Category: 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.

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.

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