UA-43475823-1

The Wrongologist

Geopolitics, Power and Political Economy

Current and Future Job Growth Will Be In Cities

The Daily Escape:

Breezewood, PA – 2008 photo by Edward Burtynsky. Each year, 3.5 million passenger vehicles and 1.5 million trucks drive the half-mile Breezewood strip on Route 30. That’s because a law in the 1950s prohibited spending federal funds to connect a free road to a toll road. So, highway planners designed an interchange that routes drivers onto Route 30 for a half-mile.

An interesting article from Market Watch shows how nearly all job growth is in big cities, while rural America is being left behind:

“Since the economy began adding jobs after the Great Recession nine years ago, about 21.5 million jobs have been created in the United States, the second-best stretch of hiring in the nation’s history, second only to the 1990s. But….Most of the new jobs have been located in a just a few dozen large and dynamic cities, leaving slower-growing cities, small towns and rural areas — where about half of Americans live — far behind.”

MarketWatch cites a July 2019 study by McKinsey forecasting that 25 cities that are home to about 30% of Americans will capture about 60% of the job growth between 2017 and 2030, just as they did between 2007 and 2017. In typical McKinsey fashion, they break cities and towns into many categories. Please read the report for full details. Here are their top-line findings about where the largest growth is happening:

  • Twelve mega-cities (and their extended suburbs) top the list: Atlanta, Boston, Chicago, Dallas, Houston, Los Angeles, Miami, New York, Philadelphia, Phoenix, San Francisco and Washington.
  • Another 13 are high-growth hubs in or around smaller cities: Austin, Charlotte, Denver, Las Vegas, Minneapolis, Nashville, Orlando, Portland (Ore.), Raleigh, San Antonio, San Jose, Seattle, and Tampa.
  • Smaller, fast-growing cities and a few privileged rural counties will also add jobs, while vast swaths of the South, Midwest and Plains will lose jobs.
  • The New York metro area, home to 20 million people, added more jobs over the past year than did all of America’s small towns and rural areas, with a population of 46 million people, combined.

McKinsey’s forecast reinforces concerns about persistent economic inequality in America. Inclusive growth is a must, or it is likely that our society will fall apart. The problem: No one, and certainly not Republicans, have a magic wand that will bring back jobs to rural and small-town America.

Anyone who’s been paying attention knows that job growth is mostly occurring in places that vote for Democrats, while the stagnation is mostly in places that vote for Republicans. In 2016, Trump was smart to tailor a pitch to those parts of America, but their situations haven’t improved since his election.

And the divide is getting larger. Over the past year, only 12% of 389 metro areas had any significant job growth, according to an analysis of Bureau of Labor Statistics data by Aaron Sojourner, a former White House economist, now an associate professor at the University of Minnesota:

So, after 17 years of significant and broadly-spread growth, fewer towns and cities are now doing so well. And, of the 47 metros that gained significant numbers of jobs over the past year, 21 were on McKinsey’s top 25 list.

Meanwhile, the regional jobs data from the BLS shows that non-metropolitan areas, which account for 18% of jobs, had just 5% of job growth over the past year.

OTOH, income inequality is greatest in those cities with the highest jobs growth. But, we can’t write off one quarter of the US population simply because they live in low-growth areas. And politically, it’s essential. Rural America is overrepresented politically — we can’t ignore them.

But, what to do? Sanders and Warren have addressed this by trying to raise tax revenues from corporations, and funding free college. They along with others, believe in some form of Medicare-for-all, which could help address the fact that rural America is older, sicker, and poorer than ever before.

Yang proposes a universal basic income of $1,000/month for everyone.

Trump proposes tax cuts for the wealthy, tariffs and weakened environmental regulations, but despite all three, the situation has gotten worse since his election.

McKinsey suggests that communities that are being left behind ought to try almost everything: improved transportation to get residents to jobs, rural broadband, and lifelong job training.

Building consensus about how to address job growth and income inequality is the key to America’s future. This is what the 2020 presidential election should be about.

Facebooklinkedinrss

Saturday Soother – August 3, 2019

The Daily Escape:

Wotans Throne, North Rim, Grand Canyon NP, AZ – photo by phantomcloud.

The WSJ has an important story on how people with what seems like pretty good household incomes, are getting more and more indebted trying to keep up a middle class lifestyle:

“The American middle class is falling deeper into debt to maintain a middle-class lifestyle.

Cars, college, houses and medical care have become steadily more costly, but incomes have been largely stagnant for two decades, despite a recent uptick. Filling the gap between earning and spending is an explosion of finance into nearly every corner of the consumer economy.

Consumer debt, not counting mortgages, has climbed to $4 trillion—higher than it has ever been even after adjusting for inflation. Mortgage debt slid after the financial crisis a decade ago but is rebounding.

Student debt totaled about $1.5 trillion last year, exceeding all other forms of consumer debt except mortgages.

Auto debt is up nearly 40% adjusting for inflation in the last decade to $1.3 trillion. And the average loan for new cars is up an inflation-adjusted 11% in a decade, to $32,187, according to a Wall Street Journal analysis of data from credit-reporting firm Experian.”

The Journal gives a generally sympathetic portrayal, provided you don’t go deeply into their comments section, where readers spout platitudes about Millennial’s lack of fiscal responsibility. Here’s a chart from the WSJ using some recent work by Georgetown bankruptcy law professor Adam Levitin showing how much certain costs have risen relative to wages:

More from the WSJ:

“Median household income in the U.S. was $61,372 at the end of 2017, according to the Census Bureau. When inflation is taken into account that is just above the 1999 level.

Average housing prices, however, swelled 290% over those three decades in inflation-adjusted terms, according to an analysis by Adam Levitin, a Georgetown Law professor who studies bankruptcy, financial regulation and consumer finance.

Average tuition at public four-year colleges went up 311%, adjusted for inflation, by his calculation. And average per capita personal health-care expenditures rose about 51% in real terms over a slightly shorter period, 1990 to 2017.”

Of course, in Wrongo’s youth, few young people were carrying large amounts of student debt. And if they went to coastal cities to build their careers, the cost premium over living in a city in the heartland wasn’t as high as it is now (except for San Francisco and New York, which have always been very expensive). Also, it isn’t just tuition that has gone up. All the other college costs, housing, meals, books, and fees, have also gone up more than 300% in the past 30 years.

It is notable that college costs have far outpaced the ability of those in the middle class to afford them. That is why student loan debt has become so high: working your way through college is no longer as realistic as it once was.

Turning to housing, the WSJ quotes Domonic Purviance of the Federal Reserve Bank of Atlanta, who says that people earning the median income can no longer afford the median-priced new home, which cost $323,000 last year, and barely have the means to buy the median existing home, which is now about $278,000.

Failure of wages to keep up with costs is a huge problem, and it has to be emphasized that this is not some inevitable outcome of our so-called “free markets” – it is driven by neo-liberal policy.

A few of the Democratic candidates are addressing the health and education cost burdens now adding to the debt load of all Americans. But we need more discussion that leads us to better policy.

With so much wrong in the world, we surely need to take a step back, and de-stress. To help with that, here’s your Saturday Soother. Let’s start by brewing up a large mug of Finca Las Nieves Green-Tip Geisha coffee ($35.00/8 oz.). This coffee is grown and roasted in Mexico. Located at an elevation of 4,000 feet, Finca Las Nieves is a 1,000-acre coffee farm located in Oaxaca State. It is completely off the grid — both solar- and hydro-powered. In addition to growing, harvesting, processing and roasting coffee, the farm also offers vacation bungalows for rent on the property.

Now, settle into a comfy chair and listen to Bach’s unaccompanied Cello Suite No. 1 in G Major, movements 1-3 of 6, by Yo Yo Ma. The video uses a painting by Hudson River School painter, Thomas Cole. It is called “The Oxbow”, located on the Connecticut River in Massachusetts near Northampton, MA. Here is Yo Yo Ma:

Those who read the Wrongologist in email can view and listen to the video here.

Facebooklinkedinrss

Fixing Social Security

The Daily Escape:

Tahitian Gardenia, Maui – 2013 photo by Wrongo

On June 13th, The New York Times had an article on the Social Security (SS) shortfall: (emphasis by Wrongo)

“Unless a political solution is reached, Social Security’s so-called trust funds are expected to be depleted within about 15 years. Then, something that has been unimaginable for decades would be required under current law: Benefit checks for retirees would be cut by about 20 percent across the board.”

With life expectancy increasing, by 2035, Social Security estimates, the number of Americans 65 or older will increase to more than 79 million, from about 49 million today. This is the high point of eligibility, as the number of Baby Boomers will start to decline by then.

Americans are counting on Congress to fix this problem. As usual, there are two answers, one offered by each Party. The GOP thinks that we can’t afford SS and Medicare. In fact, they’ve been trying to cut our SS checks since the Reagan presidency. The right-wing Heritage Foundation offered a new policy paper in May. As in the past, they favor cuts to benefits and siphoning money from payroll taxes into individual investment accounts. This is a recycling of George W. Bush’s 2005 idea, that the Democrats blocked at the time. The Heritage Foundation overlooks that at one time, pensions were widespread, and SS was a supplementary source of income for many retirees, not their primary source as it is for most today.

The Democrats have suggested an increase in Social Security benefits, along with higher taxes for the wealthy. Taken together, these measures would eliminate the SS program’s financial shortfall.

Millions of words have been written about how to deal with the shortfall. Here is one idea from Dale Coberly posted at the Angry Bear:

“All we have to do is pay an extra dollar per week per person per year.  After next year It will be more like a dollar and ten cents.  And if we wait another year it will be about a dollar and twenty cents for the first few years, then a great deal less than a dollar per week on average. This would keep Social Security solvent essentially forever.  The Deputy Chief Actuary at Social Security agrees that this is true.”

Most of the political discussion is about “we can’t afford it”. They mean the US government. But, when we think that if the individual wage earner CAN afford it, there’s no reason why the government can’t pay for it. This isn’t socialism, and the US government doesn’t have to come up with $ Trillions all at once.

Social Security was not designed to be welfare. It isn’t an “entitlement”, as though it’s an unearned benefit. People contribute a hefty portion of their annual income for their entire working lives to the SS fund, and they have the right to their SS payments in retirement. The original intent was for workers to save enough money to pay benefits when they were too old to work. Today, even the “rich” are not paying in more than they will get back with reasonable interest.

The Times article doesn’t mention that the easiest, and most obvious solution is raising or eliminating the SS cap. Most people forget that only the first $132,900 are taxed. Anyone earning more than that is paying into Social Security at the same rate as the rest of us.

Here’s a message to Jeff Sommers, who wrote the NYT article: You are fanning the flames of a false emergency when there is a sound solution to be implemented.

Several studies have shown that simply removing the cap, which affects less than 10% of US taxpayers, would solve the SS program’s solvency issues indefinitely. No benefit cuts needed. No political horse trading needed between the Republicans and Democrats, except that the GOP base will scream bloody murder if they are forced to pay in more than they will get back.

But, why should we give a pass to the rich, when the rest of us depend disproportionately on social security income to meet basic needs?

Now all we need is the political courage to get it done, which is in absurdly short supply these days.

Facebooklinkedinrss

Monday Wake Up Call – June 24, 2019

The Daily Escape:

View from Angels Landing summit, Zion NP Utah – 2019 photo by SurrealShock. 86,000 people visited Angels Landing over the four-day Memorial Day weekend in 2018.

On Sunday, the NYT reported: (emphasis by Wrongo)

“In the last decade, private land in the United States has become increasingly concentrated in the hands of a few. Today, just 100 families own about 42 million acres across the country, a 65,000-square-mile expanse, according to the Land Report, a magazine that tracks large purchases. Researchers at the magazine have found that the amount of land owned by those 100 families has jumped 50 percent since 2007.”

The West is a patchwork of public and private lands. Land ownership in the West has always been concentrated in the hands of the federal government, which owns about 50%. Now we learn that the rest of the West is quickly moving into the hands of a very few people.

The large purchases by these new private landholders come as the region is experiencing the fastest population growth in the country. That drives up housing prices and the cost of living. Some locals are fearful of losing both their culture and economic stability.

Rocky Barker, a retired columnist for The Idaho Statesman, has said this is a clash between two American dreams, pitting the nation’s respect for private property rights against the notion of beauty-rich publicly-owned lands set aside for the enjoyment of all.

In the West, there is an evolution of an economy based in minerals extraction, to one based on recreation; from a working class culture to a more moneyed one. The NYT article focuses on one family, the Wilks brothers, Dan and Farris, who made their money ($3.5 billion) in fracking. They sold out, and bought a vast stretch of mountainous land in southwest Idaho.

The Wilks brothers see what they are doing as a duty. God had given them much, and in return, “we feel that we have a responsibility to the land.”

The Wilkses now own 700,000 acres across several states, and have become a symbol of the out-of-touch owner. In Idaho, they have closed trails, and hired armed guards to patrol their land, blocking or stymieing access not just to their property, but also to some publicly owned areas. They also hired a lobbyist to push for a law that would stiffen penalties for trespass, and the bill passed.

This has made locals angry, as they have hiked and hunted on these lands for generations. Some emailed the Wilkses, asking permission to cross their property. They were surprised to receive a response suggesting they first visit PragerU, a right-wing website that was financed by the Wilkses and share their opinions of its content.

This is an example of a test for land use. Should you have to tell landowners your political views before you get to use their land?

Welcome to the future. Concentration of land ownership is a natural consequence of our free market capitalism. Our capitalist system isn’t designed to prevent concentration of ownership, whether it be of corporations or land.

That requires politicians who are not beholden to corporations and capitalists.

Our ancestors left Europe because by the 1600s, much of the land had already been bought up and was either inaccessible, or available in small lots for rent. America has been in the process of being divided up in the same way since the 1700s.

We talk about wealth inequality, and this story shows again that it is much more than numbers on a ledger. It is the power to own vast chunks of America, to decide how that land will be used, and to charge for that usage if they desire.

Battles over both private and public land have been a defining part of the West since the 1800s. For years, fights have played out between private individuals and the federal government.

OTOH, Americans in the West have made private ownership of wilderness a sacrament. They even contend that private use of public lands should be a right. Now, when the results of concentrated private land ownership become clear, when suddenly, a river or a mountain range they’ve enjoyed using for decades has a fence around it, their bellyaching begins.

But when the Wilkses, who made their money in fracking talk about how they feel they have a responsibility to the land, that has to be seen as hypocrisy.

The people in the West should Wake Up and give thanks for every inch of every national park. They should willingly pay additional taxes to keep our national parks in prime condition.

And they should finally see the wisdom in higher income taxes on corporate profits, and in Elizabeth Warren’s taxes on individuals with greater than $50 million in assets .

Facebooklinkedinrss

Sunday Cartoon Blogging – June 23, 2019

Iran’s solution to possible war with the US. If this happened, Trump would say he got a love letter from the Ayatollah:

Little-known technology shows Pentagon the best story to use about its reasons for war:

This week, the Trump administration argued in court that detained migrant children do not require basic hygiene products like soap and toothbrushes in order to be held in “safe and sanitary” conditions:

Mitch ain’t willing to discuss reparations:

Reparations are a difficult subject. As the historian Howard Zinn said, “You can’t be neutral on a moving train.” He meant that you either abide the status quo, or you oppose it. You either commit yourself to be the best anti-racist you can be, or you don’t. Whichever you choose, you should be honest in how you frame your choice. Saying that reparations are not worth pursuing, or simply doing nothing about them, is an implicit defense of the policies and systems that have created our present-day racial inequities.

The Supremes held 7-2 that a cross located in a war memorial could be displayed on public property (at a traffic circle). They said that some crosses are merely historic icons. Their decision favors one religion over others, and it seems hostile towards religious minorities. And why won’t Christians act like Christians?

How the Capitalism game actually works:

Facebooklinkedinrss

Is Ending Income Inequality a “Radical” policy?

The Daily Escape:

Mount Robson & Berg Glacier, BC, Canada – June 2019 photo by DrTand the women

New York Magazine’s Eric Levitz writes: (brackets and emphasis by Wrongo)

“…the Federal Reserve just released…its new Distributive Financial Accounts data series [that] offers a granular picture of how American capitalism has been distributing the gains of economic growth over the past three decades. Matt Bruenig of the People’s Policy Project took the Fed’s data and calculated how much the respective net worth of America’s top one percent and its bottom 50 percent has changed since 1989.

He found that America’s super-rich have grown about $21 trillion richer since Taylor Swift was born, while those in the bottom half of the wealth distribution have grown $900 billion poorer.”

This is what a few of the Democratic presidential candidates have been talking about, some loudly and some quietly, for the past few months. Levitz asks the right question:

“So, is an economic system that distributes its benefits in this manner consistent with Americans’ common-sense views of economic justice? If not, would incremental changes be sufficient to bring it into alignment with the median American’s values? Or would more sweeping measures be required?”

In a sense, Democrats are testing whether advocating for changing Capitalism is an argument that voters will accept in 2020. More from Levitz:

 “Some Democratic presidential candidates say that America’s economic system is badly broken and in need of sweeping, structural change. Others say that the existing order is fundamentally sound, even if it could use a few modest renovations. The former are widely portrayed as ideologues or extremists, the latter as moderates.”

Essentially, the question is “who’s the extremist?” in the Democratic Party. This conflation of “extreme” or “radical” with “bad” is what the GOP and the Main Stream Media do every day, and it weakens our policy-making.

We use “extremist” or “radical” as a way of signaling that a policy position is too awful to consider.

If you simply say that something is bad, then you are forced to defend your position. But, when you describe it as “extreme“, you’ve called it bad, and people will HEAR that you think it’s much too big a change to even discuss.

Respectable talking heads like Judy Woodruff will ask: “Will Americans really go for THAT?”

This is bad faith messaging about important questions. This is so ingrained into people who talk about politics that it largely goes unquestioned. We shouldn’t care about pundits and broadcasters saying how extreme or not extreme something is. We should care about the merits of the argument.

Republicans have been calling Democrats “extreme” “radical” and “Socialist” for decades. They’re using bad-faith tactics; de-legitimizing an idea or a candidate without having to debate on the merits.

Bernie Sanders and Elizabeth Warren are offering “extreme” policies only if our baseline is what the average Congress critter’s economic agenda looks like. It’s not clear why that’s an appropriate yardstick.

Did we think calls for sweeping change in Egypt were extremism when students took to the streets demanding basic civil rights? Do we think the young people demonstrating today in Sudan are radicals?  Our assessment (and support) of these dissenters’ ideologies has more to do with how far their values are from those of their corrupt political and military leaders.

And also by how close they seem to be to our core values.

Whether it is extreme or moderate to propose sweeping changes to American capitalism should depend on how close our existing system is to how a just economic system operates. And these latest data show that the one percent have gotten $21 trillion richer since 1989, while the bottom 50% have gotten $900 million poorer.

This is what economic class warfare looks like. Saying that isn’t hyperbole. The earnings and wealth of a majority of our citizens has been systematically declining with the complicity and power of our government, in order to benefit the rich.

It shows how bad things are when the “radical” in American politics is anybody who argues that the American economy isn’t working for a huge percentage of the population.

Judy Woodruff may think that the economy is great, but incrementalism has failed most of us for the past 40 years.

Given all this, any politician who insists that American capitalism is “already great” is clearly someone who is indifferent to economic inequality.

We need to adopt redistributive economic policies. That may sound like an extreme position, but the alternative of continuing our growing wealth inequality, should really be thought of as far more radical.

Facebooklinkedinrss

Fed Study Shows Rising Financial Desperation in Poorer Zip Codes

The Daily Escape:

Aliso Creek State Beach, near Laguna Beach, CA – 2019 photo via

Simon Johnson observes at Project Syndicate: (emphasis by Wrongo)

“To defeat populism requires coming to grips with a fundamental reality: bad economic policies no longer necessarily result in a government losing power. In fact, it is now entirely possible that irresponsible populists may actually strengthen their chances of being re-elected by making wilder and more impossible promises – and by causing more economic damage.”

Johnson, former chief economist for the IMF, believes that structural economic factors, including automation, trade, and the financial crisis have left many people feeling neglected by those who control economic policy.

When politicians back policies that add economic uncertainty, or that discourage investment, we see lower economic growth, and fewer good jobs. Ordinarily, dissatisfaction shows up at the ballot box, holding that government accountable at election time.

But this is no longer reliable, because politicians wiggle out of the trap by saying that the media are biased, that the experts are wrong, and that the facts are not the facts. And the angrier people become, the easier it is to persuade them to accept that no one is to blame, and vote again for those who helped to cause their economic distress in the first place.

A new study by the St. Louis Federal Reserve Bank examined American financial distress by Zip Codes. It sheds light on a topic we regularly debate: Why are there so many signs of distress in a supposedly robust economy? And this time, will politicians be held to account?

Since 2015, the lowest income households have been taking on more debt. Their wealth has become even more concentrated in home ownership. The level of distress in lower-income households has also increased, despite the official story of increasing prosperity.

The study drills into Zip-Code level data to show that even adjacent Zips show striking divergence in wealth accumulation (or erosion). For instance, they looked at the percentage of people within a Zip Code that have reached at least 80%t of their credit limit on their bank-issued credit cards.

That is believed to be a good proxy for financial distress.

Before the 2008 crisis, analysts missed the rising levels of household debt. That debt was often funded by borrowing against home equity. Rapidly falling home prices after 2008 showed how fragile many of those borrowers were.

The contrast between national averages and Zip Code households is stark. Looking at averages, the recovery appears to be quite broad.  But zooming in by Zip Code showed a bifurcated economy still suffering from the 2008 crisis. The researchers found that looking at the value of assets and reliance on debt shows a clearer picture: (emphasis by Wrongo)

“…the poor and high-leverage ZIP codes that are more affected by wealth shocks may still be vulnerable. What’s more, trends in less affluent groups are masked in nationally aggregated statistics by groups with more wealth.”

May be vulnerable”? They will certainly be vulnerable when the next downturn begins.

Since 2015, debt and financial distress have been rising the fastest in these low-wealth areas, while it rose the slowest since 2015 for the wealthiest households. We already see softness in economic indicators like retail sales, home sales and housing construction. It’s reasonable to expect that the next recession isn’t far away.

We’ve had a long economic recovery, but its gains were not distributed as broadly as they had been in previous downturns. What we got was an uneven economic recovery, with most gains going to an increasingly narrow group.

More people are left out of this supposedly robust economy than the politicians and most economists think. The Fed study shows that the averages conceal plenty of pain. Maybe this isn’t an earthshaking idea. We all see income and wealth disparities in our communities, it’s not that unusual. But the fact that the differences are now extreme enough to show up in ZIP Code level data seem significant, and worrying.

So, will politicians pay any price in 2020 for the continuing maldistribution of gains since the 2008 recession? Or, will politicians tell the people that no one’s to blame, that the Laffer curve will surely work this time?

The miracle of modern Republican economic theory allows for both the Laffer curve, and “pulling oneself up by the bootstraps” not only to be truths, but to be the desired outcome.

Facebooklinkedinrss

Monday Wake Up Call – May 20, 2019

The Daily Escape:

Steps leading to Franciscan Sanctuary, La Verna, Tuscany, Italy – photo by Guiseppe Pepperoni

Over the weekend, Wrongo and Ms. Right, along with a few friends, saw “Hadestown” on Broadway. It is a theatrical home run that has received 14 Tony nominations. Describing the plot is difficult. Most reviews focus on the mythology at the heart of the play. The story is a re-imagination of Orpheus and Eurydice set in contemporary time.

The mythological story is that Orpheus is the world’s greatest poet, and Eurydice is his bride. It is intertwined with the love story of King Hades and his wife Persephone. During the play, we take an epic journey to the underworld and back.

In the myth, Eurydice is killed by a snake bite, and the mourning Orpheus travels to the underworld to beg Hades to return his wife to life. To make his case, Orpheus sings a song so beautiful that Persephone begs Hades to let Eurydice go.

That is loosely followed in the play, where these mythic characters are pawns in a central metaphor of capitalism as death. That seems so current in today’s predatory capitalism, and yet, the play is not a polemic. In the play, Eurydice isn’t bitten by a snake. Instead, she’s lured into Hadestown by Hades’s promise of work and food.

Hadestown is a factory town, and Hades is both the god of death and a merciless taskmaster, forcing his subjects to build an endless wall around Hadestown. In his April 15thMonday Wake Up Call”, Wrongo used Hades’s call and response song, “Why We Build the Wall”. The song seems right for 2019 because of our Orange Overlord, but in reality it was written in 2010.

Wrongo posts a sample lyric for you:

Who do we call the enemy? The enemy is poverty, And the wall keeps out the enemy, And we build the wall to keep us free. That’s why we build the wall;

We build the wall to keep us free.

The Wall makes us free. Arbiet macht frei. The few Trumpets in the audience demonstratively did not applaud the song, while the vast majority cheered. Partisanship is an always-on emotion.

Some call-outs to cast members: Patrick Page and Amber Gray are standouts, he as Hades, and she as Persephone. The legendary André De Shields, plays Hermes. He’s the show’s narrator. His cool swagger pulls the audience into the play from the opening curtain.

See it if you can.

During our pre-theater meal, we talked about the Democratic presidential candidates, a list that seems destined to continue growing. Our friends at dinner follow politics quite closely, and none are fully happy with any of the Democrats on offer.

Most defaulted to “electability”, espousing the view that it is “Do-or-Die” time in America, that we can’t take four more years of what we are experiencing now. That leads them to accept Joe Biden’s candidacy. Wrongo has a different view, as captured in this Vanity Fair article: (emphasis by Wrongo)

“Since Vietnam, every time a Democrat has won the presidency, it’s because Democrats voted with their hearts in a primary and closed ranks around the candidate who inspired them, promising an obvious break from the past and an inspiring vision that blossomed in the general election. Jimmy Carter. Bill Clinton. Barack Obama. All were young outsiders who tethered their message to the culture of the time. When Democrats have picked nominees cautiously and strategically—falling in line—the results have been devastating, as Michael Dukakis, Al Gore, John Kerry and Hillary Clinton made plain.”

So, what will happen this time? Those who believe in Biden’s electability should remember that there are 45 million Americans with student loans: 22% of those loans are in default, and 99% of them fail to qualify for loan forgiveness.

It was Biden’s decision to make student loans not dischargeable in bankruptcy. That’s going to be one large group of people who, when they learn who is behind their plight, probably will vote against him.

Biden has been on the job in Washington for around 50 years. Suddenly, according to Bloomberg, he wants to “Fix Things”?

Wake up Democrats! Find a candidate who inspires YOU. Work for that candidate in the primaries. Don’t buy the argument “but he/she isn’t electable” until that is proven by the results of the primaries.

Facebooklinkedinrss

Taxes Aren’t Theft

The Daily Escape:

Humpback Whale, Tonga – Photo by Rita Kluge

Joseph Stieglitz has an op-ed in the NYT about saving capitalism from itself. He wants to re-brand capitalism as “progressive capitalism”: (emphasis by Wrongo)

“There is an alternative: progressive capitalism. Progressive capitalism is not an oxymoron; we can indeed channel the power of the market to serve society….The prescription follows from the diagnosis: It begins by recognizing the vital role that the state plays in making markets serve society. We need regulations that ensure strong competition without abusive exploitation, realigning the relationship between corporations and the workers they employ and the customers they are supposed to serve. We must be as resolute in combating market power as the corporate sector is in increasing it.”

America has been debating the role of capitalism in our society since our beginnings. In 1790, John Adams published the Discourses on Davila in which he said that entrenched economic inequality would create a political oligarchy in America similar to what had already occurred in Europe.

The problem isn’t inequality. We’ve survived a permanent underclass, but until recently, it has been a statistical minority. But, we won’t survive today’s continuing erosion of the middle class. Stieglitz says:

“We are now in a vicious cycle: Greater economic inequality is leading, in our money-driven political system, to more political inequality, with weaker rules and deregulation causing still more economic inequality.”

He calls for:

“…a new social contract between voters and elected officials, between workers and corporations, between rich and poor, and between those with jobs and those who are un- or underemployed.”

Call it progressive capitalism, capitalism plus, democratic capitalism, or whatever you want. At the core of any reform of capitalism is less corporate control over the levers of power, and a redistribution of wealth. Along with the growth in economic inequality and political impotence, so grows the myth propagated by the ultra-rich that higher taxes are a public theft of their hard earned fortunes, and are a threat to their personal freedoms.

Let’s spend a minute on the difference between positive and negative rights.

In the simplest terms, negative rights (most of the Constitution’s Bill of Rights) protect us from the government. They tell us what the government can’t do. The Constitution was designed as primarily a negative rights document, to maximize our individual liberty, and to protect us from the government interfering in our lives. They are most helpful to people whose rights are already protected.

Positive rights are different. They include things like the right to an education, and in some countries, the right to healthcare. Most of us define freedom as: freedom from hunger, freedom from ignorance, freedom from exploitation, freedom from poverty, freedom from hopelessness and despair. Very few positive rights are enumerated in the Constitution, with the exception of the right to have the government protect private property.

Today, if there’s one enduring myth that drives US politics, it is the myth that the rich have earned their reward, through nothing but their own hard work and savvy. The rich want no income redistribution, which they call “socialism”, just as the fat cats said in this cartoon from 1912:

The Republicans in the 1930s called FDR a socialist. Now, as we are thinking about a New Deal 2.0, today’s Republicans want to again brand all Democrats as socialists.

Corporations and the 1% ignore how much they are helped by a system designed by them, and for them. They are contemptuous of government and public authority, which they say act as agents of the poor, attempting to extort the rich.

They forget that our government facilitates and protects their wealth. If not for the many Federal agencies that write regulations favorable to industry, the Federal Reserve, protectors of the banking industry along with others, there would be a lot less wealth for corporations and the 1% to aggregate.

Therefore, they should pay the most.

And remember, rural electrification was a federal project under FDR. The dams on the Columbia River made irrigation possible, opening up western lands to agriculture. The Tennessee Valley Authority (TVA) was the Green New Deal of its time, and was the basis for development of a modern Southeastern US. The railroads that opened up the West relied on government property provided to private companies (redistribution?) to develop.

Let’s decide to reform capitalism. First, by making it responsive to the positive rights that average Americans are longing for. Second, paying for that with much high taxes on corporations. If the loopholes created by savvy corporate tax lawyers remain on the books, let’s create a stiff Alternative Minimum Tax (AMT) for corporations.

Just like the AMT that Wrongo has had to pay for lo, these many years.

Facebooklinkedinrss

Monday Wake Up Call – April 15, 2019

The Daily Escape:

Tax day! Wrongo got the Wrong family taxes finished, and submitted with a few days to spare. Last week was one of the many that will make you scratch your head. Here are three amazing things from last week:

  • Scientists unveiled an image of a black hole
  • That image is 50 million years old
  • Millions of Americans still believe the Earth is 6,000 years old

And just when you thought America’s cities couldn’t be any more corrupt, check out NYC’s Hudson Yards, Manhattan’s mega-project that is the largest private real estate development in the US by area. Private? City Lab reports that Hudson Yards was partially bankrolled by a federal investor visa program called EB-5, which was meant to help poverty-stricken areas:

“Specifically, the project raised at least $1.2 billion of its financing through a controversial investor visa program known as EB-5. This program enables immigrants to secure visas in exchange for real estate investments. Foreigners who pump between $500,000 and $1 million into U.S. real estate projects can purchase visas for their families, making it a favorite for wealthy families abroad, namely in China. EB-5 is supposed to be a way to jumpstart investment in remote rural areas, or distressed urban ones.”

The threshold for these EB-5 visas can be reduced to $500,000 if investors place their capital in a “targeted employment area” (TEA). The TEA can be either a rural community or distressed urban area with a high unemployment rate (at least 150% of the national average).

Investors typically obtain visas for two additional family members, so Business Insider thinks the development likely created about 10,000 EB-5 visas, the maximum permitted in any year.

These are the kind of immigrants both parties can agree should be let in!

But is Hudson Yards a distressed neighborhood? It is bordered by expensive neighborhoods such as Chelsea and Hell’s Kitchen. It sits at the start of the High Line, and is too wealthy to qualify for the EB-5 program. To solve the problem, the state included a few census tracts from Harlem as part of the Hudson Yards TEA. Here’s a map of the TEA:

This looks just like a gerrymandered Congressional district in North Carolina. And it tells you all you need to know about how our local, state, and federal politicians are in the pocket of private industry. Money is always the driving factor, and it engulfs our politicians of both parties in a stew of questionable ethics.

America can’t be bothered investing in our own people, so we sell visas to bribe foreigners to do the investing for us.

Time to wake up America! This is the tip of the iceberg for the rot in our political process. To help you wake up, listen to “Why We Build the Wall” from the 2010 album “Hadestown” by Anaïs Mitchell. This “folk opera” opens on Broadway on Wednesday. The play is inspired by the story of Orpheus and Eurydice. Here is “Why We Build the Wall”, featuring Greg Brown. Wrongo is seeing the play in the middle of May:

Note that this song was written in 2010, long before Trump, or any politician had any interest in building a wall.

Sample Lyric:

Who do we call the enemy?

The enemy is poverty,

And the wall keeps out the enemy,

And we build the wall to keep us free.

That’s why we build the wall;

We build the wall to keep us free.

Those who read the Wrongologist in email can view the video here.

Facebooklinkedinrss