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Home > Politics
Conservative Criticism of 'Much of What's Called Socialism is Just Pragmatic'
by Bob Powell, 2/17/16
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Summary

This meme is, of course, a distortion because of the kind of "government" from which he robbed. The Robin Hood myth is actually about how Robin Hood robbed from a brutal, authoritarian, feudal dictatorship and gave to those that the feudal dictatorship robbed.

Of course, this is not a "friendly reminder". It is an "unfriendly perversion of reality" by those who have been so greatly propagandized that they cannot comprehend that government is too big and intrusive in some ways -- not respecting individual privacy and freedom -- and not big and forceful enough in other ways because it insufficiently "promotes the general Welfare" instead of "special interest welfare"; see Why Government and for What?

And feudalism is exactly what Republican "conservative" candidates want to "Take America Back" to ... feudalism ... specifically now to a fascist corporate feudalism in which the great majority are wage slaves.

This article addresses a FB Poster's comments on my referencing the article I wrote on why Much of What's Called "Socialism" Is Just Pragmatic as relevant to the FB meme at right. The point of this article is that many of the policies seen as "socialist" are needed to prevent system failures and take advantage of systems effects that benefit the nation as a whole.

The meme is typical of those posted on Facebook by "conservatives" who have an instant negative response to any mention of socialism. These comments are typical of those who oppose, not socialism, but the "conservative" caricature of socialism, Democratic Socialism, and the policies Sanders promotes.

Among the failures & weaknesses are the economic effects of negative externalities, tragedy of the commons, positive externalities, inelasticities, long delays, path dependence, adverse selection, escalation, the attractiveness principle, game theory, monopoly & oligopoly effects on competition, failures of competition, game theory, and Net Present Value (NPV) calculations.

I suspect the great majority of people are either unaware of these considerations and even more unaware of their implications. The point is that, unless these dynamics are addressed by our government, it cannot live up to the Constitutional requirement to be proactively "promote the general Welfare" and tax for that purpose.

Promote! That's being active, not passive, to "promote the general Welfare." This article makes clear why collective action through government is necessary to do that in many cases that go beyond, so-called, "enumerated powers".

Unfortunately, the Poster's comments do not address the concepts in my article. They are, therefore, non sequiturs.

Despite that, the comments are useful as examples of "conservative" false beliefs; I address them point by point. I do this, because "not understanding" is a threat to the nation's economy and democracy. The comments are useful, for example, because they prompted me to add a section to my article on Governing Systems and Economic Systems; the distinction is critical. I also learned some things and document what I've learned.

Rather than engage in point-by-point exchanges on FB that immediately age into obscurity and end in being a total waste of time, I write articles such as this that allow me to refer to sections in future exchanges. That's the same reason I wrote the article on Much of What's Called "Socialism" Is Just Pragmatic and a previous article, Response to a Conservative.

This article is not an attempt to change the mind of posters such as this. As can likely be perceived from the comments, that seems impossible. Those who read parts of this can decide for themselves which perspective is valid.

Yes, I know this is too long to read. That said, it's in sections ... take a look.

 

Here are links to sections of this article with my comments:

The initial exchange on Facebook
Poster's extended comment; the focus of this article
I discredit myself & I'm naive
--
Poster's response is not simply "not right"; it's not even wrong
I push to get this country into communist territory
Hillary Clinton is so far left she rubs shoulders with Stalin and Hitler
The Majority of Americans don't agree with Bernie Sanders
Obama's Obvious Disaster
--
Another Economic Crash Coming
Today's Republican not even conservative
-- The "New Democrats" are well to the right
-- The Trump Exception?
-- Deaths of Dispair and Suicide on the Increase
I'm "so ready to give up freedom"
Hyperinflation, corrupt dictators and extinguishing human life
--
Corrupt dictators and extinguishing human life
-- Inflation and Hyperinflation
Government federally finances child murder
I despise the "capitalism that put America at the top"
-- America at the top? Well, no.
Corporate Corruption is the fault of Government
Freedom depends on LIMITING government
Don't tax the most productive job creators at 90%
-- The Myth of the 'Job Creators'
-- Sanders never proposed a 90% tax
-- Job Creators portrayed as being like "God the Creator"
-- It's the "Prosperity Gospel" perspective
-- Get Educated on What the Income Tax Pays for ... where federal spending goes
---- Lies about SS and Medicare: They're Not Responsible for U.S. Debt
I don't understand the Federal Reserve and national debt
--
The Federal Reserve is Not Government
-- Fractional Reserve Banking and Modern Monetary Theory (MMT)
-- What Modern Monetary Theory (MMT) Reveals
-- Debt, Kinds & Causes: Personal, Regional, National (Fiscal & Trade)
----- The Twin Peaks: Mountains of Debt and Idle Cash
----- Personal Debt
----- Regional Debt
----- National Debts
--------- Fiscal Debt
--------- Trade Debt
-- Deregulated Banking is Destabilizing
-- Banking Crimes and Theft


The initial exchange on Facebook

My FB Comment on what the text of the Robin Hood meme should read was:

Friendly reminder: This myth is actually about how he robbed from a feudal dictatorship and gave to those that dictatorship robbed.

And that's exactly what Republican "conservative" candidates want to "Take America Back" to ... a fascist corporate feudalism. Poliical Compass US Primary Candidates 2016 shows they are at the extreme right on both economics and authoritarianism.

We must not conflate economic systems and governance systems as Ayn Rand naively does. They are not the same.

Any economic system (be it communism, socialism, or capitalism) can have governance that's authoritarian or dictatorial. 

Democracy as I define it is all that keeps us from dictatorship and slavery. Communism, capitalism, or mixed-economy socialism can all be dictatorial in the absence of a transparent, well-functioning democracy and an informed electorate.

Those less naive may have noticed that U.S. history illustrates quite nicely that capitalism is perfectly compatible with slavery. But it's worse than that. As described in Empire of Cotton: A Global History by Sven Beckert, "... slavery was not a hidebound institution that capitalism destroyed, but an integral one that made capitalism possible."


The Poster's reply:

I would challenge that. The democratic platform that both candidates are running is about a dictatorship (ignoring the constitution and making "laws" via excommecutive action instead of process) robbing from the productive members of society to give to the least productive in order to buy votes and power.

Note: I interpret this to mean "executive action", not "excommecutive action".

My Response:

It's not true that Obama has been "making laws" by executive orders and ignored the Constitution ... that's an unfounded assertion, not fact. Plus contrary to the lies by "conservatives" he has issued fewer executive orders than any from Theodore Roosevelt on.

They are not simply the "productive members of society". They are, in way too many cases, those who have rigged the rules to drive the vast majority of Americans into poverty and make themselves even wealthier. I list those policies at The U.S. has policies that drive people into poverty and keep them there and make the wealthy even richer..

 

Poster's reply to another commenter who noted the "Robin Hood character is fictitious.":

The point is not about being fictitious, The point is socialists love to point toward Robin Hood, when he was actually fighting socialism

My Response:

No, the fictitious story is about how he was fighting feudal dictatorship, not socialism.

This is what "conservatives" do not understand about policies they call "socialist". Much of What's Called "Socialism" Is Just Pragmatic

 

Poster's extended comment; the focus of this article ... and we're off:

Note: the Poster's reply is one large run-on paragraph. Your eyes, like mine, may glaze over when attempting to read long, run-on paragraphs. Therefore, I've divided the Poster's comments into sections, because I really want you to read it. It's instructive to see this world view. I respond to each section's assertions in turn ... see links to each section above.

I read that article about socialism being pragmatic. The author discredits himself so many times in the article, while demonstrating a remarkably naive grasp of things.

The push to get this country into communism territory should be alarming to all, and the fact that so many people are ok with it is a big red flag.

It is amazing that the author labels Clinton as a "right wing democrat" when Clinton is so far left she's rubbing shoulders with stalin and hitler.

Then he goes on to make the blatantly false statement that the majority of Americans agree with Bernie Sanders socialist policies.

You would think after Obama's presidency turned out to be such an obvious disaster that people would have learned, but our nation continues sliding further and further toward dictatorships.

Today's "republican" is not even conservative--they are so far left they are where the democrats used to be, and today's democratic party would have the freedom-founders turning over in their graves.

I am constantly amazed that so many adults are so ready to give up freedom. I get it that the 20 somethings have been indoctrinated accordingly in liberal institutions, falling lock stock and barrel for the tactics spelled out verbatim in advance by stalin for how to destroy America. I don't get that educated adults that have been around a bit longer still fall for it, when we've all seen the destruction it leads to in every case.

Hyperinflation, corrupt dictators and mass government extinguishing of human life.

Our own government federally finances child murder on a daily basis. HOW IS THAT OK?

The author of the article above seems to despise the very capitalism that put America at the top of the list...the country that people were trying to get into instead of escape from like the were from the socialist failures.

There is much corporate corruption that runs over the little guy. It's disgusting. However, the worst offenders are the ones sanctioned and protected by government--the most corrupt of them all. You can't put the biggest wolf offender of all in charge of the hen house because you don't like some of the rooster's attitudes. We have an extremely corrupt government already--the idea of giving them more power and stealing from the people to give them total ownership too is just completely illogical. Even if they weren't so corrupt, the next one in line might be.

That is why the founding fathers expressed so well freedom absolutely depends on LIMITING government. The constitution was all about limiting government, not giving them an open check to destroy. Governments always destroy freedom. You can't have it both ways.

The next time you want to say it's ok to tax the most productive job creators at 90%, first get educated on what the income tax pays for and why it was ever needed.

If you don't understand the federal reserve and why we have a national debt, then pushing to feed the slaves to the masters is a bad idea.

 

Responses the these specific assertions:

Gary Larson Cartoon Caption:
"You know, Omar, I've got it, too.
The feeling that we're just going in circles."

It's a problem well beyond being "naive" that "conservatives" cannot understand that there are many times when the system is responsible for the behaviors we observe and that we set people up to fail instead of making it easier for them to succeed.

These two Vikings have plenty of "Vision" and "Mission", but Vision and Mission aren't enough.

True leaders must look at the structure they're in to see why this is happening. They have a systems problem ... each individual is "doing his job", but the system is set up to prevent progress.

Sadly, we don't look at how structure creates behavior in either business or government. We're distracted by Events ... it's like, "Look! Squirrel."

Those who call themselves "conservative" or "libertarian" believe in radical individualism. They deny even the reality of systems effects, much less their influence on the events we experience.


I discredit myself & I'm naive

I read that article about socialism being pragmatic. The author discredits himself so many times in the article, while demonstrating a remarkably naive grasp of things.

First I do not write it's simply "about socialism being pragmatic". It's that "Much of What's Called "Socialism" Is Just Pragmatic". That "much" is important because for specific issues I give specific reasons based on economics, and the dynamics of the system, for why that's the case.

One can see from the Poster's statements that they do not at all address the points I make about the economic effects of: negative externalities, tragedy of the commons, positive externalities, inelasticities, long delays, path dependence, adverse selection, escalation, the attractiveness principle, game theory, monopoly & oligopoly effects on competition, failures of competition, game theory, and Net Present Value (NPV) calculations.

And more fundamentally, the Poster does not address the foundational systems concept of emergent properties. That is: quite often systems do not behave as expected because there are properties of the whole that are not properties of the parts.

This is no surprise, because these concepts are typically unknown, even to liberals. What's true is that "conservatives" especially must ignore these effects, because to take them into consideration fundamentally undermines their whole world view of individualism and their deregulated "free market"= God" that does not fail, thinking that, if only government would "get out of the way", it could be truly free and all would be well.

Saying I've "discredited myself", while ignoring the effects resulting from the dynamics of these structures and economic realities, discredits the Poster.

Poster's response is not simply "not right"; it's not even wrong.

The remainder of the response reminds me of the comment by physicist Wolfgang Pauli, who described an unclear research paper in this way: "Das ist nicht nur nicht richtig, es ist nicht einmal falsch!" — "That is not only not right, it is not even wrong!".

An example of what that means:
2 + 2 = 4 is correct.
2 + 2 = 5 is wrong.
But 2 + 2 = dog is nonsense and "not even wrong".

In this case the Poster's response to my article, which describes the structures and effects noted above, has no relation to what I wrote. Instead the comments are standard "conservative" rhetoric, false assertions, and misconceptions that do not even begin to address what I wrote.

It's not simply that almost everything about the Poster's comments are wrong. They are and I address why they are below ... point by point. It's that the Poster's response is an extreme non sequitur ... it is "off the mark" ... also known as "sin".

 

I push to get this country into communist territory

The push to get this country into communism territory should be alarming to all, and the fact that so many people are ok with it is a big red flag.

The idea that raising the weaknesses and failures of "free market" capitalism is a "push to get this country into communism territory" is absurd. Turning a blind eye to them is destructive, deadly and a betrayal of the nation.

Taking these effects into account and addressing them requires government to prevent systemic failure. "Conservatives" ridiculously call it "socialism" or even "communism" to do anything about these "free market" failures. It is not; it's pragmatic to avoid system failure and the consequent failure of millions of individuals through no fault of their own. It seems that those like this Poster would rather cling to their failed idiology than have the nation succeed.

 

Hillary Clinton is so far left she rubs shoulders with Stalin and Hitler

US Primary Candidates 2016

This chart illustrates quite nicely that Clinton is well to the authoritarian right and that Sanders is only a little to the economic left.

Political Compass general statement about their charts: This chart extends to all areas of political thought — not just to the confines of the US campaign. Accordingly, the placement of the candidates is in the context of universal political landscape.


It is amazing that the author labels Clinton as a "right wing democrat" when Clinton is so far left she's rubbing shoulders with stalin and hitler.

Sure. That's why so many CEOs support her.

Hillary Clinton racks up business endorsements By Louis Nelson, Politico, 06/23/16

A group of major business leaders endorsed Hillary Clinton on Thursday in the wake of back-to-back speeches extolling her economic vision and slamming that of her opponent, Donald Trump.

The list includes current and former executives from General Motors, Delta Air Lines, Costco, Airbnb and Alphabet, the parent company for online search giant Google.

Among the highest-profile names on the list are Berkshire Hathaway Chairman and CEO Warren Buffett, Facebook Chief Operating Officer Sheryl Sandberg and Los Angeles Lakers great Magic Johnson, a businessman and part owner of the Los Angeles Dodgers. ...

Hitler and Stalin??? Yep. Like those guys.

Now I despise Clinton because she's a neoliberal corporatist, but you know a person is an extremist when you see her being compared to Hitler and Stalin. The Political Compass chart at right illustrates where the candidates are on the social and economic axes. Clinton is well into Republican territory.

Even right-wing Sean Hannity admits that politicians in the United States are well to the right ... though he would certainly deny that that's the reason the nation is failing. Hannity makes the incredibly ignorant statement that "Obama is far left." I document here that Obama is a right-winger in so many ways that self-described "conservatives" should absolutely love him.

Even Obamacare, called "liberal", is a corporatist policy and a government-subsidized gift to privatized (corporate) health insurance is similar to a plan from the "conservative" Heritage Foundation (there are "significant differences but in a side-by-side comparison, the similarities dominate").

The Chaos of a Hillary Clinton Presidency: Corporate Dominion and Open Rebellion by RICHARD W. BEHAN, 6/3/16

... [Trump's] intuition is also accurate respecting the Affordable Care Act: it is a triumph of corporate profiteering at public expense.

The reason so many more people have health coverage today is easily grasped. They were forced by law to buy it. Absent the “public option” President Obama quickly surrendered, however, there is no constraint on costs. The insurance, hospital, and pharmaceutical corporations charge anything they please, so the costs to consumers—and corporate profits—are astronomical and rising. Obamacare is a money machine. In Mr. Trump’s vernacular, it is an incredible deal for the health corporations, an incredible deal. But it’s a disaster for the American people. It’s a disaster. ...

Hillary Clinton has vowed to continue along Obama's path and to put "free-trading", deregulating, right-wing, colluding-with-Republicans Bill Clinton in charge of the economy. The Democratic Convention is even being hosted by right-wing corporatists opposed to liberal policies ... so much for having lobbyiests "brought to heel". As one article puts it: GOP Pulls Off Corporate Takeover of the Democratic National Convention:

Democratic Convention Hosted by Republican Donors, Anti-Obamacare Lobbyists by Lee Fang and Zaid Jilani, The Intercept, 5/11/16

THE DEMOCRATIC PARTY’S 2012 platform pledged to “curb the influence of lobbyists and special interests.” But the 2016 convention in Philadelphia will be officially hosted by lobbyists and corporate executives, a number of whom are actively working to undermine progressive policies achieved by President Barack Obama, including health care reform and net neutrality.

This chart from the Political Compass shows where Stalin and Hitler are an social and economic policies. They were both extreme authoritarians but quite different on economic policy.

The The Political Compass website explains the need for two axes: economic and social:

"In our home page we demolished the myth that authoritarianism is necessarily "right wing", with the examples of Robert Mugabe, Pol Pot and Stalin. Similarly Hitler, on an economic scale, was not an extreme right-winger. His economic policies were broadly Keynesian, and to the left of some of today's Labour parties. If you could get Hitler and Stalin to sit down together and avoid economics, the two diehard authoritarians would find plenty of common ground."

Some of the members of the 2016 Democratic National Convention Host Committee, whose job is to organize the logistics and events for the convention, are hardly even Democratic Party stalwarts, given that many have donated and raised thousands of dollars for Republican presidential and congressional candidates this cycle.

The composition of the 15-member Host Committee may appear out of sync with the rhetoric of Democratic presidential candidates Bernie Sanders and Hillary Clinton, but the reality is that the party, in the form of the Democratic National Committee, has moved decisively to embrace the lobbying industry. ...

Bill Clinton is a right-wing corporatist:

The Chaos of a Hillary Clinton Presidency: Corporate Dominion and Open Rebellion by RICHARD W. BEHAN, Counterpunch, 6/3/16

... The template for governing she adopted is the modus operandi of the "New Democratic Party" that Bill Clinton and she helped construct in the early 1990’s, and Barack Obama nurtured. It masquerades as the champion still of working class America, but it is in fact a centrist, even neoliberal party, awash with corporate campaign contributions, and driven by corporate interests. Rigorous scholarly research documents this, as does a voluminous popular literature. ...

Since the Democratic National Convention, Clinton has been reaching out to Republicans, demonstrating her neoliberal (right-wing on economics) bent ...

With Trump Certain to Lose, You Can Forget about a Progressive Clinton by Thomas Frank, The Guardian, 8/15/16
Come November, Clinton will have won her great victory - not as a champion of working people's concerns, but as the
greatest moderate of them all

... But with the convention over and the struggle with Sanders behind her, headlines show Clinton triangulating to the right, scooping up the dollars and the endorsement, and the elites shaken loose in the great Republican wreck.

She is reaching out to the foreign policy establishment and the neocons. She is reaching out to Republican office-holders. She is reaching out to Silicon Valley. And, of course, she is reaching out to Wall Street. In her big speech in Michigan on Thursday she cast herself as the candidate who could bring bickering groups together and win policy victories through really comprehensive convenings.

Things will change between now and November, of course. But what seems most plausible from the current standpoint is a landslide for Clinton, and with it the triumph of complacent neoliberal orthodoxy. ...

 

"Centrist" is the euphemism in U.S. politics for being "centered" beween the liberal center and the extreme right. That's not the "center" at all.

But, ah, yes. "Clinton is rubbing shoulders with stalin and hitler"??? One simply cannot "rub shoulders" with both these quite-different-on-economics, authoritarian dictators at the same time. The Political Compass chart at right shows Stalin and Hitler. Stalin was a dictatorial communist on the extreme left. Hitler was a dictatorial fascist with center-right economic policies; though his economic policies were mixed, he was an extreme authoritarian who scapegoated and killed millions of minorities. The truth is that any economic system can turn dictatorial in the absence of a strong democracy.

Even John Boehner, former Speaker of the House, admits Republicans have moved far to the right since Reagan:

John Boehner just confirmed everything liberals suspected about the Republican Party by Ezra Klein 4/28/16

He repeatedly called the House Freedom Caucus — the loose group of anti-establishment conservatives who are thought to have forced him out of the speakership — "knuckleheads" and "goofballs."

"I love all these knuckleheads talking about the party of Reagan," Boehner continued. "He would be the most moderate Republican elected today."

 

The majority of Americans don't agree with Bernie Sanders

Then he goes on to make the blatantly false statement that the majority of Americans agree with Bernie Sanders socialist policies.

That would be "Democratic Socialist" policies, thank you. That aside, someone's spent too much time in the "conservative" bubble.

While it's true that those elected to government are well to the political right thanks to virtually unlimited money in politics that's given us plutocracy, the evidence by far is that the majority Americans agree with Sanders' policies.

First, much of what's called "socialism" is not "collectivism" for collectivism's" sake, but pragmatic for an economy that actually works. Self-described "conservatives" cannot deal with this because they have a terribly-flawed understanding of both economics and business.

Second, never mind that:

More and More Americans Agree With Bernie Sanders, and Not Just Those Who Identify With the Left By Peter Dreier / The American Prospect 7/5/15 -- Although pegged as a fringe candidate, Sanders' views are surprisingly mainstream.

Polls show that Americans are upset with widening inequality, the political influence of big business, and declining living standards. Public opinion is generally favorable toward greater government activism to address poverty, inequality, opportunity, and climate change.

Most Americans worry that government has been captured by the powerful and wealthy. They want a government that serves the common good. They also want to reform government to make it more responsive and accountable.

On those matters—both broad principles and specific policy prescriptions—Sanders is in sync with the vast majority of Americans. ...

Political scientists, pollsters, journalists, and pundits like to identify voters and politicians with labels. But voters care less about labels—conservative, moderate, liberal, progressive, socialist, or others. They are more interested in what politicians want government to do.

Those who scaremonger, based on decades of propaganda against the "socialist" and "liberal" labels, do not understand many important aspects business or economics. I am a liberal who believes most economic functions should be private, but many must be government run, regulated, or highly-regulated to prevent system failure ... or even system collapse. Government is too big in some ways and too small in other ways; see Why Government and for What.

Based on a variety of polls, there's a long list of issues on which the U.S. public agrees with Sanders. Areas include: Big Business, Progressive Taxation, Money in Politics, Minimum Wage and Workers' Rights, Health Care and Social Security, and Higher Education. Look at the polling results!

Bernie Sanders says Americans back his agenda — and he’s mostly right By Philip Bump, The Washington Post, June 12, 2015.

This article is from The Washington Post even though Amazon Jeff Bezos owns it. The Washington Post, supposedly the most liberal of the "liberal media", is highly critical of Sanders and supports Clinton:

Washington Post Ran 16 Negative Stories on Bernie Sanders in 16 Hours by Adam Johnson, Fairness and Accuracy In Reporting (FAIR) 3/08/16

All of these posts paint his candidacy in a negative light, mainly by advancing the narrative that he’s a clueless white man incapable of winning over people of color or speaking to women. Even the one article about Sanders beating Trump implies this is somehow a surprise—despite the fact that Sanders consistently out-polls Hillary Clinton against the New York businessman. ...


The obvious truth is that Hillary Clinton is "rubbing shoulders with" Republicans and in favor of many economic policies they like.

Why does it hate him? From this same article:

The Washington Post was sold in 2013 to libertarian Amazon CEO Jeff Bezos, who is worth approximately $49.8 billion.

The Washington Post’s editorial stance has been staunchly anti-Sanders, though the paper contends that its editorial board is entirely independent of both Bezos and the paper’s news reporting.

This Big Ideas Project polling that shows voters support policies that are liberal:

POLL OF LIKELY 2016 VOTERS:

National poll of 1,500 likely 2016 voters (Republicans, Independents, Democrats) conducted by GBA Strategies on behalf of the Progressive Change Institute. More details on the poll can be found on the last page, including poll dates, sample sizes, and margin of error.

POLL OF 2014 DEMOCRATIC DROP-OFF VOTERS

This is part of a national poll of 1,500 likely 2016 voters conducted by GBA Strategies on behalf of the Progressive Change Institute. More details on the poll can be found on the last page, including poll dates, sample sizes, and margin of error.

After being asked whether they support or oppose these policies, 2014 drop-off voters were asked an additional question:

While you didn’t vote in last year’s election, if a candidate had strongly supported this policy, would you have definitely gone to the polls to vote for that candidate, maybe went and voted for that candidate, or would it have made no difference in your decision not to vote last year?

Those who stated they DEFINITELY WOULD VOTE for the issues below, had they they opportunity, went from 49% down to 29% of respondents.

Debt-Free College At All Public Universities (Message A)
Give Students e Same Low Interest Rates As Big Banks
Debt-Free College At All Public Universities (Message B)
Disclose Corporate Spending on Politics/Lobbying
End Tax Loopholes for Corporations at Ship Jobs Overseas
Universal Pre-Kindergarten
Free Community College
Expand Social Security Benefits (Message B)
Allow Governement to Negotiate Drug Prices
Close Carried-Interest Tax Loophole
Full Employment Act (Message B)
Let Homeowners Pay Down Mortgage With 401k
Full Minimum Wage For Tipped Workers
Expand Social Security Benefits (Message A)
Infrastructure Jobs Program - $400 Billion / Year
Close Oshore Corporate Tax Loopholes
Minimum Guaranteed Income
Fair Trade at Protect Workers, the Environment, and Jobs
Free, High-Quality Public Child Care
Eliminate the Electoral College
Single Payer Healthcare Via Medicare
Green New Deal -- Millions Of Clean-Energy Jobs
Tax the Rich -- Millionaires & Billionaires Tax
End Tax Deductions For Wall Street Fines
Tax the Rich - 50% Reagan Rate
End Gerrymandering

 

Obama's Obvious Disaster

This chart from the Political Compass shows where Stalin and Hitler are an social and economic policies. They were both extreme authoritarians but quite different on economic policy.

The The Political Compass website explains the need for two axes: economic and social:

"In our home page we demolished the myth that authoritarianism is necessarily "right wing", with the examples of Robert Mugabe, Pol Pot and Stalin. Similarly Hitler, on an economic scale, was not an extreme right-winger. His economic policies were broadly Keynesian, and to the left of some of today's Labour parties. If you could get Hitler and Stalin to sit down together and avoid economics, the two diehard authoritarians would find plenty of common ground."

You would think after Obama's presidency turned out to be such an obvious disaster that people would have learned, but our nation continues sliding further and further toward dictatorships.

I am not a fan of Obama. There are many reasons to criticize Obama's policies and the economy under Obama. And I do. In fact, I'm a vocal critic. Here's my list of why right-wingers should absolutely love Obama: Obama is Well to the Right on Economic & Other Issues.

Despite the Republican Party's openly-declared intent to obstruct everything Obama tries to do, Obama's presidency has seen economic improvement, though not nearly enough overall and hardly any for many millions.

On Republican obstruction:

A Walk Down Memory Lane on Republican Obstruction By Nancy LeTourneau, Washington Monthly, 2/01/15

... and Conservatives Have Been Praising Merrick Garland For Years.

Merrick Garland, Obama's Supreme Court pick, gives GOP a headache by Paul Callan/CNN 3/17/16

President Barack Obama ... picked Judge Merrick Garland, a moderate, highly experienced federal appeals court judge who has achieved bipartisan support in the past. ... Republicans ... have stated that they will refuse to even consider the President's selection. ...

Here are some facts about what's happened under Obama, which is not an "obvious disaster".

Obama’s Numbers April 2016 Update By Brooks Jackson, FactCheck.org, 4/6/16. A statistical measure of the U.S. on crime, guns, jobs, health insurance and more under Barack Obama.

It reviews various statistics since President Barack Obama first took office. They summary is all positive except for this that's mixed:

Federal debt has more than doubled, and annual deficits, after shrinking, are again on the rise.

On this issue about federal debt, one must understand why that happened ... as I have at: Fiscal Deficits! Who's Responsible?, 8/31/10 and Bush Deficits Blamed on Obama: Deficit & GDP Data, 10/19/12. Also see below at National Debt.

Another Economic Crash Coming: Little to nothing has been done about the big bank threat. There's no way Republicans, who hate the idea of any regulation, will allow anything to be done about the big banks ... and Hillary "In-Their-Pockets" Clinton won't either. How can anyone vote for anyone who thinks banks should be able to gamble with depositors money? That's the Republican Party ... and Hillary Clinton, too.

The U.S. economy is, I believe, going to crash again as it did in 2008 under Bush, thanks to too-big-to-fail-banks being bigger than ever.

Fed’s Neel Kashkari Says Banks Are ‘Still Too Big to Fail’ By BINYAMIN APPELBAUM, NY Times, 2/16/16

During the 2008 financial crisis, Neel Kashkari worked tirelessly to save the nation’s largest banks. As a senior Treasury Department official in the George W. Bush and Obama administrations, he helped those banks grow larger than ever.

On Tuesday, he said it was time to think about breaking them up.

“I believe the biggest banks are still too big to fail and continue to pose a significant, ongoing risk to our economy,” Mr. Kashkari said at the Brookings Institution, delivering his first public speech as the new president of the Federal Reserve Bank of Minneapolis. ...

Thanks to the continuing "free trade" destruction. So-called "free trade" deals drain the life blood from the U.S. economy ... resulting in the loss of high-paying jobs, technological capability and capacity. This is especially of concern if the Trans Pacific Partnership (TPP) passes thanks to Obama's collusion with Republicans (as was the case with Bill Clinton and NAFTA).

Trading Down: Unemployment, Inequality and Other Risks of the Trans-Pacific Partnership Agreement by Jeronim Capaldo, Alex Izurieta, and Jomo Kwame Sundaram, Tufts University, GDAE Working Paper 16-01, January 2016

In this GDAE Working Paper, the authors find ... TPP would generate net losses of GDP in the United States and Japan. For the United States, they project that GDP would be 0.54 percent lower than it would be without TPP, 10 years after the treaty enters into force. Japan’s GDP is projected to decrease 0.12 percent. ... [and that]

TPP would lead to higher inequality, as measured by changes in the labor share of national income. The authors foresee competitive pressures on labor income combining with employment losses to push labor shares lower, redistributing income from labor to capital in all countries. In the United States, this would exacerbate a multi-decade downward trend.

 

Today's Republican not even conservative

US Primary Candidates 2016

This chart illustrates quite nicely that Clinton is well to the authoritarian right and that Sanders is only a little to the economic left.

Political Compass general statement about their charts: This chart extends to all areas of political thought — not just to the confines of the US campaign. Accordingly, the placement of the candidates is in the context of universal political landscape.


Today's "republican" is not even conservative--they are so far left they are where the democrats used to be, and today's democratic party would have the freedom-founders turning over in their graves.

In another blatant example of turning reality on it's head, the Poster asserts that Republicans have moved to the left. Astounding.

It is so obvious that both parties have moved further to the right that this assertion should only be met with derision. Democrats in Congress now are essentially what moderate Republicans used to be. This Republican makes the case:

Obama Is a Republican By BRUCE BARTLETT, The American Conservative, 10/21/14
He’s the heir to Richard Nixon, not Saul Alinsky.

... According to exit polls in 2008, Obama ended up with 20 percent of the conservative vote. Even in 2012, after four years of relentless conservative attacks, he still got 17 percent of the conservative vote, with 11 percent of Tea Party supporters saying they cast their ballots for Obama.

They were not wrong. In my opinion, Obama has governed as a moderate conservative—essentially as what used to be called a liberal Republican before all such people disappeared from the GOP. He has been conservative to exactly the same degree that Richard Nixon basically governed as a moderate liberal, something no conservative would deny today. ...

Bartlett goes on to cite the proof on Stimulus/Deficit, Health Reform, and Other Rightward Policies on which Obama has consistently tilted well to the right.

Hillary Clinton has decided to run as what-used-to-be-known as Republican.

RATHER THAN CAMPAIGN AS LIBERAL ALTERNATIVE TO TRUMP, CLINTON TO RUN AS SMARTER REPUBLICAN by Kevin Gosztola 5/06/16

it appears the campaign for Democratic presidential candidate Hillary Clinton will directly appeal to moderate Republicans in order to win the general election, if she becomes the nominee.

The strategy will not only allow Clinton to be her authentic political self again, but it will also end the charade of moving to the left to appease supporters of her opponent, Bernie Sanders. It would also diminish any confusion over whether Clinton is anything more than a corporate Democrat, who progressives should approach with great skepticism and opposition.

As POLITICO reported, supporters of Hillary Clinton made a "furious round of calls to top Bush family donors to convince them that she represents their values better than Donald Trump." ...

G.O.P. Shift Moves Center Far to Right by Eduardo Porter, ECONOMIC SCENE, NY Times, 9/4/12

To hear Republicans on the campaign trail, the United States could not have elected a more left-wing president than Barack Obama, one more hostile to business or more eager to expand government power. Left-wing Democrats, I’m sure, would disagree. If they had their druthers, they would probably make a more liberal, more pro-big government choice. Somebody, perhaps, like Richard Nixon [more liberal than Obama]. ...

Watch the Republican Party gallop to the right over the last 40 years in this amazing chart By Daniel Donner, 10/12/15

... The most liberal Republicans of today occupy the same ideological space as the most conservative Republicans of the 1960s. On the left, the pink bars (known as a histogram) show the distribution of House Republicans from the late 1960s on an widely respected scale of ideological measurement known as DW-Nominate; the higher the bars, the more members of Congress who occupy that space. On the right, almost entirely separated, we have the dark red histogram for the 2013-2015 session of Congress. ...

While the Democratic caucus has indeed become more liberal on average, it has done so mainly by losing its conservative flank, not by jumping off of the left-most cliff. The graph below shows that the most liberal Democrats of the 1960s are pretty much in the same spot as the most liberal Democrats of the 2010s, and there's far more overlap between the two than there is in the Republican chart.

Put another way, if Democrats had lurched as far to the left as Republicans have to the right, Bernie Sanders would have been more conservative than almost the entire Democratic Party back when he was serving in the House.

The "New Democrats" are well to the right

Bill Clinton's Democratic Leadership Council is characterized as "centrist." What "centrist" actually means in the U.S. is "well to the right". It's now defunct; "the organization’s founders and allies argue that it has been a victim of its own success"; see The end of the DLC era by Ben Smith, Politico, 02/07/11.

Hillary Clinton's Ghosts: A Legacy of Pushing the Democratic Party to the Right By Michael Corcoran, Truthout, 12/02/15

... the party's latest generation of "New Democrats" - self-described "moderates" who are funded by Wall Street and are aggressively trying to steer the party to the right - have noticed this trend and are now fighting back. Third Way, a "centrist" think tank that serves as the hub for contemporary New Democrats, has recently published a sizable policy paper, "Ready for the New Economy," urging the Democratic Party to avoid focusing on economic inequality. Former Obama chief of staff Bill Daley, a Third Way trustee, recently argued that Sanders' influence on the primary "is a recipe for disaster" for Democrats.

This "ideological gulf" inside the party, as The Washington Post's Ruth Marcus describes it, is not a new phenomenon. Before there was Third Way, there was the Democratic Leadership Council (DLC). And before there was Bill Daley, there was Hillary Clinton - a key member of the DLC's leadership team during her entire tenure in the US Senate (2000-2008). ...

Koch Industries gave funding to the DLC and served on its Executive Council by Joe Sudbay, AmericaBlog, 8/25/10

Back in April of 2001, The American Prospect’s Bob Dreyfuss reported that the Kochs also funded the Democratic Leadership Council (DLC):

... And for $25,000, 28 giant companies found their way onto the DLC’s executive council, including Aetna, AT&T;, American Airlines, AIG, BellSouth, Chevron, DuPont, Enron, IBM, Merck and Company, Microsoft, Philip Morris, Texaco, and Verizon Communications. Few, if any, of these corporations would be seen as leaning Democratic, of course, but here and there are some real surprises. One member of the DLC’s executive council is none other than Koch Industries, the privately held, Kansas-based oil company whose namesake family members are avatars of the far right, having helped to found archconservative institutions like the Cato Institute and Citizens for a Sound Economy. Not only that, but two Koch executives, Richard Fink and Robert P. Hall III, are listed as members of the board of trustees and the event committee, respectively–meaning that they gave significantly more than $25,000.

The DLC board of trustees is an elite body whose membership is reserved for major donors, and many of the trustees are financial wheeler-dealers who run investment companies and capital management firms–though senior executives from a handful of corporations, such as Koch, Aetna, and Coca-Cola, are included. ...

But before all of these events shaped public opinion, the party was largely guided by the ideas of the Democratic Leadership Council. Founded by Southern Democrats in 1985, the group sought to transform the party by pushing it to embrace more conservative positions and win support from big business.

The DLC's goal was to advance "a message that was less tilted toward minorities and welfare, less radical on social issues like abortion and gays, more pro-defense, and more conservative on economic issues," wrote Robert Dreyfuss in a 2001 article in The American Prospect. "The DLC thundered against the 'liberal fundamentalism' of the party's base - unionists, blacks, feminists, Greens, and cause groups generally." ...

... that is, the DLC is not even liberal, much less socialist or communist.

Trump and Clinton share Delaware tax 'loophole' address with 285,000 firms by Rupert Neate, The Guardian, 4/25/16
1209 North Orange Street in Wilmington is a nondescript two-storey building yet is home to Apple, American Airlines, Walmart and presidential candidates

Eight days after stepping down as secretary of state in 2013, Hillary Clinton set up ZFS Holdings at CTC’s offices in Wilmington. A spokesman said it was to manage her book and speaking income.

... the candidates for president share an affinity for the same nondescript two-storey office building in Wilmington. A building that has become famous for helping tens of thousands of companies avoid hundreds of millions of dollars in tax through the so-called "Delaware loophole". ...

The loophole is said to have cost other states more than $9bn in lost taxes over the past decade and led to Delaware to be described as "one of the world's biggest havens for tax avoidance and evasion". ... [emphasis added]

The Democratic Party Is Barely Recognizable; Corporate Politicians Now Rule All, The Big Picture with Thom Hartmann [video], 9/1/16

Attorney and author Mike Papantonio appears on The Big Picture with Thom Hartmann to discuss the recent wins of corporate politicians in Florida, which leaves a void in the area of true progressive growth in Florida politics.

U.S. Senatorial Positions from the Political Compass. U.S. State Senatorial Positions according to The Political Compass with all states selected.

All senators are on the authoritarian right, Democrats only less so.

See U.S. State Senatorial Positions according to The Political Compass with all states selected.

It's a fact that U.S. politics are well to the authoritarian on the vertical social axis and to the "free market" right on the horizontal economic axis. That the U.S. is well to the authoritarian/economic-right is exactly why the nation is failing.

The figure at right shows the political positions of senators from The Political Compass site. Note that senators from the red, more "conservative", states tend to be further to the authoritarian/economic-right, but blue, less "conservative", states are also to the authoritarian/economic-right.

The horizontal economic axis shows the far right being "free market" libertarian anarchism (no government regulation) and far left being "collectivism" communism (all enterprises owned & operated by the state). The social vertical axis is authoritarian at the top and "anything goes" anarchism at the bottom.

U.S. primary election candidate positions show Clinton is well to the right and Republicans are pegged way into the authoritarian/economic-right, fascist corner.

 

The Trump Exception?

Disclaimer: Some have perceived my analysis of Trump in this section as being in support of Trump. Obviously, it is not. Note, I despise corporatist, neoliberal (right-wing) Clinton as well, just not quite as much. It's quite the "lesser-evilsim" delimma that this article addresses:

Vote for the Lying Neoliberal Warmonger: It's Important by Adolph Reed Jr., Common Dreams, 8/18/16
An explanation for why defeating Donald Trump-despite what we know about Hillary Clinton-should be the left's primary national electoral objective this November

[note that what Reed calls the "left" is actually the liberal center. The true opposite of the privatize-everything insanity of the "right" would be a nationalize-everything insanity of "state capitalism" that's called communism.]

On Trump, is he a "conservative" or not? Is he a fascist or not? This section includes perspectives ... including from "conservatives" like Ryan and Kagan.

There's some debate about the fact that in several areas he does not adhere to right-wing Republican orthodoxy. He has stated some positions not considered to be traditionally "conservative"; some even sound liberal.

Frankly, no one knows what the hell he'll do and he likely does not know either. But it's for sure the Republican Party won't let him do anything that smacks of liberal, if he's elected. They'll be full-on corporate and for "free trade" treason as has already been the case for NAFTA and passing Trans Pacific Partnership Fast Track.

Paul Ryan endorses Trump and agrees that Trump will support Ryan's right-wing, extremist Republican House agenda. The image at right shows Trump is an extreme authoritarian and far-right on economic policy.

Paul Ryan: Donald Trump can help make reality of bold House policy agenda by Rep. Paul Ryan, GazetteXtra, 6/2/16

Donald Trump and I have talked at great length about things such as the proper role of the executive and fundamental principles such as the protection of life. The list of potential Supreme Court nominees he released after our first meeting was very encouraging.

US Primary Candidates 2016

This chart illustrates quite nicely that Clinton is well to the authoritarian right and that Sanders is only a little to the economic left.

Political Compass general statement about their charts: This chart extends to all areas of political thought — not just to the confines of the US campaign. Accordingly, the placement of the candidates is in the context of universal political landscape.


But the House policy agenda has been the main focus of our dialogue. We’ve talked about the common ground this agenda can represent. We’ve discussed how the House can be a driver of policy ideas. We’ve talked about how important these reforms are to saving our country. ...

Through these conversations, I feel confident he would help us turn the ideas in this agenda into laws to help improve people’s lives. That’s why I’ll be voting for him this fall. ...

House Republicans are helping shape that Republican vision by offering a bold policy agenda, by offering a better way ahead.

Donald Trump can help us make it a reality.

This article comments on Trump's deviations from "conservative" orthodoxy:

Why Republican Voters Decided On Trump By Nate Silver, FiveThirtyEight, 5/4/16

Trump won the nomination despite having all types of deviations from conservative orthodoxy. He seemed wobbly on all parts of Reagan’s three-legged stool: economic policy (he largely opposes free trade and once advocated for a wealth tax and single-payer health care), social policy (consider his constant flip-flopping over abortion), and foreign policy (he openly mocked the Bush administration’s handling of the Iraq War, which is still fairly popular among Republicans). ...

For a candidate like Trump to win the nomination, it means that several things have gone wrong - both for the Republican Party and in the assumptions we made about how party nominations work. The other day, I summed up the three most important such factors as follows:

1. Voters are more tribal than I thought
2. GOP is weaker than I thought
3. Media is worse than I thought

... But whereas Cruz offered a mix of anti-establishment-ism and movement conservatism - and whereas Marco Rubio offered movement conservatism plus a strong claim to electability - Trump's main differentiator was doubling down on cultural grievance: grievances against immigrants, against Muslims, against political correctness, against the media, and sometimes against black people and women. And the strategy worked. It's a point in favor of those who see politics as being governed by cultural identity - a matter of seeking out one's "tribe" and fitting in with it - as opposed to carefully calibrating one's position on a left-right spectrum. ...

It's a certainty that Trump will not be able to "renegotiate trade deals" or allow Medicare to "negotiate for lower drug prices." The Republican House will not let him do what this article notes he's said he wants to do.

Did Trump University Scam Low-Income Students Who Are Now Suing the GOP Front-Runner?, Democracy Now!, 2/26/16

Lee Fang, The Intercept: ... the Republican elite, as it were—the big donors, the political leaders—they hate Trump, I think in large part because they can’t control him and because Trump has taken left-wing positions on a whole range of issues, in some cases actually taking more left-wing positions than many in the Democratic Party.

Trump wants to renegotiate a lot of these big trade deals, after the Democratic Party has even endorsed the TPP or going back all the way to NAFTA. Trump has promised to take on pharmaceutical companies, promising to have Medicare negotiate for lower drug prices. On a whole range of issues, Trump promises to bully big corporations and to be actually a neutral arbiter on issues like Israel-Palestine.

So, that’s kind of the fascinating part of this election to me, that Trump—you know, part of his appeal is that he’s a self-funder, but he also is uniquely outside of the Republican donor class, and that special interests can’t control him and force him to be on these orthodox Republican issues.

He'll do what Republican donors tell him what to do because the Trump campaign is out of money and the Republican Party will fund his campaign despite what Trump's claim that he's self-funded.

Report: Trump campaign indicates it's 'not going to have enough money' to fight Hillary Clinton before the convention by Bryan Logan, Business Insider, 5/28/16

A report from the Washington Examiner says Trump representatives told Senate Republicans that the campaign "won't have much money to spend fending off attacks from Hillary Clinton" before the Republican National Convention in July.

Trump officially secured the party's nomination for president last week. Before that, the real-estate mogul's campaign said it would partner with the Republican National Committee to raise as much as $1 billion for the general election. ...

Scapegoating is the go-to thing for authoritarians to do.



Fascism -- corporate authoritarianism and scapegoating minorities -- is what he'll bring according to neocon Robert Kagan and others. Kagan is often characterized as a leading neoconservative and a co-founder of the neoconservative Project for the New American Century that beat the drum for the invasion of Iraq.

This is how fascism comes to America By Robert Kagan, Washington Post, 5/18/16

What he offers is an attitude, an aura of crude strength and machismo, a boasting disrespect for the niceties of the democratic culture that he claims, and his followers believe, has produced national weakness and incompetence. His incoherent and contradictory utterances have one thing in common: They provoke and play on feelings of resentment and disdain, intermingled with bits of fear, hatred and anger. His public discourse consists of attacking or ridiculing a wide range of “others” — Muslims, Hispanics, women, Chinese, Mexicans, Europeans, Arabs, immigrants, refugees — whom he depicts either as threats or as objects of derision. His program, such as it is, consists chiefly of promises to get tough with foreigners and people of nonwhite complexion. He will deport them, bar them, get them to knuckle under, make them pay up or make them shut up.

Sorry Folks: It's Fascism by Kathleen Fryd, Huffington Post, 03/17/16

The fundamental error committed by those who offer comparatively benign assessments of Trump is that they judge fascism according to the metrics of hindsight, once its full ambitions became known. Yet nobody could have foreseen what the Nazis would become in the earliest days of their existence; even Hitler's startling 1926 declaration of his ambitions, Mein Kampf, was dismissed by him as fanciful in order to assuage jittery nerves once he became Chancellor of Germany in 1933. Only later did it become obvious that the account was a faithful testimonial of his intentions. ...

... it is unnerving the extent to which Donald Trump is faithful to characteristics of Hitler's early program and methods of operation. Clearly there is no great prominence of anti-Jewish bigotry in the Trump campaign. Even so, on certain mechanical levels, the comparison proves apt. (Hitler also had plans for a sprawling wall on the Eastern front, to keep Slavs from infiltrating the Reichsland.)

But more important than specific policies are the general patterns. First among these is the pivotal role of a narrative of national greatness lost, and the related penchant to categorize people and countries in terms of the "strong" and the "weak." Both Nazi rhetoric and the Trump campaign are suffused with the loaded language of humiliation and the promise to bring it to an end using not brains but brawn. ... Trump's promise to "make America great again," his tedious cataloguing of the "strong" versus the "weak," and the vivid hyper-masculinity of his campaign all place him well in line with the history of fascism.

Donald Trump Wants to Commit War Crimes and Neocons Still Think He's Too Moderate, Democracy Now!, 3/01/16

Zaid Jilani, a staff reporter at The Intercept whose new piece is headlined "Neoconservatives Declare War on Donald Trump.":

... a faction of the Republican Party ... has basically held, you know, the foreign policy of the party hostage for, I’d say, maybe at least 15 or 20 years. I mean, we’re not talking about the realists that were -- the realists that were in charge under the George H.W. Bush administration or the Reagan administration. Instead, we’re talking about folks that came in under George W. Bush -- you know, the Elliott Abrams, the Dick Cheneys of the world, the Paul Wolfowitzes and Donald Rumsfelds of the world. ... these folks, they just don’t trust Trump. I mean, Trump denounced the Iraq War as a mistake, as actually a war based on lies, right before the South Carolina debate. And yet he was -- you know, he won that primary. He won it, actually, resoundingly. And then, you know, at another point, he declared that the United States should be neutral in the Israeli-Palestinian conflict, which is a position that would go in line with sort of the old mainline, realist Republicans, but certainly doesn’t have a place in the current Republican Party. He was denounced angrily by Rubio and Cruz. And apparently it has done nothing on his approval ratings and has done nothing on his electability.

But experts on fascism say Trump is not a fascist, but rather a racist supporter of the current "democratic system" ... a system that I maintain is far from democratic; it's plutocratic.

I asked 5 fascism experts whether Donald Trump is a fascist. Here's what they said. by Dylan Matthews, Vox, 5/19/16

Kagan is wrong. Donald Trump is not a fascist. "Fascism" has been an all-purpose insult for many years now, but it has a real definition, and according to scholars of historical fascism, Trump doesn't qualify. Rather, he's a right-wing populist, or perhaps an "apartheid liberal" in the words of Roger Griffin, author of The Nature of Fascism. He doesn't want to overthrow the existing democratic system. He doesn't want to scrap the Constitution. He doesn't romanticize violence itself as a vital cleansing agent of society. He's simply a racist who wants to keep the current system but deny its benefits to groups he's interested in oppressing.

Griffin, who is a professor of history and political theory at Oxford Brookes University, puts it best: "You can be a total xenophobic racist male chauvinist bastard and still not be a fascist." ...

Every expert I spoke to identified support for the revolutionary overthrow — ideally through violence — of the state's entire system of government as a necessary characteristic of fascism. Griffin's preferred definition of fascism is:

Fascism is a genus of political ideology whose mythic core in its various permutations is a palingenetic form of populist ultra-nationalism.

The word "palingenetic" means rebirth, reflecting Griffin's view that fascism must involve calling for the "rebirth" of the nation. That might at first glance sound like Trump's promise to "make America great again," but Griffin insists on a distinction. Rebirth, in his theory, actually requires the dramatic abandonment of the existing political order. "There has to be a longing for a new order, a new nation, not just a reformed old nation," he told me. "As long as Trump does not advocate the abolition of America's democratic institutions, and their replacement by some sort of post-liberal new order, he's not technically a fascist."

Matthew Feldman, a fascism expert at Teesside University in the UK, agrees. "He's still in the democratic family," he says. "Trump is calling for ethnocratic small-l liberalism. It's liberalism that's racially tinged. ...

That is, Trump's call is for the United States to be "born again."

On economics, Trump's heresy for "conservatives" is his rhetoric that's a reminder that neoliberalism ("conservative" economics) has failed:

Millions of ordinary Americans support Donald Trump. Here's why by Thomas Frank, The Guardian
When he isn’t spewing insults, the Republican frontrunner is hammering home a powerful message about free trade and its victims

It seems to obsess him: the destructive free-trade deals our leaders have made, the many companies that have moved their production facilities to other lands, the phone calls he will make to those companies' CEOs in order to threaten them with steep tariffs unless they move back to the US.

Trump embellished this vision with another favorite leftwing idea: under his leadership, the government would "start competitive bidding in the drug industry". ...

Thus did he hint at his curious selling proposition: because he is personally so wealthy, a fact about which he loves to boast, Trump himself is unaffected by business lobbyists and donations. And because he is free from the corrupting power of modern campaign finance, famous deal-maker Trump can make deals on our behalf that are “good” instead of “bad”. The chance that he will actually do so, of course, is small. He appears to be a hypocrite on this issue as well as so many other things. But at least Trump is saying this stuff.

All this surprised me because, for all the articles about Trump I had read in recent months, I didn’t recall trade coming up very often. Trump is supposed to be on a one-note crusade for whiteness. Could it be that all this trade stuff is a key to understanding the Trump phenomenon? ...

... we cannot bring ourselves to look the thing in the eyes. We cannot admit that we liberals bear some of the blame for its emergence, for the frustration of the working-class millions, for their blighted cities and their downward spiraling lives. So much easier to scold them for their twisted racist souls, to close our eyes to the obvious reality of which Trumpism is just a crude and ugly expression: that neoliberalism has well and truly failed.

Neoliberalism is "conservative" economics ... deregulated (i.e., lawless) capitalism.

I disagree that "liberals bear some of the blame for its emergence" because it's neoliberal Democrats like Clinton who colluded with Republicans to pass NAFTA and TPP Fast Track ... I document that most Democrats opposed the NAFTA "free trade" agreement and that was true for TPP Fast Track, as well..

The rise of American authoritarianism by Amanda Taub, Vox, 3/1/16

A niche group of political scientists may have uncovered what's driving Donald Trump's ascent. What they found has implications that go well beyond 2016.

Perhaps strangest of all, it wasn't just Trump but his supporters who seemed to have come out of nowhere, suddenly expressing, in large numbers, ideas far more extreme than anything that has risen to such popularity in recent memory. In South Carolina, a CBS News exit poll found that 75 percent of Republican voters supported banning Muslims from the United States. A PPP poll found that a third of Trump voters support banning gays and lesbians from the country. Twenty percent said Lincoln shouldn't have freed the slaves.

Last September, a PhD student at the University of Massachusetts Amherst named Matthew MacWilliams realized that his dissertation research might hold the answer to not just one but all three of these mysteries.

MacWilliams studies authoritarianism — not actual dictators, but rather a psychological profile of individual voters that is characterized by a desire for order and a fear of outsiders. People who score high in authoritarianism, when they feel threatened, look for strong leaders who promise to take whatever action necessary to protect them from outsiders and prevent the changes they fear.

So MacWilliams naturally wondered if authoritarianism might correlate with support for Trump.

He polled a large sample of likely voters, looking for correlations between support for Trump and views that align with authoritarianism. What he found was astonishing: Not only did authoritarianism correlate, but it seemed to predict support for Trump more reliably than virtually any other indicator. He later repeated the same poll in South Carolina, shortly before the primary there, and found the same results, which he published in Vox ...

Trump embodies the classic authoritarian leadership style: simple, powerful, and punitive. ...

What [political scientists] found is a phenomenon that explains, with remarkable clarity, the rise of Donald Trump — but that is also much larger than him, shedding new light on some of the biggest political stories of the past decade. Trump, it turns out, is just the symptom. The rise of American authoritarianism is transforming the Republican Party and the dynamics of national politics, with profound consequences likely to extend well beyond this election. ...

Then in the early 1990s, a political scientist named Stanley Feldman changed everything. Feldman, a professor at SUNY Stonybrook, believed authoritarianism could be an important factor in American politics in ways that had nothing to do with fascism, but that it could only reliably be measured by unlinking it from specific political preferences.

He realized that if authoritarianism were a personality profile rather than just a political preference, he could get respondents to reveal these tendencies by asking questions about a topic that seemed much less controversial. He settled on something so banal it seems almost laughable: parenting goals. ...

Feldman's test proved to be very reliable. There was now a way to identify people who fit the authoritarian profile, by prizing order and conformity, for example, and desiring the imposition of those values. ...

Yes, they want to impose their values on others. They want control. There's some irony in that because that's their accusation against liberals of because liberals understand the need to address collective failures. See my response to this accusation at Freedom? Liberal vs. Conservative.

Timothy Snyder was on "The Daily Show" to discuss his book On Tyranny: Twenty Lessons from the Twentieth Century. He explained the steps through which authoritarianism, or fascism, or whatever you want to call it, can become a reality anywhere, even in the U.S. Here is his comment in its entirety:

Fascism says nothing's true. Your daily life is not important. The facts that you think you understand are not important. All that matters is the myth - the myth of one nation as together the myth of the mystical connection with the leader.

When we think of "Post-truth," we think it's something new. We think it's something at campuses. We think it's something irrelevant. Actually, what post-truth does is it paves the way for regime change. If we don't have access to facts, we can't trust each other. Without trust, there's no law. Without law, there's no democracy.

So if you want to rip the heart out of a democracy directly, if you want to go right at it and kill it, what you do is you go after facts. And that is what modern authoritarians do.

Step one: You lie yourself, all the time. Step two: You say it's your opponents and the journalists who lie. Step three: Everyone looks around and says, "What is truth? There is no truth."

And then, resistance is impossible, and the game is over.

 

Deaths of Dispair and Suicide on the Increase

Support for Trump seems to be largely due to increased pessimism about the "status quo" and the "establishment". This runs deep as is revealed by increasing death rates and suicides.

Among which groups does Trump do well? 
Among "whites who die faster" and authoritarians.

Death predicts whether people vote for Donald Trump By Jeff Guo, Washington Post, 3/4/16

[The author noticed] an eerie correlation in the voting data. It seems that Donald Trump performed the best in places where middle-aged whites are dying the fastest.

... and, logically, given they die faster, no wonder they "feel threatened and look to strong leaders who promise to take whatever action necessary to protect them from outsiders and prevent the changes they fear." They are authoritarians.

An irony is they need "change" as much, or more, than anyone ... what they've gotten is more of the same.

'Deaths of Despair' Are Surging Among the White Working Class by Jeanna Smialek, Bloomberg, 3/22/17

Researchers who sounded the alarm on increasing white working-class mortality blamed the trend Thursday on economic upheaval that created a web of social issues so tightly interwoven that even successful policies would take years to unsnarl them.

Mortality and morbidity, which measure chances of death or illness within an age group, began climbing in the late 1990s for less-educated whites between 45 and 54. That came as progress against heart disease and cancer slowed and drug overdoses, suicide and alcoholism -- so-called "deaths of despair" -- became pervasive.

Distress born of globalization and technological change probably drove the deadly outcome, new research by Princeton University's Anne Case and Nobel Prize winner Angus Deaton shows. Their findings point to a cycle of despair that's deepening: Middle-aged whites today are more likely to report pain and mental-health problems than their predecessors and are experiencing symptoms of alcoholism at a younger age.

"Policies, even ones that successfully improve earnings and jobs, or redistribute income, will take many years to reverse the mortality and morbidity increase," Case and Deaton write in their paper. "Those in midlife now are likely to do much worse in old age than those currently older than 65."

Less-educated whites are unique in their plight. Mortality has continued its long-run decline for whites with bachelor's degrees, Hispanics and blacks. In 1999, the rate for whites between 50 and 54 with only high-school degrees was 30 percent lower than the mortality rate of blacks that age. By 2015, it was 30 percent higher, a cross-over echoed across age groups. ...

These days, more Americans die from drug overdoses than car accidents -- the former killed about 47,000 people in 2015, while the latter fewer than 38,000. Opioids specifically killed 33,000 people in 2015, and the vast majority overdosing are white.

"Although we do not see the supply of opioids as a fundamental factor, the prescription of opioids for chronic pain added fuel to the flames," Deaton and Case wrote. "Controlling opioids is an obvious priority, as is trying to counter the negative effects of a poor labor market on marriage, perhaps through better safety nets for mothers with children."

Case and Deaton's story chimes with America's recent politics. President Donald Trump did far better than Mitt Romney, the 2012 Republican candidate, in counties with higher drug, alcohol and suicide mortality, according to research by Pennsylvania State University assistant professor Shannon Monnat.

"Much of the relationship between mortality and Trump's performance is explained by economic factors; counties with higher economic distress and larger working-class presence also have higher mortality rates and came out strongly for Trump," Monnat wrote. "In many of the counties where Trump did the best, economic precarity has been building and social and family networks have been breaking down for several decades."

US suicide rate soars to 30-year high in growing epidemic across America by Nadja Popovich, The Guardian, 4/22/16
Rate among women and girls increases more quickly than among men, yet males continued to account for the majority of deaths, according to a new report

US suicides have reached their highest peak in 30 years, with middle-aged Americans making up the largest part of the growing epidemic, according to new federal data.

A report published on Friday by the National Center for Health Statistics found that between 1999 and 2014, the largest increases in suicide were seen among middle-aged men and women 45 to 64 years old, and girls 10 to 14 years old. Older Americans, aged 75 and over, were the only group to see a decline in suicides during the same period.

The suicide rate among women increased more quickly than among men. But men continued to account for the vast majority of deaths in 2014, the latest year for which data is available. The suicide rate among men was 20.7 per 100,000, compared to 5.8 per 100,000 among women.

This new suicide data underpins recent studies that showed a decline in life expectancy among middle-aged, white Americans - especially women. Such studies attributed the increasing death rate to drug and alcohol misuse, as well as suicide. However, the NCHS data did not analyze racial and ethnic differences in suicide.

"We wanted to highlight the growing problem of suicide in America," said Sally Curtin, lead author on the NCHS report. "Deaths are just the tip of the iceberg. Many more incidents end up as hospitalizations and ER visits." ...

The Tragic Reason This Man Stopped Supporting Trump was that his son died from a drug overdose. He was an enormous Trump fan who actually thought Trump would help those like his son. But that has changed since he found that Trump was lying.

Here is Amanda Taub in a chilling Vox video on The political science theory that explains Donald Trump and how authoritarians moved into the Republican camp.

But never fear, Trump supporters, Scott Adams explains that Trump will win because people are irrational. So Trump appeals to emotions. Therefore facts don't matter. So Trump can't really be "wrong" no matter what he says. Clever!

Donald Trump will win in a landslide. The mind behind ‘Dilbert' explains why. By Michael Cavna 3/21/16

Here's George Lakoff on the Trump phenomenon. Not short, but as usual insightful:

Understanding Trump by George Lakoff, Huffington Post, 7/22/2016

... you will probably not read what I have to say in the New York Times, nor hear it from your favorite political commentators. You will also not hear it from Democratic candidates or party strategists. There are reasons, and we will discuss them later this piece. I am writing it because I think it is right and it is needed, even though it comes from the cognitive and brain sciences, not from the normal political sources. I think it is imperative to bring these considerations into public political discourse. But it cannot be done in a 650-word op-ed. My apologies. It is untweetable.

I will begin with an updated version of an earlier piece on who is supporting Trump and why - and why policy details are irrelevant to them. I then move to a section on how Trump uses your brain against you. I finish up discussing how Democratic campaigns could do better, and why they need to do better if we are to avert a Trump presidency. ...

In the strict father family, father knows best. He knows right from wrong and has the ultimate authority to make sure his children and his spouse do what he says, which is taken to be what is right. Many conservative spouses accept this worldview, uphold the father's authority, and are strict in those realms of family life that they are in charge of. When his children disobey, it is his moral duty to punish them painfully enough so that, to avoid punishment, they will obey him (do what is right) and not just do what feels good. Through physical discipline they are supposed to become disciplined, internally strong, and able to prosper in the external world.

What if they don't prosper? That means they are not disciplined, and therefore cannot be moral, and so deserve their poverty. This reasoning shows up in conservative politics in which the poor are seen as lazy and undeserving, and the rich as deserving their wealth. Responsibility is thus taken to be personal responsibility not social responsibility. What you become is only up to you; society has nothing to do with it. You are responsible for yourself, not for others - who are responsible for themselves. ...

The strict father logic extends further. The basic idea is that authority is justified by morality (the strict father version), and that, in a well-ordered world, there should be (and traditionally has been) a moral hierarchy in which those who have traditionally dominated should dominate. The hierarchy is: God above Man, Man above Nature, The Disciplined (Strong) above the Undisciplined (Weak), The Rich above the Poor, Employers above Employees, Adults above Children, Western culture above other cultures, America above other countries. The hierarchy extends to: Men above women, Whites above Nonwhites, Christians above nonChristians, Straights above Gays.

We see these tendencies in most of the Republican presidential candidates, as well as in Trump, and on the whole, conservative policies flow from the strict father worldview and this hierarchy.

Family-based moral worldviews run deep. Since people want to see themselves as doing right not wrong, moral worldviews tend to be part of self-definition - who you most deeply are. And thus your moral worldview defines for you what the world should be like. When it isn't that way, one can become frustrated and angry. ...

 

I'm "so ready to give up freedom"

I am constantly amazed that so many adults are so ready to give up freedom. I get it that the 20 somethings have been indoctrinated accordingly in liberal institutions, falling lock stock and barrel for the tactics spelled out verbatim in advance by stalin for how to destroy America. I don't get that educated adults that have been around a bit longer still fall for it, when we've all seen the destruction it leads to in every case.

Oh yes. I "fall for" Stalin's tactics. This reaction to the word, socialism, is typical of those who conflate economic and governing systems. For example, Louie Gohmert has no clue that Democratic Socialism is not the same as Socialism:

Louie Gohmert defends Trump from pope - and accidentally admits socialism would be heavenly by Travis Gettys, Raw Story, 2/25/16

Gohmert then joined Trump in slamming Pope Francis, saying the pontiff was wrong to focus on climate change and wealth inequality.

"He can't see that socialism, anywhere it's ever been done, it's always led to, you know, just a totalitarian government," Gohmert said.

The Republican lawmaker suggested that socialism might be a godly form of government that could never be administered on Earth.

"When everybody's in heaven, socialism will be great," Gohmert said. "But in this world it's never worked, it requires totalitarian government, it requires giving up your freedoms, your freedom of speech and religion and all these things. So it's amazing to see a pope who's saying, ‘Let's all get behind the thing that always destroys freedom of religion.'"

I don't get it that so many fall for the idea that being liberal is falling into "Stalinist tactics to destroy America". That is utter nonsense and the kind of rhetoric that led to the McCarthyism that restricted dissent and political criticism of capitalism, which was not "freedom" at all.

Only the thoroughly indoctrinated conflate economic systems and governing systems and don't understand the difference:

This is vitally important: In the absence of a well-functioning, transparent democracy, any economic system, be it communist, socialist (mixed), or capitalist can become authoritarian and dictatorial.

Communism can become dictatorial Stalinism where the state has control of production, plans production and distributes the returns on production; this is actually "state capitalism". Hitler's mixed economy became a fascist dictatorship.

The U.S. is essentially under corporate/fascist control. We live in a plutocracy where moneyed-interests control government through campaign contributions and they control the media by direct ownership. This is all in the name of "freedom" ... the "freedom of corporations to control government and the media". That's the perversion of "freedom" that Republicans and right-wing Democrats support.

I specifically address this at Freedom? Liberal vs. Conservative. Those who think of themselves as "conservative" seem to not have a clue that there is no "freedom" when there's systemic collapse ... as in 2008. Those policies and effects are what my article, Much of What's Called Socialism Is Just Pragmatic, is all about.

I am constantly amazed that so many "conservatives" still fall for a distorted view of freedom that's solely about the individual and totally ignores system effects. The fact is that both are relevant. They have been indoctrinated for at least six decades by right-wing, false propaganda against liberals -- demonizing the label -- instead of understanding that for which they stand. Distorting what it means to be liberal is the only way they can win any debate on economics or government.

But no, raising such issues makes a person a communist who is "so ready to give up freedom".

What's amazing is that we can see right now the destruction capitalism leads to in nations around the planet. Any nation and any economic system without a strong democracy is destined to be destructive. Capitalism is failing because it destroys its customer base and the carrying capacity of the planet. This is the epitome of evil!

This Poster is likely sincere and only misguided. But using the phrasing of Marco Rubio:

Let's dispel once and for all with the fiction that those behind this propaganda (the Glenn Beck, Rush Limbaugh, and Fox News types) don't know what they're doing. They know exactly what they're doing. They're engaged in a systematic effort to destroy American democracy in service to those desiring corporate control of the U.S. government ... and that's fascism.

The media as a whole is not a "liberal media"; it's corporatist "conservative". All we need for full-blown fascism to take hold is the mentality of those like Trump and Cruz to be even more widely adopted.

That mentality: blame the Mexicans, blame the blacks, blame the poor, blame the Muslims, blame non-Christians, blame the LGBT and transgendered ... and especially blame the liberals, who are, after all, actually communists.

 

Hyperinflation, corrupt dictators and extinguishing human life

Hyperinflation, corrupt dictators and mass government extinguishing of human life. [The issue of hyperinflation discussed below]

Corrupt dictators and extinguishing human life

Yes indeed, our government warmongers and extinguishes human life all over the globe. But it's so-called "conservatives" who promote that, not liberals. That means "conservatives" of both parties ... too many Democrats are corporatist-conservative on economic and for war in service of corporate profits. The U.S. government has financed and backed the overthrow of many democratically-elected governments in favor of corrupt dictators on behalf of increasing corporate control and promoting "conservative" government. Note ... that's the promotion of far right-wing "conservative" government.

Mapped: The 7 Governments the U.S. Has Overthrown BY J. DANA STUSTER, Foreign Policy, 8/20/13
Yes, we now have confirmation that the CIA was behind Iran's 1953 coup. But the agency hardly stopped there.

The article reviews the coups in Iran, 1953; Guatemala, 1954; Congo, 1960; Dominican Republic, 1961; South Vietnam, 1963; Brazil, 1964; Chile, 1973.

America's Coup Machine: Destroying Democracy Since 1953 By Nicolas J.S. Davies / AlterNet, 4/8/14
U.S. efforts to overthrow foreign governments leave the world less peaceful, less just and less hopeful.

... To place the coup in Ukraine in historical context, this is at least the 80th time the United States has organized a coup or a failed coup in a foreign country since 1953.  That was when President Eisenhower discovered in Iran that the CIA could overthrow elected governments who refused to sacrifice the future of their people to Western commercial and geopolitical interests.  Most U.S. coups have led to severe repression, disappearances, extrajudicial executions, torture, corruption, extreme poverty and inequality, and prolonged setbacks for the democratic aspirations of people in the countries affected.  The plutocratic and ultra-conservative nature of the forces the U.S. has brought to power in Ukraine make it unlikely to be an exception.

Noam Chomsky calls William Blum's classic, Killing Hope: U.S. Military and CIA Interventions since World War II, "Far and away the best book on the topic."  If you're looking for historical context for what you are reading or watching on TV about the coup in Ukraine, Killing Hope will provide it.  The title has never been more apt as we watch the hopes of people from all regions of Ukraine being sacrificed on the same altar as those of people in Iran (1953); Guatemala(1954); Thailand (1957); Laos (1958-60); the Congo (1960); Turkey (1960, 1971 & 1980); Ecuador (1961 & 1963); South Vietnam (1963); Brazil (1964); the Dominican Republic (1963); Argentina (1963); Honduras (1963 & 2009); Iraq (1963 & 2003); Bolivia (1964, 1971 & 1980); Indonesia (1965); Ghana (1966); Greece (1967); Panama (1968 & 1989); Cambodia (1970); Chile (1973); Bangladesh (1975); Pakistan (1977); Grenada (1983); Mauritania (1984); Guinea (1984); Burkina Faso (1987); Paraguay (1989); Haiti (1991 & 2004); Russia (1993); Uganda (1996);and Libya (2011).  This list does not include a roughly equal number of failed coups, nor coups in Africa and elsewhere in which a U.S. role is suspected but unproven.

The disquieting reality of the world we live in is that American efforts to destroy democracy, even as it pretends to champion it, have left the world less peaceful, less just and less hopeful.  When Harold Pinter won the Nobel Prize for Literature in 2005, at the height of the genocidal American war on Iraq, he devoted much of his acceptance speech to an analysis of this dichotomy.  He said of the U.S., "It has exercised a quite clinical manipulation of power worldwide while masquerading as a force for universal good.  It's a brilliant, even witty, highly successful act of hypnosis… Brutal, indifferent, scornful and ruthless it may be, but it is also very clever." ...

Former Chilean Army Officer Found Liable for 1973 Murder of Víctor Jara After U.S.-Backed CoupDemocracy Now!, 6/29/16

In Florida, a jury has found former Chilean army officer Pedro Barrientos liable for the murder of legendary folk singer and activist Víctor Jara in September 1973. In the days after dictator Augusto Pinochet seized power in a U.S.-backed coup, Víctor Jara was rounded up, tortured and shot more than 40 times. Barrientos has lived in the United States for more than two decades and is now a U.S. citizen. The Jaras sued him under a federal civil statute known as the Torture Victims Protection Act, which allows U.S. courts to hear about human rights abuses committed abroad.

The Guardian newspaper called the verdict "one of the biggest and most significant legal human rights victories against a foreign war criminal in a US courtroom." We speak to Víctor Jara's widow Joan, his daughter Manuela Bunster and Dixon Osburn, executive director of the Center for Justice and Accountability, which represented the Jara family.

"She's Baldly Lying": Dana Frank Responds to Hillary Clinton's Defense of Her Role in Honduras Coup, Democracy Now!, 4/13/16

Dana Frank, an expert on human rights and U.S. policy in Honduras. "... I think we're all kind of reeling that she would both defend the coup and defend her own role in supporting its stabilization in the aftermath," Frank says. "I want to make sure that the listeners understand how chilling it is that a leading presidential candidate in the United States would say this was not a coup. ... She's baldly lying when she says we never called it a coup."

In debate, Hillary Clinton boasted that she is supported by Henry Kissinger, accused war criminal who oversaw policies that led to millions of deaths by BEN NORTON, Salon, 2/4/16
Hillary Clinton has a long history of supporting former Secretary of State Henry Kissenger

... Kissinger infamously insisted "The illegal we do immediately; the unconstitutional takes a little longer."

In his book "The Trial of Henry Kissinger," the late journalist Christopher Hitchens detailed the war crimes Kissinger partook in. Hitchens described Kissinger as a master of "depraved realpolitik" with "a callous indifference to human life and human rights" who is complicit in U.S.-backed atrocities in Vietnam, Cambodia, Laos, East Timor, Chile, Bangladesh, Cyprus, Kurdish Iraq, Iran, South Africa, Angola and more.

Hitchens argued the former secretary of state should be tried in court "for war crimes, for crimes against humanity, and for offenses against common or customary or international law, including conspiracy to commit murder, kidnap and torture." ...

35 countries where the U.S. has supported fascists, drug lords and terrorists by NICOLAS J.S. DAVIES, ALTERNET, 3/8/14
As the situation in Ukraine continues to fester, a handy history guide -- from A (Argentina) to Z (Zaire)

The U.S. is backing Ukraine's extreme right-wing Svoboda party and violent neo-Nazis whose armed uprising paved the way for a Western-backed coup. Events in the Ukraine are giving us another glimpse through the looking-glass of U.S. propaganda wars against fascism, drugs and terrorism. The ugly reality behind the mirror is that the U.S. government has a long and unbroken record of working with fascists, dictators, druglords and state sponsors of terrorism in every region of the world in its elusive but relentless quest for unchallenged global power.

Behind a firewall of impunity and protection from the State Department and the CIA, U.S. clients and puppets have engaged in the worst crimes known to man, from murder and torture to coups and genocide. The trail of blood from this carnage and chaos leads directly back to the steps of the U.S. Capitol and the White House. As historian Gabriel Kolko observed in 1988, "The notion of an honest puppet is a contradiction Washington has failed to resolve anywhere in the world since 1945." What follows is a brief A to Z guide to the history of that failure. ...

A huge amount of human suffering could be alleviated and global problems solved if the United States would make a genuine commitment to human rights and the rule of law, as opposed to one it only applies cynically and opportunistically to its enemies, but never to itself or its allies.

 

Inflation and Hyperinflation

Hyperinflation due to a lack of economic capacity with too much money chasing too few goods is not a factor with U.S. Capacity utilization well below 80%.

It's true that when an economy is a full capacity, increasing the money supply can cause inflation due to too much money chasing too few goods (see Demand Pull below). In the extreme, there can be hyperinflation. But the U.S. economy is nowhere near full capacity. The chart at right shows U.S. Capacity Utilization from 2006 through May 2016.

United States Capacity Utilization 1967-2016 is available at this link.

Capacity Utilization in the United States increased to 75.40 percent in April from 74.90 percent in March of 2016. Capacity Utilization in the United States averaged 80.41 percent from 1967 until 2016, reaching an all time high of 89.40 percent in January of 1967 and a record low of 66.89 percent in June of 2009. Capacity Utilization in the United States is reported by the Federal Reserve.

The view at Causes of Inflation, Economics Help:

If there is more money chasing the same amount of goods, then prices will rise. Hyperinflation is usually caused by an extreme increase in the money supply.

However, in exceptional circumstances – such as liquidity trap / recession, it is possible to increase the money supply without causing inflation. This is because in recession, an increase in the money supply may just be saved, e.g. banks don’t increase lending but just keep more bank reserves.

And that's what's been happening ... huge increases in the money supply and little inflation.

John T. Harvey explains an important perspective on inflation in The Big Danger In Cutting The Deficit by John T. Harvey, Forbes, 3/18/11.

... inflation is a far more complex phenomenon than is allowed for in the popular press or in introductory economics courses. The way a modern financial system works, simply creating money does not lead to price increases in the same way it might in a world where gold was the only currency, for example. In the latter, discoveries of gold would increase the money supply regardless of people's wishes.

If (and this is a very important "if") the economy were already operating at full capacity, with all willing workers employed, then, indeed, as it spent the newfound gold, inflation would follow, since no more goods or services could be produced. However, first, we are not at full employment (far from it), so a discovery of gold like this would actually have the effect of increasing production and employment, and second, our monetary system doesn't work that way in the first place. The primary tool by which our central bank introduces new money into the economy is the purchase of government debt from the public. This is a voluntary transaction, in the sense that no one who owns that debt is forced to sell it. Thus, it is impossible to create a situation analogous to the discovery of gold mentioned before. Money doesn't get dumped on us and thereby cause inflation. Instead, it is created when agents make portfolio management decisions.

To make this more clear, consider a brief example of how inflation really works. Recall the worst episode of inflation in U.S. economic history, that of the 1970s and early 1980s. What happened, of course, was that the OPEC oil cartel cut supply in order to drive up prices. The increases went well beyond oil, because of the central role played by energy in our economy. The money supply most certainly did increase, but in response to these events and not as a causal factor. Businesses (especially banks) and households freely offered to sell Treasury bills to get the cash they needed to pay the higher prices caused by the OPEC oil embargo. The Federal Reserve, recognizing that these were legitimate and even desperate needs, accommodated by buying them, and the money supply rose.

This is not to say that increases in the money supply cannot cause inflation. However, not only are the conditions under which they would do so uncommon, but one of the key ones would be that we were already operating at or near full employment. That hardly describes where we are today. Creating new money-which we do all the time, of course, as the money supply is constantly growing-is not in and of itself inflationary, particularly in a time of high unemployment. ...

Harvey explains the factors that cause inflation in a later article: increasing in the money supply does not cause inflation (that is, when it's not in the extreme case mentioned above).

What Actually Causes Inflation (and who gains from it) by John T. Harvey, Forbes, 5/30/11

... Money comes into existence when someone adds it to her portfolio of assets. This occurs either when she borrows money (which creates new cash from reserves) or sells securities to the Federal Reserve (which injects new cash into the system). Neither of these scenarios allows the central bank to increase the supply of money beyond demand, the story told by those in the money growth ==> inflation camp. Instead, inflation happens first. This then means that agents need more cash for transactions, leading them to borrow more or sell government securities to the Fed. Thus, the money growth accompanies inflation, but it does not cause it. ...

As a general point, he explains:

... As a very quick aside, it’s worth pointing out that just because the market created a particular price, wage, profit rate, or income does not mean that it is somehow objectively “fair.” These numbers only quantify our existing social values. ...

So what does cause inflation? Harvey's article describes 4 causes.

Market Power: This is about monopoly or oligopoly power. Economic agents with great market power have the ability to avoid (at least to some extent) competitive pressures that would contain prices. He explains what happened in the 1970s and 1980s was that ...

...  In fact, it is the very attempt to capture more income that is at the heart of the inflationary process under these circumstances. Money supply growth did not cause prices to rise, OPEC’s attempt to grab a larger income share did. No amount of controlling the money supply was going to eliminate the ultimate impact of rising oil prices: the redistribution of income towards those countries and the oil industry. ...

I describe here what caused The Oil Shocks of the 70s: The 1973 Oil Shock was a result of Nixon devaluing the dollar; the impact rippled through the economy.

Demand Pull: This is about supply shortages.

Another means by which inflation can take place is a rise in demand relative to supply. Say there is an increase in the demand for housing during an economic expansion. Bottlenecks may arise in certain building supplies like lumber. Contractors bid up these prices in an attempt to secure the materials they need; these price increases then ripple through the economy. Firms and consumers again desire a larger money supply to be able to operate, which the Fed presumably accommodates. The producers of lumber and bricks may also experience a rise in their incomes as part of this process–and why shouldn’t they?

This is how a market system is supposed to work. Those selling goods and services in highest demand should see their profits and wages rise, even though by definition this will almost certainly cause inflation. This attracts others to sell these same goods and services, while some consumers go in search of substitutes. This is the greatest strength of a market system, it’s flexibility in the face of unanticipated changes.

Asset Market Boom: This is about speculation, which increases when the wealthy get even more wealthy.

... When speculative money bids up the price of a commodity future, this creates an incentive for those actually selling the commodity to withhold supply today in favor of the future (when prices will presumably be higher). ...

... a goods price is driven up by the price of a financial asset. The winners here are 1) those whose portfolios include those assets (of course, they can only realize their gain by selling) and 2)the producers of the commodities in question. Those producers often bear the brunt of the blame for these inflations, but they are not actually the source. As usual with inflation, it leads to a rise in the money supply as agents take out loans and sell government securities. The way to stop this inflation is not via blocking monetary growth, however, but to control the link between the asset market and the commodity price.

Supply Shock:

... If a storm rages through the Gulf of Mexico, taking out oil derricks and refineries along the way, this may well raise the price of oil and gas. As it should, for this creates incentives to build more derricks and refineries and for consumers to find alternate energy sources. Again, this is what capitalism is supposed to do. In terms of who wins with this sort of inflation, it’s obviously more complex since it depends on whose derricks were destroyed and who gets to build new ones. In any event, this, too, can lead to a rise in the money supply and there is no logical reason for the Fed to block this.

His conclusion:

... The bottom line is that there are a number of processes that can create inflation, none of which starts with, “the money supply increases.”

Someone makes a conscious decision to raise a price or wage, and they must be able to make this stick. Because every higher price you pay means someone is getting more income, inflation causes a redistribution of income. Sometimes it does so in a manner that we would endorse and sometimes not. But in any event, it causes a rise in the demand for money that the Fed will almost certainly accommodate – and rightfully so, for refusing to do so almost always serves to punish those already in the weakest position.

I’m afraid this more realistic perspective does not offer a nice, simple rule as in the money growth ==> inflation camp. That said, neither do they since that’s not how the world really works! In reality, monetary policy does not cause inflation, and it is not well placed to stop it. What it does do is very strongly and directly affect interest rates. But prices are determined elsewhere in the system. [emphasis added]

While Harvey points out that "monetary policy is not well placed to stop it [inflation]", that doesn't mean the Federal Reserve does not attempt to use monetary policy to do so. It does! It will work, pre-emptively, to put you out of a job to reduce demand.

The Federal Reserve tends to see the main threat of inflation as coming from a wage-price spiral. It works actively to "cool the economy" to put people out of work to decrease demand for labor to hold wages down. I document that the root cause of inflation does not matter to the Fed. The Fed "cooling the economy" puts people out of work to reduce demand no matter what the cause of inflation (such as an oil shock).

I explain this and the Fed's NAIRU-based policies with excerpts from Federal Reserve meeting minutes and Fed statements at ... Federal Reserve Policy: Drive Down Wages by Limiting Demand for Labor.

The Federal Reserve is the main actor doing "command & control" of the U.S. economy. Thing is, it's not really government doing that because The Federal Reserve is Not Really a Government Agency ... it's privatized U.S. monetary policy run by and for the banks. Many "conservatives" and libertarians claim hate the Federal Reserve because of "fiat currency" [which is not a problem], but it's the epitome of the privatization they claim to love.

 

Government federally finances child murder

Our own government federally finances child murder on a daily basis. HOW IS THAT OK?

Though many think there should not be, there's a law against using federal funds to pay for abortion.

FactCheck: "The Hyde Amendment prohibits federal funding of abortions through Medicaid except in cases of rape, incest or endangerment of the life of the mother. ... the new law [the ACA] doesn’t change the Hyde Amendment restrictions on abortion funding through Medicaid."

Granted, some don't like such exceptions. For example, Missouri Republican lawmaker, Rep. Tila Hubrecht, (R-Dexter):

Rape Pregnancies Are a "Silver Lining" from God, Says Missouri Lawmaker By Danny Wicentowski, 5/6/16

"Sometimes bad things happen, horrible things, but sometimes God can give us a silver lining through the birth of a child."

Now that's horrible.

Of course, an "it's not the fetuses fault"-type argument does not apply in other cases.

When it comes to providing financial support to children borne to poor or irresponsible parents, "conservatives" reject an "it's not the child's fault" argument and object to supporting poor families and their children. It doesn't apply when it comes to children getting a healthy diet or medical care or a good education. An "it isn't the children's fault" argument doesn't apply even when they're borne to poor or irresponsible parents. Too bad.

That's even though the U.S. economy is rigged to drive millions into poverty.

So-called "conservatives" don't hesitate to lie about Planned Parenthood "selling baby parts"Planned Parenthood Is Not Harvesting 'Baby Parts' By Andrea Grimes 10/8/15.

The Irony: Two filmmakers were indicted in Texas by a Republican DA for attempting to buy baby parts from Planned Parenthood: Grand jury indicts 2 behind Planned Parenthood videos by Trevor Hughes, USA TODAY, 1/26/16. The two were indicted "on felony charges of tampering with a governmental record.  [One] was also charged with attempting to purchase and sell human organs, a misdemeanor."

Abortion is not "child murder". Fetuses are not children. The word, "spirit", has the same root as the word, "inspiration", for breath. I do not consider the Bible as delivered truth from God, but even that book has verses that maintain that Life Begins at Breath, Not Conception (By OllieGarkey, 3/19/14).

Those that don't like these verses resort to citing less direct passages to maintain otherwise (see Life Begins at Conception NOT at First Breath! Delight in Truth, 11/19/12).

 

I despise the "capitalism that put America at the top"

The author of the article above seems to despise the very capitalism that put America at the top of the list...the country that people were trying to get into instead of escape from like the were from the socialist failures.

Well, comrade, I'm aware that it's not politically correct to point out weaknesses and failures of capitalism. But isn't it great that we no longer have to be politically correct ... at least according to "conservative" Republican primary candidates ... and especially according to their chosen nominee.

The truth is that "the author" (that's me) despises both communism and and capitalism. Actually, I despise any economic system that does not have transparent, well-functioning democracy and an informed electorate. That's because any economic system absent those will become authoritarian and dictatorial.

Conflating the concepts of economic system and governing system ignores there's a difference; they are orthogonal and independent. Not having a strong democracy is what happened for many the above-cited "socialist failures" and that's exactly what's happening now with the United States sliding well into plutocracy and fascism. Many of the "socialist failures" were a result of U.S. backed regime changes to reverse the results of democratic elections.

People weren't fleeing "from the socialist failures"; they were fleeing from authoritarianism, dictatorship and persecution. They also fled from fascist Germany for that reason. Any economic system will become authoritarian and dictatorial without a governing democracy!

America at the top? Well, no, it's not.

The Legatum Prosperity Index - 2015 ranks the United States at 11th in Overall Rank, Economy, Governance, and Social Capital; 9th in Education; 15th in Personal Freedom; 33rd in Safety & Security. Somehow it ranks the U.S. at 1st in Health (Th„e Health sub-index measures countries' performance in three areas: basic health outcomes (both objective and subjective), health infrastructure, and preventative care.).


Corporate Corruption is the fault of Government

There is much corporate corruption that runs over the little guy. It's disgusting. However, the worst offenders are the ones sanctioned and protected by government--the most corrupt of them all. You can't put the biggest wolf offender of all in charge of the hen house because you don't like some of the rooster's attitudes. We have an extremely corrupt government already--the idea of giving them more power and stealing from the people to give them total ownership too is just completely illogical. Even if they weren't so corrupt, the next one in line might be.

Complaining about corporations "that the worst offenders are the ones sanctioned and protected by government" ignores that they are created by government and that originally their charter was to serve the public good and they had fixed/limited life spans. Thanks to neoliberal policies (conservative on economics) those constraints no longer apply. They should.

Corporations and the Public Interest By Jonathan Rowe, Originally published in. Summer 1995 on page 26.
A look at how the originally purpose behind corporate charters has been lost ... One of the articles in Business On A Small Planet (IC#41),

Individual responsibility is one of the bedrock principles of common law. To dilute this principle was an extraordinary step, one that was conceivable only for a mission that presumably served the public good. In other words, there was a direct link between the exemption from individual responsibility for corporate investors (and later officers), and the public good that the corporation was chartered to carry out.

This legal tradition carried over to the American colonies. It gave rise to the corporate charters that the state legislatures bestowed one by one, and only for specific undertakings.

Corporations are now monstrous, amoral machines for which profit is the only imperative unless government imposes other requirements. Slave labor is fine with corporations. Negative externalities are just fine, which is theft from every member of the pubic. Examples: pollution, global warming, redistribution of the costs of growth onto the public, wage theft, and banking theft.

The idea that this is about giving the government "total ownership" is nonsense. The current right-wing move is to privatize all government functions, instead of doing what will actually work and be more efficient as I describe in my article.

Stephen Hawking: Humankind is still greedy, stupid and greatest threat to Earth, by Mary Bowerman, USA TODAY Network, 6/28/16

Physicist Stephen Hawking says pollution coupled with human greed and stupidity are still the biggest threats to humankind.

During an interview on Larry King Now, the science superstar told King that in the six years since he's spoken with the talk show host people haven't cleaned up their act.

"We certainly have not become less greedy or less stupid," Hawking said. "The population has grown by half a billion since our last meeting, with no end in sight. At this rate, it will be eleven billion by 2100."

He noted that the massive problem of pollution has only grown in the last five years.

"Air pollution has increased over the past five years," he said. "More than 80% of inhabitants of urban areas are exposed to unsafe levels of air pollution."

When asked what the biggest problem facing the world is, Hawking said climate change.

Hawking told King he wonders if we are past the point of no return. "Will we be too late to avoid dangerous levels of global warming?" ...

Very likely we will "be too late" thanks to global warming deniers, but the physics of the system is undeniable.

 

Freedom depends on LIMITING government

That is why the founding fathers expressed so well freedom absolutely depends on LIMITING government. The constitution was all about limiting government, not giving them an open check to destroy. Governments always destroy freedom. You can't have it both ways.

And the idea that "freedom absolutely depends on LIMITING government" is utter nonsense. Freedom depends on having the right kind of government. Goverments do not "always destroy freedom." Government can either enhance or erode freedom.

As I explain in Why Government and for What?, the issue is not about "big government" vs "small government", and especially not about "limited government". As I explain, in the U.S. we have somewhat the worst of both worlds: too big in some ways, too small in others. So

It's democratic government that provides freedom. Unfortunately, so-called "conservatives" are doing their utmost to eliminate democracy in favor of corporate rule. The Trans Pacific Partnership "free trade" treason is their latest and most despicable initiative to undermine freedom in favor of corporate rule. Obama colluded with Republicans to pass Fast Track against massive Democratic opposition.

The Constitution was not "all about limiting government." This is a "conservative" trope, repeated so often that they actually believe it.

They should actually read the document because somehow they ignore the specific and active mandate in the Constitution of the United States: that government must "promote the general Welfare" and tax for that purpose.

Unfortunately what those who vote "conservative" actually stand for is what we mostly have today: "promote the special interest" welfare of corporations and the wealthy. They say that this is because of crony capitalism and failures of government that's "too big". But capitalism is crony capitalism because, by definition, it caters to capitalists.

Government is corrupt because corporations and the wealthy control it in order to externalize costs onto the public in order to increase profits ... that allows them to effectively steal from the public. That's the result of plutocracy and crony capitalism.

As an example, in "conservative" Colorado Springs, if "conservative" ideology were correct, there should be freedom galore! To the contrary, in A Broken Region I describe that government here is controlled by corporate developers. This is true in most growing regions -- that's exactly what "local control" means.

Here in Colorado Springs developer-controlled government wants taxes/fees on citizens for stormwater infrastructure that should have been paid for as growth occurred by taxes/fees on development. And ratepayers here are on the hook for the Southern Delivery System to subsidize developers' future product sales. Each of these is on the order of $1 billion.

That ~$2B and other negative externalities are the real theft, not socialism. Though one could call "corporations being allowed to socialize costs onto the public" corporate socialism.

Internalizing costs that have been externalized would include them in the cost of houses and businesses to allow market forces to properly regulate supply and demand. "Market forces" vs the "free market" explains the difference between them. "Conservatives" believe the "free market" propaganda, so they don't understand how the "free market" violates the proper operation of "market forces."

"Free market" ideologues even think corporations should not pay taxes, because they don't understand either economics or business. It's the epitome of ignorance.

Corporations Should Pay Taxes, 9/4/14. Corporations, separate legal entities from stockholders, should pay taxes, despite the irrelevant fact that ultimately people pay all taxes. Corporations do not necessarily pass on costs to either customers or stockholders. And costs of government services must be internalized in order for market forces to properly balance supply and demand. If costs are externalized, the public must bear them and *that* is the true theft, not taxes.

Those who consider themselves "conservative" have such a myopic and limited view of "freedom" that they promote its opposite. I describe this failure in Freedom? Liberal vs. Conservative ... also see A Libertarian Diatribe and the Gardening Analogy.

 

Don't tax the most productive job creators at 90%

The next time you want to say it's ok to tax the most productive job creators at 90%, first get educated on what the income tax pays for and why it was ever needed.

The Myth of the 'Job Creators'
What we have now is corporate feudalism.

The "Job Creators" propaganda is the epitome of class warfare ... a war the wealthy have won.

The article below observes that the so-called "job creators" are referred to in "reverent and worshipful" terms. Indeed, the message of "don't tax the job creators" is: "On your knees, slaves. Bow down to your betters."

The very idea is based on economic ignorance. Posting of the TED Talk below was delayed -- it was censored for a time -- because reality is not allowed in the United States when it contradicts "conservative" economic myths ... it's not politically correct.

Nick Hanauer explodes the myth of the capitalist 'job creator' By David Horsey, LA Times, 2/17/14

Republicans, such as Speaker of the House John Boehner, talk of job creators in reverent, worshipful terms. In their vision of how the world works, it is these brave titans of capitalism who, with no help from anyone else, build the companies that create jobs for American workers. To Boehner and his party, anything that inhibits job creators in their endeavors — taxes, environmental laws, financial regulations — is a job killer.

This is economic theory at its most simplistic and has been proven erroneous, over and over again. ...

In a controversial TED talk in 2012, Hanauer castigated policymakers who subscribe to the false faith that rich people and businesses will provide all the jobs we need, if only they do not have to pay much in taxes.

"I have started or helped start, dozens of businesses and initially hired lots of people," Hanauer said in his presentation. "But if no one could have afforded to buy what we had to sell, my businesses would all have failed and all those jobs would have evaporated.

"That's why I can say with confidence that rich people don't create jobs, nor do businesses, large or small. What does lead to more employment is a circle-of-life-like feedback loop between customers and businesses. And only consumers can set in motion this virtuous cycle of increasing demand and hiring. In this sense, an ordinary middle-class consumer is far more of a job creator than a capitalist like me." ...

When Hanauer made these remarks two years ago, they went against the prevailing narrative, but many Democrats are seizing on his vision as an alternative to the GOP job-creator myth. In a country where economic ignorance is pervasive, it would not be a bad thing if these competing ideas become the focus of the 2014 election debate.

Sorry, Folks, Rich People Actually Don't 'Create The Jobs' by Henry Blodget, Business Insider, 11/29/13

... In this war of words (and classes), one thing has been repeated so often that many people now regard it as fact.

"Rich people create the jobs."

Specifically, by starting and directing America's companies, entrepreneurs and rich investors create the jobs that sustain everyone else.

This statement is usually invoked to justify cutting taxes on entrepreneurs and investors.  If only we reduce those taxes and regulations, the story goes, entrepreneurs and investors can be incented to build more companies and create more jobs.

This argument ignores the fact that taxes on entrepreneurs and investors are already historically low, even after this year's modest increases. And it ignores the assertions of many investors and entrepreneurs (like me) that they would work just as hard to build companies even if taxes were higher.

But, more importantly, this argument perpetuates a myth that some well-off Americans use to justify today's record inequality — the idea that rich people create the jobs.

Entrepreneurs and investors like me actually don't create the jobs -- not sustainable ones, anyway.

Yes, we can create jobs temporarily, by starting companies and funding losses for a while. And, yes, we are a necessary part of the economy's job-creation engine. But to suggest that we alone are responsible for the jobs that sustain the other 300 million Americans is the height of self-importance and delusion.

So, if rich people do not create the jobs, what does?

A healthy economic ecosystem — one in which most participants (especially the middle class) have plenty of money to spend. ...

Sanders never proposed a 90% tax

Sanders' proposed marginal tax rates are nowhere near 90% as false memes assert. Marginal tax rates apply only to income above each level, not to all income. Progressive income tax rates are necessary to oppose the "path dependence" dynamic.

When CNBC's John Harwood asked:

HARWOOD: People on Wall Street, people in business ... some have even likened the progressive/Democratic crusade to Hitler's Germany hunting down the Jews. What do you think when you hear stuff like that?

SANDERS: It's sick. And I think these people are so greedy, they're so out of touch with reality. They think they own the world. And the idea that anybody like me or anybody else are challenging them and say, may be, just maybe there's something wrong when 99% of all new income goes to the top 1%. Oh, this is Hitlerism that you suggest that. What a disgusting remark. If you have seen a massive transfer of wealth from the middle class to the top one-tenth of 1% [see chart just below], you know what, we've got to transfer that back. Radical socialist Dwight D. Eisenhower was president, I think the highest marginal tax rate was something like 90%.

The share of wealth owned by the top 0.1% is almost the same as the share owned by the bottom 90%.

Remind me again what happened in the 30s when inequality was this great? Oh yeah.

HARWOOD: When you think about 90%, you don't think that's obviously too high?

SANDERS: No. What I think is obscene and what frightens me is, again, when you have the top one tenth of 1% owning almost as much wealth as the bottom 90%. Does anybody think that that is the kind of economy this country should have? Do we think it's moral? You got people not workin' one job. They're workin' two jobs, three jobs. People scared to death about what happens tomorrow. Half the people in America have less than $10,000 in savings.

Even though top marginal tax rates were over 90% during the Eisenhower years, that's not what Sanders is proposing. The 90% tax rate came up when Sanders was interviewed by CNBC’s Chief Washington Correspondent, John Harwood.

SANDERS: Radical socialist Dwight D. Eisenhower was president, I think the highest marginal tax rate was something like 90%.

HARWOOD: When you think about 90%, you don't think that's obviously too high?

SANDERS: No. What I think is obscene and what frightens me is, again, when you have the top one tenth of 1% owning almost as much wealth as the bottom 90%. ...

The table at right shows what he's proposed: a top marginal tax rate of 52%, not 90%, on those with incomes over $10M/year. Those who make $250,000/year or less would pay the current top marginal tax rate of 33%.

 

Job Creators: "Conservatives" call them "Job Creators" to imply they are like "God the Creator"

This adulation of the "Job Creators" -- the enormously wealthy -- is disturbing.

Here's what's obscene, grotesque, and deadly: Richest 62 people as wealthy as half of world's population, says Oxfam and 20 People Now Own As Much Wealth as Half of All Americans.

This didn't "just happen." It was designed through policy. As Nobel Prize Economist, Joseph E. Stiglitz, wrote, American Inequality Didn’t Just Happen. It Was Created. I list some of the policies at The U.S. has policies that drive people into poverty and keep them there and make the wealthy even richer.

This shows:

Tax Expenditures (Tax Breaks) compared to Discretionary Spending (from Income Tax) and Mandatory Spending (from the dedicated SS & Medicare income streams)

Note that Tax Expenditures (Tax Breaks) are greater than all Discretionary Spending. Those Tax Breaks are tax dollars diverted to subsidies. The U.S. doesn't have a simple "Spending Problem", it has a "Tax Expenditure / Tax Break" problem!

While Social Security and Medicare spending is large, it comes from dedicated payroll taxes specifically for that purpose. By law, this spending cannot be allowed to increase debt ... instead benefits will be reduced should there be a shortfall. The black propaganda that there's a debt problem because of these programs is a lie!

We hear, SS and Medicare must be cut because we're going broke. But they're not a problem now or in the future. What is a problem now is Tax Expenditure Spending, which is even larger than Discretionary Spending.

Somehow these Tax Expenditures are the real entitlements that continue on with little, if any, scrutiny.


Tax breaks (Tax Expenditures) for corporations and individuals are 10% greater than all discretionary spending! While budgets for Discretionary Spending must be voted on every year, Tax Expenditures in the tax code are not voted on every year. Those hidden-spending, Tax Expenditures are essentially entitlements that last forever unless rescinded!

Over 50% of tax breaks go to those in the top 20% of income ... that exceeds military spending! !!!! WTF??? 
16.6% to the top 1% ... that's $203 Billion ... that's 2.7 times more than SNAP Benefits (i.e., "food stamps")
7.7% to the bottom 20% ... that's less than half of what goes to the Top 1%.  
[See the chart below that shows the comparisons.]

Bernie Sanders: Democrats Need to Wake Up By BERNIE SANDERS, New York Times, 6/28/16

... Incredibly, the wealthiest 62 people on this planet own as much wealth as the bottom half of the world's population - around 3.6 billion people. The top 1 percent now owns more wealth than the whole of the bottom 99 percent. The very, very rich enjoy unimaginable luxury while billions of people endure abject poverty, unemployment, and inadequate health care, education, housing and drinking water. ...

Meanwhile, in our country the top one-tenth of 1 percent now owns almost as much wealth as the bottom 90 percent. Fifty-eight percent of all new income is going to the top 1 percent. Wall Street and billionaires, through their "super PACs," are able to buy elections.

Incredibly, millions of Americans defend this. A comment I saw that explains this rings true: "Most people live in a state of collective Stockholm Syndrome, defending & virtually worshiping their institutionalized captors & abusers."

Indeed, worship is the correct word. The "Job Creators" terminology is the modern equivalent of the "Divine Right of Kings."

The Divine Right of Kings, divine right, or God's mandate is a political and religious doctrine of royal and political legitimacy. It asserts that a monarch is subject to no earthly authority, deriving the right to rule directly from the will of God. The king is thus not subject to the will of his people, the aristocracy, or any other estate of the realm, including (in the view of some, especially in Protestant countries or during the reign of Henry VIII of England) the Catholic Church. ...

The wealth of the so-called "Job Creators" is seen as the manifestation of their being Godly and Righteous. It's well-aligned with "conservative" thinking described in The Conservative Mind from Burke to Eliot by Russell Kirk, 1953. It venerates aristocracy and was written by a conservative for conservatives. It's considered the foundational book that inspired the conservative resurgence in America. Excerpts:

Social and political equality, he declared, do not fall within the category of the real rights of man; on the contrary, hierarchy and aristocracy are the natural, the original, framework of human life; if we modify their influence, it is from prudence and convention, not in obedience to "natural right." These are the postulates for his praise of natural aristocracy and his condemnation of leveling. p. 58

Burke's denial of ... the one-man, one-vote idea of democracy is at its most vigorous in an earlier passage from the Reflections: ... Political equality is therefore in some sense unnatural, Burke concludes an aristocracy, on the other hand, is in a certain sense natural. p. 61

 

It's the "Prosperity Gospel" perspective

The Prosperity Gospel is

... is a religious belief among some Christians that financial blessing is the will of God for them, and that faith, positive speech, and donations (possibly to Christian ministries) will increase one's material wealth. They are based on interpretations of the Bible traditional in Judaism (with respect to the Hebrew Bible),[1] though less so in Christianity. Prosperity theology views the Bible as a contract between God and humans: if humans have faith in God, he will deliver his promises of security and prosperity. Confessing these promises to be true is perceived as an act of faith, which God will honor.

The doctrine emphasizes the importance of personal empowerment, proposing that it is God's will for his people to be happy. The atonement (reconciliation with God) is interpreted to include the alleviation of sickness and poverty, which are viewed as curses to be broken by faith. This is believed to be achieved through donations of money, visualization, and positive confession, and is often taught in mechanical and contractual terms. ...

Churches in which the prosperity gospel is taught ... typically set aside extended time to teach about giving and request donations from the congregation, encouraging positive speech and faith.

Micro to Macro Nonsense. It's Everywhere Thanks to Neoliberalism by Ellis Winningham, 8/10/16

[John] Calvin, like other "thinkers", insisted ... any economic prosperity that an individual experienced was a direct result of God showing favour on that individual and conversely, anyone who was poor was clearly out of God's favour, or grace, as it were. Being rich was evidence of someone who was a responsible, hard-working individual, because God blessed that person with wealth. Being poor was evidence of someone who was lazy and irresponsible, because God turned his back on the person. Again, these were minor thoughts to him, though they did, in fact, contradict the teachings of Jesus concerning the poor. But in 2016, who cares, right?

This has implications related to the "job creators" nonsense examined in the previous section. He continues ...

Let us fast-forward to 2016 where we hear the oft repeated propaganda:

"Business is the job creator. Without business, none of us would have jobs! The reason there is unemployment, is because lazy people don't want to work. If they did want to work, there wouldn't be any unemployment. If you want to get ahead, you've got to bust your ass, work hard and be responsible. These moochers on welfare don't want to work. They're too lazy and irresponsible to find a job. If you do give them a job, these lazy bottom-feeders damage businesses, 'costing' business ‘money' and causing harm to the economy." ...

When it comes to the subject of unemployment, American society simply drops any references to God, replacing God with business, tells everyone that if you "work hard and play by the rules" you will get ahead and that the poor are poor because they are irresponsible lazy moochers. Then we hear how the federal budget is just like a household's and the race begins - a race to the bottom, that is.

Neoliberalism begs all of us to see no difference between the micro level of the economy and the macro level. The purpose of an economics education to neoliberalism is to prey upon the political leanings of the people and then disseminate anti-knowledge for the financial industry's gain. The modern neoliberal mantra of "business is the job creator" is one of the most pernicious lies ever to grace the economics profession and to be handed down as so-called "common knowledge". Borrowing and modifying a couple of lines from the film "THX-1138" for our purposes concerning work ethics, neoliberalism teaches you, the citizen, that:

"You are to be a true believer in private sector supremacy and freedom. Let us be thankful we have an occupation to fulfill. Work hard, increase production, prevent accidents and be happy."

Which then follows with a lesson from neoliberalism to you, the citizen, on proper consumer behavior:

"You are to be a true believer in private sector supremacy and freedom. Let us be thankful we have commerce. Buy. Buy more. Buy more now. Buy. And be happy."

The former, concerning what constitutes a proper work ethic, is abject nonsense. It asserts that through hard work, happiness is the end result. The truth is, the scarcer the federal government makes US dollars, the harder the working class must work to obtain US dollars. ...

So this prosperity gospel perspective is that those who are wealthy are Godly, righteous and, therefore, deserving. Those in poverty are poor because they have personally failed God; it's their own fault and evidence that they are spiritually unworthy.

For obvious reasons prosperity theology has drawn followers from the American middle class and poor because it teaches that adhering to the proper faith will increase their prosperity. The wealthy see it as a confirmation of their worthiness. That is, "conservatives" believe that luck and "conservative" policies that drive people into poverty and that enrich the already wealthy have little to nothing to do with it.

They are ignorant of the path dependence dynamic that has produced the enormously rich and terribly poor everywhere and throughout history. Instead of understanding the dynamic, they take it to be evidence that it is "God's Will".

It confirms their propaganda that extreme wealth inequality is as it should be: right and proper. It's a perverse and deadly ideology that denies reality.

 

This first pie chart shows Discretionary and Mandatory Federal Spending.

Get Educated on What the Income Tax Pays for ... where federal spending goes

Summary: There's Discretionary Spending, Mandatory Spending, and Tax Expenditures

Discretionary Spending, $1.11 Trillion: The income tax pays for discretionary spending and interest on national debt. The largest share, 54% of  discretionary spending, goes for "defense". As shown in the 2nd pie chart, three percent of discretionary spending goes for SS, Unemployment & Labor (most of the SS spending is in the Mandatory category).

Mandatory Spending, $2.45 Trillion: There are separate federal payroll tax income streams that pay for mandatory spending on Social Security and Medicare. Though these taxes are very regressive, the surpluses in these programs are "borrowed" to help pay for federal discretionary spending.

Tax Expenditures, $1.22 Trillion: These are Tax Breaks for corporations and individuals. They are 10% greater than all discretionary spending, $1.11T. While budgets for Discretionary Spending must be voted on every year, Tax Expenditures in the tax code are not voted on every year. Those hidden-spending, Tax Expenditures are essentially entitlements that last forever unless rescinded!

Spending Lowlights Summary:

-- Tax Expenditures ($1.22T) are 10% greater that ALL Discretionary Spending ($1.11 Trillion, funded by income taxes)! WTF???

You've heard of Tax Loopholes, right? Turns out that the Hole is bigger than the Loop.
And yet, we're told the reason the federal deficit is because of "free stuff" like "food stamps."

-- 50.6% ($617B) of Tax Expenditures go to the top 20%; that's more than military spending ($599B, 54% of Discretionary Spending)! !!!! WTF???

-- Tax Expenditures ($1.22T) are 16.5X SNAP Benefits ($74.1B)

-- Tax Expenditures going to the top 20% ($617B) are 8.3X larger than SNAP Benefits ($74.1B)

-- Tax Expenditures going to the top 1% are ($203B) are 2.7X SNAP benefits ($74.1B)

This illustrates that "food stamps" (SNAP) are hardly a problem.

Tax Expenditures (Tax Breaks) are 10% greater than all Discretionary Spending. And we wonder why there's government debt and many swallow the lie that Social Security is the problem.

That Tax Breaks for the top 20% are larger than Military Spending is a result of capitalism and its lobbyists.

This makes it clear that "Capitalism" is exactly "crony capitalism" that caters to capitalists and the wealthy.

-- 16.6% of Tax Expenditures goes to the top 1% ($203B); that's over twice the 7.7% ($94B) that goes to the bottom 20%

Note: The tax system has been so corrupted that what's "legal" to avoid taxes has incredibly expanded. In fairness, the legal avoidance tactics that allow this are not all "loopholes", that is, they're not all ways to avoid taxes that weren't intended. They're designed-in "features", not "bugs".

Self-described "conservatives" against Social Security and Medicare love to put Mandatory Spending on the same pie chart with Discretionary Spending because it misleads the public on what the problem is. But you'll *never* see them put Tax Expenditures that are 110% of *all* Discretionary Spending (and 200% of Military Spending) on the chart with Discretionary Spending.

Military Spending Summary:

This means that the top 20% get Tax Breaks of over $610B
Military expenditures are 54% of Discretionary Spending: $598B .
Tax breaks for the top 20% exceed military spending!

So there's Enormous Welfare for the wealthy while we've this:

The U.S. Department of Housing and Urban Development's 5th Annual Homeless Assessment Report to Congress estimated that 1.56 million people, or one in every 200 Americans, experienced homelessness and found shelter between October 1, 2008 and September 30, 2009.

But no, it's the "takers" with the lowest incomes who are the problem.

SNAP Benefits ("food stamps") Summary:

This shows that:

Tax Expenditures for the Top 1% are 2.7 times larger than SNAP Benefits (i.e., known as "food stamps"). But there's enormous sound and fury about "making people dependent on free money", but ignore subsidies for the Top 1%. Amazing! >

Tax Expenditures for the Top 20% are greater than Military Expenditures. That's incredible considering the enormity of U.S. military spending compared to other nations. >

Tax Expenditures (Tax Breaks) are 10% greater than all Discretionary Spending. Those Tax Breaks are tax dollars diverted to subsidies.

Again, the U.S. doesn't have a simple "Spending Problem", it has a "Tax Expenditure / Tax Break" problem!

SNAP benefits cost $74.1 billion in fiscal year 2014 and supplied roughly 46.5 million Americans with an average of $125.35 for each person per month in food assistance.  
Compare that to $1.22 Trillion total Tax Expenditures ... 16.5X larger than SNAP Benefits
Compare that to Tax Expenditures [tax breaks] going to those in the top 1% of income: $203 Billion ... 2.7X the $74.1B in SNAP Benefits

Even "food stamps" can be properly viewed as farm subsidies because they increase market demand for farm products.

Details

The first pie chart shows how much federal spending is Discretionary, Mandatory, and Interest on Federal Debt
from Federal Spending: Where Does the Money Go, Federal Budget 101'.

The second pie chart shows the Discretionary Spending breakdown.

Note that the great majority of that is on "defense" and Veterans Benefits ... that is, for war and empire. But that's not all of it; spending on Nuclear Weapons is buried in the Energy Department.

The third pie chart shows the Mandatory Spending breakdown.

Medicare and Social Security are federal programs that are almost wholly funded through regressive payroll taxes, an income stream that's separate from progressive income taxes. Regressive payroll taxes fall hardest on those with lower incomes because they are deducted from the very first dollar of pay with no exemptions and because those with incomes higher than the $118,500 cap in 2016 pay no tax on income over the cap.

Medicare provides health care coverage for senior citizens and the disabled. Social Security (officially it's the Old Age, Survivors, and Disability Insurance program) is meant to ensure that elderly and disabled people do not live in poverty.

Lies about SS and Medicare: They're Not Responsible for U.S. Debt

Begin: Facts about SS and Medicare ____________________________

National debt has nothing at all to do with spending on SS and Medicare. The surpluses in those programs have been used to offset excess general fund Discretionary Spending that has led to enormous debt. Somehow, while borrowing from SS and Medicare surpluses, federal debt is blamed on SS and Medicare. This turns reality on its head and it's the epitome of false propaganda that so many believe these two programs must be cut.

Republicans want to steal the Social Security Trust Fund to benefit their donors.
The propagandists even say that what they call, unfunded liabilities, are $128 Trillion.

For example:

Does the United States have $128 trillion in unfunded liabilities? By Glenn Kessler October 23, 2013

"We have $128 trillion worth of unfunded liabilities and the total net worth of our country is $94 trillion and we have another $17 trillion worth of debt."
- Sen. Tom Coburn (R-Okla.), interview on NBC's "Meet the Press," Oct. 20, 2013

It's a lie! Primarily because SS and Medicare, by law, cannot run deficits as explained here:

Is Our Debt Burden Really $100 Trillion? by DEREK THOMPSON, The Atlantic, 12/28/12

... Our $16 trillion in debt and our $87 trillion in "unfunded liabilities" represent two very different ideas: real past promises and projected future promises. Real past promises are, well, very real. We have to pay back our debt. Failing to do it would be an illegal and disastrous default. Unfunded liabilities are future promises, and, since they're not as real, we can change them whenever we want without destroying ourselves. For example, raising the taxable income ceiling and slowing the growth of benefits could reduce the Social Security gap to zero tomorrow.

And that's if there is a Social Security "gap" to begin with. Technically, it's not legal for Social Security to have "unfunded liabilities" since it can only pay as many benefits as it receives in earmarked taxes. Both it and Medicare hospital insurance are prohibited from spending money they haven't collected from specific revenue dedicated to their programs (i.e.: payroll taxes). It is impossible for either to technically be "unfunded", since they cannot legally outspend their funding. ...

75-year projections are scarier than they are informative. ... When Republicans say unfunded liabilities come out to $520,000 per U.S. household, they're taking a figure from 2087 and dividing it over a 2012 population to exaggerate. Scary, to be sure, but not very informative. ...

Note that such an exaggerated, essentially fictional, number for unfunded liabilities is said (by many perporting to be concerned about debt) to be equally the responsibility of all families, rich and poor alike, even though the income and wealth of families is vastly unequal. So equality for debt, but inequality for income and wealth. Excellent.

Right-wing extremists, like those at the Peterson Institute, will say anything in their efforts to privatize and loot Social Security and Medicare.

This second pie chart shows the Manditory Spending breakdown.

Income Taxes pay for Discretionary Spending, which is primarily for the military, but somehow there's never enough spending on "Defense" (... read Offense to support Empire and War). [Note there is some Discretionary spending for Medicare and Health.]

The Big Lie at the Core of Pete Peterson's Attack on the Baby Boomers by William Black, New Economic Perspectives (Modern Monetary Theory, MMT, Perspective), 7/10/14

... Pete Peterson, in his never ending quest to privatize Social Security and make Wall Street even wealthier, is sending groups to campuses trying to convince college students that their parents are the enemy and that austerity and privatization are their only means of staving off poverty. The reality, as Makovsky is stressing to bankers is the opposite of Peterson's propaganda.

Looting Social Security By William Greider, The Nation, 2/11/09
Behind closed doors, advocates of entitlement reform are pushing Obama to tap the Social Security surplus to pay for bank bailouts. It could be a defining test for new politics in the Obama era.

Governing elites in Washington and Wall Street have devised a fiendishly clever "grand bargain" they want President Obama to embrace in the name of "fiscal responsibility." The government, they argue, having spent billions on bailing out the banks, can recover its costs by looting the Social Security system. They are also targeting Medicare and Medicaid. The pitch sounds preposterous to millions of ordinary working people anxious about their economic security and worried about their retirement years. But an impressive armada is lined up to push the idea-Washington's leading think tanks, the prestige media, tax-exempt foundations, skillful propagandists posing as economic experts and a self-righteous billionaire spending his fortune to save the nation from the elderly.

These players are promoting a tricky way to whack Social Security benefits, but to do it behind closed doors so the public cannot see what's happening or figure out which politicians to blame. The essential transaction would amount to misappropriating the trillions in Social Security taxes that workers have paid to finance their retirement benefits. This swindle is portrayed as "fiscal reform." In fact, it's the political equivalent of bait-and-switch fraud.

Defending Social Security sounds like yesterday's issue-the fight people won when they defeated George W. Bush's attempt to privatize the system in 2005. But the financial establishment has pushed it back on the table, claiming that the current crisis requires "responsible" leaders to take action. Will Obama take the bait? Surely not. The new president has been clear and consistent about Social Security, as a candidate and since his election. The program's financing is basically sound, he has explained, and can be assured far into the future by making only modest adjustments.

But Obama is also playing footsie with the conservative advocates of "entitlement reform" (their euphemism for cutting benefits). The president wants the corporate establishment's support on many other important matters, and he recently promised to hold a "fiscal responsibility summit" to examine the long-term costs of entitlements. That forum could set the trap for a "bipartisan compromise" that may become difficult for Obama to resist, given the burgeoning deficit.

This third pie chart shows the Manditory Spending breakdown.

Medicare and Social Security are federal programs that are almost wholly funded through regressive payroll taxes, an income stream that's separate from progressive income taxes. Regressive payroll taxes fall hardest on those with lower incomes because they are deducted from the very first dollar of pay with no exemptions and because those with incomes higher than the $118,500 cap in 2016 pay no tax on income over the cap.

Medicare provides health care coverage for senior citizens and the disabled. Social Security (officially it's the Old Age, Survivors, and Disability Insurance program) is meant to ensure that elderly and disabled people do not live in poverty.

National debt has nothing to do with spending on SS and Medicare. The surpluses in those programs have been used to offset excess general fund Discretionary Spending that has led to enormous debt. Somehow, while borrowing from SS and Medicare surpluses, federal debt is blamed on SS and Medicare.

This turns reality on its head and it's the epitome of the success of constant, false propaganda that so many actually believe these two programs must be cut.

If he resists, he will be denounced as an old-fashioned free-spending liberal. The advocates are urging both parties to hold hands and take the leap together, authorizing big benefits cuts in a circuitous way that allows them to dodge the public's blame. In my new book, Come Home, America, I make the point: "When official America talks of ‘bipartisan compromise,' it usually means the people are about to get screwed." ...

Amen! "When official America talks of ‘bipartisan compromise,' it usually means the people are about to get screwed."

This is true whenever Democrats collude with Republicans: be assured you're going to be screwed. This has been the case with NAFTA, the creation and expansion of the World Trade Organization, the 1999 Gramm-Leach-Bliley Act that abolished the Glass-Steagall Act, the telecommunications deregulation (1996 Telecom Act), and the recent Trans Pacific Partnership Fast Track.

Obama would have colluded with Republicans in a Grand Bargain that would have cut future SS and Medicare benefits, but  right-wing, Tea Party extremists were against any compromise. Irony: we were saved from these proposed cuts by the anti-government extremists.Seems that all SS is effectively funded by payroll taxes.

Big gap between Social Security cost-of-living adjustment and retiree inflation By Mary Beth Franklin, Investment News, 10/24/16
Miniscule benefit hike won't protect seniors' buying power

... "The consumer price index that the government uses to determine the annual COLA is simply not doing the job of protecting the buying power of older and disabled Americans," said Mary Johnson, a policy analyst for The Senior Citizens League, a retirees' advocacy group.

The federal government is looking at the wrong market basket to determine the annual change in prices in the goods and services used by retired and disabled individuals, Ms. Johnson said. Had the government used what many consider to be a more appropriate inflation index that measures costs experienced by people age 62 and older known as the Consumer Price Index for the Elderly or CPI-E, retirees would get a COLA of 2.1% in 2017 instead of the 0.3% that will be applied to retirement and disabilities benefits next year.

The official inflation measure used to calculate cost-of-living adjustments for Social Security benefits, the CPI-W, gives less weight to medical care and housing costs - two categories that have climbed by more than 7% and 5% respectively over the past 12 months - and more weight to gasoline which has plunged deeply over the past year.

Older Americans tend to use more medical services and spend more of their budgets on housing than younger workers. Because the CPI-W excludes the spending patterns of people over the age of 62, it does not include things like rising Medicare premiums, which are one of the fastest growing costs in retirement. ...

Social Security Administration: How is Social Security financed?

Social Security is financed through a dedicated payroll tax. Employers and employees each pay 6.2 percent of wages up to the taxable maximum of $118,500 (in 2016), while the self-employed pay 12.4 percent.

In 2015, $795 billion (85 percent) of total Old-Age and Survivors Insurance and Disability Insurance income came from payroll taxes. The remainder was provided by interest earnings ($93 billion or 10 percent) and revenue from taxation of OASDI benefits ($32 billion or 3 percent), and $325 million in reimbursements from the General Fund of the Treasury - most resulting from the 2012 payroll tax legislation.

Medicare is complicated; see at the link just below. There is some funding from general fund Discretionary Spending. Note that those who have medical coverage from their employers are also subsidized because corporations can deduct the amount they pay for the employees' health insurance, which means the taxpayers pay it. An article that explains:

The Facts on Medicare Spending and Financing

Paul Ryan lies about Medicare.

Paul Ryan's false claim that 'because of Obamacare, Medicare is going broke' By Glenn Kessler, Washington Post, 11/14/16

"What people don't realize is, because of Obamacare, Medicare is going broke."
- House Speaker Paul D. Ryan (R-Wis.), interview with Fox News, Nov. 10

Our eyebrows went up when we saw this quote from Ryan. It has been a bipartisan fallacy to claim that the old-age health program Medicare is going "broke," which is incorrect for the reasons outlined below. But what was notable was he specifically blamed the Affordable Care Act for making Medicare go broke.

That's doubly wrong. Let's explain. ...

End: Facts about SS and Medicare ____________________________

 

The fourth chart, a bar chart, shows Tax Expenditures

Fascinating! Tax Expenditures, that is tax breaks, are 10% greater than total discretionary spending! So, one should ask, where's the bulk of the spending problem.

This chart is also from Federal Spending: Where Does the Money Go, Federal Budget 101'.

When the federal government spends money on mandatory and discretionary programs, the U.S. Treasury writes a check to pay the program costs. But there is another type of federal spending that operates a little differently. Lawmakers have written hundreds of tax breaks into the federal tax code - for instance, special low tax rates on capital gains, and a deduction for home mortgage interest - in order to promote certain activities they deem beneficial to society.

In fact, tax breaks function as a type of government spending, and they are officially called "tax expenditures" within the federal government. When the government issues a tax break, it chooses to give up tax revenue for a specific purpose - so both spending and tax breaks mean less money in the U.S. Treasury, and both reflect spending priorities laid out by Congress in various pieces of legislation. ...

Unlike discretionary spending, which must be approved by lawmakers each year during the appropriations process, tax breaks do not require annual approval. Once written into the tax code, they remain on the books until lawmakers modify them. That means that even when tax breaks fall short of, or outlive their original purpose intended by Congress, they frequently stay on the books.

Fascinating! Tax Expenditures, that is tax breaks, are 10% greater than all total discretionary spending! They're enormous. While budgets for Discretionary Spending must be voted on every year, tax breaks in the tax code are not voted on every year.

Those hidden-spending, Tax Expenditures are essentially entitlements that last forever unless rescinded!
Former Federal Reserve Board Chair Alan Greenspan has referred to tax expenditures as "tax entitlements".

That they're seen as entitlements is evidenced by Pence's question in the Vice-Presidential debate with Kaine:
PENCE: "Senator, do you take all the deductions that you're entitled to?"

Donald Trump is clear that he's entitled. In the third debate: "Trump: We're entitled because of the laws that people like her passed to take massive amounts of depreciation and other charges, and we do it."

... But it's not only by "her", but by "conservatives" of all stripes doing the bidding of their corporate masters, and Trump has no plan to do anything about tax entitlements. In fact ...

Trump's Defense of His Tax Avoidance Is Getting Even More Brazen By Helaine Olen, Slate, 10/20/16

... Trump, who conveniently didn't say whether he thinks his income tax avoidance was a problem, even though he's criticized much less fortunate Americans for doing the same: His tax plan, according to many analysts, would actually increase the tax breaks available to real estate honchos like himself. Deplorable. ...

This chart also shows the top 20% get Tax Breaks that are 50.6% of all Tax Expenditures: $617B ... more than $598.5B in Military Expenditures.

Who benefits most? Those with higher incomes who whine about their "tax burden", of course. So, please? Tell us again about your outrage over the $74.1B in SNAP Benefits.

"Tax Expenditures cost nearly $1.1 trillion a year in 2011. If classified as spending, they would constitute the single largest category of federal spending — larger than Social Security, or the combined cost of Medicare and Medicaid, or defense or non-defense discretionary spending.

Somehow, those who complain about "entitlement spending" don't complain about "Tax Entitlement Expenditures"

So, one should ask, where is the bulk of the federal "spending problem"? The answer: on Defense Spending (aka, Offense) and on Tax Expenditures.


I don't understand the Federal Reserve and national debt

If you don't understand the federal reserve and why we have a national debt, then pushing to feed the slaves to the masters is a bad idea.

The Federal Reserve is Not Government

"Conservatives" complain about "fiat money", but that's not the problem. They complain that they don't want a "command and control" economy, but that's exactly what we've got with the Federal Reserve and Congress. The problem is that it's a political institution owned and run by the banks for the benefit of the banks and the wealthy. See The Federal Reserve: The Epitome of Command and Control.

- The Federal Reserve has command and control of the economy's brake; it can increase interest rates or decrease the money supply to reduce economic activity.

- Congress has control of the accelerator: it can increase spending to increase economic activity (that's called stimulus).

Many consider the Federal Reserve to be "government". It is not ... or only barely. The deceptive wording on the Federal Reserve's website gives the impression that the Federal Reserve is a government agency. But Ellen Brown is correct that it's a privately-owned, secretive, "independent entity within government" with little to no oversight by Congress or citizens.

By definition, that is not "government as I explain at The Federal Reserve is Not Really a Government Agency. A video on this: The Biggest Scam In The History Of Mankind.

The banks own and rule not just the Federal Reserve, but have overwhelming influence on government:

Dick Durbin: Banks "Frankly Own The Place", Huffington Post, 05/30/09, Updated 05/25/11

"And the banks -- hard to believe in a time when we're facing a banking crisis that many of the banks created -- are still the most powerful lobby on Capitol Hill. And they frankly own the place," he said on WJJG 1530 AM's "Mornings with Ray Hanania." Progress Illinois picked up the quote.

The Federal Reserve is a parasitic entity that has horrific effects on the nation and peoples' lives. But that is not why we have personal, regional, national, or trade debt.

Who benefits most from Tax Expenditures? Those with higher incomes, of course.

Roughly 70 percent of each year’s spending on individual tax expenditures is delivered in the form of deductions, exemptions, or exclusions. The value of these tax breaks increases as household income rises — the higher one’s tax bracket, the greater the tax benefit for each dollar that is deducted, exempted, or excluded.

As a result, these tax expenditures provide their largest subsidies to high-income people, even though they are the individuals least likely to need financial incentives to engage in the activities that tax expenditures are generally designed to promote, such as buying a home, sending a child to college, or saving for retirement. Meanwhile, moderate- and low-income families receive considerably smaller tax-expenditure benefits for engaging in these activities.

Economic "conservatives" -- especially libertarians -- complain about government and generally want it to be privatized as much as possible. Well, they've got their wish with the Federal Reserve. They complain about it, but should love it. It's the epitome of privatization.

Fractional Reserve Banking and Modern Monetary Theory (MMT)

It's widely believed that fractional reserve banking is how money is created. The standard "Loanable Funds Theory" is that, when a bank makes a loan, keeping a fraction of deposits in the bank in reserve, that debt created by the loan is new money injected into the economy.

Turns out though, that this is the simple, but incorrect, explanation of what's going on according to Modern Monetary Theory (MMT) economists; "MMT explains inflation as being caused primarily by resource constraints, rather than monetary expansion."
See Paul Krugman vs. MMT: The Great Debate by John Carney, 4/3/12 
Banking Buffoonery, Modeling Mysticism and Why Paul Krugman Should Be Sweatin’ Bullets by F.F. Wiley, 5/20/14

In the introduction by Ann Pettifor [UK-based economist, director of Policy Research in Macroeconomics] of The Keen-Krugman debate by STEVE KEEN 2/26/14, she explains why the standard "Loanable Funds Theory" is incorrect:

... Krugman thus supports what monetary reformers like Prof Steve Keen identify as the orthodox 'Loanable Funds Theory' – often (wrongly) defined as "Keynesian". Professor Mankiw of Harvard, a prominent neoliberal economist, defines 'Loanable Funds Theory' this way: "Saving is the supply of loans – individuals lend their saving to investors or they deposit their saving in a bank that makes the loans for them.  Investment is the demand for loans – investors borrow from the public directly by selling bonds or indirectly by borrowing from banks." (Mankiw, Macroeconomics, p.65).

According to this theory money for loans is provided by savers, and the 'price' (or rate of interest) for loans is determined by changes in demand and supply of 'loanable funds'. Credit does not appear to enter into the theory. Mankiw and Krugman do not appear to accept that banks create credit -- "out of thin air" -- on the guarantee of collateral, a contract to repay over a fixed time period, and at a certain rate of interest. Instead, according to this view, they are simple intermediaries between savers and borrowers; between those who are 'patient' savers and 'impatient' borrowers.

We fundamentally disagree, and argue that it is this misunderstanding of the nature of credit and the role of bankers that led to reckless de-regulation of the finance sector, and ultimately to many financial crises.

The piece below is Steve Keen´s final response to Krugman in a long exchange that began in March of 2012. It serves as an excellent introduction to the ongoing debate within professional economics about the nature of credit and bank money, the role of banks, and the impact of credit (or debt) in generating demand within the economy. ...

Fascinating reading for those interested in this kind of thing.

What Modern Monetary Theory (MMT) Reveals

Playing Monopolis Monopoly: An inquiry into why we are making ourselves so miserable by Mitch Green, 5/17/12.

... Are we really too poor to put America back to work making and building the things we need to maintain a prosperous nation?

Searching for an answer, I discovered a small (but growing) group of economists (see here, here, here, here, here, here) who represent an emerging school of thought known as "modern monetary theory" (MMT). These men and women are valiantly trying to make us all understand a paradigm shift that occurred some forty years ago, when the world abandoned the gold standard.

The first shock the game reveals!

Their key insight shocked me: A sovereign government is never revenue constrained when it is the Monopoly issuer of its own pure fiat currency; it has all the money that’s needed to put its citizens to work building anything—and providing any service—that is desired by the public (provided the real resources are available). Even more remarkable, sovereign "deficits" in the fiat currency are just the accounting record of the surpluses that have been injected into the private economy. Eliminating the sovereign currency deficit by imposing austerity will not make the economy healthier; it will, in effect, bankrupt the citizens!

If this seems to defy logic, stay with me for just a few minutes. I’m going to propose a simple exercise that will help you "see"this reality for yourself. The exercise is simply that everyone join me in a familiar game of Monopoly. By the end of the game, I hope to convince you that MMT is correct and that we could be doing better, much better – for ourselves and future generations—if we just understood and took ad vantage of our modern monetary system.

Let’s begin. ...

The second shock the game reveals!

Indignant as I might get, however, Monopoly forces me to realize that if I want to play the game, I have to accept the fact that the CIG gets to create the money, and I have to use the money it creates. I could insist otherwise, demanding that each player bring to the table his own private stash of gold and silver. In fact, it was just forty years ago that the real world played the game in exactly this way, and the long history associated with that experience is what implanted our brain-stems with Neanderthal beliefs about what money is and how it works. But as will become evident (if we can ever get started) the game proceeds with much greater efficiency and potential for economic growth (prosperity for more and more people) if we use our CIG’s fiat currency, which has an unlimited supply, as opposed to the player’s "gold and silver" which has a limited quantity. ...

A society with a sovereign fiat currency can build any thing or obtain any service it deems necessary or desirable, so long as the citizens of that society are willing and able to build the thing, or provide the service, in exchange for the fiat money. The sovereign deficit, no matter how large it may grow, is not like a shortfall in your own bank account: it is the balance sheet record of the money that was transferred to our side of the ledger.

The implications of this, I believe, are simply astounding.

Go do the exercise. It'll take more than a few minutes, but it's worth it to understand money. This really matters!

But nevermind which theory of money is correct, the Federal Reserve and the banks are parasites. Banks can, and they do, borrow money from the Federal Reserve as a rate of less than 1% and then lend it back to the government at 3.2% -- now that's free money! What a deal!!! Parasites.

And banks lend through credit cards at a rate of 13% (to 27% penalty APR if you miss a payment). No wonder they're so profitable and control government.

 

Debt, Kinds & Causes: Personal, Regional, National (Fiscal & Trade)

But despite the parasitic nature of the banking industry or what it says at Positive Money about Debt, fractional reserve banking is not what keeps "us all trapped under a mountain of personal debt and mortgages." I know this is difficult to believe for those who've bought into this story, but let me explain.

There's personal debt, regional debt, and national debt of two kinds: fiscal debt and "trade" debt.

The Twin Peaks: Mountains of Debt and Idle Cash

But first a look at the two sides of capitalism's dysfunctional coin. When there's vast inequality with the vast majority of wealth going to the top, there is necessarily going to be a vast majority of persons with stagnant wages and debt. 

Some ask, "What's wrong with inequality? Do you want everyone to have the same income and wealth?" Well, there's absolutely nothing wrong with some inequality. The problem is the vast, obscene, and deadly inequality that exists in the U.S. and the world.

How vast? Richest 62 people as wealthy as half of world's population, says Oxfam and 20 People Now Own As Much Wealth as Half of All Americans.

This is appalling and results in great suffering, but it also reveals fundamental flaws that are tearing apart the capitalist economic system. This is explained in this TED Talk video by Yanis Varoufakis. Yanis Varoufakis is a Greek economist, academic and politician, who served as the Greek Minister of Finance from January to July 2015, when he resigned.

Yanis Varoufakis, Capitalism will eat democracy - unless we speak up (transcript)

... Speaking of waste, allow me to point out an interesting paradox that is threatening our economies as we speak. I call it the twin peaks paradox. One peak you understand -- you know it, you recognize it -- is the mountain of debts that has been casting a long shadow over the United States, Europe, the whole world. We all recognize the mountain of debts. But few people discern its twin. A mountain of idle cash belonging to rich savers and to corporations, too terrified to invest it into the productive activities that can generate the incomes from which you can extinguish the mountain of debts and which can produce all those things that humanity desperately needs, like green energy.

Now let me give you two numbers. Over the last three months, in the United States, in Britain and in the Eurozone, we have invested, collectively, 3.4 trillion dollars on all the wealth-producing goods -- things like industrial plants, machinery, office blocks, schools, roads, railways, machinery, and so on and so forth. $3.4 trillion sounds like a lot of money until you compare it to the $5.1 trillion that has been slushing around in the same countries, in our financial institutions, doing absolutely nothing during the same period except inflating stock exchanges and bidding up house prices.

So a mountain of debt and a mountain of idle cash form twin peaks, failing to cancel each other out through the normal operation of the markets.

The result is stagnant wages, more than a quarter of 25- to 54-year-olds in America, in Japan and in Europe out of work. And consequently, low aggregate demand, which in a never-ending cycle, reinforces the pessimism of the investors, who, fearing low demand, reproduce it by not investing -- exactly like Oedipus' father, who, terrified by the prophecy of the oracle that his son would grow up to kill him, unwittingly engineered the conditions that ensured that Oedipus, his son, would kill him.

This is my quarrel with capitalism. Its gross wastefulness, all this idle cash, should be energized to improve lives, to develop human talents, and indeed to finance all these technologies, green technologies, which are absolutely essential for saving planet Earth. ...

 

Personal Debt

Borrowing -- adding to debt -- is not necessarily a problem, if what a person buys is worth more than what is borrowed; the collateral (home, car, or whatever) can be sold to relieve the debt.

Simple and obvious, but needs stating:
For a business,         Profit  = Income - Expense
For a person,    Net Income = Income - Expense

If Income is less than Expense, then Net Income is negative and one is increasing debt (or decreasing assets).

People go into debt for many reasons: irresponsibiility, specific reasons, systemic failure.

1. People Can Be Irresponsible

Indeed, I stipulate that many are irresponsible and engage in profligate spending. Those who consider themselves "conservative" primarily focus on this as the reason. But that's not the only reason.

2. Specific Reasons. Many go into debt for reasons that aren't simply irresponsible. Examples:

2a. Student Loan Debt: Many can't get jobs in an economy in recession and go to university in hopes of getting a job. Or those in a lousy job get more education because they want a better job.

What we've got: Debt for Diploma with no bankruptcy possible. This shows the power of the financial sector to control government in order to reduce or eliminate their risk in making loans.

Students and parents (who co-sign) get into debt for advanced education. Corporations can declare bankruptcy; individuals can declare bankruptcy. But the power of the banks is so great that, if your "business" is yourself and you invest in more education for yourself, bankruptcy is not an option for student loan debt. "Conservatives" have put into law that students cannot discharge that in bankruptcy; it's for life; their eventual social security payments can even be confiscated.

America’s growing student-loan-debt crisis By JILLIAN BERMAN, MarketWatch, 1/19/16

... Research indicates that the $1.2 trillion in student loan debt may be preventing Americans from making the kinds of big purchases that drive economic growth, like house and cars, and reaching other milestones, such as having the ability to save for retirement or move out of mom and dad’s basement.

This student debt crisis has become so huge it’s even captured the attention of presidential candidates who are searching for ways to make college more affordable amid an environment of dwindling state funding for higher education and rising college costs. But meanwhile, the approximately 40 million Americans with student debt have to find ways to manage it. ...

Who Is Getting Rich Off the $1.3 Trillion Student Debt Crisis?, Democracy Now!, 6/29/16 [... an example of the wonders of "small government" and privatization.]

A stunning 42 million people now owe $1.3 trillion in student debt. A new investigative report published by Center for Investigative Reporting peels back the layers on this trillion-dollar industry. The article, titled "Who Got Rich Off the Student Debt Crisis," follows what happened after the federal government relinquished direct control of the student loan program and opened it up to banks and profit-making corporations.

... after the privatization of Sallie Mae, Lord became CEO, and he took it to a totally different level. They bought servicing companies, they bought companies that collected the delinquent loans, they began issuing private loans, they began issuing federal loans-things that they could not do beforehand. It became a colossus of the student loan industry. In the minds of a lot of students, they thought it was still part of the federal government. But it wasn't.

It was a private company, making hundreds and hundreds of-actually, billions of dollars in profits over the years. Lord himself did very well, hundreds of millions of dollars. He made so much money-and this is the thing that astonished us when we looked at this-he made so much money, he was able to build his own private golf course. Now, I'm not talking about a private club, where any of us could like put in an application, maybe be turned down. I'm talking about your own private golf course in southern Maryland, near Annapolis-I mean, that's the kind of money he made-so he and his buddies could play golf there ...

2b. Precarity: Stagnant wages and policies that drive people into poverty and make the wealthy even richer leave millions vulnerable to financial setbacks. Despite what this article says, it has a name: precarity.

Millions of Americans are facing a serious financial problem that has no name by Rebecca J. Rosen, The Atlantic, 5/7/16

... At its core, this relentless drive to spend any money available comes not from a desire to consume more lattes and own nicer cars, but, largely, from the pressure people feel to provide their kids with access to the best schools they can afford (purchased, in most cases, not via tuition but via real estate in a specific public-school district). Breaking the bank for your kids’ education is, to an extent, perfectly reasonable: In a deeply unequal society, the gains to be made by being among the elite are enormous, and the consequences of not being among them are dire. When understood mainly as a consequence of this rush to provide for one’s children, the drive to maximize spending is not some bizarre mystery, nor a sign of massive irresponsibility, but a predictable consequence of severe inequality.

2c. Medical Emergency: Millions are underinsured or not insured. They have serious medical condition that drives them into bankruptsy (affected nearly 2 million people in 2013) or a serious accident. One can argue that they should have had insurance, but for many wages are so low they cannot afford insurance.

2d. Caring for Elderly Parents:

The Sandwich Generation - Rising Financial Burdens for Middle-Aged Americans BY KIM PARKER AND EILEEN PATTEN, Pew Research Center, 1/30/13

With an aging population and a generation of young adults struggling to achieve financial independence, the burdens and responsibilities of middle-aged Americans are increasing. Nearly half (47%) of adults in their 40s and 50s have a parent age 65 or older and are either raising a young child or financially supporting a grown child (age 18 or older). And about one-in-seven middle-aged adults (15%) is providing financial support to both an aging parent and a child.

While the share of middle-aged adults living in the so-called sandwich generation has increased only marginally in recent years, the financial burdens associated with caring for multiple generations of family members are mounting. The increased pressure is coming primarily from grown children rather than aging parents.

According to a new nationwide Pew Research Center survey, roughly half (48%) of adults ages 40 to 59 have provided some financial support to at least one grown child in the past year, with 27% providing the primary support. These shares are up significantly from 2005. By contrast, about one-in-five middle-aged adults (21%) have provided financial support to a parent age 65 or older in the past year, basically unchanged from 2005. ...

3. Systemic Failure:

This is the widely-unappreciated biggie. Millions can play by the rules, work hard, save ... and still get clobbered.

When an economic system fails and they already living in precarity, millions go into debt through no fault of their own. This is true in every economic downturn, and especially in collapses like the Great Depression of the 1930s and the recent Great Recession of 2008.

So to what kinds of systemic failures do I refer? Examples:

A Financial Bubble Bursts: They lose their job because an economic financial bubble bursts. The dot-com bubble burst in 2000. The housing bubble peaked in 2006 and burst in 2008. And here we go again: Housing today: A 'bubble larger than 2006' by Diana Olick, CNBC, 10/6/15

Offshoring: Millions lose good paying jobs because they're offshored and take much lower-pay jobs because they're all that's available.

When people have borrowed, the collateral (e.g., the home) can be sold to discharge debt ... absent the bursting of an economic bubble, as in 2008. In the last century banks excercised due diligence to only make loans to those who have enough income and/or assets to assure the person can make the payments on the loan.

This was not the case before 2008 economic recession, as described in the movie, The Big Short; and Michael Burry, Real-Life Market Genius From The Big Short, Thinks Another Financial Crisis Is Looming By Jessica Pressler, 12/28/15.

Note that the whole foreclosure mess was so fraudulent that that derivative-creation process didn't even keep track of the chain of title. For example, Bank of America actually foreclosed on a couple that had paid cash and so didn't even have a mortgage on which to default. To get BoA to pay for their legal expenses, they foreclosed on BOA, showing up with police and vans to remove BOA property.

For example:

Majority Report podcast with David Dayen: Chain of Title: How Three Ordinary Americans Uncovered Wall Street’s Great Foreclosure Fraud, about his book, Chain of Title.

On the three individuals that Dayen followed to understand banking corruption in the housing market. Scams, fraud and mortgage loans. How illegality was built into the market. MERS and why everyone is susceptible mortgage fraud. The fraudulent document industry. The development of CDOs. How the mortgage security industry became such a mess. Why compensation models incentivized illegal behavior in the mortgage market. The inspiring stories of three ordinary people who expose Wall Street’s fraud.

JPMorgan Based Foreclosures on Faulty Documents, Lawyers Claim by Lorraine Woellert and Dakin Campbell, Bloomberg, 9/26/10

JPMorgan Chase & Co. faces a legal challenge next month that could cast doubt on thousands of foreclosures after a mortgage executive at the bank said she didn’t verify documents used to justify home seizures.

Banks Settle, Will Pay Back Homeowners For Faulty Foreclosures by Halah Touryalai, Forbes, 4/13/11

U.S. bank regulators settled with mortgage lenders over seedy foreclosure practices.

The  14  mortgage servicers  including Bank of America, Citibank, HSBC, JPMorgan Chase, MetLife Bank, PNC, U.S. Bank, and Wells Fargo have not admitted or denied wrongdoing and are not being hit with monetary penalties. ...

... Well, of course they did not admit wrongdoing for attempted grand theft and no one goes to prison.

In Debt because We're Taxed Too Much? No!

The current fashionable "conservative" reason for why people are financially strapped is that they are "Taxed Too Much Already" ... the message from the TEA Party and "conservatives". But people aren't taxed too much, they're paid too little. Why is that?

A Rigged U.S. Economy Drives Down Wages:

It's primarly because the Federal Reserve has rigged the economy to assure there are aways more people who need jobs than there are jobs. As game theory tells us, this pitting of, say 10 people going after 9 jobs, against each other drives wages at the low end to between subsistence level and zero. This is not a "conspiracy theory"; it is a fact.

If unemployment goes too low or if the Federal Reserve fears inflation for any reason, then the Federal Reserve increases interest rates and/or contracts the money supply to "cool the economy". That "cool the economy" means "put people out of work" to reduce demand for goods and services in order to drive down prices. I document this is Fed policy based on statements in Federal Reserve meeting minutes (which are released only years after the meetings ... remember that secretive part).

I explain much more about how it's rigged at The U.S. has policies that drive people into poverty and keep them there and make the wealthy even richer.

Regional Debt

In the same way too many people in competition for too few jobs drives down wages to between zero and subsistence level, regions in competition for too few jobs compete by offering lower taxes and more subsidies to attract more jobs. This race to the bottom drives down tax revenue that supports regional government and infrastructure needs.

Regions make the individually-logical decision to offer subsidies, tax breaks and other "incentives" to corporations to get them to move to their region. These are even offered by so-called "conservative" regions like Colorado Springs ... so much for "conservative love of the "free market." Besides, Colorado Springs should not need them because of the beauty of the region; when it does, the competition destroys the economy of regions that do not have this natural beauty.

When all or many regions compete on this basis, taxes decline and regional income is insufficient to pay for needed infrastructure; infrastructure backlogs grow.

This competition and the attractiveness principle tell us that: Given free migration, no place can long remain more attractive than any other place (where "attractive" is the composite of factors that attract). That is, people move here until Colorado Springs becomes as unattractive as any other place. The only choice any region (or business) has is how it will become unattractive ... that's called exercizing "strategic unattractiveness." Colorado Springs: A Broken Region explains with links to more in-depth analysis.

National Debt

There are two kinds: federal government debt and trade debt, with the latter being more dangerous.

Fiscal Debt

Again, it's the obvious: when federal government expenses exceed tax income, the nation falls into debt.

One rationale used is that reducing tax rates actually increase federal taxes collected -- predicted by the so-called Laffer Curve theory that justifies Trickle-Down Economics. You can read about this false theory in Forbes, Do Tax Cuts Increase Government Revenue?:

In simple terms, when taxes are cut, Federal revenue has a very strong tendency to rise! And when taxes are raised, government revenue has a strong tendency to fall.

This Forbes article presents a graph showing correlation between reducing marginal tax rates and increasing federal receipts. But correlation is not causality. what the "analysis" omits is that GDP and federal receipts along with it are constantly growing because of increasing population.

The article, Do Tax Cuts Increase Revenues? No, Tax cuts do not Increase Revenue, explains this and that at times, when the economy is in the growth phase of an economic business cycle, there can be increases in tax revenue despite tax cuts.

In general, cutting tax rates does not increase tax revenue.

Trade Debt

This is the really serious problem!

Trade debt is what the U.S. owes to the rest of the world. Because of trade deficits, the U.S. borrows a lot of money from the world. Until ~2006 the "trade" deficit was increasing exponentially (see the trade deficit trend graph).  But nothing increases exponentially forever. What can't go on forever will stop; and it did stop increasing. As I explain at Why Offshoring is Economically Unsustainable.

How has the U.S. coped? As the trade deficit has grown, the U.S. has been selling companies, buildings, ports, and toll roads to take back some of the dollars from foreign hands to stave off the collapse of the dollar. See the graphs on the "trade" deficit and the growing foreign holdings of U.S. assets at What to do about the 'trade' deficit.

Now the U.S. is also exporting oil thanks to the fracking boom to reduce the "trade deficit". The oil corporations are plundering U.S. resources for private gain and to hell with the future.

To understand the offshoring of industry (and associated jobs) that's responsible for increasing "trade" debt, see The Fallacy of Composition and structures responsible for what's happening. It's not just jobs; the U.S. is losing technological capability. The U.S. in 1991 had a $40B Advanced Technology Products surplus; by 2010, it was -$60B. See the graphs at Advanced Technology Products & Green "Trade" Deficits.

For a simple model that helps understand what's happening and what to do about it, see Economic Development: What to do locally?

Deregulated Banking is Destabilizing

The "conservative", ideal world of "free market", deregulated banking is destabilizing:

-- Speculation is inherently destabilizing (a tax on speculation would be stabilizing).

-- Bigger banks are inherently destabilizing.

-- Banks being able to gamble with depositors' money, rather than doing the ordinary, mundane business of banking, is destablilizing.

-- Rating agencies competing with each other for business by giving unrealistic higher ratings is destabliizing.

-- $700B bank bailouts are inherently destabilizing.

-- Bankers escaping going to prison for their crimes is inherently destabilizing (massive fines admitted for bribery, money laundering, rigging Libor, mass fraud in the subprime mortgage markets and the forex markets.

Banking Crimes and Theft

How a big US bank laundered billions from Mexico's murderous drug gangs by Ed Vulliamy, The Guardian, 4/2/11
As the violence spread, billions of dollars of cartel cash began to seep into the global financial system. But a special investigation by the Observer reveals how the increasingly frantic warnings of one London whistleblower were ignored.

... During a 22-month investigation by agents from the US Drug Enforcement Administration, the Internal Revenue Service and others, it emerged that the cocaine smugglers had bought the plane with money they had laundered through one of the biggest banks in the United States: Wachovia, now part of the giant Wells Fargo.

The authorities uncovered billions of dollars in wire transfers, traveller's cheques and cash shipments through Mexican exchanges into Wachovia accounts. Wachovia was put under immediate investigation for failing to maintain an effective anti-money laundering programme. Of special significance was that the period concerned began in 2004, which coincided with the first escalation of violence along the US-Mexico border that ignited the current drugs war.

Criminal proceedings were brought against Wachovia, though not against any individual, but the case never came to court. In March 2010, Wachovia settled the biggest action brought under the US bank secrecy act, through the US district court in Miami. Now that the year's "deferred prosecution" has expired, the bank is in effect in the clear. It paid federal authorities $110m in forfeiture, for allowing transactions later proved to be connected to drug smuggling, and incurred a $50m fine for failing to monitor cash used to ship 22 tons of cocaine.

More shocking, and more important, the bank was sanctioned for failing to apply the proper anti-laundering strictures to the transfer of $378.4bn - a sum equivalent to one-third of Mexico's gross national product - into dollar accounts from so-called casas de cambio (CDCs) in Mexico, currency exchange houses with which the bank did business.

"Wachovia's blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations," said Jeffrey Sloman, the federal prosecutor. Yet the total fine was less than 2% of the bank's $12.3bn profit for 2009. On 24 March 2010, Wells Fargo stock traded at $30.86 - up 1% on the week of the court settlement.

The conclusion to the case was only the tip of an iceberg, demonstrating the role of the "legal" banking sector in swilling hundreds of billions of dollars - the blood money from the murderous drug trade in Mexico and other places in the world - around their global operations, now bailed out by the taxpayer. ...

 

The Democratic frontrunner seems to be counting on America's ignorance about the 2008 crash By Matt Taibbi, Rolling Stone, 10/14/15

"It’s one mass crime over—you know, after another, and there’s no consequence." Matt Taibbi: World's Largest Banks Admit to Massive Global Financial Crimes, But Escape Jail (Again), Democracy Now!, 5/21/15

Bank Crimes Pay by ANDREW GAVIN MARSHALL, CounterPunch, 11/27/15

Major Banks Slapped With $5.7 Billion In Fines, Unprecedented Criminal Charges Over Foreign Exchange Manipulation BY OWEN DAVIS, International Business Times, 05/20/15

The Great American Bubble Machine By Matt Taibbi, Rolling Stone, 4/5/10
From tech stocks to high gas prices, Goldman Sachs has engineered every major market manipulation since the Great Depression -- and they're about to do it again

... The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money. In fact, the history of the recent financial crisis, which doubles as a history of the rapid decline and fall of the suddenly swindled dry American empire, reads like a Who's Who of Goldman Sachs graduates. ...

The heads of the Canadian and Italian national banks are Goldman alums, as is the head of the World Bank, the head of the New York Stock Exchange, the last two heads of the Federal Reserve Bank of New York — which, incidentally, is now in charge of overseeing Goldman — not to mention …

But then, any attempt to construct a narrative around all the former Goldmanites in influential positions quickly becomes an absurd and pointless exercise, like trying to make a list of everything. What you need to know is the big picture: If America is circling the drain, Goldman Sachs has found a way to be that drain — an extremely unfortunate loophole in the system of Western democratic capitalism, which never foresaw that in a society governed passively by free markets and free elections, organized greed always defeats disorganized democracy. ...

Goldman Says U.S. Mortgage Settlement to Cost $5.1 Billion by Tom Schoenberg & Michael J Moore, Bloomberg, 1/14/16

Some lawmakers and public-interest advocates have criticized the government’s approach to holding mortgage lenders accountable. Without individual prosecutions, the settlements allow banks to pay money to atone for bad behavior, making financial penalties a cost of doing business.

Goldman Sachs to pay $15 million to settle SEC stock lending case BY SUZANNE BARLYN, 1/14/16

TOO BIG TO TAX: SETTLEMENTS ARE TAX WRITE-OFFS FOR BANKS BY LYNNLEY BROWNING, Newsweek, 10/27/14

At the Justice Department, senior officials like to congratulate themselves on the headline-making, big bucks settlements they have imposed upon banks and lenders for their part in causing the 2008 mortgage meltdown that sparked the biggest American financial crisis since the Great Depression.

But wait a moment. Those settlement figures are not quite what they seem. Buried deep in the announcements of the astronomical sums that Wall Street banks are being forced to pay is a dirty secret: A big chunk of the hundreds of billions of dollars banks have paid in settlements to various federal agencies and regulators since 2010 is deductible from the taxes banks and lenders pay.

When is a fine not a fine? When it can be put against your tax bill. ...

This means it's tax payers who actually pay the fines.

Pity the Billionaire: The Hard Times Swindle and the Unlikely Comeback of the Right by Thomas Frank [excerpt]

... The bailouts were one of those moments that crushes the faith of a nation. Wall Street had gambled with the world's prosperity; Wall Street had brought about a financial catastrophe; and yet Wall Street was now to get the kind of government help that you and I will never receive.

When you decided, reader, to spend your life making things/designing things/writing things instead of trading risky financial instruments, perhaps you thought that you were doing something productive, something our society valued.
But here now was the truth, as revealed by Hank Paulson and Co.: In the land of the red, white, and blue, only one calling mattered. To go into any line of work other than finance was to confess yourself a fool. To play by the rules was a chump's game."

To believe in the fairness of the system was just as naive. The awful but unmistakable message of the bailouts was that the lords of Wall Street owned the government. ...

The Banking System's Rampant Theft is a National Disgrace, even more articles on the corrupt banking system.

 

 

 

 

Big Farm-a Gets a Raise in 2014 Farm Bill by Willy Blackmore is TakePart's Food editor. 2/5/14

Benefits to the poor are cut, while corporate welfare is increased.On the ag side of things, the 10 percent of farmers who have received 75 percent of all subsidies between 1995 and 2012, according to the Environmental Working Group, have earned an average of $32,043 per year in federal payments. While it lays to rest the direct payment program, which guaranteed farmers a chunk of cash regardless of what they grew or how prices or weather fluctuated in a given year, the new farm bill shifts that money into the crop insurance program. The corporate welfare status quo is therefore largely maintained. Under two new programs, Agriculture Risk Coverage and Supplemental Coverage Option, eligible growers will be guaranteed revenues of at least 86 percent of earnings from recent years-years when crop prices hit record highs.

Why does the federal government, including many conservative politicians who say they like government waste and overspending only slightly more than Ayman al-Zawahiri and Beelzebub, favor handing massive amounts of money to large landowners while vilifying the poor as needy people angling for a handout?

As Dr. Daryll E. Ray, director of the University of Tennessee's Agriculture Policy Analysis Center, told me last year, subsidy programs are preferred by politicians because throwing money at farmers somehow absolves the government of doing anything that could be misconstrued as "manipulating markets." Never mind that doing so-controlling commodity crop prices when they go too high or too low-could provide a more reliable, cheaper safety net for the agriculture industry.

 

Which costs more: Food stamps or farm subsidies?

The answer is surprising -- food stamps are more expensive, but farm subsidies mean more to those who get them.
By DAVE HELLING

In 2013, 47.6 million people received food stamps. That means recipients get about $1,680 in benefits, on average, each year.

There are roughly 3.1 million farmers who split the remaining $20 billion in the farm bill. That works out to $6,451 per farmer.

So overall spending on food stamps is much higher than farm subsidies. But on a per-person basis, farmers come out ahead.

Cartoon from http://www.textbooksfree.org/Economics_31_The_Economics_of_Government_Subsidies.htm


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