Archive for the ‘plutocracy’ Tag

Rants. A Long, Vaguely Coherent Rant.

I feel a rant coming on. And I think I’m just going to run with it – to purge out everything that might come out, so if this reads like a rambling stream of consciousness type post, well, either enjoy, or don’t read, whatever suits.

Dear America:

What the hell is wrong with you people? How are your election campaigns this… disturbing?

I’ve been trying to understand the mindset of the Republican voter for a very long time, especially in the context of the red/blue state thing. I don’t get it. I can’t wrap my head around it at all. The only way that Republicans can get any support, obviously, is by getting people who are so poorly informed that they can’t see that their interested are not represented by the GOP to vote for them. I guess xenophobia, scapegoating of the poor, and outright lying really do work. And it’s amazing, as an outsider, to see it happen. Nothing stuns me more than watching the right rail against the “liberal media”, which is just a giant myth that they’ve created. In their mind, in their narrative, “liberal media” means any outlet that will not simply spin a story exactly the way they want it. They seem to lack a basic understanding of what actual journalism, which I think is a dying art, is all about – to look at the story from as many angles as possible and to report it accurately. There’s no such thing as “conservative news” or “liberal news”. Or rather, there shouldn’t be.

I console myself a bit by realizing that generally, the worst of the commentators (regardless of their alignment on whatever political spectrum you want to use) are really only ever preaching to the choir. If you’re listening to the screed of the likes of Rush Limbaugh, it’s not like you’re an informed, intelligent, politically pragmatic character. In all likelihood, you’re listening to him, because the message – the racist, anti-woman, xenophonic, right wing message is already something you believe. I’d like to think that a rational person hearing Limbaugh for the the first time would simply laugh and say, “What’s this guy’s problem?” or dismiss it as some sort of poorly executed satire. But I guess I’d be wrong.

To me, though, it makes no sense why their ideas would get support. The reality of conservatism is that it absolutely needs low information voters. It needs ignorant, easily manipulated minds who can be sold a vision of an alternate reality that they then think voting Republican (or any conservative party, since it could happen anywhere, it’s just the USA is such a great ilustrator, and probably the worst case of ┬áit) will actually give them access to this world. Americans, as I understand it, grow up believing in the “American Dream”, the idea that hard work will make you successful. The grow up with the idea that they can become one of the so-called “one-percent” if they just work hard at it. It’s a lie. Well, not totally. They may well just end up lucky, but most of those people, they come from old money. The best way to become rich and powerful in the USA is to be born into it. Joe Sixpack, the ignorant, Rush-listening trailer trash living in the backwoods of Georgia? It’s not going to happen for him. And voting Republican, as he likely does, is only going to help ensure it doesn’t happen for his kids, or their kids.

Conservatives, for all their bluster about hard work, initiative, and personal responsibility, seem to view the working family as some kind of parasite, or drain on the system. This has never been put out more clearly to the American electorate than last week when Romney’s “47%” video emerged. Who are those 47% who don’t pay taxes? Senior citizens who paid taxes all their working lives and now are living on the Social Security they contributed to. Young families who’ve availed themselves of tax credits and other fiscal incentives to keep them prosperous (which were lauded by the likes of St. Ronnie Raygun himself), and people who work for minimum wage or just above it – the people who clean your schools and offices, who work unskilled labour jobs, who serve you food, do your laundry, pump your gas, and so on. These people are the invisible underclass on which the prosperity of the richest depends.

I don’t want to start sounding Marxist or anything, because I’m not. In broad terms, capitalism, individual initiative, and free markets have for the most part been responsible for providing those of us lucky to live in the industrialized world the great standard of living that we have. In fact, even many of the poorest dregs of American society are still far, far better off than most of the world. I’ve been in Afghanistan for almost eight months now. Think you’ve seen poverty? Think again. And things here aren’t even as terrible as they are in some places in the world. The concept of a social safety net, as miserable an existence as they may well be in North America, does not exist in most of the world. People starve to death, freeze to death, try to eke out some sort of existence in most of the world. However, there’s a definite class division. And the idea of social mobility – that you can earn your way into the sort of upper crust that goes to $50,000/ticket fundraisers to hear politicians mock half the population of a country? That’s a fairy tale. It’s possible, but so unlikely that you’re better off trying to win the lottery. And on that subject, winning the lottery only proves the point more. Even having money can’t get you into that circle. If you didn’t have the right parents, go to the right schools, and so on, that’s a world that simply is not open to you.

That’s not to say there’s no point to working hard. My father was an immigrant. Granted, he came from England, and was likely a few steps ahead of immigrants today – he looked like Canadians, spoke the same language (albeit accented), and shared a cultural heritage with them. But he came to Canada with a few dollars, a job offer, and that’s about it. He didn’t have an advanced education. Never went to university. He left school as a teenager and started working, and realized that England in the 1960s was a bleak place. He got married, worked, saved, had a family, and is now enjoying a modest retirement. Well, less modest than many. While I was growing up (I’m 32 now), most of my friends’ mothers didn’t need to work for their family to enjoy a decent standard of living – or worked part-time, as my mother did. It was not the norm as it is now. I went to school with many children of very recent immigrants – tradesmen, many of them, or autoworkers. They worked hard and pushed their kids hard to succeed so they could have a better life. And it seems, mostly, like that worked. Now I have to wonder.

That said, the days of going and getting a good paying job without a lot of education seem to be gone. North America is deindustrializing. It’s no shock. The industrial revolution has spread to the developing world, and with cheaper labour costs, it simply doesn’t make sense not to globally rationalize production. That leaves North America (and perhaps, to a lesser extent, Europe, as manufacturing seems to remain very viable in countries like Germany) to figure out what to do next, economically. Here, we should be focused on what we’ve always been good at – innovation, development of new, better ways to live life and do things, invention, research, and developing knowledge-based industries. If we don’t stay ahead of the curve there, we’re going to be in for a world of hurt. It’s often noted that Chinese and Indian universities are churning out engineers at a far higher rate than North America, and soon, innovation will all come from them. That giant underclass? It’ll become all of us, because you can’t base an economy on selling hamburgers to each other (I can’t remember who I got that line from, but it’s not original, and if you know, let me know so I can attribute it properly).

How does a party manage to succeed on a platform that’s entirely based on ideas that not only have failed in the past, but that don’t even sound reasonable or logical?! Romney’s “platform” seems entirely based on the same tired ideas. “Let’s give big tax cuts to rich people, so that they’ll create more jobs.” Of course, since he is one of those plutocrats, who was born into the right family and is insufferably out of touch with the average American, he’s going to benefit from that, but let’s leave that aside. Why do people think that this will work? Even if there’s any merit to the Laffer Curve, the concept the idea is based on – it all depends where on that curve (it’s actually a parabola) you are. There’s no reason to believe it will work all the time.

And then there’s the GOP’s ideas about healthcare. They clearly live in a dreamworld. Only what, yesterday(?) Romney actually said something like, “Everyone has access to healthcare, they can go the ER.” The most expensive form of care available, only available as a last-ditch intervention? This is a brilliant plan. So our folks (30+ million of them) who don’t have health insurance are expected to go get emergency treatment. Then they’ll get the staggering bill, and they won’t pay. So who picks up the cost of this incredibly expensive, too late care? Everyone. Because prices go up while hospitals try to recoup the cost.

This. Makes. No. Sense.

This is the whole problem in the healthcare debate. You want to save money? Make sure everyone has access to care, to good, effective, preventative care. That won’t guarantee that everyone will use it, but over time, it will save money. It works in pretty much every other industrialized country, since they all manage to spend less public money on healthcare, and yet insure everyone.

But we’re not seeing this discussion in American politics. Instead, we’re talking about personhood, slut-shaming, and how ridiculous the idea of improving access to contraceptives is. All bullshit issues. And all generally aimed at women, who it seems conservative men seem to think they can make decisions for. Again, common sense should prevail. Oh, you’re pro-life (read: antichoice)? Don’t like abortion? Great, then why don’t you get behind making comprehensive sexual health education available to everyone, and access to contraceptives simple. That will reduce the demand for abortions! But of course, this doesn’t make sense to these people. They’d rather try to push “personhood amendments” and actually seem to believe that criminalizing abortion (which they’re not helping demand for by making it harder for people to prevent pregnancy!) will make it go away, instead of pushing it into shadows with real consequences to those who decide they have no other option. Nonsense. Sheer lunacy.

This brings me back to my original question. Who the hell supports these people and why? Why is it that the “47%”, who overwhelmingly seem to live in Red States which mooch federal tax money off of Blue States, are voting for a party which seems to despise them. What do they see being offered to them? What is to gain for them in supporting a party that thinks that people who find themselves unemployed, or who want to further their education but don’t have rich parents to fund it for them, or who are raising a family are just freeloaders? And that “47%”? It’s not a static population. It’s fluid. People pass through periods of unemployment for brief moments, generally. They may get tax credits for having kids and learning lower income for other brief moments. In fact, I’d wager the only people who stay in that bracket a long time are senior citizens, availing themselves of benefits they paid toward for their entire working lives.

The Red/Blue thing always makes me laugh. Want to piss off a rabid Red State Republican? Highlight that California subsidizes their state. They love to rant about how California is “broke”. At the state level, their fiscal position is a mess, thanks in large part to stupid populist ideas like Proposition 13, but also due to some of the demographic challenges they face. And yet, they send far more money into the Federal Treasury than they get back. Where does that federal tax revenue go? To prop up Red States. This is the perverse fiscal reality. And if they don’t believe you, there’s myriad sources that will support it. From notoriously liberal sources. Like, er, The Economist. In fact, just Google. There’s plenty of sources.

So what’s the way forward? The way I see it, it’s pretty simple. First, drop this horseshit talk about yet another war. Sorry right-wing Americans, you don’t get to complain about the national debt (by the way, You Built That!) while at the same time crying for war with Iran to protect the interests of a third party. Wars are incredibly expensive, which is why the Bush Administration was so keen to keep the Iraq War off the budget books. And stop talking about “uncertainty” as though electing a plutocrat who doesn’t have a plan is going to fix that. What is dragging down the economy is demand slumps. It’s pretty simple. People who feel unsure about their future employment prospects put off purchases because they don’t want to deplete their savings, or they don’t want to take on more debt for them. Less demand means companies need less labour, which causes unemployment to grow. It’s a rather vicious circle.

So, what can be done? Well, let me take you back to Macroeconomics 101. We start with a simple equation:

Y = C + I + G + NX

Y is GDP (or national income, more technically, in some books). C is consumption (consumer spending). I is investment – capital investment, essentially. G is government spending. NX is net exports. Pretty simple identity.

That whole thing also can be used to assess something called Aggregate Demand. That’s what’s dragging down the US economy. And probably a lot of other places. So how to we spur more demand? How do we make people feel more confident to open their wallets and buy durable goods, or go out to dinner more, or travel, or otherwise just put money into the economy? What could be done?

Well, the US (and everywhere else) has something called an Infrastructure Deficit – that is, a valuation placed on the amount of work needed to be done to maintain or upgrade infrastructure. Roads, bridges, railways, ports, all sorts of things. All these things are vital to the function of the economy. Remember “you didn’t build that”? The out-of-context remark that the GOP seized on? Among other things, like education, President Obama was talking about that infrastructure. In the United States, this deficit is in the trillions. So, let’s flesh this out. What would happen if the government, instead of handing yet more tax cuts to the rich, instead plowed money closing this gap?

Yes, they’d have to borrow the money. But that’s not manifestly evil. Hell, if the Republicans are cool with borrowing money to go to war, they should be cool with borrowing money to invest in economic growth. And if not, well, why listen to them?

Doing this work would require the employment of a large number of people. Some of the jobs will be unskilled, simple construction jobs, and to jobs producing raw materials. Some will go to engineers, skilled tradesmen, etc. Regardless, that will put money in people’s pockets. They’ll feel some security, and they’ll start spending money. They’ll eat out occasionally. They’ll buy coffee while they work, beers on Friday night. They might actually feel secure enough to buy a new car, or replace their washing machine.

And then something awesome kicks in. It’s called the multiplier. See, each of those businesses that those workers are now patronizing, they’re seeing demand. They’re making money. And they’re either paying wages to workers they need, or maybe it’s a sole proprietor who now too feels some security to start spending a little. Estimates on the size of the multiplier vary, but somewhere between 1.25-1.40 seem common. So gradually this growth in demand will becomes self-sustaining. As the infrastructure deficit closes, you’ve got some demand that’s replacing it.

But why’d I put that equation up? Well, the “I” is often the problem. Critics of stimulus will readily point out that private capital investment can be “crowded out” by government spending. Except that right now, “I” is low. Firms are sitting on their cash because they don’t see much value in investing in capital they don’t need. So crowding out isn’t likely to be a real problem. There’s just not much to crowd out.

Doing this – basically Keynesianism – requires an understanding that the money borrowed now equals future obligations to be collected through the tax system. That’s where Keynesianism breaks down for people – and why I argue it’s never actually been done – Keynes said that spending to stimulate the economy in bad times was important – but he also highlighted that you need to use the surpluses in boom times to retire that debt or save for the next bust. That doesn’t happen. Surpluses in Canada were used to give tax cuts to people (with little stimulative effect) instead of to retire the national debt back before the last big crash. Then the government made some big stimulus investments and leveled the economy out, but ran massive deficits that are harder to recoup because raising taxes is a lot less easy to do.

If we actually had an informed citizenry, this might be something that could be debated, discussed, shaped into something resembling a plan that most reasonable people could support. Then, if the US had a legislature that actually cared about doing its job rather than just trying to jockey for position in the next election (again, not likely), maybe they could actually work together to craft a solution and push it through. I’m pretty sure what the vaunted but oft-misquoted or misrepresented Founding Fathers were going for looked a lot more like that than that blind partisanship to the detriment of the national interest that pervades ow.

Unfortunately, I’m too cynical to believe that’s actually possible. I know that Joe Redneck Sixpack will not be swayed from his moronic talking points, because thinking for himself requires an effort he’s not prepared to make. I know that the media won’t be able to sway people either. And I know that most people just won’t put the thought it takes to write something like this into choosing which box to put the X in or what lever to pull or however it is you folks decide elections, so we’re stuck with a system that’s horribly broken. Or are we?