Saturday, January 19, 2013

The "Libertarian Ideal" is neither libertarian nor ideal.

A lot of talk has come up from conservative quarters about "government so small you can drown it in your bathtub". It makes for great campaign rhetoric, and it sounds really good on a flyer. But does it work? Let me explain why it may not be such a great idea in practice.

Let's say you and I start our own little Galt Gulch. I'm a fair bit wealthier than you, so I buy a couple of thousand acres of land. You get a good deal on a section, and you settle down.

Pretty soon, I decide I really don't like you. The reason is immaterial; maybe you listen to Justin Beiber and I don't want that in my libertarian paradise. I quickly realize that the land around your nice little section is for sale in every direction. So I buy it.

Suddenly, you're your own little island, with no means of entrance or exit. You are completely dependent on me. I haven't done anything to trespass on your property, I haven't assaulted you...nothing that would amount to committing a crime, where we would want to get the authorities involved. I haven't even restricted your movement, as long as you stay on your land.

You can't get a variance; that would involve a sort of eminent domain, and an abridgement of my rights as a property owner. You can't ask the county to build you a road; it's my land, my rights. Suddenly, unless you have a well developed airstrip, you're not getting your goods to market and all of your production is useless except for your own subsistence.

So you come to me in desperation. You need relief. I offer to build a toll road...but I set the tolls. Because you are the only customer and I want to receive a return on my investment, I charge draconian tolls. I can, right, no business regulation? You finally sell out to me for pennies on the dollar and head off for more socialist pastures.

These are not hypothetical examples. Sure, the specifics are hypothetical, but because there is no government regulation, my control of the wealth, and the land, allows me to get wealthier at your expense. And because you insisted on a lack of government regulations, there's really nothing you can do about it. A feudal system quickly develops, and the poorer members of society begin to serve the wealthier members.

Just like a pyramid scheme, this is pretty good, as long as you are at the top. But as long as you're part of the support structure, bearing the weight of society gets pretty tiring pretty quick. Your Libertarian dream just turned into a nightmare.

Now, it's equally obvious that overregulation stymies growth. But a total lack of regulation creates oppression, and upward mobility that was once aspired to suddenly becomes a privilege for the very few.

I have said for some time that what we need is smarter government, not necessarily smaller government. There's a time and a place to regulate, but all the time isn't the time, and everywhere isn't the place.

So the next time someone tries to pitch a "perfect" Libertarian system, remember, it's good to be king; not so good if you ain't the king!

Will you be a Go-Getter or a Grumbler?

One of my favorite old time yarns concerns a travelling salesman who came upon a farmhouse in the middle of the country. He saw an old hound dog sitting on the porch, howling away. After the dog quieted down some, he rang the doorbell and an old farmer came out. He started his sales pitch, and the dog started in again. Again, the dog quieted down, but kicked it up just as the salesman was trying to continue his pitch.

Finally, exasperated, the salesman looked at the farmer and asked "what in the WORLD is wrong with that dog?"

"I dunno", the farmer replied, "probably sat on a burr or something."

"So why doesn't he get off of that burr?"

The farmer shrugged, "I dunno. I guess he'd rather holler".

We have a lot of pressing problems in the world; will you go out and be a go getter, or will you be a grumbler?

In an attempt to make a difference, I have started a petition to create a five year plan to eliminate homelessness on the White House petition site. Won't you join with me and sign the petition so that together we can make a difference? Petition

Friday, January 4, 2013

Republicans and Racism

I have a a fair amount of Republican friends, some of whom may choose to re-evaluate their status after reading this article. that's fair enough; I am speaking in generalities here, and that shouldn't require constant disclaimers.

I also have number of NON Republican friends, a strong number of whom consider the GOP to be racist. I'm usually dismissive of that kind of talk, but after the last election, I have to wonder if there's more truth than non truth.

Before going forward, let me be very clear: this is not about whether you did or did not vote for Obama. This is about whether fears and concerns about the future were based primarily on race, rather than reality.

Republicans should have loved Obama's first term. Gun control? Not a whimper, aside from the chatter that followed the unfortunate shooting of Gabriel Giffords. Trickle down economics? Done, to the point of not one, but TWO stimulus packages that favored big banks, interest rates held at historic lows, and tax policy that retained capital gains at a low rate favoring the wealthy. War President? He continued action on the wars in Afghanistan and Iraq, only scaling down the latter on a timetable established by his predecessor.

Add to that his continuation of detentions at Guantanamo Bay, extension of Patriot Act Provisions, and adoption of a longstanding Republican health care model based on an individual mandate, and you could have called this guy Bush III.

But Republicans suddenly became fiscal conservatives, and the deficits that "didn't matter" under Bush II became deficits that mattered. And the same people that gave W a blank check to reinvigorate the economy got squeamish.

But even that paled in comparison to their Presidential choice. If they wanted a candidate who could make government so small "you can drown it in a bathtub", they had that candidate. They had that chance. Ron Paul offered all of that and more.

Instead they chose as a candidate the one who authored the model for the ACA; a big government, big spender from Massachussetts. Why? Aside from his contempt for the poor, there really was not a huge difference between Obama and Romney. No radical new tax plan, no spending reduction plan, nothing that would have altered the suddenly all important budget significantly. No exit strategy for the remaining war in Afghanistan, or government reduction plan, when these issues were allegedly important. Only vague suggestions, altogether reminiscent of the "change" mantra from 4 years ago.

Ahhh, but it gets better. The GOP prides itself on the Christian Right (a group that is neither). And having lived for most of my life around people who self identify as part of the Christian Right, I know that in their worship, they're pretty open about the feeling that the LDS church is a cult. There have been volumes of books written on the subject, and all you need to do is walk into a Christian bookstore OUTSIDE of the state of Utah, and you'll find them prominently displayed in the cult section. Yet all of that not only didn't matter to these people, they literally shouted down anyone who felt that it SHOULD matter.

Seeing all of this, one has to wonder why. Why they would select as their candidate a priesthood holder in a faith they consider to be evil over another candidate whose policies were largely a continuation of the policies of his predecessor. And as I search the horizon, I can find only one.

Are Republicans racists? I can't call that, really. I know a good number of Republicans who are decent people, who don't have a racist bone in their body. Those people were usually the ones who reluctantly voted for Romney, in my personal experience. But it's starting to appear there is at least a plurality within the party that does the label does fit. And that plurality, I believe, is significant enough that no thinking conservative would want to be involved with a party that allows and even embraces it.

Thursday, September 20, 2012

Why We Need to Address Income Inequality

One of the questions I get often is why I keep dogmatically driving home points when people have already made up their minds. The answer is pretty simple: because you can, and do, change minds when you present an argument in a way people can relate to it, a way that they comprehend. I know because it's happened to me.

Despite many people's protests that I am leftists, I am very strongly pro free enterprise, and have been for many years. The only way to achieve economic growth, really, is to give people incentive to keep reaching higher, to keep moving forward i their careers. So the idea of income equality is a bit disconcerting at times; after all, if a burger flipper made as much as a CEO, it would be easier to stay a burger flipper.

In the 2002 Wisconsin elections, I had the pleasure of meeting a man named Tony Palmeri. He was a University of Wisconisn -- Oshkosh professor, and had a prety good understanding of labor issues. We were addressing the ida of collective bargaining, and he commented that every time collective bargaining came up, opponents would refer to it as socialism. The pproblem is, in a socialist sytem, your wages are set by the government. Conversely, in free enterprise, you have the right to shop goods and services on the open market, and the only thing a worker has to market is his labor.

Thanks to the magic of Facebook, we've all seen a half a billion graphs on income inequality in the us. It would be almost overkill to add more. But the basic truth is, CEOs and top level employees are earning more, and workers are earning less (against inflation). Of course, the laissez faire economist would insist that this is because of the basic supply/demand curve; that because of high unemployment, the supply exceeds the demand in the workforce.

But this is an inadequate answer as llong as we are outsourcing jobs and issuing H1B visas. There is obviously significant demand, and in some areas, the demand still exceeds the supply. But more to the point, many costs have actually risen during this time, while worker's pay has not.

And this brings me to my chief point: addressing income inequality. While it's tempting to say that a CEO should be able to make as much as they wish, in practice, that's just not working. Seven figure salaries are creating a super wealthy class of people who not only will never have to work, but whose heirs for several generations down will never have to work.

While the founding fathers didn't speak to this, it's a fair bet their opposition to titles of nobility stems directlly from the idea that creating a leisure class that's free from the encumbrances of labor because of excessive wealth is pretty distasteful.

Whether the wealthy want to acknowledge it, the working class deliver the value to a product. An IT worker, for instance, is the brand. When they leave employment, all their certs, their skills, their knowledge leave with them. A teacher also brings the same qualities to the table. In fact, in every area of the workforce, a knowledgeable employee brings things to the table that can't be replaced by simply walking to the day labor establishment and pointing to the guy with the yellow shoes.

I have long said that I LOVE capitalism; I just want to be included, not exploited. And a good capitallist recognizes that. They recognize the value of their employees, the value of someone who has the knowledge to keep thei gears of industry turning while they head out to the Hamptons. And they pay accordingly.

We're at a time when a llot of Americans are at their breaking point. And they're where they are because they're fed up of spending their lives in a hamster wheel, moving forever, but never forward. They want aa promise, a hope, a legacy that only the promise of upward mobility can bring. And they want to know that the simple costs of living will not drive them to bankruptcy and leave them intestate. That's a problem that can only be solved by paying executives a bit less and paying the working class a bit more.

Call it wealth redistribution if you want. I call it compassion.

Wednesday, September 19, 2012

America's Economic Problem: We've Overvalued the Middleman

When I held a job not long ago in education, I was quite excited at the opportunity. I had, at one time, acquired a great number of older computers in the hopes they could be applied in the education sector. After all, I was constantly hearing complaints about how poor school districts were, and how they were struggling on barebones budgets.

I didn't spend much time there, but I did spend enough time to find out that just isn't true. The truth is, there's a boatload of money out there, especially for rural schools and schools with high free lunch program participation.

I was then excited about the possibility of using my thrifty approach to spread the school's dollar further. Unfortunately, once a vendor knows you work for a school district, they get dollar signs in their eyes. I distinctly recall a vendor trying to push off computer models that were nearly 6 years old for $300 per unit. When you can get a reliable new machine for under $500 per unit, that's really not a spectacular deal.

But as I looked at the vendor relationships, I began realizing the key role the middlemen played in the business transactions. And that there were aa llot of them, many layers of folks dipping their hands in the till somewhere between the vendor and us. And I realized it's happening in a lot of industries, notably healthcare.

The problem we have is that the people who get paid the most are the people who do not actually PRODUCE anything. They certainly provide a value added service in expanding the market for a particular product, and moving that product. But they simply aren't worth the price they're asking.

I have worked, for instance, with resellers. Consignment stores and resale shops definitely provide a value in getting items to the market. But their margins, once in the 10 to 15% range, crept upto 25%. Even at 25%, it was still a value, as it saved me the hassle of finding a buyer for my goods. But after a "revelation" when they travelled to a larger city where commissions were 65%, they increased their commissions to 50%.

Now, some people may feel this is a good idea, but it doesn't work for me. If you pay me 50 cents on the dollar or less for the items I'm selling, well, then, I'll skip the middleman, sell it at 75% of my planned asking price, and save the buyer a bit while making more for myself. The middleman is just not worth that much.

And we've seen the trend in the current economy. While workers' wages have been stagnant, the wages for middlemen have increased. A business degree is still considered a "hot" degree despite an apparent overabundance of business majors. And it often seems that for every person doing the work, there are two or three people moving money.

I don't think middlemen are without value; they've certainly created a broader market with greater potential. But they've greatly increased the demands on returns on their investment to unrealistic and unsustainable levels. Until we get back to realizing that the wealth of a nation is in the workforce, not on wall street, this problem will not get better.

The Romney Gambit

Ever since the release of Romney's comments on the 47% that he described as "victims" and "dependents", something has not set right with me. And it has to do with the nature of American politics. When you run for the highest office in the country, you've already been vetted, you've already learned how to handle a mic, and what to say and what not to say when the cameras are rolling.

Sometime late last night, amidst the Facebook fury that continued to pour out, it hit me. Romney didn't misspeak, this was very deliberate. I believe that the Romney campaign is employing a new strategy to separate the two candidates. Let's call it the Romney Gambit.

It has long been theorized that to understand how someone's mind works, you need to look at the accusations of their opponents. In the case of the Republican Party, look back no further than 2008, when they accused the Obama campaign of using race to bait the undecideds. They charged the Dems with planting the idea that if you didn't vote for Obama, you were racist.

Switch "Obama" with "Romney" and "racist" for "classist", and you have the Romney gambit in a nutshell. Buy demanding that 47% are victims, he is challenging voters to prove that they are NOT part of the 47%, that they are in charge of their own destiny. He is charging everyone who has ever bought a scratch ticket, every worker who has ever tried to burst that glass ceiling, to prove that they are not part of the dregs, the commoners, the unwashed masses.

It's a risky proposition, to be sure: potentially alienate half of the American public in order to push the other half to the polls to prove they're worthy, to pony up to the Republican trough in the mere hopes that the 1% will throw their breadcrumbs to the 99.

But gambits are risky, and it's one that just may work. Certainly a lot of self identified conservatives that are part of the 47% Romney chastised have come up to defend his statements. And Romney has not backed away from his statements, something he would have done had it been an actual gaffe.

Monday, September 17, 2012

No Worker Left Behind

This is a bad time in America for labor. And some would say it's a bad time to speak up for worker's rights. But the truth is, in all of my 42 years of existence, I can't think of a BETTER time to speak for worker's rights. To that end, I propose the following program, which I call "No Worker Left Behind". It's an imperfect proposal, to be sure, and probably contains ideas that both left and right reject, but I'd like to use it as my contribution to start the conversation on how we should address workers' rights in America.

1. Minimum wage should be set regionally, with a base that puts a full time worker's salary at 80% of the poverty line for a family of four. Based on a 40 hour week, this would give a median minimum wage of $9.22/hour ($23,050 x .8 = 18440/2000 = $9.22). This minimum wage would have a regional multiplier based on the area cost of living. Thus, a region where the cost of living is 85% of the national average would have a minimum wage of $7.84; an area with a cost of living of 120% of the national average would have a minimum wage of $11.06.

2. Small businesses and startups that meet certain defined criteria would receive a stipend of up to 50% of their employee's salary if they hired the long term unemployed or employees from disadvantaged demographics, which would include not only minorities, but employees from families with multigenerational poverty.

3. Businesses would be allowed to outsource, but they would pay a tariff equal to two times the percentage of their workers times the tariff charged to the country where their employees are outsourced. For instance, if they outsource 20% of their workforce, they would pay 40% of the tariff they would pay if they did business within that country; if they outsourced 80%, they would pay 160%. Exempt employees would NOT be included in the headcount of employees for this tariff program. Tariffs would be applied to the small business/startup stipend mentioned in point 2, as well as workforce development programs.

4. Workforce development programs would include a relocation grant/resettlement program for the longterm unemployed. This would allow unemployed individuals to be able to afford relocation to seek employment.

5. All employees will be advised of their right to unionize. While they wil not be required to join a union if they work in a "right to work" state, they must be advised of their right, and that the employer does not have rights to terminate them if they join the union.

6. 401k/pension plans will be portable, meaning they don't have to move from one plan to another when they change jobs. While employers will not have to match employee contributions, the employee will be able to move their payroll deductions to allow their old plan to accumulate.

7. Businesses will be allowed to deduct all contributions to employees' salary and benefits.

8. Businesses that cap CEO salaries and payout over 50% of net company profits to their nonexempt workforce on a proportionate scale will receive a 25% tax liability reduction.

9. We will work to provide legal immigration status to any worker who has committed no violent felonies, meets a strict residency requirement, and has worked/attended school continually for at least 90% of their residency.

10. H1B visas shall not be issued until a database of workforce applicants in all 50 states has been searched and eligible candidates interviewed and, if qualified, offered relocation assistance.

I don't think of any of these points as being particularly radical, but am interested in CIVIL discussion on the ideas I have advanced.