January 27, 2013

The Dying Gasp of the Ancien Regime

Students of history will recognize the term Ancien Regime as referring to Pre-Revolutionary France and the dominance of the monarchy and noble families. My reason for invoking this phrase isn’t too different. We don’t have a monarchy or titled nobility in the U.S., but we certainly have an aristocracy that seeks to protect their privilege at the expense of the average citizen.

But you say, “No! we have elected government and free markets!” And I respond, “Ah, but look closer. There are subtle limits on our representative governments and the reality is that it isn’t too hard for the monied and the powerful to manipulate these segments of our government.

What I mean by all of this is demonstrated by the dysfunction of the Senate, the unfairness in tax policy and the method by which congressional districts are drawn. Many of the current problems we see in the federal government are actually due to institutional structures put into place by the Founding Fathers. We tend to lionize the people who created the Declaration of Independence and the Constitution and we regard the Constitution, itself, as a quasi-religious text.

However, in some very subtle (and sometimes not so subtle) ways, our government was designed to protect the interests of the powerful. The Founding Fathers, to a large extent, were all rich white men. It makes sense that they would structure a government that would tend to favor people like them. However, the structure of the government designed by this document tends to work against the interests of the average citizen.

How is it that every member of Congress has more wealth than probably 90% of the country? How is it that the most profitable company in the world (Exxon, at the time of this writing) gets substantial tax breaks and other subsidies from the government while we’re cutting unemployment insurance and other social services? How is it that many state legislatures are dominated by one political party (the Republicans, with super-majorities in some cases) and we re-elected a Democratic president and increased Democratic control in the Senate? How is it that it is perfectly constitutional for state legislatures to pass laws that would have changed the outcome of the Presidential election without affecting the number of votes cast or the outcome of the popular vote? How is it that it takes 60 votes in the Senate to pass legislation (the Senate is a majority rule, 51 votes win, legislative body)?

All of these are the result of structures put into place by the Founding Fathers and reworked over time through our history. All of these reflect a government that is fundamentally concerned with protecting the privileges of the wealthy.

It’s not just social progress such as civil rights, creating a viable healthcare system or providing protection and fair wages for workers which remains deficient. When a privileged few are allowed to flourish based on ‘stacking the deck’ – providing incentives based not on continued achievement, but on some perception of innate worth – our society as a whole stagnates. Resources which could fund research into new technologies or provide education for a smarter, more innovative workforce are diverted to fund the luxurious lifestyles of the powerful few. If this pattern is left to continue or becomes more extreme, a society can sabotage its future.

Changes We Can Make

The first thing we need to do to level the playing field and undo some of the control the wealthy and powerful have on the country is redraw gerrymandered Congressional districts. For example, in Florida, we have a fairly moderate electorate: one Republican Senator and one Democratic. The state is considered a swing state in the Presidential election. However, our state legislature has a Republican super-majority and all three branches are dominated by Republicans. Also, there are more registered Democrats than Republicans, by a margin of about 7%.

The Republican Party, which for the past 80-90 years, has been dominated by corporate interests, conservative (regressive) social values, generally against the Civil Rights Movement, anti-Union and opposed to the expansion of the social safety net. This list seems to be all over the map, but there is a unifying theme if you look closely. All of these political positions favor an entrenched white Protestant upper class composed of business owners and capital investors. (Bears a striking resemblance to the social composition of the Founding Fathers, wouldn’t you say?)

Now, over the past 20 years, Republican leaders have been conscious of the fact that the nation as a whole is becoming less white, less Protestant and more accepting of non-traditional social values. As a result, they’ve developed methods of using constitutional limits on democracy to their benefit.

Gerrymandering is Unconstitutional

With the advent of computer technology, the task of redistricting (which affects the state House, Senate and federal House of Representatives) has fallen victim to the most efficient methods of gerrymandering ever seen. By creating a small number super-majority districts for your opponents, you can increase the number of districts in which your party has a better than average chance of winning. For evidence, all we have to do is look to the fact that over 90% of House seats are considered ‘safe’, meaning there is a very small chance of the incumbent or the incumbent’s party losing an election.

It’s not necessarily that Republicans are the bad guys and Democrats are the good guys when it comes to redistricting. Both parties have been guilty of gerrymandering and it will continue to be a problem until we have strong laws in place recognizing that stacking districts to favor one party or another (or any one group or another) is unconstitutional.

There’s a provision in the 14th Amendment that reads as follows:

No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

The important section in there is “No state shall make or enforce any law which shall abridge the privileges or immunities of citizens…”. We tend to gloss over what it means to abridge the rights of an individual. It doesn’t seem as significant as the outright violation of one’s rights. However, it is still very important and when it comes to gerrymandering, it is an indispensable concept. To abridge is to reduce or lessen the impact. In everyday English for our purposes here, it translates to the concept of ‘one person, one vote’.

Once we understand that diluting the voting rights of one group to favor those of another group, through gerrymandering, abridges the voting rights of one citizen in favor of another, then we have tools available to combat the anti-democratic forces which would seek to retain power for the privileged few.

Public Financing for All State and Federal Elections

I wrote earlier that most members of Congress are wealthy and are not representative of average Americans. One of the biggest reasons why this is the case is that running an election is very expensive. The sad fact is that most Americans can’t afford to run for office.

It is true that elections are funded by campaign donations, but even getting to that point requires substantial investment in building a campaign organization, fees to get on the ballot as well as getting your message to potential donors. All of this is necessary before you consider that you have to know the ‘right’ people (i.e. people rich enough to donate to campaigns) so that you’ll have enough money coming in to be competitive. Note: in over 90% of political campaigns, the person who raises the most money is the one who wins.

This bias towards the wealthy was purposely written into the Constitution by the Framers. We have to remember that this was a time when those in the aristocracy and upper classes felt that the under-privileged and the poor were not capable of governing themselves. Thankfully, we’ve reached a point of enlightenment where we know that average Americans are capable of governing themselves and must participate in order to protect the interests of everyone.

To that end, we need a revolution in campaign financing. We need to put an end, once and for all, to a system of private campaign financing which always favors the wealthy and well-connected. We need a system of public campaign financing for all elected officials: city, county, state and federal. Until the average American has a reasonable chance of winning an election at any level and is not beholden to special interests for campaign money, this country will be in the hands of the rich and powerful.

The Opposition

There is a lot of opposition to the ideas I’m presenting here. Some of them appear valid until you really look at them and others are based on fear, personal bias and/or greed.

On the subject of redistricting, I’ve been hearing about how Republicans feel that the current electoral college system weakens the power of rural areas to the benefit of urban areas. (Basically, Republican strategists want to move away from the system where the winner of the popular vote in states gets all of that state’s electoral votes. They want to replace it with a system in which electoral votes are awarded according to congressional district) Now I will agree that when you look at a map of voting in congressional districts, there seems to be a lot more red than blue. However, the reason the blue areas are small is that they tend to be large cities with extremely high population density. The red areas tend to be mostly empty space.

What that argument about rural vs. urban wants you to believe is that democracy is based on demographics. They would have you believe that one rural area is equal to one urban area. Democracy is based on people. Specifically, the number of people who feel one way vs the number of people who disagree. Which ever side has more people wins the day. Demographics, urban vs. rural, etc. have nothing to do with the principle of ‘one person, one vote’. When someone proposes electoral schemes and the like, what they really mean is that they know they can’t win with a majority. They are looking for some way to subvert the will of the majority without appearing to do so.

Once you begin to think about it, there is no rational defense for reworking Electoral votes to be awarded according to the winner of congressional districts. The concept of the Electoral College, itself, is outdated.

Why We Need Change

Because our system is skewed to favor the interests of an entrenched wealthy minority, often resources are allocated not based on need (poverty programs, healthcare, transportation and communication infrastructure) or where the most good can be done (such as education and scientific research). Instead, our resources subsidize the corporations and special interests with political clout. If our politicians weren’t beholden to the campaign donations of the wealthy and corporations, I doubt we’d be subsidizing the most profitable company in the world while trying to figure out how to cut programs which serve the poor and elderly. If we had more average Americans in elected office (and you will never convince me that a rich white man is an average American) I believe a lot of the social and economic struggles we currently face would quickly disappear.

And Finally…

The progression towards democratic participation for all, regardless of class, sex, religion, ethnicity or social group has been a major theme in the narrative of American history. The concepts of ‘one person, one vote’ and that ‘not everyone can be a great legislator, but a great legislator can come from anywhere’ ought to guide us into the future. Only then will the Ancien Regime finally be eliminated.

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January 11, 2012

The leveraged Buyout Con

I’ve often wondered what a leveraged buyout is and how people make money with it.  I have recently discovered that this is the means by which a lot of the wealth of our country has been swindled out from under us.

We’re all familiar with the reality that when we make a large purchase, such as a car or a house, we often have to take out a loan or a mortgage.  The same is true when an investor or group of investors want to buy a company.  Say John Smith and Mike Edwards want to perform a leveraged buyout of Company X.  What they do is form Corporation Y and go to Wall Street to borrow money to acquire Company X.  They then buy Company X with the loans obtained under the name of Corporation Y.

Afterwards, they basically merge Corporation Y with Company X to form Corporation XY (which is basically Company X under new management), which now holds all the debt that was used to finance its purchase.  The company which was just purchased is now saddled with all the debt used to finance its purchase.  The new owners, John Smith and Mike Edwards are then free to screw around with Corporation XY (which is really just Company X) as they see fit.  Frequently, this means selling off assets so they can make immediate profits for John Smith, Mike Edwards, and the people who loaned them the money.  Also, often the operations of the new Corporation XY are out-sourced and cutbacks are made because of the debt payments now owned by Corporation XY (which is now a cannibalized Company X).

As a result, all of the hard work that went into making Company X a business that was successful and allowed its employees to build wealth is now owned by Wall Street financiers and has fired a huge chunk of its American workforce.  All of the wealth has been replaced with debt taken on by the people who purchased it.  This is modern America, Wall Street’s America, the Republican Party’s America.

November 8, 2011

Greed vs. Responsibility

Every time I see a conservative commenting on an article about taxes or revenue, they always rant about how ‘Liberals want to steal our hard-earned money to advance their goal of socialistic redistribution of wealth.’  I’m tired of trying to argue with people who take this stance.  For one thing, it does no good because they don’t want to actually debate the point.  They’re like children who take every opportunity to throw a tantrum and whine about having to contribute to society.

Secondly, their argument is completely wrong.  Taxes, among other things, are the way the government balances out the cost to society which is owed by those who control a large proportion of resources and thereby deny access to the rest of society.  This one is a little tough to explain, so bear with me.  If you think of property and resources as things which belong to the world and everyone, then you can understand that they can be ‘owned’ only so far as someone has been granted legal status (by a governmental body)  to prevent other people from using them.  Specifically, ownership is the government’s way of saying: ‘You have access to this resource to do with as you wish, with certain exceptions, and we grant you the right to prevent others from using it.’  In exchange, you must pay a small compensation (tax) because you are denying the rest of society from full access to the resource.

Here’s an example: you ‘own’ an acre of land.  The government guarantees that you are protected against other people coming in without permission and doing whatever they may want to do (planting their own crops, building a house, just walking around, etc.).  Even if you allow everyone to do whatever they want on your land, you still possess the right to change your mind about its usage at any time.  The government recognizes your right to use the land as superseding the rights of anyone else.  Since your rights supersede those of everyone else, you are effectively controlling access to it and thereby removing it from the public domain.  You have effectively taken the land away from the public domain (the realm of things which we, as a species and a society, all own in common) and reserved it for your private use.  As such, you owe a debt to compensate for the property you’ve removed from the public domain.

This is completely unrelated to purchasing a property or anything else from a previous owner or manufacturer.  When someone buys, or trades for, something, it is merely a transfer from one owner to another.  The property still remains cut off from the public domain.  The only thing that changes is the person who is responsible for compensating society for the private use of the property.

Since we all own things, this conceptual framework can get quite complicated.  However, when you compare the totality of all the things a person owns to that of another person, there emerges a clear implication for taxation.  The more things you own (assets), the more things you are removing from the public domain and, thus, the more compensation you owe to society.

Using this conceptual framework, you cannot help but see the clear argument for a progressive system of taxation based on the level of privately held resources.

I should address the concept of liquid vs. non-liquid assets before I finish.  The above argument, as is, would allow people to argue that we should tax savings accounts, checking accounts, cash, etc.  I would argue that this is not true, since these are liquid assets.  In my system these are liquid assets, or better yet potential assets.  Liquid assets do not have value in and of themselves.  They only have exchange value: liquid assets are only valuable when they are exchanged between people for whatever reason.

As a result, (leaving aside the concept of interest for a moment) if you have a million dollars in a savings account, it is worthless from a taxation and public domain perspective until you do something with it.

Additionally, I should add that investments, such as mutual funds, IRAs, etc, are not liquid assets.  In a very real way, investments are ownership shares of a particular asset.  Therefore, they are subject to taxation as if they were any other type of asset.  In a different way, labor is an asset as well.  When you provide another individual exclusive use of your labor, you are effectively denying it to the public domain.  (Think about a comparison between helping out with a church, doing chores around the house, raising your children, etc. and working at your job for a good example of what I’m talking about)  As such, labor is a type of asset and is subject to taxation.  When you provide your labor to another person as per a mutually agreed upon arrangement, you are trading your labor asset for either a non-liquid asset or a liquid asset.

That’s my analysis.  Now, keeping that in mind, when Republicans and conservatives make the argument that taxes are a form of ‘socialistic wealth redistribution,’ they’re trying to sell a lie.  They want you to believe that the rights and benefits provided by government and society to the individual does not necessarily mean that the individual owes anything to society and the government.

Here’s a good way to look at it.  Imagine if you are married and you enjoy the financial, social and emotional benefits from having a spouse.  Then you try to justify having an affair with another person because it is your god-given right to have sex and that god-given right trumps everything else.  See how far that gets you.

October 18, 2011

Lately

All I seem to be seeing on the political news is Democrats advocating watered down ideas about how to fix the economy and create jobs while the Republicans trip over themselves to see who can be more ruthless to the unemployed, women and minorities.  It is so often said that the press is complicit in promoting this farce that I’m sick of hearing it.  Stop talking about it and do something!  The press can take action by refusing to air the idiotic verbal diarrhea perpetrated by the Republicans.  When Rick Perry talks like George W. Bush after a punch to the head, the press could just shut off the camera and disallow his message to reach the public.  When Michele Bachmann begins ranting like a mental patient on cocaine, just walk away and ignore her.

The press is duty-bound to advance the national dialogue not turn it into an episode of Jersey Shore.

On the other hand, OccupyWallStreet should be attracted journalists like ants to a picnic.  If they want the real story of what’s going on in America, it can be found on the streets of Manhatten, downtown Tampa, Boston and many other cities,  The Occupy movement is larger than the Tea Party ever was.  It’s not a tool of the plutocrats, nor is it an arm of the social regressive movement (conservative evangelical Christianity).

Every time a journalist questions a politician about policy, they should ask about the Occupy movement and how they are addressing the grievances of the people.  That would be a step in the right direction.

October 2, 2011

Work Updates

I’ve been looking into a couple of new concepts I can add to my toolbox.  The first idea is that I need to develop a service plan for website management.  I know there is mention of it on the website, but I need to add a more description to it and broadcast it more.

The second is the 960 Grid.  Basically, it’s a coding structure for easily making variable grids for web page layout and templates.  I know there are a few options that already exist for content management installations and I should look it.  At some point, I’ll integrate 960 Grid into the WebVellum website.

September 15, 2011

Insanity

Oh, where to begin?  The Republicans, in the last few days, have affirmed their indifference to whether people who can’t afford health care live or die.  They’ve affirmed that they would rather execute wrongly convicted individuals than admit mistakes.  They’ll say and do anything, even if it’s a bald-faced LIE!

How can we allow such self-serving, greedy people any sort of power?  My fear is that we, as a people, will give away everything, including our lives and freedom, through be conned and understandable ignorance.  Unless we all take a step back and see what’s going on, I’m very afraid for the future.

September 11, 2011

Outsourcing?

I had a thought about what we could do, as a nation, to prevent corporations from outsourcing our jobs to other nations.  Strictly speaking, there’s not much we can do as far as an outright ban.  I think it would fall under the First Amendment (freedom of association) or something like that.

However, we can use the tax code to encourage behavior: do this and this happens; do something else and that other thing happens.  In this case, I suggest that corporations who lay off American workers and outsource those operations overseas be subject to a tax penalty.  Generally speaking, when a corporation outsources and lays off workers, not only are the workers shortchanged because of the loss of employment, the federal government is also shortchanged because of the loss of revenue from the income and payroll taxes which cannot be collected from those unemployed Americans.

I propose that corporations who lay off workers to ship those jobs overseas should pay, as a tax penalty with no possible deductions, an amount equal to the income and payroll tax liabilities paid by all the workers who have been laid off in the previous tax year.  Generally speaking, if a corporation laid off 1000 workers this year (2011) who each made $50,000.00 and filed as single in 2010, the corporation would owe roughly  $8,625,000.00 in tax penalties to the federal government.

This seems like a bold and extreme idea and would be quickly dismissed by some, especially in the business world.  However, if you think about it, it does make some sense.  Corporations are, unfortunately, free to hire and fire whomever they want.  (This is the result of the weakening of the rights and position of organized labor.)  However, the federal government has a responsibility to raise revenue in order to maintain critical functions.  By reducing its domestic workforce and shipping it overseas, a corporation is denying the ability of the federal government to raise revenue from the newly unemployed American workers.  Since it is solely the corporation’s decision to eliminate those American jobs, it should be the responsibility of that corporation to compensate for that loss.

Laid off workers still have the right of unemployment insurance to compensate them for their loss at the hands of the corporation.  However, the federal government currently is not compensated for that loss.  I’m simply suggesting that we rectify the situation.

September 9, 2011

A thought

I keep thinking about something, though I’m not sure if it’s accurate or not.  The nature of the federal debt is that the money the government  borrows and injects into the economy must, at some point, be repaid.  It’s not so much a creation of wealth, but instead is a means of lubricating the economy.  As it becomes captured (for lack of a better word) by the wealthy, it is removed from the economy and bolsters private treasuries.  I’m trying to think about it mathematically:

A, B = wealthy individuals

G = Federal Government

x,y= Average Citizens

(V+some amount) = wealth held by that entity

A+B+G+x+y = total wealth in U.S.(t)

government spending = 100

A+B+(G+100-100)+x+y = t

(A+40)+(B+40)+(G-100)+(x+10)+(y+10) = t

subtract 100 on both sides of equation

[(A+35)+(B+35)+(G-100)+(x-10)+(y-10)]-70 = t-100  (recession)

Roughly, that’s what happened in the recession.  Then, the stimulus:

[(A+35)+(B+35)+(G-100+100-100)+(x-10)+(y-10)]-70 = t-100

[(A+45)+(B+45)+(G-200)+(x-10)+(y-10)]-10 = t-50

(A+45)+(B+45)+(G-200+100-100)+(x-10)+(y-10)]-10 = t-50

(A+60)+(B+60)+(G-300)+(x-10)+(y-10)] = t+70

(A+70)+(B+70)+(G-250)+(x-10)+(y-10)] = t (austerity)

See how none of that money goes to regular people, yet the government is more in debt than when we started.  By the way, the wealthy captured all of the benefits, through low taxes, the law of diminishing returns (they don’t have to spend as much as a total percentage of income compared to average people), and because they control the mechanisms of capital.  What’s even crazier about this is that there would be a net reduction of wealth if we were to clean up the left side of the equation.  Funny how that works out.

September 8, 2011

Outrage

The Republican Debate was last night and President Obama’s speech in front of Congress is tonight.  All I see and all I hear is Republicans criticizing the President, disrespecting the office of the President and trying to sell their Snake Oil policies.  Their solution to the current problems we have is to enact more of the policies which got us to this point.

I’m so tired of the press giving these people a free ride on spreading their rubbish.  Their ideas are demonstrably bad and have been proven wrong over and over and over.

I also want to call out the Democrats for sitting back and DOING ABSOLUTELY NOTHING to challenge the Republican corporate toadies.  You guys say you’re for the people and when a serious populist like James Hoffa calls out the Republicans, you cower like craven sycophants!  When the Republicans dishonor their offices and act like fascists, you call for civility!

I’m tired.  I’m very tired of a Republican party that seems hellbent on returning us to the Middle Ages.  I’m growing more and more tired of a Democratic party that seems to be DOING NOTHING to stop them!

August 31, 2011

Sinking Feeling

I have the terrible fear that I killed my XBox.  Either that or I may have worn out my copy of Elder Scrolls:Oblivion.  Maybe this is Cyrodiil’s way of saying I need a new machine before Skyrim comes out.