Category Archives: Economy

Why Can’t Texas Cash in on the Marijuana Bonanza?

April 18, 2013

I rail against my native state Texas for the wellspring of stupid politicians we have been seeing over the last few years but the state does have some economic benefits for its citizens. So why can’t they see the financial gold mine that other states are beginning to realize by legalizing pot?

In a depressed economy where politicians are unwilling to raise taxes to pay for vital social services and equally vital infrastructure, you would think they could get beyond outdated taboos and unreasonable fears to find the necessary resources to sustain such services. There’s a natural product out there that’s been around for centuries that suffers from this stigma. One that not only has medicinal benefits to it but when properly regulated could reduce crime and prison populations while generating revenue to put people back to work in construction and the essential public services of education, law enforcement and firefighting services.

Marijuana has long been the victim of social biases that prevents its entry into the market place along the lines that alcohol and tobacco have. The alleged “evils” of marijuana have always overshadowed its economic value. The hemp cultivated from the Cannabis plant has the ability to produce seed foods, hemp oil, wax, resin, rope, cloth, pulp, and fuel.

movie poster for “Devil’s Harvest”, a 1942 film about an investigator who goes after the people who are corrupting the nation’s youth by spreading the weed of Satan–MARIJUANA!!!

There are, like any controversy, pros and cons to marijuana’s use as a euphoric substance. But before we tackle the facts and myths about marijuana lets come to terms with two arguments that hang over the use of any drug.

The Social Stigma of Marijuana

Any mind-altering chemical can impair judgement where some choices under the influence could jeopardize your health and well-being. But if the effects of the buzz that marijuana gives you was the only reason to prevent legalizing it, then alcohol and caffeine would have to be banned as well as other controlled substances (and some not so controlled) that currently make million$ for chemical and pharmaceutical companies.

There’s also the point of view that getting high in any fashion seems unnatural and thus unnecessary. Only weak-minded people want to get high, or so the argument goes. Yet natural states of high are built into our physiological system so that argument has little merit. Socially acceptable highs that don’t consist of controlled substances are the high we get from sugar and food. Getting “high on Jesus” or the high we get from winning a competitive sporting event are responses that many promote, not condemn.

There will be a propensity to induce this natural high, even by artificial means, to reduce the ill-effects of stress in today’s world where depression is reaching epidemic proportions. Alleviating excessive stress is necessary for sound health but not everyone can attain a state of nirvana through exercise and yoga therapies, not to mention the time it takes to achieve these states by using such tactics. Life styles that develop and sustain healthy diets, exercise, 7-8 hours of sleep and are filled with healthy doses of sex and genuine love for other humans, usually avoids the need for getting high from manufactured sources. But finding such ideal conditions in today’s fast-paced world has become more a thing of the past.

I don’t dispute that natural processes have advantages that unnatural measures haven’t but I am only making the point that getting high is not an innate evil and avoiding it is not necessarily something that should be done at all costs. Making marijuana illegal is not going to stop anyone who wants to try it. It does increase the risk of providing a product that has unsafe levels of THC, not to mention other toxic elements that get picked up through the less than ideal conditions of growing, harvesting and handling it from producer to consumer.

Considering the Facts

So, considering these two overarching points let’s look at the myths and facts on marijuana put out by the Office of National Drug Control Policy (ONDCP), that governmental agency that currently supports what most assume is the general consensus of the American people.

Myth #1: Marijuana is harmless

This is a straw man that of course can easily be knocked down but is not a myth that anyone sensible would argue. Depending on where they got their marijuana, what one’s existing health conditions are and the frequency they use it, marijuana like anything else can be harmful. Drinking too much water can be fatal. Too much Jesus and too much Mohammad can and has been fatal since the days of the Crusades. Too much food or the wrong foods can be fatal. So suggesting that proponents of legalizing marijuana are claiming that the weed is harmless is simply a red herring that ignores the caveats that apply.

One of the claims the ONDCP makes here is that the health threat is greater based on “the fact that the marijuana available today is more potent than ever”. The potency currently is regulated by drug lords whose sole aim is to make it more addictive and thus more profitable. When licensed pot dealers who are regulated by U.S. inspectors meet standards that control potency, where this is a threat, it then becomes contained. But how big of a threat is this really?

The Drug Policy Alliance (DPA) notes that “Although marijuana potency may have increased somewhat in recent decades, claims about enormous increases in potency are vastly overstated and not supported by evidence. Nonetheless, potency is not related to risks of dependence or health impacts. According to the federal government’s own data, the average THC in domestically grown marijuana – which comprises the bulk of the US market – is less than 5 percent, a figure that has remained unchanged for nearly a decade.”

Myth #2: Marijuana is not addictive

I can personally vouch for this but again that doesn’t mean this applies in all instances. The government claims that “recent research shows that use of the drug can indeed lead to dependence. Some heavy users of marijuana develop withdrawal symptoms when they have not used the drug for a period of time.”

The key term is “heavy users”. According to the DPA “a federal Institute of Medicine study in 1999, fewer than 10 percent of those who try marijuana ever meet the clinical criteria for dependence, while 32 percent of tobacco users and 15 percent of alcohol users do.”

Perhaps the best argument that disputes the government’s claim about marijuana being addictive is that studies have found that addiction is not the result of some external substance. It’s a neurological disorder, making addiction a health problem. Ten kids can meet after school and smoke a joint but none will become addicts unless their brain isn’t wired properly to prevent this health defect.

In his book Clean, David Sheff takes an in-depth look into the causes of addiction. Though he finds that teens are especially prone to drug use and more likely to become addicted the earlier they start, any addiction that does occur “is almost always a symptom of another illness like PTSD, depression or obsessive disorder that likely doesn’t get treatment during any recovery program”.

Myth #3: Marijuana is not as harmful to your health as tobacco.

This would only be a fact if the average pot smoker toked as many joints a day as the average smoker. At the height of my smoking days I would consume two packages a day of cigarettes. During this same period I may have had inhaled a total joint in one week’s time. I know several people who smoked at least a reefer once or twice a day, everyday. I’m pretty sure that most smokers I was acquainted with smoked at a bare minimum 10 -15 cigarettes a day.

The ONDCP actually makes this case for me when they point out that “regular use of marijuana appears to be at least as damaging as regular use of tobacco”. These are their words, not mine. Notice they say regular use of marijuana, not the casual users or infrequent tokers. And then they fall short of any absolute by stating that this “appears” to be the case.

This entire argument should be pretty much dismissed because beyond the ONDCP’s claims based on a 1990 study entitled “Pulmonary complications of smoked substance abuse” and published by the Western Journal of Medicine, there is a more recent one from the University of Alabama at Birmingham and University of California at San Francisco, that finds “Occasional marijuana use does not appear to have long-term adverse effects on lung function. In fact they found that “cigarette smokers saw lung function worsen throughout the 20-year [study] period, but marijuana smokers did not. “

Myth #4: Marijuana makes you mellow.

Yes it does but it can also make you anxious and if you are prone to violence without ingesting marijuana, guess what? You’re going to be even more so at a heightened state induced by smoking the weed. Again, potency levels can be in play here but the research the ONDCP claims, regarding violence levels and marijuana use, doesn’t make us aware of what the behavior traits prior to smoking marijuana are of the “kids who use marijuana weekly” and who they found to be four times more likely to be violent than non-users.

“According to that study, incidences of physically attacking people, stealing, and destroying property increased in proportion to the number of days marijuana was smoked in the past year. Users were also twice as likely as nonusers to report they disobey at school and destroy their own things.” Was this a pattern of behavior prior to smoking weed and was weed the only drug being used here? What was the mental health state of these individuals? We don’t know any of this because the ONDCP fails to make such correlations.

Myth #5: Marijuana is used to treat cancer and other diseases.

This is another straw man created by anti-marijuana supporters and is mentioned in the ONDCP’s report. What supporters of medicinal marijuana claim is that it has been proven helpful for treating the symptoms of a variety of medical conditions. Big difference between implying that it directly “treats cancer” and treating “symptoms of cancer”. In its report the ONDCP does state “that THC, the primary active chemical in marijuana, can be useful for treating some medical problems. Synthetic THC is the main ingredient in Marinol®, an FDAapproved medication used to control nausea in cancer chemotherapy patients and to stimulate appetite in people with AIDS. Marinol, a legal and safe version of medical marijuana, has been available by prescription since 1985.”

It further claims that marijuana as a smoked product has never proven to be medically beneficial and sites a 1999 study from the Institute of Medicine (IOM) that “concluded that smoking marijuana is not recommended for any longterm medical use, and a subsequent IOM report declared, “marijuana is not a modern medicine.” Yet Several state legislatures appear to have found sufficient evidence that disputes this claim along with the testimonies of many cancer patients who smoke the rope to alleviate their pain symptoms. It also ignores the fact that Big Pharma gets a cut in the legal sale of Marinol® In those states that have legalized marijuana for medicinal purposes patients are allowed to grow their own and thus save the expense of a drug store purchase.

What really caught my eye is the ONDCP’s claim that “medicines are not approved in this country by popular vote. Before any drugs can be released for public use they must undergo rigorous clinical trials (emphasis mine) to demonstrate they are both safe and effective, and then be approved by the Food and Drug Administration. Our investment and confidence in medical science will be seriously undermined if we do not defend the proven process by which medicines are brought to market.”

The image of the FDA as one that looks out for the interests of American consumers has been seriously tainted over the last few decades. So-called “rigorous testing” is often nothing more than those tests that the companies themselves have done and submitted to the FDA for review. These tests are then signed off on by FDA officials who are under pressure from corporate friendly directors often appointed by conservative administrations. One WSJ report noted in the case of Menaflex, a new device to treat knee injuries, that “some senior FDA staff members complained in documents that the handling of Menaflex, made by ReGen Biologics Inc., shows how political and industry pressure can influence scientific conclusions.”

The deaths of some 60,000 people occurred when the FDA failed to do due diligence with the reports from Merck with their nonsteroidal anti-inflammatory drug,Vioxx, after it was discovered that they “were developed by the company’s marketing department, not its scientific department.”

So until the FDA can be shown to once again serve the public’s interests rather than pharmaceutical lobbyists, we needn’t feel intimidated by the ONDCP’s claims about “our investment and confidence in medical science” is being undermined regarding medical marijuana. For more on the FDA’s recent history for easy approval on pharmaceuticals read, The Problem with Fast-Tracking Drug Approvals: Pharmas Fail to Follow Up

Addendum, Ad nauseam

The remaining five myths posted on the ONDCP’s web page are equally filled with vagueness and misinformation or inadequate information. Comparing marijuana’s use to the Ecstasy drug is an irrelevant apples to oranges comparison. And if the main reason the government feels that someone’s marijuana use is hurting those other than users because of the “violent” nature of marijuana trafficking, then it only seems reasonable that we remove this problem by taking it away from unregulated drug lords.

Not only do we remove the violence but we control the conditions its grown under and processed for sale. The money we save decriminalizing it by removing it from court dockets and emptying prison space will be additionally enhanced by the tax revenue we garner from its legitimate sale. Then of course there is the additional jobs benefits this new business creates.

Underage kids are no more likely to get their hands on it as a legalized substance than they are in its current state. Even the ONDCP admits that “if kids want marijuana, they can find it. More than half (55 percent) of youths age 12 to 17 responding to the National Survey on Drug Use and Health in 2002 reported that marijuana would be easy to obtain. The survey indicated that most marijuana users got the drug from a friend, and that almost nine percent of youths who bought marijuana did so inside a school building.”

But here’s the clincher that ONDCP makes. “[N]early 17 percent of the young people surveyed said they had been approached by someone selling drugs in the past month. In the 2000 survey, more than a quarter of 12 to 17 yearolds (26.6 percent) reported that drugselling occurs frequently in their neighborhoods”.

It only seems logical that the need to “push” marijuana in locations where kids gather is because there are no legal outlets that can be monitored for underage sells. Strict regulation and monitoring of known suppliers in a legal environment diminishes, if not removes, this vulnerability to our nation’s youth.

Reality Check

Let’s be clear here though. Like any controlled substance there are hazards that can occur. Abuses in all aspects will prevent a scenario where those who shouldn’t have access to marijuana are unable to do so. Like smoking tobacco, drinking alcohol and eating unhealthy foods, parents and society have an obligation to provide accurate information and utilize all resources to educate our kids about marijuana smoking. Proper education is something we are always obligated to do despite any industry’s effort to circumvent such education to protect their profits.

Rather than using science to appeal to their intellects we will fail as we currently have to prevent inquisitive kids from trying something that society considers taboo. Taboo not for the right reasons but for the fairy tales we tell them that discredits our authority in their eyes once they discover that they won’t grow horns from its use. There’s nothing to prevent concerned citizens to diligently educate kids about marijuana as they do other drugs, especially alcohol, in a child’s formative years; in their homes, their schools, churches and youth clubs.

If a child or young adult then makes the choice to use pot, then clearly there are drivers there that not even attempts to banish its access will stop. Throwing them in jail may have a “scared straight” effect but it will also give them a criminal record that will follow them in their early attempts to seek gainful employment and could even associate them with a true criminal element that may carry on once they’re no longer incarcerated

Once we resolve to act like intelligent adults not motivated by irrational fears, then we can take control of a product that has too long been socially demeaned and its users relegated to a criminal icon. We remove the stigma and the legal costs that takes this thing out of the dark shadows and make it a profitable source of revenue that creates jobs and funds for the essential public services that the anti-marijuana crowd seem all to willing to cut taxes for.

Now if only these facts will penetrate the thick skulls of the ideologues and bible thumpers here in Texas we may solve our budget issues they created in the first place.

The Top Five Special Interest Groups Lobbying to Keep Marijuana Illegal

Wednesday, 02 May 2012 08:59

Posted by lbwoodgate in Economy, Social Discourse, Texas/Local stories Tags: Cannabis, Controlled substance, economic and social benefits to legalizing pot in Texas, Health, legalizing pot, Marijuana, Office of National Drug Control Policy, Social stigma, Texas

7 comments

The Sound of Heads Exploding

October 22, 2012

I awoke a little later this Sunday than I usually do, having a restless night and not falling asleep until close to 2am. By 7am though I was up and preparing my usual Sunday breakfast of two eggs, hash browns, one strip of bacon, two breakfast patties, an English muffin, a cup of coffee and a glass of juice. The patties however were a veggie product, though I did let the bacon grease drift over to them in the pan they shared.

After the morning’s feast was laid out on the table for consumption I opened my local Sunday newspaper and previewed the headlines before heading to the editorial page. The editorial column caught my eye but before I could get engrossed with what it had to say I began to hear dreadful noises that sounded much like watermelons splattering against brick walls. The sounds were faint but they seemed multitudinous and spread out all around me.

I went to the windows to see what I could but there was no visible signs that would clue me in to what was transpiring, so I went back to my breakfast and newspaper to finish what I had started. Then it dawned on me as the impact of what the editorial comments were conveying about the local Denton economy as to what that god-awful noise was. It surely was the heads of right-wing extremists exploding when they discovered that their fantasy world was coming unraveled. How? I’ll let the editorial comments draw that picture for you.

“Recent reports reflect a promising picture for Denton County’s economy.”

The comments go on to point out how there has been “significant gains from the first quarter of 2012 to the second quarter in sales [of real estate] as well as median and average prices.

In addition, the number of pre-owned homes on the market in Denton County has dropped 38 percent in the past 12 months.

Automotive sales are also up year over year, according to Freeman Auto Report.

[The City of] Denton’s unemployment rate dropped to 5 percent for September, down seven-tenths of a percentage point from August. In September 2011, the city’s unemployment rate was 6.3 percent.

In Denton County, the unemployment rate dropped to 5.6 percent, also down seven-tenths of a percentage point from the prior month. In September 2011, the county’s unemployment rate stood at 6.9 percent. SOURCE

Though not the economic news that would elicit such euphoria, the recent revelations of recovery are indeed something to celebrate rather than scorn

This indeed is good news for my local community but it appears that Denton is something of a microcosm of what’s going on around the nation.

For the first time in six years, the residential market is expected to add to U.S. economic growth in 2012. New home sales are up 28% from a year ago and new construction is running 35% higher.

The long-awaited recovery in the devastated real-estate market was a long time coming, but it finally looks like it’s here to stay. Barring another recession, most economists expect sales and construction to continue to rise steadily over the next few years SOURCE

Retail Sales beating forecasts support U.S. Growth. The 1.1 percent advance followed a revised 1.2 percent increase in August, the best back-to-back showing since late 2010, Commerce Department figures showed today in Washington. The median forecast of 77 economists surveyed by Bloomberg called for a 0.8 percent rise.

“This keeps the economic expansion moving forward,” said Dean Maki, New York-based chief U.S. economist at Barclays Plc. “Consumer spending is continuing to grow solidly.” SOURCE

The Franchise Business Index increased by 2.2 percent from September 2011 to September 2012, marking the industry’s best year-over-year gain since the Great Recession began in December 2007.

A drop in the unemployment rate, coupled with a slow but steady improvement in small-business credit conditions, contributed to the gains. SOURCE

Now this good news still doesn’t ignore the reality that unemployment is still at a traditional high and that wages and benefits for most American workers hasn’t realized significant growth over the last few decades but it is indicative that things are turning around from the nightmarish times of late 2008 and early 2009. As we all know the economy was tanking and government bailouts with the financial sector and the auto industry had to be implemented to prevent a death spiral that would have taken us to the depths of the Great Depression that we saw in the early 1930’s.

But based on the ominous uttering from many right-wing contributors whose letters on this editorial page asserted that we were headed for even worse conditions and that another four years of an Obama administration would take us over the edge completely makes these positive economic revelations a true cause to celebrate rather than to fret our lives away.

To be clear, those doom and gloom types assured us that unless we removed Obama from office and inserted the glossed over promises of trickle down economics that is being touted by the Romney/Ryan camp, we would, in the words of one letter writer, miss our “last chance to remain free, to save our country and ourselves.” Today’s economic positive news flies in the face of another assertion by a writer who shares the views of many who oppose Obama, saying that “A vote for Obama is a vote to continue down the road to ruin.” If this “road to ruin” continues, by the end of a second Obama presidency we may well be out of the Great Recession that we found ourselves in at the end of George Bush’s terms as president.

One can only hope that maybe these prophets of woe and misery will now see that their fears were unfounded after all. I mean, how can you refute this logic in light of this economic good news for Denton, a model that likely serves as a microcosm for most other cities in the U.S., even Paul Ryan’s hometown of Janesville, Wisconsin that has seen a drop in unemployment from 13.9% in Aug 2009 to only 8.6% in Aug this year.

Oh wait. I forget these people live in another world detached from reality. These positive numbers will likely be turned on their heads and will be declared, as were the recent job numbers and polls showing Obama ahead in the presidential race, as something being twisted by the “liberal media” and the gubermint of that Islamic socialist, Barack Hussein Obama

Obama to Romney: “Those 12 million Jobs you’re claiming will happen without you.”

Posted by lbwoodgate in Economy Tags: Denton County Texas, Denton local economy, doom and gloom economic prophecies, housing starts and retails sales are up, Obama, u.s. economy improving

12 comments

Unable to See the Forest For the Trees

January 17, 2012

It is a failure that has serious consequences for us all as those within the ranks of the 99% continue to support the wealthiest 1% for the wrong reason

In a video from Bill Moyers’ new show, Moyers & Company there is a segment where members of his team are interviewing people at the Zuccotti Park’s Occupy Wall Street movement in lower Manhattan. I was captivated by the presence and comments of a Wall Street-type investment banker from Florida named Stephen Hays. He clearly stuck out from the OWS crowd as he and a friend with him were dressed like the Wall Street bankers they were. He was having a conversation with a market executive from Oregon, Peter Craycroft. Craycroft was speaking optimistically about the Occupy Wall Street movement and particularly how the OWS encampment was a “perfect kind of forum for us all to come and talk about [our concerns]”

Hays was smirking as Craycroft explained how he had “seen many souls change” on both sides. “Really” Hays said dismissively, then proceeded to lecture his peer:

“I went through the Woodstock generation, Hays said, and I thought it was just back to business as usual. Just sort of … it was a big party. That’s what I see this as, (gesturing to the OWS crowd gathered around him) a party with no cover.”

Hays then turned his attention to the Moyer’s reporter:

“I’m a defender of money, freedom, individual freedom, rich people. Cause I’m still … even though I’m still trying to be one … because the more money I have, the more good I can do. And it will be my decision on how I allocate that good. How I allocate that capital.

And when I look around at all of these buildings, hospitals, colleges … I don’t see many poor peoples names. They’re all rich people.

Reverend Ike, a black minister use to preach up here in New York, and he used to say ‘if you curse the rich you’ll never be one’”

When challenged by a passerby who questioned whether rich people will actually allocate their resources in a manner that benefits society as they see fit, Hays circumvents the question by condescendingly pointing out that the guy questioning him has “a nice camera, nice clothes” alluding to the fact that it was the free-markets that made that possible. I just can’t be so pessimistic” Hays tells the man.

We hear that a lot from the supporters of rich people and money. The fact that many of the 99% can have cheaply made gadgets and other commodities totally misses the point that we are only able too because they were made in cheaper foreign labor markets. Labor markets that took many American jobs and have ultimately created the condition we are seeing today where wages in this country have to more closely reflect those cheaper wages abroad.

Where Peter Craycroft from Oregon saw opportunity to address the core issue with the OWS crowd regarding the growing income disparity in this country, his counterpart in investment banking, Stephen Hays, only saw a new generation of hippies threatening his income source as they “party” with no meaningful solution to the problem – “no cover” as he referred to it.

Stephen Hays had pre-conceived notions before coming down to Zuccotti Park. It seems pretty clear that he left with them completely intact.

To people like banker Hays the OWS crowd represents a direct threat to the iconic status of the career he has chosen. The belief in money, individual freedom and rich people that Hays defends seems to come across however as a defensive reaction that isn’t willing to accept the reality that this choice has some serious flaws. It isn’t easy for people to come to grips with the fact that their choices they have aspired to for years has lost some credibility. People who don’t share their views will automatically be seen as a threat. Demonizing this threat is an act to reinforce their own self-worth.

But there really isn’t any threat out there from the OWS crowd or anyone else for that matter who feels like large corporations should have some government oversight, contrary to what Stephen Hays thinks. The Occupy Wall Street movement is not an anti-capitalist, socialist movement as has been portrayed by Wall Street. It’s a reaction to the overwhelming evidence that Wall Street is occupying nearly every facet or our lives, the 99%. The American middle class is slowly disappearing while 1% of the nation’s income earners expands astronomically as this chart shows.

Left unchecked this rapid income-gap expansion could see this once great economy that people from all around the world wanted to emulate turn into something closer to those nations run by despotic oligarchies. Let’s put things in perspective so people like Stephen Hays can have a more realistic view of the problem we’re having in this country.

Sean F. Reardon and Kendra Bischoff of Stanford University put out a report entitled Growth in the Residential Segregation of Families by Income,1970-2009, that demonstrated how a severe income disparity can affect the character of the local areas where people currently live, going from once stable, middle income neighborhoods to more crime ridden, less sociable poorer ones. As people lose their jobs or suffer wage decreases they ultimately lose the ability to keep up with mortgages or buy homes homes that are in good neighborhoods.

What slowly tends to happen is that mixed neighborhoods where there is a blend of affluent and moderate income families begin to disappear creating greater segregation between the haves and have-nots. As this income segregation grows it may well lead to inequality in social outcomes.

Income segregation implies, by definition, that lower-income households will live in neighborhoods with lower average incomes than do higher-income households. A large body of research suggests that the neighborhood context one lives in can directly affect that person’s social, economic, or physical outcomes. This suggests that income segregation will lead to more unequal outcomes between low- and high-income households than their differences in income alone would predict because households are also influenced by the incomes of others in their community.

What this portends is that more and more children today are less likely to be upwardly mobile than their parents were. Current census data has shown that “a record number of Americans — nearly 1 in 2 — have fallen into poverty or are scraping by on earnings that classify them as low income … [depicting] a middle class that’s shrinking.”

Coupled with this is a report by the Organization for Economic Cooperation and Development (OECD) that shows a pattern here that could prove economically disastrous for this country as “the gap between rich and poor in O.E.C.D. countries has reached its highest level for over 30 years.” O.E.C.D. countries are not third world nations. They are some of the most prosperous nations in the world. Of the 22 nations rated, the U.S. has the 3rd highest rate of income disparity, trailing nations like Denmark, Luxembourg and our neighbor to the north, Canada.

Paul Krugman elaborates on these findings, explaining that “we actually have less intergenerational economic mobility than other advanced nations. That is, the chances that someone born into a low-income family will end up with high income, or vice versa, are significantly lower here than in Canada or Europe.”

And there’s every reason to believe that our low economic mobility has a lot to do with our high level of income inequality.

Last week Alan Krueger, chairman of the president’s Council of Economic Advisers, gave an important speech about income inequality, presenting a relationship he dubbed the “Great Gatsby Curve.” Highly unequal countries, he showed, have low mobility: the more unequal a society is, the greater the extent to which an individual’s economic status is determined by his or her parents’ status. And as Mr. Krueger pointed out, this relationship suggests that America in the year 2035 will have even less mobility than it has now, that it will be a place in which the economic prospects of children largely reflect the class into which they were born. SOURCE

So let’s return to Stephan Hays’ defense of wealth and his right to allocate his capital as he chooses. This is not simply about one’s “individual freedom”. It’s about a way of life that has developed over the last century where upward mobility has been a given. It resulted not because we waited for the wealth of a few to trickle down to everyone else but because their was an ethic within our government and society to provide for the general welfare. An ethic which saw that a decent living wage and basic health care coverage made good economic sense and enhanced growth. An ethic that provided good education for all its citizens and provided quality roads, schools and parks so that upward mobility would be possible.

Mr Hays was also wrong about how only the names of the rich people were on the all the buildings, hospitals and colleges. Yes, there are those private institutions whose wealthy benefactors have insisted that part of the deal for laying out the funding include plastering their name on the building. However, every public school, public library, county hospital and state university system are there through the taxes that we all pay for. Those along with every private institution are built not by rich people but the labor of hard working low and middle income people.

Most of that wealth generated to pay for that labor came from a prosperous middle class that could afford to buy the products and open savings accounts that ultimately provided investment funds to construct great depositories of business, medicine and education. Take that middle class away by reducing their income and it will be matter of about two decades where fewer such dwellings will be in place.

When everything becomes owned by the private sector then only people with enough money will be able to utilize their services, slowly eliminating more and people as that income for most of the 99% fails to keep pace with the 1%. The public commons will eventually exist no more.

Mr Hays should be grateful that this “new generation of hippies” is out their trying to save capitalism from itself so he can continue to aspire to be wealthy. Follow their lead Mr. Hays if for no other reason than you own survival is at stake. No one is “cursing the rich” because we don’t want to be like them. We merely want a livable income so we can prepare our kids and grandkids to take advantage of those opportunities that are all but disappearing from their grasp.

Inconvenient Income Inequality (Charles M. Blow, NY Times)

Posted by lbwoodgate in Corporate Influence, Economy, Financial Reform, Occupy Wall Street Protest Tags: Bill Moyer, concentrated wealth, haves and have-nots, income disparity in America, Occupy Wall Street, OWS, private versus public ownership, Wall Street

9 comments

The Hazards of Ideology When Critical Thinking is Removed: Part II

December 13, 2011

HOW WE GOT TO THIS POINT

In Part I I talked about those elements in free market thinking that puts job creation above other human needs and that those who take this tact use it for persuading voters to keep government “over reach” out of the free markets, a position that presumes that if left alone, an “invisible hand” of the market will create a level field and ultimately make life better for all of us

However the human element of greed has taken root in Capitalism and the vision that Adam Smith spoke to is now being exploited and allowing some to expand their wealth to the detriment of the rest of us. It has creeped into the very system of government that allowed the free markets to flourish and is changing our democracy to one of a plutocracy

“Yes, our regulatory agencies are incompetent. But they are incompetent by design.” –writer David Goldstein

During the Bush/Cheney years nearly every agency and department was staffed and chaired by people from the very industries they were supposed to monitor and check for abuses and excesses. Laws were watered down and in many cases overlooked to prevent what they felt was any undue hardship to corporate interests. One of the most glaring examples was failure of the Deepwater Horizon well in the Gulf last year. The short cuts and omissions by management helped create conditions that led to this human and environmental disaster but government oversight was lacking and perhaps led to this lax state of mind by the industry

Bush’s Mineral Management Service Agency Director (now called BOEMRE, the Bureau of Ocean Energy Management, Regulation and Enforcement), Johnnie Burton, and her boss at the Interior Department are but two examples.

In July, Republicans the House Government Reform Committee accused [Ms. Burton’s] agency of stonewalling their investigation. In September, they accused [her] of going too far in making concessions to oil companies. That same month, the Interior Department’s chief independent investigator declared that “short of crime, anything goes at the highest levels of the Department of the Interior.

Under President Bush, the Interior Department’s top ranks were filled with people with close ties to industry. Most prominent were Gale A. Norton, a strong advocate of domestic drilling who [eventually] stepped down as Interior secretary and subsequently joined Shell Oil, and G. Steven Griles, a former industry lobbyist who became deputy secretary and now faces a possible indictment on charges of lying about his dealings with the disgraced lobbyist Jack Abramoff.

In November [of 2006], Interior officials announced that a new task force of outside experts would evaluate the royalty program. Officials named David T. Deal, a longtime lawyer for the American Petroleum Institute, to head the panel.

“[Under Bush], there [w]as … a clear agenda to promote oil and gas development wherever and however they can,” said Erich Pica, a policy analyst at Friends of the Earth, an environmental policy group. “Time and again, you [saw] the administration and its political appointees side with the oil and gas companies.” SOURCE

The problem of corporate cronyism under Bush was so prevalent that the sentiment expressed in 2005 by former EPA toxicologist, Deborah Rice, pretty much sums it up – “They [the FDA] really consider the fish industry to be their clients, rather than the U.S. public.” But this sort of relationship started long before George W. Bush became our 43rd President and has existed to some degree in most administrations. Shortly after we became a nation, men like Thomas Jefferson were already concerned about corporations and their influence in government.

“I hope that we shall crush in its birth the aristocracy of our monied corporations, which dare already to challenge our government to a trial of strength, and bid defiance to the laws of our country.” Thomas Jefferson, 1816

Even James Madison, a favorite of the TeaParty crowd, saw the encroachment of corporate power as a threat to the new republic.

There is an evil which ought to be guarded against in the indefinite accumulation of property from the capacity of holding it in perpetuity by…corporations. The power of all corporations ought to be limited in this respect. The growing wealth acquired by them never fails to be a source of abuses. -President James Madison

The complicity of ardent, laissez faire free marketers to over look the flaws and deception by corporate interests has reached a level that simply defies logic. The belief that individual liberties always supersede the collective good has led many political leaders paid by corporate lobbyists to promote their concerns even in light of serious issues where better judgement would pause and reflect on the wisdom or the lack thereof to follow through with them.

Take for example the current stand taken by those on the right towards the EPA’s efforts to monitor CO2 emissions from coal-fired power plants. It has been proven beyond a reasonable doubt already that such sources of energy production create other toxic emissions like mercury and ash that have caused serious health issues with populations that live in close proximity to these facilities. CO2 buildup in the earth’s atmosphere is occurring at a faster rate than historical records have shown and yet corporate friendly congress men and women refuse to make provisions to keep in check such emissions from a source known to contribute heavily to this build up.

There are those within the industry that see the need to comply with efforts to keep our CO2 emissions at reduced rates to prevent their further impact on man-made global warming but the ardent laissez faire free marketers within that industry are spending millions to obstruct such efforts based purely on their ideological beliefs that it is not the government’s job to inhibit their production and thus their profits. Specious arguments are contrived by paid goons to dispel the threats of global warming by presenting arguments that have been aptly debunked by a consensus of climate scientists.

Critical thinking is abandoned by such strongly held views that refuse to look outside the box of their own thinking. It is one thing to hold to views that don’t require the use of tools at our disposal to attest to the veracity of such claims and another to ignore the body of evidence that reliably shows how the actions of “A” can lead to the consequences of “B”.

In religious views for example there are no measuring devices to better ascertain whether an unseen force uses evil to punish a wayward people as Jerry Falwell claimed on Pat Roberson’s 700 Club shortly following the terrorist attacks on 9/11, or the belief by many evangelicals that “God causes disasters and sometimes does so as punishment.” But we have the capabilities and tools to measure global warming’s impact on climate change through an array of measuring devices spread across the globe, on land, under the sea and in the air. Some skeptics, especially those paid by the fossil fuel industry, may refute or challenge the findings of these measurements but the countless empirical tests of numerous different hypotheses that have now built up a massive body of Earth science knowledge creates a consensus view that only a fool would deny.

” A real free market does not allow one person to damage another person with impunity.” — Michael Rozeff

It is equally dangerous to ignore the bigger picture where only one aspect dominates the thinking of authoritative figures over the total impact of a given decision. The outcry by ardent laissez faire free marketers regarding the delay of construction of the Keystone XL pipeline that will transfer oil from the Canadian tar sands in Alberta to the refineries in Texas is a case in point. They claim in this time of high unemployment that we should be doing everything we can to push for the types of jobs this pipeline will create.

It makes a good argument but overlooks the bigger picture we face for potential health and environmental hazards similar to what we suffered from not only the BP Gulf oil disaster but from the Exxon Valdez oil spill, BP’s TransAlaska pipeline, a million-gallon oil spill in Michigan, and a gas explosion that destroyed 37 homes and killed eight people in California. There are also the “14 other spills that have occurred from Keystone since the first phase opened in 2010”, says Vern Meier, the company’s vice president of U.S. pipeline operations.

“Much corporate environmentalism boils down to misleading statistics and hype.” –Business Week cover story investigating the impacts of corporate environmental initiatives

The environmental threats are worth noting, especially individual concerns that the pipeline’s path “would threaten the water for people in seven states and a third of irrigated groundwater for U.S. agriculture.” This could prove to be costly in the not-so-distant future for those municipalities in these areas, eating more into the already dwindling wages of most workers. There is also the very real possibility that constructing this pipeline as planned “will raise gasoline prices.”

I have not even mentioned the reality that this project extends our dependence on a source of fuel that directly impacts man-made global warming; warming that will melt the glaciers and arctic ice, raising sea levels that will devastate the world’s coastal cities and cover some nation islands. When these factors are included into the equation the long term health care and energy cost increases that will result are sure to outweigh the immediate need to create jobs today. When that time arrives will we have regretted our haste to achieve a short term goal that will leave our budgets even further strained had we thought things through more critically?

“The difference between what we are doing and what we are capable of doing would solve most of the world’s problems.” — Mahatma Gandhi

Job creation from sustaining the finite fossil fuel sources of energy today need to be weighed in terms that look beyond tomorrow. Increased costs for finding the more hidden remaining sources of oil and coal will not keep these sources cheap and their use will continue to create health issues as they also threaten our ecosystem, creating food and water shortages around the globe and opening us to the hazards of war to compete for these dwindling essentials

When such views hold that violent climatic changes are a sign from God and that immediate concerns should ignore long term consequences, you have to wonder if the thinking of the Dark Ages is not resurfacing.

The real owners of this country, the wealthy business interests … don’t want a population of citizens capable of critical thinking. They don’t want well-informed, well-educated people capable of critical thinking. That doesn’t help them. That’s against their interest. - George Carlin

RELATED ARTICLES:

What The Founding Fathers Thought About Corporations

30 Major U.S. Corporations Paid More to Lobby Congress Than Income Taxes, 2008-2010

The Hazards of Ideology When Critical Thinking is Removed: Part I

Posted by lbwoodgate in climate change, social security, aging, Corporate Influence, Economy Tags: Adam Smith, Aldous Huxley, Ayn Rand, Capitalism, change of direction, coal and oil, consumption economics, corporate special interests, crony capitalism, Deepwater Horizon, dirty energy, EPA, financial market collapse, financial markets, fossil fuel industries, Free market, Gale Norton, George W. Bush, global markets, James Madison, job growth, Laissez-faire, military-industrial complex, Milton Friedman, one-percenters, post world war II economy, rigid ideology, Tea Party politics, U. S. government, United States Department of the Interior, wealth of nations, wealthy interests

2 comments

The Hazards of Ideology When Critical Thinking is Removed: Part I

December 12, 2011

Because I’ve learned that blogging requires relatively short commentaries I have broken this post down into two parts to make its consumption more palatable. Both may be too lengthy for some but brevity is seldom my better suit. Thanks for your indulgence.

“Unless we change direction, we are likely to end up where we are headed. “ - Chinese proverb

We urgently need to generate job growth but not in energy fields where supplies are running out, costs to find, gather and protect those dwindling sources will only escalate and their use will have significant adverse impacts on personal health as well as the health of the eco-system we all depend on for clean air, water and adequate food supplies.

Do some jobs take more from us than they give?

A fable: A snake lover was taking a nature walk when he felt a sting on one ankle. As he looked down he saw a snake that was moving away from him. Because he was a lover of snakes and felt sure snakes only bit defensively when threatened, he didn’t think it was the snake that bit him but that a sticker weed in the high grass at the edge of the trail had caused the slight pain. Or so he convinced himself. He kept on walking but soon collapsed. The next day his corpse was found on the nature path by another hiker. The man’s body was taken to the medical examiner’s office who determined that the cause of death was due to toxic venom in his blood, most likely from a snake bite.

Today it seems like many on the far right are like that snake lover. The evidence abounds but contradicts what they have chosen to believe about things like global warming, industrial pollution and trickle down economics. Some of their views are relatively accurate but misdirected like the one that asserts we’re losing our personal freedoms as a result of government over reach when in fact government is being taken over by wealthy corporate interests to create policies and perceptions that too often disregard the rights of individuals. The belief by some that free markets are infallible is a misconception that could lead to the elimination of a strong middle class.

There is an ideological bloc in this country that preys on poorly informed people, especially those of a conservative stripe, that insists we must choose jobs over environmental threats, contaminated water, air and food, and lower wages without benefits. Their argument is less concerned about job creation than it is about protecting their own self-interests, which is always searching for ways to find greater profits.

Unemployment is a real-time crisis whereas environmental consequences appear to be something we can deal with down the road. What we actually don’t see or feel is less likely to influence us. Toxic air and water at low levels can go unnoticed for years whereas the immediate affects of no income from joblessness threatens individuals and families today. Without an income it is argued, all other things are impossible.

The perception conveyed here is that some ill effects from doing business will occur but the markets will prevent excesses or pushing things beyond the envelope that threaten the self-interests of capitalistic endeavors. How ironic that there is a fervent belief amongst many zealots of laissez faire capitalism that the markets will protect us while casting pejoratives on an “overreaching government” who some may claim will also watch out for the general welfare of its citizens. Both are designed and impacted by fallible humans yet somehow free marketers believe in an invisible hand of the market as if were controlled by an unseen omniscient and benevolent force.

“The propagandist’s purpose is to make one set of people forget that certain other sets of people are human.” -Aldous Huxley

The core values of capitalism is that entrepreneurship is the engine of economic success along with its corollaries that not all people are promised great fortunes and government intervention obstructs economic success. An element of truth exists here but adherents to Miltonian free markets and Ayn Rand lassiez faire economies circle the wagons around these concepts and defend them as if they were totally inflexible. Ascribing an inertia to them allows them to ignore the weakness of there claims and like the fundamentalist christian prophets who claim the Bible is the “inerrant word of God”, the capitalist credo is to be interpreted likewise as defined by the corporate prophets from that Libertarian mountaintop.

This sacrosanct view was pretty much turned on its head in 2008 as the housing mortgage bubble burst and large unregulated financial systems went belly up, requiring massive amounts of bailout funds from that government that was expected to keep it’s distance. This utter failure of the free markets stunned its supporters and as they wandered aimlessly amongst the wreckage that occurred under a White House and Congress that were mostly members of the same economic view as them, they were lost to explain what was a plain and simple fact – their views of an inerrant word had been a sham.

But like the Old testament prophets who helped the “chosen people of God” rise from their defeats, rather than admit that maybe they got it wrong about who they were and what they were there for, the calamities they incurred were instead seen as the result of a tainted faith, a following that did not adhere to the strictest precepts of the code that God allegedly laid down for them. They needed to re-do themselves and purify their beliefs, following every dot and tittle written down and castigate, ostracize and put to death any one of them that stepped outside these rigid expectations.

So from the ashes of the financial market meltdown comes the TeaParty phoenix from the small band of libertarians that have been around for decades but on the fringes, hollering out to everyone else about the purity of their views. This time the core constituencies in this country began to listen because the economic devastation was so massive beyond anything most of them had seen in their lives. The stereotypical spending Democrat and the pro-corporate Republican that always bestowed federal largesse upon special interests groups were the cause for our failures and need not be trusted. Caught up in the surface common sense of it all, many who wouldn’t know a libertarian from a lemming jumped on this initial grass-roots movement to go after a government that had failed us.

[Adam]Smith (father of capitalism) roundly mistrusted businessmen. … [H]e insisted that businessmen, for all they may talk of freedom and fairness, “generally have an interest to deceive and even oppress the public.” – Adam Smith: An Enlightened Life by Nicholas Phillipson.

But the surface message that packed so much power at first has faded with time as the devil in the details become apparent and the corruption of the movement exposed. Government wasn’t the direct cause of our ills. It was the capitulation of government to the whims of what Eisenhower referred to in his farewell address – the military-industrial complex – that small sector of our economic system that generated great wealth for this nation, especially for the few entrepreneurs who controlled large companies that during WWII put out the planes, ships and weaponry that overwhelmed and defeated the militaristic nations of Germany and Japan.

In this victory however we transplanted ourself as the military giant out of the initial need to secure the global threats out there to prevent a WWIII. But, now enters one of the flaws of unregulated free markets and its precept about profits. This behemoth that helped secure our freedom from foreign despots had developed a life of its own and needed to be continually fed. There was after all the need to provide jobs for returning vets who, when they first left, the economy was still struggling some to relieve itself from the Great Depression. But also, there was now a greater global need that the U.S. could serve to help those countries in Europe and Asia that had been devastated by the war, furnishing needed essentials to help them rebuild.

This noble and generous act however led to a pattern of behavior that was on-going and when the government began subsidizing private interests to take over this chore, a global market was developed, revolving around consumption. Not the type of minimal consumption to sustain oneself but the profit motive type of consumption that free marketers in Adam Smith’s day never envisioned. Wealth grew to a level that would have put to shame the richest aristocrats in early America.

“Capitalism has defeated communism. It is now well on its way to defeating democracy.” – David Korten

Every conceivable need or want that made our life even just a shade more simpler and happier became a growth industry and through skillful marketing techniques the free market euphoria amongst some developed a culture of consumers that came to believe that having everything we ever wanted was part of the pursuit of happiness our founding fathers alluded to in our primary documents that formed this nation. Little was thought of concerning the consequences of over consuming and the processes required to make the goods that we felt compelled to buy. America was a new and vast domain. The notion that there would never be enough resources to constantly supply us with the wherewithal to pursue this lifestyle indefinitely or the room to dispose of it all just simply never struck a chord with many.

In its early post war days this new found wealth in America’s economic growth benefitted most of it’s citizens but not simply by virtue of the jobs that were created. Through government policies and regulations to curb corporate excesses, a strong middle class was formed. This nation had learn from an earlier decadent period in the late 19th century where the wealth of a few had been derived by paying unlivable wages to laborers with no health care benefits and forcing most of them to often produce their products in unsafe and unhealthy environments. Capital was hoarded by a small elite and the ability of most hard working Americans to get a great education to advance themselves and own a home was an unrealistic goal for low and middle income families.

Tomorrow:

HOW WE GOT TO THIS POINT

The Hazards of Ideology When Critical Thinking is Removed: Part II

What The Founding Fathers Thought About Corporations

30 Major U.S. Corporations Paid More to Lobby Congress Than Income Taxes, 2008-2010

Posted by lbwoodgate in climate change, social security, aging, Economy, Jobs Tags: Adam Smith, Aldous Huxley, Ayn Rand, Capitalism, change of direction, coal and oil, consumption economics, corporate special interests, crony capitalism, dirty energy, EPA, financial market collapse, financial markets, fossil fuel industries, Free market, global markets, job growth, Laissez-faire, military-industrial complex, Milton Friedman, one-percenters, post world war II economy, rigid ideology, Tea Party politics, U. S. government, wealth of nations, wealthy interests

8 comments

Let’s Expand the Black Friday Concept

November 25, 2011

Instead of making this a once a year event that shows an ugly image of the crowd mentality and corporate efforts to squeeze workers to garner more profits, why not expand on this concept in a more humane fashion and create an economic boost to our sluggish economy?

Black Fridays have become known as those days when retailers open their stores extra early with discounted merchandise to entice consumers. This year, many retailers are pushing back there store hours to as early as midnight, Thanksgiving Day, to hopefully gain a few extra hours to increase sells opportunities. It is understandable why many use such a tactic to help them improve their profit margins that have suffered during a time when many people are forced to cut back on non-essential expenses. Profits are essential to keep businesses moving forward and provide jobs for working Americans. But are Black Fridays really needed to achieve this.

The biggest draw for consumers is the huge discounts retailers use to move inventory that has otherwise stagnated throughout the year. With consumer budgets strained due to fewer jobs and lower incomes, Black Friday is an opportunity for them to buy many items that they would otherwise not be able to access at non-discounted prices the other days of the year. But if this is the primary reason for meeting financial goals, why is it done at this level just once a year. Why humiliate eager consumers to pack the parking lots of retail outlets hours before the doors open while forcing store employees to work longer hours that cut into a time when families usually come together to celebrate an important holiday?

Many of the large, multi-national corporations like Target and Wal-Mart are doing well profit wise. The 3rd quarter reports for this year have both of them in the black, however Wal-mart has struggled as they are confronted with issues that hurt their brand, like eliminating health benefits for future employees to keep their profit margins on par. On the other hand Target has been seeing more consistent gains due to changes that in part promote a 5% discount when people sign up for and use the retailers credit card.

These tactics could easily be used sparingly, at more reasonable hours during the day throughout the year to achieve their goals and they could just as easily be achieved by allowing people to purchase on-line rather than allow people pack like sardines in front of stores set to rush counters and the clerks who are expected to handle such mobs. These are tough economic times and it is harder now than it has been in the past for people to make the purchases they feel will still give them and their families a sense of giving and receiving at a level they’re accustomed to.

I don’t promote consumption for the sake of consumption but this economy is floundering because spending is down. By generating offers throughout the year that promotes enthusiasm with consumer buying, retailers should extend the idea of Black Friday – huge savings on popular items – throughout the year and with some convenience that more people can share in. It would go a long way in boosting economic growth and return the holiday to its traditional roots where family comes first.

Posted by lbwoodgate in Budget Crisis, Economy, National Holiday Tags: Black Friday, Christmas and holiday season, consumer spending, corporate profits, economic stimulus, Retailing, Target Corporation, Thanksgiving, Wal-Mart

7 comments

One Conservative at Least is Hearing the Complaints Coming From the OWS Protests.

November 16, 2011

“From tax write-offs for gambling losses, vacation homes, and luxury yachts to subsidies for their ranches and estates, the government is subsidizing the lifestyles of the rich and famous. Multi-millionaires are even receiving government checks for not working. This welfare for the well-off – costing billions of dollars a year – is being paid for with the taxes of the less fortunate, many who are working two jobs just to make ends meet, and IOUs to be paid off by future generations.”

It might come as shock to those on the right who read this that these are not the ramblings of an anti-Capitalist, left-leaning Democrat. They come from a report recently released from the office of ultra-conservative Oklahoma Senator Tom Coburn. Coburn states in his report entitled Subsidies of the Rich and Famous, that as “families across the country [are] struggling to make ends meet during these economically trying times, many are left with few options so they are turning to the government – some very reluctantly – for assistance.” Some may recall that it was Coburn who single handedly blocked the efforts of the full Senate in 2010 to extend unemployment benefits to the millions of people who had lost their jobs as a result of the financial collapse of the free-market.

Coburn is also part of the Republican bloc in the Senate where minority leader Mitch McConnell has stated that the “single most important thing we want to achieve is for President Obama to be a one-term president.” Thus, every effort where the Obama administration has attempted to alleviate the plight of “families across the country struggling to make ends meet”, has been blocked by Senator Coburn and the rest of the GOP.

Coburn’s report is not testament to any shift in political views regarding government aid. He still lamely claims that taxing the rich because they “are getting too much of the economic pie … is no different than taking a dollar from one pocket and putting it into another in the same pair of pants.” That would only be true if the wearer of those pants was also a millionaire. Entitlement programs and aid grants that provide a safety net for the poor and unemployed during tough economic times is hardly money that goes to people who really don’t need it.

But unlike many of his Republican/Tea party colleagues, Coburn appears to have seen the writing on the wall from the ever growing and popular Occupy Wall Street movement that has brought home the reality of the vast income disparity between the wealthy 1% in this country and everyone else.

His report is a worthy attempt to show that “welfare for the well-off – costing billions of dollars a year – is being paid for with the taxes of the less fortunate, many who are working two jobs just to make ends meet, and IOUs to be paid off by future generations.” His report aptly demonstrates that billions have been going to millionaires over the last decade for things like tax write offs in the form of farm subsidies to people who neither actively work or even live on a farm to some 60,000 wealthy individuals who have filed for Medicare Part B with modified adjusted gross incomes of $1,000,000 or more.

He also makes a great case for means testing of all entitlement programs like Social Security, Medicare/Medicaid and Unemployment benefits. In 2009 over 38,000 people with adjusted gross incomes of $1 million or more, collected $1,142,204,000 in Social Security benefits, an annual average of $30,780 for each recipient. Though that’s a wapping amount for most income earners it is only about 3% of those who made $1 million each year and about 0.30% for those who made over $10 million.

Granted, even some millionaires paid into the social security trust fund during their lifetime as wage earners. But with high unemployment rates today where there are fewer workers available to contribute their share through payroll taxes and the aging baby boom generation starting to retire, the strain on the trust fund has created a deficit in receipts for the first time in nearly 30 years. The system is capable of paying 100% of benefits until 2036 but if we don’t make necessary adjustment it will only be able to pay 75% of benefits after that. Means testing would reduce the payout to millionaires and even eliminate benefits for some, providing needed revenue for those wage earners who depend on Social Security benefits as their sole source of retirement funds. “Returning the purpose of the program to a need-based service instead of one available universally may help keep Social Security solvent for future generations”, says Coburn

Medicare/Medicaid is in even worst shape than Social Security because of the increase in high health care cost and fraud abuses by health care providers. For millionaires to apply for this entitlement program when their resources allows them buy some of the best health care coverage that the private sector offers is ludicrous. According to Forbes reporter Janet Novack last month, a “couple on Medicare with a $428,000 AGI will benefit from a 13 percent decrease in their Part B premium payments. At the same time, the majority of Medicare Part B participants who pay the lowest premiums will see their monthly premiums increase slightly, offsetting the first cost-of-living-adjustment (COLA) increase recipients have seen in about 3 years.”

To deplete these vital resources for low income and handicapped individuals in order to prevent a millionaire’s resources from diminishing is ludicrous. How many of these very wealthy people have referred to Medicaid/Medicare as a “socialist” program that is depleting tax payers of their hard-earned wages?

Fraud is apparently rampant within the Unemployment Insurance (UI) Program too. This entitlement program that also receives contributions from wage earners through their payroll taxes as well as employer contributions, serves to alleviate the loss of wages when workers have been laid off for reasons other than poor performance. Without these benefits many families would be strapped to pay for food and rent until they can find other work. Yet Coburn’s report showed there were those collecting unemployment benefits who were “also earning millions of dollars in the same year. In 2009, the Internal Revenue Service reported that 2,362 millionaires collected a total of $20,799,000 in UI. Eighteen individuals reporting an adjusted gross income of $10,000,000 or more also received $12,333 on average in UI in 2009, for a total of $222,000.”

Angela Wade, who has also reported on this at her Blue States blog has broken the benefits down cited in Coburn’s study to show just how much revenue is being lost for essential social programs to people who are far from being in need.

$18.15 million in child care tax credits

$74 million in unemployment checks

$89 million for preservation of ranches and estates

$316 million in farm subsidies

$608 million in business entertainment deductions

$9 billion in retirement checks

$21 billion in gambling losses

$28 billion in mortgage breaks for mansions, vacation homes and yachts

Though it is encouraging to see Senator Coburn present such a detailed outline of the waste of needed government revenue going to people within the top 2% of income earners in this country, it will be interesting to see if this just a head jerk to feign concern about the need to correct such abuses that occur through federal subsidies and policies that neglect to prevent unethical practices by those in the top tier income groups.

His conservative creds are still locked into the notion that “government policies intended to mainstream wealth redistribution are undermining these principles” that expects “everyone to contribute and to demonstrate personal responsibility”. Yet the expectations one sees coming from this study suggests that Coburn is not in the same camp with other Republicans who see the removal of existing tax subsidies as onerous “tax cuts”.

Coburn has boasted that this study is the first comprehensive effort that has revealed how nearly $30 billion in giveaways and tax breaks has fleeced the American taxpayer. We can only now hope that he will step up to the plate and vigorously defend this data and convince his fellow Republicans to step away from their pro-corporate entrenched view of supporting the haves to the detriment of the have-nots in our country. Or will we see him wilt in the face of the strong opposition from the right-wing extremists who have taken over the Grand Old Party of Lincoln?

Posted by lbwoodgate in 2012 Presidential Elections, Budget Crisis, Economy, Financial Reform, Health Care Reform, Jobs, Medicare/Medicaid, Occupy Wall Street Protest, Society and Politics Tags: billions in subsidies for millionaires, Coburn, fleecing American tax payers, gop gaming the system in favor of wealthiest 1%, Medicare, Mitch McConnell, Republicans, Senate, Social Security, Tom Coburn

11 comments

Conservatives Balk on “Special-Interests” Spending Cuts

November 1, 2011

Paul Krugman makes a striking observation that has sat beneath my radar about the U.S. Defense department’s budget all this time. I used to scream and holler about the bloated defense spending in this country (still do in fact) on destructive forces along with many items that served no real need for our modern military.

An example of the latter is Lockheed Martin/Boeing’s F-22 Raptor jet that no one in the Pentagon really wants, but many in Congress do to appease Lockheed Martin/Boeing, or in mixed company with his or her voting constituency an elected official would refer to it as “important job creation “. With the full support of the GOP back in 2009 the Democratic-led House Armed Services Committee stripped $369 million for environmental cleanup – a job creator – to find enough money in the fiscal 2010 budget to fund an additional 12 F-22s.

But these are tough economic times and as Krugman matter-of-factly notes:

Military spending does create jobs when the economy is depressed. Indeed, much of the evidence that Keynesian economics works comes from tracking the effects of past military buildups. Some liberals dislike this conclusion, but economics isn’t a morality play: spending on things you don’t like is still spending, and more spending would create more jobs. SOURCE

With all the hollering and hammering by TeaParty-GOPers about how government can’t create jobs along with the equally baseless claim that tax cuts for millionaires is a job creator, we discover that they are really just hypocrites when it applies to defense spending.

The super-committee that was formed by Congress shortly after the fiasco about raising the debt ceiling was resolved this last summer (albeit temporarily) but now has to come up with some other, more permanent cuts next month that the full committee agrees on or there will be automatic cuts across the board. Not just in the areas that many conservatives and Libertarians are salivating over like Social Security and Medicare, but also in areas that they do not want to see, specifically cuts in the DoD’s budget.

Many of them are unabashedly opposed to cuts in Defense because they say it will kill jobs. Think about that for a minute. The anti-government crowd is affirming that the federal contracts with many private businesses, which are paid with tax payers dollars, not only established new jobs at one time, they sustain them as long as the Defense budget is kept pumped with public funds. Those in Congress who support such federal spending are pretty much the same ones opposed to Obama’s Job plan that seeks to stimulate job growth through infra-structure repairs and on energy efficient projects like high-speed rail, wind and solar innovation and retro-fitting government buildings and fleets to run off of renewable, cheaper energy sources.

We need jobs bad and we need them now but conservatives in Congress can’t own up to the reality that, as Krugman puts it, “spending on things you don’t like is still spending.” The business acumen that affirms “you have to spend money to make money” seems totally lost on those who want to eliminate spending on needed programs simply because they’re not ideologically sound in the Tea Party-Libertarian view of things. Infrastructure spending is spread out and not necessarily dominated by a national or even international corporate interests; that power element within the top 1% that tends to pull the strings of many in Congress and even dictate how to write legislation benefitting these wealthy interests.

Spending on infrastructure repairs has a multiplier affect too, creating jobs that benefit more businesses. Repairing bridges and roads better enables those vehicles who transport the parts for the unwanted F-22 Raptor jets while it also generates jobs that feed the truckers and repairs their vehicles. As these businesses expand there is a greater need for other retail services that accompany the influx of new workers.

The same occurs when you replace older manufacturing jobs with newer ones in the fields of renewable energy. Developing countries like China and India are beginning to dominate this 21st century opportunity, leaving the U.S. to catch up. We need to make stronger advances to make sure that the U.S. is competitive in this new growth field.

The finite sources of fossil fuels is not lost on these two expanding economies and they are fully aware that to sustain their growth they are going to need vast quantities of easily attainable and cheaper sources of energy along with the huge amounts of coal and oil they are already drawing from the global supply of limited resources.

Social welfare spending on things like Medicare/Medicaid, Unemployment benefits and Food Stamps are not entities that can stuff campaign coffers with big bucks but they do have a healthy impact on the economy, despite the reservations of anti-government types. Sustaining such programs does have negative consequences for the deficit when unemployment rates climb and tax revenue is removed but the money spent on such programs goes directly back into the economy and keeps some businesses from going under in tough recession conditions like those we are currently experiencing. In a healthy economy where there are high rates of employment and a livable wage, the need and thus the burden for such programs diminishes. Our current deficit issue is more a factor of the Bush tax cuts and two foreign wars.

There was a time when traditional political conservatives felt the need to keep Defense spending at a reasonable level. Eisenhower’s warning about the threat from the military-industrial complex pretty much fell on deaf ears but back in 1989 then Defense Secretary Dick Cheney sought to cut $10 billion from the Pentagon’s budget

Cheney termed the proposed cuts “very, very painful” but said that there is no way to balance the budget “without offending somebody, without breaking some china, without stepping on some toes.”

Cheney’s budget–$305 billion for the 1990 fiscal year, which begins Oct. 1–contains a 1% reduction after inflation from the current year’s spending plan. It marks the fifth consecutive year of real declines in defense spending, which has fallen 12% short of keeping pace with inflation since 1985.

But the $10 billion in reductions for 1990 represents only a down payment on a total of $64 billion that Cheney must pare from Reagan’s military spending goals over the next five years to meet the Bush Administration’s deficit-reduction targets. SOURCE

The issue of job creation by defense spending is apparent even today as one can attest to with the projected military spending for this month alone. I cringe at the thought of this reality but under such dire economic circumstances I am willing to forego my ideological bent to see Americans back on the job and off of the welfare rolls. TeaPublicans need to do the same and reciprocate by allowing the needed spending requested in Obama’s Job’s Plan.

The deficit matters but not half as much as job creation does right now and those on the Right need to swallow this tough pill and do what’s needed for ALL Americans. That means we need to raise taxes on the wealthiest 1% to spend on these essential job-creating programs and as the job market grows include the remaining 99% in fair proportion to their income.

To seek spending cuts in areas that hurts most Americans while ignoring them in others as efforts are also made to further reduce needed revenue through tax cuts is a short-sighted and callous approach to job creation – not to mention the hypocrisy of those who refuse to see how spending by the government is in fact a job creator

We’ve Heard This One Before

October 26, 2011

Herman Cain, the new GOP front-runner following recent polls has a tax reform plan that has a catchy name – “9-9-9” – but the simplistic moniker is merely another flawed ruse by the corporate-friendly candidate that incorporates the equally flawed practice of trickle down economics.

The plan would replace the existing complex tax code where it would appear that all people are treated equally

- A flat 9 percent income tax for everyone – no more, no less

- A 9 percent tax on corporations

- A 9 percent national sales tax

But the catch lies in how the rich will actually be impacted by this plan. Analysts say the wealthy would gain while low and middle income families will lose out on Cain’s Plan. Why? As Think Progress illustrates, people who make under $100,000 will be impacted by all three “9’s” in Cain’s plan where the wealthy will be able to avoid a lot of it, keeping more of their income.

[M]ost Americans will end up paying all three of those taxes, for a combined tax rate of 27 percent of their income.

That’s because middle and low-income Americans get all, or nearly all, of their income from ordinary wages — all of which would be subject to Cain’s 9 percent wage tax — and then they spend all of their income, which means it would be taxed again by the 9 percent sales tax. Finally, the burden of the 9 percent business income tax would be passed on to them as well, either in the form of lower wages — since wages are not deductible — or in the form of higher prices for goods and services.

The bottom line is that most Americans will pay all three of Cain’s taxes, making their real federal tax rate 27 percent. Compare that to the current tax code, under which someone in the bottom quintile pays two percent of their income in federal taxes and someone in the middle quintile pays 15 percent.

[W]ealthy people get a lot of their income from capital gains — which are exempt from the wage tax — and they don’t spend all of their income, so anything they save won’t be subject to taxes either.

Today, someone in the richest 1 percent typically pays about 30 percent of his or her income in federal taxes. Since people at the top of the income ladder make about half of their income from capital gains, and only spend about half of their income in a given year, their tax rate would drop all the way down to 13.5 percent. That’s even lower than what middle-income people pay today. SOURCE

What’s missing here too, that may be more important to the generation known as the baby boomers, is that this plan eliminates the pay roll taxes for social security and medicare. Without going into too much detail Cain is on board with the Paul Ryan Plan that would phase out Medicare/Medicaid as we know it and promises to initiate a voucher system to enable low income families to provide for these services on their own through the private sector; a solution that critics have pointed out will cost more for future generations because it fails to adjust for ever increasing medical costs. Presumably too, Cain is a supporter of privatizing Social Security, a scheme that could allow investment-challenged people to lose most of their savings in the speculative volatile markets.

Herman Cain boasts how the average family would have an extra $4000 in their pocket to invest in retirement plans and buy health insurance but ignores the fact that his plan would cancel out about the same amount with the elimination of the child tax credit. Add to this an increase in food taxes that amount to an additional $2000 and that plus of $4000 changes into a negative. One reports estimates that a family of four with an income of just under $50,000 could end up paying $2,725 more under Cain’s 9-9-9 plan.

But never fear. Trickle down is here (again)

The Cain campaign says that his plan will not hurt people with lower incomes because under his plan employers would save $4,000 in social security taxes. That money could then be passed along to the employees creating a system in which everyone benefits. – SOURCE -

In a previous article I presented the argument that supports the belief that the wealthy don’t necessarily allow their gains from tax cuts to trickle down to the rest of us.

The Moody’s research covering couples earning more than $210,000 found that spending by the wealthy is more likely to be influenced by the ups and downs of the stock market than changes in income-tax rates.

Stock-market performance is the “primary factor that is driving the savings of the top 5 percent of households,” said Mustafa Akcay, economist and co-researcher of the savings data.

Some economists voice caution about the promised effects of a change in tax rates. The nonpartisan Congressional Budget Office in January analyzed policy options and possible short- term effects on growth.

“Policies that temporarily increased the after-tax income of people who are relatively well off would probably have little effect on their spending because they generally would be able finance their consumption out of their income or assets without such a change,” CBO director Douglas Elmendorf testified to Congress on Feb. 23.

On the other hand, tax relief for families with “lower income, few assets and poor credit would probably” spur spending, he said. Elmendorf said because of job losses and a drop in assets over the past two years more families “probably fit that description now.” Source

Only a fool would continue to promote the benefits of supply side economics, better known as trickle down. It all began under Ronald Reagan during the 80’s and since that time income for the top 1% as multiplied 4 fold while either remaining unchanged or even decreasing for most every other American wage earner.

Supply siders argue that tax increases, especially on the wealthy have a negative impact on efficiency. They insisted that “lowering taxes would cause output to go up enough to lift all boats substantially.” But Mark Thoma with the Fiscal Times points out the fallacy with this, using the Bush tax cuts as a model.

The economy did grow after the Bush tax cuts, but the rate of growth was unremarkable, especially for jobs, and there’s little evidence that they caused large increases in output growth, as promised.

In fact, there’s little evidence that the Bush tax cuts had any effect at all. The trade-off simply wasn’t there.

And the tax cuts at the upper end of the income distribution did nothing to correct for the fact that although worker productivity was rising, wages remained flat — a problem that began in the mid-1970s.

This was an indication that something was amiss in the mechanism that distributes income to different members of society. Workers were helping to increase the size of the pie, but income did not trickle down, and their share of the pie was no larger than before. SOURCE

It is this failure by those in the GOP-Tea Party like Cain to recognize the short comings of trickle down economics, raising the issue of their credibility and their sincerity to enact policies that will have real and lasting change that will restore an economy where the middle class is slowly becoming invisible.

Income Inequality is Hobbling the Middle Class

So you Think You Want to Dump Social Security for a Private Retirement Plan? Think Again

GOP Presidential Hopefuls Flat Tax Proposals — A Big Handout To Wealthy

I Support Occupy Wall Street

Posted by lbwoodgate in 2012 Presidential Elections, Economy, Health Care Reform, political fringe groups, Society and Politics Tags: bigger deficit under Cain's 999 plan, Congressional Budget Office, Herman Cain, income disparity, investment taxes, lost revenue from Cain's 999 plan, privatizing social security and medicare, Republicans, Sales tax, Tax rate, trickle down economics

6 comments

Message in the Music

October 22, 2011

If you’re still having difficulty comprehending what those participating in the “Occupy” protests are speaking to, perhaps the lyrics from a couple of tunes will better bring the message home for you.

Music is the art form that fills our personal life and helps connect us to the rest of the world, whether it be a love song, a ballad or a stirring anthem on national pride. The lyrics of some can inspire us while others give clarity to issues we can’t get from more institutional offerings like the mainstream media and even our educational system.

In the ’60’s and ’70’s, the youth culture of that era began to redefine the value of humanity through their music by suggesting that materialism was robbing us of our essence as flesh and blood people. Today’s youth culture, many who are represented in the “OccupyWallStreet” movement, are reiterating this message in their music as they seek solace from the growing inequities within a system that places more value on profits than people.

Music of the Woodstock Generation

There are two pieces I have come across recently that resonate a message pertinent to the Occupy Wall Street protests and answers the basic questions of some who are unsure what this grass movement represents.

This first is familiar to most of us and goes back to 1976 with the release of Jackson Browne’s fourth album, The Pretender, whose talent as a writer and musician began pretty much in Greenwich Village and as a part of the The Nitty Gritty Dirt Band. The roots his music derived from in this era and culture identified with the everyman. In The Pretender we have the struggle of a working class man trying to get by in a world that is fraught with challenges and expends perhaps more energy trying to make a living than filling a deeper human need.

“Caught between the longing for love

And the struggle for the legal tender “

Recalling his youth where life seemed more simpler, where church bells rang and “children solemnly waited for the ice cream vendor”, his dreams of life and love have now become too entwined with the economic world of consuming and earning the legal tender.

Where the ads take aim and lay their claim

To the heart and the soul of the spender

And believe in whatever may lie

In those things that money can buy

In his closing lyrics Jackson bemoans what most of us have experienced and how our lives too often fall short of our dreams. We’re left with the regret that true love was knocked out of contention as our life progressed and we surrendered instead to fulfilling economic ambitions. It catches us unaware and seems so natural to get a job before we make a life for ourselves, not realizing that our humanity with others takes a back seat and often gets lost in this contemporary rite of passage. Competing with our heart’s desire is this more self-centered need to be successful and to “get rich”.

The other song that I came across also hit on the effects of the “petty green” but on a more global scale than Jackson’s smaller town setting. It’s a song by The Decemberists, a group that formed at the beginning of this century out of Oregon. On their 3rd album, The King is Dead, the lyrics of the “Calamity Song” addresses the “root of all evil” and how people seem obsessed with their habits of consumption as the world around them begins to smother what was once the dominant society of the 20th century.

There are references to Islamic terrorism (Andalusian tribes), and the cheap labor markets of Mexico (Panamanian child) and China, who is waiting in the wings to become the preeminent economic power (Dowager Empress)

The lyrics tap into the thoughtless acts we are a part of consciously or subconsciously as we disrupt cultures to attain the fossil fuels that take lives here and abroad and pay cheaper labor markets in Mexico and China to create the junk we consume and are encouraged by Wall Street to spend our shrinking paychecks on. Ultimately all that is left will be “the arms of the angels.”

The energies of those who are dedicated to the “Occupy” movements around the country and now the world are bringing to light how the needs of human beings are being overshadowed by the need of corporations and their profit-seeking investors. This disparity where only a handful benefit as the rest of us are left to surrender to a more destitute life is growing ever larger. Already many third world nations suffer from severe drought, food and water shortages, disease and health depravations.

Without some profound changes in our economic philosophy that serves only our consumptive self-interests, we too will become susceptible to a world that has limited resources and begins to fight back in the form of rapid and powerful climate change toward those who deplete and contaminate it while the rest of us who are caught up in their unconcern.

: I Support OccupyWallStreet

Posted by lbwoodgate in Economy, Global politics, Music, Social Discourse, Society and Politics Tags: consumption society, for-profit investors, income disparity, Jackson Browne, materialism, Occupy Wall Street, Pretender, profits over people, The Decembrists, Wall Street, wall street greed, Zuccotti Park

12 comments

Category Archives: Economy

The Sound of Heads Exploding

“Recent reports reflect a promising picture for Denton County’s economy.”

The comments go on to point out how there has been “significant gains from the first quarter of 2012 to the second quarter in sales [of real estate] as well as median and average prices.

In addition, the number of pre-owned homes on the market in Denton County has dropped 38 percent in the past 12 months.

Automotive sales are also up year over year, according to Freeman Auto Report.

[The City of] Denton’s unemployment rate dropped to 5 percent for September, down seven-tenths of a percentage point from August. In September 2011, the city’s unemployment rate was 6.3 percent.

In Denton County, the unemployment rate dropped to 5.6 percent, also down seven-tenths of a percentage point from the prior month. In September 2011, the county’s unemployment rate stood at 6.9 percent. SOURCE

This indeed is good news for my local community but it appears that Denton is something of a microcosm of what’s going on around the nation.

For the first time in six years, the residential market is expected to add to U.S. economic growth in 2012. New home sales are up 28% from a year ago and new construction is running 35% higher.

The long-awaited recovery in the devastated real-estate market was a long time coming, but it finally looks like it’s here to stay. Barring another recession, most economists expect sales and construction to continue to rise steadily over the next few years SOURCE

“This keeps the economic expansion moving forward,” said Dean Maki, New York-based chief U.S. economist at Barclays Plc. “Consumer spending is continuing to grow solidly.” SOURCE

The Franchise Business Index increased by 2.2 percent from September 2011 to September 2012, marking the industry’s best year-over-year gain since the Great Recession began in December 2007.

A drop in the unemployment rate, coupled with a slow but steady improvement in small-business credit conditions, contributed to the gains. SOURCE

Unable to See the Forest For the Trees

Let’s Expand the Black Friday Concept

Conservatives Balk on “Special-Interests” Spending Cuts

Search Blog Content

America Honors Leaders, Not Politicians

Bet on solar power

What I have written recently

Blogroll

Archives

Follow “Woodgate's View”