Here is a film trying to humanize the protests in Wisconsin:
I'm more of a "just the facts, Ma'am" kind of guy, so this kind of "massaged" message doesn't do it for me, but I realize that a lot of people are more persuaded by pictures of puppy dogs and personalized pleas. So the above is to "give a human face" to the protest.
For a nuts & bolts guy like me, the facts are that the Republicans have been on a 30 year crusade to beat down the middle and working classes while giving all the breaks to their buddies, the ultra-rich. They have been wildly successful. Taxes are extremely low on the rich. Wealth has shifted from being reasonable well distributed to being hoarded by the top 1% with everybody else treading water (and actually sinking below water as real wages don't keep up with inflation). It is a political agenda that they called "trickle down" economics. With 30 years of experience, people should be able to judge for themselves just how much "trickle down" has occurred.
Bush called all of his tax cuts "necessary" to kick start the economy, but the 2001-2007 "recovery" was the worst ever experienced. The rich hoarded the tax cuts. Economists warned the Repubilcans about this. But the ideology of the Republicans is to do everything possible to reward the rich while beating down everybody else.
I don't need "heartfelt" video to sell me. I use the facts. But for those who want mood music, people-oriented messages, and puppy dogs, the above video is meant to let you get in on the "debate" about Wisconsin.
Friday, February 25, 2011
Scott Adams: How a Smart Guy Shows He is Stupid
I like Scott Adams' Dilbert cartoon, but I'm coming to loathe Scott Adams the human being. He is a reactionary "libertarian" who deliberately misunderstands the way the world works. Here's his latest blog posting:
He claims he doesn't know how it is funded. It has always been funded by the current generation paying for the current seniors' retirement. He wants to call that a Ponzi scheme. It isn't. It is the same principle that families are built on (parents care for children when they are young, the children take care of their senior parents). We don't talk about "family exploitation" and demand that children stop requiring parents to feed, clothe, and raise them. We don't talk about seniors "extorting" money from their adult children to help them. Why does Scott Adams want to see social programs as "exploitation"?
The reality is that back in the early 1980s Greenspan ran a group that changed the funding formula for Social Security. The worry was that the retirement of the Baby Boomers would bust the system. So the plan was to build up a huge surplus to tide the system over during the retirement of the Baby Boomers. So they started charging a lot more for FICA. And a big surplus was built up. And just last year did that process of setting aside hundreds of billions (trillions?) to fund the Baby Boomers finally came to an end because the number of retirees started growing, so the big surpluses have come to an end and the system will not start taking tiny amounts from that surplus to cover the extra costs over the next 30 years. Social Security is well funded. But the Scott Adams' of the world ignore this fact. Instead they focus on the fact that Social Security funds is just "IOUs" and are "meaningless". Well, if you are a thief, then ownership is "meaningless" and up for grabs. But for most normal people, the Social Security Trust Fund is well funded and isn't "going broke". Adams has to know this, but he willfully purveys the lie that it is some kind of "Ponzi scheme".
This is expecially funny because Scott Adams presents himself as a paragon of virtue would would willingly look after not just his own aged parents, but any aged person in need. He says "You and I are compassionate. We would open our homes and take in the oldsters.". If he is so compassionate, why is he complaining about a social program to help the aged? I don't know Mr. Adams but I suspect he is a hypocrite. I suspect he loves to play Scrooge McDuck and sit on his piles of gold and let the gold pieces trickle through his fingers and his real complaint is that the government would tax him to force him to exercise his so-called "charity" for others.
He claims that the US doesn't need Social Security because "Some say Social Security is a social safety net. But old people wouldn't die on the streets if the program suddenly stopped sending out checks.". But if Scott Adams read some history he would find that prior to government programs, a fair number of old people did "die in the streets". Those who were spinsters and never married, those who were childless couples, those who were socially isolated. But Scott Adams lives in an ideologues heaven where there are no storm clouds, where manna falls from heaven, and liberty reigns. He lives in a fantasy world. Prior to Social Security there was real privation among those too old to continue to work.
Ah... but the Scott Adams' of the world have a solution. They are pulling out the old playbook and calling for a "fix" to Social Security that would simply tell people to work into their late 60s, through their 70s, through their 80s, and if they are so luck as to live into their 90s, to keep plugging away at a job so that they don't become "social parasites" and require a rich man like Scott Adams to have to give up the possibility of a third vacation home, or taking his eighth getaway vacation, or hiring his fourth domestic servant. You know, times are tough for the rich, the world needs more WalMart greeters. That keeps the aged "productively employed" where they should be!
I gag when I think of Scott Adams. He is a hypocrite. He is too smart to not know the lies he spews. To point of social programs is to give everybody a social safety net. But Scott Adams wants to go back to the sharp divides of the Dickensian era when the rich could lord it over the underclass and the poor people knew that their life was a veil of tears, many years of hard work, and when their health failed, the only recourse was to crawl in a corner and slowly starve to death because the "charity" of the rich was certainly "on show" with lots of balls and galas where the rich showed off their "urge to help the poor" but in fact the poor were left to starve. All those "donations" really went to wine and dine the rich. It didn't end up as crusts of bread and a little milk for the poor.
What exactly is Social Security?He pretends to know know what Social Security is, but the answer is at his fingertips with Wikipedia. Just click the link I provided in the previous sentence.
Some say Social Security is like a retirement plan, but that would require it to be self-funding, which it isn't.
I've called Social Security a Ponzi scheme because it's funded by the next generation of suckers. But Ponzi schemes are voluntary. So that analogy is flawed.
Some say Social Security is a social safety net. But old people wouldn't die on the streets if the program suddenly stopped sending out checks. You and I are compassionate. We would open our homes and take in the oldsters. The alternative would be feral gangs of senior citizens grazing on our rosebushes. That's not good for property values.
So it seems to me that the main purpose of Social Security is to prevent old people from sleeping on our couches. Keeping old people out of the house, and away from the rosebushes, is expensive, so we cleverly pass along part of the bill to people who haven't yet been born.
While each person in my generation is paying to prevent, on average, one old person from sleeping on his couch, the next generation will be paying to keep two or three old people out of the living room, and the thermostat below 85 degrees. It might seem like a bargain to them. I call that fair.
People in my age group don't have a cool name like the Greatest Generation. But I think we have a legitimate chance of someday being known as the Generation that Prevented the Greatest Generation from Sleeping on Its Couches.
He claims he doesn't know how it is funded. It has always been funded by the current generation paying for the current seniors' retirement. He wants to call that a Ponzi scheme. It isn't. It is the same principle that families are built on (parents care for children when they are young, the children take care of their senior parents). We don't talk about "family exploitation" and demand that children stop requiring parents to feed, clothe, and raise them. We don't talk about seniors "extorting" money from their adult children to help them. Why does Scott Adams want to see social programs as "exploitation"?
The reality is that back in the early 1980s Greenspan ran a group that changed the funding formula for Social Security. The worry was that the retirement of the Baby Boomers would bust the system. So the plan was to build up a huge surplus to tide the system over during the retirement of the Baby Boomers. So they started charging a lot more for FICA. And a big surplus was built up. And just last year did that process of setting aside hundreds of billions (trillions?) to fund the Baby Boomers finally came to an end because the number of retirees started growing, so the big surpluses have come to an end and the system will not start taking tiny amounts from that surplus to cover the extra costs over the next 30 years. Social Security is well funded. But the Scott Adams' of the world ignore this fact. Instead they focus on the fact that Social Security funds is just "IOUs" and are "meaningless". Well, if you are a thief, then ownership is "meaningless" and up for grabs. But for most normal people, the Social Security Trust Fund is well funded and isn't "going broke". Adams has to know this, but he willfully purveys the lie that it is some kind of "Ponzi scheme".
This is expecially funny because Scott Adams presents himself as a paragon of virtue would would willingly look after not just his own aged parents, but any aged person in need. He says "You and I are compassionate. We would open our homes and take in the oldsters.". If he is so compassionate, why is he complaining about a social program to help the aged? I don't know Mr. Adams but I suspect he is a hypocrite. I suspect he loves to play Scrooge McDuck and sit on his piles of gold and let the gold pieces trickle through his fingers and his real complaint is that the government would tax him to force him to exercise his so-called "charity" for others.
He claims that the US doesn't need Social Security because "Some say Social Security is a social safety net. But old people wouldn't die on the streets if the program suddenly stopped sending out checks.". But if Scott Adams read some history he would find that prior to government programs, a fair number of old people did "die in the streets". Those who were spinsters and never married, those who were childless couples, those who were socially isolated. But Scott Adams lives in an ideologues heaven where there are no storm clouds, where manna falls from heaven, and liberty reigns. He lives in a fantasy world. Prior to Social Security there was real privation among those too old to continue to work.
Ah... but the Scott Adams' of the world have a solution. They are pulling out the old playbook and calling for a "fix" to Social Security that would simply tell people to work into their late 60s, through their 70s, through their 80s, and if they are so luck as to live into their 90s, to keep plugging away at a job so that they don't become "social parasites" and require a rich man like Scott Adams to have to give up the possibility of a third vacation home, or taking his eighth getaway vacation, or hiring his fourth domestic servant. You know, times are tough for the rich, the world needs more WalMart greeters. That keeps the aged "productively employed" where they should be!
I gag when I think of Scott Adams. He is a hypocrite. He is too smart to not know the lies he spews. To point of social programs is to give everybody a social safety net. But Scott Adams wants to go back to the sharp divides of the Dickensian era when the rich could lord it over the underclass and the poor people knew that their life was a veil of tears, many years of hard work, and when their health failed, the only recourse was to crawl in a corner and slowly starve to death because the "charity" of the rich was certainly "on show" with lots of balls and galas where the rich showed off their "urge to help the poor" but in fact the poor were left to starve. All those "donations" really went to wine and dine the rich. It didn't end up as crusts of bread and a little milk for the poor.
Wisconsin: The "Shock Doctrine" Applied
Here is an interesting observation by Paul Krugman in his latest NY Times op-ed:
Krugman remains pretty pessimistic about the future:
Here’s a thought: maybe Madison, Wis., isn’t Cairo after all. Maybe it’s Baghdad — specifically, Baghdad in 2003, when the Bush administration put Iraq under the rule of officials chosen for loyalty and political reliability rather than experience and competence.That does help explain the bizarre behaviour of Governor Walker. The unions caved after a couple of days and gave up the 8% to 9% of salary he was demanding, but Walker didn't declare victory and pass his bill. Instead he continues to insist on the removal of collective bargaining rights. (Oh sure, he will let them "collectively bargain" for just one thing, pay increases, but only so long as whatever they fight for is less than the cost of living, in other words they have the right to "organize" and fight for pay cuts!)
As many readers may recall, the results were spectacular — in a bad way. Instead of focusing on the urgent problems of a shattered economy and society, which would soon descend into a murderous civil war, those Bush appointees were obsessed with imposing a conservative ideological vision. Indeed, with looters still prowling the streets of Baghdad, L. Paul Bremer, the American viceroy, told a Washington Post reporter that one of his top priorities was to “corporatize and privatize state-owned enterprises” — Mr. Bremer’s words, not the reporter’s — and to “wean people from the idea the state supports everything.”
The story of the privatization-obsessed Coalition Provisional Authority was the centerpiece of Naomi Klein’s best-selling book “The Shock Doctrine,” which argued that it was part of a broader pattern. From Chile in the 1970s onward, she suggested, right-wing ideologues have exploited crises to push through an agenda that has nothing to do with resolving those crises, and everything to do with imposing their vision of a harsher, more unequal, less democratic society.
Which brings us to Wisconsin 2011, where the shock doctrine is on full display.
In recent weeks, Madison has been the scene of large demonstrations against the governor’s budget bill, which would deny collective-bargaining rights to public-sector workers. Gov. Scott Walker claims that he needs to pass his bill to deal with the state’s fiscal problems. But his attack on unions has nothing to do with the budget. In fact, those unions have already indicated their willingness to make substantial financial concessions — an offer the governor has rejected.OK... now prepare to meet the dark side of the Republican craziness:
What’s happening in Wisconsin is, instead, a power grab — an attempt to exploit the fiscal crisis to destroy the last major counterweight to the political power of corporations and the wealthy. And the power grab goes beyond union-busting. The bill in question is 144 pages long, and there are some extraordinary things hidden deep inside.
For example, the bill includes language that would allow officials appointed by the governor to make sweeping cuts in health coverage for low-income families without having to go through the normal legislative process.These are just the things that Naomi Klein talked about in her book The Shock Doctrine (for my comments on her book, see here).
And then there’s this: “Notwithstanding ss. 13.48 (14) (am) and 16.705 (1), the department may sell any state-owned heating, cooling, and power plant or may contract with a private entity for the operation of any such plant, with or without solicitation of bids, for any amount that the department determines to be in the best interest of the state. Notwithstanding ss. 196.49 and 196.80, no approval or certification of the public service commission is necessary for a public utility to purchase, or contract for the operation of, such a plant, and any such purchase is considered to be in the public interest and to comply with the criteria for certification of a project under s. 196.49 (3) (b).”
What’s that about? The state of Wisconsin owns a number of plants supplying heating, cooling, and electricity to state-run facilities (like the University of Wisconsin). The language in the budget bill would, in effect, let the governor privatize any or all of these facilities at whim. Not only that, he could sell them, without taking bids, to anyone he chooses. And note that any such sale would, by definition, be “considered to be in the public interest.”
If this sounds to you like a perfect setup for cronyism and profiteering — remember those missing billions in Iraq? — you’re not alone. Indeed, there are enough suspicious minds out there that Koch Industries, owned by the billionaire brothers who are playing such a large role in Mr. Walker’s anti-union push, felt compelled to issue a denial that it’s interested in purchasing any of those power plants. Are you reassured?
Krugman remains pretty pessimistic about the future:
The good news from Wisconsin is that the upsurge of public outrage — aided by the maneuvering of Democrats in the State Senate, who absented themselves to deny Republicans a quorum — has slowed the bum’s rush. If Mr. Walker’s plan was to push his bill through before anyone had a chance to realize his true goals, that plan has been foiled. And events in Wisconsin may have given pause to other Republican governors, who seem to be backing off similar moves.The only thing that will really bring this 30 year reign of right wing craziness to an end is if the people catch fire like the Egyptians in Tahrir Square and fight tooth-and-nail to prevent the dark forces from smothering them for another thirty years.
But don’t expect either Mr. Walker or the rest of his party to change those goals. Union-busting and privatization remain G.O.P. priorities, and the party will continue its efforts to smuggle those priorities through in the name of balanced budgets.
Thursday, February 24, 2011
What Does Inequality Mean?
Here is a graphic from an article in Mother Jones magazine to give you an idea of just how extreme the income inequality is in America:
Think about living in a world where one person can "work hard" and earn $30,000 while another who is also "working hard" but gets $27 million for their effort. Can you think of any activity that justifies this huge a gap between two human beings? Sure those who work harder, those with more responsibility, those with more talents deserve more, but not to this outrageously distorted extent.
Click to Enlarge
When I watch films that are meticulous "period pieces" of aristocratic times (i.e. before the Great Depression which seemed to have killed off "personal servants" and conspicuous display of wealth), I am appalled. Beggars at the gate starve to death while the elite "party" at a banquet table tossing out gobs of food that is wonderfully edible with no though of sharing with those who are starving. That is a horrible world. But during my adult lifetime I've watched that disgusting world creep back and re-establish itself.
I first knew something bad was up when you had the stories of Wall Street and the logo "Greed is good!" along with the TV show "Lifestyles of the Rich and Famous". At first this was a bit of a lark since it was so unreal. But the rich have gone from being peripheral to once again lording it over people. They now command the majority of income and it keeps growing. The economy is stagnant for the bottom 90% but the rich have the politicians dancing to their tune so the fight isn't over taxing the rich more, it is over taking away the "fat pensions" and the "extra pay" that public union employees get. The rich have turned the poor on each other and chuckle as they fight light cats and dogs over scraps while the great gobs of wealth keep being diverted to the obscenely rich. Sick.
Click to Enlarge
What I find so outrageous about current US politics is that all the talk about cutting deficits never considers the fact that the budget problem springs from too many tax cuts for the rich! The original justification for tax cuts was that they would stimulate the economy and "trickle down" benefits to all. But looking at 30 years of hard times for the bottom 90% of the population puts the lie to "trickle down". The US needs to raise taxes on the rich!
Go read the Mother Jones article.
A huge share of the nation's economic growth over the past 30 years has gone to the top one-hundredth of one percent, who now make an average of $27 million per household. The average income for the bottom 90 percent of us? $31,244.The graphic is colourful and its proportions show the underlying data, but it is hard for most people to "take in" the enormity of the discrepancy. You need to spend time looking at the graphic and think and think hard to appreciate the grotesque reality it is trying to communicate.Click to Enlarge
Think about living in a world where one person can "work hard" and earn $30,000 while another who is also "working hard" but gets $27 million for their effort. Can you think of any activity that justifies this huge a gap between two human beings? Sure those who work harder, those with more responsibility, those with more talents deserve more, but not to this outrageously distorted extent.
When I watch films that are meticulous "period pieces" of aristocratic times (i.e. before the Great Depression which seemed to have killed off "personal servants" and conspicuous display of wealth), I am appalled. Beggars at the gate starve to death while the elite "party" at a banquet table tossing out gobs of food that is wonderfully edible with no though of sharing with those who are starving. That is a horrible world. But during my adult lifetime I've watched that disgusting world creep back and re-establish itself.
I first knew something bad was up when you had the stories of Wall Street and the logo "Greed is good!" along with the TV show "Lifestyles of the Rich and Famous". At first this was a bit of a lark since it was so unreal. But the rich have gone from being peripheral to once again lording it over people. They now command the majority of income and it keeps growing. The economy is stagnant for the bottom 90% but the rich have the politicians dancing to their tune so the fight isn't over taxing the rich more, it is over taking away the "fat pensions" and the "extra pay" that public union employees get. The rich have turned the poor on each other and chuckle as they fight light cats and dogs over scraps while the great gobs of wealth keep being diverted to the obscenely rich. Sick.
What I find so outrageous about current US politics is that all the talk about cutting deficits never considers the fact that the budget problem springs from too many tax cuts for the rich! The original justification for tax cuts was that they would stimulate the economy and "trickle down" benefits to all. But looking at 30 years of hard times for the bottom 90% of the population puts the lie to "trickle down". The US needs to raise taxes on the rich!
Go read the Mother Jones article.
Brian Greene's "The Hidden Reality"
I have to admit that I had to struggle to get through this book. The theme of the book was exciting, but the writing was dull and wandered off into corners of such extreme "science" that it didn't look like science to me so my attention drifted and I had to work hard to keep up the level of attention necessary to plow through the book.
The book looks at 7 theories of "parallel" universes and 1 theory of off-the-wall "we all live in a simulated universe". That last one didn't belong in the book and was the capstone sealing the fate of this book in my mind: crap. The other seven theories were mildly interesting but struck me as a waste of brilliant minds:
- The Quilted Multiverse - the idea that we can only see part of the universe and if it is infinite then there can be infinite patches like ours that "quilt" the infinite fabric of the universe. And that in each of these the physical constants can be set slightly differently so you get an infinite variety. In fact, you can get an infinite number of patches are are exact mimics of the patch we inhabit.
- The Inflationary Universe - uses the idea of inflation to talk about how new universes can pop into existence as the inflationary universe continues its infinite expansion.
- Brane Universe - the idea that string theory requires a 10 dimension (or 11 dimension, depends on how you count them) universe in which we live stuck on a 3D "brane". There can exist many branes so there are multiple parallel universes.
- Cyclic Multiverse - uses the string theory multi-dimensional brane world as a way to allow branes to bang up against another branes. Each "bang" is in fact a "big bang" that generates a universe. This allows an eternal cycle of big bang then big collapse then big bang then big collapse ad infinitum without breaking the 2nd law of thermodynamics that requires entropy to increase. The entropy gets spread over the other dimensions.
- Landscape Multiverse - uses the fact that string theory allows 10^500 power different possible universes allowed by the underlying Calabi-Yau curled up dimensions of string pace, and you let the hypothesized "inflaton" field of the inflationary universe create all the "bubble universes" which give you every possible 10^500 different string-based universes replicated an infinite number of times.
- Quantum Multiverse - this takes the crazy "many worlds" interpretation of Hugh Everett III and populates an infinity of infinite universes that are hived off each time a quantum probability wave "decoheres" and collapses into the actual measured result in a world. Since the wave can decohere is many, many ways, then at each instant all over our current universe we are hiving off practically infinite numbers of new univereses where the decoherence gave a different result. Crazy stuff because it takes puzzle in our world and propagates an unimaginable number of multiple universes as "the solution" to this problem. Talk about rabbits out of a hat!
- Holographic Multiverse - takes some physics developed by Leonard Susskind that finds a duality between 3D objects within a universe to 2D objects on the event horizon of a something like a black hole. Mix this with string theory and you can speculate about bubble universes where their 3D innards are "determined" by 2D entities on the skin of the bubble universe.
Most of these theories in Greene's book are about stuff that -- by assumption -- are things we can never see. That strikes me as nonsense. It isn't physics. The only place where he can get my interest up is when he claims that the proposed universe beyond our own might have experimental and measurable impacts on our universe. That I can accept as potential science, but even here he ends up talking about "possibilities" and nothing tangible.
So I'm left wondering... why waste all that brilliance chasing fairy dust? Is it really the case that there are no interesting physical phenomena in the world we actually inhabit? I've been waiting for 30 years for a competent theory of superconductors. Nothing. Instead a bevy of high-powered physicists have wasted thousands of man-years on string theory. Understanding dark matter and dark energy which exist in our universe strikes me as important, but all this effort is diverted into chasing ideas that probably will never have any impact on real science. This book, and all this work on string theory, strikes me as the same tragedy as the last 30 years of Einstein's life: he chased dreams rather than do solid physics. It was a terrible waste of an excellent mind.
I don't recommend this book. Too much wild-eyed speculation. Far, far too little real physics. I've read Brian Greene's two previous books. They are fine. They are readable and they include real science. But neither is a "stand out" book that excites the reader. I do admire scientists who take the time to write for the public, but only a few have a real feel for the public and are able to write a book that sets a non-scientist's mind ablaze with possibilities and a glimpse into the real science. Partly this is because science is so highly technical these days. But also because it takes a peculiar writing talent to capture a reader's imagination. Brian Green has created "workmanlike" books in the past but nothing that blazed with brilliance. And, sadly, this latest book is quite a dud.
Update 2011mar04: Here is an audio of an interview of Brian Greene by NPR's Ira Flatow.
The Failure of the American Two-Party System
You don't have choice is your two parties are extreme right and centre-right. But that is the situation in the US today.
Here's a bit from an article by Robert Reich:
Here's a bit from an article by Robert Reich:
You can’t fight something with nothing. But as long as Democrats refuse to talk about the almost unprecedented buildup of income, wealth, and power at the top – and the refusal of the super-rich to pay their fair share of the nation’s bills – Republicans will convince people it’s all about government and unions.There is a war by the top 1% on the bottom 99% in America, but that isn't presented by the media or by the political parties. Consequently the US economy is in the toilet and will stay that way:
Republicans claim to have a mandate from voters for the showdowns and shutdowns they’re launching. Governors say they’re not against unions but voters have told them to cut costs, and unions are in the way. House Republicans say they’re not seeking a government shutdown but standing on principle. “Republicans’ goal is to cut spending and reduce the size of government,” says House leader John Boehner, “not to shut it down.” But if a shutdown is necessary to achieve the goal, so be it.
The Republican message is bloated government is responsible for the lousy economy that most people continue to experience. Cut the bloat and jobs and wages will return.
Nothing could be further from the truth, but for some reason Obama and the Democrats aren’t responding with the truth.
The truth that Obama and Democrats must tell is government spending has absolutely nothing to do with high unemployment, declining wages, falling home prices, and all the other horribles that continue to haunt most Americans.The American electorate is clueless. They are unhappy and they lash out. The Tea Party is a symptom but its anger is directed at straw men that the ultra-rich has set up to distract the easily distractible:
Indeed, too little spending will prolong the horribles for years more because there’s not enough demand in the economy without it.
The truth is that while the proximate cause of America’s economic plunge was Wall Street’s excesses leading up to the crash of 2008, its underlying cause — and the reason the economy continues to be lousy for most Americans — is so much income and wealth have been going to the very top that the vast majority no longer has the purchasing power to lift the economy out of its doldrums. American’s aren’t buying cars (they bought 17 million new cars in 2005, just 12 million last year). They’re not buying homes (7.5 million in 2005, 4.6 million last year). They’re not going to the malls (high-end retailers are booming but Wal-Mart’s sales are down).
Only the richest 5 percent of Americans are back in the stores because their stock portfolios have soared. The Dow Jones Industrial Average has doubled from its crisis low. Wall Street pay is up to record levels. Total compensation and benefits at the 25 major Wall St firms had been $130 billion in 2007, before the crash; now it’s close to $140 billion.
But a strong recovery can’t be built on the purchases of the richest 5 percent.
The truth is if the super-rich paid their fair share of taxes, government wouldn’t be broke. If Governor Scott Walker hadn’t handed out tax breaks to corporations and the well-off, Wisconsin wouldn’t be in a budget crisis. If Washington hadn’t extended the Bush tax cuts for the rich, eviscerated the estate tax, and created loopholes for private-equity and hedge-fund managers, the federal budget wouldn’t look nearly as bad.American politicians on both right and centre (there is no effective left) have been bought off:
And if America had higher marginal tax rates and more tax brackets at the top – for those raking in $1 million, $5 million, $15 million a year – the budget would look even better. We wouldn’t be firing teachers or slashing Medicaid or hurting the most vulnerable members of our society. We wouldn’t be in a tizzy over Social Security. We’d slow the rise in healthcare costs but we wouldn’t cut Medicare. We’d cut defense spending and lop off subsidies to giant agribusinesses but we wouldn’t view the government as our national nemesis.
The final truth is as income and wealth have risen to the top, so has political power.
The reason all of this is proving so difficult to get across is the super-rich, such as the Koch brothers, have been using their billions to corrupt politics, hoodwink the public, and enlarge and entrench their outsized fortunes. They’re bankrolling Republicans who are mounting showdowns and threatening shutdowns, and who want the public to believe government spending is the problem.This is the culmination of 40 years of agitation, calculation, and political maneuvering by Republicans that became effective because Nixon embraced the "southern strategy", i.e. use social conservatism to get the shock troops to use to blind the public to the real agenda: make politics subservient to the ultra-rich.
They are behind the Republican shakedown.
William Black on the Supersized Banks
Here are some bits from an excellent article by William Black from Barry Ritholtz's The Big Picture blog:
The great tragedy of the 2008 election was that a "reformer" was elected who promised "change you can believe in" but he ends up captive to Wall Street and has left the very actors who caused the financial crisis in charge of the economy. Put simply: Wall Street has bought the presidency. Worse, the Republican party is filled with right wing crazies who are worse than the financial parasites of Wall Street. Wall Street would suck the blood out of the economy slowly, the rabid Republicans would drive the economy over a cliff immediately. The American people have been left with a completely dysfunctional political system with no solutions at hand and now white knight on the horizon. It is bleak. Until the electorate awakens to the deep mess the country is in, things will either tread water under Obama and quickly by strangled by the Republicans. Sad.
What exactly is the function of the financial sector in our society? Simply this: Its sole function is supplying capital efficiently to aid the real economy. The financial sector is a tool to help those that make real tools, not an end in itself. But five fatal flaws in the financial sector’s current structure have created a monster that drains the real economy, promotes fraud and corruption, threatens democracy, and causes recurrent, intensifying crises.There is more in the original article, go read the whole thing.
1. The financial sector harms the real economy.
Even when not in crisis, the financial sector harms the real economy. First, it is vastly too large. The finance sector is an intermediary — essentially a “middleman”. Like all middlemen, it should be as small as possible, while still being capable of accomplishing its mission. Otherwise it is inherently parasitical. Unfortunately, it is now vastly larger than necessary, dwarfing the real economy it is supposed to serve. Forty years ago, our real economy grew better with a financial sector that received one-twentieth as large a percentage of total profits (2%) than does the current financial sector (40%). The minimum measure of how much damage the bloated, grossly over-compensated finance sector causes to the real economy is this massive increase in the share of total national income wasted through the finance sector’s parasitism.
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2. The financial sector produces recurrent, intensifying economic crises here and abroad.
The current crisis is only the latest in a long list of economic crises caused by the financial sector. When it is not regulated and policed effectively, the financial sector produces and hyper-inflates bubbles that cause severe economic crises. The current crisis, absent massive, global governmental bailouts, would have caused the catastrophic failure of the global economy. The financial sector has become far more unstable since this crisis began and its members used their lobbying power to convince Congress to gimmick the accounting rules to hide their massive losses. Secretary Geithner has exacerbated the problem by declaring that the largest financial institutions are exempt from receivership regardless of their insolvency. These factors greatly increase the likelihood that these systemically dangerous institutions (SDIs) will cause a global financial crisis.
3. The financial sector’s predation is so extraordinary that it now drives the upper one percent of our nation’s income distribution and has driven much of the increase in our grotesque income inequality.
4. The financial sector’s predation and its leading role in committing and aiding and abetting accounting control fraud combine to:
• Corrupt financial elites and professionals, and
• Spur a rise in Social Darwinism in an attempt to justify the elites’ power and wealth. Accounting control frauds suborn accountants, attorneys, and appraisers and create what is known as a “Gresham’s dynamic” — a system in which bad money drives out good. When this dynamic occurs, honest professionals are pushed out and cheaters are allowed to prosper. Executive compensation has become so massive, so divorced from performance, and so perverse that it, too, creates a Gresham’s dynamic that encourages widespread accounting fraud by both financial firms and firms in the real economy.
As financial sector elites became obscenely wealthy through predation and fraud, their psychological incentives to embrace unhealthy, anti-democratic Social Darwinism surged. While they were, by any objective measure, the worst elements of the public, their sycophants in the media and the recipients of their political and charitable contributions worshiped them as heroic. Finance CEOs adopted and spread the myth that they were smarter, harder working, and more innovative than the rest of us. ...
5. The CEOs of the largest financial firms are so powerful that they pose a critical risk to the financial sector, the real economy, and our democracy.
The CEOs can directly, through the firm, and by “bundling” contributions of its officers and employees, easily make enormous political contributions and use their PR firms and lobbyists to manipulate the media and public officials. The ability of the financial sector to block meaningful reform after bringing the world to the brink of a second great depression proves how exceptional its powers are to corrupt nearly every critical sector of American public and economic life. The five largest U.S. banks control roughly half of all bank assets. They use their political and financial power to provide themselves with competitive advantages that allow them to dominate smaller banks.
This excessive power was a major contributor to the ongoing crisis. Effective financial and securities regulation was anathema to the CEOs’ ideology (and the greatest danger to their frauds, wealth, and power) and they successfully set out to destroy it. That produced what criminologists refer to as a “criminogenic environment” (an atmosphere that breeds criminal activity) that prompted the epidemic of accounting control fraud that hyper-inflated the housing bubble. ...
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We need to commit to fixing the real economy by guaranteeing that everyone willing to work can work and making the real economy sustainable rather than recurrently causing global environmental crises. We must not spend virtually all of our reform efforts on the finance sector and assume that if we solve its defects we will have solved the other fundamental reasons why the real economy has remained so dysfunctional for decades. We need to be work simultaneously to fix finance and the real economy.
The great tragedy of the 2008 election was that a "reformer" was elected who promised "change you can believe in" but he ends up captive to Wall Street and has left the very actors who caused the financial crisis in charge of the economy. Put simply: Wall Street has bought the presidency. Worse, the Republican party is filled with right wing crazies who are worse than the financial parasites of Wall Street. Wall Street would suck the blood out of the economy slowly, the rabid Republicans would drive the economy over a cliff immediately. The American people have been left with a completely dysfunctional political system with no solutions at hand and now white knight on the horizon. It is bleak. Until the electorate awakens to the deep mess the country is in, things will either tread water under Obama and quickly by strangled by the Republicans. Sad.
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