Income & Wealth Inequality 2: Realistic Taxation Might Help

Re: 'It's Economic Inequality Stupid -- What to Do About the Biggest Crisis Facing America’
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Robert CreamerPolitical Organizer, Strategist, Author; Partner Democracy Partners

Mr. Cremer mentions that economically the wellbeing of the middle and working poor classes have been on a downtrend or static for decades:

Today, to qualify for the top 1%, your family has to have an income of at least $394,000 -- and the average income of the top 1% of the population is $717,000. The average for the rest of the population is $51,000. The difference in net worth is even more stark. The top 1% have net assets that average $8.4 million. That would be 70 times the average net worth of the rest of the population.

And this inequality is growing. In 2012, the share of income flowing to the top 1% soared to almost 20% of the income generated by the entire economy. That is the highest level since 1927 - the height of the "Roaring 20's" that set the stage for the Great Depression.

This increase in income and wealth inequality has gone on for some time. According to a study by UC Berkeley economist Emmaunuel Saez, from 1993 to 2012 average real income for the bottom 99% of the population increased 6.6%. Average real income for the top 1% went up 86%. In other words, over the last two decades, the top 1 percent received two thirds of the overall economic growth in real income per family.

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...who did nothing to earn these fortunes except benefit by the accident of birth.

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This is often heard but despite being born iINTO wealth a child is never born guilty ‘a priori’ as implied. It also seems ‘whimsy’ to tax the rich too quickly and heavily just as it is unfair to tax lesser income strata more than their commensurate ABILITY TO PAY, so ‘less wealthy’ classes should have a lesser tax rate than the rich. The country needs to evaluate exactly what ‘fair’ means and what for what PURPOSE(s) do our taxes really serve!

What exactly is our national tax purpose? Is it simply to make the rich pay their ‘fair share’ whatever that might be and even-out the tax impact? Or, to accumulate government surpluses just because it sounds good? Or, as an optional purpose, one might propose a ‘TAX ENOUGH’ policy that focuses on meeting a few significant objectives but leaves a goodly amount of monies in circulation for jobs, investment, risk etc.

What is the real-life tax impact on our socio-economic classes? Can we even guess at taxation equivalencies?

Oversimplifying, a quick look at tax reform might start with a simple ‘equation': increase the ‘rich’ tax rate but not to de-motivate investment and risk; give the middle class relief by tax reductions and/or tax-reduction-equivalents (college credits, national health care, family tax credits, etc); and give the working poor emergency relief that prioritizes the concept that ‘WORKING POOR’ is not a permanent class but a temporary condition. And above all, avoid the conservative POV that a ‘good’ social policy is one that is punitive in spirit and result, i.e., one that ‘strikes the fear of God’ into the minds and spirits of the taxed...as if America is mired forever in the past battles between the Shires and Robin Hood - a too-easily referenced template left over from America’s core roots in feudal Europe.

MBA Follies - About the ‘Common Good’: A Battle between the Citizen and Corporate Ownership-for-profit

This post was motivated by Noam Chomsky’s recent op-ed in ’Nation of Change’ webzine, ('What Is The Common Good?’),that focuses on a seemingly increasing and critical lessening of importance, and increasing fuzziness, of being a human citizen in America. This blogger maintains this is a crisis time because it appears the requirements of traditionally defined citizens (i.e., human) are competing somewhat unsuccessfully with corporate wishes, influence and priorities that are often in conflict with, are ignorant of, or just plain unconcerned and callous about the quality of life of normal citizens. The results are persistent erosion of our natural environments, depletion of natural resources even those that are replenishable but require husbanding and planned harvesting (our fisheries) and a general rush to perdition in the interests of corporate quarterly profit reports.

Professor Chomsky summarizes this problem of citizen vs state as not new but a continued debate from even the era of Aristotle 2400 years ago. Chomsky brings the debate into ‘current’ focus at the moment of the formation of America and summarizes the thoughts of Thomas Jefferson who was the principal writer of the Declaration of Independence and served as the third president of the United States:

Thomas Jefferson, the man who drafted the United States’ Declaration of Independence, captured the essential nature of the conflict, which has far from ended. Jefferson had serious concerns about the quality and fate of the democratic experiment. He distinguished between “aristocrats and democrats.”

The aristocrats are “those who fear and distrust the people, and wish to draw all powers from them into the hands of the higher classes.”

The democrats, in contrast, “identify with the people, have confidence in them, cherish and consider them as the most honest and safe, although not the most wise depository of the public interest.”

Today the successors to Jefferson’s “aristocrats” might argue about who should play the guiding role: technocratic and policy-oriented intellectuals, or bankers and corporate executives.

Pericles21 has for several years posed this same broad question, 'what has happened to the notion of the citizen?' Has America lost it’s sense, along with its senses, about what is the purpose of a nation and whom does a nation exist to serve - human citizens or corporate enterprise? Where along the path so far in this nation’s history have we detoured to value ‘signs’ of wealth (not health) such as material possessions, wealth in itself beyond even expanded wants, and acted-out greed, above social needs and individual happiness, physical health, education, child nurturing and spiritual well being?

From Pericles21’s commentary added at the end of Professor Chomsky’s article:

American culture appears to be facing the ‘depletion’ of room for its human citizens (note, now, the break-out of 'citizenry' into subcategories) to co-exist with their corporate co-citizens whose sole responsibility is the quarterly financial report; and whose regard for human citizenry is focused on their usefulness as a labor pool, a flexible (disposable) pool at that. In this respect, the labor pool is respected only as long as employed by the corporation who assumes nothing about the welfare of laborers outside the corporation’s physical and fiscal boundaries, the plant or office walls and the employee list.

Question, ‘is the human citizen to accept this status? Or, more accurately, ‘can’ the human citizen accept its new status - a status defined as co-equal to a sister population that does not eat, breathe, drink, care for its children, etc., and consequently does not need healthy, safe food and water, does not need to nurture a child, support an education system, nurture a spiritual life and carelessly and without conscience tosses aside surplus labor whenever they are not needed. Note: a great many, increasingly too many, American workers are not owed more than 24 hours notice of layoff. All of these human ‘requirements’ not met by corporations seem to be leading to a ‘Crisis of Choice’ for human citizens in America - accept second-class status according to a new democracy (for humans citizens) regardless of race, creed, etc. - or, what? As yet, no optional theories for coexistence are being formulated? While the corporate ‘American’ citizen is free to roam the globe seeking the lowest-cost labor, and is often freed (by special interest lobbying) from any tax loyalties to America, yet, the human citizen labor pool, unneeded and cast aside must (?) remain in place within America, ...unless we become the next global pool of low-paid migrant labor available (forced) to work in foreign industrial zones.

Question - what is the process whereby elected, human, Americans willingly fall into place and support the corporate citizenry in this madness? WHAT QUEER, ILLOGICAL, UN-COMMONSENSICAL LOGIC MOTIVATES SCOTUS TO INTERPRET THAT CORPORATIONS MERIT EQUAL CONSIDERATION OF ‘RIGHTS’ AND PRIVILEGES (E.G., CAMPAIGN CONTRIBUTING) AS HUMAN CITIZENS???

These thoughts are repeated more and more often now even by concerned (and thinking) Conservatives. and, it appears the critical point has yet to be reached. What will be the nature of that critical point - a fundamental collapse of our natural environment or resources? A serious calling of ‘time out’ by the grass roots (human)? Or, will we stand and watch with wringing of hands as it all goes down the drain?

The Growing Inequality of Wealth in America and the Globe: Revisiting the Red Queen of Productivity and the False God of ‘Profit’ (July 19, 2013)

Is America's economic 'INEQUALITY' increasing (e.g., Robert Reich's new movie, Inequality for All)? Is America becoming an economically locked-down caste system? Has American class mobility, the basic promise of our democracy, been lost? America’s and the world’s drift in this direction has been seen and felt for some years. Prior to seeing Professor Reich’s movie, this blogger mused in a previous previous post on (July 19, 2013), that in the glare of immense wealth and a ‘Bling’ culture, America seems to have forgotten a basic economic reality - an economic market is an interdependent world of consumer-product-and-capital - and when the consumer is removed or de-emphasized in this ‘model-equation’, everything breaks down. Why? Because we seem to have forgotten that ultimately, economics is all about someone being able to consume, i.e., BUY. So, when the buyer is stripped of the means to perform their function by losing jobs or being paid less than rising costs of living, the reality of the model dictates a collapse. Robert Reich’s movie presents this ‘truth’ with elegant clarity. Even though there are many graphs and tables to look at in his movie, the story is easily seen.

Are we at the economic crisis point Reich believes we are? Joel Kotkin’s October 6, 2013, article , 'California’s New Feudalism Benefits a Few at the Expense of the Multitude’, presents a detailed case that we are near Reich’s economic crisis point by looking at the growing ‘skewedness’ of California’s wealth and power. Kotkin reluctantly focuses on the current-context mis-directedness of liberalism’s previously held sacred icons of environmental protection and the advantages of clean industry, notably the digital technologies. Kotkin makes a good point that there are ‘unforeseen consequences’ of these old standards that today makes environmental protection equate with job loss and overseas outsourcing. But, overall is it really true that the 'good' guys and causes (e.g., politically 'progressive techies' and environment protection) are actually bad medicine for our economic health?

The following is Mr. Kotkin’s view of the changed value of environmental protection and clean-industry laws; previously I've thought this pov was right wing propaganda against the EPA but now things seem fuzzier as the mix of trade-offs among protection costs vs benefits has grown more complex. So, are even the techies guilty of riding globalization to bigger profits...and contributing to wealth inequality? Also, the article floats a new meme, 'techno-coolies', which will probably pop up more and more - imported technical labor for the digital hubs like Silicone Valley because US education is failing to teach our kids math and science. "Digital Oligarchy" is another descriptor that seems meme-destined.

"...The state’s digital oligarchy, surely without intention, is increasingly driving the state’s lurch towards feudalism. Silicon Valley’s wealth reflects the fortunes of a handful of companies that dominate an information economy that itself is increasingly oligopolistic. In contrast to the traditionally conservative or libertarian ethos of the entrepreneurial class, the oligarchy is increasingly allied with the nominally populist Democratic Party and its regulatory agenda. Along with the public sector, Hollywood, and their media claque, they present California as “the spiritual inspiration” for modern “progressives” across the country.
Through their embrace of and financial support for the state’s regulatory regime, the oligarchs have made job creation in non tech-businesses—manufacturing, energy, agriculture—increasingly difficult through “green energy” initiatives that are also sure to boost already high utility costs. One critic, state Democratic Senator Roderick Wright from heavily minority Inglewood, compares the state’s regulatory regime to the “vig” or high interest charged by the Mafia, calling it a major reason for disinvestment in many industries."

And Mr. Kotkin writes this about California's mal-distribution of wealth:

"...The gap between the oligarchic class and everyone else seems increasingly permanent. A critical component of assuring class mobility, California’s once widely admired public schools were recently ranked near the absolute bottom in the country. Think about this: despite the state’s huge tech sector, California eighth graders scored 47th out of the 51 states in science testing. No wonder Mark Zuckerberg and other oligarchs are so anxious to import “techno coolies” from abroad."

Also from Mr. Kotkin’s article is his use of the term, ‘liberal apartheid’which though harsh-sounding strikes home regardless of one’s political loyalties:

“"...liberal apartheid,” a sharp divide between a well-heeled, mostly white and Asian population located along the California coast, and a largely poor, heavily Latino working class in the interior. But the class divide is also evident within the large metro areas, despite their huge concentrations of affluent individuals. Los Angeles, for example, has the third highest rate of inequality of the nation’s 51 largest metropolitan areas, and the Bay Area ranks seventh."

Another of Mr. Kotkin’s word-inventions is his assertion that with the new California mal-distribution of wealth has come an increasingly wide communication gap between the ‘have’s an have not’s’. And, despite the legality of the map-distributed wealth which is supported by the historical religious-political iconizing of wealth and accumulation in America, this gap is, in summation, dysfunctional because it describes the loss of common societal goals which are useful to maintain a smoothly functioning and stable society. To help resolve this disfunction and the associated communication gap between classes, Mr. Kotwin proposes that there has risen a middle-situated class by analogy with medieval-feudal society in Europe. This 'mid-class’ (not middle class) serves to mediate between the oligarchy and the rest of America. He terms this class the “Clerisy” which in his words, does the dirty work of the oligarchy:

"...in today’s hyper-secular America, the job of shaping the masses has fallen to the government apparat, the professoriat, and the media, which together constitute our new Clerisy. The Clerisy generally defines societal priorities, defends “right-thinking” oligarchs, and chastises those, like traditional energy companies, that deviate from their theology".

Mr. Kotkin’s proposal has much credibility in defining a need for a mediating bloc to soften the friction between the Oligarchy and the ‘Serfs’ (Mr. Kotkin). But, this blogger disagrees with the expectation that the ‘Clerisy’ is/will be a somewhat independent ‘estate’. Although This blogger agrees a ‘Clerisy’ has been created, this blogger also believes the ‘Clerisy' has been co-opted by Big Money in the hands of and almost completely controlled by the ‘Oligarchy. This corruption of a theoretical modeling of America as a system of 'power-blocs-in-balance’ is especially exampled by the controversial (to some) Supreme Court (SCOTUS) decisions in recent years that extend corporate election funding prerogatives.

But, Mr. Kotkin goes further to propose an extended future for this feudalism:

"...Yet except for occasional rumbling from the left, neo-feudalism likely represents the future."

But, this future of a feudal longevity is too much a stretch for this blogger. Contrary to Mr. Kotkin’s conclusion that economic feudalism in California and the rest of America is here to stay, this blogger believes the keystone and the miracle of America is still its democratic basis which remains intact and ever ready to show its strength through the ‘vote’. This means change is always at most 2 years away and thus makes it impossible for Kotkin’s dire modeling of a long, feudal American future. And, as we are seeing now, the balance of powers written into the Constitution remains a very powerful ‘check’, though sometimes it appears to be mis-applied as in the current stoppage of government by the GOP dominated House (US)(October 2013).

This blogger doesn't agree with all of Mr. Kotkin’s views. Or maybe this blogger takes issue that Mr. Kotkin, despite his admirable effort to sort out what is happening, or has happened, to California and by extension, to America, needs to risk going further to envision what kinds of paradigm changes might work. Such an adventure would be especially fruitful about environmental protection: 'Yes, there are economic penalties to pay (right now) for a clean environment but what about the reduction in medium-to-long health costs to cities, states and the nation? And doesn’t this just mean we have to find new paradigms to pay for and justify the costs? One hopefully sees a multitude of articles, and books and books, on this subject of new paradigms. Right now it appears no one or very few are taking risks to stretch imaginations and conjecture about a workable future of economic equitability and re-establishing the ‘good society’ looked forward to in 1776.

The False God of Productivity, The Red Queen of Profits and Fewer Jobs (A Potential for Social Collapse): More MBA Follies

This is offered both as another example of an MBA fallacy and as a response-in-agreement to a recent article in The Daily Beast that discussed the notion of how might the emphasis in the market place on increased productivity lead to fewer jobs ((Robert Shapiro. 'Robotic Technologies Could Aggravate the U.S. Problem of Slow Jobs Growth’. July 19, 2013). Mr. Shapiro poses a fundamental problem with 19th century industrial capitalism that was bound to eventually require our attention: in the headlong pursuit of maximizing profit by reducing labor costs among other factors, where is the boundary to how many people can be laid off before the system collapses? He notices that since 1981, recoveries from boom-busts have been slower and slower which he sees as a sign of technology-displaced, unrecoverable jobs:

In the four years, since the Great Recession of 2008–09 ended, private employment has risen at an annual rate of 1.4 percent. That’s 61 percent below the rate of job creation following the deep downturn of 1981–82, after which jobs rose at an annual rate of 3.6 percent. A similar disparity is evident between job creation in the first four years of the two most recent expansions that followed more moderate recessions. The 0.7 percent annual rate of job growth over the first four years of the 2002–07 expansion was 68 percent less than the 2.2 percent annual job gains seen in the first four years of the 1991–2000 expansion. Something has clearly changed.

Clue - the goal of productivity is 100% efficiency, 0% wasted resources and NO (human) LABOR COST (100% productivity is a theoretical limit). These objectives, especially the last, are built into profit-focused capitalism where the overall, effective goal (realized or not) is the elimination of labor cost which, believe it or not, translates to the elimination of human labor. This is an absurd idea but our current, 19th century industrial capitalist view of people as a faceless labor pool might soon lead to machines doing all the work... and no-one has a job.

An economic system needs consumers to buy product and consumers need money to perform their necessary function which is to shop. This is an interdependent system which existed for 1000’s of years before industrial capitalism. But this system might be in the process of breaking down. Why? Because basically this equation exists because of the fundamental difference between machines and humans - machines don’t eat, wear clothes, sleep, drive cars, prefer tastes, etc. - all those things which define the need for, and essence of, an economic market. Writing people out of this simple equation destroys the whole system. (Sorry, Mr Romney.)

SO, WHAT DOES ONE DO WITH ALL THOSE JOBLESS PEOPLE who don’t have money to buy products? The classic capitalist was not concerned and assumed the overall system had enough vacant jobs in another city, county, state or country to take care of his laid off labor while ‘he’ sprinted blindly toward more profit. But if this previously-assumed, always ready, labor sponge might be ending (saturated), what is to be done with redundant humans displaced by higher productivity? How does one regard and sustain humanity - unless the plan is to eliminate people which is an idea that hopefully no one takes seriously? Or, if it is in planning, it (depopulation) will be implemented with a smile or on a time scale of generations.

One solution to runaway capitalism (free-market style)is ‘managed’ capitalism whose first, or at least parallel goal with GDP, is to preserve society through sustained employment achieved by de-prioritizing profit, or rather redefining profit to include social utilization (preserve jobs), or maybe even to reduce human population by natural attrition such as people having one child instead of two or three - either by choice as the result of natural economic forces or by national policy (e.g., China). But then we'll face religious plus economic boundaries which is a deeply sensitive subject deserving a separate blog post. But, as for ‘managed capitalism’, nearly every industrialized country has such a system in some form, and even America has it although disguised in various ways to avoid upsetting fundamentalist orthodoxy of both religious and economic factions.

Absent a serious approach to looking for alternative paradigms to the classic 19th century industrial capitalism model for our and the global economy, we might at least pay attention to helping workers cope with the growing stress of working under increasing productivity pressure and increasing uncertainty about job security. And there is such a movement, the ‘Third Metric’concept championed by several thinkers including Arianna Huffington who is committing the weight of her online assets to conferences and other support venues to promulgate worker education in ways to combat stress. The Third Metric ‘way’ chooses to untangle the worker from the faceless pressures imposed by corporate life and survival through meditative techniques such as the currently faddish ‘mindfulness’ method (which is actually very ancient and a pillar of Buddha’s '8-fold Way’). This approach is helping many workers, largely women right now, but will hopefully lead to a national discussion about evolving new paradigms for redefining corporate profitability, social utility (contribution to social stability) overall success.

"LAGOM": A New Life Style for Post Recession Americans

This recession hasn't finished teaching us that American idol of Darwinian-capitalist pursuit of riches, where a neighbor in difficulty automatically becomes a "loser" to be put out of mind and forgotten, just doesn't cut it when "we" are coming close to becoming one of "them".

This recession is marked by a frightening prospect overnight conversion from plush to bust that can reach all levels, just ask Bernie Madoff's "clients". We all feel the anxiety of material failure, of being second, being the loser when we are nicely comfortable. It all doesnt make sense, we intuit, but who has the time to contemplate when we are so driven to materially excel and garner more than our neighbor in the race to see who next will be the winner, or loser.

The essence of this recession is the repeated lesson that wild frontier, laissez faire (self-regulated, NOT!) capitalism ala Ayn Rand is just a dream, actually a dangerous nightmare because it creates a false theater of false fronts, and actors in false face, where "dollars are the ultimate". And time after time all of these falsities come tumbling down killing the fortunes and hopes of many many people, families, countries. However, America is not down and out for good. We can move on to a higher level of maturity by adopting a life style of moderation, suitability (LAGOM) from one of the most advanced cultures on the planet, and perhaps the culture with the highest standard of living and certainly the first or second highest in cultural well being, Sweden.

The cultural happiness can be summarized in the following observation about purely economic success (which seems to be the current way America values itself):

For all its prominence, GDP is only one yardstick of economic performance and it is no guide to social progress. It simply indicates the market value of all goods and services produced in an economy. It takes no account of how income is shared out, or of how it is generated. Few would celebrate a boom in costly divorce cases – but it would be great for GDP.

America is ready for a new way of living life. It is in our best interest to try a new way of valuing life than material accumulations. That is to say, let's try on "Lagom".

"LAGOM" has no exact translation in English. But good translations of lagom are: "enough, sufficient, adequate, just right". Lagom is also widely translated as "in moderation", "in balance", "optimal", and "suitable", also "sustainable" as a way of life.

Lagom also carries the connotation of perfection through appropriateness.

The value of "just enough" can be contrasted to the value of "more is better". It is viewed favorably as a sustainable alternative to the hoarding extremes of consumerism

"Lagom" is said to describe the basis of the Swedish national psyche,..of consensus and equality. It is ... to be modest and avoid extremes.

Similar to Lagom" is the Middle Path in Eastern philosophy, and Aristotle's "golden mean" of moderation in Western philosophy.

So, America, let's have "Lagom" meals; "Lagomish" houses, cars, and visible material wealth in general.

Perusal on Our Search for Life: Questioning and Suggesting

Why are Earth’s scientific agencies and minds, or at least most that are popularly heard about/from, so focused on limiting our official searches for extraterrestrial life to “sweet zones” and “metal abundances” and such life-limiting scenarios? Do they know something they are not telling us? Are they that caught in such a deep human-centric paradigm trap? And why are uber-world class minds such as Mr. Hawking sounding the flight alarm that a super advanced life species might use their esoteric technologies to look throughout the universe to feed themselves, as if in their super-advancement of physics and space travel they had forgotten all about solving the food and waste disposal problem and we would be the prime roast, sushi, Tabuli or Muktuk on their ideal dinner menu? What is happening, or has happened, to promote such limited perspectives?

Has any one or body called for a scientific/common sense interdisciplinary team to hash out a set of prerequisites for ET life in any form? And how shall or do we define "life", exactly or broadly. A personal perspective is that our scientific communities should greatly expand the definition of life and consequently the physico-chemical settings for the creation and evolution of life. Likewise, as Feynman pointed the great range of magnitudes spanning the nano-to-galactic scales, advanced life could be several orders of magnitude different in scale from humans and still have enough manipulative distance in scale to develop technologies - and why exactly are thumbs needed when on earth we have such outstanding natural nano-scale engineering forms such as the the exuded, lacy exosceletal forms in the seas and soil, and even the many magnitudes smaller viruses?

What does seem universally required is a source of some kind of POTENTIAL (in the physico-mechanico-chemical sense, or in some other sense we are not yet advanced to be aware of), to drive the ORGANIZATION of life, i.e. to combat the natural drift of entropy which means a mechanism to counteract the normal, disruptive drift of ENTROPY, i.e. decay. This requirement does not self-define Goldilockian “sweet zones”, earth-chemistry or even species large enough for us to see (or a species might be too large to for us to notice its “organization”). Supra-large organization of SENTIENCE (life?) could exist with scaled up densities that might look to us at our scales to be mist, fog, dust, near-vcuum but actually might be equivalent to flesh and blood in function - which perhaps represents another requisite of life, a MEDIUM to support functions such as signal (INFORMATION) TRANSPORT? And what about maintaining a state of negative entropy (SURVIVABILITY and REPLICATION). These capitalized words seem part of the descriptive matrix representing life and are not limited to earth-like settings.

In retrospect, such a possible life form would not be interested in us and probably would not notice us as pertinent to its interests of survival, enjoyment of life or whatever other activities dwell in the realm of its activities. Perhaps we would be viewed as we view Nematodes in our soil.

With such an expanded view, the issues we seem terribly concerned about such as “ethics” or predation have little or no meaning. Finally the Drake expression which is in danger of becoming a sacred cow: the observed frequency of supernovas which are galaxy-wide scourings (life-ending) by immense gamma ray explosions seem to reset the time-for-evolution every 4.5 billion years or so, and perhaps the Drake expression needs to be reviewed with this thought.

Monkey Business Can be Good Business: Japanese Restaurant Trains Monkeys as Waiters

A Japanese restaurant has discovered that Macaque monkeys have a natural bent for pleasing customers.
Why publish this? Because much of everything else in current news makes just as much (or as little) sense. Are we arrived to a Neo-Dadaist comic book world? Have we morphed into kind of global unreality, a spoofing on life, a sense of final noir humor? Or, are we taking us less seriously? This could be a healthy sign, right?
Send comments (yawn).