Monday, December 04, 2017

The Tax Bill: aspects that no one (at all) will discuss.

It seems that the GOP, which has owned every branch of government and lever of power, since January, will at last have an "accomplishment" -  a Tax Bill they admit will add a trillion dollars to the national debt, while offering last-minute gushers for real estate developers, banks, hedge funds, the oil industry, lobbyists and aristocratic heirs…

… all of it without spending a red cent on infrastructure, which would have generated high money velocity and growth, while fixing actual bridges, actual roads we use. 

(Funny how that list describes almost every power broker or politician-owner correlated with this Congress and this White House:  Real Estate developers, Banks, hedge fund skulks, the oil industry, lobbyists and aristocratic heirs… ah, swamp drainage.)

To distract from this raid on our children, the oligarchy offers up more magical incantations of Supply Side “economics,” proclaiming that this time the oligarchs will spend their windfall on R&D and productive capacity and jobs… unlike every single other time, when they spent it all on passive asset bubbles, exactly as Adam Smith predicted, back in 1776.

Smith warned that aristocrats — like the ones our U.S. Founders rebelled-against — tend not to spend infusions of cash on risky capital formation, or research, or factories. Generally 90% of them will plow it into ‘rent-seeking’ assets like stocks or land, where they can passively collect dividends or gains.  (Note that every tax break in this bill favored passive income, not wages you actually earn through work.) 

As in King George’s time, top cronies adjust the laws to favor rent-grabbing assets over innovation, production or work. Smith would be outraged today… but not surprised.

Of course there is an end game to asset bubbles, and that end-game is the elephant in the room! One that, so far, no clever pundit has raised, amid all the yelling over this tax bill... an important aspect of the legislation that matters far more that the petty attacks on higher education and science, or the open war waged upon Blue States. I'll get to this invisible pachyderm, in a moment.

But pause first to congratulate the victors! The same folks who howled that Democrats passed the ACA (‘Obamacare’) in "just a year," holding open, public hearings for just 6 months in just five committees… those same complainers have now passed the biggest tax bill in history with ZERO days of hearings, with scribbled margin notes enacted into law, forging this trillion dollar raid for billionaires in top secret and passing it in the dead of night, amid a festival of lies.

What you fellahs do is evil. It is treason. But you do it very well.


== The real reason for the tax cut - an oligarch exit strategy ==

Critics of the Tax Bill point out that benefits to aristocrats are locked in, while much smaller cuts for working people fade quickly and turn into tax hikes, over a few years. That’s a travesty, of course.  But also a distraction, because we're left with an impression that the biggest change - slashing corporate tax rates - has little to do with the top-rich families of the country.

We're assured corporations will then invest it all in R&D, in new products, in factories and jobs. But...

1) Again, across 40 years, this Supply Side incantation never came true. Ever. Once. The eras of highest U.S. growth, rising wages and middle class health all took place under high tax rates established by the Greatest Generation, in the 1940s, 50s and 60s. Except for the JFK rate cuts, every other cut was followed by reduced growth rates.


2) For the 2nd half of the Obama Administration, corporations have been mostly very profitable. They already had tons of cash on-hand, in the USA, to invest in production, jobs or R&D, but those investments declined. Their bulging cash larders were spent instead on dividends and stock buybacks that helped their CEOs to meet performance criteria for their vampiric option plans.

3) Any “competitive disadvantage” from other nations’ lower corporate rates might have been dealt with by negotiating a world treaty balancing such rates. It’s happened before! Sure, negotiations might not work, this time. But there’s no mention of even trying, only a race to the bottom.

4) Those who used to lie - claiming they care about deficits and debt - are suddenly shouting “squirrel!” and pointing offstage.

5) If this Tax bill had anything to do with investment in new products etc., it would have targeted to incentivize R&D, new factories and jobs. Instead, this was left as only a vague, armwaved promise. There is a reason.


== They need an exit from the bubble they created ==

Look across the era since Adam Smith wrote The Wealth of Nations. Every generation of Americans since then has witnessed attempted political and economic putsches by would-be aristocrats gaming the rules so they can get richer without working or producing. Instead, as Smith described, they heap wealth into passive (rent or dividend or capital gains or parasitic-commission bleeding) assets. They do this because it’s far easier than putting “skin” into actually producing goods and services.

They also do this because sweetheart legislation makes it a great deal! But the smart ones know there is a price. 

That price is an ASSET BUBBLE.  We’ve seen many in our lifetimes: commodities, housing, real estate, banking and now a hyper-inflated stock market, with price to-earnings ratios that seem straight from the Twilight Zone. Those who piled their earlier tax largesse into asset bubbles know the great times always end.  

And hence, being clever, they always plan an exit strategy, for when the bubble bursts.

The dream strategy concocted during our previous two bubbles used to be "privatize social security!"  Get every middle class bumpkin to funnel his or her SSI account into stocks during a market peak! Fill equity markets with Greater Fools to sop up bloated assets, so the current (rich) owners can cash-out at top prices. 

That scam was stopped, thank God, just before the last collapse.  Whereupon Republicans suddenly lost interest in privatizing Social Security.  Go figure!

So what's the plan now?

Send hundreds of billions of tax-bennies to already profitable corporations!  Without any requirements or incentives to actually spend any of it on R&D or factories or jobs, members of the inbred, incestuously conniving “CEO caste” of 5000 golf buddies will know what to do, with a nod and wink.

Accelerate their already absurdly massive stock buy-backs!  (There are reasons why this was illegal, during the Greatest Generation.) Break the U.S. budget subsidizing companies to squander their futures, giving money to current stockholders... buying up stock that the moguls know will soon plummet in value.

We stopped their earlier scam, but this time — by skulking in secret and at night — they will get their way.

How can you benefit from this insight?  The wise will wait till the first buy-back crest brings equities to their final peak, then sell. Get out before the middle gets crushed again.

Oh, it may work. Only they are counting on us never noticing. And that could be a mistake.


=== Coda ===

“There are two ideas of government,” William Jennings Bryan declared in his 1896 “Cross of Gold” speech. “There are those who believe that if you will only legislate to make the well-to-do prosperous their prosperity will leak through on those below. The Democratic idea, however, has been that if you legislate to make the masses prosperous their prosperity will find its way up through every class which rests upon them.”

That was more than three decades before the collapse of the economy in 1929. The crash followed a decade of Republican control of the federal government during which trickle-down policies, including massive tax cuts for the rich, produced the greatest concentration of income in the accounts of the richest 0.01 percent at any time between World War I and 2007. Those disparities were brought to their minimum under FDR and Eisenhower, with tax rates and policies that were ratified over and over by the Greatest Generation.
        
 We need to study them, and how they achieved all that they did in a spirit of moderation and enterprise. Especially, how they veered away from dogmatism and craziness, just when it seemed overwhelming.

One major danger of the right's current madness is that the left might over-react, returning to its own past insanities. The Evonomics site is where calm, rational, brilliant scholars & others reveal how cheaters have betrayed not just the poor and middle class, but also enterprise, innovation, genuine market economics, common sense, national self-interest and even Adam Smith! The articles and studies get better and better, making the clear case that market enterprise works, but only when cheating is tymied. (I've published a few there.) 

If your cousin is one of that vanishing breed - a residually sane Republican - take her to Evonomics and tell her: "Only you can save enterprise capitalism from its age-old foe. Not socialism so much, but feudalism."

Which brings me to my question. You’d have to be deaf and blind not to see the signs of a growing movement of American conservatives who are fed-up... not just with Bannon and Putin and their Trump, but with Rupert Murdoch and the insanity promulgated by Clear Channel Radio. Signs are all there - especially among the Mormons - that vigorous conversations are afoot about holding a convention of Sane American Conservatives.


Here's a parallel event, showing how it happened, in the past. If the dems could do it, why not you guys? 

Hence my question. Surely some of you have been approached by now? By people desperate to save American conservatism, before it is too late?




=====

Addenda:

* In addition to stock buybacks, there are mergers and acquisitions. At one level, this helps to make up for the plummet in industrial R&D -- purchasing small, innovative startups does have its logic, reducing short term risk, passing it over to entrepreneurs. That's fine. But the other half is what three generations of our ancestors fought, tooth and nail, the trend toward monopoly, duopoly or oligarchy in an industry. Anti-Trust laws were there for hard-won reasons that the Baby Boomers may be too stupid to grok.

*  Apparently the tax bill actually makes corporate tax deductions more or less irrelevant. But don't get excited.  The omission will be fixed in conference committee. What matters is: "The biggest consequence could be the research credit, often used by manufacturers, technology firms and pharmaceutical companies."  This is just another part of the War on Science. But more-so, since it directly goes to the jugular of American strength. Putin could not have asked for more.

133 comments:

Lynx said...

Apparently the tax bill actually makes corporate tax deductions more or less irrelevant:

http://nymag.com/daily/intelligencer/2017/12/senate-gop-accidentally-killed-all-corporate-tax-deductions.html

If true, it sounds like they basically shot themselves in the foot in their mad rush to clear all legal hurdles.

LarryHart said...

Dr Brin in the main post:

You’d have to be deaf and blind not to see the signs of a growing movement of American conservatives who are fed-up... not just with Bannon and Putin and their Trump, but with Rupert Murdoch and the insanity promulgated by Clear Channel Radio.


Well, call me "Tommy" then, but all I see and hear points to conservatives who are willing to accept and defend greater and greater thresholds of atrocity in the name of tax cuts, deregulation, and "changing the courts for a generation".

I'm sorry, I'd like to believe what you say is the case, but I'm afraid that, "like so many others, I've...lost faith in the dynamic duo."

#ThereAreNoGoodRepublicans


Signs are all there - especially among the Mormons - that vigorous conversations are afoot about holding a convention of Sane American Conservatives.


And that reminds me of the bit from Monty Python's Life of Brian:

"This calls for immediate...discussion."

LarryHart said...

Lynx:

If true, it sounds like they basically shot themselves in the foot in their mad rush to clear all legal hurdles.


You just made my day. Even if it ultimately doesn't matter*, that's still too funny.

Under the previous post, I commented that I hoped something like that would happen--not necessarily that exact thing, but that something in the bill would turn out to say something different than what they thought they were ramming through. I even fantasized that some Democratic Senator might slip a paragraph or two into the margin additions when no one was looking. Like that Calvin and Hobbes bit with the game of Calvinball: "Ha! I wrote 'Calvin = Stupid' into the book. Now, it's a rule!"

* You can bet that, unlike the insistence that Obamacare's "Exchange implemented by the state" has to mean only those individual states who don't rely on the federal exchange because that's what the words say, the Republicans will be granted all sorts of leeway as to what they (obviously!) really meant to pass while they were voting on it.

Frederick Ellrod said...

Stock buybacks, yes -- but don't forget mergers and acquisitions. An enormous amount of money can be spent unproductively by buying up other companies, resulting in further consolidation in already highly-concentrated industries.

LarryHart said...

From that NYMag article linked above. I'll let it stand without comment:

“What the Senate did, in their befuddled mess, is drove me out of business and then bragged about the fact that they got some tax reform passed,” Mr. Murray said in an interview Sunday. “This is not job creation. This is not stimulating income. This is driving a whole sector of our community into nonexistence.”


Tony Fisk said...

Mormons...hmm.

Interesting that the great theft of National Parks has commenced, in Utah (Bears Ears).

@Larry there probably are still a few good republicans, but they are in the minority. 'Conservatism' started to be replaced by 'selfservatism' over forty years ago.

Tony Fisk said...

Reflecting on my last comment in the last thread about comparing things you'd have considered unacceptable to what you have accepted, I find nothing about Trump acceptable. This correlates with my opinion of Abbott. Howard did, at least, ban semi-automatic weapons.

LarryHart said...

@Tony Fisk,

I insist on using #ThereAreNoGoodRepublicans because the ones who sound like they have some sanity or decorum left always end up caving and allowing the deplorables to get their way. Susan Collins, John McCain, and Jeff Flake are some of the latest examples.

Anonymous said...

“One major danger of the right's current madness is that the left might over-react, returning to its own past insanities.”

It is easy to find quotes of people saying pretty much anything. But have you an example of the left actually implementing (or even seriously trying) any such insanity? Any examples of what you are talking about at all?

David Brin said...

Anonymous. Sure, most "leftist plots" are at best gross exaggerations, if not chimeras or else Berkley anecdotes that have nothing to do with the vast majority of liberals and American moderates. But those campus or Berkeley or Chicago flakes do a lot of damage by providing those anecdotes that Hannity relishes.

I can tell you that our son's colleagues are picking up and dusting off copies of Marx. For now, just out of curiosity about this "class war thing" that's been imposed on us by the Mad Right. But that curiosity could veer badly, if we don't arrest this oligarchic putsch soon. And if you are about to make excuses for Leninism, then (quoting the Beatles) you can count me out.

In America, ONE major liberal mistake cost us all dearly, radicalizing the American populist right. Integration through Forced School Bussing. It was absolute insanity, guaranteed to be counter-productive, at best. No radical imbecile who had anything to do with that dismal, stupid and EVIL fad should ever be trusted with anything, ever again. The only things they accomplished were to put Reagan in office and permanently give the white lower middle class to the GOP.

Zepp Jamieson said...

One of the pettiest and most cruel elements in the tax bill: it places a 20% tax on all imports from Puerto Rico.

Alfred Differ said...

@David| You are quite the bear today. Care to expand on why stock prices will plummet if the supply of stock dwindles due to buy-backs? I get that recessions come and go, but stock prices generally recover when the fundamentals do. I get that you think we are in the midst of a speculative bubble, but I don't see WHY you think that. We ARE in a bull market that will correct a bit next year (possibly), but that doesn't sound like the dire consequences you point out.

Alfred Differ said...

We should be clamoring to make Puerto Rico a state.

LarryHart said...

Zepp Jamieson:

a 20% tax on all imports from Puerto Rico.


I realize you may be speaking metaphorically, but Puerto Rico is part of the United States. Do shipments from there really count as "imports"?

LarryHart said...

Alfred Differ:

We should be clamoring to make Puerto Rico a state.


Can that be done without Republican support?

It might be easier for an existing state to annex Puerto Rico as part of the state. The obvious choice would be Florida, but I doubt Rick Scott or the Republican legislature would cooperate. New York, maybe? They already contain a few islands, so why not one more?

Robert said...

Okay. You're not quite seeing things clearly.

Who is going to sell stocks during a stock buyback? The executives exercising their options, of course. They are going to be turning stocks into cash which they will then hold onto.

When the stock market crashes in a year, then people who held onto their stocks because they are so valuable will be holding onto worthless paper. The people behind the crash, these new aristocrats, will be holding onto gold and other materials worth far more - but probably not until first causing gold prices to plummet with a sudden "influx" of gold sales to increase supply and kill prices, so they can get in at a better rate.

And then in the middle of the new Depression, they will sell their gold and buy up company after company as people try to sell their stock portfolios for pennies on the dollar. The ultimate fire sale. And no doubt they'll be focusing on AI, robotics, and the like so these rich bastards can have automated guards to protect them when people decide it's time to bring out the guillotines once more.

What will be amusing is to see how the Libertarians react. After all, they will be the ones who end up losing everything and are abandoned by the oligarchs. Will they decide to honor
their property-rights-is-king view, or go pure anarchist and try to kill the people who want to become the New Kings.

Rob H. who will be among the first in the concentration camps and gas chambers

P.S. - the cynic in me wonders if Israel is looking forward to a purge of the American Jew. After all, if America goes full fascist, then the U.S. Jewish population will be targeted along with LGBT and the mentally ill. That would leave Israel as the largest Jewish population.

Zepp Jamieson said...

"Do shipments from there really count as "imports"?"

Apparently so.
I think we can guess who was behind that particular piece of nastiness.

Herbert Miller said...

Yes items sent from p Puerto Rico are considered imports. And yes they are going to be taxed at 20%
https://www.thedailybeast.com/gops-tax-bill-would-be-worse-for-puerto-ricos-economy-than-hurricane-maria

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LarryHart said...

Robert:

Rob H. who will be among the first in the concentration camps and gas chambers


You sound a bit like Ted Nugent, who last I heard is neither in jail nor dead.* Just sayin'


P.S. - the cynic in me wonders if Israel is looking forward to a purge of the American Jew. After all, if America goes full fascist, then the U.S. Jewish population will be targeted along with LGBT and the mentally ill. That would leave Israel as the largest Jewish population.


That's crazy talk.

First of all, it would turn America from Israel's staunchest ally into the Fourth Reich.

Second, it would make Israel into the sole target for Arab terrorism.

Finally, that makes the same sense as Chicago wanting Poland to be destroyed so that it can become the largest population of Poles in the world. Manhattan cheering for the destruction of Puerto Rico so they can be the largest concentration of Puerto Ricans. It's a Pyrrhic victory.

* Hopefully that's the point. Self-defeating prophecy and all.

Tim Wolter said...

Regards the Tax Bill I don't have anything new to offer. While I doubt it will be a Worst Case scenario I consider it nonsense to trim revenue without addressing the larger and much less popular concept of spending less. And more wisely. I have made my own financial plans accordingly.

I'm sure we are in agreement on one point. Our politics have gotten very strange. I struggle to come up with metaphors that are even decent theories. Here's one.

Politics as bio warfare.

Did the Clinton campaign think that emphasizing Trumps shoddy treatment of women would be so effective that any collateral damage would be worth it? This is like releasing a bio weapon with utter, if ill founded, confidence that it will destroy your enemy but that your forces have effective immunity to the agent. Neither assumption has proven correct. Or perhaps it just mutated in the wild and has become something that its makers could never have anticipated?

Maybe even the peculiar political involvement of the FBI and the Justice Department will become the next example of a bio weapon gone astray. Much remains obscure. But if dodgy oppo research can be used to justify FISA warrants... If (news of the day) openly anti-Trump agents are in charge of interviewing not only Trump aides but earlier Clinton aides...have we another situation where something was unleashed with glib assurance that the target would be destroyed while friendly forces are left untouched? Where partisan politics, the fabled but probably real "deep state" and the intelligence world meet its a dark, creepy place.

Mind you I have no patience for much of Trump's persona. I even to a point concur with (legal) stalling efforts to limit the damage he can do. But there are strange things going on behind the scenes. They worry me.

Two final thoughts.

I recall it was Gerald Ford who proposed Puerto Rican statehood...and was roundly lambasted for such a silly idea.

If Brin is still trying to lure me into politics (and likely divorce court at the same time) he should know that I actually look stuff up. I am at the "tail of a gerrymander" regards Congressional districts. WI-3 is about a 50:50 split in party allegiance. Our Congressperson is retired military and a Dem. He's a decent guy. Some years he runs unopposed. This year the R party has made my district a priority, and there will be an R candidate. The one serious candidate is also retired military but don't know much more. No reason for me to run. Plus the incumbent has a 2.5 million dollar campaign war chest.

TW/Tacitus

LarryHart said...

http://www.electoral-vote.com/evp2017/Senate/Maps/Dec05.html#item-6


Donald Trump's personal lawyer, John Dowd, has asserted that a president can never obstruct justice by definition. Louis XIV of France had the same view, which he summed up by l'état, c'est moi. That didn't work out so well for his relatives, one or two of whom lost their heads over the matter, but maybe it will work out better for Trump. One potential problem for Trump, however, is that one of the articles of impeachment drawn up by the House Judiciary Committee against Richard Nixon charged him with obstruction of justice, so there is precedent for it.

Of course, that was a long time ago. What about more recent cases? Well, in 1999, a U.S. senator laid out a very impassioned case for impeaching Bill Clinton for obstructing justice. The Congressional Record documents him as saying: "The facts are disturbing and compelling on the President's intent to obstruct justice." Who was this senator? None other than Jefferson Beauregard Sessions III, currently the chief law enforcement officer of the United States. Sessions wasn't alone, either. More than 40 current Republican members of Congress voted for the impeachment or conviction of Clinton for obstruction of justice. One of them was Mitch McConnell (R-KY), now Senate majority leader, who then said: "I am completely and utterly perplexed by those who argue that perjury and obstruction of justice are not high crimes and misdemeanors." In short, there are many statements by Republicans still in Congress stating unequivocally that obstruction of justice fits the Constitution's definition of the high crimes and misdemeanors required to impeach a president. If the Democrats take back the House in 2018, expect many of them to begin quoting their Republican colleagues on the subject.

Darrell E said...

Tim Wolter said...

"Mind you I have no patience for much of Trump's persona. I even to a point concur with (legal) stalling efforts to limit the damage he can do. But there are strange things going on behind the scenes. They worry me."

Skepticism is a good thing in general, but as with many other things taken to an extreme it ain't so good. I don't think this is down simply to ideological differences. I think you have set the bar for evidence too high. Or maybe it is down to ideology. Perhaps that is why you set the bar so high for evidence against "your side," and, in comparison, set it so low for the "other side."

LarryHart said...

Tim Wolter:

Did the Clinton campaign think that emphasizing Trumps shoddy treatment of women would be so effective that any collateral damage would be worth it? This is like releasing a bio weapon with utter, if ill founded, confidence that it will destroy your enemy but that your forces have effective immunity to the agent. Neither assumption has proven correct. Or perhaps it just mutated in the wild and has become something that its makers could never have anticipated?


You're accepting the idea that any actual facts on the ground that cause one party/candidate to look bad are designs of the opposition. The Clinton campaign hardly invented Trump's many disqualifications for high office. Likewise, Roy Moore's initial accuser was a lifelong Republican who voted for Trump (as was Franken's initial accuser, funny thing there). I wonder why I don't hear you asserting that Republicans better watch out when they accuse Franken or Harvey Weinstein or Anthony Weiner of offenses that the Republicans themselves also engage in. Somehow, it is only Democrats (or is it only Clinton in particular?) who deserve blowback for true accusations because they should have known better.


Mind you I have no patience for much of Trump's persona. I even to a point concur with (legal) stalling efforts to limit the damage he can do. But there are strange things going on behind the scenes. They worry me.


There are strange things going on right in the open (to thunderous applause) which worry me, one of which is your implication that molehills that one side might be building outweigh the Himalayas on the other side as causes for concern.


I recall it was Gerald Ford who proposed Puerto Rican statehood...and was roundly lambasted for such a silly idea.


Take that up with Alfred. It's not something the general liberal/progressive/Democratic community is advocating.

I happen to think it would be better for an existing state to annex the island.

LarryHart said...

Tim Wolter:

I consider it nonsense to trim revenue without addressing the larger and much less popular concept of spending less. And more wisely. I have made my own financial plans accordingly.


I'll address this point later when I have time to write paragraphs on it. Let's just say I think "spending" is the wrong paradigm. America is approaching metaphorical retirement age (I don't mean individuals, but the country as a whole). We've led a full productive life, and now it's time to settle back and live more off of our metaphorical savings and investments. Sure, metaphorical retirement planning of a sort is necessary to keep from outliving our savings, but with that conceded, it is not required that spending in retirement is limited to wages coming in.


I'm sure we are in agreement on one point. Our politics have gotten very strange. I struggle to come up with metaphors that are even decent theories. Here's one.

Politics as bio warfare.


Don't let my political disagreements prevent me from acknowledging that your metaphor is a good one. True, I take issue with some of your individual examples as being more like a natural disease running rampant that one manufactured by a particular side. But the juxtapositioning of concepts is a good one for illustrating the point.

LarryHart said...

@Alfred Differ,

Are we there yet? #IllegitimatePresident ?

What is it going to take? I'm afraid that the goalposts keep moving so that firing Muller won't be enough ("Let's see what his replacement comes up with.") nor will pardoning Flynn or Manafort ("He has that right after all.") I believe that cancelling elections or pardoning himself might send you over the edge, but he can get away with all sorts of s### without quite stepping over that line.

https://www.nytimes.com/2017/12/04/opinion/president-trump-obstruction-justice.html


On Monday morning, Axios reported that Mr. Trump’s top personal lawyer, John Dowd, said in an interview that the “president cannot obstruct justice because he is the chief law enforcement officer” under the Constitution and “has every right to express his view of any case.”


Yesterday, I asked rhetorically what it means to not recognize #TrumpUniversity as the legitimate president when the real world is forced to accommodate him anyway. It occurs to me now that Trump, his cabinet, and his court nominations are the equivalent of a sit-down strike. They're physically occupying the offices, not to perform work themselves, but to prevent anyone else from getting in there and performing work.

LarryHart said...

@Dr Brin,

I have to take issue with your continual haranguing at "Chicago" as an example of a liberal outlier of harm done which gives cover to right-wingers (full disclosure, I've lived in Chicago suburbs my whole life except for college). If you're talking about violent crime in our streets, that problem is exacerbated by the lax gun laws of surrounding states which feed the gangs with weapons.

http://www.chicagotribune.com/news/opinion/editorials/ct-edit-gun-20171204-story.html


...
Illinois, which began issuing concealed-carry permits only in 2014, has some sensible rules. Any resident who wants a permit has to get a state Firearm Owners ID (which requires a background check), undergo fingerprinting and complete 16 hours of training, including live-fire drills. These requirements are meant to assure that only law-abiding people able to handle guns safely may carry in public.

Not every state is so careful. Indiana, Wisconsin and Iowa allow residents to get concealed-carry permits without live-fire training — which is like letting a 16-year-old get a driver’s license without any behind-the-wheel experience. “I have people who come to my class who basically couldn’t hit the broad side of a barn,” Rick Strohmeier, a firearms instructor in Kentucky, which does require such training, told The Trace. Missouri doesn’t require a permit at all. That means no background check and no training for anyone 19 years or older, except felons and domestic violence offenders.

We’re prepared to let these neighboring states apply alarmingly loose rules within their own borders. But the Concealed-Carry Reciprocity Act would let their residents pack heat even in Illinois. Really. People who would be legally barred from carrying if they actually lived in Illinois would be free to do so in Illinois. It would create a bizarre disparity.

The National Rifle Association has made the measure its “highest legislative priority.” Rep Richard Hudson, R-N.C., the chief sponsor, considers it an unconscionable imposition that those driving from his state to Delaware have to “reroute their trip to avoid driving through Maryland” if they want to keep a loaded pistol in their pocket the entire way.
...

matthew said...

Alliances changing in the Gulf.
https://www.theguardian.com/world/2017/dec/05/uae-saudi-arabia-alliance-gulf-relations-gcc

My take is this just makes official what has been happening on the ground. Donzelion, any thoughts?

David Brin said...

Tim W. You speak well, but seriously? How hard do you have to twist in order to find “some blame for Hillary and the dems, too!” false equivalence? Attempting to use DT’s own foul-obscene words against him is a ‘bio-weapon?”

Put aside the fact that these revelations about workplace sexual aggressions are (mostly) a good thing! And that liberals respond by cleaning house of these twits while Republicans double down and defend theirs (who are often far worse.)

Anti-Trump FBI? It is only human to drift a bit toward hostility when you are being unfairly attacked. Still, Mueller and Wray are harshly maintaining professional discipline.

Where have we gone, when the conservative party is openly attacking groups like the FBI, Intel Agencies and Military Officers, who are themselves INHERENTLY CONSERVATIVE? The “deep state” excuse is spectacular insanity/hypocrisy. It ignores the pure crime these groups have committed — giving higher priority to nation and to facts than to dogmatic incantation.

Tacitus, old man… what about your state assemblyman? State Senate? How about running as a moderate for your local Republican committee? Hey man, I’m just trying to preserve and enhance your almost-extinct political species.

Alfred Differ said...

@LarryHart | Are we there yet? #IllegitimatePresident ?

No. Did something big happen today that I haven't heard yet?
(His lawyers HAVE to argue that he can't obstruct justice. Of course they will. History is against them, though.)


Skewering Puerto Rico has me angry, but not at Trump yet.
I think California should adopt them if only to annoy people who want to treat them like they aren't Americans.

Jon S. said...

I recall it was Gerald Ford who proposed Puerto Rican statehood...

A quick Google search tells me that the first plebiscite on Puerto Rican statehood took place in 1967. While Ford was in the House of Representatives at the time, he seemed mostly concerned with whether Johnson had a plan to end the Vietnam war (spoiler: he didn't). I haven't found any mention of Puerto Rico in relation to Ford, who was after all Representative from Grand Rapids, MI, a place not noted for its large Puerto Rican population.

I suggest your memory may be in error in this instance.

Tim H. said...

Gerald R. Ford... they don't make Republicans like that anymore. I heard him speak in Independence, MO a dedication for the Harry S Truman statue on the square, much less security than these days, maybe WW2 vets worried less?

LarryHart said...

Dr Brin:

Tacitus, old man… what about your state assemblyman? State Senate? How about running as a moderate for your local Republican committee?


At this point, what are you trying for?

I consider Tim a friend (virtual friend, anyway) and owe him for my wife's survival, but he's doing his best to make clear to you that not only is he uninterested in political office, but if he did serve as a Republican, he'd be another voice in congress or wherever blaming Democrats, excusing right-wing excesses, and voting "aye" for Republican bills and judge appointments.

Why not believe him?

Catfish N. Cod said...

@Larry: It occurs to me now that Trump, his cabinet, and his court nominations are the equivalent of a sit-down strike. They're physically occupying the offices, not to perform work themselves, but to prevent anyone else from getting in there and performing work.

What, you just now figured that out? It was obvious to me the second they started appointing administrators to positions they thought shouldn't exist.

@Tim, @David Brin: The "deep state" did not originally exist, except for what every bureaucracy always does: try to preserve its own budget. Then during the early Cold War it came into being as the "Anti-Communist" counterintel campaign became a cesspool of secrets. It was pretty much killed by Congress in the '70s after Watergate and the death of J. Edgar blew up the notion that the Establishment could be blindly trusted with power. This led to a chastened generation of uberprofessionals trying desperately not to have another such debacle.

But if the Trumpists keep this up, they will create one again, this time outside the government. The huge cadre of professionals that ran the USA for three generations are NOT going to just blithely accept authoritarianism.

And WOW. I have never seen anyone condemn busing from the liberal perspective that strongly. On the one hand, it was clearly the prompt for everything from private/homeschooling to the Religious Right (which was originally about the religious schools, not abortion) to Reagan. On the other.... if you are a progressive circa 1970, what alternative steps do you take to rectify the ruinous inequity that "separate but equal" left behind?

@matthew: With the US State Department neutralized, everyone is just grabbing for any cookie they've always wanted. That will likely lead to more wars. If it were not for (a) Israel and (b) having US energy independence but not world energy independence, I'd be ready to wash my hands and let everyone including Russia play out their lives. IIRC our presence there was minimal until the '67 and '73 wars caused the Russians to threaten with nukes, and then the oil embargo made us go all Arrakis on the place.

@Alfred: Your scenario (bull market verging on correction) would be the trajectory, absent the tax bill. The tax bill is what will CREATE the bubble, just as Bush's tax cuts caused the real estate bubble. And then, in the crash, they will demand another government bailout for the corporations, even as they spend all that safeguarded wealth on buying up complete control of the economy. And "They" doesn't just mean the plutocrats here. It will mean foreign investment too.... primarily Russians (via money laundering and proxies) and Chinese (openly and forthrightly).

Then stock prices recover, but it won't matter because all spare equity has been sucked away. A few mergers later and we have our oligopolic fascist/feudal overlords, matching those of Russia and China (which is nominally socialist but closer to fascist these days). Then those lords form the new world leadership and plan out how to build their empires, either in partnership or fake "competition". The former would be Pournelle's Co-Dominium nightmare, but executed by the right and not the left. The latter would be 1984.

David Brin said...

LH... Tim knows I am teasing. He serves as a metaphor for my call for old-fashioned Republicans to prioritize nation, civilization, posterity, reason and maturity above reflexive party.

LarryHart said...

Alfred Differ:

(His lawyers HAVE to argue that he can't obstruct justice. Of course they will. History is against them, though.)


His lawyers argue, FOX News and Breitbart dutifully repeat, and 40% of my fellow Americans agree and think anything else is fake news and liberal conspiracies. And thus it shall ever be. That argument then just becomes business as usual. Now, he has to do something much worse than assert Presidential Infallibility before we can acknowledge that this man doesn't belong holding the office he holds.

Let me put it this way--I think you've said you'd turn if he fired Meuller, but how is that a higher threshold than firing Comey? My ear keeps hearing, "Well, he's hasn't crossed that line yet. Let him keep going and we'll see!" And the goal posts keep moving.

I almost wish he would shoot someone on Fifth Avenue. His supporters would still be with him (as promised), but that would be a New York state crime, and a capital offense to boot. No pardon for you!

LarryHart said...

Tim H:

Gerald R. Ford... they don't make Republicans like that anymore.


He was probably the last Republican presidential candidate whom I wanted to win. Of course, I was 16 years old, and the reason I wanted him to win was so Chevy Chase would keep playing him on Saturday Night Live. But I miss the days when that could be a major campaign issue!

Ford's 1976 loss to Jimmy Carter continued my then-unbroken streak of desiring the losing presidential candidate which began with Humphrey vs Nixon in 1968 and finally fell with Clinton over Bush in 1992. Since then, Clinton and Obama are the only winning presidential candidates I've voted for in my life.

LarryHart said...

Alfred Differ:

Skewering Puerto Rico has me angry, but not at Trump yet.


If not him, then who? Serious question.


I think California should adopt them if only to annoy people who want to treat them like they aren't Americans.


I think New York would make more sense. Florida would make even more sense, but not in the political climate there now.

But my reason is the same as yours--make voters out of them in presidential and congressional elections. California and New York are both solid blue already, but they'd pick up a few more EVs in the 2020 census. Florida would be even better as the reddish state would probably turn permanently blue, but that's a pipe dream.

LarryHart said...

Catfish N. Cod:

@Larry: It occurs to me now that Trump, his cabinet, and his court nominations are the equivalent of a sit-down strike. They're physically occupying the offices, not to perform work themselves, but to prevent anyone else from getting in there and performing work.

What, you just now figured that out? It was obvious to me the second they started appointing administrators to positions they thought shouldn't exist.


Hard to explain. I don't mean I just figured out that they're sabotaging the departments from within. I meant that I just figured out how to think of them occupying positions they shouldn't have and enacting policies that they never should have been allowed to do but can't be un-done just by recognition of that fact.

Trump is illegitimate (sorry, Alfred), but no one else can be president. Trump never should have been able to appoint Gorsuch (or other lower judges), but they're not going away. Trump shouldn't have been able to give away federal land, but it isn't coming back. What just now occurred to me is to think of what he's doing as a sit-down strike. He doesn't belong in the office, but while he's there, no one else can sit there either.



LarryHart said...

Catfish N. Cod (again) :

and then the oil embargo made us go all Arrakis on the place.


Heh. Maybe Trump is Beast Rabban, and we're supposed to welcome the new Feyd-Rautha who saves us from him. I wonder who is being groomed for the position. (No, I don't have the answer)

LarryHart said...

Dr Brin:

LH... Tim knows I am teasing. He serves as a metaphor for my call for old-fashioned Republicans to prioritize nation, civilization, posterity, reason and maturity above reflexive party.


Then he's demonstrating to you the futility of that hope. The rest of the principled Republicans are doing the same thing he is, expressing their moral distaste at Trump and Moore (as outliers), but noting how much more dangerous Democrats would be for the country, civilization, posterity, reason, and maturity.

We can't convert them. We either have to outvote them, or else force them to water the tree of liberty with our blood (and hopefully recoil in horror afterwards). Maybe they'll be as good as your respectable, old-fashioned Gubru were during the humans' last-stand retreat in "Uplift War".

matthew said...

Hell, don't attach Puerto Rico to New York.

North Dakota. Wyoming. Even West Virginia.

If you're going to fantasize about annexation, do so where it would change the makeup of the Senate.

Take away a little bit of the rural advantage in our House of Lords.

@financequant said...

Putting the current tax bill into a larger context is important, and, unfortunately, what is missing from almost every critique I have read. There is a famous quote (whose attribution I forget), "All I want is an unfair advantage." I believe you are correct in assessing this as the underlying motivation here.

It would be hard not to argue that we are not in an asset bubble. The rise in assets is an illusion created by the low rate-low growth state we find ourselves in and it is impossible for those unrealized gains to ever be realized. When that is combined with unsustainable debt levels the stage is set for disaster.

Perceptions of low rate-low volatility increase the tendency to use debt to increase return. Initially, that strategy is effective and further risk taking is encouraged. The economy becomes increasingly fragile.

If a random perturbation occurs that causes values fall, the debt to equity ratio increases. That further increases risk. Those higher risk levels cause more devaluation. The debt to equity ratio increases; often rates increases. Additional risk. Additonal devaluation. Feedback. Not good.

We are in a state of increasing metastability which lasts until some inevitable, often minor perturbation pushes things over the edge. These insights, put forth by the economist Hyman Minski, were ignored for years until history repeatedly proved him correct.

David Brin said...

financequant you are welcome here. Hope you become a regular.

Yes to Minsky. Stability generates instability. Our current very low volatility should terrify any equities investor.

LH: “We can't convert them.”

No, but the battleground is over 10 million residually sane American conservatives. I have striven for 20 years to come up with counter-incantations to break their hypnosis… their ostrich “see-no-evil” trance. Many of them might work! If only folks with bigger voices would try them.

LarryHart said...

matthew:

Hell, don't attach Puerto Rico to New York.

North Dakota. Wyoming. Even West Virginia.

If you're going to fantasize about annexation, do so where it would change the makeup of the Senate.


Well, I was trying for a state which might actually be in favor of the plan.

My first thought was Florida, but Rick Scott is governor there and I believe the legislature is still Republican controlled. New York already has a large Puerto Rican population, plus they have Lin-Manuel Miranda. They just might be ok with another island.

Tim Wolter said...

With regard to Gerald Ford and statehood:

https://www.washingtonpost.com/archive/politics/1977/01/01/ford-proposes-statehood-status-for-puerto-rico/86b94a18-bb20-4415-bd4b-afe697ff7cbf/?utm_term=.63192af1f991

It came as a surprise, lame duck proposal.

Although I have occasional concerns about the state of my memory I believe in this instance it has not failed me. Others have of course raised the issue before and since but this was a high profile moment.

On other matters I have seen at fairly close quarters what elected office does to people. It is generally not positive.

I take occasional umbrage here but nothing in the thread so far is over the line.

My "bio weapon" analogy is simply a frame work, an attempt to help you understand the thinking of a sizable group of your fellow citizens. You are welcome to look through this lens or not.

TW/Tacitus

oldandgrumpy said...

While taxes never directly funded spending in our system, giving policy room to Congress to create new currency instead without risking inflation, the fiat currency has practically removed any connection between taxes and spending. The issuer of the currency neither needs nor uses our currency to spend currency. However, maintaining the illusion that spending must be "paid for" has allowed both major political parties to claim their territory in the tax debate, and the donors and voters that go with that. Any time that a politician voices intention to "fund" a program popular with the 99% with taxes on wealth or its creation the oligarchs purchase a few more Congresscritters.

The truth is that a nation with a fiat currency can never run out of it or fail to pay any obligation also denominated in the currency its government creates at will. Where a mostly useless gold reserve used to define the point of inflation of the currency with a hard number the measure is now more elusive, being more affected by the ability of the economy to produce goods and services to absorb available currency. Markets will almost always increase output to a maximum before too much currency chases limited goods, causing prices to increase. Supply bottlenecks might create targeted increases, but that is true at any time and are usually corrected by the market. With affordability off the table, there is no justification for austerity when so much potential productivity is lost each year, never to be recouped.

Another change brought by our transition to a fiat currency that slipped notice was the definition of our "debt" that is now used to beat us about the head and shoulders should we ever question why we can't have nice things like other, less prosperous, countries have. The old formula (spending - taxes - reserve = deficit) used to inform Congress of what policy was necessary to maintain the currency supply at or below the value of the gold reserve. This was so critical that the Federal Reserve Act included a mandate that any spending by Congress that was in deficit had to be funded by issuing Treasury bonds, which serve to remove currency from circulation in a 1/1 ratio to the spending they fund. The accumulation of these year to year deficits make up the number that is now accepted as our national debt. However, since the value of the gold reserve was removed from that formula we are now left with "spending - taxes = deficit" and no reserve to offset such a large number, which grade school math would tell us is now nothing more than an accounting of currency created by Congress into the economy not yet used to satisfy a tax obligation. It is represented by Treasury debt obligations but it is our national savings, albeit poorly distributed. Congress created the currency by spending in deficit into the private sector to provision government and pay for programs, and the private sector exchanged goods and services for the currency. That is a completed contract, not an obligation of debt for either party, and a balanced budget effectively claws back 100% of the payments made to the private sector for those goods and services.

Faced with provisioning government practically free gratis and having little currency to operate such a massive economy, the private sector is forced to leverage its bank debt to maintain, which is how asset bubbles and the inevitable crashes that are inherent with them are created. As long as America remains econ illiterate, accepting the fear porn of the oligarchs and their minions over the debt and taxes, this will remain our lot. Should the public realize that the issuer of the currency is not restrained as "users" of the currency are and that they don't actually "owe" $20 Trillion, but "OWN" $20 Trillion, the light poles in DC will be decorated with the corpses of politicians and bankers like macabre windchimes.

Berial said...

@oldandgrumpy

Stephanie Kelton summed it up like this:

"Balanced Budget:
Government spends $100 into the economy and taxes $100 out.

Deficit via Tax:
Government spends $100 into the economy and taxes $90 out, leaving someone with an extra $10.

Deficit via Spending:
Government spends $110 into the economy and taxes $100 out, leaving someone with an extra $10.

Either way, government deficits ADD dollar assets to some other part of the economy. They are neither good nor bad, in and of themselves. The relevant questions are (1) deficits for whome and (2) are they serving the broad public purpose?

WRT the GOP tax proposals, the answers are clearly (1) for corporations and wealthy individuals and (2) not remotely."

MMT economists can give some interesting insights.

LarryHart said...

@Alfred Differ,

I'm listening to Norman Goldman on the radio as I type, and he's describing some of what I mean by illegitimacy. He's talking about the courts, but the same applies to the executive. He says that the only reason we obey the courts is because we expect them to give fair rulings. Once we begin to perceive (as is happening now) that the courts (think Supreme Court) are rigged and fixed, then we only obey to the extent that they can compel us by force. It's no longer a willing complicity in the system.

That's where I am with Trump at the moment. While I don't hope things get worse than they already are, if (when) they do, I hope you'll be on board.

BTW, Norman Goldman seems to expect Trump to fire Mueller soon, probably over the Christmas period. His reasoning is that Trump already said that looking into his business would be a red line. I mention that to say we might soon have a real life put-up-or-shut-up situation regarding illegitimacy.

Norman continues to agree with me (Who'd have thought transcribing live radio would be hard?) :

"They [Republicans] are the ones always screaming about God and country, and they are the ones pouring battery acid on our institutions."

LarryHart said...

Tim Wolter:

My "bio weapon" analogy is simply a frame work, an attempt to help you understand the thinking of a sizable group of your fellow citizens. You are welcome to look through this lens or not.


I often disagree with you politically, moreso than I used to think. But I thought that was a good one.

LarryHart said...

I mention Norman Goldman often enough, I should provide a link to his radio show:

https://www.normangoldman.com/

You can listen to the live broadcast (3-6pm Pacific) free of charge. Also, the archives of the first hour of each show going back a few weeks.

Subscribers can hear full shows and extra segments.

Duncan Cairncross said...

Hi OldandGrumpy

I believe that R A Heinlein had the best explanation in "Beyond This Horizon"

One of the most important parts IMHO was right at the start
A simple explanation that The money supply should increase as the economy does
Which if you think of money in the economy as similar in function to blood in a body makes perfect sense
The other side of this is that the increase in money supply is normally added directly to the basic living stipend (We could simply mail a cheque to all citizens)

Directly from the book
"We call the system “finance” and the symbols “money”
The symbolic structure should bear a one to one relationship to the physical structure of production and consumption .
It’s my job to keep track of the actual growth of the physical processes and recommend to the policy board changes in the symbol structure to match those in the physical structure "


These two simple rules are the opposite of what we do Money supply is NOT linked to the physical economy
The increase in money supply goes to those who hold assets (the 0.1%)

Smurphs said...

Well, thank God debts don't matter!

Let's get rid of all taxes. We can just print money for whatever we need as a nation.

So simple.

Why hasn't anyone tried this before?

Oh, wait...

TCB said...

Statehood for Puerto Rico?!?!?!?!?!

Look. I'm an old-fashioned guy. All my life it's been fifty states and I say fifty states is a fine number. I shall not countenance changing this very felicitous number of States in the Union.

Speaking of numbers: there are 3,411,000 people in Puerto Rico. Good American citizens, dammit!

There are only 2,991,000 people in Mississippi. A backward Confederate shit-fucking-hole that makes South Carolina look good. These queefs have two mothergreasing Senators and three monkeyhumping seats in the House of Goddam Representatives.

Out with Mississippi, let them be a Territory. In with Puerto Rico. Let them have a state. Boricua!

Wyoming has a mere 582,000 people compared to 646,000 in the District of Columbia. Can someone explain to me why the flock of hoary shitbirds who gave us Dickhole Cheney should have statehood? And the first home of Marvin Gaye, Samuel L. Jackson, Bill Nye and Duke Ellington is accorded a second-class statues? FUCK THE FUCK OFF, TERRITORY OF COWFUCKERLAND and make room for a more deserving State of the Union.

Columbia, the gem of the ocean!

LarryHart said...

TCB:

Look. I'm an old-fashioned guy. All my life it's been fifty states and I say fifty states is a fine number. I shall not countenance changing this very felicitous number of States in the Union.


Maybe in deference to #TrumpUniversity's regulatory scheme, we should insist that for every new state allowed in the Union, two states have to be removed.

LarryHart said...

Duncan Cairncross quotes Heinlein:

"The symbolic structure should bear a one to one relationship to the physical structure of production and consumption .
It’s my job to keep track of the actual growth of the physical processes and recommend to the policy board changes in the symbol structure to match those in the physical structure"


I'm proud to say I kinda worked that relationship out on my own when I was in my teens--that absent a gold standard or something similar, inflation or deflation occur when the relationship between production, consumption, and money supply is altered.

The trick then is to define "value" as pertains to production and consumption. One aspect is "what people are willing to trade labor for". Another is "what allows people to satisfy basic needs". I'm sure there are many others, and they won't all agree with each other, thus the futility of trying to mandate a specific objective value to the economy as a whole. But I believe the basic idea is sound.


These two simple rules are the opposite of what we do Money supply is NOT linked to the physical economy
The increase in money supply goes to those who hold assets (the 0.1%)


To which Smurphs replies sarcastically:

Well, thank God debts don't matter!

Let's get rid of all taxes. We can just print money for whatever we need as a nation.

So simple.


Technically, "the nation" (or "the government", or "we") don't print money; the Federal Reserve does as a quasi-private institution. In practice, I think that's a distinction without much difference, but might be well to note.

The system doesn't work if we "print money for whatever we need", but does work better if we "print money for whatever we have of value to trade for it." I know Alfred has his own separate idea, which he may chime in with, but I personally tend to think of fiat currency as a kind of claim check for a piece of the national economy. A dollar bill, instead of being a claim check for 35 ounces of gold (which it used to be) is rather a claim check for a piece of the national product. Or perhaps a claim check for part of the commons. I don't have a full fledged theory worked out. But I do think it's clear that if there's more stuff available to buy, then there can be more money in circulation without causing inflation. If we just print money without producing more value first, then that is inflationary. If there's not enough money to sell the stuff for, then we're in a depression.

Clear as mud?

David Brin said...

The quick and dirty solution for Puerto Rico someone alluded to here. It might be a matter of just Congressional legislation to either:

1) Let Guam and Samoa "join" Hawaii. Let Puerto Rico join Florida or New York. With financial assistance.

2) Let US citizens who live in these territories choose a "state of official residence" and register there. And get censused there.

Duncan Cairncross said...

Hi Larry

I was thinking about value in the country as a whole
Improvements to land
Improvements to or new buildings
Factories
Production machinery
New methods of doing things better
new machines
new cars
New stuff
Fixed "stuff"

A lot of this is a Red Queens Race - where we need to do a lot just to keep up but overall our society grows each year

The things that we all do that makes the world richer when we leave it

oldandgrumpy said...

@Duncan Cairncross
Duncan said:

"The trick then is to define "value" as pertains to production and consumption. One aspect is "what people are willing to trade labor for". Another is "what allows people to satisfy basic needs". I'm sure there are many others, and they won't all agree with each other, thus the futility of trying to mandate a specific objective value to the economy as a whole. But I believe the basic idea is sound."

For a long time, this was defined by the minimum wage. It was the number that described what one could live on if employed full time, although it didn't offer much of what is now expected of employers. Regardless, all societies evolve and we should expect that our needs become more evolved as well and are supplied with full-time work. In the aggregate, this only works if the society is employed at close to 100% so as to not provide capital with the advantage of a labor pool that is available and hungry. This is why so many MMT advocates also advocate for a guarantee of a living wage job with benefits, with the government as the default employer via the fiat currency for any who simply show up ready and willing to work. The program would have to be administered by state or local managers to provide insight into jobs needing to be done, but the funding has to be via the federal government.

Such a program would set a floor for labor in all aspects of work including wages, benefits, and work conditions, forcing employers to step up their offering to attract a quality work force. It also eliminates the stigma associated with long-term unemployment by keeping work and social skills sharp. It would naturally be counter-cyclical to the business cycle and provide value to the communities by monetizing labor needed to do many jobs not being done now for lack of a path to profitability. Simply offering such a program placed government between labor and capital to mediate for the best interest of "society" as the constitution mandates as its responsibility when creating the currency.

Duncan Cairncross said...

Hi oldandgrumpy

T'was Larry who said that!

I'm more in favor of a Universal Basic Income - that would put a nice floor under everybody and require employers to pay what the job is worth as opposed to what they can get away with
I look forwards to people who clean toilets being paid MORE than paper shufflers

Zepp Jamieson said...

"Look. I'm an old-fashioned guy. All my life it's been fifty states and I say fifty states is a fine number. I shall not countenance changing this very felicitous number of States in the Union."

I think the number of states should be a prime number, just for the challenges it would pose for the flag designer laddies.

Therefore, I propose that Puerto Rico, Guam and the Virgin Islands be made states.

Matt said...

The rich are citizens of the world. When things go to shit here they will simply leave. The bankers have us locked into this spiral. They know how our politicians and oligarchs get their money and who gives it to them. They use this leverage along with their own campaign contributions to decrease their regulation and further blur the lines between investments using FDIC insured money and non-FDIC money. The money "lost" in derivative bets goes somewhere and they make money when the market goes up and when it goes down. The government knows the banks will push the entirety of the debt onto them, just by rigging the accounting. It will seem cheaper just to start the QE and start printing money and buying the worthless assets, sound familiar? There is no reason for them to care. It's very nice in other places in the world, if your rich, and this is all that matters. It isn't really their fault. It's our fault.

Duncan Cairncross said...

Hi Matt
What makes "the rich" rich?

Property - and a lot of property (most) is not very portable
In the old days you were not allowed to take money out of the country - there were limits to capital flow
IMHO there is a lot too that - its a good idea

Lets say that there is a global meltdown and "the rich" flee to their safe havens - places like here (NZ) - what do you think will happen?

How will they stay rich?
Why won't we simply take their property and then feed them to the Maori?

TCB said...

@Zepp, although I like the prime number idea, I'd like to add the Northern Mariana Islands as a state too. Except they fall just short of the old requirement of 60,000 people... maybe attach them to Guam, and then the number is easily met (Guam has over 160,000).

Because right now, the NM islands have the same status as Puerto Rico, with a twist: they were long used as a kind of giant offshore sweatshop, a policy almost entirely of the GOP as far as I can tell. Seems these garment factories ("Made in the USA" clothing produced by near-slave foreign laborers) were all shuttered in 2009.

LarryHart said...

@TCB,

As someone who prides himself on not being a geography-illiterate American--who knows the difference between Iran and Iraq, knows Monaco from Morocco, and can tell approximately what time zone Somalia is in* --I'm embarrassed to admit to continually confusing the names "Mariana Islands" and "Mauritania".

But I believe you are correct. As soon as you mentioned the NM Islands, the sweatshop thing came to mind. I didn't know that anything had changed in Obama's term, but don't tell Donald Trump or he'll be sure to re-instate the old policy.

* In a 1970s "Iron Man" story arc establishing that Tony Stark had an alcohol problem, a scene had him offering someone a drink who chided that it was only 9:30 in the morning. Stark replied, "It's midnight in Somalia" I get that the point was to "think out of the box" in finding an excuse to drink, and to sound all worldly that he could pull a stat like that out of his head instantly, but it bothered me many years later when the Somalia conflict was a thing and I learned where that country was. No way it could be 9:30am in New York City and anywhere near midnight in Somalia at the same time. Either the writer picked a name at random without having a clue where the place was or he purposely wrote Mr Stark saying the equivalent of "made the Kessel Run in less than twelve parsecs."

LarryHart said...

Matt:

It's very nice in other places in the world, if your rich, and this is all that matters. It isn't really their fault. It's our fault.


Duncan Cairncross:

How will they stay rich?
Why won't we simply take their property and then feed them to the Maori?


In a less snarky way, I've wondered the same thing. And I ask this as a legitimate question to which I don't already know the answer. If wealthy Americans flee the country, taking their electronic representations of currency and land titles with them, does that truly impoverish the rest of us? Is the food suddenly unavailable? Are the power plants sending electricity overseas instead of to local areas? And on the other side of the equation, what do they then possess to bribe or threaten their way to privilege in those other countries?

If the internet hubs in the USA are allowed to deteriorate and collapse, what even happens to Bitcoin? Ok, that last one was snarky, but kidding on the square.


LarryHart said...

Another legitimate question...

With the news that Trump plans to announce moving the US Embassy in Israel to Jerusalem, recognizing that city as the defacto capital of Israel, I keep hearing that Jerusalem is better negotiated eventually as a shared capital of both Israel and Palestine.

How does the one preclude the other?

God knows I'm no fan of Trump, but I don't get how recognizing Jerusalem as the capital of Israel is at odds with the same city being the capital of Israel and the capital of independent Palestine. It almost sounds like a necessary condition.

Jon S. said...

Grumpy, I'm 54 years old. I was a programmer back in the '80s - if you need COBOL, I'm your man. However, so far as I can tell all of the COBOL positions in the known universe are filled until someone dies.

Since then, I've worked as a janitor, I've been an answering service operator, and I've delivered newspapers. Now I've got back issues, so the janitor and paperboy things are out, and increasing voicemail automation has made answering services obsolete. I'm also on the autism spectrum, so any position that requires persuading people to buy things is right out (that's why I'm not working for Comcast's customer "service" line today).

What "guaranteed job", exactly, would you propose for someone in my position? If it's a matter of just showing up and getting paid, how does that differ significantly from UBI?

Tim H. said...

Jon S., the difference between a "Guaranteed job" and UBI (Citizen's Dividend?) looks more like a rephrasing to avoid offending the practitioners of a popular secular religion, which unsurprisingly, depicts the holders of large fortunes as the blessed. I wouldn't call it conservative, because it's elect aren't a large enough number to provide genetic diversity suitable to the unguessed requirements of the future.

Alfred Differ said...

@Catfish N. Cod | The tax bill is what will CREATE the bubble, just as Bush's tax cuts caused the real estate bubble.

David is sounding the alarm as if we are already in a bubble. I CAN see how tax relief would create opportunities to speculate which would drive up prices creating a bubble, but David warns that the money will be used to buy back shares instead. That would create higher stock prices due to lower supply of equities and that is NOT a speculative bubble maker. I suspect David is thrashing due to the remembered pain of a decade ago and calling attention to the stock market for the wrong reasons. Yes. Buy backs might happen. Yes. The bulls might continue to run. No. The Fed is already hinting that they are going to raise rates to mitigate the bull run. As money becomes more expensive, leverage costs go up.

On an historical level, though, I disagree that Bush’s tax cuts caused a real estate bubble. The cuts were too small. What they caused, in conjunction with two wars, was a deficit explosion. The real estate bubble was a result of something much more subtle and much more insidious. I worked in the sub-prime industry between 1995 and 2004. There was a belief that high risk loans could be made for a reasonable mark-up and then packaged with other loan grades and securitized as high quality debt. The ratings agencies bought off on it too. The amount of money flowing into these instruments DWARFED the tax cuts. When the ratings proved to be wrong, we didn’t just get deficits. We bankrupted nations who bought into the creditworthiness of those bonds and their derivatives.

Y’all can dislike Bush all you want, but the damage done with those tax cuts isn’t large enough to explain what happened in the crash. What IS large enough is the collapse of a belief in a pricing model for non-investment grade loans. Many, many people believed and then suddenly did not believe. THAT moves markets.

Catfish N. Cod said...

@financequant: when things start going pear-shaped, where would you put assets? Bonds or money markets (less secure than in former times)? Foreign funds? Gold?

@Smurphs, @Larry: Yet we printed beaucoup amounts of money in the last eight years, and inflation didn't go anywhere. Nor did the dollar massively weaken, so the money didn't go overseas. Why is that? One possible answer: because all that newly-printed money was sucked into the rentier accounts, isolating it away from the economy, but also increasing relative ownership for the rentier class while depreciating everyone else's assets.

@TCB: Nah. If things get too bad, you could merge them into Alabama, as they originally were in 1798. Even Alabama's economy is in better shape.

@David: Merge? PR has $75B in debt for an economy of $103B. New York has $267B in debt for an economy of $1400B. You add 7% extra economy for 28% extra debt, and the budget deficit would more than double. NY is the state most likely to agree, given its large PR population... which is also the only way PR would not decide it was becoming a colony of NY. Which it would be, as NY would take control of PR's management of infrastructure, which would likely improve but also move control to NYC and Albany.

That's the *best* scenario.

So I think having stateside addresses is probably the only thing that would work. Pick state(s) with lax residency requirements. Or have everyone take online college courses and then register with the school's address. Either way, Kobach's minions would houl.

@oldandgrumpy: But how do you insure that the "government-guaranteed job" produces its keep?

@Duncan: Good damned question. Profits themselves could only be extracted through trade and overseas funds transfers (which have to be paid for by trade and/or currency value shifts). Presumably, they would use lawyers to try and tie down attempts at nationalization, eminent domain, civil-asset forfeiture, criminal conduct fines, and investigations of shell companies... but with them physically absent, how long might that continue? The critical question isn't the wealth. It's the control they buy with it.

@Larry: recognizing Jerusalem as Israel's capital is seen as implying support for Israel's claim to have annexed East Jerusalem outright -- hence the formulation "eternal and undivided capital". And neither state wants to share the entire city as a capital of two states at once, as that means shared sovereignty over the city.

@Tim H.: the practical difference between UBI and Citizen's Dividend is that a dividend goes up and down as resources increase or decrease, whereas UBI is fixed (unless increased by fiat or vote).

In other words, there's no specific dollar-amount entitlement -- you're entitled to a share of public proceeds by virtue of your portion of public ownership, in the same way that you're entitled to a share of private proceeds by virtue of your portion of private ownership.

By experience with such things at VAs, city governments, etc., "guaranteed jobs" aren't worth the trouble. Community service requirements, on the other hand, may well be. Put in a year's worth at graduation and a week's worth per year thereafter to stay eligible for citizen's dividend. (I can't see employers being willing to give up more than a week's productivity, but less would be a cop-out.)

Alfred Differ said...
This comment has been removed by the author.
Alfred Differ said...

@LarryHart | And thus it shall ever be

I think you underestimate your neighbors. They are definitely charmed at the moment, but charms have a way of leading to ugliness when the glamor fades. THAT should scare the piss out of GOP regulars.

how is that a higher threshold

It’s not about higher thresholds. If it were, then I’d be in danger of moving the goalposts as you might imagine I’m doing. What I’m really doing is recognizing the right of my fellow citizens to be really stupid and elect a scammer. Their actions are stupid, but allowed. Trump is their legitimate choice. Legitimacy is about our neighbor’s actions. It isn’t about him until he can be convicted. The reason firing Mueller would be over-the-top for me is it would be an obvious effort to prevent conviction of cheaters.

The reason that doesn’t apply to firing Comey is because firing Comey IS the act to be investigated as obstruction of justice. If I apply it to Comey, I’m assuming guilt. Comey legitimizes Mueller’s work. Firing Comey doesn’t make Trump illegitimate until charges are brought, but it did instantly demonstrate just how dumb Trump could be. I find that heartening. The smart cheaters are the hard ones to topple. 8)

Catfish N. Cod said...

Just to note, some ballpark for what a "citizen's dividend" could look like:

* In 1980, the top 1% of the US population earned 8% of the income. This was pretty typical for the developed world.
* Today that number is around 18%.
* That 10% of the personal income of the USA comes to about $1.3T.
* Redistributed head for head, that would come to about $4400 per person.

For most people, that's nice but not a game-changer. For the 20% of the population that live under the poverty line, that's insanely huge and could be the difference between entrapment and opportunity.

On the other hand, it also shows the limits of "soaking the rich".

Robert said...

There is a stock market bubble currently pushing prices higher and higher. People have been warning that stocks will be crashing. This tax "reform" just gives the rich the ability to force their companies to buy their stock options so they can pocket the money. Then when profits don't come out as expected, stock prices will drop and likely plummet.

Probably as a result, you'll see companies absorbing corporate pension programs and profit-sharing 401(k) and the like in the name of balancing the books. This will kill the ability of people to retire. Add in cuts to Social Security by the Republicans and you will have Generation X, Y, and the Millennials unable to retire because there will be no pensions, money saved up will be confiscated by corporations for profit margins, and Social Security will be dead.

This is ultimately a big fuck you to the younger generations.

Rob H.

oldandgrumpy said...

@Jon S.

It's important that some distinction is made for payment of one's labor and for simply existing. A job guarantee for simply showing up and performing whatever task is needed sets a bottom on private sector wages, benefits, and work conditions. It weeds out tyrants as employers instead of rewarding them, but it also instills the sense of "community" as work that is now volunteer-based is monetized. It would also allow the artists and musician types to pursue their craft/art to the benefit of society, solidifying their importance again. FDR's New Deal would be the model. Most think of the New Deal as grand highway and dam projects, but the program also built libraries, theaters, etc, and paid people to perform and manage them.

The safety net would still be left intact, although greatly diminished in scale. UBI would be a good model for it, recognizing that people can actually make choices for how their benefits are spent. I think we could assume that single payer health care would be part of either package if we could elect representatives progressive enough to enact either. The main reason I don't advocate for just UBI is that it would present no change to our broken employer/employee relationship and could quickly become just a wage subsidy to tamp down private sector pay scales. When women re-entered the workforce in numbers in the 70's and 80's their income elevated the living standard of the family, making boat payments and funding vacation time. How's that workin for us now? Pity the fool now that marries/partners with anyone who has no marketable skills. Just the fact that Friedman liked it is enough for me to second think it.

The job guarantee is more effective at setting employment standards, being entirely optional to the worker at any time, not simply replacing unemployment benefits. It would be mostly counter-cyclical to the business cycle though, leveling the playing field for workers somewhat while offering employers a pool of workers with their social and job skills intact when the cycle turns up again, eliminating the stigma of long-term unemployment that is a real deal in the present job markets. The fact that community leaders would have a paid labor pool available to accomplish many much-needed tasks would immensely benefit both cities and small towns. Community gardens, home repair for the elderly and invalid, community beautification, staffing public services, all could be accomplished without placing pressure on state and local tax bases that don't have the luxury of creating their own currency.

Alfred Differ said...

Tying the money supply to the physical economy is a non-starter as far as I'm concerned. People trade for revenue streams from rents, so those values have to be counted too. Failing to do so will cause too little money to be available in the market, and people will find some other way to invent types of money.

The truth is that a nation with a fiat currency can never run out of it or fail to pay any obligation also denominated in the currency its government creates at will.

oldandgrumpy's claim is demonstrably false because people quit using those types of currencies when they suffer hyperinflation. Preventing people from quitting them requires draconian laws and enforcement and in a nation like the US, there would be blood in the streets before long. Quitting currencies happens and then debts denominated in those currencies lose ALL value. The payoffs made have equally little value and the nation is said to be in default. It happens.


Money is just a commodity we use to denominate debt obligations. Print too much of the stuff and we re-price debts. There isn't anything we can reasonably tie our currencies too anymore except the stuff we buy and that is EXACTLY what we've always done. Gold and silver was just one of the things we buy along with a believe in the stability of their value. That believe is long gone for most of us, so fiat currencies are things we have to live with in a real world. Crypto-currencies won't change that either because we will invent new ones as we want. They are just commodities.

Alfred Differ said...

@Catfish N. Cod | ( I keep wanting to type your name as Catfish N Code. Heh.)

1980 was the last post WWII year and things began to change. The top 1% earned 8% because the value of their wealth had been destroyed earlier in the century. The damage wasn't as large in the US, but our population growth was enormous, which ensured old wealth could not earn as much in rents. Piketty explains this well.

The post-WWII era is over and private wealth has returned to more historical levels. Soaking the rich is popular among some who don't realize the 20th century as abnormal... and why it was abnormal. Not only are there the limits you describe, but an awful lot of people suffered miserably following leaders who argued we could soak the rich.

My usual question, though, for people who use 'dividend' applies here. For what is the dividend being earned? What risk is being taken that justifies the dividend?

Alfred Differ said...

(sigh. My grammar checker is on holiday. Sorry everyone.)


I DO hope David is right in that the GOP will have their own 1947 moment. I fear they have already missed the opportunity, though. Ron Paul almost did to them in 2012 what Trump actually DID do. I see Trump as an opportunists feeding on a carcass, but I'd like to see it rise from the ground and demonstrate that it isn't dead yet.

Alfred Differ said...

Generation X, Y, and the Millennials unable to retire because...

Could we see a show of hand here for people who think their retirement money is within reach of corporations who can confiscate it? I have little experience with pension plans as I don't trust them. I have plenty with US 401(K) plans, though, and I don't see it. I have more with US IRA's and don't see it there either.

What is the issue here?

oldandgrumpy said...

@Catfish N Cod

@oldandgrumpy: But how do you insure that the "government-guaranteed job" produces its keep?

What "keep" is that? The primary "purpose" of such a program would be similar to a UBI, placing money in the hands of those who will spend it. The private sector has organized itself into logical divisions of labor/management/public service to shuffle the deficit spending that the federal government allows it to keep, but none of them "produce" a single dollar. Even the IOU's "created" by banking have to be repaid in high power money that only the Fed creates. Until we come to terms with this reality we will not effectively gain a handle on the private sector economy and realize the full potential of our fiat currency. Government creates the money when it spends in the private sector to provision itself and it cancels it when it collects taxes, end of story for money. What the private sector does between those two events is entirely flexible. Too many absolutes are assumed in economics considering the entire concept of money is imaginary and only exists by the enforcement of tax law.

LarryHart said...

Alfred Differ:

I think you underestimate your neighbors.


I didn't start out that way, either in the general case or the specific case of our own Tim/Tac. In both cases, they spent much effort convincing me that I was wrong about what they'd put up with.

They are definitely charmed at the moment, but charms have a way of leading to ugliness when the glamor fades. THAT should scare the piss out of GOP regulars.


Much damage will be done in the meantime, but I'll be glad to watch them piss their pants.


how is that a higher threshold

It’s not about higher thresholds. If it were, then I’d be in danger of moving the goalposts as you might imagine I’m doing. What I’m really doing is recognizing the right of my fellow citizens to be really stupid and elect a scammer. Their actions are stupid, but allowed. Trump is their legitimate choice. Legitimacy is about our neighbor’s actions. It isn’t about him until he can be convicted.


Sort of. I see your point, with which I take issue on a number of items. Some I know you disagree with, but the other might give you some pause.

I believe the election itself was rigged and fixed (as we were warned to be the case by Donald Trump). I get that more proof would be required before any legal repercussions could be taken on that account, and that the sort of cheating I perceive has likely gone on as far back as when Aaron Burr would have been our first president had not millions of illegals voted for George Washington.

A second reason, which I expect you also to dismiss, is that Trump has violated the emoluments clause of the Constitution from the moment he assumed the office. That should disqualify him as much as if it turned out he was only 16 years old or had been born in Olde Yorkke, Nazi Germany, or Kenya. It shouldn't be up to the voters or the congress to decide whether or not to allow someone who doesn't meet the Constitutional qualifications to hold office.

The third, of which I might plant a seed of convincing in your head, is that "conviction" isn't the only threshold for illegitimacy. I also see Trump as completely failing to perform the duties inherent in the office. If I were hired to dig ditches, and I didn't know how to use a shovel or couldn't lift one, I'd be removed from the job in favor of someone who could actually perform the required duties. If I wouldn't let go of the shovel so that someone else could use it, I'd be engaging in the equivalent of a sit-down strike. I see Trump's continued presence in office as only slightly different in degree (and only slightly funnier) than that.

continued...

LarryHart said...

Alfred Differ (...continued) :

The reason firing Mueller would be over-the-top for me is it would be an obvious effort to prevent conviction of cheaters.


Good to know. I was beginning to worry that you wouldn't even see firing Mueller as a red line any more, and I'm afraid that line will be crossed before the ball drops on Times Square.


The reason that doesn’t apply to firing Comey is because firing Comey IS the act to be investigated as obstruction of justice. If I apply it to Comey, I’m assuming guilt. Comey legitimizes Mueller’s work. Firing Comey doesn’t make Trump illegitimate until charges are brought,


Because I sort of "know" you, I take your word that this is a meaningful distinction for you. It sounds to me like circular reasoning. If firing Comey doesn't make Trump illegitimate, then neither does firing Mueller (until charges are brought). If the legal structure puts Trump in charge of the office that brings the charges (and also gives him pardon power), then he could avoid conviction on technicalities forever. Not only that, but even if Mueller proves his case, the Republicans in congress aren't going to impeach him, so that road to conviction is cut off as well.

What makes him illegitimate is not conviction, but his interference in the process of conviction. Firing Comey was as much that as firing Mueller would (will) be.

but it did instantly demonstrate just how dumb Trump could be. I find that heartening. The smart cheaters are the hard ones to topple. 8)


From your lips to God's ear. I also thought Trump's stupidity would trip him up, but so far, he's proven to be stupid like a FOX (in all senses of those words). His base won't desert him; Republicans won't offend that base; and someone wrote "Republican = American" in the Calvinball book, thereby making it a rule. Looks like checkmate to me.

LarryHart said...

Robert:

you will have Generation X, Y, and the Millennials unable to retire because there will be no pensions, money saved up will be confiscated by corporations for profit margins, and Social Security will be dead.


"Unable to retire" is the so-called-irresistible force which will come up against the actually-immovable object of "unable to find a job." I've had this argument with the retirement planners who want to convince me that retirement is a personal choice. And if a generation is unable to work and yet unable to afford living in retirement, then something has to give. Either we adopt the model of Ethical Suicide Parlors from Vonnegut's "Welcome to the Monkey House" in which 6-foot tall statuesque hostesses do what it takes to convince you to painlessly end your own life, or else a whole lot of people will have nothing to lose by watering the tree of liberty with the blood of patriots and tyrants.

Social Security was implemented in the 1930s for a reason.

Note, I'm not arguing with you that it might in fact come to this. I'm not saying Republicans are smart enough not to do it. I'm saying they'll get what they want and still not be very happy about it.

Tim H. said...

Alfred, you ask"For what is the dividend being earned?", human labor is being obsoleted as fast as vendors can sell gadgets and the swindle needs to be adjusted to avoid something profoundly ugly, that could potentially end civilization. To be more plain, civil behavior is a very thin veneer over an ill-tempered creature with a knack for mayhem, why would you wish that unleashed? To me, civilization is worth paying for.

Catfish N. Cod said...

@Alfred:

1) I agree, the Bush tax cuts were just a spark. The insanity of derivatives and the faith that turds could be polished into gold became the massive boost that made it a disaster. I avoided entering the real estate market in 2004 because I saw a bubble... and I was shocked that it took three more years to burst. That was the effect of the repackaging, AFAICT.

2) Does the 20th century have to stay unusual?

And the risk is in policy selection by the polity, most notably in
* contracts for use of public lands
* public lending for education, import/export, homeownership, corporate bailouts, etc.
* excise taxes
* use fees
* etc., etc.

There would be more such choices if there were more government-overseen investment vehicle(s) that invested in other than T-bills (analogous to, say, state pension funds). I am not sure those would or would not be a good idea, though I am sure that making Social Security into one would be a terrible idea.

@oldandgrumpy: Fiat money is imaginary. Resources aren't. The relationship between fiat money supply and resource supply determines inflation. The "keep" you need is overall production in terms of resources. That either has to come out of productivity from the job itself, or increased productivity from public goods (efficiency from better roads, better AI due to government research, etc.). Otherwise it's parasitism, no matter how you configure the money to track it. A land with twice as much gold and half as much food feels twice as rich but also stays twice as hungry, and digging more gold won't help.

LarryHart said...

Alfred Differ:

My usual question, though, for people who use 'dividend' applies here. For what is the dividend being earned? What risk is being taken that justifies the dividend?


I'm not sure that's the right question. Capital gains are the payoff for risk. I'm old enough to remember stocks that paid dividends, and those were like distributions of value collectively owned by the company to the individual owners (shareholders) of the company. It's not so much about risk as about distributing from the commons to private ownership.

In this case, what justifies the dividend would be collective ownership of the national commons, i.e., citizenship.

LarryHart said...

Alfred Differ:

I see Trump as an opportunists feeding on a carcass, but I'd like to see it rise from the ground and demonstrate that it isn't dead yet.


If it's not dead, it's possessed and requires an exorcism.

If it is dead, it's nosferatu and requires its head removed, mouth stuffed with salt, and separate parts buried at separate crosswalks.

oldandgrumpy said...

@Alfred Differ

"oldandgrumpy's claim is demonstrably false because people quit using those types of currencies when they suffer hyperinflation. Preventing people from quitting them requires draconian laws and enforcement and in a nation like the US, there would be blood in the streets before long. Quitting currencies happens and then debts denominated in those currencies lose ALL value. The payoffs made have equally little value and the nation is said to be in default. It happens."

Firstly, you can't "quit" using the currency that the government demands in payment of taxes. Taxes are what gives currencies demand so governments can always provision themselves with the currency they create at will. Even if you attach such silliness as a gold standard to it, this remains the driving factor for any currency. Grocery coupons are currency, just don't try paying your tax bill with them.

Secondly, the issuer of the currency can never "default" on any obligation denominated in the same currency it creates by fiat (decree). A dollar will always be worth a dollar of tax credit. Inflation actually happens via resources, not currencies. When goods and services for sale are scarce they can command more currency for their purchase. Bottlenecks in supply chains can inflate individual prices, but the market corrects those if at all possible and such price increases aren't "true" inflation of the currency. A fiat currency won't inflate until the economy is at close to 100% production, having consumed all potential for increase. This is usually thought to be 100% employment at living wages, which we are decades away from with deficit spending doubled. Even at close to 100% productivity, there are still the controlling factors of taxation and interest rates (monetary policy) available to the issuer of the currency. Taxes draw down demand, not fund it. The same can be said of bond issues at Treasury, albeit kinder and gentler than taxation. When FDR initiated the sale of war bonds his intention was drawing demand (currency) out of a market that was at full employment with few available resources to purchase. When it became "patriotic" to save people did so, even though the government had no need for revenue since the gold standard was effectively dead at the start of WWII. The US dollar will always be in demand as long as we can manage our economy in a way that keeps demand for goods and services high. Even losing international currency of trade status won't hurt us, as those dollars pass through reserves with no benefit to us. Even if demand were to fall for Treasury debt we can spend via reserves directly instead. Such demand is counter-cyclical to private sector investment confidence anyway so it would present a good sign.

LarryHart said...

Alfred Differ:

Could we see a show of hand here for people who think their retirement money is within reach of corporations who can confiscate it? I have little experience with pension plans as I don't trust them. I have plenty with US 401(K) plans, though, and I don't see it. I have more with US IRA's and don't see it there either.

What is the issue here?


Here I agree with you. 401k plans are not confiscatible by the company you work for.

I think the only issue of concern there is that they are tax deferred, and if future taxes on the middle class are drastically raised, we might pay more in taxes than we would have done allowing the money to be taxed up front. Also, if market values collapse, then your retirement money evaporates.

So while confiscation per se is not a worry, that doesn't mean it's all sunshine and roses.

Twominds said...

Jon S,
What about data-entry work? Not the most inpiring, but useful and not at all like a customer service job.

Or digitizing municipal and other archives, so they can be accesible online. I did such a project once, with 18th century books in our Royal Library. Software can't do it on its own, old printing is too irregular for OCR.

No make-work, but things that are often neglected because they don't fit well in the profit-model.

sociotard said...

Brin has often asked what Republicans have deregulated outside their darling industries. Here, Trump is deregulating tipping.

http://www.nationalreview.com/article/454379/restaurant-tipping-regulations-labor-department-makes-good-move

oldandgrumpy said...

@Catfish N Cod

"@oldandgrumpy: Fiat money is imaginary. Resources aren't. The relationship between fiat money supply and resource supply determines inflation. The "keep" you need is overall production in terms of resources. That either has to come out of productivity from the job itself, or increased productivity from public goods (efficiency from better roads, better AI due to government research, etc.). Otherwise it's parasitism, no matter how you configure the money to track it. A land with twice as much gold and half as much food feels twice as rich but also stays twice as hungry, and digging more gold won't help."

First of all: "ALL" money is imaginary and is only given demand by the sovereign that issues it, usually via imposed taxation. Who would trade a cow for a piece of paper that the sovereign hasn't attached some value to? If the population isn't confident in the sovereign's legitimacy some additional store of value may be necessary, such as a gold reserve. No one in a modern western economy actually believes they would be better off without the currency as a representation of value, in spite of all the politicizing of our monetary system, so such a reserve would only serve to limit the economy's ability to serve the population and grow as needed.

Our nation's founders recognized this fully, which is why they vested the monopoly authority to create the currency in the people's house with the mandate that it does so for the public good. A fiat currency enables this mandate better than any other system, as long as we elect representation that understands the potential, and limitation, inherent with it. I agree that the balance between currency and available resources, goods and services, is critical and should guide policy at all times. However, much of the political rhetoric surrounding the topic, along with assumptions we develop from our own experience with finances, keep us from realizing the full potential of our economy and the fiat. The government has no "affordability" constraints or need for revenue. As the issuer of the currency, it must divorce itself from the concept of taxation for revenue and use its power to impose taxation as a brake on the economy as required. Then it can deal with appropriations strictly for the value they add and the resources available to absorb the currency created to fund them. Approaching every issue from the perspective of its possible extremes is not conducive to good governance, or discussion.

Jon S. said...

Twominds, I've done those jobs as well. Turns out that most corporations have all the data-entry people they actually need, and will hire more only on a temporary basis. (The one time that turned out not to be true for me, I streamlined the process so much that my position became redundant. So much for the idea that being smart is a good thing in employment!)

Grumpy, you still haven't addressed my question. I've also done "day labor"; in general, in my experience, the "work that needs done" in the manner you intend tends to be physical. And I can't ride a shovel for four to eight hours any more, no matter how badly the job needs to be done. Where is the government office going to stick me for work? (The Washington WorkForce office hasn't been able to find me a job for over ten years now. I'm just not qualified.)

More generally, how do you make sure the people showing up for their "guaranteed jobs" are at all capable of performing them? What if you need data-entry people today, but half of the folks in the waiting room are illiterate in English? What if it's a job that requires rapid manipulation, but the candidate is physically disabled? What if it merely requires someone to stand for eight hours straight, but the person is, well, me?

People are not interchangeable units, all equipped with the same interfaces and data. You can't use a ratchet wrench to drive nails, at least not for very long, and you can't use just any person to do just any job. It sounds nice in theory, but in practice, well...

Catfish N. Cod said...

@oldandgrumpy: you can quit using the fiat currency for paying anyone OTHER than the government. That's what Russians did in the 1990's: any rubles they received were rushed to the bank to convert to dollars or marks ASAP (and there was a measurable loss of value in the time it took to stand in line at the bank). Likewise, you converted back ONLY to pay government debts.

Commodities of some sort were the primary currency all the way up to the High Middle Ages, when the Muslims invented checks and the Chinese invented paper money. Paper money became superior for the reason you note: tying to any commodity ties the money supply inelastically and limits the economy's self-responsiveness. Despite the complaints of my anarcho-libertarian friends, moving to a state-issued fiat currency was an advantage.

...as long as we elect representation that understands the potential, and limitation, inherent with it...

We never did have such representation, which was why control of the money supply was handed off to the Fed. We had terrible distortions in our politics until that was done: money policy dominated Congressional elections. Today that has resumed since the link between fiscal policy and monetary policy is again being denied, as part of the Norquist Plan to destroy the New Deal and return to Harding-Coolidge days. The Fed thinks the way you do, but the Congress does not. Some days I think the Fed ought to put Congress on an allowance.

Berial said...

@Catfish N. Cod

Don't forget that the Fed has a mandate to maximize employment, keep prices stable, and to moderate long-term interest rates. I'd say they've been so focused on long-term interest rates that they've ignored the 'maximize employment' part of their mandate. If you want to see wages go up for the general population, have full employment. For some reason this hasn't been the focus of the fed since the 70's.

(I can understand why they changed focus DURING the 70's; Stagflation. But what's the excuse for the last 40 years.)

Twominds said...

Jon S

I'm doing data entry myself at the moment, and it is temporary. I hope it will be a stepping stone to more interesting and permanent work. There's enough to do, they would want to hire me but budgeting/hiring-stop gets in the way.

More in general:
When guaranteed jobs are a thing, and taken seriously, I expect that effort will be made to match job and person.
Here, people on welfare can be made to do unpaid work to keep their income, and often it's done in a rather punishing/huniliating way. I don't think it's wrong to do something for money the community is giving you, when you need that support for a long time. I do think it's wrong to take people's dignity. Often, the work is pure make-work, like taking staples out of old dossiers, counting the pages, having that number checked, and laying it in piles for a hypothetical scanning sometime. This for people who had good jobs, not for the ones without skills.
I'm not making this up. This is what Amsterdam came up with. The Hague had people weeding the parks whatever their background or physical fitness.
I must say this is a couple of years ago, when the effects of the crisis of 2009 were still very much there. I don't know if and how that changed recently. I do know that if you need unemployment benefits (which you helped pay for with part of your taxes (deductions I guess is the word I need) and is a right for a certain period of time), you have a good chance to be treated like a work-shy moocher. Unpleasant for all and unjust for most.

I see advantages and drawbacks in both UBI and guaranteed jobs. I haven't made up my mind which one would work better. I don't really see them happening, actually, but I know many people are pushing for it. It could be one of those things that are almost unthinkable till they're suddenly reality.

LarryHart said...

Berial:

Don't forget that the Fed has a mandate to maximize employment, keep prices stable, and to moderate long-term interest rates. I'd say they've been so focused on long-term interest rates that they've ignored the 'maximize employment' part of their mandate.


Just a few years ago, influential economists were arguing that the Fed should explicitly ignore the "full employment" mandate and exclusively work at lowering inflation, even when inflation was beneath their target.


For some reason this hasn't been the focus of the fed since the 70's.

(I can understand why they changed focus DURING the 70's; Stagflation. But what's the excuse for the last 40 years.)


They take orders from (and belong to) the investor class, which wants low inflation, high interest rates, and high unemployment (to keep wages down). Instead of balancing interests, they just want everything their way.

Berial said...

@LarryHart:

Naked Capitalism has something to say about that. An excerpt:

"Our case is made all the more desperate by the fact that our “therapists”—the economic pundits and budget analyzers—are actively in collusion with the rich fat-cat. We lie down on the couch and are told that we have a deficit. The deficit we have arises from the fact that our sovereign government—which (whisper, whisper) is not really us but, instead, is a conspiring other who wishes nothing more than to confiscate our tax dollars—insists on spending more of those dollars than it can confiscate. So we therefore have a deficit which, even though it is not our fault, we will be forced to somehow make up and repay. Our simple hope that perhaps our tax dollars might provide us with beneficial public goods and services are dashed and trampled by mathematical calculations demonstrating there can never be enough tax dollars to pay for all the public goods we clearly need. Our only hope (whisper, whisper) is to further fatten the fat-cat so he can accomplish everything for us. If we fatten the fat-cat, he will educate us; he will grow our food; he will build our houses; he will cure our aches and pains; he will put gasoline in our fuel tank. All we have to do is give him everything we have: our farmland, our national parks and forests, our wildlife preserves, our streams and estuaries, our mountain tops. All we have to do is give him our air and our water to do with as he needs"

Berial said...

Oh, and if you follow the link to NC above check out their comments for a big throw down on MMT and why some do and don't believe/understand it.

LarryHart said...

@Berial,

If that last long complex sentence from the "Naked Capitalism" article could be put to music, it should probably become the National Anthem.

Speaking of "capital", I hear Donald Trump saying of recognition of Jerusalem:

"This is nothing more or less than a recognition of reality.

It is also the right thing to do."


If so, that would be a first for Trump in both cases.

Of course, his saying any true thing would also be a first.

LarryHart said...

A comment in Berial's "Naked Capitalism" article:

It might be more helpful to think in terms of money sitting in gov coffers as being “out of circulation.” This is the way several of the MMTers explain it. The gov spends money into circulation and taxes it back out. Since they can can create (and destroy) money at will, it doesn’t really matter how much is in their bank account to the rest of the economy.


Except that "the government" doesn't create money at will--the privately owned banks of the Federal Reserve do. They lend (rather than spend) it into circulation, and (if I understand correctly) the money leaves circulation when it gets paid back. And since more money is always owed back than was originally lent out (thanks to interest), it is not mathematically possible to pay back all of the debt.

LarryHart said...

Y'know, I mentioned this once before, but it seems more relevant as time goes on.

In the mid 1980s, Marvel put out a sort of humorous mini-series called "The One" whose initial set up was that a millionaire arms dealer had rigged the US weapons systems to act on their own to bring the US and USSR right to the brink of World War III. Having positioned himself to benefit economically from that state of affairs, he was set to make a killing. Of course, the plan depended on the countries stopping short of actually blowing each other up.

When the (fictional) US president and USSR premier insisted that their national honor didn't leave them a way out, the villains "schooled" them that they're living 100 years in the past, and that it was their job, not the villain's job, to prevent the war.

It sounds as if Donald Trump is operating on the same principles.

Anonymous said...

An insightful comment on that "Naked Capitalism" article above:

So Congress can order the government to go do something, and the policy + budget is a two phase commit to doing something as a government. If they approve a policy, but don’t fund it, then they were just fooling around. Similarly, if the executive branch refuses to enforce the law, then they are just fooling around. Really no different than ancient Egypt or ancient Babylon.

Certain things need to be done. Authority decides what, when and where. And provides the why, who and how. So … you are ordered to build a pyramid or a ziggurat … and you do it, provided for mere practical reasons, your bodily needs are provided for (food and water).

In Babylon, there were clay chits, for accounting, that specified who could withdraw resources from the granary, when, and how much. That is how people got fed … and to keep them from being bored, they were made to dig ditches for irrigation. Command economy with socialism.

With society, you get some kind of socialism … the independent person is … deluded. They always depend more or less on public resources. The question remains, how autonomous should we allow different parts of society be? And capitalism really just says, make the power as distributed as possible, and make the decisions based on business not politics.

Alfred Differ said...

@LarryHart | Much damage will be done in the meantime… Yup. That annoys me a great deal, but not enough to start shooting people over it. We will recover when the charm wears off.

I believe the election itself was rigged and fixed… I don’t, but if it were so, he would instantly be illegitimate and I would want heads to roll. Not just his.

Trump has violated the emoluments clause… I already believe that, but Congress has to impeach him for that. There is no mechanism for de-legitimizing for that short of a conviction and I prefer that to be the case. Politics is full of accusations ranging from the kissing of babies to the eating of babies. We regularly go insane during each election period. I’d rather convictions be the standard for legitimate removal from office. Yes… I know. That means a criminal can sit in the White House in the meantime. Trump wouldn’t be the first to do so.

I also see Trump as completely failing to perform the duties inherent in the office. Yes… for which I am grateful at times. He can sit on his ass and do nothing most of the time for all I care. I would prefer that to some of the things he thinks should be done. Our institutions will continue to govern moderately well if he leaves them be. Yah. I know you feel that shouldn’t be allowed. Okay. If someone wants to trigger Amendment #25 over that, I’ll consider it. I suspect there is a decent case to be made that he is nuts. Unfortunately, he wouldn’t be the first at that either. However, there IS a mechanism for removing him for this kind of ineptness. We do it every four years and YOUR neighbors wanted him in there to give it a try. I’m inclined to let them see just how stupid that was.

If firing Comey doesn't make Trump illegitimate, then neither does firing Mueller… Think like a mathematician a bit and you’ll understand me better. Firing Comey is case #1. Firing Mueller would be case #2. Apply induction argument for N leading to N+1. If induction argument holds up, Trump is illegitimate as our President. I’ll consider N=2 enough to believe N+1. Preet Bharara doesn’t count unless Mueller says he does.

His base won't desert him… Not necessary. If he is stripped of political allies in DC, he will go down in flames. They are providing cover right now by not impeaching him, not censuring him, and all manner of other things that require little more of them than not act when Evil is present.

Looks like checkmate to me. You are not really young enough to believe that, are you? 8)

Alfred Differ said...

Time H | Human labor has been obsoleted many times since the industrial revolution. Few of us farm anymore, yet we found work to do for which we could get paid. Few of us work in textile mills anymore, but most of us still find work. Industries come and go in a world of innovation and we have managed to employ people. In fact, we employ FAR more people today than at any time in our history, so I don’t see a cause for alarm. Yes. CERTAIN jobs are going away. I’m cheering. I’ve worked some of them and they are mind-numbingly dull and destructive of human values. Good riddance. Let a decent ‘expert system’ do the work.

Civil behavior is indeed far more than a thin veneer. I think the veneer is thinner while we work at jobs that treat us like machines under bosses who treat us like slaves. Good riddance, I say.

I’m willing to pay to be part of this civilization, but I’m willing to do far more than that if the rest of you treat me decently. Don’t steal. Don’t cheat. Grant me the dignity to try my innovations in a fair market and try to get filthy rich doing it. In return, I’ll play in that market that is likely to steal my ideas and ensure I gain little more than 2% of the value I create if I’m really, really on my toes. Most of the remaining 98% will go to all of you if I’m successful. If I fail, let the market’s evolutionary process kill my innovation so I can move on to the next grand idea, but respect me for trying anyway.

You all ALREADY get a dividend, you just don’t see it.

Alfred Differ said...

@Catfish N Cod | I used to prefer privatization of Social Security and still do a little, but I have to admit most people are ignorant of the damage they can do to their finances if given control of their retirement funds. Social Security isn’t like a 401K, but the education level people need to get that isn’t present here in the US. Without that education, they’d probably be raped and think their ‘lover’ cares about them. I still feel that way a bit about government looking out for our retirements too, but not as much.

and I was shocked that it took three more years to burst I wish I’d realized sooner and preserved the bubble value of my home, but everyone says that. It dawn on me that something was seriously amiss when the kids down the street came begging at my door for food. Their family owned a house that I estimated was worth about twice what mine was. (I tend to buy the smallest place on the block). It dawned on me that the broken-down coffee cart in front of his place was probably his ‘stated’ income. Argh. If I knew who sold him his loan, I’d take them out back for a beating and not with a nerf clue bat. Greed was rampant, but ‘everyone does it’ fails as an ethical defense.

Ah well. Hindsight isn’t 20/20, but it IS better informed. That’s why I’m not moved by David’s concern about a bubble. I don’t see the signs I saw (in hindsight) last time. S&P high-mark record aren’t enough. The market is humming because money came off the sideline, but the economy isn’t growing at the old rate. It still has one hand tied behind its back because financial growth is where the money is going. No doubt we will get a correction eventually, but that’s normal

Alfred Differ said...

@oldandgrumpy | you can't "quit" using the currency that the government demands in payment of taxes. Sure you can. One can go bankrupt and be unable to pay. They might not let you off on the assumption that you’ll recover later, but they do write off tax debt occasionally. There is also the libertarian way to do it if you don’t mind doing jail time. I do, of course, so I pay. Most of the time I don’t even mind paying as they don’t sting me enough to motivate me to rebel.

The way you really quit, though, is to go underground. If your income isn’t visible to them, they can’t tax it easily. They’ll estimate it based on your apparent standard of living, but that might not match. You can hide your money overseas like many do, though that is getting to be more difficult. You CAN quit, but you might not like the annoyances associated with doing so.

Issuers of fiat currencies DO default even if they do not do so by that name. The UK inflated away the value of its currency after WWII to wipe out debt. That is a default by another name. France outright defaulted. The US chose intentional inflation. That IS default in my book because a bond holder would see it that way. Public perceptions on these things don’t matter much. The viewpoint that matters is that of the bond markets.

A dollar will always be worth a dollar of tax credit. Tell that to the silver dollar sitting in my pocket right now. Tax penalties accrue interest and not just for punitive reasons.

When goods and services for sale are scarce they can command more currency for their purchase You are quoting Econ 101 stuff, but paraphrasing it in a way that tempts me to correct you. Maybe you know better and don’t want to write a book on it here. I know better and DEFINITELY don’t want to write a book on it here. For example, scarcity doesn’t result in high prices. Scarcity of something in demand does. It’s really the imbalance between supply and demand. Scarcity just influences the first derivatives. So, I’m not convinced your causal links are correct. If you want to address them individually, though, I’ll do that.

LarryHart said...

Alfred Differ (in reverse chronological order) :

"Looks like checkmate to me." You are not really young enough to believe that, are you? 8)


Only in my most pessimistic moods. But those moods have been taking over more of the time.

I can use a Dave Sim-ism to try to explain: "The part of my brain that doesn't want to believe that hasn't been able to convince the part that does believe it that he's wrong."


His base won't desert him… Not necessary. If he is stripped of political allies in DC, he will go down in flames.


You separated that one out, whereas my three points go together.
1) His base won't desert him
2) The Republican Party is beholden to his base, and so won't desert them
3) Too many Americans wouldn't vote for a Democrat if their life depended on it, so they won't desert the party

Which sounds much like O'Brien's description of why Ingsoc will last forever.

(continued...)

LarryHart said...

Alfred Differ (...continued) :

"If firing Comey doesn't make Trump illegitimate, then neither does firing Mueller"… Think like a mathematician a bit and you’ll understand me better. Firing Comey is case #1. Firing Mueller would be case #2. Apply induction argument for N leading to N+1. If induction argument holds up, Trump is illegitimate as our President. I’ll consider N=2 enough to believe N+1. Preet Bharara doesn’t count unless Mueller says he does.


I love the fact that you're bringing math into this. Really. But two things...

Mathematical induction says that if the thing is true for N=1 and if the thing being true for any N implies that it is true for N+1, then the thing is proven true for all values. It doesn't require proving that it is true for N=2--only that truth for N=2 is a consequence of truth for N=1.

So N=1 is "He fired Comey". The other required premise is not "He fires Mueller too", but something like "His firing of Comey implies that he will fire Mueller." I suppose I believe that to be true, where you won't believe it until he actually proves it.

Separately, you mention a previous case which I hadn't even remembered until now: Preet Bharara. You mention him to dismiss him as an example, but I have to ask why. Firing
Bharara is N=1, and "If he fired Bharara, he'll fire Comey" is the second premise. So really, induction would lead us to believe that N=1 and N=2 implies N=3 has already been proven, and we can take as given that "If he fired Bharara and he fired Comey, he'll fire Mueller." We don't have to wait for him to prove it, either mathematically or morally. He has repeated the pattern of firing whoever is in a position to investigate him.

Really, I'm not focused on what you personally declare except that you're a willing proxy for "An intelligent person who is not me and who indicated that there is a line he will not cross." I figure that when you are fed up, so will be many others. And it therefore concerns me that even in the course of this conversation, your red line has moved from N=2 to N=3. I'm afraid that induction is proving a different thing, in fact the opposite thing, from what you are saying.

N=1: Firing Comey doesn't cross the line.

If firing Comey and firing Bharara doesn't cross the line, then firing Mueller doesn't cross the line then firing Mueller doesn't either.

This is exactly my fear: that the line keeps moving out to infinity.


There is no mechanism for de-legitimizing for that short of a conviction and I prefer that to be the case.


There's a semantic difference between our positions which I don't think you're getting. You perceive me saying I want Trump removed from office, where I'm saying I don't accept that he's in there in the first place. You're telling me it's really hard to un-boil an egg, and I'm saying if you look carefully enough, you'll see that the egg isn't boiled after all.

I realize you have the stronger position there, as he's occupying the space whether I believe it or not. But I see that as the result of a coup, not of an election. The best way I can explain it is: What if we found out now that Trump was born in Kenya? Would he have to be removed from office by normal means (with the possibility that that doesn't happen)? Or would his election be null and void?

LarryHart said...

Alfred Differ:

Yes. CERTAIN jobs are going away. I’m cheering. I’ve worked some of them and they are mind-numbingly dull and destructive of human values. Good riddance. Let a decent ‘expert system’ do the work.

Civil behavior is indeed far more than a thin veneer. I think the veneer is thinner while we work at jobs that treat us like machines under bosses who treat us like slaves. Good riddance, I say.


I agree with both, but the veneer is also thinner when the means of survival are not available to us because they are someone else's private property, and the owners have no incentive to trade them to us.

The fact that society's survival requires less and less human drudgery is a good thing, but the result should free humans to spend less time and effort in tasks they don't want to do. It should not "free" them from the right to live. The economy should serve humanity, not the other way around.

Alfred Differ said...

I don’t want to hog the comment thread too much, so I’ll stop for now with something about jobs. My employer is a small IT contract shop. We serve the US Navy. If you think you can pass a security clearance (or better yet… already have one) and you do IT type work, we might be interested in you. The contract I’m on is in a part of California that is on fire at the moment, but don’t let that deter you. We do government work for wages THEY can afford, so that is a much better reason to be deterred. 8)

If you are an underemployed IT worker or think you can break in to our kind of work, just say so. Most everyone here is pretty smart, so it can’t be all that hard to do, right? I’m not the hiring manager and I DO stand to gain a referral bonus if that guy likes you, but it’s decent work that I enjoy enough to make it pretty easy to get up every morning and come in to work.

If you ARE an underemployed IT worker and want to stay that way, that’s fine too. I’ll leave you be and sleep just fine at night. 8)

LarryHart said...

Alfred Differ:

I don’t want to hog the comment thread too much...


Yeah, er...(choke!), ahem.

LarryHart said...

@Alfred Differ,

I apparently can't message you on LinkedIn until you reply to my old message. Or something. But yes, I'm an underemployed IT worker.

Zepp Jamieson said...

Iter nuclear fusion project reaches key halfway milestone

https://www.theguardian.com/environment/2017/dec/06/iter-nuclear-fusion-project-reaches-key-halfway-milestone

At last! A Bigot we WANT to hear from!

Alfred Differ said...

@LarryHart | I'm at first initial last name on Google's email system. Write me there and I'll send you a more work-related address and we can talk. No promises, of course, but we do have a rather constant need for people no matter what the job climate is like. We are a small company, so we have to look for people the old-fashioned way. 8)

Jossy said...

Incredible Analysis .

Tim Wolter said...

LarryHart

Although we continue to get along personally I do concede that our political views have diverged more in recent years. Is this because I am more willing to accept the unacceptable or because I am more able to comprehend the (seemingly) incomprehensible?

As a person I find Donald Trump repugnant. Whether he is more or less so than others who have held the office is a glass of beer question. But I don't question the legitimacy of his election. There is where we diverge.

I think my increased animus towards the Democratic Party (whose principals I still quite admire) goes back a few years to the whole Walker/John Doe/recall election fiasco. If you have the time for it a detailed summary is here:

https://legalinsurrection.com/2017/12/wisconsin-ag-report-govt-election-officials-were-on-a-mission-to-bring-down-the-walker-campaign-and-the-governor-himself/#more-235170

I know you see it differently but my interpretation is that this is classic partisan politics extended to a weaponized legal system. If some of it sounds rather like what Mueller is doing today, well if I have given you something to think about then I have accomplished something this morning. (A favor you and others do for me here regularly).

To extend my earlier analogy of a political "bio weapon" released without thinking it through, the D party in WI has pretty completely discredited themselves. As a by product of my posting "decloaked" I shan't talk about things on a very local level, but at the state level any politician willing to side with mobs chanting "This is what Democracy Looks Like" is going to cause a lot of moderate voters such as myself to shake their heads. Although interestingly my votes still tend to skew roughly 50:50.

And beyond that, on a National level, what exactly would you have me do? I know equivalency arguments are anathema here but if I see the R's being taken over by a shyster and the D's by idiots it does not give me an obvious good choice.

I'm just trying to do some good in the small places where I can, and in realms where politics need not dominate things.

TW/Tacitus

LarryHart said...

Tim Wolter:

I think my increased animus towards the Democratic Party (whose principals I still quite admire) goes back a few years to the whole Walker/John Doe/recall election fiasco.


Every so often, I had to remind myself that Dave Sim's political views were colored by his living in Canada, not here in the US. Likewise, I should remind myself that some Wisconsin-specific viewpoints affect yours in ways that my Illinois-centric viewpoint does not. Fair point.


...on a National level, what exactly would you have me do?


That's Dr Brin's bugaboo, not mine. :)


I know equivalency arguments are anathema here but if I see the R's being taken over by a shyster and the D's by idiots it does not give me an obvious good choice.


I don't entirely disagree, especially since you said "taken over by". I see plenty of great Democrats who remember what Democrats should stand for, but somehow they are kept away from the levers of power.

I do see differences though, even if one dislikes both parties. The harm they do is not equal. On the old "Cerebus" list, I used to argue that if you regret voting in Democrats, you can vote them out again next election, whereas if you regret voting in Republicans, they will have changed the country (or state or whatever) before you've had a chance to blink. I still believe that.

Also, there is much internal dissent within the Democratic Party. Hillary vs Bernie type feuds ultimately weaken it, making the members dislike and distrust each other. For that reason, today, there is no clear national leader of the Democratic Party. OTOH, Republicans who are sickened by Trump or Moore end up embracing them unconditionally. It strengthens the party in exactly the worst way--giving the most extremist outliers power to shape party dogma. The worst examples win in primaries, and then the choice is a damn Democrat or someone you'd shoot at for looking at your daughter.


But I don't question the legitimacy of his [Trump's] election. There is where we diverge.


Honestly, I think I know where we diverge, and it is this: I come at contemporary politics from the perspective that liberals are besieged and losing on every front, whereas you seem to feel conservatives are in that position. Those often-unstated assumptions lurk in the background of our conversations, and those conversations probably make more sense if we acknowledge that aspect of them.

Tim Wolter said...

Larry

Regards your last paragraph.

The world is changing. The assumptions that were true ten years ago no longer are. Sure I think the legacy media is pro-Dem. But they no longer have the power to command public opinion in the internet age so this is hardly Conservatism under siege. To edge very nervously towards issues I should avoid I have concerns that our government and educational systems have been staffed up with people who too often put their own interests ahead of those they should be working for, even if many of them honestly believe that they can help themselves out while doing The Right Thing politically.

In the age of transparency it is still the first moments of sunrise. When we can see more, and can do so without burning our retinas by staring too long or too directly, then hypocrisy - that Cardinal Sin of American politics - will get harder and harder.

I try very hard to call Nonsense when it is being put forward by alleged Conservatives. It is a salutary exercise for us all.

TW/Tacitus

LarryHart said...

Semi-legitimate questions on false equivalence. I think I know the answers, but am willing to be demonstrated wrong.

Is there a pro-Republican equivalent to the woman lying about Roy Moore impregnating her in order to discredit the Washington Post and Moore's other accusers?

Is there a Democratic equivalent to the support for the latest tax bill with "Our donors have told us not to bother calling them again if we don't pass something"?

Is there a Republican equivalent of the party's forced resignations of John Conyers and Al Franken?

Inquiring minds want to know.

LarryHart said...

Not political at all...

http://www.chicagotribune.com/suburbs/ct-met-buffalo-grove-orchestra-tribute-20171115-story.html

This story about my daughter's high school orchestra is only of local interest, but I post it in order to say this. My teenager, as is the wont of her generation, shows little interest in print media. But when I showed her that this article was on the front page of yesterday's Chicago Tribune, she read the whole thing with rapt attention, even turning to page 6 to read the bulk of the article. Later, they must have been talking about it as school, because she texted me to be sure to cut the article out for her.

Even in this post-print age, there is still a mystique about being mentioned in a prestigious newspaper, especially in a front-page article. I had to smile anyway.

Smurphs said...

Yes, I was being sarcastic with my comment on printing money. But I was thinking more Wiemar Germany than Qualitative Easing.

BUT...
"can never default";
"can't "quit" using the currency";
"The US dollar will always be in demand as long as we can manage our economy in a way that keeps demand for goods and services high."

These are all true only as long the US remains the 600 lb gorilla of the world. Note, we are no longer the 800 lb gorilla, and the change is accelerating. The US (and its currency) is rapidly losing the trust of the world, our fall will be swift when it happens. I don't blame this all on Trump, we have been making bone-headed international moves for domestic political reasons for a long time, but Trump certainly is not helping.

The "Economy" is a human construct, it does not exist in a vacuum or inside a textbook. Theories are fine, and I understand our "fiat" currency, but your extension about debt reminds me of Karl Marx. Interesting theory and useful in parts, but it totally ignores human nature.

Every five year old in world understands that eventually the Piper must be paid. We can all hope that someone else does the paying, but he must be paid.


A.F. Rey said...

For future reference, a highly accessible article on how deniers (of every stripe) use science's virtues to undermine belief in it.

https://fivethirtyeight.com/features/the-easiest-way-to-dismiss-good-science-demand-sound-science/

raito said...

Tim H.,

I consider Gerald Ford to be one of only 3 decent men to hold the office in my lifetime. Some of the less-decent did a good job, though.

Catfish N. Cod,

Re: Busing

My old elementary school buses half its students to a school in a poorer neighborhood. That school buses half its students to my old elementary. Everyone despises it. The poor neighborhood despises that their children are forced to ride in a bus for an hour because that district can't seem to make the local school work. My old neighborhood despises that their children are forced to ride in a bus for an hour to go to a school that doesn't work. Everyone hates that which half goes is random (i.e. you can't know, moving into that area which school your children will attend). This also has adverse affects on the neighborhood by segregating the children into those who go to each school.

Where I am now, several years ago the district tried to remedy the income disparity between a couple of schools by busing a large block of rich people's children to the 'poor' school. The only result was that the local Catholic school got a jump in enrollment. Because you can't solve the problem by busing the rich because they have alternatives. You can only bus the poor, because there's nothing they can do about it. Not that it actually solves the problem.

This year, the boundaries got redrawn again, as the district is building 2 new schools. But the problem remains -- the poor live in one section of town, the rich in another. The rich who spoke to the committee all said, "Stop busing my children past 2 other schools." (though some of them clearly just don't want theirs going to school with 'those' people). But the poor people who spoke didn't want any changes.

raito said...

(continued)

As I see it, there's 3 problems. The first, but less important, is that the neighborhoods are economically segregated. If that's to be addressed at all (and it isn't, here), the city has to address it. The school district can't.

The second, and more important problem, is that those poor children are simply less prepared for school. We know that reading to your child every day gives results. But if you're a single parent working a minimum wage job and a half, or two jobs, who's going to do that? Sure, I'm upper middle class. I work a straight 40 hours a week. I can afford to stimulate my children's brains because the basics are taken care of.

The third problem is the attitude of the poor parents. I was on the district's long-range planning committee. It was nearly impossible to even get academics discussed, because they wanted to blame their children's poor academic records on not having enough non-white teachers. Which is pretty much garbage. And dragging their baggage with them. One mother I spoke to said she grew up in a poorer section of Chicago. She said the problem is not accommodating different cultural expectations. But her example was that when she was growing up, if she avoided a fight, her mother would have beaten her. The expectation being that avoiding it marked you as prey. But up here, fighting will get you very negative consequences. You'd think that she'd prefer to be somewhere where violence isn't tolerated, but she thinks it needs to be acquiesced to. Naturally she had no answer to the idea that she was now living in a different culture, and maybe that culture should get a little consideration, too.

Huge divide in that committee. They were concerned with their children getting jobs (i.e. 'preparing for the future'). They literally could not comprehend that I preferred that my children create the future rather than just submit to it, and that I'd prefer mine to be the ones doing the hiring rather than be the ones getting hired.

Also amusing was the look on one of their faces when it turned out that she, whose very identity was being poor, had never actually missed a meal (because her mother always managed to put food on the table), while I, the rich old white guy, had had to volunteer at a food pantry so that I could feel as though I was actually working for my food.

raito said...

Alfred Differ,

There was another cause to the real estate bubble. Those sub-prime loans weren't used as originally intended. They were supposed to only be held for a few years, until the debtors credit score rose far enough for conventional financing (because they'd dutifully paid the higher interest for those years). That might have worked if done as designed. Unfortunately, the loans started being given without regard to even subprime standards, which then rendered the derivatives toxic. Again, it might have worked, except for the cheating.

Back in 97, the AI and graphics firm I worked for was getting money from someone whose prime source of funds was a mortgage aggregator. Make loans, package them, sell them to Fannie Mae (or whoever). I was tasked with figuring out how to approve subprime mortgages over the internet. And I did figure it out. But what I also figured out was that hat they really wanted was a way to approve every application, then blame 'the computer' if things went wrong.

What happened was that these guys were issuing loans of which 14% were defaulting when the average was 4%. Investigations followed. Their contracts were cut off. They were forced to buy back all the bad loans. Their stock went from $10 to 25 cents. And I never got to implement a self-organizing map beyond a sketch or two. Not that my PhD of a boss would have allowed it. He didn't understand how it worked, nor why an expert system would not (hard to have an expert system in those days when the experts couldn't tell you how they made decisions).

As for retirement plans, no not confiscate. Devalue, certainly. Drive up prices so that the amount is no longer enough, probably.

Tim Wolter,

As you know, I also live in WI. And yes, the D party has done some incredibly stupid things that have allowed the R party to gain enough power to do some incredibly destructive things.

I'm not running for anything, though. No one would elect an honest politician not affiliated with any party who admits to not having all the answers.

LarryHart said...

Tim Wolter:

To edge very nervously towards issues I should avoid I have concerns that our government and educational systems have been staffed up with people who too often put their own interests ahead of those they should be working for, even if many of them honestly believe that they can help themselves out while doing The Right Thing politically.


This is where your attitude concerns me--not just you, but the fact that there are others who share the view. The nagging doubts about what entrenched Democratic bureaucrats might do for misguided but admittedly-noble reasons somehow outshines the glaring "putting their own interests ahead..." Republican corruption being done right in the open and without apology or justification.


"It's happening now, Reg! Something is actually happening, Reg!"

matthew said...

I disagree with Alfred very often but this is dead on correct.

"I’m willing to pay to be part of this civilization, but I’m willing to do far more than that if the rest of you treat me decently. Don’t steal. Don’t cheat. Grant me the dignity to try my innovations in a fair market and try to get filthy rich doing it. In return, I’ll play in that market that is likely to steal my ideas and ensure I gain little more than 2% of the value I create if I’m really, really on my toes. Most of the remaining 98% will go to all of you if I’m successful. If I fail, let the market’s evolutionary process kill my innovation so I can move on to the next grand idea, but respect me for trying anyway.

You all ALREADY get a dividend, you just don’t see it."

David Brin said...

Tim W. We had a perfectly innocent governor hounded out by a partisan recall too. Gray Davis? Please. I’ll happily compare the number and severity of such incidents from each party. Alas, you are still operating on anecdotes when we need to be statistical.


now...
onward

onward

onward

Duncan Cairncross said...

School bussing

We didn't have anywhere near the racism problem that you guys do/did
But one of the ways that we coped was the opposite of the way you do it

We gave MORE money to the schools in poor areas

The wealth of the area that they serve is assessed and schools get more money the poorer the area

This means that while in the UK it's important to get your kids to the right school here in NZ all schools have similar outcomes

We have not completely fixed the problem - poor parents still = poorer performance

But the overall achievements from each school are similar so all of the kids do get a chance

So instead of "bussing" you could have just given the "white" schools less money and the "others" more money

Jon Sigurdsson said...

Thanks for the informative post. Good arguments, not that it'll change anything
Tax Specialist

alaa ammar said...
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