HMThurman

Economics and Why Things Aren't Working For The 90%

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Economics and Global Warming

By

On November 21, 2019

In Economics

Economics and planet destruction

Okay, picture this; you come home to find a perfect stranger1 in your kitchen making something in your kitchen. You are about to throw him out except you notice that he fixed your coffee maker and while hands you two perfectly toasted Pop tarts he starts talking to you about how you were the only person on the block who had the “right ingredients” and the both of you can make some money. You sit down and start in on the pumpkin spice Pop tarts, suddenly entranced by the idea of improving your lot in life when your new friend opens the door to your apartment and lets in another guy2  that you don’t know. Again you start to object until you notice that he pays your trespasser $100.00, licks his lips and picks up what looks like a small statue of Kim Kardashian3 from the neck down. You watch this until your new friend gives you half of the hundred and introduces himself as Larry. “It’s edible”, he explains, “I can make 3 kinds, Kimmy, Seth and The Bulldog.” His eyes bulge out strangely as he talks about making the bulldog and the special tools that are needed for that one. Larry continues, “Look, your job would be to keep me supplied, okay? It’s largely caramel, marshmallow and raisins, a few other things but in smaller amounts4, sound good? Oh, and I can make four to six a day, kinda depends on how the market is.” You agree to this arrangement figuring with a few rules attached but after a week or so of nearly constant visitors picking up their Seth’s, Kimmy’s and even a few Bulldogs, you are sold on the wisdom of your partnership. Your job as supplier is fairly easy at first, you run to the big box stores and the cheap supermarkets but after a few months it becomes harder to get what you need in your town. The demand is still there, though and you find yourself scoping out the kitchens of relatives, breaking into the town daycare and the retirement home hoping to find some supplies.

You are now a capitalist. Do you care if an edible Seth is destroying the rainforest6 or if the last Bulldog was teeming with listeria? No, you do not. You’re thinking about hiring at least 2 more Larry’s at a low rate of pay so that you can maximize your profit. The product won’t be nearly as good when it’s done by Larry but the demand is there and a new car would be nice. And why the fuck is Larry taking those 45 minutes lunch breaks anyway? Half an hour would be more efficient, yes?

Economics tells us that a constant rate of growth is necessary but why is that, really? It’s for the same reason that our hero is helping to make lurid edible statues, profit. Constant growth is there to make certain that capitalist have an ever increasing rate of profit and if they have an ever increasing rate of profit then they will be lured into making things that we all want. The assumptions in this are many. That nothing would ever be made without the lure of constantly increasing profit that might promise the capitalist that he will become mind bogglingly wealthy instead of just filthy rich.   Our society tells them and us that their greed is the only concern that we should have aside that “growth” and greed is good and necessary. Does the future of global warming seem to you like it’s worth continuing a system that has given you 80 different kinds of bottle water? We have traded our fairly hospitable planet for 80 different brands of water in plastic water bottles and we need to think deeply about the process that has brought this on.

1 Yeah, I know about no one being perfect but frankly the people who say that haven’t seen Larry’s Bulldog have they?

2 A surprisingly well dressed douche-baggy type who made intermittent chuffing noises while gathering up his Kimmy.

3 Okay, so he her behind was a bit exaggerated but I only heard one person ever complain and what Larry did to him is best not put into print.

4 The Bulldog required a small piece of fudge and .025 mcg of promethium. Larry giggles while he makes it.

5 Don’t ask what part the raisins were used for. Just, don’t.

6  Palm oil is a ubiquitous ingredient in all kinds of cheap stuff in the store and is largely responsible for the destruction of the rainforest in Indonesia and other countries near the equator.

UBI and The Dangling Carrot

By

On September 24, 2019

In Economics

What is this wonderful thing?

UBI stands for universal basic income. This describes an amount of money that is given to everyone without an expectation of work or anything else. You don’t even have to tell your boss that he looks like a moron in his emo jeans, you just get the money every month.

Andrew Yang currently promising everyone a thousand dollars a month if he gets elected and many people are happy to get in line for it, so  what could be the problem? Who in their right mind could have a doubt that this is a great idea?

Q: Is your problem with it that he’s a billionaire?

A: Yep.

Q: So, you think, (you suspicious person, you) that maybe he’s planning on giving away a ton of the governments money for some reason other than he’s just an incredibly nice empathetic guy?

A: Uh…yeah, you got it.

There are several reasons why  you should question this potential windfall that is being promised, too.

Question The Question or OMG That Robot Has My Job

I know this unhappy scenario has been sold to us like it has already happened but it has not. Whether you think that it will happen depends on who you ask. It is easy to look around the internet and find articles that will tell you that all is lost and the other side points out that in the past we have actually gained jobs after technology advancements. I am not moved greatly by either argument because frankly it kinda depends.

Q: Whaddya mean depends? The robots are coming and you know it. Who cares what happens?

A:Well, there are learned sources that have data proving that technology creates jobs rather destroys them but this is not true for all sectors, of course.

Q: Yeah, whatever, how can you trust those people who look at data. I’m pretty sure that Forbes guy is a scientist, right?

A: You do know that there is a person that is deciding whether you have a job in the future or not, right?

This is the real question, kind people, do you want to live in a society that decides you are suddenly not worth a job because a robot can work 24 hours a day with potty breaks? Is it okay that don’t even have a say in it? There are many things in economics that are explained like the weather. It is inevitable and will happen whether you like it or not. You should wonder why this is because you do have other options. This brings us to the second question.

Question The Reason

Most recently, UBI was pushed by Milton Friedman in the 1970’s. This was like many of the supposed UBI”s meant for only those who needed it  and was intended to completely do away with all other social safety nets. The devil is in these details. Is the money for everyone or just those who are poor? Will the amount be adjusted for inflation? If human beings enjoy being productive then why are we paying them to sit at home? Why aren’t we putting those people who can work, in a good job instead?

Guy: Well, if you don’t give me a thousand dollars or a decent job then maybe, just maybe I’m looking at some Oligarch chow mein with guillotine sauce for dinner.

Oligarch: Now, you got it. All that super productivity that has made me rich is well worth the thousand dollars. Here’s your pittance and I’ll throw in S’mores covered bacon* just this one time, ‘cos you’re such a swell guy.

What happened that last time that we had a slew of people that were jobless and starving? That’s right, they got together and in roughly 1930 and put pressure on FDR to do something. FDR was forced to create most of the social safety nets that we have today because he was facing a large and angry population. These people understood that our system will slide back to a few with a whole a lot and tons of people with too little, it always has. FDR “saved capitalism” by placating the populace with these safety nets.

Do we really want these large tragedies and small victories to go on forever?

Conclusion

UBI can be a wonderful thing for many people. It can give the homeless homes, pay the rent for the unemployed  and generally be a source of income for those that need it. Caring for others in our society is good for us, them and the economy. My only caution is look at he big picture and see whether you are supporting an economy that you want for everyone in the future and not just one that seems to be convenient for you at the moment.

Part 2

By

On September 5, 2019

In Economics

Don’t worry about the deficit—Part 2

Then why are they always saying it

The short answer is that it gets them what they want. When they come back to you with, “How are we going to pay for this?” Have you seen our deficit?” They use this particular gem to explain why someone’s hard working mom, dad, or uncle can’t have universal healthcare, decent social security payment or worse yet have their student debt paid off. This tactic has been used many times, usually accompanied by wide eyes and disturbingly curled lips. I have only seen this expression on politicians describing the “evils” of a deficit and on the faces of high schoolers studying flesh-eating bacteria for the first time. It is a fairly effective technique to get everyone behind the “belt-tightening” that will only be applied to social programs.

Go back a few decades (yes, get in your time machine and we’ll wait) and you will be able to hear neoliberals from the Reagan era start the call of, “If you make this large and immoral debt, then your children will receive an enormous bill in the future and they don’t deserve this!” No one has ever gotten a bill, of course, because this is simply theatre, folks.

In the neoliberal fantasy world, this is what would have been sent to you:

Dear Taxpayer

We’re so sorry that it has taken us 40 years to get this to you and quite honestly you can just give it to the youngest person in your household.  We have warned repeatedly about the evils of letting us spend money that we claim to not have and now this has really, actually, happened.**

This is only a token bill but, frankly, if you decide that you want something in the future ,  like,  say,  parental leave or food stamps, then really, we’re gonna  come by your house and collect.*

Thank you so much for your cooperation,

The Management

Milton L. Weasel
               
               
  <New Nited States of Amurika >       INVOICE : 1456823  
  <1600 Pennsylvania Ave NW, Washington, DC 20500>        
  <(202) 456-1111 >        
            DATE-The Future  
               
            INVOICE NO. 2144656667  
               
             
        *Payment terms (due on receipt, due in 365 days (sorta)>  
  BILL TO   SHIP TO      
  <Mr. Nameless Rabble >   <USA >  
  <ACME Corp. >   <TheFED >  
  <999 Jekyl Lane Leadwater MI 30953 >   Downdaroad >  
  <771-653-1123 >   <800-323-3232>  
  <Aftermecomesthe@deluge.com >          
           
               
  DESCRIPTION QTY UNIT PRICE TOTAL  
  Stuff before & Carter     50000.00  
  Reagan     50000.00  
  The first Bush     700.00  
  Clinton and Obama     288,000.00  
  The second Bush     5,234,122.03  
  Guilt payment for letting us spend so much     1200.00  
  Just in case you want anything in the future     899,100.00  
    Remarks / Payment Instructions:     SUBTOTAL 6,523,122.03  
          DISCOUNT 0.00  
          SUBTOTAL LESS DIS-COUNT 0.00  
          TAX RATE 0.00%  
          TOTAL TAX 0.00  
          SHIPPING/HANDLING 0.00  
        Balance Due $ 6,523,122.03  
       
               

*Please see note on invoice

**This threat only applies to social programs. Any debt incurred for the purposes of war (you know, we call it “defense”) or other stuff like bailing out the people who caused the last major recession doesn’t count. Don’t worry about it, we don’t.

Thanks again.

Do you see a trend? Yeppers, tons of deficit type stuff that averaged 2.9 % of our happy GDP.

Conclusion

If this were a concern then you would see a very different graph. MMT tells us that this is not the end of the world as we have been told that it is, but I will get into MMT at a later date. Suffice it to say that we have carried deficits for a very long time (with one little blip in the middle) and it has not brought about the end of the world or a bill from the feds saying that your kids owe a dime.

Why You Shouldn’t Worry About the Deficit – Part 1

By

On August 15, 2019

In Economics

Don’t worry about the deficit—Part 1

Rarely am I so motivated to put fingers to keyboard and respond to those who would have us worry about the country owing money and the mindless refrain of, “Who’s going to pay for it?”

I addressed this one with the healthcare, I know, but it keeps coming up, like an ecoli laden burger, choking YouTube, the mainstream media and whatever else is being used for economic propaganda these days.

The evil tale goes something like this: Your country is just like your household. You need to balance your budget, right? You can take on a little debt but pay it off soon otherwise you’ll be deluged with interest, right? Sure we put in a few nice things for you like unemployment insurance and social security but look at the debt we owe, how can we keep this up, right?

At this point the speaker will start eyeing social security (possible UI, too) and start making arguments about how we just can’t afford it anymore, right? But, hey, maybe we could save it and privatize it? You get the picture.

This story is appealing to a lot of people because they understand it from their own life. Debt will hurt a household if you let it accumulate but the same is not true of a country. There are some important differences such as, you cannot tax the people in your household and you cannot print money.

You cannot print money

If you could then the question of, “Who is paying for Lamborghini?” is moot, my friends. Print up the pile of money, visit the dealership and miracle of miracles, they take your “money” and you drive off the lot doing 80 in second gear.

Ah, but you say, if the country could do that then why do we collect taxes? Well, there are few views on that, taxes are there to lower consumption or it creates demand for the currency.

As far as that first one goes, is there some reason why we would want to lower the consumption of a populace that is barely making ends meet with their real wages frozen for several decades? Nope. Although I do think that the Trump tax cut did a pretty good job of doing just that.

The second explanation makes more sense than the first. You absolutely need our beautiful dollars to pay your taxes but taxes are not used to pay for your government in any kind of balance-the-books kind of way.

You cannot tax your household        

You could try, of course; if you had six kids and each one of them had six kids and you throw on a modestly progressive tax rate of say, 30%, that would start to add up nicely and you wouldn’t have to worry about the secret service knocking on the door. Sadly for you, the kids can just refuse and not show up at thanksgiving.

End of Part 1

What is Neoliberalism

By

On August 2, 2019

In Economics

Milton Friedman–A famous neoliberal as a Least Weasel

The Basics: It is an economics term, not a political one. You cannot tell if someone is a neoliberal by whether they listen to Thom Hartmann or not. In other words, it is not referring to a liberal person politically.

So, really, what is neoliberalism? What is this thing that has taken over our normally happy, Game of Thrones Oreo eating lives?

The liberal part of neoliberal refers to someone who wants the economy run on personal freedom. Ostensibly, the economy would not be run by organizations but by individuals. In addition, they want laissez-faire** economic policies and a free market. Generally, this would be a person that would describe themselves as a libertarian.

A libertarian believes in a hands-off approach to the economy. In their world, the people will have freedom and the market will take care of itself. A neoliberal has all the bad of the libertarian along with more bad. Neoliberals will bail out companies that bring about a recession (remember 2008), do not flinch at the thought of doing the revolving door dance with government and endorse fiscal austerity (think of Greece). Free trade, deregulation, privatization and choosing winners or losers in the economy are all their bag, baby.

It is a libertarian with complexity and guile.

A libertarian world would look something like this:

Libertarian: You won’t pay taxes and you’ll have more money.

Citizen: Okay, but can I leave my driveway to go to work now?

Libertarian: Sure, you can, just hand over the $23.61 toll to use the private road I built. Isn’t life without taxes great!

A neoliberal world looks like our world, like this:

Neoliberal: Your real wages* have been frozen for 40 years and worker productivity has never been higher. We’re not gonna give you universal healthcare or repair the infrastructure and we’re not sorry for that little 2008 problem that we caused….kaaayyyy?

Citizen: Yeah, what’s with you guys, you suck, and weren’t you discredited way back before the internet or FDR or running water?

Neoliberal: Hey, did ya know everything can be solved by being an entrepreneur? If you got an Uber job in this fabulous gig economy then you could start making money on your own time, when ever you want. You would be your own boss.

Translation of the neoliberal speak: Low wages, long hours, no healthcare and more taxes to pay as an independent contractor.

Why You Should Care: You should care because you have been massively productive, not gotten a share of what you have produced for a very long time and, adding insult to injury, you’ve lied to about what is really going on. Example (yes, I love examples): The financial sector got bailed our with bags and bags of your money and you got kicked to the corner.

*Real Wages   –These are wages adjusted for inflation

** Laissez-Faire —This refers to an economic system that allows everyone to do as they please. Transactions between individuals free from any kind of intervention like regulations. If you didn’t like those fruit pies I sold you yesterday (only 10% sawdust and 1% listeria) then your only recourse is not buy them again (if you recover).  

The Trump Tax Cut – Impressively Bad for Most

By

On July 15, 2019

In Taxes

Rabbit Trump

THE PROBLEM: We were given a tax cut that was supposed to be for the middle class.

WHY YOU SHOULD CARE: Because this just made it tougher for most people to make ends meet at the end of the month (or year).

Yeah, this thing has been around a little while and we’ve had a couple of months to think about it, but honestly, who of us can say what was going on in someone’s mind when they put this thing together. Roughly 14 years in the tax biz did not prepare me for the sight of a 1040 form the size of a postcard (in truth, it is a very large postcard that looks very much like it should be used for a direct mailing scheme and say, “Your Logo Here”). If it did nothing else, it at least gave the impression that we should saving lots of money…because, hey, there’s just nothing to here to fill in and pay, right?

Appearance are sometimes deceiving, my friends. Along with this little postcard (that still takes up two pages, sadly) there are numerous schedules (6 actually) to fill in. But, wait, there’s more. Do you remember all of those wonderous things that you could deduct from your income or tax amount, well most of them have disappeared into the same void that the bottom part of the 1040 went into. A few things have gone up, mind you, like the standard deduction, but this did not seem like quite enough to make up for all the other goodies that are now in the trash heap.

My plan for getting a handle on whether this is good or bad is to fill out the 1040 from 2017 and the 1040 for the same family and see what the difference would be. Will they suffer from not being able to take the personal exemption or will everything come out okay with increased standard deduction? It seemed likely, but it is a bit hard to tell when, apparently, your 1040 form for 2018 was put together by extracting the readable bits of tax code from the hind end of a lactose intolerant baboon after he was fed a trenta sized Cap’n Crunch Milkshake**. 

This is what 2017 would have looked like:

2017 1040 page 1

2017 1040 page 2

This is what 2018 looked like for the same family with the same information:

2018 1040 page 1

2018 1040 page 2

Conclusion: I’m not seeing where this tax cut is actually a benefit. The tax for this family went up and the refund went down. I think this lack of benefit would have been more obvious if I had this family taking any of adjustments or deductions that were taken away, but I tried to avoid doing that to keep it simple and relatively unbiased. Having said that, they still didn’t do so well for 2018.

Some of the major points

  • Although they had an enormous refund for 2017 that was largely due to the lowering of what was withheld in 2018. ***
  • No personal exemption.
  • No moving expenses (except for military).
  • No more deducting of alimony payments, union dues or home office.
  • But, get this, the Estate Tax exemption doubles. Don’t bother taking a cup of coffee over to your new neighbor with the extra huge McMansion to commiserate, because this little gift to the upper 1% will only apply to estates over $11.4 million.

**This is a real thing. If you have tasted this tender morsel, please leave me a comment to let me know how you survived it what you thought of it.

***You can look this kind of thing up in Pub 15 (also known as Circular E)

Why we can’t have nice things—–Healthcare

By

On June 5, 2019

In Economics

Why we can’t have nice things—-National Healthcare

THE PROBLEM: The United States has no Universal Health Care plan.

WHY YOU SHOULD CARE: You spend way too much money on health insurance (if you can get it) and get really lousy healthcare in return.

Why are we so rich and yet don’t have national healthcare? I’m certain that you’ve heard a lot of answers to this one. These are just a few:

  • It costs too much and will raise taxes.
  • We just aren’t homogenous enough.
  • Americans love paying lots of money for stuff, it’s just the way we do things.

Although many of these have puzzled me for a long time, I have to say that the one about homogeneity makes an ugly blue vein in my forehead pop out just a bit. What kind of magic happens when people are the same color is something I have yet to see but I’ll get into this one on another occasion.

Today I want to talk about the issue of national healthcare being some kind of enormous expense that we cannot possibly deal with despite many other countries not having this unsurmountable problem. Is there something about being a hugely rich country that requires health care bankruptcies? I can’t see that it is.

ISSUE #1: OMG! It will cost too much!!!

Well, folks, we already spend per capita twice as much on health care than the most expensive European system. “Per capita” is referring to per person (FYI) so this has nothing to do with the size of our country (this is frequently used as another flimsy excuse for lack of decent healthcare). With the national system we will pay half or less than half what we pay now, but that amount will be paid through taxes instead of an insurance company. Here’s skinny on how much we spend:[1]

Now, you might say, “Hey, but this is only because we have such great health care and it really is worth it to spend more money to get that machine in the emergency room that goes ping and lights up randomly.” You might say that but, there is ample proof that the quality of healthcare sucks, at least in comparison to the price.

Q: How could we possibly spend only half?!?!

First, take a close look next time that company A buys company B. What happens shortly after the dust settles on the event you will see quite a few employees jettisoned. Why does this happen? Simple, each company now has duplicate paper pushers, and widget cleaners. The same thing will happen when the 5,977 (2016) insurance companies [2](in the US) are boiled down to one. In more technical terms this is saving us on overhead.  

Second, with the power of the whole of the whole country behind one huge health insurance organization, our bargaining power would also be huge. Canada has notoriously low prices for drugs compared to the US because they can negotiate for the entire country. Imagine having the ability to tell big pharma that they cannot quadruple the cost of insulin because you will take your 327.2 million[3] people (2018) and buy your insulin elsewhere.

Conclusion: Asking how we as a country are going to pay for something that costs us less is a sad attempt at manipulation. Trying to get your average citizen to focus on what they will be paying more in taxes and not that they will be paying less in insurance payments is disingenuous at best.  The real reason that we don’t have national health care is the enormous profit to be made off of most of the American public.

Per Capita: for each person; in relation to people taken individually.

 Overhead: These are business expenses that support the business but don’t produce revenue. Examples: salaries, utilities and office supplies.

[1]https://en.wikipedia.org/wiki/List_of_countries_by_total_health_expenditure_per_capita#/media/File:Health_care_cost_rise.svg

[2] https://www.insurancebusinessmag.com/us/news/breaking-news/these-are-the-top-25-propertycasualty-insurance-companies-in-the-us-32630.aspx

[3] Data from U.S. Census Bureau –Last updated: Feb 14, 2019

What Do You Want?

By

On October 1, 0001

In Economics

What do you want? What do we want?

I don’t just mean for dessert or whether your considering the unicorn  onesie or the cat in the hat onesie.*

What do you want your county or city or neighborhood to do with it’s resources? This is a question you’re asked a lot but rarely seriously but you and I do not know where we are going or where we might go unless you answer it for yourself.

The purpose of economics is to tell us how resources or goods should be disseminated. Not long ago this was determined by the lord of the manor (who took part of crops) or the chief, perhaps. If you were fortunate enough to be a pirate (yeah, you heard me) then the spoils were handed out equally. Pirates had more democracy than we do, believe it or not.

Do you see your resources going to feed the hungry, putting a space colony on mars or or possible saving your children from having to wear cooling suits for most of their lives? Maybe you have always dreamed of building a monster truck area the size of the Pentagon?**

Okay, now think hard about that. Have we done it?

Are we working towards it?

Is it a glimmer in the eye of anyone capable of doing it?

I think that most  of us would say no, to this question. No single payer healthcare, no infrastructure kept up, no affordable housing, lots of debt, lousy retirement plans***, etc.

The guy who only wanted eggnog Oreos, though, I’m certain his dream will come true soon.

The hard working person who dreams of having the bridge on his commute fixed so that he doesn’t meet up with a watery death on his 43rd birthday will say, “No”.

There are two reasons for this: neoliberalism and our complacency.

Under the not so gentle fist of neoliberalism we are at the mercy of THE MARKET. So, the market and not you, me or the eggnog Oreo guy or even the bunch over there that are holding hands singing Kumbaya determines what we do with our planet and our money.

Yes, you heard me right, our planet. Somewhere the decision was made that most of what is on our planet should go into the hands of people with lots of money. You get to send a penis shaped rocket and a car into orbit while the rest of pay our bills with charity because The Market SEZ: “Those with the most money have the most.”

There are not just many of us that think this is normal but that this is the way it should be but if the planet belongs to all of us and all of us put in a hard day’s work why is this okay?

*Okay, I have an opinion: Choose the cat in the hat and be thing 2. It’s the best choice and you know it

** This may be the only good use for it after global warming kicks in.

*** You may consider yourself lucky if you have any retirement plan at all, however, in the olden days (pre-1990’s roughly) actual pensions were much more common than the 401K’s and other plans that we have now. The current plans are tied to the market and that is not a good thing. Just imagine getting ready to retire at about late 2008. Nope, put those plans for your, “Get Fat On Deck” cruise away for another 40 years ‘cos you are not going any where, the financial sector just took your retirement.

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