The Other Shoe

Under Ryan and McConnel’s proposed tax plan, tax breaks for corporations will drive up stock markets, creating the impression that they are a more secure haven for retirement funds than Social Security. The Republicans will advance legislation to transfer Social Security obligations to private investment funds.

Remember that during the corporate restructuring of the ’90s, companies with well-funded pension plans were bought out, raided, and the folded up, leaving pensioners destitute. The new Social Security fund managers will reap windfall profits, and then default on Social Security commitments.

The New Deal recognized a fundamental fact that Republicans don’t wish to honor: “innovation” in financial services generates profits by churning wealth and increasing risk. That’s fine for those with money to play with, but the middle class needs a safe haven for its wealth. Those havens have been steadily decimated.

Prior to deregulation of the Savings and Loan industry, the middle class loaned money out to each other and earned interest on savings at a 1% differential. Today the differential is closer to 8%, and the profits go to Wall Street.

Prior to the regulations of the Affordable Care Act, which stabilized health insurance markets, the middle class paid for insurance and was denied coverage by corporation that hired huge teams whose sole purpose was to find technical errors in their applications for coverage. It was fraud.

And now we confront the desire to privatize our retirement planning. The financial industry drools over the huge pool of Social Security funds, but it is a temporary opportunity. Social Security comes directly off of our paychecks, and so reduces disposable income. Once that direct deduction is removed, people will be faced with a choice between putting money into a retirement fund and buying a fancier car or replacing a broken water heater,. Most of them will choose to spend the money, and the cost of living will rise to absorb all of their disposable income, eventually leaving nothing for retirement savings. This is what happened in the era before Social Security, and our country’s elderly were the poorest segment of society.

So, yes, Ryan and McConnell, burn down the house that Roosevelt built. Your friends on Wall Street, understanding the demographic realities, will siphon off the money to finance mansions on the pristine federal parkland that I am certain you will sell off to them. And you will be remembered as the facilitators of the greatest con ever run against the American people.

Christian Tax Policy

Here’s the prescription:

  1. Progressive corporate tax to punish monopolies and foster small business formation.
  2. Value-added tax to soften the transition to automation of work.

What follows motivates the prescription.


As a Christian, it is hard for me to focus on money. It’s not that I don’t understand economic and financial theory, it’s just that money isn’t important to the ends that I pursue. I seek, through this blog and other work, to heal the confusion that poisons our relationship with the Most High. That’s a difficult problem, demanding the fullest commitment of my energies.

As I told my sons in their formative years: “Money is a way of storing power. For those that commit all of their power to solving difficult problems, there is nothing left to store.”

Jesus warned us that “You cannot serve two masters…No man can love both God and money.” Therefore, in seeking to transform our relationship with the Most High, we do need to understand money, because it is a principle source of resistance to the rule of love. People that desire money desire it because the are selfish, and as I have explained out at Love Returns, selfishness is the opposite of love.

We have two looming disasters in our economy. The first is the destruction of the middle class by the richest members of our society, people such as Rupert Murdock and Peter Thiel that have no compunction about using their wealth to fund propaganda machines that demonize government. The second is the loss of blue-collar jobs, accessible to those with high-school diplomas, to automation.

The exploitation of resources has always been a foundational principle of American politics. Elected our first president, George Washington complained that he spent all of his time as a promoter of business opportunities in the nation’s undeveloped lands. That practice is enshrined in most of our state constitutions, where the first priority in land use policy is economic. At the federal level, conservation policy has limited the most brutal forms of resource exploitation.

Contract law provides a legal framework for exploitation of the last great resource: human potential. In the “Land of the Free,” the ability to enter into economic contracts is one of our most honored acts, though paradoxically it places us under the heavy hand of law enforcement when we have disputes. It is this that is decried in Revelation 13:18:

so that no one could buy or sell unless he had the mark – the name of the beast or the number of its name.

Murdock, Thiel, and their ilk know that they have attained wealth only through exploitation of investments made by others – investments accrued over millions of man years of public education and government-funded research, and trillions of dollars of infrastructure investment. Their attempts to limit their obligation to “pay it forward” are driven by greed.

Not being limited any longer by prudence or compassion, this class seeks economic dominance in their various industries. Concentration of industrial power is visible in all industries. It was decried as monopoly in the late 1800’s, and defense against it was established through the Sherman Act, the Clayton Act and the Federal Trade Commission. Those tools have become blunted in the last twenty years because trade has become multinational. Facebook and Google, the information service monopolies of our era, are not disciplined because they are American monopolists. The European Commission sees them as adversaries, of course, and Google, for one, is facing some large fines for monopoly conduct. But it’s not limited to high-tech: concentration is growing in telecommunications and financial services.

Fortunately, monopoly has one clear indicator: huge profits. In the personal tax code, we recognize that those making the most money also benefit most from public services, and tax them accordingly. We should do the same in corporate taxation. While large corporations use their market position to reap huge profits, it is small businesses that generate new opportunities and new jobs. We should reward them for their efforts. We need a progressive corporate tax code.

The middle class is not only being squeezed by monopoly pricing, it is being gutted by automation. Jobs are disappearing, and fast. On the immediate horizon is the loss of almost two million blue-collar jobs as shipping moves to self-driving trucks. But we see this throughout America: even as wages rise overseas, making local production competitive again, the factories that we are building use a fraction of the employees needed by their predecessors. All the material manipulation and most of the assembly is done by machines.

The factor that drives this investment is payroll reduction. A robot is a fixed-cost investment, does not ask for higher wages, and is subsidized by capital equipment tax write-offs. They are also far more precise in their work, yielding higher-quality goods that are preferred by consumers.

The replacement of taxed payroll expenses with tax-free capital equipment investment also hobbles government by restricting tax revenues. Clearly, our workforce needs new skills. Our youth are provided those skills for free by pubic education, but those skills no longer guarantee lifetime employment. People need to learn throughout their lives.

Employers, of course, don’t want to pay for that investment, because it creates opportunities for their best people to take positions elsewhere. So – as predicted by Adam Smith in The Wealth of Nations – the tendency of corporations is to exploit workers until they can be replaced by machinery, and then to cast them aside.

Smith defined the theory of capitalism, and his prescription was simple: governments must tax businesses to provide workers opportunities to retrain when they are replaced by equipment. Governments starved of tax revenues by automation can’t provide that service, which means that America’s human capital is now going to waste.

The solution comes to us from policy-makers confronting outsourcing of jobs: in Europe, companies were caught out selling products “Made in England” that were assembled from parts produced overseas in low-wage markets. To limit that incentive, a “value-added tax” was created. VAT charges a tax on companies reflecting the increase in their wealth as materials move through a system to create a finished product.

While this didn’t prevent jobs from going overseas, it did ensure that government revenues were maintained to support retraining and job placement services. If applied to goods shipped into our lucrative consumer market, it is also a reasonable way to limit the social costs of overseas production by countries that choose to exploit both labor and the environment. If a car made in South Korea for $2000 and sold in South Korea for $6000 enters the American market to be sold for $20,000, well the South Korean manufacturer should pay a VAT when that product is unloaded at Los Angeles.

The Clock is Ticking!

Women have a biological clock: menopause, the point beyond which they cannot have children.

This is my version:

For about a decade, whenever I entertain romantic aspirations, I gravitate toward a vision of lying on the couch with my head in her lap while she strokes my hair.

I’m 57 1/2, ladies! Will I have to settle for a scalp massage?

More Bread on the Water

When I went out last to the Skeptics Society meeting in Pasadena, I had to apologize to the presenter for my difficult questions. My three sites (Love Returns here at WordPress, and the philosophical treatise at the original everdeepening) are not random ruminations, but develop messages. In interacting with other intellectuals, I tend to drive conversation into those oceans of meaning.

The challenge is their eclectic foundations: physics, philosophy, theology, spirituality, sociology, politics, and psychology. I have been blessed to live in an era during which people exploring at the edges of those fields have been nibbling at each other’s cheese, so to speak. Unfortunately, those feasting on the resources established to support mainstream thinking have also become adept at avoiding discussion of alternatives.

But I am proud of the body of work I have amassed, and believe that it deserves consideration. Since I earn enough to make ends meet, I’ve decided to finance that process through Stumble Upon.

It’s bracing. I set up two campaigns, one pointing at Love Returns and the other to the New Physics page here. I went in pretty hard, setting up to spend $100 a week. In both cases, I decided to target under-forty audiences, expecting that they would be more open to new ideas.

I was warned when I established the advertising campaign for my books. Click-through rates are about 3%. So while views on my sites have indeed mushroomed, only about one in twenty appear to actually click through to read the development outlined in the initial page.

Feedback is limited, much as it is here. New Physics has gotten three likes in 300 views. Love Returns four likes and five dislikes in 500 views. I’m actually surprised that it’s that positive: the target audience are Christians, and I was expecting dogmatism to push the dislikes far higher.

When I was in my first year here, I had a couple of visitors from the Philippines start at the very first post and walk all the way through my blog. That hasn’t happened in either of my Stumble Upon campaigns. People pick and choose their content, based upon the thumbnails on the anchor page.

But people are looking. I can’t maintain $100 a week, given that I’ve got $100 a month already in outlay here and at Wistia for the video feed at Love Returns. I’m not expecting anybody to contact me to ask me to come speak to them. But I think that I’m getting enough click-through activity that I’ll keep it going at about half the current outlay. That corresponds to 1000 views a month between the two campaigns. We’ll see if it tails off at some point.

It’s Finally Come to This…

I know that my less liberal friends are put off by my campaign against fiscal conservatism.

But it’s brought us to this:

UN Investigates Poverty in the US

To say that I am ashamed is an understatement.

“In God We Trust.” “One Nation Under God.”

Right. Go ahead. Wrap yourselves in the flag, and brandish the cross while you shed tears over profits lost.

How long must we suffer this faithless perversity?

Trolls against Compassion

In watching the Republican Tax Deform bill works its way through the institutional process, I can’t help but see trolling in play.

Online, a “troll” has been determined to be a person that understands human psychology, and uses it to disrupt functioning social systems. They have all the tools necessary for compassionate engagement, but choose to use them to cause fear and pain.

You see this in the tax bill crafted by Ryan and McConnell. After accounting for the additional $1.5 trillion in debt that will accrue to the public during the lifetime of the program, only the rich will benefit from the bill.

Every successful troll claims a beneficial intent, and we see this advancing in the Republican policy program. Ryan and McConnell want to create a fiscal crisis so that they have a remit to cut middle-class entitlement programs such as Social Security and Medicare. This is a program that has been pursued by the Republican Party since the Reagan era. America’s $20 trillion public debt was amassed due to tax cuts for the rich advanced during eras of Republican control. They created the public debt, and now claim it as the reason to cut benefits established and paid for by the middle class.

To understand why these trolls are not exposed, we have to understand who benefits from their strategy. It is the financial system. Large money-center banks suck at the teat of government debt. They profit every time a government bond is sold and redeemed – and long-term deficits means that those redeemed must be replaced by new. They profit from fiscal irresponsibility in Congress. The same is true of our trade deficit: every time an American buys a Chinese product, dollars must be converted to yuan, which flow overseas and then come back to America as dollars that buy our government debt. Every step in that process makes money for the financial industry.

What should be alarming is that profits enjoyed by the financial industry accrue from the exchange of dollars that does not add value to our economy. The value of the dollars does not change – they simply move from place to place.

Wall Street is effectively a tax on Main Street.

What is painful is to realize how deeply this psychology has migrated downward into our economy. Payday lenders make short-term loans against future earnings, sometimes charging as much as 1/3 of the loan value for bridge financing that lasts only a week. In Kansas, the most successful franchise (raking in billions of dollars in profits) was started by three brothers that claimed Native American sovereignty to get around state regulations that prohibited predatory practices. Eventually, the FBI stepped in to tear down their empire. But as the empire collapsed, the remaining brother took the protected financial data and created a list of fake debt claims that were then sold on to the debt collection industry.

Yes, many debt collectors are no longer paid by claimants. They actually pay for debt listings, and do little to verify the validity of the claims. The Tucker family made millions by selling the fake debt claims to multiple debt collectors. Those debt collectors had mouths to feed and mortgages to pay, and the only way to make good on their investment was to get money out of the people whose private financial information they had acquired. The FBI is now investigating the abusive practices of the collectors working against those false claims.

The abusive behaviors of the financial system, libertarian politicians and online trolls are linked by another factor: their behaviors harm people that they don’t know personally. Safely at a distance, trolls reach out through our communications infrastructure to wreak havoc in the lives of their victims. The don’t have to confront the mounting desperation of individuals and communities ground down by their hunger for money or power. They simply acquire wealth that they use to finance the careers of politicians that oppose regulation of their industry.

This is what makes men like Paul Ryan so pitiful. They believe that they must be doing something good because people tell them that they are taking on a problem that poses an existential threat to our country: the federal debt. But the people that applaud his determination are those that engineered the creation of that debt, and that benefit most from its existence. The true motivations for their investment in politicians such as Ryan is to ensure that their wealth is protected when the system collapses.

Trembling underneath this juggernaut of debt, there are those in American commerce that still believe in producing goods for consumption, and that compete to create value for their customers.  Working in the automation industry, I am conscious that the work that I do displaces workers, creating distress from a distance much as does the financial industry. But being involved with the creation of goods and services, I do feel the pulse of that part of the economy.

The mantra that is evolving is hopeful. On the surface, that is hard to see: robots are displacing blue-collar workers, and artificial intelligence is threatening knowledge workers. What remains for people to do, then, is to ensure that customers are happy and successful, building a base for repeat business.

In other words, while the masters of the universe troll society, on the ground people are focused on learning to care for each other.