Archive for the ‘Economics’ Category

Conservatives Are “Mistaken” about the Minimum Wage

May 14th, 2016 1 comment

BoehnerquoteI have written before about how conservatives make rookie “mistakes” in economics when it serves their purposes. They claim that Reagan doubled revenues but “neglected” to take inflation into account; they claim Obama drove unemployment up to 10% but “forget” that unemployment is a lagging indicator; they claim minimum wage hikes caused job losses in 2008, but “overlook” the subprime mortgage crisis.

With the current minimum wage debate, conservatives are at it again. With willful ignorance, they make two glaring “mistakes” in their claims.

“Mistake” #1:

In 2013, Boehner said, “When you raise the price of employment, guess what happens? You get less of it.” This quote exhibits the exact same knowing ignorance behind the whole minimum wage issue: that increasing wages is an cost, and when cost goes up, consumption goes down.

The rookie “mistake”? That employees are a commodity. They’re not. They’re an investment. Saying that raising wages will make businesses hire less is like saying that when stock prices go up, people don’t buy as many.

When you raise wages, people leave the job less; turnover is reduced. Employees stay on longer, acquire more experience, have greater job satisfaction, and they become more skilled, more efficient, and more effective at their jobs. In short, their value rises. Employers recognize this, and give the employee greater responsibilities. End result: by investing, the employee becomes more valuable, thus returning on the investment and making it worthwhile to the employer.

“Mistake” #2:

Conservatives often claim that businesses will not be able to afford higher wages; a common retort they have is, “Where do you think that money comes from?” The answer is easy: where do you think the money goes?

If all minimum wage earners get a higher wage, that is a massive amount of money going into the economy. Minimum wage workers do not stash their money overseas like a rich person would; they buy goods and services here and now, because they need them. Where do they shop? They shop at the exact kind of business that pays their workers the minimum wage. So the money that pays minimum wage workers goes right back to the businesses paying minimum wage.

That’s where the money comes from.

Lies that Forbes Told Me

April 23rd, 2016 1 comment

I avoid the Forbes site like the plague. Not only do they indulge in click-bait and are aggressive in their advertising and anti-privacy tracking of you, but their bias is even more pronounced than the Wall Street Journal’s, and that’s saying something. Still, I do use Facebook, and so I get Forbes thrown in my face anyway.

A recent lie: Seattle’s decision to boost the minimum wage has resulted in an increased unemployment rate. The Forbes hack author shows this chart, and then comments:


As you can see we have a fall in the number of people employed in Seattle since that higher minimum wage began to bite. You should go see Perry’s post as he’s got three different charts and all three of them are telling us much the same thing. There’s fewer jobs, the unemployment rate is higher and the number of unemployed is higher. The combination of those three means that it’s not a change in population size driving this: it really is that more people who would like to have a job don’t have one.

Wow. That seems pretty iron-clad. I mean, look at that chart! And the ones at his source! The numbers go way down right after the wage hike! Hard to argue with that! And he said that it’s not because of population change, so that pretty much nails it, right?

Sure—if you don’t look too hard or try to find the facts out for yourself. Like I did, when I went to the BLS site and got all the data for myself.

The first thing I noticed was that these people used only the numbers for the city of Seattle, and not for the metropolitan area. That’s dishonest: many people who work in Seattle live in the surrounding areas. So I got the numbers for the metropolitan area, not just the city.

Here are the stats for the Seattle metropolitan area between April 2015 and December 2015, the numbers cited in the article:

Labor Force Employment Unemployment Unemployment rate
4/2015 1,971,701 1,887,637 84,064 4.3%
12/2015 1,983,893 1,884,635 99,258 5.0%
Change +12,192 -3,002 +15,194 1.0%

Hmm. First glance, he seems to have a point: employment dropped by 3,002 jobs. The minimum wage hike got three thousand people canned! Holy cow!

Let’s look at the chart showing the long-term numbers for Seattle, city only (so it matches the data he shows you):


The red vertical line shows when the wage hike went into effect. Hmm. When it started, a peak. At the time of the article, a drop. So, the Forbes guy is right, yes?


This is what you could call a “temporal lie.” It takes a very small segment of time in a volatile data set where there are many short-term variations up and down, and tries to claim that the short-term volatility somehow represents a long-term trend.

Notice on the chart that there was a huge spike just before the wage hike. Notice that there was a drop just before that, and there were similar spikes every year. Oh, hey! Look! A pattern! Every year, in April, there are spikes! And every year, around December, there are drops!

Let’s look at that!


Hey! Who would have thought?! Every April, there’s a bump up, every winter the numbers drop. And, conveniently, the Forbes hack author uses that exact time frame to tell us that the variation is due to the minimum wage drop! Wow! I’m sure that it never occurred to him, because to be a Forbes author, you have to be a completely blind idiot!

Well, I suppose you can excuse him on a few accounts, like (a) he’s biased, and (b) his source is the American Enterprise Institute, a heavily biased right-wing think tank, and (c) the AEI’s chart is built in a way to disguise these yearly regularities unless you look really hard.

So, we now can see that April is usually high and December is usually low. According to the pattern, we should see numbers jump up again in early 2016.

Fortunately, I can show you this, because the article was published two months ago, and we now have two more months of data. And lo, look at what happens:

Labor Force Employment Unemployment Unemployment rate
4/2015 1,971,701 1,887,637 84,064 4.3%
2/2016 2,019,459 1,912,335 107,124 5.3%
Change +47,758 +24,698 +23,060 1.0%

And jeez, will you look at that. Numbers jumped in February. What do you know. Here’s the updated chart, again limited to the city of Seattle:


If the trend follows the usual yearly pattern, then we should see the numbers for March and April increase even more, sticking to the previous trend line, and thus prove wrong the assertion that Seattle is suffering because of the wage hike.

Looking at the whole actual numbers in a larger context, we can see that in fact, Seattle is doing great!

What they’re doing here is playing on a common illusion in charts: base your claim on a very small part of a trend line and claim it’s proof of something much bigger. It’s what conservatives did with climate change data.

It’s what they do: lie with numbers.

Why Taxing the Rich Works

April 20th, 2016 2 comments

Laughing-Rich-ManThose who advocate trickle-down, tax cuts for the wealthy, are dead wrong. The amazing thing is, it’s not very hard to work out why—but people seldom do the math. Let’s take a look.

The idea behind cutting taxes for the rich is that wealthy people will take that money and create jobs with it.

First of all, let’s deal with this “job creator” falsehood. Purchasing (mostly by the lower and middle class) is what creates jobs, not wealthy people or businesses. Businesses hire workers only when it is absolutely necessary, and never simply because they have disposable income. Businesses only hire people when demand exists to justify the expenditure. Otherwise, businesses work hard to destroy jobs, because profits must be maximized, and payroll is one of the greatest expenses to a business.

So these people and businesses are not “job creators.” Still, the claim is that their investments will drive businesses that will hire people. Is that true?

Mostly, no, and certainly not in essence. Just ask this: when wealthy people get more money, what happens?

The idea behind trickle-down is that they invest it. Investment drives businesses, businesses hire more people, people get more jobs, etc.

However, there’s a major error in the very first step of that assumed process: that wealthy people invest the money in businesses that hire people. That’s not a valid assumption, especially in a bad economy.

When wealthy people get money, they do not say, “Terrific! I can hire more workers now!” Instead, what they do is to ask, “what is the best way I can put this money to work to get me more money?” And in a slow economy, when demand is low, they do not invest in businesses that offer goods and services—the kind that hire people. Instead, they invest in things like real estate, commodities, foreign currency, or a variety of derivatives—none of which drive the creation of jobs. When they do invest in businesses, they want ones that maximize profits—usually at the cost of the worker, demanding that pay and benefits be minimized and that “productivity” (translation: making each worker do more work) be maximized. This is often accomplished by using cheap foreign labor.

So giving money to rich people in a slow economy will not result in that money circulating back into the part of the economy where you most need it. In fact, it’s the entirely wrong end of the economy to put money into. Wealthy people are driven by the desire to accumulate wealth. Giving them more wealth—their end objective—will not drive them to go faster. It’s like giving the horse the carrot at the start of a trip instead of at the end. In another way, it’s like putting gasoline into your tailpipe.

So let’s look at reversing the idea. Instead of cutting taxes for the wealthy, what if we raise taxes—let’s say, for a start, to 50% at the highest margin. Take the money made from that added tax, and the money that would have been used to give the rich a big tax break, and instead, give it to the lower and middle class, in the form of both tax breaks and infrastructure jobs.

First off, we get a lot of value simply from the infrastructure spending alone. The infrastructure in our country is in bad shape, and is essential to the economy—it’s money we have to spend anyway, and the payoff down the line is great.

Second, we get job creation right off the bat by actually hiring people. Conservatives claim that “government never creates jobs,” which is baloney—the government hiring people to build infrastructure is far closer to job creation than is giving tax cuts to rich people. However, technically, they are correct, as job creation (as I pointed out earlier) is driven by demand. However, the demand, in this case, is that we need infrastructure. Whatever you call it, jobs are being created here.

Third, and most importantly, you now have millions of lower- and middle-class Americans either with new jobs and/or with more disposable income from tax breaks. These people do not spend that money on derivatives or foreign currency. They may use some of that to pay down debt, but much more, they will buy stuff. That creates demand, and that drives the economy, creating more jobs.

But wait, you say: we taxed rich people too much! They won’t have enough money to invest in new businesses, or they will be so repelled by the higher taxes that they will (as many Randians such as Bill O’Reilly claim) feel that it just isn’t worth it to try to make money any more!

That’s nothing but nonsense. First of all, rich people will always have enough money to invest. That’s why we call them “rich people.” The tax is on new income, not capital wealth. If money is fed to the lower part of the economy and demand rises, then that demand becomes the best new investment. That is what will drive wealthy people to make investments which involve new or better jobs.

But what if a wealthy person’s capital is already tied up? They really could have used that tax cut to invest!

Baloney. Even if a business or a wealthy individual’s assets are all tied up, they are still assets. And you know who just loves to lend money to wealthy people and businesses with lots of assets in a demand-driven economy? Banks. The wealthy have no problem raising capital in such situations. Millions of people are buying a product, you’re a wealthy person with lots of assets, and you want to borrow money to build that product which is in high demand? Of course banks will lend you money.

But what about the second point? Bill O’Reilly said that if Obama were to raise the marginal tax rate to 50%, he would see that as too onerous, and would quit his cushy, estimated $20 million-a-year job, laying off “scores” of workers, because having a take-home of $10 million instead of $12 million (although in reality, no one pays the top marginal rate on all their income) is just too little for him to sit on his ass all day and pontificate to crowds of adoring fans. What a hard life he leads. No, he would rather fire dozens of people who depend on him rather than suffer with only $10 million a year.

But does O’Reilly have a point? After all, if you tax people at 100%, nobody will want to make money, not legally, at least. So isn’t it logical that there’s some kind of limit for most people, where they’ll quit working if they payoff isn’t good enough?

In a way, this is like asking if a starving man would refuse to eat if you took away half his food. How little food could you offer a starving man in order for him to turn his nose up at it? It would have to be a very small portion.

Most rich people work hard for money, not for an optimally proportional after-tax income. If they want lower taxes, it’s because they want more money, not all or nothing.

Not to mention that, for two or three decades in the mid-20th century, the highest marginal tax rates were at or above 90%. These produced the best economic times we can remember! And if you want to want to argue that it was the war economy, be careful—that economy consisted of the government taxing high and hiring millions of people!

In order to understand this better, let’s ask a basic question: why do rich people keep trying to make money? For most people, making money is for necessities and then luxuries. But we’re talking about people with enough money that they could live in luxury for their entire lives without ever having to work again. So, why do they keep working for money? Or, at least, why do they invest?

I see only four reasons:

  • They want to win. They want to be the best at whatever competition they are engaged in.
  • They want to accomplish something. It might be a cause, it might be a beautiful product, it might be simply to be great at something.
  • They love money. They would work no matter what the conditions to just make more money.
  • They have a financial goal. Reach that amount of money, and then I’m out.

If you can think of any other reason that does not fall under any of these categories, let me know. However, that’s it as far as I can see it.

And now that we have defined these categories, ask yourself: will higher tax rates make ANY of these people quit and go home? Will any of these people just stop investing, even in a high-demand economy?

Of course not. None of them would. Let’s look at each type.

For the type that want to win, the tax rate is largely irrelevant, so long as everyone is taxed the same. They want to be the top dog. Taxing wealthy people more won’t change that, and so will have no effect.

The type that wants to accomplish something will similarly not be deterred by higher tax rates. They will still want to accomplish something. If the higher taxes make that more difficult, then they will work harder to do what they set out to do.

The type that just love money would not love it any less if they were taxed. They want more money, so if you tax them more, they will only work harder to make more, not less.

Finally, the type that have a financial goal will have to work harder in order to reach that goal. Some may be satisfied with a lower goal, but few if any would work less for it.

See the point? Higher taxes on rich people will not impoverish them, it will not make investment capital inaccessible, and it will not deter them from working hard—if anything, the rich will work more if you tax them more. If there is some go-home cut-off level, we know from experience that it comes at a marginal tax rate higher than 90%!

Not to mention two other underlying flaws in the Ayn Rand theory of “the productive class will leave the game” theory.

First, one assumes that the rich people are the productive ones. Wrong. They’re the ones who hire the productive ones. And there is no end to the number of people who want to play the business game. Every time there’s a void in the game, hundreds of others fight savagely to fill that void. There is no shortage of people to fill the ranks of business leaders to manage the many productive workers who will make the managers rich.

Second, the whole idea that rich people will stop working if taxes are even slightly higher must assume that wealthy people are weak quitters who can’t handle adversity. Do you really think that people who are driven to succeed for whatever reason are defined by their immediate propensity to give up the moment they encounter a setback?

That, like every aspect of the “don’t tax the rich” argument, is patently absurd.

Taxing rich people will only improve the economy. When we did that more, the economy was better. Since we tax rich people less, the economy has degraded and sunk, while debt has soared. Hard to argue with facts.

Categories: Economics, Taxes, The Class War Tags:

Immigration, Boiled Down

March 20th, 2016 Comments off

LibertyThe first thing we need to realize about immigration is that any problem which exists does not lie with the people who come to this country without documentation.

Immigrants do not “take” jobs. They are offered jobs. They are sought out for jobs. No immigrant ever came to the United States, pointed a gun at someone, and said “give me that job.”

Rather, the problem is with businesses who draw them in and take advantage of them, and because of certain economic and political realities which make it easy for them to do so.

Here are the facts.

No immigrants looking for work would come to America if no jobs were being offered.

No working immigrants would be here illegally if we offered them a legal recourse which matched the jobs being offered.

The conclusion is simple. They are not the problem. We are.

We have millions of immigrants coming to work in this country for three basic reasons. In no particular order:

The first reason is that there are many jobs which Americans generally will not do. You hear about Americans complaining about immigrants stealing their jobs, but it is a sure bet that none of those people want to be migrant farm workers. We need these people—but in most cases, we do not give them a legal avenue to come.

The second reason is that there are many jobs which Americans will not do for the amount of money that the job can pay, given consumer demand. Americans do not want to pay more for food, clothes, or labor in a variety of categories, prices which would be necessary if we did not employ immigrant labor.

The third reason is simply greed. Employers want more profit. They could hire American workers, and they could make a profit and sell at a price that American consumers would accept, but they want to keep more and more of that money for themselves—so they hire immigrants. And since it is cheaper to do so if the immigrants are illegal, they lobby against change.


Part of this is the consumer’s fault: we want cheaper goods and services. You don’t want so many immigrants? Fine. Be prepared to pay a lot more for many of the goods and services you consume. It’s a stark choice; you cannot have it both ways. Part of this is consumers of general goods, such as food and clothing, who support industries who use immigrant or overseas labor. Part of this is people who hire immigrants directly, for jobs such as child care or other labor in or around the house.

Part of this is the country’s fault, the fault of voters and politicians: we clearly call for these people to come and work, but we steadfastly refuse to create a visa system which would accommodate them. They come illegally because we give them little choice. And if you think that one choice is to simply not come, then I invite you to go to the countries where these people come from and live in the conditions from which they come. You will be clamoring to come back to America immediately.

The greatest fault in all of this is the fault of business, and our tolerance of their greed and maltreatment of the workforce. These are the people who take advantage, these are the people who spread fear and doubt, these are the people who most directly influence the laws which maintain the current system. For the jobs Americans do not want or would not pay for, Americans would otherwise be happy to allow the system of immigration to allow these people in legally—but that would cut into profits. For the other jobs, there are many Americans who would be happy to pick up the jobs in fields from construction to high tech, but the companies involved reject these workers and either hire people without documentation, or even specifically import them with valid visas, obtained by fraudulently claiming that American workers cannot be found.

There is one more reason that illegal immigration is rampant: we could stop it, but we do not.

The solution would actually be simple. Trying to arrest and deport immigrants is pointless, as they are not only mobile and have every incentive to return, but they are not the root cause—they’re just people trying to live.

The definitive and simple solution is to police and punish the real offenders: employers. They are the ones asking for immigrants to come in the first place. They are not mobile, and they would respond quite strongly to being caught and punished.

We don’t even come close to doing this. In 2004, a grand total of three—yes, three—businesses were cited for hiring undocumented workers. Nor is the reason for this a surprise. From the New York Times in 2006:

Employers have long been the main driver of immigration policy…. Not surprisingly, they tend to dislike the provision in current immigration law for penalties against employers.

That may explain why fines for hiring illegal immigrants can be as low as $275 a worker, and immigration officials acknowledge that businesses often negotiate fines downward. And why, after the I.N.S. raided onion fields in Georgia during the 1998 harvest, a senator and four members of the House of Representatives from the state sharply criticized the agency for hurting Georgia farmers.

So we make laws: first offense, a warning; second offense, a hefty fine; third offense, a major fine and prison time. And then we set the people we now have chasing immigrants and guarding the borders, and set them to police the employers.

I guarantee you: illegal immigration would halt, and immigrants here without a visa would leave soon after.

But this is what it boils down to: we don’t want to send these immigrants packing. These people do not drain our resources, they enrich us. They do not cause an increase in crime; in fact, they commit fewer crimes than the native population. These people do not sap the economy; they make it robust.

The solution is simple:

  • create a guest worker visa program for jobs we really need filled by immigrants
  • create strict laws against employing illegally
  • crack down on businesses that violate these laws
  • stop allowing companies to import workers for jobs that citizens are trying to fill
  • set up tax and tariff laws which penalize companies that use cheap labor abroad

If we do this, we won’t have immigrants coming in to the country against the law. We will maintain all the benefits that we now have. It’s good for everyone. Everyone honest and fair, that is.

Why don’t we do this? Because businesses don’t want it; businesses want their workforce to be here illegally because it profits the businesses, makes the immigrant workforce easy to manipulate, and disempowers citizen workers. And we have bought into the fear and frenzy that people who profit from the current system, people like Donald Trump, have whipped up to make us believe that it is all the fault of the impoverished, powerless, and mostly law-abiding people who these people of wealth and power take advantage of.

Agree? Then do something about it.

A good start: don’t vote for Donald Trump. Do vote for politicians who espouse the right thing to do. Write and agitate for the correct solution for the issue. Write your current representatives. Make a stink.

And vote. Vote. Vote.

Your Paycheck Is Not Your Value

September 2nd, 2015 1 comment

Reich is, of course, correct. I remember sitting in on an Econ class and hearing that assertion: remuneration reflects the person’s worth to the company. Which, of course, is baloney.

People are not paid what they are worth, they are paid what they can negotiate. And since unions have been decimated and unemployment is still high, that means businesses are in a powerful position to negotiate, and workers are in a weak position. On the other hand, people high up in the business are in a much more powerful position to negotiate for excessive pay—both the negotiation power and the excessive pay because they either are the ones who decide what pay is, or they hold sway over those people. So the workers are hit hard, and the execs are awash.

But what about the worth of a person to the business? True, a leader can make or break the business much more than could a rank-and-file worker. But then, if a company had mostly rank-and-file and just a handful of executives, they would likely do much better than a firm with mostly executives and only a handful of actual workers. The workers are at least worth what the executives are—and probably much more.

But that’s not how remuneration is decided: it is decided, at least in theory, on who is easier to replace. You can much more easily replace the rank-and-file, so they are valued less. And while you can just as easily replace executives, the illusion is that somehow they are magical in their value and deserve far greater pay.

The pay is certainly not based on what the employee generates. I recall once taking a management position at a conversation school. I was told that my performance for the year would determine if I got the same pay as the person I replaced. Despite having replaced two managers and then innovating a system that saved the school tens of thousands of dollars per year, I was told I would not get the promised pay based on a single mild disagreement I had with someone else in the office some time before, despite the matter never coming up at that time or any other. The idea that you are rewarded in step with what you generate may be true in some places of business, but not, I would wager, in most.

In business, the rule is not “what people are worth,” it’s not “what’s fair,” it’s not “what’s right.” It is, to put it simply, “what you can get away with.”

If businesses are not going to abandon that rule, as is apparent, then why should they expect workers to not begin playing by it?

Categories: Economics Tags:

The Secret of Sabotaging Your Own Success

August 3rd, 2015 3 comments

Here’s how you keep wages down: make people who make very little angry at others who are trying to make their lives better.

It worked for Scott Walker in Wisconsin when he successfully cut the legs out from under teacher unions: by falsely claiming that teachers were lazy moochers luxuriating under massive teacher salaries and 3-month vacations (yeah, right), he made enough of the people of Wisconsin believe that the teachers were hurting everyone else and should not be allowed, therefore, to use their unions as a way to fight for better conditions:

“We can no longer live in a society where the public employees are the haves and taxpayers who foot the bills are the have-nots.”

That’s the trick: if someone down below is having some success at making things better for themselves, then instead of making everyone else feel they should also have better conditions, generate resentment against the ones being successful and make them get the same crappy wages and conditions as everyone else.

You have to admit, it’s a brilliant strategy for the corporations: get the people you’re abusing to force others to stand for even more abuse.

It’s happening in places where fast food workers are demanding $15 an hour. Many people in other professions are now apparently grumbling about how “burger flippers” are making more money than people who are trained as professionals in more serious jobs—but the complaints are about how the fast food workers don’t deserve it, and are not about how the professionals should be getting much more.

Which is idiotic. $15 an hour is a sustenance wage, it barely lets you escape poverty. It is not living high off the hog. If you’re an electrician and you’re making less than that, you shouldn’t be mad at the fast food folk—you should be pissed at your employer, and you should be asking yourself, “How can I do the same thing that the burger flippers did?”

That correct thinking is embodied in this brilliant and reasoned Facebook post by one such professional:

I’m a paramedic. My job requires a broad set of skills: interpersonal, medical, and technical skills, as well as the crucial skill of performing under pressure. I often make decisions on my own, in seconds, under chaotic circumstances, that impact people’s health and lives. I make $15/hr.

And these burger flippers think they deserve as much as me?

Good for them.

Look, if any job is going to take up someone’s life, it deserves a living wage. If a job exists and you have to hire someone to do it, they deserve a living wage. End of story. There’s a lot of talk going around my workplace along the lines of, “These guys with no education and no skills think they deserve as much as us? Fuck those guys.” And elsewhere on FB: “I’m a licensed electrician, I make $13/hr, fuck these burger flippers.”

And that’s exactly what the bosses want! They want us fighting over who has the bigger pile of crumbs so we don’t realize they made off with almost the whole damn cake. Why are you angry about fast food workers making two bucks more an hour when your CEO makes four hundred TIMES what you do? It’s in the bosses’ interests to keep your anger directed downward, at the poor people who are just trying to get by, like you, rather than at the rich assholes who consume almost everything we produce and give next to nothing for it.

And that’s the point that everyone should be focusing on. Not how the person below you deserves less than you, but rather on how everyone deserves a decent living. And why you get paid squat while CEOs and shareholders deserve the lion’s share of the profits. Economic theory suggests that because CEOs have such critically important, one-of-a-kind talent, they deserve 300 times more than you. Really?

Sadly, when some CEOs with the right way of thinking actually try to make things better, petty jealousy fostered amongst workers can screw things up. Remember Dan Price, that standout CEO of the Seattle credit card processing firm? The guy who slashed his own salary and benefits so he could give everyone in his firm a “minimum wage” of $75,000 a year?

His business is failing. And you know why? Partially because enough selfish asshats critical to the company’s success were pissed that this gave them less of a raise in pay then people “below” them. That’s right: the boss actually raised the pay of some workers by thousands of dollars a year, and they quit because others who started later got a proportionally larger raise than they did.

Were they happy that they got a raise? Were they happy that they now got paid better than industry standard?

Apparently not. They felt snubbed because someone else was getting the same as them.

“He gave raises to people who have the least skills and are the least equipped to do the job, and the ones who were taking on the most didn’t get much of a bump,” she said. To her, a fairer proposal would have been to give smaller increases with the opportunity to earn a future raise with more experience.

A couple of days after the announcement, she decided to talk to Mr. Price.

“He treated me as if I was being selfish and only thinking about myself,” she said. “That really hurt me. I was talking about not only me, but about everyone in my position.”

You’ll have to forgive me, but that person is a first-rate dick. Seriously? Your boss does you and everyone at your company a solid, he cuts his own pay so he can give you a raise, you’re getting better than other people who do the same work as you… but you get all whiny, drive away customers, and leave your company in the lurch because you resent others who you feel aren’t as worthy as you?

Screw you, you selfish, self-absorbed prick, and don’t expect anyone to buy that self-serving crap about how you were really concerned for others and not justing resentful for yourself. You’re what’s wrong with labor today. You should have been happy that everyone was making a good wage, you should have been grateful to your boss for cutting his pay so you could get better, and you should have worked harder out of that gratitude—so that the company could be more successful, and then you and everyone else could get even more.

Not that this person was the only problem, or the main one: apparently, generosity is not widespread in the Price family, as soon after Dan Price made the wage increase, he got sued by his brother over money issues. Not, the brother claimed, over the wage thing. Right. It’s just a coincidence that the suit came just as Dan Price raised everyone’s wages.

So now, Fox News and many others are reveling in showing how the company that dared pay a decent wage is floundering, as if the boost in wages was the real culprit, instead of selfishness and greed amongst people who just wanted more for themselves and were willing to cripple the company out of spite if they didn’t get it.

Because instead of celebrating the little guy and wondering if the CEO really deserves 300 times more pay than the average worker, instead of noticing that CEO pay has risen 90 times faster than worker pay, we should instead get pissed off because someone who was working 70 hours a week and was still below the poverty line should win a raise that lets them not live in squalor, just barely. We should get angry at other workers because we didn’t get as big a raise. And instead of going to the CEO of the hospital where you work and ask if a small part of that billion-dollar profit the institution made could be directed to horrifically underpaid staff who do all of the critical work—instead, you should fight to shove the fast food workers’ heads back underwater. Just like the people of Wisconsin did when they thought, “My salary isn’t great, so let’s punish teachers!”

No. Instead:

My company, as they’re so fond of telling us in boosterist emails, cleared 1.3 billion dollars last year. They expect guys supporting families on 26-27k/year to applaud that. And that’s to say nothing of the techs and janitors and cashiers and bed pushers who make even less than us, but are as absolutely crucial to making a hospital work as the fucking CEO or the neurosurgeons. Can they pay us more? Absolutely. But why would they? No one’s making them.

The workers in NY made them. They fought for and won a living wage. So how incredibly petty and counterproductive is it to fuss that their pile of crumbs is bigger than ours? Put that energy elsewhere.

Organize. Fight.


Categories: Economics, The Class War Tags:


April 17th, 2015 3 comments

Living in Japan, tipping is just something you don’t have to deal with. You don’t tip here, ever. Not at any restaurant, not for taxi drivers, not for deliveries, hotel service, nothing. It’s actually very nice, as you don’t have to research and remember complex rules about how much to tip which kind of service. You don’t have to deal with the fear of seeming like a cheapskate, or worry about how the person serving you will feel if it’s this much or that much. Here in Japan, paying for something is a stress-free process.

Honestly, to this day, I have no idea how much I would tip a taxi driver for a fare (is it different from short and long hauls?), or a bellhop to show me to my room (I have to ask family and friends when that’s something I have to deal with). I recall that 15% used to be the standard for restaurant tips, now it seems to be 20%.

This causes problems for me when I travel back to the U.S., as I have to break long-held habits. Once, some years back, while on vacation from Tokyo, I went to a restaurant in San Francisco with a friend who was also visiting from Japan. We ate, paid, and left. I realized I had left my jacket at the restaurant, so I went back. I told the waiter who had served us that I had forgotten my jacket. He said, “You forgot your tip, too.” Somewhat abashed, I got out a generous tip as I tried to explain why that happened; I am guessing he didn’t believe me, but whatever.

So I was a bit confused on more recent trips back when I would go to a place that had general seating, but I would instead order something for take-out. There would be a tip jar on the counter, and when I pad by credit card, there would be a line for the total, the tip, and the total with the tip, so that you would have to write the same amount twice, essentially making an outright statement that you are not tipping at all. I was rather taken aback when I first encountered it, and have never been comfortable with it—it seems excessively pressuring, like a few years back when many businesses asked out loud in the line at the register if you “wanted” to make a donation to a charity (which you usually had never heard of and knew nothing about) with your purchase, and to refuse you had to say it out loud in front of a line of people.

When someone waits on me, that deserves a tip. They have to show me to a table, be prompt with service, carry stuff back and forth across the restaurant, make sure your water glass is full, deal with complaints corrections, take care of the payment, maybe other things we don’t even notice. With a home delivery, well, they drive across town to deliver for you, presumably doing so promptly but safely. The standard is, special work is being done.

But a counter pick-up? Really? The person behind the counter is doing no more work than any other register person at any other store. Do you tip the check-out person at the supermarket? Do you tip the concessions seller at a movie theater? Nope.

The argument is often made that these people are paid minimum wage. If that’s the standard, then why are only restaurant people afforded this generosity? Not to mention that servers get tipped because they get paid a pittance (well below minimum wage, often just a few bucks an hour) as the tips are expected to be their main income; cashier people, I understand, are paid a regular wage, as are the cooks.

I’m also pretty sure that a tip was never demanded for counter service when I was younger—of course, tip jars were hardly ever there, either. I’m not arguing that counter staff don’t need the money; however, a lot of minimum wage earners who never get tips deserve better as well. It just seems like an attempt by restaurants to justify paying more workers less, and/or an attempt by better-paid staff to get a gratuity simply because it is a close extension to an established but separate gratuity system.

I would be quite happy if America followed Japan’s example and just got rid of the system completely. Pay people a living wage ($15 at the very least for a minimum wage for whatever job), and just factor that into the prices.

Of course, what would probably happen is that the businesses would all pretend like the difference would cost them a lot more than it really would, and would take the opportunity to hike prices too much… still, the change would be a good thing.

Categories: Economics, Travel Tags:

Shut Down the F**k Barrel

March 23rd, 2015 7 comments

John Oliver:

Watching this, something occurred to me: when explaining how those terribly oppressed rich people should have their taxes cut, conservatives love to harp on the 47%, about how poor people get away with “not paying taxes.” What they mean, of course, is that poor people don’t pay income taxes. Well, federal income taxes. Well, in that one year where so many people lost their jobs. Usually it’s been more like 40%. Although most of that 40% do pay federal payroll taxes—typically only 14% of households don’t pay payroll taxes. And in fact, the poorest 20% of households pay more than 12% of their incomes in state and local taxes, and about 16% of their total income in taxes altogether. While Mitt Romney, who is worth more than $200 million and apparently works little enough to enjoy equestrian dressage, only paid 14% on his $13.69 million income, and that’s the only year he let us see, meaning he usually pays less than that.

But I digress. Suffice it to say, people who claim poor people “don’t pay taxes” have their heads up their asses. Let’s leave it at that.

But the video above, along with Oliver’s piece on civil forfeiture, made me realize that there are even more hidden “taxes,” and they’re not just lottery tickets. The heinous system of cities and their police forces shaking down citizens for as much cash as possible is perhaps one of the more significant overlooked taxes paid almost exclusively by poor people.

These videos also made me realize something else. Remember how, a few decades ago, we shook our heads at the kinds of countries—and we usually envisioned Latin American countries—where policemen typically shook down citizens for bribes and protection money?

Yeah, that’s right: we’re that kind of country now.

Congratulations, everyone who decided it was a good idea to cut taxes. This is so much better.

Republicans: We’re So Awesome

January 8th, 2015 9 comments

So, Republicans won more seats than before in the last midterm election, and now control both houses. One day after they started their new session, Mitch McConnell tried to take credit for the economic upturn that has been years in the making:

After so many years of sluggish growth, we’re finally starting to see some economic data that can provide a glimmer of hope; the uptick appears to coincide with the biggest political change of the Obama Administration’s long tenure in Washington: the expectation of a new Republican Congress. So this is precisely the right time to advance a positive, pro-growth agenda.

Yes. Sure. Because so many people were just so ecstatic and hopeful once Republicans gained their completely meaningless majority in the Senate. That’s what caused the economy to surge.

What asshats.

Look, I don’t even credit Obama with this, though the fact that more Americans are insured probably has a bigger effect than anything concerning Republicans. In the end, the economy will tend to swing around despite anything happening in the political sphere. However, if anyone in politics has the right to claim credit for what we’re seeing now, it sure as fracking hell is not the obstructionist, hostage-taking, shut-down-the-government pack of loonies that right now is strutting like a bunch of idiots who you know are going to self-destruct pretty soon.

For several charts and a general rundown proving what anyone could intuitively guess, The Washington Post has the goods.

Categories: Economics, Republican Stupidity Tags:

Consumption Tax

November 22nd, 2014 2 comments

If one counts out the recessions caused by U.S. economic concerns in 2001 and 2008, then it is noteworthy that 2 of the last three recessions in Japan—including the current one—have closely followed increases in the consumption tax.

It should also be noted that the initial consumption tax was accompanied by a lowering of taxes targeted at the upper end of the economic spectrum, and that in Japan, consumption tax has no exemptions for food or other necessities for lower-income people. Japan’s consumption tax just happens to remove large amounts of income just where it is needed most—not just out of personal needs, but out of the need for disposable income to fuel purchasing and therefore production.

If Japanese politicians want to raise the consumption tax yet again to 10%, as is currently planned, I think they would be well-served by doing so only after a 3-year experiment in which the tax is brought back down to 3% and original higher-end taxes reinstated. If the economy is doing worse after those three years (and not depressed by the world economy), then they can try a 10% consumption tax.

Not that that’s going to happen.

Categories: Economics, Taxes Tags:


July 4th, 2014 3 comments

Wow. The job market improved so much that even Fox News couldn’t find anything bad to say about it. That’s a rarity.

But seriously. 288,000 jobs, 5th straight month of 200,000 or more added jobs, unemployment back down to 6.1%.

We still took dramatic damage since 2001 and 2008 that has not been repaired. We are still crippled by debt. Taxes for wealthy people are still too low. Spending on infrastructure is still too anemic. Jobs still pay less. Who knows, maybe if Republicans in Congress hadn’t obstructed Obama for the past six years solid, maybe things would have improved a lot more—though Obama did not exactly try nearly as hard as he should have.

Bottom line, economies recover sometimes just because they do. But the political bottom line is, for better or worse, whoever is in office when something happens, they get the credit or blame.

Of course, just because Fox can’t find anything bad to say, doesn’t mean they give Obama any credit at all—a search of their main article on the story or other articles shows they do not mention Obama once, even indirectly, alongside good economic news. The opposite holds for bad news, naturally.

On a related topic, Obama shows promise to finally dig himself out of the hole that Bush dug for him. In the past, it has been a reliable fact that job creation under Democrats has been better than under Republicans—so consistently so that the poorest-performing Democrat (Kennedy) did better than the best-performing Republican (Nixon).

Obama’s problem: In his first year, his performance was crippled by Bush’s disastrous recession. Although Obama immediately turned job prospects around for the better, he still had to pull up out of a record-breaking dive. In that first year, 4.3 million jobs were lost. No fault to Obama, as I said, but he gets those losses put onto his portion of the ledger.

As it turns out, with the latest reports factored in, Obama has added a total of 4.8 million jobs net—and more than 9 million jobs if you don’t count the first year. Which is more fair—Obama only improved things, he did not create the abyss he dragged us out of. Obama’s record looks even better when considering that Republicans in Congress not only obstructed but did everything they could to sabotage things, up to and including the debt default threat, which did serious damage.

Compare this with Bush, who only added a net of 1.1 million jobs over 8 years. More fairly, if you count from February 2002 to January 2010, assuming it takes a year for one’s policies to get started and wind down, Bush lost 1.3 million jobs. But the official record, however undeserved, is +1.1 million.

Obama has overseen job gains of 1.4 million in the past 6 months alone, and 2.5 million in the past one year.

Alas, even at that rate, by the time he leaves office, he will only have added only an additional 7 million jobs or so—maybe a total of 12 million jobs added, net, over his eight years. That would probably end up being only a 1.1% average increase over his term, placing him of Ford or Coolidge territory.

Sadly, even if you don’t count that first year of climbing out of the hole, his yearly average job creation would only reach about 1.8%, still below Reagan (2.1%) and Nixon (2.2%).

Unless job creation really takes off and we regularly see numbers over 300,000 until January 2017, Obama will break the trend of Democrats always performing better than Republicans.

Categories: Economics Tags:

Perry’s “Texas Miracle”: Rob the Poor, Lavish the Rich

March 10th, 2014 2 comments

To hear Perry and conservative-cheerleader NewsMax tell it, Perry’s Texas is a paradise for all. 37% percent of all new jobs in the U.S. have been created in Texas since 2009, and it’s all supposed to be because of low taxes and low regulation:

Texas Gov. Rick Perry tells Newsmax that he attributes the “Texas Miracle” — the Lone Star State’s relatively robust economy during the economic downturn — to a “light” tax burden and a favorable regulatory climate. …

[Perry states:] “The men and women in Texas know something now after a decade-plus of our governorship and our policies being implemented by a Republican House, Senate, lieutenant governor and speaker. We’ve kept our tax burden as light as we could and still delivered the services that the people of Texas desire, and we have a regulatory climate that is fair and predictable.I cannot tell you how important is predictability and stability in the regulatory climate.”

What’s not stated is that it’s also because of a lot of other stuff:

  • Oil and gas prices are high, which sucks for the nation, but benefits Texas’ economy
  • Texas has a high birth rate and migration rate, artificially raising job numbers
  • Texas made off like bandits from the Obama stimulus, with half of the job growth coming from education, health care, and government sectors
  • Texas used $6.4 billion in stimulus money to help balance the state budget, more than all but 2 other states

And since the stimulus money is running out, Texas is now facing huge budget shortfalls, which it plans to mitigate in part by slashing Medicare and education spending—in a state which already has rock-bottom health care and education stats.

Certainly, Texas is great for businesses and wealthy people—but is horrible for the majority of people in the state:

  • Texas shares with Mississippi the highest rate of minimum-wage workers in the U.S.
  • 26% of Texans have no health insurance, the highest rate in the country
  • Deregulation of health insurance has led to sky-high rates
  • Texas has the 4th-highest poverty rate of any state in the nation
  • Texas’ unemployment rate, at 8.2%, is higher than the national average
  • Texas has fewer adults with a high school diploma than any other state; is 43rd in the nation in graduation rates, and 45th on SAT scores

I guess that when Perry says that the people of Texas are getting all the services that they desire, he figures Texans don’t “desire” education or health care. Or, likely more accurately, none of the people Perry associates with are lacking in any such services.

But the kicker is in the tax rate, when all taxes are taken into account. The state has no income tax, but it does have a high sales tax, and overall, its tax rates are extraordinarily regressive. Here is Perry’s so-called “light” tax rate, compared with California’s:

Blog Taxes Texas California

The poorest 20% of Texans pay four times more of their income in taxes than do the wealthiest 1%. That’s pretty shocking.

California’s is pretty regressive because it has an even higher sales tax, but that is attenuated by the income taxes. There is no such balance in Texas, meaning that the state’s tax burden falls chiefly on the poorest people—who also get the crappiest education, the least health insurance, and the worst pay.

So the message is clear: if you want all the benefits of third-world cheap-labor exploitation but don’t want to leave the U.S., Texas is your destination!

What’s most scary: this is the model for what Perry and many other Republicans want to bring to the whole country.

Not that that’s a big surprise, or anything.

Categories: Economics, Right-Wing Extremism Tags:

Right Wing Expectations

October 13th, 2013 5 comments

Bill Maher had Carol Roth on his show, yet another of the long line of conservatives calling themselves “independents,” talking deficit reduction we somehow never heard when Bush was in office. One of her points was about how Obama has raised the debt by “6 trillion dollars over the last four and a half years,” and despair that we have to raise the debt ceiling at all.

First of all, the $6 trillion number only comes from adding the full spending for 2009—which was George W. Bush’s budget, not Obama’s. And what Obama did spend over that was expressly to deal with the massive economic catastrophe Obama inherited on day one.

That’s a favorite ruse conservatives love to play: conflate the tail end of Bush with Obama’s own record, as in “Obama gave us a $1.4 trillion deficit,” or “Obama drove the unemployment rate up to 10%.”

A less contrived total deficit would be $4.7 trillion over five years. So, where did that come from? Did Obama just say, hey, let’s generate $4.7 trillion dollars in spending that wasn’t there before?

Of course not. Almost all of the debt under Obama has been from the money that, again, George W. Bush and Republicans in Congress committed us to. The Bush tax cuts for the wealthy. The wars in Iraq and Afghanistan. And then there was the damage caused by the fiscal cataclysm Bush handed Obama in early 2009.

The fact is, Obama has done almost nothing but cut the deficit since he came into office:

Year Deficit in
$ Billions
$ Change
in Billions
2009 1,413   —
2010 1,294 -119
2011 1,300 +6
2012 1,087 -213
2013 973 -114

But that’s not good enough for Roth; she was appalled that Obama’s spending was still raising the debt ceiling at all: “[The debt ceiling is] going up because the government overspends, because they refuse to balance the budget…. If they didn’t overspend, we wouldn’t be hitting the debt ceiling.”

So, what was Obama supposed to do, cut $1.4 trillion dollars in one year? To wipe that out in even five years would require raising revenue and/or cutting the budget by $282 billion per year, every year. Something unprecedented, save possibly for coming off of wartime spending at the end of WWII.

When Bush was in office, most of that time being when Republicans also controlled both houses of Congress, deficit spending went up more often than it came down (up 5 years, down three years). When it went up the first two years of Bush’s budgets, it went up by huge amounts: $286 billion and $220 billion.

The three years the deficit went down under Bush, it went down by $94, $70, and $87 billion dollars, an average of $84 billion a year—something conservatives at the time hailed as little short of genius. Under Bush overall, the deficit increased $192 billion a year—and we did not hear conservatives complaining even a tenth as much as they do now.

Under Obama, the deficit has fallen an average of $110 billion per year.

Even under Bill Clinton, while he was creating a surplus, it went down only $70 billion a year.

So, what exactly do conservatives expect from Obama, when they themselves are entirely mute on where this money should be cut? Of course, we know where they want to cut it: Social Security and Medicare, the exact programs they claim they want to “save.”

We know where Republicans do not want to cut it: from the military, where almost all of the waste and overspending exists. In fact, they want to increase our ludicrously high military spending. They not only want to stay in Iraq and Afghanistan, they want to start a new war in Iran—and wanted to invade Syria, at least until Obama said he’d take action there.

And we know where Republicans do not want to raise revenue: from millionaires and billionaires, and from corporations making tens of billions in profit every year with many of them paying no taxes at all on those profits.

So when a conservative whines about how Obama is spending us into oblivion? I would suggest trying to speak facts to them, but they would almost certainly not listen, and would instead probably spout the same utter bullshit like Roth was on Maher’s show.

Screw Altruism

September 27th, 2013 2 comments

Never live for the sake of another man, nor ask another man to live for mine.

Motto of the man who hoards 40% of the wealth held by 100 people, after he has become wealthy.

Categories: Economics Tags:

Just Saying

September 24th, 2013 1 comment

This is Krugman’s chart showing the U.S. budget as a percentage of potential GDP. To accentuate my point, I highlighted Republican administrations in red, and Democratic administrations in blue. There’s a pattern there, though it may be hard to discern if you are conservative.


Categories: Economics Tags:

Do Tax Cuts for the Wealthy Stimulate Jobs?

September 15th, 2013 8 comments

For the past thirty years and some, conservatives have claimed that the best way to create jobs and stimulate the economy is to cut taxes for wealthy people. From “trickle-down” to the recent drive to cut or eliminate the capital gains tax, the idea is that if you put more money into the hands of wealthy people, they will invest in business, thus creating jobs, leading to a stronger economy with more people paying taxes on greater incomes. Presto! A revived economy and more revenue collected by the government.

This has always struck me as one of the most obviously stupid ideas I have seen. Let me paint a little scenario with two variations.

Let’s say you have a depressed economy. People are not buying products, let’s call them “widgets.” They want to buy widgets (who doesn’t?), they just don’t feel they can afford to. Then there’s a Wealthy Person, who has tens or hundreds of millions of dollars. That person wants to invest in what will give the best return on his investment.

Variation One: you cut the taxes of the Wealthy Person. Both income tax and capital gains tax. The Wealthy Person gets a few million dollars extra that he would have otherwise paid in taxes, adds it to his pile of wealth. So, what happens? Will the Wealthy Person invest that money in a widget factory, thus creating jobs? No: nobody is buying widgets. Investing in a widget factory would be a stupid investment, bound to fail. Cutting capital gains will not lead the Wealthy Person to invest in a business which will fail. It’s not like the Wealthy Person did not already have lots of money to invest; if they weren’t putting it into widget factories before, why will adding a little more to their fortune change anything? The Wealthy Person will take that money and instead apply it to investments designed to increase his personal wealth even further, not to investments that are designed to create jobs or stimulate the economy.

Result of Variation One: the economy is still depressed, you have less tax revenue, and more debt—and some very pleased Wealthy Persons.

Variation Two: you don’t cut the taxes of the Wealthy Person. In fact, you raise his taxes to a marginal rate of 50%. Then you take that money, add it to the money that would have gone to the Variation-one Tax Cuts for Wealthy Persons, and apply all of that to give tax cuts to the lower-middle class and assistance to the working poor. Suddenly, the people who want to buy widgets have enough money to do so. They start buying widgets, and suddenly demand outstrips supply. Building a widget factory is suddenly a prime investment.

What about your Wealthy Person? You just raised his taxes. He won’t have enough money to invest in the widget market, right? Wrong. He’s a Wealthy Person. Which means he has lots of money. He doesn’t need a government tax cut. You can raise his tax rates to much higher than 50%, that’s not going to stop him from wanting to make more money. He’s got piles of cash, so no matter what, he’ll want to invest that in whatever gives the best return. When people start buying widgets, he’s going to build widget factories. And even if somehow his assets are all tied up somewhere, there are things called “banks.” These banks love lending money to people with lots of collateral and who want to invest in a booming business.

In short, no matter how high you raise his taxes, the Wealthy Person will not have any problems investing in a booming market.

Result of Variation Two: a revived economy, more jobs, stable revenue—and Wealthy Persons who are still making money and increasing their overall wealth.

Where am I getting things wrong here, beyond the simplicity of the scenario? How does this math not work out?

Categories: Economics Tags:

Pooling vs. Redistribution

September 7th, 2013 4 comments

Conservatives today have a favorite bugaboo: “redistribution of wealth.” By itself rather innocuous-sounding, it is clear code for a variety of evils: taxes, stealing, and downright, outright communism. It has now commonly been replaced with the term “confiscation.”

What is strange is that redistribution, in its conventional form, is mostly admired, including by the very people who demonize it. Most people favor a progressive tax system, for example. Those who loathe redistribution nevertheless claim that the free market will redistribute, imagining that the wealth will circulate with wealthy people paying handsome wages in exchange for labor—as false a myth as you can find, of course. They approve of redistribution, they just naively and foolishly believe that wealthy people will do it unbidden—many even credulously believe that that is what is happening right now.

What is not usually spoken of is the only alternative to redistribution: pooling of wealth. Most of the wealth in a society being drawn to one place and staying there. Not funding jobs or infrastructure, not moving through the economic engine. Just sitting there, its only purpose to draw more money to the pool.

If you think that redistribution is distasteful, then the effects of pooling are downright catastrophic. We’re seeing many of those effects right now, and they are going to get worse. And as wealth pools more and more, the usual corrective measure of higher tax rates will affect it less and less, because tax only reaches wealth that moves. To reach pooled wealth, you need the estate tax, which takes generations to reenter the economic cycle—and which wealthy people are clamoring to eliminate.

The economy is an engine; capital is the fuel. Should wealth pool, the engine will stall. Redistribute, and the engine runs with efficiency. Even Romney understood the basic principle, he just believed, like so many conservatives, that the fuel runs between capital investors and corporations—from one part of the top to another part of the top—with money to workers being a by-product, if anything—instead of the actual path it must take for an economy to be dynamic, which is from bottom to top and top to bottom.

A necessary observation is that while the bottom is forced to spend upward to live, the top has no such built-in force, and unless forced to redistribute downward, the top naturally tends to collect wealth and remove it from circulation. Conservatives have been systematically dismantling the forces we had created to accomplish this, including taxes and unions, thus making downward redistribution voluntary—which, in real terms, means the minimum necessary and no more. And the minimum is too slow a trickle to make our economy run.

At the gut level, most people seem to know this. But too many people now have bought in to the scam that somehow managed redistribution is evil and destructive.

Categories: Economics Tags:

Reward the Rich, Gut the Poor

July 16th, 2013 7 comments

Paul Krugman writes concisely and pointedly on what the Republican Farm Bill, stripped of food stamps, fully represents:

For decades, farm bills have had two major pieces. One piece offers subsidies to farmers; the other offers nutritional aid to Americans in distress, mainly in the form of food stamps (these days officially known as the Supplemental Nutrition Assistance Program, or SNAP).

Long ago, when subsidies helped many poor farmers, you could defend the whole package as a form of support for those in need. Over the years, however, the two pieces diverged. Farm subsidies became a fraud-ridden program that mainly benefits corporations and wealthy individuals. Meanwhile food stamps became a crucial part of the social safety net.

So House Republicans voted to maintain farm subsidies — at a higher level than either the Senate or the White House proposed — while completely eliminating food stamps from the bill.

To fully appreciate what just went down, listen to the rhetoric conservatives often use to justify eliminating safety-net programs. It goes something like this: “You’re personally free to help the poor. But the government has no right to take people’s money” — frequently, at this point, they add the words “at the point of a gun” — “and force them to give it to the poor.”

It is, however, apparently perfectly O.K. to take people’s money at the point of a gun and force them to give it to agribusinesses and the wealthy.

In the previous post, I pointed out something very similar. In the 2012 election, Republicans proposed tax cuts that would have heavily favored the wealthy, including capital gains tax cuts, a 20% income tax cut (new top rate: 28%), and a 30% corporate tax cut, on top of a slew of new loopholes for corporations, eliminating the estate tax and slashing the gift tax.

Romney tried to sell it as a “fair, flat” proposal that would cut things evenly for everybody—except that in reality, the top 0.1% would have gotten a 13% cut (just in personal taxes, not counting corporate savings) while the lower-middle class and the poor would have received less than a 1% decrease in their tax burden.

In the same year, Republicans also tried to raise taxes—something they had purportedly pledged never to do—on more than 20 million lower- and middle-class families. They tried to kill a tax credit for 11 million families paying for college for their kids; they tried to end child tax credits for as many as 12 million families; and they tried to end the Earned Income Tax Credits for as many as 6 million families.

They have consistently tried to slash unemployment insurance payments, and now are trying to eliminate food stamps for millions of families below the poverty line—while at the same time fighting for the most generous possible handouts to wealthy people and corporations.

Tell me, exactly what do Republicans have to do to get most Americans enraged at this kind of crap? Do they have to ritually slaughter a poor family and feed their flesh to billionaires on live TV or something?

The Truth, Revisited

May 20th, 2013 3 comments

This post is from a year ago. Maybe I should re-post this annually, or even monthly. It bears seeing again, and again. Recommend this. Share it. Post it. It’s the Truth.

Precisely. I’ve also been reading Thomas Frank’s Pity the Billionaire, which deals with the same topic from a different perspective.

The frustrating thing is, this should be so obvious, as obvious as the fact that the Laffer curve was full of crap. And yet millions, even a majority, buy into the bull.

Money naturally circulates upward; in order for an economy to work well, there must be some kind of mechanism to circulate the money back down. Conservatives think that jobs will perform this function all by themselves, even as they try to destroy unions, deny workers benefits, and otherwise minimize that precise flow downwards. In fact, a healthily progressive tax system and good working conditions are what create jobs and a prosperous economy.

The best way to stimulate the economy is to inject the money into the lower half of the economic cycle; injecting it into the upper half is counter-productive.

Taxing the rich is not only a good thing, it is a necessary thing. Government spending on infrastructure, education, and supporting the poorest among us is not just a good thing, it is a necessary thing. If you truly wish to have a robust economy.

But just as we still prosecute the same old drug war despite decades of studies telling us that decriminalization and treatment would be light-years better, we still bridle against the bloody obvious in economics.

We know it’s a fact that dollar for dollar, food stamps are the most effective stimulus mechanism, followed closely by unemployment benefits and infrastructure spending, and yet most of the nation seems to accept Republican whining about how that will destroy the economy.

It is just as solid a fact that dividend & capital tax gain tax cuts, corporate tax cuts, and the billionaire-slanted Bush tax cuts are among the absolute worst stimulators–and yet we somehow allow right-wingers to insist that these be given a priority.

We’ve tried it the Republican way for 30 years and we have nearly destroyed our economy. Now right-wingers complain about how they have never gotten a chance and how liberals have ruined everything. They are absolutely wrong. Tax rates for the wealthy and for corporations should rise, for their own good as well as everyone else’s. Tax rates for the middle class should stay the same (being as low as they are) or be eased. Money should be spent on infrastructure, scientific & technological research, and education.

Categories: Economics, Right-Wing Lies Tags:

Top 20 Pages with Ads You Should See

February 17th, 2013 Comments off

In case you were wondering why “Top 10” and “Top 20” lists are so popular right now, it’s the same reason why regular articles which are not that long are broken up into four parts, or why sites like the Christian Science Monitor offer so many “fun” quizzes and tests: to get money.

It’s all about the ad count. The more times you can make a reader visit a new page, the more ads they are exposed to. Numbered lists are perfect for this: each item gets its own page. Make it interesting, and you get 10 or 20 times the number of ads you can reasonably get away with on a page.

Quizzes (can you pass a citizenship test?) are even bigger traps: users are drawn into finishing these as they get no payback until the very end; this is abused when the number of questions is not initially revealed and the test goes on and on and on…. Alternately, sites can double the ad views by giving a page to each answer as well as to each question.

However, any quiz or numbered-item article should be approached with caution; they are the go-to gimmick these days, and are made not because they have anything interesting to forward, but simply because it’s time for a new one.

I understand that sites have to find a way to pay for everything, but there comes a point when it goes a bit too far.

You know what would probably pull in more money from ads? Stop making them distracting. I’d love to see an ad service that guarantees no ads will move, jump, cycle, or otherwise distract from the primary focus of the page. If they did that, I would switch off my ad blocker (as would perhaps millions of others) and, if the ads were designed right, I would probably start clicking on them.

But if Top 100 lists draw in enough yokels and lets those with ad blockers sail serenely past… well, so be it.

Categories: Economics, Entertainment Tags: