020 Election Debate

I hope the Democrats don’t fall into the trap of debating what Trump says he will do vs. what they say they will do.  That’s not the heart of the matter.  The heart of the matter is this: Trump says he will do many things, most of which he will not or cannot do.  His followers think he will get North Korea to get rid of their missiles, bring peace to the Middle East, get U.S. troops out of Afghanistan without giving it back to the Taliban, solve Venezuela, stop immigration from Central America, build new roads and bridges, cut taxes for the average American, reduce the budget deficit, strengthen the military so that it’s strong enough to confront endless imaginary threats, drive Russia out of the Ukraine, move better high-paying jobs to America from overseas,  get a better trade agreement with China, and give everyone access to a better health care plan than the ACA.

He is not even close do doing any of those things.  Why debate, for example, a Republican health care plan when it doesn’t exist?  Why debate policy towards the Ukraine when Trump has no intention of pushing the Russians back out?  Why debate Trump’s approach to income inequality when Trump has no policies that will affect it?

If the Democrats are wise, they will stick to the character of the man in office, knowing full-well that 30% of Americans adore that character.  What a character!  Did you hear Trump today?  He says he invented time!  That’s my guy.

So, have a coherent policy outline, but stick to the salient matter: you really want this embarrassment representing the U.S. to the world?  Okay, you can have him.

 

 

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You Can Have it Back

The U.S. is now negotiating with the Taliban to return the nation to some kind of hybrid administration that gives a significant amount of power to our former arch-foes.  The current government of Afghanistan is not invited to these talks.  Can there be a more anxious government in the world right now than the government of Afghanistan?

In other words, after almost 20 years of war and the loss of thousands of lives, we are going to restore things to exactly the way they were when we started.

The U.S. has lost this war.  It will never publicly admit it, but it has lost the war in Afghanistan and it is finally going to leave, but not before adding insult to injury.  The Taliban has no interest in a pluralistic, representative government.  They have no interest in the rights of girls and women to an education or any other choice.   Once the U.S. is gone, they will extract revenge on all who opposed them, including the thousands of Afghani volunteers who joined the police forces– at great risk– for $300 U.S. a month.  They will almost certainly drive out their coalition partners and establish a repressive Islamic regime, like the one they had before the U.S. invaded, and after they drove out the Soviets.

Will anybody responsible for this disaster ever be held to account?  The George W. Bush Presidential Library still stands.  Dick Cheney’s daughter sits in Congress.  Rumsveld?  Wolfowitz?  Richard Perle?  Probably serving on boards of large corporations for hugh sums of money?

The dead?  They remain dead and buried and mourned by their families and loved ones who think Colin Kaepernick should just go and piss off.  We are patriotic.  We invite you to use us.  We invite you to offer our bodies as a sacrifice to your political career.  They will name a freeway after you.  They will bury our fathers, brothers, sons, daughters, wives, and sisters under the freeway.

 

 

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Half of Everything

Suppose you had a big plate of delicious french fries, and a friend to share it with.  You both sit down at opposite sides of a table.  “I’ll give you half,” you say.  “That seems fair,” says your friend.  So you divide the plate in half and pick up your fork.

Your friend gobbles down all of his french fries in a hurry, as you pick over yours, one by one.  After a few minutes, he looks at your side of the plate longingly.  “I don’t have any more fries,” he says.

“You can have a few of mine,” you say.

“Okay.  Thanks.” and your friend takes half of the remaining fries.

And gobbles them down in a hurry.

And then stares at the remaining fries.  “I don’t have any fries,” he says.

“No.”

“Oh come on– look at all the fries you’ve got.  Is it fair that you get all those fries and I don’t get any?  How can you be so greedy?  I should get half.”

And so it goes, until there are no fries left.

And that’s how we get to drilling for oil in the Alaskan National Wildlife Reserve.  One of the last preserved natural regions in the nation.

Not for long!

When the oil companies started drilling, some politicians with good sense, including Theodore Roosevelt, realized that the public would like some areas of natural beauty to be kept free from the massive destruction caused by mining and oil wells.   So they said, you can’t have everything.  They set aside some remote areas like the Alaskan Wildlife Refuge to be maintained in their natural states.  And the oil companies got carte blanche to drill practically everywhere else.  The government was generous– to the oil industry.  You don’t like oil wells?  Tough shit.  They went up almost everywhere if there was oil.  But yes, even then, the government reserved a few areas for the pleasure of that part of the general public that appreciates natural beauty and wonder.

And then the oil industry used up their everywhere else and began to look longingly at all that pristine wilderness.

The clever carbon industry has realized that public perception is not very sophisticated.  The public doesn’t understand that areas that were set aside to be protected from industrialization are the half the government resisted handing over to the oil barons.  (It’s actually far less than half.)  The public doesn’t understand that the oil industry already ate half of the fries.   The oil industry says, how can you be so selfish?  Share your fries!

Eventually, of course, they will keep taking the half the public stupidly offers them until there are no halves left: just a world full of arid, polluted, wasteland.

The owners of these industries have the means to live in luxury somewhere else.    But if you happen to live in one of these protected areas, you are screwed.

They will promise to preserve the environment, to clean up their mess, and provide good jobs for a lot of people for a long time.  And you believe them?

It is very important for the conscientious citizen to understand this important fact about the oil barons:  there are absolutely no consequences for them if they are lying.  The executives who decide to lay waste to millions of acres or allow alcoholics to captain their vessels, or scrimp on safety equipment face no personal consequences at all.  They never have.  Their corporations will pay fines which will not come out of his bonus.

I repeat: the executives of these companies face no consequences at all for even the most reckless, criminally destructive behaviors.

Think about it– when is the last time you heard about a corporate executive going to jail for lying, for fraud, for polluting the environment, for breaking government regulations?

But the public should not be spared.  We elected the assholes who do the bidding of the oil companies.  And we refuse to accept any plan to address global warming if it involves the slightest personal sacrifice.

We want a plan that reduces our carbon emissions without reducing our carbon emissions.

Only people like Doug Ford and Donald Trump can work such a miracle.

 

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Oily Bears

I have no doubt that if the oil industry succeeds in wheedling another chunk of Alaskan wilderness from the government to drill and develop and exploit, that they will solemnly insist to everyone that they, more than we could ever imagine, are passionate about preserving some other part of Alaska’s remaining pristine wilderness for generations to come. And then, once they have sucked up all the oil they can, their pimps in the Alaskan state government will once again whine and whimper that it is so unreasonable to insist that this other pristine wilderness area be preserved.

There is no end of parts of the world that have been despoiled by the energy or lumber or mining industry, but there are precious few parts that remain pristine wilderness. And they will come after those parts, relentlessly, hurling millions dollars at politicians, begging and pleading, and lying through their teeth: we care about the environment.

If conservatives think liberals are fools for thinking that poor people can be improved with education or opportunities, or that negotiations can lead to peace, or that some black youths are not out to kill police officers, then liberals have a right to think conservatives are absolutely idiotic to think any energy company has the slightest interest in preserving the environment. Industries are driven by profit: they have no conscience. Their PR flacks will say and promise anything to increase profits. Money doesn’t weep: actors do, and the top executives of these corporations are primarily actors.

If you believe them, you seriously have to answer the question, why, do you think, they would keep those promises? What possible incentive do they have? Once they have fully exploited the mineral or energy resources of a given area, they can retire with untold riches. There are no real consequences for a corporation: they can pay any modest fines out of future profits– someone else’s problem.

It’s not like perjury. Standing in front of a TV camera and mellifluously praising the mountains and meadows and creatures of some distant land promising that never, in a million years, would you do anything to harm them, cost nothing. There are no consequences for lying.

In 1994 Verizon promised to lay fibre optic cable to every house in Pennsylvania in exchange for over $2 billion in tax breaks.

Were they laughing even then? 20 years later, they have done nothing to deliver on that promise. Refund the taxpayer’s money? Are you mad? Recall the politicians who made that deal? Can you even remember that they made that deal? Do you care that they sold you down the river? Not enough, apparently, to not re-elect them.

Verizon learned what the oil companies already know: they have immunity. They all know whose side the politicians are really on.

 

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Credit Shackles

It is quite amazing how the credit industry in the U.S. has convinced conservative and liberal legislators that extending easy credit to people without the means to pay off their loans is an act of kindness and generosity. As if they were not charging interest or demanding repayment.

That is what they will tell you if you bring up the fact that U.S. credit industry has essentially reintroduced indentured servanthood on the sly. The average American carries a balance of $5,000 to $8,000 (depending on your sources) on their credit cards, for which they are paying an interest rate that was regarded as illegal for most of American history– usually, about 28%.

Most of these credit card companies are headquartered in the state of Delaware (yes, Joe Biden’s home) because at one time it was illegal in most states to charge “usurious” interest rates on loans.

Why is this allowed? The cover story, as I stated, is that this is a service to people, especially people with low income who otherwise would not be able to buy the big-screen television or xBox or laptop, or lavish that trip to Disney World on their youngsters. It’s a clever ruse: they are only able to continue to consume until they have reached the limits of their credit; if their limits are extended, they go even deeper into debt, and are even less able to pay off the principal. In keeping with the Republican tradition of giving laws names that are the opposite of their real purpose, (like the “Clear Skies Act”, in 2005, Congress passed “The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005”. The BAPCPA should have been called “The Perpetual Credit Servitude Act” or the “Consumer Exploitation Act”. Some Democrats opposed it, some supported it. All Republicans supported it.  And that tells you a hell of a lot.

It is a tragedy that many otherwise sensible people take the attitude that if people are so stupid as to run up debts they can’t pay off quickly, they deserve what they get. To me, that is like asserting that a woman who goes to a party and drinks is asking to be raped. This attitude might make a little sense if most of the people you know are well-educated, have decent jobs and a decent income and an RRSP, and understand how they are being ripped off but do it anyway. But most people are not; they are drunk with consumer choice, bombarded by advertising, convinced by government and the media that they are entitled to enjoy the fruits of capitalism, lavishly.

But the essence of good government regulation is to protect vulnerable people from being exploited and abused by other people or corporations without a sense of right and wrong. And a corporation never has a sense of right or wrong: it has profits. The fact that the average credit card balance in the U.S. is so high tells you that the average citizen doesn’t understand credit or credit cards and is vastly over optimistic about his or her ability to pay off debt. The average consumer is vulnerable. They don’t understand that being able to buy the big screen tv and xBox now on credit means they will be able to buy a lot less in the future when their credit card payments are $400-500 a month, and barely cover the interest, while they continue to add on debt. It makes perfect sense for the government to step and restrict the ability of banks and credit agencies to offer them loans.

It made more sense when the government allowed some of these consumers to declare bankruptcy and crawl out from under an unbearable debt load. That’s what the BAPCPA was all about: tightening the noose. It imposed new, vast restrictions on the ability of any person to declare bankruptcy.

Why? The banks will tell you that they have to charge 28% on credit cards because of the great risk they take that people won’t pay these loans back. The only escape for many people was to declare bankruptcy and start over: risk taken, Mr. Banker, sometimes you lose. That’s why you were allowed to charge 28%– why are you complaining?

The only way Congress should have tightened the restrictions on bankruptcy law should have been by forcing the banks to drop their interest rates to something like 7% at the same time, in the same legislation.

The banks and the conservatives and their lobbyists and toadies would have howled to high heaven. For good reason. It’s easy profit. If you are in the investor class, it’s a fantastic way to extract money from poor people. Like taking candy from a baby, and just as ethical.

The banks and credit card agencies insisted that consumers would benefit because the tighter regulations would increase their profits and then– get this — allow them to pass on the savings to consumers in the form of lower credit costs.

Of course it did increase their profits. And of course, credit costs to consumers went up, not down.

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Indentured Students

Did you know that the Government of Germany pays the full cost of post-secondary education for all of its students? Even for American students who speak German?

The student loans program  needs to be seen in a completely different light. Here we are now recruiting even younger people with even less knowledge or understanding of credit and pushing them to lock themselves into major debts so that immediately upon leaving college or university they begin making their perpetual payments to the banks.

The banks don’t care about he principal. They don’t need the principal. What they need and want is your perpetual payments to them, and you must not be allowed to escape until you are very old.

That’s when the medical bills kick in…

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Shill Shun

“I was regularly called a shill for the food industry”. Elizabeth Whelan, in NY Times Sep 18, 2014.

Why is this so inevitable? From the inside, it must look like something no one will really notice or pay attention to. Or maybe you just don’t care. Or maybe you are right: no one thinks that just because you take money from the industry that benefits from your “science” you would alter your findings.

And Elizabeth Whelan set out to establish a national organization that would battle what she called “junk science” and excessive government regulation protecting us from chemicals and substances which, she believed, were of marginal risk.

Why oh why oh why did she not resist the temptation? I thought there might be something to her point of view. I thought, it is likely that government bureaucrats would over-react to preliminary test results. It is possible that banning one substance will only increase different risks from the alternatives. I thought, let me read more.

And then, inevitably, it is discovered that the industry, delighted with her point of view, began to fund her organization.

And she accepted the money.

Among other things, American Council on Science and Health has endorsed saccharine, smokeless tobacco, pcbs, and fracking. She ridiculed Michael Bloomberg’s drive to ban sales of huge soft drinks in New York City.

Now, if I had been one of the corporations, I would have kept as far away from her organization as possible. I might even have attacked her for being too cautious, too reticent. I would have urged my fellow corporate buccaneers to lay off, stay back, restrain yourselves– because the minute a person like me finds out that Elizabeth Whelan is paid by the industry that benefits from her activism, her research loses all of it’s value and credibility.

Now, I shouldn’t have to respond to this hypothetical argument from the conservatives: activists from the other side also benefit from their cause– they have nice, paying jobs, junkets, expenses, and so on. But that is like saying that any married woman is the same as a whore because she offers sex to the man who feeds her and keeps her. It is not even remotely the same thing. The “benefit” corporations receive from Elizabeth Whelan’s advocacy is increased material profit for a small number of shareholders and owners. The benefit received by those who support Greenpeace is a healthier, more beautiful world for everyone– not just themselves.

***

And I guess Dalton McGinty just couldn’t resist either, signing up with a company that makes software for schools– which it sells to the provincial government. I agree with the NDP on this one: MP’s should have to wait five years after retirement before they can take jobs like this. But I think it should be 10.