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                          Existence, Economics, and Ecological Intelligence

                                                                    An Earth Manifesto publication by Dr. Tiffany B. Twain                

Eleven score and nineteen years ago in the year 1776 our forefathers declared independence from the British Empire and brought forth upon this continent a new nation conceived in liberty and dedicated to the proposition that all people are created equal in their natural human rights.  Now I imagine the entire body politic gathered here together, one nation, supposedly indivisible and committed to liberty and justice for all, and we are collectively pledging allegiance to these great ideals. In curious contradiction, however, many Americans are at loggerheads, and the interests of narrowly-focused groups are taking precedence over broader civic concerns.  Most people are distinctly divided by stoked conflicts and ideological disputes and hyper-partisanship, and our society seems increasingly to be becoming characterized by growing extremes of economic insecurity, social injustices and unfairness in political representation.  These are pathetic developments that significantly undermine social cohesion and our democratic form of governance, and they endanger the future well-being of the American people and our children and grandchildren and all generations to follow.

A great battle of ideas has been taking place in the world in the past 100 years.  Conservatives and libertarians and market fundamentalists stubbornly maintain that the optimum plan for every country is to adhere to strict principles of private enterprise, and to keep government rules and regulations to a minimum, and to ensure that workers do not have much power, and to minimize the taxes that wealthy people pay.  By staunchly supporting these objectives, these partisans are basically rationalizing inequalities, inequities, injustices, heightened social stresses and the unwise and excessive exploitation and degradation of natural ecosystems.  One of the unspoken goals of these ideologically motivated individuals is basically to help ensure that 50% all the nation’s wealth remains concentrated forevermore in the hands of the richest 1% of the people.

Astoundingly, the 400 richest families in the U.S. have more wealth than the bottom 180 million people combined, AND many of these rich people demonstrate a brazen eagerness to utilize their accumulated riches to corruptly influence our representatives to get them to commit to purity pledges swearing that they will never ever dare impose any higher levels of tax on earnings, investment income, or inheritances.  The problem with this severely skewed state of affairs is that there is far-reaching truth in this observation, made by Louis Brandeis, a Supreme Court Justice from 1916 to 1939:

   “We can have democracy in this country, or we can have great wealth concentrated in the hands of

       a few, but we can’t have both.”

In the highly regarded tome Capital in the Twenty-First Century, French economist Thomas Piketty skewers assumptions about the benevolence of advanced capitalism “and forecasts sharply increasing inequality of wealth in industrialized countries, with deep and deleterious impacts on democratic values of justice and fairness.”

Unless something changes, says Piketty, wealthy individuals will keep getting wealthier, and at an accelerating rate.  He describes this prospect as “terrifying”.  Thomas Piketty not only poignantly analyzes problems related to global capitalism in this book, but he also prescribes creative solutions for the inequality problem, like a “global wealth tax.”  More about that later.

A Mini-Me Makes a Persuasive Claim

A touching aspect of the important documentary film Inequality for All is the outsized larger-than-life mini-me character of Robert Reich and the personal motives he expresses that have inspired him to champion greater economic justice in the world.  Robert Reich was always very short, due to a rare genetic condition, so bullies in school tended to pick on him.  He found it expedient and safer to affiliate himself with older boys who commanded more respect, and thus he made friends with a young man named Mickey Schwerner who cared about social justice so much that he later ventured to the Deep South to help black people to exercise their right to freely vote during the “Freedom Summer” of 1964.  Tragically, this friend and protector was murdered in Mississippi by racist members of the white supremacist Ku Klux Klan for his honorable concern. 

As a result of these circumstances, Robert relates, he has always been acutely sensitive to injustices in the world, and to the bullying of the working class by those who insistently proclaim their all-but-divine right to riches, status, power, privileges, maximized corporate profits, and very low rates of tax on their incomes and capital gains.  Bob cites the murder of his friend as an inspiration to "fight the bullies, to protect the powerless, and to make sure that the people without a voice have a voice."

The USA was founded by people who loved liberty, and who hated bullying despotic abuses of power, so it is surprising that the richest 1% of Americans have succeeded so blatantly today in buying enough influence in the Senate and House of Representatives and the Supreme Court to corrupt our national purposes into a repetitiously ideological and weakly rationalized protectorate of greedy privilege.  An expansive examination of this theme pervades the ideas that unfold in this essay.

   “There are more things in heaven and earth, Horatio, than are dreamed of in our philosophy.”

                                                                                                            --- William Shakespeare, Hamlet

Politics, Not Economics, is the True Morality Play

Many people like to see economics as a morality play, and in particular as a tale of excess and sin, and of deserved punishment as a consequence.  “We lived beyond our means, the story goes, and now we’re paying the inevitable price,” wrote the distinguished American economist Paul Krugman.  “Economists can explain ad nauseam that this is wrong, that the reason we have mass unemployment isn’t that we spent too much in the past but that we’re spending too little now, and that this problem can and should be solved.  No matter; many people have a visceral sense that we have sinned and must seek redemption through suffering -- and neither economic argument nor the observation that the people now suffering aren’t at all the same people who sinned during the bubble years makes much of a dent.”

Paul Krugman made this cogent point in April 2013 in a good New York Times Op-Ed column titled The 1 Percent’s Solution, adding that there is nothing about the fact that bankers made bad loans in 2005 that makes it sensible to still have high levels of unemployment and underemployment for ordinary workers so many years later.  He expresses his strong conviction that the profession of economics should not be a sermon, but just a job, and the task is to figure out how to fix the economy for the benefit of the majority of people and the greater good.

While it can be a deception to regard economic activities as a morality play in an absolutist judgmental way, there is a contrasting sense in which work activities really can be accurately regarded as a morality play.  The judgment in this drama is clear:  the 1% of people who largely control the economic system are emulating bad guys who almost personify evil in a Manichean vision of black-and-white judgmentality.  If you ever hear privileged people using the word lazy when they are talking about working people, snap to attention!  There's something happening here, and what it is ain't exactly unclear.  Buffalo Springfield recommended: 

    “I think it's time we stop, children, what's that sound

          Everybody look what's going down.”

The fact of the matter is that the agenda of those who advocate austerity policies for the masses looks a lot like a simple expression of the preferences and demands of wealthy people.  This agenda is shrewdly sugar-coated in a facade of supposed academic rigor.  “What the top 1% wants becomes what economic science says we must do.”  And “it’s not just a matter of emotion versus logic.  You can’t understand the influence of austerity doctrine without talking about class and inequality.”

In Inequality for All, Professor Reich exposes the deep inequities and adverse effects of rising economic inequality in the United States.  He makes it crystal clear that middle class wages have dropped since 2009 while the top 1% of people have reaped 95% of the gains made in the economic recovery.  Professor Reich expresses heartening optimism that, by working together, Americans can change this undesirable dynamic.  Progress has eventually gained sway throughout our nation’s vaunted history, despite occasional periods of retrograde trends, and Robert believes the turning point is soon approaching to reverse these inegalitarian trends.  The American people succeeded in gaining a fairer bargain and broader prosperity between 1930 and 1980, so we sure could do it again today!

Emmanuel Saez, a French economist and Professor of Economics at UC Berkeley, has confirmed this fact that the richest 1% of Americans have made almost all of the gains in the economic recovery since 2009, and that middle class wages have fallen in real terms.  Inequality of this magnitude is “poisoning our society and making a mockery of the American dream of equal opportunity.”  Professor Saez recommends that much higher taxes be implemented for the highest income individuals, with marginal federal tax rates on the highest levels of income of at least 70%.

Economic strategies that would help create good jobs and more widespread prosperity would be much better than current strategies designed mainly to increase corporate profits and stock prices.  These better plans include improving our current educational system to make it more affordable and more accountable for improved outcomes;  increasing the minimum wage so that families can live on pay they receive;  eliminating payroll taxes on the first $15,000 of income for every taxpayer;  raising the cap on income subject to payroll taxes;  giving workers more collective bargaining power;  creating greater systemic safety in our economic system;  and moderating risks and costs of bailouts by reducing the multiples of leverage allowed to banks, and by mandating higher levels of equity. 

Extreme levels of income inequality represent a new “inconvenient truth”, to borrow the phrase Al Gore used about the dangers of a warming planet.  This inconvenient truth reveals the dark side of unfairness in our econopolitical system and its negative impacts on poor people and the middle class.

America’s Political Duopoly

One awful obstacle towers above all others in preventing us from taking positive steps to remedy the serious socioeconomic and environmental problems that confront us.  It is the staunch resistance of the political duopoly that strives to monopolize our economy and politics.

This is the conclusion reached by Charles Ferguson, the director of the compelling documentary film Inside Job, which concerned the financial crisis that began in 2008.  Ferguson is also the author of the sensational story told in Predator Nation: Corporate Criminals, Political Corruption, and the Hijacking of America.  Ferguson gradually arrived at the understanding that a fundamental structural problem in American politics is at the root of many of the most dangerous problems in the world today.  He calls this political duopoly “a remarkable system for remaining in power”, a system that both Republican and Democratic politicians have perfected to maintain their power and primarily serve America’s plutocratic oligarchy, i.e. today’s rule by the wealthy few.

“Far from being in an era of brutal partisan warfare, as conventional wisdom holds -- and as watching the nightly television news might suggest -- the U.S. is now in the grip of a political duopoly in which both parties are thoroughly complicit.  They play a game: they agree to fight viciously over certain things to retain the allegiance of their respective bases, while agreeing not to fight about anything that seriously endangers the privileges of America’s new financial elites.”

Pay close attention to these insightful words in Charles Ferguson’s provocative book Predator Nation:

“America has experienced a profound realignment of its politics over the last generation, driven by a combination of globalization, American economic decline, and the rising use of money to shape American politics and government policy.  The core of this realignment is that the two political parties now compete for money, while colluding to hide this fact.  They provide the appearance, and often the reality, of fierce partisan conflict on social and ‘values’ issues, whereas on the issues of critical concern to the financial sector and America’s economic oligarchy, their actions are almost identical.  We have, in short, a political duopoly -- a cartel formed by the two parties that, between them, control all of American politics.”

“At first glance, the suggestion that both parties are colluding and under the influence of a single oligarchy seems absurd.  There are red states and blue states, and the two parties are viciously polarized.  And there is real political conflict in America, especially on social issues that matter to the two parties’ bases -- abortion, gay marriage, sex education versus religion in schools, creationism and evolution, guaranteed-health-insurance-as-socialism, taxes-and-government-as-evil, gun control, welfare, drug policy, immigration, environmental policy and the reality of global warming.  These are very real, very important issues;  and on these issues, each political party can credibly tell its base that defeat would mean real, painful losses.”

“But that is exactly the point.  It’s a brilliant strategy.  These social and ‘values’ conflicts serve excellently to divide and distract people who should, and perhaps otherwise would, be dangerously united in feeling that they were being raped by their CEOs, their bankers, their elected leaders, and the political establishment.  Thus, each party can continue to command the grudging support of people who fear that if the other side won, they would lose something important, which leaves the two parties free to collude on the most important thing to both of them -- money.” …

“Whether this duopoly will endure, and what to do about it, are perhaps the most important questions facing Americans.  The current arrangement all but guarantees the continuing decline of the United States as a nation, and of the welfare of the bottom 90% of its citizens.” …

“Many Americans no doubt still believe in the American dream.  One wonders how long they can maintain that illusion, for America is transforming itself into one of the most unfair, most rigid, and least socially mobile of the industrialized countries. … No other developed country, even class-conscious Britain, comes remotely close to the extreme income and wealth inequalities of the United States in 2012. … The flip side of the growth in American inequality is an obscene, morally indefensible decline in the fairness of American society -- in education, job opportunities, income, wealth, and even health and life expectancy.”

I believe we have a definite moral obligation to honestly do something about this state of affairs.  The urgency of the need to positively change the most egregious aspects of the status quo motivates the line of thinking that follows.

Ecological Economists to the Rescue!

A scientific and philosophical discipline called ‘ecological economics’ has been in the process of being articulated in the past three decades.  Ecological economics is guided by the need for humanity to find ways to live sustainably and to leave a fairer legacy to future generations.  This discipline is concerned with the carrying capacity of natural ecosystems and the conservation of resources and the true implications of environmental damages caused by human activities. 

Ecological economists recognize a broad range of unintended consequences of human actions.  They point out the wisdom of honestly taking into account these bigger-picture perspectives in all public policy decisions.  They question economic ideologies that advocate a gospel of stimulated consumer indulgences, recklessly wasteful growth, less regulated capitalism, and the risky growth of social inequalities. They contend that it is foolish to measure economic activities in distorted and misleading ways, and to make dubious assumptions in analyses of costs and benefits of public policies.  And they strive to advance ideas that are consistent with values that really represent the greater good.

Ecological economists emphasize the vital importance of natural capital and the incalculably valuable “ecosystem services” provided by a healthy biosphere.  It makes much more sense to give serious consideration to these underpinnings of our well-being than to mindlessly ignore them.  We simply must begin to recognize the hidden costs associated with courses of action that recklessly deplete resources and cause irreversible harm to habitats and ecosystems.

One of the cautionary lessons of history is that an economic collapse is often the end-game result of unchecked growth and a disregard for the foundations of well-being.  Our societies cannot ignore with impunity ecological damages and the heedless over-exploitation of resources.  The ancient civilization on Easter Island in the remote reaches of the eastern South Pacific collapsed because the native Rapanui people apparently failed to see limits on the amount of native forests, arable farmland and fresh water on their small island, even as they depleted these vital resources and their population grew beyond sustainable levels.  The relics of their famous monumental volcanic stone statues stand in mute testament to this folly.

Potential economic catastrophes pose risks far too serious to ignore.  When people pay too little heed to long-term considerations today, such shortsightedness creates an increasing likelihood of terrible hardships for billions of people in coming years.  During economic boom times, people tend to develop “disaster myopia” and essentially ignore the chances that things could actually go wrong, and they tend to forget the vital importance of sensibly adhering to precautionary principles.

Damages to the crucially important environmental commons could be catastrophic for humanity, and they could be practically irreversible on any meaningful time scale.  This is why ecological economists tell us we would be wise to take precautionary measures into account in our public policy approaches.  It is also why they advise us to make smarter investments in more fair-minded plans, and in economic activities that will prove to be sustainable in the long run.

Most people want something for nothing, so they do not support “paying as we go” rules.  Our representatives in Congress consequently resort to the risk-laden expediency of borrowing huge sums of money from people in the future to finance the demands of vested interest groups and the dictates of short-term-oriented goals.  This myopic strategy threatens to exacerbate a wide variety of negative impacts that will be a salient aspect of our legacy to our descendents.

It would be wise for us to embrace ecological economics as the mainstream of our understandings of economic development.  The short-term orientation of other economic ideologies is proving to be far too destructive and unsustainable.  It is time that we make a much clearer distinction between the mere quantity of growth we can achieve and the contrasting factors that contribute to real improvements in the quality of life.  The overall quality of life, after all, is assuredly more important by all meaningful measures. 

The efficient allocation of resources cannot be considered alone without assessing the fairest and best uses of resources or the sustainability of our activities.  We can no longer continue to ignore carrying capacity limitations inherent in natural ecosystems.  The overarching value of healthy habitats and intact ecosystems and adequately protected biological diversity of life on Earth should be recognized and honored.  The full range of problems created by industrial agriculture should be taken into account, and we should also be honest with ourselves about the ramifications of egregiously wasteful uses of heavily subsidized fossil fuels.

We should also seek ways to give greater protections to critically important rainforests and temperate forests, and wetlands and estuaries and coral reefs.  Surely it would be wise to strive to prevent further declines in wild fisheries and nursery habitats.  The problems that are associated with impending fresh water shortages need to be boldly and comprehensively addressed.  And courageous actions must be taken to prevent further disruptions of global weather patterns that are being caused by our improvident propensities to wantonly spew tens of billions of tons of greenhouse gases into the atmosphere every year.

Inequality and Inequities

The gap in fortunes and privileges between the super-rich and all other Americans has been radically widening in the past 35 years.  Economic inequities, as a result, have become almost as extreme as they were in Mark Twain’s days.  In The Gilded Age: A Tale of Today, Mark Twain wrote about a phony patina of prosperity that materialized during an era in the late 19th century when conspicuous consumption by the wealthy was glaringly gaudy.  At the time, there was widespread corporate and political corruption and many abuses of power by “robber barons”.  In that era of industrialization, workplaces were unsafe, many products were dangerous, wages were low, child labor was pervasive, numerous assaults took place against worker organizations, and there were widespread discriminatory practices against women and racial minorities.  In addition, corporate entities were often engaged in monopoly practices that made competition unfair and wasted resources, and harmed competitors and consumers, and polluted the commons and damaged the environment.

Mark Twain decried rapid increases in economic inequality during the Gilded Age.  Historian Vernon Louis Parrington later called the period “the Great Barbecue", ostensibly because many of the eminent people at the time were figuratively roasting the country to amass enormous amounts of wealth and to enjoy special benefits and privileges for themselves.  A narrow concentration of income and wealth developed in those days, as it has again today.  This deep inequity eventually sparked a powerful reaction in a far-reaching Progressive Era reform movement that flourished from the 1890s to about 1912.  Then an economic boom took place after World War I, during the Roaring Twenties, which rudely culminated in a crash of wild speculation in the stock market in 1929, and the harsh Depression of the 1930s began.  This economic crisis stoked massive social unrest, and it forced the financial and political elites to agree to a fairer deal in which the concentration of income and wealth was reduced for the ensuing 45 years, and the middle class was strengthened, and America was made truly fairer. 

I repeat:  the elites were forced by these developments in our democracy to agree to a fairer deal.  Today?  Damn the masses!  Wait -- can't 99% of the people prevail and require rich people to pony up a fairer contribution to social insurance policies that will actually serve not only to make the average person more secure but will also help protect many of the privileges of the rich?

Today the richest Americans are once again abusing their power in astonishingly effective ways.  They are doing so by tirelessly working to subvert fairly representative decision-making, and by making sure they continuously increase their relative advantages over all others.  CEOs, Wall Street fat cats, lobbyists and our political representatives are lavishly entertaining themselves with sumptuous banquets, often at the public’s expense.  They jealously rationalize their good fortune by ruthlessly promoting disingenuous, misleading and often patently false ideological arguments.  They abuse power by rigorously controlling wages paid to workers, increasing the prerogatives of corporate entities, and collaborating together to pay low rates of tax at the expense of young people and future generations. 

Inequalities and inequities are widening between people in many arenas, including in opportunities available, income earned, tax rates paid, wealth accumulated, and overall privileges enjoyed.  These trends are creating grave risks to our national solvency and our econopolitical system, and also a wide range of dangers to our collective well-being.

The hallowed idea of government of the people, by the people, and for the people is being perverted into government of corporate interests, by corporate interests, and for rich people.  This betrayal of our national ideals is simply unethical and wrong.  It is a perfidiousness subversion of our democracy that is being perpetrated by a small set of ideologically uncompromising and greed-driven wealthy people who are betraying the public trust.  They are succeeding in this swindle by rigging the system for their own narrow benefit and striving mercilessly to exploit natural resources and diminish the power of working people.  In demanding both historically low tax rates for themselves and austerity for the masses, they are helping create huge budget deficits and powerful pressure for cuts in funding to vital things like public education, national infrastructure, renewable energy, innovative R&D, family planning programs, and protections of wildlife, public lands and the environment. 

Public policies obviously change the distribution of income, as they have dramatically since Ronald Reagan began gutting progressive tax policies by slashing marginal tax rates on the highest income earners from 70% to 28% in the 1980s.  Less obvious, but possibly even more influential, are government policies that have enormous effects on the distribution of income before taxes or government benefits are taken into account.  Public policies establish “the rules of the game”, so they have determinative effects by means of establishing laws affecting corporate governance, copyrights, securities, trade, contracts, labor rules, minimum wages, and regulations relating to financial markets and high-risk ventures and the capitalization of banks.  A wide variety of exceptionally special deals are given to vested interest groups, and the Federal Reserve pursues policies that lopsidedly aid and abet the inflation in rich people’s assets.

This is how government entities, and thus politicians, have had a very big role in making America into a winner-take-all society in the past 35 years.  As inequalities increase to extreme levels in our country, people’s attention is diverted from the real big long-term problems that are insidiously festering in the world.  Unless we admit this reality and take bold steps to prevent looming economic calamities and ecological disasters, Nero’s fiddling while Rome burned will appear like a mere bonfire compared to a coming worldwide conflagration. 

By collectively allowing this abuse of power to persist, we are undermining vital ecosystems and thus unconscionably cheating people in future generations.  Even the Vatican has called for an overhaul of economic systems in the world.  The Catholic Church has expressed concern about economic instability and trends toward ever-widening inequality of income and wealth between people in nations around the globe.  These issues transcend the ability of governments everywhere to effectively address them.  The Vatican stated in October 2011 that new international institutions are needed that are capable of helping solve these issues, “now that vital goods shared by the entire human family are at stake, goods which the individual states cannot promote and protect by themselves.” 

In December 2013, Pope Francis castigated certain elements of modern capitalism and decried the "idolatry of money".  He asserted that these things were leading to “a new tyranny” in the world.  The bizarrely entertaining right-wing radio personality Rush Limbaugh was enraged at the Pope’s words, so he called the Pope's ideas "pure Marxism."  Ha!  Jesus was then the first Marxist?

Great economic thinkers weigh in below, and their perspectives are synthesized with those of arcane but insightful economic theorists like Hyman Minsky and Arthur Cecil Pigou.  Important Big Picture ideas are also explored that relate to democracy, capitalism, socialism, taxation, the financing of government activities, deficit spending, proper accounting, common sense incentives and disincentives, and systemic corrupting influences.  And recommendations are provided for smarter plans to really improve our societies. 

An Introspection into Rational Rationality

Our decision-making about the best courses of action to pursue is dominated by a condition known as “rational irrationality”.  This is the unfortunate situation where rational actions, from points of view of individual choices, lead to outcomes in aggregate that are irrational.  As Garrett Hardin almost poetically opined in his 1968 article, The Tragedy of the Commons, “Ruin is the destination toward which all men rush, each pursuing his own best interest in a society that believes in the freedom of the commons.”

The true tragedy of the commons is that intently-focused special interests are driven to exploit the commons, damaging and depleting them, while all other interest groups are much less focused on ensuring that commons areas are adequately protected and best managed for the longer-term greater good.

Ideas promulgated by economists and politicians powerfully affect people’s lives and our societies.  Good ideas are becoming ever more urgently important in our world, beset as it is by financial crises, high unemployment, record levels of poverty, growing inequities, a continuing rapid growth in human numbers, and economic activities that deplete resources, damage ecosystems, and contribute to the disruption of normal precipitation and weather patterns.  In contrast, bad ideas, and ones that are misguided and inflexibly applied, can lead to disastrous consequences.

The bottom line is that a civilizing sense of social cohesion requires us to manage our societies more fairly and more intelligently.  This is the secret!  The Common Sense Revival and the ideas in Part Four of the Earth Manifesto online contain numerous specific ideas on how humanity should be improving our societies, heeding ecological understandings, and coping effectively with the valid concerns of ecological economists and other visionary thinkers.  Check out these compendiums of ideas!

Germinating Idea

There are exceptionally stupid laws in every county and every state and every country.  Let’s all agree to demand that our representatives in the United States work to get rid of the worst ones!  In Happy Harbingers in Good Ideas for a Better Future, the creation of an Office of Public Integrity is proposed.  Its mission would be to establish a system of Citizens’ Civil Grand Juries in every county and state in the U.S., along with a federal Civil Grand Jury.  One of the responsibilities for these bodies of citizen volunteers could be to solicit input from all citizens as to which are the stupidest laws in effect in their jurisdiction, and these Civil Grand Juries should be given the responsibility of assessing the merits of the laws suggested as the most stupid.  These Juries should use the criteria of comprehensive considerations of the negative consequences of the laws, both intentional and unintentional.  The Civil Grand Juries should be authorized to submit their findings to appropriate officials who would be expected to deliberate and take action to get rid of such laws.

If we let up on the masses a bit more with less opprobrious laws, this strategy would make everyone more secure.  Let’s pass a national minimum wage law starting at $12 per hour immediately, indexed to inflation for annual increases.  Let’s honestly debate the value of investments in people rather than in the padded bank accounts of those who get the most in our society.

The Shifting Meaning behind our National Motto

Perhaps we might meditate for a moment on our national motto until 1956, E Pluribus Unum, or “Out of Many, One.”  I feel strongly that everyone in our country would find it advantageous if we all worked together to find good ways to resolve the serious problems we face.  It is a sad fact that our national motto was changed in 1956 to In God We Trust.  This motto carries a much different message than “Out of Many, One.”  The change makes it seem as though we value disunity and discord more than unity in our nation today.  Yet it has been recognized since the days Aesop, the ancient Greek story teller, that “United we stand, divided we fall.”  Uncompromising partisanship and ideological extreme conservatism are likely to augur poorly for the future well-being of our country.

Notably, God is proving to be untrustworthy to keep peace between the faithful of various religions, or between nations.  It is curious that this change in our national motto took place just two years after the phrase “under God” was added to America’s oft-recited Pledge of Allegiance.  This change was made in reaction to perceived menaces of “godless Communism”, but it unfortunately also signaled a turning away from our founding roots in religious tolerance and the separation of church and state.  The Religious Right in the past 50 years has been acting as though it can provide a tautological proof that our Founders were Christians who believed that their particular obedience-demanding Almighty God is meant to rule supreme, and that ‘He’ is a staunch conservative.

If we really want liberty and justice for all, we need our leaders in Congress to represent the greater interests of all Americans, and not just moneyed interests who corrupt our politics and public policy decision-making by giving politicians big bucks to finance their election and reelection campaigns.  Moneyed interests generally have very narrowly self-interested agendas, and they demand high-end tax cuts, more corporate perks and subsidies, less collective bargaining power for workers, and increased private profits by being allowed to continue to foist costs onto society.  They also tend to want less public-interest regulation and oversight, fewer requirements for accountability, and no limits on campaign finance contributions, so that they can continue to jerry-rig the system even more outrageously in their favor.  I believe that liberty and justice for all would be much better guidance!

What Form of Governance Would Be Best?

No nation has ever actually tried libertarian rule, perhaps proving that societies need regulations and rules of law and adequate revenues and a reasonably balanced role for government to ensure the greatest public good.  Germany, Japan and many other countries tried fascist governance in the past century with authoritarian rule and close government ties to financiers and industry, but this mode of rule was clearly disastrous and reprehensible because it involved horrific repression and tragic wars of aggression and tens of millions of people killed.

The Soviet Union, China and many other countries have tried communistic governance, but it turns out that planned economies allocate resources according to dictates that do not fairly reflect supply and demand, so they tend to be inefficient, bureaucratic, inadequately flexible, and poorly capable of competing with capitalist economies.  Market sensitive and relatively competitive economic systems have demonstrated a definite ability to outcompete centrally planned ones.  That’s one reason that communist China has unleashed its huge population on cutthroat competition capitalist-style. 

The Soviet Union made a heroic effort to compete militarily with the U.S. during the Cold War, and it kept up well enough to contribute to the endangerment of the world a hundred times over with its nuclear weapons and mutually assured destruction (MAD!) geopolitics.  To accomplish this, the Soviet Union had to skimp on things like education, national infrastructure and social safety net measures.  This caused the Russian people a wide variety of terrible privations, and even worse ones when their system eventually collapsed and their Union fell apart.  Some Russians are really, really rich these days, but their fragmented union is still much worse for its costly Cold War emphasis on militarism.

Since market economies are quite effective in utilizing people’s self-oriented motivations, the best plan generally involves encouraging free market policies and making smart use of market forces to achieve common good objectives.

Free market economies are afflicted with their own serious shortcomings.  For one, demand is artificially stimulated through aggressive advertising and promotion, so people’s desires are skewed into a grotesque caricature of sensible consumption and resource usages.  Allocations of resources are distorted because materialistic consumerism is stimulated to the detriment of conservation and moderate resource usages and more spiritually enlightened purposes for living.

Another cause of failure of capitalist systems is found in the periodic economic slumps, recessions and depressions that are associated with bubble economic policies.  These economic disasters harm millions of people and leave large numbers of people unemployed for long periods of time.  The overwhelming influence of the profit-prepossessed military-industrial complex also significantly distorts our national priorities.

There are always economic trade-offs and unintended consequences in all policy decisions.  These and many other issues are explored below.

A Declaration of Inter-Dependence

John Muir once said that when you tug at any single thing in nature, you find it attached to the rest of the world.  Filmmaker Tiffany Shlain and the Moxie Institute have elaborated on this idea in the excellent film, Connected: An Autobiography About Love, Death, & Technology.  Watch this film to get a good idea about its biographical perspectives on the great philosophic physician, Dr. Leonard Shlain, whose four books I admire deeply.  The film is available on Netflix.

Here is an entertainingly apt description of Ms. Shlain by newspaper columnist Leah Garchik:

Filmmaker-philosopher Tiffany Shlain, whose work reflects a “Poor Richard’s Almanac” sensibility -- here’s a good way to live your life … is a dazzling blonde in a fedora, with assertive lipstick.

With that image in your mind, consider that Tiffany Shlain is also creating a film series advocating positive global change.  The first film in the series expanded on the last line of Connected:  “For centuries we’ve declared our independence.  Perhaps it’s now time we declare our interdependence.”

The Moxie Institute created a Declaration of Interdependence to give us pause to realize how very important it is to recognize our interdependence with each other and with the healthy ecosystems that are the foundations of our well-being.  These tenets are vital for creating a better future.  I recommend that everyone watch the Cloud Film Declaration of Interdependence.  Let it ripple!

Contemplate the ideas in the script of this short film:

        A DECLARATION of INTERDEPENDENCE

When in the course of human events, it becomes increasingly necessary to recognize the fundamental qualities that connect us,

Then we must reevaluate the truths we hold to be self-evident:

That all humans are created equal and all are connected.

That we share the pursuits of life, liberty, happiness, food, water, shelter, safety, education, justice, and hopes for a better future.

That our collective knowledge, economy, technology, and environment are fundamentally interdependent.

That what will propel us forward as a species is our curiosity, our ability to forgive, our ability to appreciate, our courage, and our desire to connect …

That these things we share will ultimately help us evolve to our fullest common potential.

And whereas we should take our problems seriously, we should never take ourselves too seriously.

Because another thing that connects us ... is our ability to laugh ... and our attempt to learn from our mistakes.

So that we can learn from the past, understand our place in the world, and use our collective knowledge to create a better future.

We can make the future whatever we want it to be.

So perhaps it’s time that we, as a species, who love to laugh, ask questions, and connect ... do something radical and true.

For centuries, we have declared independence.  Perhaps it’s now time that we, as humans, declare our interdependence!

Why Win-Win Philosophies Are Better than Win-Lose Ones or Lose-Lose Ones

It is easy to overlook the extent to which in-group cooperation was a crucial part of survival for clans of our ancestors throughout the long evolutionary history of our kind.  It is true that our instincts evolved in situations involving stiff competition for food and the best mates, but our instincts also evolved in contexts of competition between social groups.  Natural selection favored groups that worked together for the greater good of their group as a whole.  Behaviors that involved cooperation were integral aspects of our survival and prospering as social creatures. 

It is provocative to consider the insightful realization of the famous psychotherapist Sigmund Freud about our deepest motives:  “It is impossible to overlook the extent to which civilization is built upon a renunciation of instinct.”  He was talking about the renunciation of aggression, selfish greed, and promiscuous sexual instincts, not the more collaborative impulses that are explored in modern day books like Steven Pinker’s The Better Angels of Our Nature.  Ironically, Sigmund Freud had developed theories about repressed sexual drives in our unconscious minds, and yet he indulged in a very close long-term relationship and possible sexual affair with Minna Bernays, the younger sister of his wife.  Nice going, Dr. Freud!  Shouldn’t he have been more virtuous in sublimating those impulses?!

Human societies have gone through a civilizing process over the millennia as human numbers have increased.  Many growing pains have been associated with the hundreds of millions of people who have moved from rural environments to urban ones.  The civilizing process has involved a gradual inhibiting of people’s anti-social impulses, and has featured the development of more keen abilities to anticipate longer-term consequences of actions.  In addition, civilizing processes have involved growing empathic sensitivity and willingness to take into consideration other people’s thoughts, feelings, perspectives and human rights.

As societies grow more civilized, people coexist with each other through an improving degree of self-control, empathy and mutual respect.  These qualities are born of Golden Rule considerations, and not merely through fear of punishment by authorities or deities.  Civilizing influences include the control of appetites and extreme emotions and the suppression of violent impulses.  People become more and more civilized when they are willing to delay gratification to achieve more important goals and give greater consideration to the sensibilities and natural rights of others. As civilizations grew and developed, so did an awareness of cultural guidelines of moral conduct and hygiene and “campfire etiquette”.  A recognition also came about that it was socially desirable to avoid rashly unhinged inhibitions and episodes of dangerous emotional hijackings and related violence. 

Sigmund Freud observed in his seminal work Civilization and Its Discontents that the fundamental tension between civilized society and individuals stems from the individual's quest for freedom and contrary demands of civilization for people to conform, to repress instinctual drives, and to avoid harms to the well-being of human communities and common resources.

Civilizing influences are promoted by public policies such as the reasonable governance of a nation by means of a system of fairly formulated laws.  Also, there is a mutual utility involved in fair trade and commerce between people that has made these activities largely positive influences that have contributed for centuries to making our societies less cruel, barbaric and violent.  The result of all these civilizing influences, according to Steven Pinker, was a curious outcome:  “A culture of honor -- the readiness to take revenge -- gave way to a culture of dignity -- the readiness to control one’s emotions.”  Hallelujah!

Our societies have always been powerfully influenced by both zero-sum games and positive-sum interactions.  Zero-sum games are those in which one person’s benefit is another person’s loss.  In contrast, positive-sum interactions are situations where people make choices that improve the lots of both parties at the same time. 

Positive-sum relations shift incentives from one-sided selfish gain to a more mutualistic, empathetic and sane utility in which both sides benefit.  Specialization and exchanges of mutual benefits in commerce were accompanied by the development of safeguards that were required to prevent people who had the capacity to be ruthlessly selfish from exploiting all others at the expense of the whole.

A key insight of evolutionary psychology is that human cooperation and the social emotions that support it -- like trust, empathy, sympathy, gratitude and guilt -- were naturally selected for, over many generations, because these qualities allowed people to flourish in mutually beneficial positive-sum interactions within their own clans and in-groups.  This conferred a definite survival advantage over other groups that had more fiercely competitive and individualistic-oriented characteristics.

Human relations have unfortunately too often been dominated by win-lose gamesmanship.  These zero-sum games include ruthless monopoly practices and arrogant plunder and predatory exploitation and aggression in warfare.  Some of the worst of these zero-sum situations are so-called “social traps”.  In a social trap, a group of people acts to obtain short-term gains for themselves that lead to a net cost for the group as a whole in the long run.  Classic social traps include “tragedies of the commons” conditions like overfishing, the mindless extermination of wildlife, overgrazing of cattle on fragile lands, and the destruction of rainforests by logging and agricultural interests.

The most pervasive and negative social trap of all is that of wealthy people who unrelentingly pursue their own self-interest at the expense of the greater good of the whole.  Politicians who pander to these rich people help them exacerbate this inegalitarian and ill-advised national dilemma.

In capitalist economies, a fever pitch of competition pits business owners and speculators and wealthy people in a triumphalist struggle against reasonable prerogatives and fair treatment of those who work for a living.  Unfairness in competition arises and becomes worse with monopoly practices and corrupting abuses of power by people vested in anti-social selfish advantages.  In the process, social justice and the overall security of the citizens of a nation are undermined.  It seems to me to be an exceedingly poor plan to put policies into place that effectively force the vast majority of people to be excessively busy, and to subject them to high levels of stress by allowing corporations to squeeze workers mercilessly.  It seems intolerably unfair to make the rewards of increasing productivity by workers to be primarily beneficial to business owners, managers and shareholders, and to blatantly deprive the vast majority of workers from sharing more broadly in the fruits of their contributions.

“My role in society, or any artist’s or poet’s role,

  Is to try and express what we all feel. 

   Not to tell people how to feel. 

      Not as a preacher, not as a leader, but as a reflection of us all.”

                                                                                                        --- John Lennon (1940 – 1980)

A Call for a New Square Deal

The exuberant ‘Rough Rider’ Republican leader Theodore Roosevelt advocated “Square Deal” policies during his presidency in the early years of the 20th century, during the last decade of Mark Twain’s life.  Distinct parallels exist between economic conditions back then and those today.  In Roosevelt’s day, corporate entities like railroad conglomerates and big oil companies abused their influence in monopoly-like manners to quash competition, exploit workers, and foist a long litany of harms upon society. 

Today, banks and corporations have sprawled across all international boundaries around the planet and gained so much power that they can now declare themselves to be “persons” in the U.S., supposedly pursuant to the Fourteenth Amendment.  This claim serves to give them valuable rights like those of ‘due process’ and ‘equal protection’ under the law.  Since corporate persons tend to be picky and choosy about what ethics they subscribe to, they claim they should be accorded the overarching right to maximize profits, minimize tax obligations, and receive limited legal liability for wrong-doing and harms to other real people.  These rights inadvertently mean that everyone else in society has their fair rights circumscribed.

Theodore Roosevelt presided over a “trust-busting era” in which many large businesses were broken into smaller and less powerful organizations so that they would be less capable of abusing the power of their size.  Inequities between wealthy people and working class people had grown more and more pronounced, so Square Deal policies were designed to curb abuses of power by corporate entities and root out corruption and reduce the excessive exploitation of workers, farmers and consumers.  As a part of his Square Deal, Roosevelt also laudably strived to ensure that resources were conserved and great tracts of valuable public lands were protected. 

A new Square Deal is needed with similar goals in the world today.  This initiative should be designed to assure people reasonable rights within guidelines that include fair-minded responsibilities to every person in society and all people in future generations.  To overcome injustices associated with the entrenched status quo, a sustained movement is needed that will create an effective coalition with principled leaders.  Occupy Movement protests in 2011 helped inspire a national conversation about current extreme levels of inequality, and they focused attention on efforts to increase economic fairness. 

The anger and hope of similar movements should now be channeled into strategies that will forge a new political and economic order.  We should all hope that the forces of decency and humanity will prevail over those of reaction, discrimination, polarizing divisiveness, pigheadedness and inequality.  The compelling and well-conceived documentary film Inequality for All promises to advance this vital awareness by sharing Professor Robert Reich’s poignant perspectives.  So does the overriding theme of Thomas Piketty’s Capital in the Twenty-First Century.

A modern new Square Deal should emphasize a reduction in the concentration of wealth in the hands of the top 1% of Americans.  It should strengthen the middle class and address the fact that more than 46 million Americans are living below the official poverty level, as reported by the U.S. Census Bureau for 2010.  This is the highest number of people in the 52 years that the Census Bureau has been publishing figures on poverty.  It is shameful that our society has been reduced to such a degree of degradation for so many.

A recent study of the status of women in the U.S. reveals that the worst six states for women, in terms of average pay, barriers to reproductive health care, and under-representation in leadership, are Louisiana, Utah, Oklahoma, Alabama, Mississippi and Texas.  An average of 28% of women in these states do not earn enough to lift them out of poverty.  Sadly, all these states are dominated by Republican politicians who hew to conservative orthodoxy, and thus prevent women from being accorded fairer treatment.  There is plenty of shame in the ranks of politicians to go around!

We should remember the important understanding expressed by Franklin D. Roosevelt:  "We cannot be content, no matter how high the general standard of living may be, if some fraction of our people -- whether it be one-third or one-fifth or one-tenth -- is ill-fed, ill-clothed, ill-housed and insecure." 

Note that women are vitally important parts of families, so it makes sense that they should be treated more fairly.  Alert!  The Global Gender Gap Report 2014, published by the World Economic Forum, has found that the U.S. ranks 20th in gender equality in the world, far behind Iceland, Finland, Norway, Sweden and Denmark, the nations that treat females most fairly. This Index measures gender equality by studying the relative gaps between women and men in terms of four key areas: educational opportunity, economics, health care and political representation.  I call for all citizens in the U.S. to become more enlightened by acting boldly to improve the status of women in these arenas.

Part of the reason that the U.S. rates so low, curiously, is because of “The Caveman Dilemma”, as Greg Hanscom explains in “Why We Take Such Lousy Care of Ourselves and the Planet.”  As it turns out, collective action is required to help us make choices that are in our own greater self-interest.  We need, as a society, to help induce people to do what is right.  And government should be on the side of people’s best interests, because traditional cultural conservatism undermines the principles of gender equity, and people are too easily swayed by stereotypes and established biases.

All these ideas are consistent with rallying cries of feminists and sensible ecological economists and people involved in protest movements like the indignados in Madrid and the Occupy Wall Street protestors in New York City and their philosophical kin around the planet. 

Wealth Inequities

Another disparity between Americans highlights the extreme level of unfairness in our economic system today.  It is the “intergenerational wealth gap”.  According to an analysis done by the non-partisan Pew Research Center, the wealth gap between older and younger Americans has widened sharply in recent years.  The average net worth of people over age 65 increased by 42% between 1984 and 2009, while the average net worth for those younger than 35 years decreased by 68%.  The average net worth for those between the ages of 35 and 44 went down by 44% during this period.  These trends are exceedingly unfair. 

These statistics confirm that the interests of older people have been given significantly more weight than those of younger ones.  Meanwhile, we are piling up unfunded liabilities and risky levels of national debt and large interest expense obligations.  These will be heavy burdens on people in future generations, and they will radically increase the inequities our descendents will face in the future by forcing them to effectively start their lives with an ever-increasing negative net worth.  These trends are colossally unfair, retrogressive and ill devised, and thus misguided and socially undesirable. 

It personally irks me to see that we are ramping up the real estate market once again, causing rapidly increasing inflation in home costs in many places.  This makes it ever more challenging for renters and first-time homeowners, two categories of people who are disproportionately young.  The smartest plan for any society would be found in farsighted investments made in its young people.  Like in their heath, their educations, their living situations and their overall well-being!

 “If you think education is expensive, wait until you see how much ignorance costs in the 21st century.”

                                                                                                                              --- President Obama

God’s Own Trumpet Sounds for Greater Good Goals

Our courageous forefathers famously declared in 1776 that when a form of governance becomes destructive of the “unalienable rights” of its citizens, it is their right and indeed their duty to alter that system and lay new foundations based “on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.”  When our economic and political systems facilitate “a long train of abuses and usurpations”, they simply must be changed.  Common sense tells us that NOW is the time to begin to revolutionarily alter these systems.

The days figuratively run past like wild horses over the hill.  Ecological “tipping points” appear to be approaching that could push us toward abrupt changes in environmental conditions.  And social “tipping points” appear to be stoking revolutionary discontent and outrage over increasing inequality, especially in destabilizing movements like the so-called Arab Spring.

Our Founders championed the honorable ideals of the Enlightenment Era.  These included a measure of equality of rights for all, along with a recognition of the vital importance of the general welfare.  In pursuing these goals, they tried to create a fair system of representative government of the people, by the people and for the people.  This was a brilliant idea, but the system they established was unfortunately susceptible to becoming entrenched against fundamental reforms.  In many ways, the gap between our country’s ideals and its reality seems to be growing wider and wider.  It is time today for us to unshackle our imaginations and reject discredited ideologies, and to overcome the corruption inherent in the influence of Big Money in our politics. It is time for We the People to collaborate together with both determined idealism and grounded pragmatism, and to begin honestly building healthier, fairer, and more fiscally and ecologically sound societies. 

Likewise, all people around the globe should strive to make their countries fairer so that they will have sturdier foundations, and thus help ensure they will more likely be sustainable far into the future.  I call on the ruling interests in every nation to accept progressive adaptive reforms and help set their peoples on more auspicious paths toward satisfying the intentions of General Welfare clauses like that in the Preamble to the U.S. Constitution.

A Call for Fairer and More Progressive Taxation

Regressive changes in our system of taxation tend to concentrate wealth and increase disparities between the fortunes of the Few and the Many.  This results in increases in inequality that make everyone in society less secure.  Poor people and those in the middle class become less secure in economic terms because their struggle is made harder to pay for safe housing, good nutrition and adequate healthcare.  The rich become less secure because a heightened impetus develops in society toward stress-engendered conflicts, crime, and excessively costly repression and incarceration.  More money is consequently needed for police forces and prisons to enforce this inegalitarian state and to defend against increasing impulses toward revolutionary change.  More money is also spent on wars to distract people from a lack of fair opportunities, and from the daunting existential dilemmas associated with our unfairly rigged and gimmicky econopolitical system.

Occupy this thought: The rich have pressed their luck too far by abusing the power of their influence to get the lowest tax rates in generations at a time of record debt and wide-ranging socioeconomic crises.  We should now take action to make sure that the Bush tax cuts on all earnings in excess of $250,000 are ended.  By restoring tax rates to the levels that pertained during the Clinton era for all annual earnings above $250,000, future deficit spending could be significantly reduced.  We simply cannot afford to borrow more money to allow the richest 2% of Americans to hoard it and let them pay historically low tax rates.  Such gambits come at the expense of the other 98% of Americans, and of all persons-to-be in future generations.

Business magnate Warren Buffet once provocatively suggested that federal budget deficits could be ended “in five minutes.”  Here’s what he suggested:  “You just pass a law that says that anytime there’s a deficit of more than 3% of GDP, all sitting members of Congress are ineligible for re-election.”  Of course our representatives would never pass such a law unless there was intense and unified pressure from their constituents.  Shall we?  The point, in any case, is that a law like this would put the incentives in the right place to help deal with the risky, unfair and foolish expediency of record levels of deficit financing.

A practical five-year plan to dramatically reduce federal budget deficits is articulated in One Dozen Big Initiatives to Positively Transform Our Societies.  See the Fiscal Responsibility Act under the heading Balanced Budgets Initiative.  This plan would be highly effective in reducing federal deficits because it would give the primary deciders in our econopolitical system -- wealthy people, CEOs and top managers in banks and big corporate entities -- a powerful motivation to demand that politicians actually move toward fairly balancing the national budget. 

One observer has noted:  “Time and again we have proven incapable of addressing major national concerns without the boot of acute crisis bearing down on our necks.”  This is true, and yet today, as we struggle to emerge from the throes of the most severe economic crisis since the Depression of the 1930s, gridlock prevails in our politics.  We seem to be incapable of making fundamental changes like fair-minded campaign finance reform and more strict lobbying restrictions.  We have been unable to make really smart changes to our banking system like restoring the sensible Glass-Steagall Act to eliminate conflicts of interest between the activities of depository banks and investment banks.  No serious efforts have yet been made to reform the Commodities Futures Modernization Act of 2000 to sensibly regulate the risks of financial derivatives that contributed to the severe credit crisis of 2008 and on-going economic instability in Europe, the U.S. and many other countries.

We also seem incapable of sensibly improving our highly unfair and costly healthcare system.  Our political representatives have adamantly refused to create a single payer universal healthcare system, and they have denied people the freedom to buy a public option that would compete with profit-prepossessed, coverage-denying plans sold by the health insurance industry.  We have been unable to rein in the ludicrously profitable Big Pharma industry with all its predatory marketing schemes and obnoxiously aggressive advertising and powerfully influential lobbying.  Our leaders are reluctant to seek common ground to reform our fragmented immigration and labor policies.  And we are collectively failing to invest adequate amounts in important infrastructure maintenance and improvements. 

In addition, many schools are deteriorating and student debt is becoming burdensome to a ridiculous extent.  Interest rates on student loans are too high, and bankruptcy laws related to student loans are downright medieval.  We are failing to take smart steps to prevent a looming eventual insolvency of the Social Security and Medicare systems.  We seem to be unable to pass an adequate climate protection bill, or to come up with a rational national plan for independence from our addiction to wasteful and polluting uses of fossil fuels.  And we are proving to be incapable of rationally limiting budget deficits caused by our expedient propensities to borrow money to finance wars and give people tax cuts and bailout the economy and give vested interest groups more perks. 

These issues must be boldly and honestly addressed!  The Earth Manifesto points the way.

Reflections on Recent History

After the first 12 years of the 21st century finally staggered into the history books, I observed:  “Wow, what a doozy they have been!  First the terrible 9/11 terrorist attacks took place, and then a colossally costly and unending global ‘war on terror’ ensued in reaction.  Economic bubbles in technology stocks and real estate and oil price speculation were inflated and then burst, and there was even a bubble in the prices of contemporary art.  Globalization trends intensified as the economies of China and India grew at very rapid rates, and millions of jobs in manufacturing were lost in Western nations to cheap labor competition overseas.  Environmental impacts of fast growth in consumption and increasing rates of resource exploitation became more distinctly detrimental.  Devastating hurricanes, floods, droughts, wildfires, earthquakes and tsunamis wreaked havoc in many areas.  And the population of human beings on Earth experienced a net increase of more than 800 million people.”

Remember that an economic meltdown began in December 2007 and reached its worst point in late 2008, and it still distinctly impacts the global economy as the year 2015 unfolds. Think of it!  We have been living through one of the most sensational and scandalous debacles in the history of capitalism, and in many ways it has been an “Inside Job”.  Laissez-faire “free market” capitalist ideologies took a blow as unprecedented interventions by governments worldwide were necessitated to get credit flowing again to prevent another Great Depression.  Bank losses and write-offs exceeded $1 trillion.  In addition, Western governments committed an amount in excess of $10 trillion to shore up their financial systems, according to estimates made by the International Monetary Fund.  About half of this astonishingly large cost came in the form of direct financial commitments, and the other half in various kinds of guarantees and insurance schemes. 

Despite all these emergency measures, tens of millions of people lost their jobs and many people lost their homes or a significant portion of their retirement savings.  The enormous costs of this economic bust are being foisted upon workers, taxpayers, and people in future generations who are being obligated for gigantic liabilities and unprecedented levels of debt.  This outcome is exceedingly unfair, so we should boldly change course from the policies that contributed to this state of affairs.

Our economic system obviously does not work adequately well when it fosters boom and bust cycles that force people to shoulder the burdens of the bust who are different from those whose rash leveraging of risks contributed the most to economic cataclysms.  Even worse, the adversities affect almost everyone, while the perks and rewards have gone primarily to the culprits who have profited the most from the inflation of economic bubbles. 

Since tens of millions of people have been hurt by the economic turmoil, it seems absurd to allow big bonuses to be paid to the CEOs and managers whose risk-taking decisions contributed to this disastrous outcome.  Our Congressional representatives, the President, the business community, and shareholders take heed!

There is much to be thankful for in the world, but this is certainly not the “best of all possible worlds” that Dr. Pangloss wryly postulated in Voltaire’s famous short story, Candide.  We could, however, work together to create a much better world, and the ideas in the Earth Manifesto suggest a wide range of salubrious ways to achieve this good goal.

A Clarion Call for Reform

Journalist John Cassidy wrote a book titled How Markets Fail: The Logic of Economic Calamities.  In this book, Cassidy points out the need for fundamental reforms in our economic and political systems.  He sagely observes that it is not enough to merely tinker with the status quo.  Our systems are structured in ways that ensure the perpetuation of the status quo, or even worse, they facilitate changes in the way things are that benefit entrenched interests at the expense of the greater good.  Consequently, our systems are dysfunctional, and it is proving to be much too difficult to reform them, making it increasingly important for us to collectively demand that our econopolitical system is more fairly and honestly restructured.

Everyone can see that there are many serious problems that need to be solved.  To fairly cope with these daunting existential challenges, an accurate and comprehensive understanding of problems must be developed.  The relative importance of items in our hierarchy of priorities should be rearranged appropriately. And it is becoming increasingly urgent for us to focus our energies and allocate resources accordingly.

Albert Einstein once wisely observed, “We can't solve problems by using the same kind of thinking we used when we created them.”  Einstein also noted that it is insane to do the same things over and over again and expect different results.  So, let’s get creative!

The existentially challenging problems we face include a wide range of environmental dilemmas and a variety of complex conundrums related to social justice, peaceful coexistence, true fiscal responsibility and proper long-term priorities.  We should deal more fairly with poor people to reduce the record number of people living in poverty.  We should minimize undue interferences by the government with people’s personal liberties.  And we should give overarching consideration to critical needs for giving greater respect to our beautiful home planet’s ecological commons.  To solve these problems, a sustained and passionate commitment to the greater good is required.

“Technique in art is like technique in lovemaking:  heartfelt ineptitude has its charms, and so does

     heartless skill, but what we all really want is passionate virtuosity.”

Awareness of the Population Connection

Ecology is a comprehensive field of study that looks at broad inter-relationships between plants and animals and ecosystems.  Ecology takes into account the impacts of human activities on natural habitats, and it cultivates perspectives that are longer-term oriented than the current short term-oriented ideologies that dominate our economic system.  Ecological understandings are basically more valuable ways of comprehending our species’ inter-relationships in the struggle to prosper and pursue meaning and find happiness and live healthy lives.

Economic growth is the overriding goal of most economic policies.  Growth is stimulated, in part, by continuous increases in the number of people on Earth.  From a long-term point of view, economic growth is structured like a mega-Ponzi scheme predicated on a growing population and an increasing consumption of goods by each person.  This ‘plan’ cannot continue indefinitely, so we should get our economic house in order and heed the insights of ecological economists!

    “Living is easy with eyes closed
          Misunderstanding all you see.”

                                                      --- John Lennon, The Beatles, Strawberry Fields

We can no longer afford to misunderstand all we see.  As of July 2015, there are more than 7.3 billion people on Earth.  Within less than 12 years, there will be EIGHT BILLION.  By about 2040, current trends indicate the global population will reach NINE BILLION.  This means much more than terrible traffic!  There will be a greater intensity of competition in the struggle to survive and get ahead.  This will cause an escalating rate of resource exploitation, and limits will become more viscerally clear.  More serious environmental problems will become increasingly apparent.  Associated worsening poverty will make it likely that more people will go hungry and engage in violent conflicts.  These global challenges loom before us like a tsunami gathering force and magnifying its deadly potential as it approaches the shore.  This wave seems to be converging toward a crescendo, as if a Rapture-mad deity is wrathfully working itself into a frenzy.  But folks, the cause of this danger is not God, it is us!

Compelling correlations exist between the rapid growth in human population and the long litany of daunting environmental challenges that face us, as articulated by organizations such as the Cousteau Society, the Natural Resources Defense Council, and Population Connection.  I strongly recommend that readers consider the ideas of Professor Jared Diamond in his insightful book, Collapse: How Societies Choose to Fail or Succeed.  Diamond’s observations about the depletion of native forests and other natural resources by the people of Easter Island, and similarly myopic actions by other ruined civilizations throughout history, make it clear that we would be wise to give much more serious consideration to the implications of our own similar courses of action on island Earth.

It is startling to realize that more than 200,000 people died in a tragic earthquake in Haiti on January 12, 2010, and yet they were in effect ‘replaced’ in total number on Earth in less than one day.  The number of human beings alive has increased by more than 70 million each and every years since 1965.  This is stunning!  And it is surely not a sustainable trend for much longer.  We should find ways to restructure our economies and societies worldwide so that we are effective in reducing the growth in the number of people on Earth.  This would be a smarter strategy than marching lockstep toward terrible tragedies when we have exhausted resources and irreversibly damaged the vital ecological foundations of our well-being. 

Thomas Paine was eminently wise to suggest that the best way to confederate and embrace all the various competing interests in a nation would be through a representative democracy that fairly takes ALL interests into account as best possible.  Shall we try it?!

We surely should give people in the future much greater consideration and respect by committing our nation to the overarching principles proposed in a Bill of Rights for Future Generations.

A Valuable Insight into Competing Interests

Professor Robert Reich is the former Secretary of Labor who discusses in detail a distinct conundrum of human behavior in his insightful book Supercapitalism.  As consumers, we generally want cheap prices and good deals.  By providing such things, companies like Wal-Mart and CostCo have been remarkably successful.  At the same time, people in their roles as speculators and investors want the best possible returns on investments.

In contrast, as citizens we value things that are often contrary to what we want as consumers and investors.  We want, for example, healthy communities and expanded social justice and safeguards of our liberties.  We want good quality public education that is affordable, and a fair shake for workers.  We want reasonable access to health care for all.  We want at least a minimal social safety net, and a modicum of security in retirement, and equitable institutions, and peaceable coexistence.  We want clean air and clean water, and protected parks, open spaces, public lands, wilderness areas and biological diversity.  And we want a stable economic system with credit adequately available at a fair cost. 

In summary, as consumers and investors we do NOT want products and services to contain all of the costs of a healthy society, because we want prices to remain low and profits to be high.  As citizens, however, we DO want prices to include the fair and sane treatment of workers and communities and the environment.  Over the last few decades, things have generally gotten better for consumers and investors, but they have gotten worse with regard to good citizen goals and long-term considerations. 

This way of looking at our economy makes it clear that the competing interests we should be trying to “confederate” are not just some clear-cut strife between “us and them”, but a conflict between the goals within each and every one of us.  Recognizing this, it is crucial that we begin to require the inclusion of all production costs in the prices of goods and services, so that consumers will pay a little more for them and investors will receive a little less return on their investments, but assurances will be made that common good goals will have a better chance of being achieved.

A Big Perspective on the Failings of the Capitalist System

There are a variety of shortcomings of capitalist economic systems.  Cyclical periods of rash risk-taking and irrational exuberance are followed by periods of fear-dominated risk aversion.  These are defining characteristics of our Bull and Bear markets.  Volatility tends to generate bigger fees for Wall Street firms, and this makes these vested interests wealthy and powerful.  Other problems arise in addition to the propensity within capitalist market systems to create destabilizing economic booms and busts and to stimulate the unsustainable depletion of natural resources and environmental degradation.  Capitalist systems have a socially irresponsible tendency to create ever-more extreme concentrations of wealth and power in the hands of a small minority of rich people, and this money is allowed to buy influence and power, effectively subverting democratic fairness principles by seducing politicians into doing the bidding of wealthy people at the expense of the greater-good interests of the vast majority of all others. 

These dynamics of capitalism are facilitated by socially unfair activities in which big profits are privatized while many costs are socialized and environmental protections are ignored or violated.  It is precisely because money is allowed to buy so much influence that our national policies are so skewed to benefit the few at the expense of the many.  Rich people, giant corporations and established interests manipulate our democracy to the detriment of small businesses, innovative entrepreneurs and the majority of Americans, as well as all people in future generations.  This is how the system works, NOT just how it fails.

Politicians often carry out a charade of pretending to be working to redress national problems, when in fact they are pandering to financial and commercial interests to which they are beholden.  As a consequence, they expend most of their energies striving to protect the status quo and give entrenched interest groups even more advantages.  This could and should be changed!

The overwhelming majority of Americans are members of the Many.  Together we have the collective power to demand the formulation and implementation of policies that would strengthen the middle class and make success easier for entrepreneurs and small businesses, and also serve to alleviate the hardships of the poor.  Simultaneously, we could ensure that our nation provide at least a minimally secure social safety net of health care and affordable retirement.  And we could make sure that sensible precautionary principles are followed, so that the environment is reasonably protected.

To accomplish these goals, much of the propaganda of giant corporations and right-wing think tanks should be rejected.  In their place, we should cultivate clearer visions of the nature of human impulses and social institutions, and political policies, and economic exigencies, and ecological truths.  And we should demand action that is consistent with these larger visions.

“In the nineteenth century, anti-capitalist critics like Marx insisted that economics must be contained within an ethical context;  they contended that social justice counted for more than industrial efficiency or private profit.  In the late twentieth century, the environmental movement is trying to teach us that both economics and ethics must be contained within an ecological context.”

                                        --- The Voice of the Earth, An Exploration of Ecopsychology, Theodore Roszak

A Vast and Rash Uncontrolled Experiment

A compelling point is contained in the Earth Manifesto treatise Comprehensive Global Perspective: An Illuminating Worldview:

The worldwide impacts of human activities have never been as all-encompassing as they are today.  The course upon which humanity is embarked has many parallels in history, but at the same time it is unprecedented in global scope.  Technological and demographic changes are affecting societies and the natural world with a broad scope -- and an accelerating speed.  

We are all inextricably involved in a rash uncontrolled experiment in (1) industrialization, (2) urbanization, (3) stimulated consumerism, (4) profligate resource use, (5) rapid population growth, (6) large-scale monoculture agriculture, (7) economic globalization, (8) excessively high levels of deficit spending, (9) asset speculation, (10) financial deregulation, (11) inegalitarian social policies, (12) status-seeking behaviors, (13) divisive political strategies, (14) militarism, (15) extensive habitat modification, and (16) the generation of a myriad of pollutants, toxins, wastes and greenhouse gas emissions into the atmosphere.  Almost every other species of life on Earth is affected by this concatenation of activities.  No one knows exactly what the outcome and the consequences of this risky experiment will eventually be. 

To better manage our economic, social and environmental challenges, we should cultivate new ways of thinking, and behave and act with more broad-minded intention.  Strong resistance generally arises in opposition to ‘paradigm shifts’, but when we are able to understand these challenges in bigger-picture perspectives, the opportunities accelerate for achieving important progress and propitious change.  Among the many things that we should unflinchingly reform are socially irresponsible aspects of unbridled capitalism and unfair imbalances in globalization.  National policies that create speculative bubbles should be scrupulously evaluated to preemptively prevent the need for costly bailouts.  We should invest in measures designed to gain independence from fossil fuels.  We should make bold commitments to avoiding hawkish nationalism and imperial aggression.  Sensible and open-minded attitudes should be adopted toward women’s reproductive rights, contraception and family planning policies.  And our electoral system that obeys Big Money over all other influences should be reformed.

Nobel Prize winning economist Joseph Stiglitz writes in Globalization and Its Discontents that globalization has brought huge benefits to millions of people worldwide, but that it has been poorly managed.  Market fundamentalist ideologies have been allowed to hijack good intentions, and the troika of international governance institutions -- the International Monetary Fund, the World Bank and the World Trade Organization -- have set the rules of international economic activities “in ways that, all too often, have served the interests of the more advanced industrialized countries -- and particular interests within these countries -- rather than those of the developing world.”

Joseph Stiglitz observes that globalization should be reshaped to realize its greater potentials for the good of humanity, and that international institutions should be reshaped to contribute to this goal rather than to narrower goals of vested interest groups.  This is smart thinking!

Pope Francis has expressed empathy with marginalized people like those stricken with extreme poverty or migrants who are exploited or females trapped in sexual slavery.  This sale of life and dignity is the dark side of markets, so Pope Francis vividly warns against the “globalization of indifference.”  He is not “a neo-Marxist”, but he makes it clear that market outcomes are not in general socially just, and he calls for public investment in fairer opportunities in the world.  “Absent a moral commitment to human dignity, justice and compassion, capitalism is conducive to materialism, individualism and selfishness.  It is a system that depends on virtues it does not create.”

When we see the bigger picture, it can help us re-evaluate issues, and to be better able to shift our priorities to fairer and more honorable ones.

Lessons Learned from Observations of the Mark Twain Bank in St. Louis, Missouri

We are living in a period when the inherent instability of capitalist economic systems is starkly apparent.  Economists called the international credit crisis in 2008 “a Minsky moment”, after the little-known economist Hyman Minsky who developed a “financial instability hypothesis” in connection with his personal observations as an economist and a director of the Mark Twain Bank in St. Louis, Missouri.  I’m not making this up!

Hyman Minsky noted that stability begets instability in a cyclical progression.  In the early stages of an economic cycle, banks lend cautiously to borrowers, sensibly requiring loans to be collateralized safely with pledges of underlying assets.  When an economic boom begins to develop, the competition between lenders intensifies and finance becomes more speculative as banks make loans to less creditworthy borrowers.  Eventually, banks throw caution to the wind in a bubble frenzy, and indulge in “Ponzi finance”.  This is a scheme in which borrowers are much more vulnerable to default because they may not even be able to afford the payments on their loans.

A primary contributing factor in this boom and bust cycle is the irresponsible actions of bankers and traders.  This is why rules governing the financial industry should be changed to keep leveraging of borrowed funds within safe parameters.  It is also why effective rules should be implemented to prevent systemic risks and vulnerabilities from developing that lead to credit crises and economic recessions.  It just doesn’t make sense to allow the ‘rational irrationality’ of self-interested players to subvert the greater good in such significant ways.  This is an economic problem, and it is also a serious social and environmental problem, and it has distinct ethical underpinnings.

Hyman Minsky’s description of the cycles in the economy reveals a salient fact:  the best plan for society as a whole is to make sure that there are reasonable minimum requirements for the amount of down payments and collateral required for home loans, so that real estate booms and busts are leveled out rather than being made more volatile.  Clear rules should be formulated to ensure that our entire economic system is not threatened by speculative risk-taking, and to prevent excessively leveraged gambles and the unregulated use of financial derivatives.  A stable economy is more important than a boom-and-bust bubble economy to the well-being of the majority of people over the long term.

Some people say that corporations should be allowed to regulate themselves.  Joel Bakan, author of The Corporation, strongly disagrees.  He points out: “No one would seriously suggest that individuals should regulate themselves, that laws against murder, assault and theft are unnecessary because people are socially responsible.  Yet oddly, we are asked to believe that corporate persons -- institutional psychopaths who lack a sense of moral conviction and who have the power and motivation to cause harm and devastation in the world -- should be left free to govern themselves.” 

I find this perspective to be persuasive.  We simply cannot continue to allow big corporations to abuse their influence and evade accountability.  Deregulation, corporate favoritism, privatization and bubble economics have caused too much financial turmoil in the past seven years, and we can no longer afford to allow economic fundamentalists and laissez-faire proponents to dictate our policies and dominate our national politics.  Surely the primary reason our government does not work better for the majority of Americans is because it has been bought off by wealthy people and big corporations and other vested interest groups.  For more extensive insights into the details related to this state of affairs, see Common Sense vs. Political Realities: An Anatomy of Dysfunctionality.

Visceral Connections: The Intimate Impacts of Creative Destruction

Capitalist economic systems tend to promote a process that economist Joseph Schumpeter called “creative destruction”.  By allowing businesses to fail that do not compete successfully, a winnowing-out takes place that ensures a kind of survival of the fittest organizations.  This can have positive effects by letting innovative forces transform markets, products, equipment and production methods, making capitalism quite adaptive when competition is fair.  But it can be extremely maladaptive when vested interest groups use unfair tactics like monopoly practices, or when they take advantage of the power of their size to quash competition.  Likewise, negative outcomes are generally associated with corrupt government policies and agencies that allow special advantages, privileges, and subsidies for entrenched interests. 

Creative destruction can have salubrious effects by improving production processes and product quality, and healthy competition can lead to lower consumer prices.  But it can also wreak terrible dislocations and hardships on workers and passive investors and the environment.  To manage change well, individuals and businesses and the government need to be more flexible and forward thinking. 

When the federal government is forced to bail out organizations that are “too big to fail”, this thwarts market processes.  Under such circumstances, taxpayers should be generously rewarded for their rescue of organizations that indulged in speculative risks and other types of “moral hazard”.  This compensation to taxpayers should come in the form of significant stakes in the profits that the bailed out entities earn after they recover.  It is unfair for us to risk national bankruptcy to save banks and other institutions without requiring them to make large contributions to taxpayers from their resurgent profits.  It was, after all, the speculative gambits taken by CEOs, banks and other players that are mainly responsible for the havoc being wreaked upon millions of people worldwide.

Creative destruction sometimes merges with ruthlessly exploitive aspects of capitalism, as analyzed by author Naomi Klein in her compelling book Shock Doctrine: The Rise of Disaster Capitalism.  When this occurs, not only is our standard of living at risk, but so is our financial, physical and ecological well-being.  Even our liberties and basic human rights are at stake.  We can begin to take control of these dysfunctional aspects of capitalism only by understanding them better, and by courageously acting in accordance with more enlightened understandings!

The Story of Stuff

The excessive promotion of consumption is contrary to long-term greater good goals, especially when it contributes to the wasteful depletion of resources and production of toxic wastes and the generation of huge volumes of climate-altering greenhouse gases. Annie Leonard, the social activist, folksy filmmaker and promoter of sustainability, explores the risk-laden madness of wasteful consumerism in her compelling video The Story of Stuff.  She points out, startlingly, that 99% of all the stuff we extract, produce, distribute and consume every day becomes a waste product within 6 months. 

Annie Leonard also created an animated video titled The Story of Broke.  In this film, Ms. Leonard succinctly encapsulates important issues related to the misuse of our tax dollars and the misleading idea that our nation is broke.  She refers to the established status quo as “The Dinosaur Economy”, and makes it clear that far too much money is given to companies vested in the status quo in the form of tax subsidies, risk transfer subsidies, freebie subsidies, and resource extraction subsidies.  She examines the folly of allowing businesses to externalize big costs onto society for the clean-up of pollution and toxic wastes -- things that corporate entities should be required to include in their determinations of prices and true bottom-line profits.  These simple and entertainingly illuminating videos can be viewed online right now.  The Story of Change is another Annie Leonard video that provides valuable perspective and ideas on how we might best head where we need to go.

With our human numbers now exceeding 7.3 billion, and seemingly destined to reach 9 billion well before the year 2050, we are going to run up against harsh limits in the supply of food and raw materials and fossil fuels and fresh water.  The capacity of the environment and the atmosphere to absorb all the waste products, toxins and climate-disrupting greenhouse gas emissions that result from this profligate consumption will also become a more crucial consideration. 

“Socialism collapsed because it did not allow the market to tell the economic truth, and

   capitalism may collapse because it does not allow the market to tell the ecological truth.”

                                                                                                                             --- Norwegian Oystein Dahle

The Republican Party and its angry, fervently righteous and simple-minded Tea Party wing may deny these understandings, but such denials will only have the effect of speeding the pace at which our runaway train of consumption and waste production is lurching toward calamitous outcomes.  No matter how zealously the myopic Tea Party crowd waves its <Don’t Tread on Me> flags, and no matter how desperately our leaders strive to ramp up consumerism again to create jobs and increase corporate profits, ecological truths cannot be indefinitely ignored.

“The survival of a species is, by definition, biological existence that is indefinitely sustained.  The human race needs to more clearly recognize and respect the fact that we cannot continue to consume far more than can be supplied by natural and biotic resources, regeneration, and healthy ecosystems.  The carrying capacity of damaged ecosystems is less than that of healthy ones, so it is an overarching necessity for us to act to prevent harms to habitats that will upset the providential balance in nature.”

           --- Comprehensive Global Perspective

Revelations Exhibited in Our Enveloping Maniacal Consumer Culture

We are immersed in what psychologists call a manic culture.  This manic state is characterized by short and fragmented attention spans, scattered energies, poor impulse control, compulsive behaviors, addictions to sensationalism, profligate spending, shallow understandings, tweeted communications, unmindful argumentation, a fixation on celebrity and eternal youth, occasionally indiscriminate sexual appetites, widespread consumption of fast foods, happy-face promotions, increasing susceptibilities to mental depression, and widespread uses of anti-depressant and psychotropic drugs. 

More than $200 billion is spent on advertising in the U.S. every year to stimulate demand for products and services, and to sway people’s opinions.  This amount exceeds the GDP of about three-quarters of the countries in the world.  That’s A LOT of propaganda!  This advertising can be a perniciously manipulative form of indoctrination that results in a wide variety of outcomes that are socially undesirable and even harmful when considered from big picture perspectives. 

Advertising is particularly effective in affecting children, whose minds are not yet fully formed or capable of realizing that such persuasion can be untrue, distorting and manipulative.  The imagery of marketing can have negative impacts on the development of young person’s brains, and it tends to objectify gender roles and create unrealistic body images.  Astonishingly, television programs for children in the U.S. are interrupted by advertising on average every 3 minutes.  Every three minutes!  This is ridiculous.  Brain conditioning at a young age is especially seductive because the brains of youngsters are not able to easily distinguish fiction from healthier visions of “reality”. 

Television advertising subjects people to a barrage of images and commercial messages that are loud, seductive and insidiously intrusive.  The medium in which messages are delivered has profound impacts that are influential beyond the scope of the content of the messages.  Repetition in advertizing can imprint commercial messages on our subconscious minds with a force that contributes to unhealthy fixations and manic character.  This is one reason why attention-deficit and bipolar disorders are proliferating! 

Rapid successions of images, subconscious messaging, persuasive marketing, and chatter on social media are physiologically affecting our brains, contributing to misguided values, sleep deprivation, alienation, rude behaviors, rage and mental depression.  Our psyches are powerfully influenced by programming that is focused on celebrities, sensationalism and violence.  Polarizing political rhetoric, ranting talking heads on television, and anger and hate incessantly expressed on talk radio (and on many websites) also take their toll.  The demonizing of people with differing perspectives, and imagery containing demeaning stereotypes, all contribute to mania in our cultures.  The increased susceptibility of many Americans to depression makes it the leading cause of disability, and anti-depressant drugs currently are being prescribed to more than 20 million Americans. 

What we need is a prescription for more positive influences!  Here are a few.  Experience nature outdoors more often.  Join the Slow Food movement and enjoy leisurely meals with friends or family.  Spend time cooking or gardening.  Listen to soul music, jazz, classical music, or the blues.  Find time to meditate or enjoy silence.  Read an entertaining or spiritually uplifting book.  Immerse yourself in Carl Jung’s Spirit of the Depths, not just in the Spirit of the Times.  Be with what is.  Sing words of wisdom.  Create some “senseless acts” of beauty and generosity.  Cultivate friendships.  Accentuate the positive.  Breathe deep and let go of negative thoughts that compel obsessions.  Recover an authenticity of the soul by focusing on honest spirituality, true values, and healthier philosophy.  And support progressive ideas and reforms.

Or watch some comedy by stand-up comedians or late-night entertainers like Jon Stewart or Bill Maher or Stephen Colbert.  Humor is healthy!  Think, for instance, about the “Friends of Irony” email that once circulated on the Internet, which contained visually funny photos of ironic juxtapositions of various images.  One showed the reader-board of upcoming events at a church’s Parish Hall.  It reads:

MONDAY          ALCOHOLICS ANONYMOUS

TUESDAY         ABUSED SPOUSES

WEDNESDAY   EATING DISORDERS

THURSDAY      SAY NO TO DRUGS

FRIDAY            SOUP KITCHEN

-------------------------------------------------

         SUNDAY SERMON

                   9 A.M.

            “AMERICA’S JOYOUS FUTURE”

-------------------------------------------------

Ha!  That struck me as a funny commentary on our culture, almost as humorous as a handwritten sign in front of “Le Petit Mort”, which read:

         Psychic Fair Cancelled

            Due to Unforeseen Circumstances

A Fascinating Fact and a Related Observation

Consumer spending in the United States was the highest it had ever been in 2010, relative to total incomes earned.  Spend, spend, spend!  This situation cannot continue indefinitely.  Debtor’s prisons may be a thing of the past, but I’ll bet big banks and their friends in Congress will be thinking up new ways to make sure that enormous banking profits are not jeopardized by the declining solvency of students and the majority of the American people.  I wonder if it’s possible that they will flip to the far side, and think like Henry Ford, who believed that by paying his employees generously and putting other policies in place that help build a healthy middle class, we might thereby put most Americans on a path toward saving more money so that they can actually afford to buy more products that are produced by businesses.  Such a course of action makes good sense!

Important Steps to Greater Fairness and Justice

The Founders of modern democracies essentially championed a social contract in which greater fairness and justice for a nation’s citizens would be honored and respected.  To actually create such a state of affairs, our economic and political systems need to be re-structured so that they actually do provide for fairer and more just conditions. 

One important reform that would ensure fairness to people in future generations would be to require businesses to include all currently externalized costs in the price of every product and service, particularly those costs related to the prevention and clean-up of pollution and the safe disposal of wastes and toxins, and medical care for people harmed by pollution.  We should additionally re-evaluate all government expenditures and tax loopholes that provide subsidies to big corporations.  Subsidies to vested interest groups tend to hamper competition and impede innovation.  Taxpayers are forced to finance these subsidies without enjoying any benefits, and this is contrary to the greater good.  The influence of vested-interest money in election campaigns and the intense lobbying of our representatives in Congress to manipulate their decision-making should be limited, so that the policies implemented are more consistently and honestly focused on the common good.

“Rent-seeking” is the general term that economists use for gambits employed by exploitive interests to get money at the expense of the public.  Rent-seeking activities today often refer to efforts to capture various monopoly privileges that stem from government regulation of a market.  Rent-seeking, in general, involves getting a bigger share of existing wealth, rather than actually creating any new wealth.  Joseph Stiglitz analyzes this concept in Chapter Two of his compelling book The Price of Inequality.  He discusses the curious fact that countries with large amounts of crude oil, like Venezuela, Saudi Arabia, Iran and Iraq, which should be able to afford to treat their people more generously because of the huge windfall receipts of money from their large oil reserves, tend instead to have more inegalitarian societies because of political corruption and rent-seeking abuses of power.  While an abundance of natural resources should allow countries to take better care of their poor people, and to invest in things like better education systems and universal healthcare, it turns out that countries with the most natural resources are often among the ones with the most extreme inequalities. 

Another form of rent-seeking involves selling things to the government at prices higher than market.  Drug companies and military contractors excel in this form of socially detrimental scam.

Rich people worldwide tend to gain at the expense of everyone else by means of a variety of socially undesirable rent-seeking activities.  These actions and swindles include perverse government subsidies, laws that make the marketplace less competitive, lax enforcement of existing laws, and statutes that allow corporations to take advantage of others or to foist costs onto the rest of society. 

The Perspectives of Arthur Cecil Pigou

Economic arguments can be quite complex.  But it is important to understand them in a comprehensive way.  This is how we can create the best balance in decision-making.  Take, for instance, the insights of Arthur Cecil Pigou, a British economist who was one of the first people to articulate the nature of imperfections in markets and to examine market failures due to “cost externalities”. 

A big variety of deep interdependencies exist between people, and there are many “spillover effects” of one person’s actions onto the well-being of others.  The same is true for businesses.  For this reason, Arthur Cecil Pigou advocated subsidy incentives (“extraordinary encouragements”) and tax disincentives (“extraordinary restraints”), because such mechanisms generally have the salubrious effect of properly reflecting both social benefits and costs to society that are not accounted for in private transactions.

This idea of properly designed incentives and disincentives, boldly implemented, is one of the best plans for making our societies healthier and more sustainable.  A “Pigou Club” of prominent economists and pundits recommends that we enact higher gasoline taxes or other forms of carbon emissions taxes.  The purpose of these taxes would be to allocate a higher price to the burning of fossil fuels, so that cost externalities associated with risks created by our dangerous addiction to these sources of energy would be reduced.  Pigouvian taxes like this would serve to reduce the rate of increase in the quantities of greenhouse gases we are spewing into the atmosphere every year.  We should listen to these Pigou Club experts in this regard.  They include a wide range of people like Paul Volker, Alan Greenspan, Al Gore, Thomas Friedman, Charles Krauthammer, Jeffrey Sachs and Paul Krugman.

Imagine the effect of a new incentive system designed to increase fuel efficiency on all new vehicles sold.  If much higher sales taxes were assessed on purchases of vehicles that get less than 20 mpg, and the proceeds were used to provide rebates for all vehicles that get more than 40 mpg, it is easy to see how demand for vehicles would be significantly shifted to more fuel efficient vehicles.  Such a system of incentives would powerfully influence people’s choices.  We could even be more effective in weaning ourselves from our Achilles’ heel dependence on imported oil from foreign countries, and from extremely high costs related to positioning our military forces in and around nations that have the biggest oil reserves in the world.  At the same time, we would burn less oil and cause less pollution and create fewer greenhouse gas emissions, and hence cause less damaging changes to the global climate.  This would be a smart course of action!

Federal gasoline taxes are only 18.3 cents per gallon, and they have not been increased since 1993.  Inflation diminishes the value of money over time, so the net amount of this tax has effectively gone down by more than one-third in the past 22 years.  Simultaneously, the costs of materials for highway construction, repair and maintenance have increased by more than 50%.  The costs of military expenditures to ensure uninterrupted access to imported oil from Middle Eastern countries have skyrocketed.  Costs for public health, traffic congestion, and environmental damages associated with the oil industry and transportation systems and air pollution have also increased much faster than the rate of inflation.  And our national debt has reached unprecedented levels.  This penalizes people in the future as a result of our weak-willed inability to manage more fairly and fiscally responsibly.

The inescapable conclusion is that gasoline taxes should be increased to help finance these costs. 

People buy insurance to cover potential calamities like floods, fires and auto accidents.  But when it comes to larger considerations of our probable impacts on the health and well-being of people in future generations, we seem to be unwilling to pay a modest premium in the costs of products and services to pay for costs externalized onto society, or to mitigate the adverse health impacts of polluting activities.  We essentially are collectively unwilling to act to minimize damages done to ecosystems, or to reduce the pollution of waterways, or to prevent inadvertent impacts of human activities on the gaseous composition of the atmosphere and the stability of Earth’s climate.  It is time for us to remedy this state of affairs by making fiscally and ecologically intelligent changes in the systems that encourage these misguided outcomes.

Almost all free market economists and people who advocate a better-managed economic system admit that incentives are important.  But free markets give too little emphasis to aspects of existence that are vital to our collective well-being.  They do this because they fail to adequately take into account the guidance of socially fair and environmentally enlightened understandings.

Instantaneous Lucidification

To get economic incentives right, it helps to understand big picture perspectives.  We should stop blindly acting as though corporate prerogatives and laissez-faire business doctrines are the end-all of policy making.  Too many of the incentives created by corporations and governments are “perverse incentives”, like those in the banking industry that encourage speculation and highly leveraged risk-taking and predatory banking practices.

Incentives should be designed to encourage people to behave in ways that are more socially and environmentally beneficial.  Disincentives should be formulated and instituted to prevent costs from being foisted onto innocent victims.  Cost-shifting from corporations to taxpayers and people in the future should be reduced.  Once the details and magnitude of this cost shifting are understood, we should be better able to make smarter determinations of how to structure incentives and disincentives so that they reflect realities and mitigate adverse impacts on society.

The Environmental Protection Agency completed a six-year study in 1997 that took into account the human health and welfare and environmental effects of the Clean Air Act.  The EPA found that the total benefits of Clean Air Act programs in the 20-year period from 1970 to 1990 ranged from about $6 trillion to about $50 trillion, with a mean estimate according to varying assumptions of $22 trillion.  These benefits represent the estimated value that Americans place on avoiding the dirty air quality conditions and dramatic increases in illness and premature deaths that would have prevailed without the 1970 Clean Air Act and associated programs at the state and local level. 

The actual costs of achieving these benefits of pollution reductions over the 20 year period were $523 billion.  This is a small fraction of the estimated $22 trillion in benefits gained.  From this perspective, it seems obvious we should collectively be making choices that respect environmental protections, rather than allowing them to be undermined by narrowly-focused interest groups!

A study by the federal Office of Management and Budget in 2003 sought to evaluate the cost and impact of environmental laws over the 10-year period from 1992 to 2002.  The extensive analysis found that the cost to businesses and government of environmental and health regulations was 5 to 7 times less than the costs to society related to dealing with pollution and toxic waste clean-up and related adverse healthcare expenses for workers, families and people in communities nationwide.  These findings prove that it is downright absurd to let lobbyists and politicians rewrite environmental laws to weaken protections like those of the Clean Air Act. 

Many of the incentives in our economic and political systems are sadly misguided.  They provide big benefits to small constituencies while costing significant amounts to the general public.  Incentives like this should instead be re-targeted to provide overall benefits at reasonable costs.  We should keep in mind that these costs are not just monetary ones.  They include harmful impacts upon real people’s health and the quality of their lives. 

The Implications of Systemic Unfairness on Our National Health

Think about the red tape and profit-making in the health insurance industry.  The combined profits for the five largest health insurers in the U.S. increased 56% in 2009 over 2008.  The employees and investors in these companies were probably quite pleased with these results, but they represent a heavy burden of high costs to millions of people whose lives are detrimentally impacted by high annual increases in premiums, or by care denials or exclusions for “pre-existing conditions” by medical insurance corporations.  Big increases in medical insurance costs for individuals and small businesses have caused tens of millions of Americans to be unable to afford health insurance.  More than 45 million Americans did not have health insurance before the Affordable Care Act was enacted.  This fact makes it urgent that we make much more sincere reforms to the U.S. health insurance system.

Look at it this way.  Each and every person is born, gets older, and eventually dies.  No one knows what the vicissitudes of destiny have in store for them, and infinite are the variety of potential adverse circumstances faced by individuals.  Anyone at any time can suffer a serious accident, disease or other health calamity, so we should have a medical insurance system that covers everyone fairly. 

On average, an American today lives to be 80 years old, according to World Health Organization statistics.  This longevity is shorter than the average lifespans of people in more than 30 other nations, according to the Wikipedia “List of countries by life expectancy”.  Why does our supposedly advanced nation perform worse than so many other countries? 

The reason is to be found in a curious place:  inegalitarian public policies.  Our healthcare system has a primary focus on profit-making by insurance companies and drug companies, NOT on fairly providing for the health of American citizens.  About 45,000 people die each year as a result of things like medical coverage denials and high costs for health insurance, according to estimates by researchers at the Harvard Medical School.  Why do they die?  “In large part because they lack health insurance and can not get good care.” 

Fairer societies tend to have greater average longevity because all people have better access to preventative care and affordable care.  We should give these understandings greater consideration in the national debate about how to reform the U.S. healthcare system!

STAND AND DELIVER!

Mark Twain was robbed by “highwaymen” in 1866 during his stay in the silver mining boomtown of Virginia City in what was the Nevada Territory at the time.  He reported that a bandit “thrust a horrible six-shooter in my face and demanded, ‘Stand and deliver!’”.  In those gun-toting days of the Wild West, life and property were not particularly respected, so a person was well-advised to comply with such an imperious command, no matter how offensively criminal it may have been.

I’m not a big fan of the use of force, or of the expanding ownership and uses of guns in these more modern times.  But as an organizational imperative, I like the sound of this command.  “STAND AND DELIVER!”  Say, can’t we tell our political leaders, and CEOs of big corporations, and investors and the relatively small number of wealthy people who gain half of all the income and own half of all assets in this country, to STAND AND DELIVER!? 

Deliver fairer democracy and more progressive tax policies!  Deliver a greater equity of job and educational opportunities in our nation.  Deliver a better means of adequately financing our national infrastructure.  Help create truer social justice and fairer economic policies, and cleaner sources of energy, and universal healthcare, and more honest fiscal responsibility, and saner environmental policies.  We want and need these things! 

The enactment of a Bill of Rights for Future Generations might prove to be the best way to constrain our short-term-oriented addiction to mortgaging the future.  Cease and desist with this on-going orgy of expedient and irresponsible deficit spending to finance low tax rates on high incomes!  STAND AND DELIVER!!

Two Theories of Socioeconomics

  Deepening disparities of wealth --à  Less financial and health security for most people --à

       --à  More societal stresses and anxieties --à  More civil unrest --à  Higher prison costs --à

                 --à  Worse personal and national security for all.           

                                                                                                    (A BAD IDEA!)

    Also:  More People ---à  More consumption ---à More waste ---à  More ecological damage --à

         --à More species extinctions --à A less sustainable future --à

         --à A faster diminution of the Carrying Capacity of the Earth for our kind.      

                                                                                                                                 (A POOR PLAN!)

The Opportunities Implicit in the Economic Crisis of 2008

The word “crisis” in Chinese is represented by two symbols.  One means “danger”, and the other means “opportunity”.  There is profound wisdom in seeing a crisis as a potential good opportunity in a context of heightened risk.  Every crisis presents us with a dangerous opportunity to learn the lessons that the crisis reveals, and to act accordingly.  Unfortunately, entrenched interests are shrewd at exploiting opportunities during times of crisis for their own narrowly self-interested advantages, and they generally defend business-as-usual rather than supporting proactive reforms. 

The severe credit crisis that began in 2008 highlighted the obscene nature of extreme economic inequalities and increasing barriers to upward mobility in the U.S.  This crisis contributed to a powerful people’s movement that had the potential to help bring about needed reforms.  Significant peril accompanied this crisis because the forces of reaction and entrenched power strive to spin circumstances to prevent fair-minded reforms.  The failure to heed the revelations of a crisis, after its acute phase passes, can result in a greater risk of more serious consequences in the future.

Consider this closely.  A destructive earthquake reveals that life-saving values embodied in sensible structural building codes are vitally important.  Hurricane Katrina taught us that the destruction of wetlands on the Gulf Coast negatively contributed to dramatic increases in vulnerabilities to the levee-protected city of New Orleans.  Tsunamis teach us that warning systems in coastal areas can help prevent the loss of life in the wake of powerful offshore earthquakes.  The BP oil spill in the deep waters of the Gulf of Mexico demonstrated vividly that government regulations should not be formulated with so much influence by corporate lobbyists, and that regulators should not be in bed with representatives of the industries they regulate.

A back injury caused by lifting heavy objects, or the onset of diabetes caused by a poor diet and obesity, or a heart attack caused by eating too much high-cholesterol fatty foods, or a car accident caused by texting while driving are all outcomes that teach us lessons about the inadvisability of heedless behaviors.  Likewise, sudden health adversities serve to make us cogently aware of activities and habits that contribute to these setbacks. 

It is a terrible shame for us not to learn the lessons that a crisis reveals.  Consider the economic turbulence of the past seven years.  The cozy partnership of government with business has created an anemic economic recovery from this calamitous crisis, and yet most of our business and political leaders seem hell-bent on obstructing wise and far-reaching reforms that would prevent a new economic crisis or reduce our vulnerabilities.  Political partisanship, government gimmickry, greedy advantage-seeking, and struggles for domineering power by ambitious and ego-driven individuals are preventing us from responding to this crisis in ways that are more intelligent.

A number of things make us more vulnerable to setbacks in the future that are potentially more devastating for billions of people worldwide than what have been suffered in the recent past.  They include inadequately regulated speculation, banks that are “too big to fail” and yet are getting ominously bigger, our undiminished addiction to wasteful usages of fossil fuels, and our reliance on irresponsible deficit spending and increases in the national debt.

In the wake of the Depression of the 1930s, bold corrective actions were taken to make our economy fairer and more fiscally sound.  More egalitarian social policies were created to build a stronger middle class.  Labor relations reforms were instituted.  A protective wall was created between depository banks and investments banks to minimize the conflicts of interest between the goals of safeguarding the money of depositors and risking it to make potentially big profits. These actions helped set the stage for the United States to become more broadly prosperous for decades. 

Keynesian economics became fashionable at that time.  In the following 40 years, economic stimulus was applied when it was needed during contractions of the economy, and then the proverbial “punch bowl” was removed as economic activity heated up and economic expansions began to cause spiking wages and prices and excessively wasteful uses of resources.  

Today, perverse forces dominate our decision-making and threaten to make us drastically less secure.  We are like proverbial ostriches that supposedly stick their heads in the sand to avoid perceived dangers.  Even ostriches aren’t actually so stupid!  How could this state in human affairs have come about?  And how could it continue to be so foolishly perpetuated?

Perhaps John Fowles was right when he observed in The Aristos that the more clearly we see that our own individual deaths are inevitable, and the more clearly we see the seriousness of the risks we are taking to our well-being, the more rash we become in striving to get all the material things and sensual pleasures we can get while we are able.  Each of us at least dimly realizes that, in all of eternity, there will be only this one fleeting life to enjoy.  As a result, we are simultaneously both rational and irrational in excessively consuming goods, and in over-indulging in eating and drinking, and in mindlessly exploiting resources. This mindset is one of the main reasons we ignore the lessons contained in a crisis.  It is also one reason why we ignore cautionary voices that advocate voluntary simplicity and the wise recommendations of people who counsel moderation, ecological intelligence, and greater fairness toward people in other generations.

Understanding the grand sweep of lessons learned from previous crises, it becomes obvious that we should work together to find ways to re-structure our economic and political systems so that every person becomes more responsible for their actions toward others, and toward those in future generations.  The Earth Manifesto contains an integral assembly of dozens of ways for us to move in directions that are distinctly more propitious.  Read on!  For a summary of specific proposals, see the comprehensive compendiums of ideas in Common Sense Revival -- Book One of the Earth Manifesto -- and in Part Four of this manifesto online.  These ideas summarize many smart steps we should be taking to create fairer and more peaceable societies. 

It is common sense that our primary goal should be to create the greatest good for the largest number of people over the longest period of time.  This utilitarian objective contrasts starkly with our current tendencies to stimulate the opportunities for a small group of hyper-privileged people to gain and maintain significant advantages at the expense of all others over a myopic time horizon!

Moving in Positive Directions

“The modern conservative is engaged in one of man’s oldest exercises in moral philosophy; 

    that is, the search for a superior moral justification for selfishness.”

                                                                                       --- American economist John Kenneth Galbraith

As noted, business-as-usual policies that encourage profligate consumerism are among the most serious shortcomings of our economic and political systems.  Such gambits may help maximize short-term profits by allowing many costs, damages and risks to be socialized, but that is a rationalization, not a smart plan.  Bailouts are the mechanism by which bad speculative risks are socialized and paid for by taxpayers and with borrowed money.  Some of the costs of doing business are socialized when big corporations are allowed to evade the costs of pollution mitigation and clean up, and to thereby foist them upon taxpayers and future generations.  It is foolish not to require the costs of things that harm people’s health to be included in the products and services that cause the harm. 

Subsidies, depletion allowances and tax loopholes for special interest groups are other means by which costs are socialized.  Future costs of environmental damages are often socialized when vested interest groups are allowed to control policy-making.  We should instead implement good governance plans.  By inadequately funding government, we fail to set aside “rainy day funds” that would provide financing to deal with cataclysmic future costs that are being made more likely by resource depletion, natural disasters, population growth, global warming and related climate changes, species extinctions, and the potential for ecosystem collapse. 

Deficit spending is another expediency by which we are obligating future generations in order to facilitate profit-making for large corporations and rich people today.  It is important, parenthetically, to accurately understand exactly what drives rapid increases in the national debt.  The primary causes of deficits incurred from 2001 to 2009, according to the authoritative Center on Budget and Policy Priorities, were NOT due to domestic government spending.  The regressive tax cuts pushed by George W. Bush accounted for 49% of the deficits;  the military buildup and wars, another 34%;  increased entitlements, mainly the new 2003 Medicare Drug benefit with its generous provisions for big drug company profits, 10% more.  Just 7% was the result of all nonmilitary spending, so it was actually only a trivial source of the increases in federal deficits. 

President Obama inherited a fiscal emergency when he came into office in January 2009, and record high levels of budget deficits were incurred in dealing with this risky episode.  The U.S. added more than $1 trillion to the national debt every year for four years in a row from 2009 through 2012.  Again it seems clear that we should collectively strive to improve our societies by transforming them with the cooperation of the principal deciders in our political system.  We should demand that the most powerful segments of our societies align themselves with socially responsible outcomes and greater good goals.  Instead, economic elites in our society are often allied against such goals.  The guardians of the status quo must be given much more powerful incentives to align themselves with the common good and the best interests of the people.

Our economy is currently structured so that good citizen goals are somewhat contrary to the interests of the segments of society that have the most power.  Professor Robert Reich articulates this concept clearly in his aforementioned book, Supercapitalism, pointing out how dysfunctionality in our societies today is being caused partially by allowing consumer and investor goals to be paramount while good citizen goals are given a distinctly lower set of priorities.  This is the opposite of what should be done for a saner and healthier future.

A redesign of our economic system is required.  I harken back to the brilliantly sensible author and businessman Paul Hawken, who wrote in The Ecology of Commerce:  “We must design a system … where doing good is like falling off a log, where the natural, everyday acts of work and life accumulate into a better world as a matter of course, not a matter of conscious altruism.”  Think about this great and revolutionarily simple idea!

The Earth Manifesto essay The Common Good, Properly Understood provides a clear synopsis of the varying goals we all have as consumers and as investors, along with the contrasting goals we have as good citizens who want things that are consistent with the common public good.  If we were to choose to revolutionarily restructure the current state of affairs by altering the rules that encourage “tragedy of the commons” outcomes, we would discourage harmful impacts on other people and the environment.  This would be more advantageous than to continue foolishly encouraging outcomes that are proving to be demonstrably undesirable. 

Adverse outcomes arise, in general, from two categories of harmful impacts:  social harms and ecological harms.  Negative social impacts of our current economy include those activities that cause inequalities to increase between people, and activities that destabilize the economy, and activities that serve to financially mortgage the future and harm the aggregate well-being.  Negative ecological impacts include the degradation of wild lands and ecosystems, the pollution of streams and lakes and oceans, the wasteful depletion of resources, and the spewing of unprecedented and growing quantities of greenhouse gas emissions into the atmosphere that alter global weather patterns.  These activities are driving many species of life to extinction and reducing the biological diversity on Earth by altering habitats, polluting the commons, introducing many toxic wastes into the environment and diverting fresh water sources.

Some say we are like sleepwalkers shuffling toward a planetary ecological disaster.  So here’s a bold plan.  To align the most powerful interests in our society with good citizen goals, we should alter the rules in our economies in two vital ways.  First, we should enact a Social Justice Taxation Act that will make fair revisions to the U.S. tax code that would ensure taxes are more progressively structured.  Second, we should enact a five-year plan to balance the federal budget by giving the primary deciders in our economic and political systems powerful motivations to achieve balanced budgets.  The details of these two proposals are contained in One Dozen Big Initiatives to Positively Transform Our Societies. 

Seven Proposals to Align Costs with Responsibilities

One of the core ideas in the Earth Manifesto is that we should collectively take effective steps to make sure that all costs incurred in making products, or in providing services, are included in the prices of the corresponding goods and services.  By making such changes from our current jerry-rigged system, we would allocate costs properly to where they are incurred and where they should be reflected.  This change would limit the socially undesirable “privileges” currently enjoyed by people and businesses that are being allowed to externalize costs upon society as a whole. 

Here are 7 specific plans to fairly and providentially accomplish this smart goal.  They would do this by shifting incentives and disincentives to more proper priorities.  These seven changes in policy would probably have a regressive effect, in the sense that they would have a greater adverse financial impact on poor people and the middle class than they would have on wealthier people.  In recognition of this fact, taxes should simultaneously be reduced equally for every taxpayer to partially offset this inegalitarian affect.  The fairest and easiest way to do this would be by increasing the Standard Deduction exclusion of income from taxes on everyone person’s tax return.  Here are the proposals:

First, since more than 400,000 people die each year as a consequence of tobacco use, and since more than 8 million people suffer from at least one chronic disease due to having smoked cigarettes, the medical cost of treating these people should be borne by those who buy and use tobacco products, not by everyone in the general population.  We should assess additional taxes on tobacco products to pay for these healthcare costs.  Startlingly, the influence of Big Money obstructs such an initiative.  It is surprising how dramatically public opinion can be influenced by political advertising and other forms of slick propaganda.  Large amounts of money spent on political ads can easily manipulate people, as was demonstrated by the defeat of Proposition 29 on the California Ballot in June 2012.  This initiative would have assessed an additional $1 per pack on cigarettes, with the revenues raised to be used to fund medical research into tobacco-related diseases and programs that discourage tobacco use.  This initiative enjoyed a commanding lead in polls earlier in the year before the election, but then big tobacco companies spent almost $50 million on a deceptive advertizing blitz, and the outcome was a very narrow victory for tobacco industry profiteering over the health and well-being of the people.

Second, alcohol is responsible for the deaths of more than 100,000 people each year.  The costs of alcohol-related afflictions should be paid for by those who drink beer, wine and hard liquor.  Higher taxes on alcohol should be imposed to raise money to cover these costs.  These increased duties would also serve to reduce the abuse of alcohol and the sheer amount of adversities suffered as a result of excessive consumption of alcoholic beverages.

Third, obesity is estimated to be responsible for more than $150 billion in health care costs each year.  More than half of this total cost is paid by taxpayers through programs like Medicare and Medicaid.  The most significant contributing factor to this cost is excessive amounts of saturated fats, processed salt, refined sugars and chemical preservatives that are contained in fast foods.  A surcharge on all sales of fast foods should be implemented to cover these obesity-related costs.

Fourth, the cost of health damages and crop losses caused by air pollution are estimated to exceed $100 billion in the United States each year.  Half of this air pollution is caused by motor vehicle emissions.  Those who contribute to this problem should pay for these costs.  To achieve this goal, a provision for these externalized costs should be included in the price of gasoline.  Americans drive about 2 trillion miles each year, in total, using more than 100 billion gallons of gasoline, so an increase in gasoline taxes of $.50 per gallon would cover this half of the externalized costs.  The other half of the air pollution is caused by industries like those that generate electricity by burning coal, oil and natural gas.  Again, costs should be included in the processes that are responsible for generating them, so these industries and all electricity users should be required to pay for them instead of allowing these costs to be indiscriminately foisted upon everyone, regardless of how conservation-minded they may be in their uses of electricity.

Fifth, the costs of natural disasters in the past 10 years have averaged more than $30 billion per year.  There have been wide swings in such costs due to epochal events like extremely damaging hurricanes and periodic storms, floods, droughts and wildfires.  All these events are being caused with increasing frequency because of climate disruptions associated with greenhouse gas emissions.  A national carbon tax should be instituted, with proceeds used to create a ‘rainy day fund’ that covers these costs.  This would establish a direct correlation between the primary contributors to global warming emissions and those who pay for the consequences.  Some of the funds generated from these taxes should be used to finance a necessary ‘green transition’ to a cleaner energy future.

Sixth, tens of thousands of people are killed or injured every year through the use of handguns or assault weapons.  The related cost of emergency room visits and law enforcement and court costs should be covered by assessments in the price of all sales of guns and ammunition.

Seventh, the total cost of the U.S. Army, Navy, Marines and Air Force, and of military occupations, armaments, domestic homeland security, and intelligence gathering services is somewhere around $1 trillion every year.  This huge cost is beneficial to industries and investors that are part of the military-industrial complex.  A portion of this cost should be covered by taxes on the primary beneficiaries of wars, like armaments manufacturers and Big Oil companies, instead of allowing these costs to be foisted on all Americans and all people in future generations.  Military interventions in the Middle East in the past 25 years have cost trillions of dollars, and these aggressive actions have been directly related to our being addicted to oil, so it would be only fair to partially finance such military adventurism with a tax on oil imports.  The premise, once again, is to sensibly raise revenues from products, services and undertakings that are directly responsible for the costs being incurred. 

The Inauspicious Expediency of Out-of-Control Deficit Spending

The most insidious way that costs are being externalized onto society and people in future generations is by the popular but fiscally irresponsible NO-WAY-WE-WANT-TO-PAY-AS-WE-GO tactics of the past 15 years.  This is a modern form of the ‘tragedy of the commons’ in which we borrow gigantic sums of money from people in the future to avoid making the difficult decisions that would be required to actually balance the budget.  If we did not indulge in this risk-laden expediency, we would be forced to squarely face the need to cut things like military expenditures and the compensation and benefits paid to federal government employees and the cost of entitlement programs AND at the same time to increase revenues by reversing a portion of the overly generous tax cuts that Ronald Reagan and George W. Bush have given to wealthy people and large corporations in the past few decades.

Modern societies have serious problems that tend to get worse as nations become more populous.  Financially successful segments of every society are composed of people who have benefited the most from the ways the economic system is structured.  These are the people who gain outsized benefits from law and order and strong military forces and low taxes on capital gains, and from public investments in education and infrastructure.  They are also the primary beneficiaries of provisions that encourage resource exploitation and cost externalizing scams and the concentration of wealth. 

Considering these facts, it is sensible and fair to require well-to-do people to shoulder a greater share of the tax burden required to maintain our civilization.  It is, in fact, the only practical thing to do.  It is also the only morally responsible way to make a society work more fairly.  This leads again to the conclusion that a more progressive tax structure is needed in which everyone pays the same amount of taxes on all levels of earnings, and those who earn higher levels of income pay progressively higher marginal tax rates on higher levels of earnings. 

Understand how eminently fair progressive taxation turns out to be.  Every taxpayer essentially pays the same rate of tax on every dollar they earn.  A person earning $1 million a year in “ordinary income” pays exactly the same amount of tax on their first $50,000 as a person making only $50,000.  The big exception to this is one that favors wealthy people who make money on capital gains, for our U.S. tax system generously allows them to pay much lower tax rates than working people.

Tax policy in effect provides a reflection of our social values and moral stances.  The design of tax policy has far-reaching consequences, so this issue is not merely some arcane accounting matter.  No one particularly wants to pay taxes, and many people today are angry at having to pay them.  This anger has been shrewdly channeled into a retrogressive agenda that allows taxes to be shifted from those who can most easily afford to pay them, i.e. the highest earning and wealthiest Americans, to other people and to all people in future generations.  This is pure scheming genius by the ruling class.  In the long run, however, it is a form of class and intergenerational treachery that undermines the prospects, health and well-being of all Americans.  

The era of taxing capital at lower rates than labor should now end, contends billionaire financial manager Bill Gross.  He recommends that even rich people should support taxes on carried interest and capital gains that are as high as existing marginal income tax rates.  In other words, taxes on hedge fund profits and capital gains should be almost 40%, not just a mere 15%.  Higher marginal tax rates would help reduce wealth inequality, and they would also stimulate broad-based economic growth.

It seems obvious that higher marginal taxes on the 2% of people who earn more than $250,000 per year, coupled with unchanged taxes on everyone else, should be supported by a 98 to 2 vote in a democracy that functioned rationally and properly.  But those with the most money control our political system and the bullhorns of ideological spin, so we seem to be practically incapable of altering our tax system in this fair and sensible direction.  Nonetheless, our political leaders must find a way to make our tax system fairer sometime soon.

Congress should also pass a bill like the Stop Tax Haven Abuse Act proposed by Senator Carl Levin, in order to control “offshore secrecy jurisdictions” and money laundering schemes.  This would result in the collection of an estimated $100 billion each year in revenues from tax-evading corporations and high-income individuals who use sophisticated gimmicks to avoid U.S. taxes. 

A Giant Pool of Money

This essay follows a long and winding road of historical perspectives and insights.  Right now we’re rounding a corner and seeing economic developments taking place that force us to realize that Big Picture understandings are urgently required.  Let’s start by considering “The Giant Pool of Money.” 

This American Life, a National Public Radio show, presented a compelling discussion in 2008 about a giant pool of money, estimated to total about $70 trillion at the time around the world.  This money figuratively prowls the planet seeking good investment returns.  During boom times, this pool of savings seeks high returns, but during economic downturns the people who control this money are much more obsessed with the safety of principal.  This pool of money is generally invested in the five primary categories of assets:  stocks, bonds, real estate, businesses, and commodities.

Financial planners, incidentally, say that the best plan for any individual is to avoid putting all of your eggs in only one basket, and to thus make a balanced allocation of assets among these classes of investments.  This strategy results in gains in one category that will offset losses incurred in others.  Stoic discipline, it seems, is required to stick with such diversification strategies in the face of dramatic volatility in the stock market and gold prices, and in currency and interest rate fluctuations and heightened international economic and geopolitical risks.

This giant pool of money got burned by the mortgage-backed securities debacle of 2007-2009.  Bond portfolios have done well in recent years due to low interest rates, but eventual higher interest rates will create bigger risks even in bonds.  Investors realize that nations worldwide have been pursuing fiscally irresponsible monetary policies that will eventually lead to higher inflation.  These factors create their own set of winners and losers, and they carry a variety of financial risks. 

The U.S. national debt has skyrocketed in the past 15 years, and the percentage that this debt represents relative to the GDP has  increased radically.  Fifteen years ago, federal debt was 35% of GDP, and in 2012 it exceeded 100%, and is unsteadily increasing.  It is madness to allow this to happen.  How and why is this taking place?

Business As Usual: Courting Economic and Ecological Calamity

Irony cruelly mocks us.  First, the Senate refused in early 2010 to create a commission to look into the shortsighted expediency of record levels of deficit spending and the ongoing rapid increase in the national debt.  So President Obama, recognizing our national avoidance of the tough choices required to solve daunting fiscal problems, issued an executive order in February 2010 to establish a National Commission on Fiscal Responsibility and Reform.  We do, after all, have an overriding need to honestly examine the expediently popular but extremely irresponsible tactic of mortgaging the future for short-term benefits.

This so-called Deficit Commission spent nine months struggling to come up with a comprehensive set of proposals to deal with the growing national debt.  Ideologies clashed, and vested interest groups practically gnashed their teeth in their efforts to influence the purportedly “bipartisan” commission to get it to sacrifice everyone else’s sacred cows rather than their own.  Finally, when the Commission submitted its sobering proposals, they included a conflict-of-interest-generated, counterproductive and lame-brained idea of cutting taxes on rich people and corporations, which would most likely serve mainly to make deficits worse. 

There was preposterously little in the report about providing powerful incentives to corporations for them to stop exporting millions of jobs abroad.  There was little about investing in higher education or research and development, or helping build a green economy, or undertaking a modernization of our crumbling national infrastructure -- even though such plans are essential to the maintenance of our competitiveness and the creation of a stable foundation for healthy economic growth.  And the Commission did not give adequate consideration to broader factors that affect deficit spending like regressive tax policies, the climate-disrupting impacts of unlimited emissions of greenhouse gases into the atmosphere, or the adverse impacts of rapid global population growth. 

The biggest irony of all came just a few days after the Commission submitted its recommendations.  Our political leaders chose to completely ignore the Commission’s recommendations!  Instead, they rejected common sense and once again resorted to embezzling money from future generations by compromising amongst themselves to continue the highly regressive Bush tax cuts for all Americans for two more years until the end of 2012.  These tax breaks primarily benefitted millionaires and billionaires who gained extravagantly from this action.  This decision alone was expected to add a whopping $858 billion to the national debt.  And by extending the Bush tax breaks that are so heavily tilted toward the rich, one of the best options was temporarily eliminated to honestly deal with our deficit spending and national debt problems.  This shortsighted strategy crippled the potential for positive efforts to invest more money in solving many other daunting challenges that we face.

What this action really did was to compromise the hopes and potential prosperity of people in the future in order to avoid making the difficult decisions we really should be making today.  This was a compromise made behind closed doors between President Obama and Mitch McConnell, and it violated one of the idealistic visions that the president had been elected to pursue.  “We lose ourselves when we compromise the very ideals that we fight to defend,” Mr. Obama had stated early on.  “And we honor those ideals by upholding them not when it is easy, but when it is hard.”  Oops!

We are collectively risking the financial stability of our nation by refusing to courageously deal with the true implications of this dangerously undisciplined deficit madness.  We are risking an eventual devaluation of the U.S. dollar by the irresponsibility of our fiscal and monetary courses of action.  We are also sowing the seeds of another possibly even more severe economic crisis than the one that our leaders helped create in the past decade.  This is recklessly imprudent!

The extension of the Bush tax cuts allowed rich people to continue to pay historically low rates on their incomes and capital gains and dividends, and on their estates after they die.  This gambit is a form of intergenerational treachery.  By mortgaging future generations, we are compromising their potential prosperity to make rich people richer today.  This is prolonging the trend toward an ever-more extreme concentration of wealth.  It is also increasing inequities and exacerbating the economic insecurity of the vast majority of Americans, and it is undermining our democracy in the process.  The decision to give two more year’s worth of this multi-trillion-dollar folly to rich people was irresponsible, and to the extent that it crowded out financing for important social and infrastructure and environmental priorities, it was pathetically misguided.

Once again it can be seen that Big Picture perspectives and overarching guiding principles are sorely needed to create a higher level framework for formulating public policies and making national decisions on spending and taxation.  This is another reason we should establish and follow the guidance of a Bill of Rights for Future Generations.  This commitment should be debated and developed and passed and ratified in the U.S. as soon as possible -- and in nations worldwide.

In the face of the myriad ways we are fleecing the future with our profligate consumption, resource depletion, pollution, habitat destruction and climate disrupting activities, our collective complacency toward budget deficits is obscene.  These myopic expediencies reflect a selfish, undisciplined and weak-willed inability to make difficult choices that would be fairer to our descendents.

Human nature is quite resistant to change, but our habits and behaviors can quickly be modified with attractive incentives and dissuading disincentives, so it is high time we make better use of these Pigouvian tools to create more responsible societies.

An Aside on the Partisan Intransigence of the “Super Committee”

A “Super Committee” of politicians was established in August 2011 and given the task of coming up with ways to reduce the large additional budget deficits that were projected to be incurred in the next 10 years.  After trying for three months, this committee abjectly failed to find a compromise on reducing deficits.  This failure of the political class reflected the corruption in our political system.  Conservatives arguably took the most outrageous stance in these “negotiations” by sticking to their absolute opposition to increasing revenues or eliminating tax loopholes.

At a Republican debate between presidential candidates in 2011, all of the candidates were asked if they would accept a deficit reduction deal that would include ten dollars in real spending cuts for every dollar in revenue increases.  Every single Republican candidate essentially declared they would refuse to accept any such deal.  Ten times!  Recent times have obviously not been very good years for reasonable people.

One need not be a particularly keen observer to realize that the $10 trillion in additional deficits projected at the time to be incurred in the next decade could not fairly and adequately be reduced without both additional revenues and spending cuts.  Sacrificing the security and well-being of tens of millions of Americans to protect generous perks for the top 2% of Americans who annually earn more than $250,000 is not a practical or sensible plan.  Dismantling the social safety net and making education and health care more expensive for people is shortsighted.  So is the idea of cutting funds necessary for those who are first responders to emergencies.  And those who advocated that we should fund disaster relief programs only by cutting other government spending are heartlessly inflexible.  Proactive planning would be a much better idea -- let's establish a well-funded Disaster Insurance “rainy day fund” for inevitable natural disasters events!

A Digression on Rich Kids’ Inheritances

     “I’ll have a bottle of your tawniest Port.”

                                                                --- Vinnie del Mar

Theodore Roosevelt indicated in a remarkable speech 100 years ago that he strongly believed in “a graduated inheritance tax on big fortunes, properly safeguarded against evasion and increasing rapidly in amount with the size of the estate."  Inheritance tax plans should be instituted that are consistent with this idea, instead of giving away the farm and figuratively fiddling while Rome burns!

One would think that the schizophrenic status quo of estate tax law would have put a hot burner under our leaders in the year 2010.  After all, the Bush Administration’s regressive tax cuts that favored rich people finally chipped away at taxes on rich kids’ inheritances so much that what was 55% on all inheritances over $675,000 in the year 2000 had been reduced to 45% tax on amounts inherited over a much larger $3,500,000 exclusion in 2009, and then ZERO TAX on all inheritances from people who died in 2010.  Estate taxes would have reverted to 55% on all inheritances over $1 million in 2011, but the Obama/McConnell tax “compromise” in December 2010 gave rich people an outlandish $5 million tax free exclusion for each parent, and then it taxes inheritances at a rate of only 35% on amounts in excess of these high exclusions. 

This governmental gimmickry is a lamentable result of undue influence by moneyed interests.  It is distinctly unethical gamesmanship in action.  We need a system of taxation that is more progressive, and we need greater social fairness and smarter national planning!

It is crazy to have allowed the less than 1% of people who have a net worth large enough to be subject to any estate tax at all to have gotten off ‘scot-free’ if they died in 2010.  Our budget deficits are too big to allow rich people to continue to pay historically low tax rates on their estates after they die.  Our representatives should courageously and honorably address this issue.  They should also act to close tax haven loopholes.  All these things, together with more steeply-graduated tax rates on incomes and capital gains, are needed to help satisfy smarter national priorities and needed social programs, and to slow the growth of our irresponsibly accumulating national debt.  STAND AND DELIVER!

This demand applies particularly to scheming Republicans, who have made so many of our national problems worse in the years since 2001.  They have stubbornly obstructed almost every effort being made to solve the serious challenges we face since President Obama was elected.  Their overarching goal has been to make the President fail, no matter how adversely such efforts affect the majority of Americans.  Republican politicians gained traction and political power in the national elections of November 2010 and 2014, though their overreach and economic sabotage was disadvantageous to the country.  The perversely single-minded Republican obsession with power and domination has come at a terrible cost to tens of millions of Americans, and to all people in the generations to come.  This is unacceptable.  STAND AND DELIVER!

Parenthetical Observations Concerning President Obama and Republicans

Television host and political satirist Bill Maher once wondered aloud in a TV editorial what exactly Barack Obama had done that has made conservatives so angry.  Why did Republicans such as Michele Bachmann, John Bolton and Newt Gingrich call President Obama the most radical president in history?  In terms of federal spending, his Administration has had the smallest increase in decades.  Bill Maher, giving this fair consideration, noted (in 2012):

”If Obama were as radical as they claim, here’s what he would have already done: pulled the troops out of Afghanistan, given us Medicare for all, ended the drug war, cut the defense budget in half, and turned Dick Cheney over to the Hague.” … “How can you guys be so unhappy with Obama when I’m so unhappy with Obama?  You think you got coal in your stocking?  I wanted single-payer health care, a carbon emissions bill, gun control, and legalized pot.  If you get to carry around all this outrage over me getting that shit, shouldn’t I have gotten it?”                                    

“Now, it somehow became an article of faith on the right that Barack Obama is the most extreme President in American history.  Although, when they say that, I think what they really mean is:  <He’s black.>”   

The element of racism in conservative circles is hard to deny.  Conservatives blamed President Obama for persistent high levels of unemployment, yet they have hypocritically done everything in their power to ensure that he does not succeed in reducing joblessness.  A funny greeting card in 2010 revealed deeper truths:  it has a picture of George W. Bush on it, and a caption below it reads:  “I Screwed You.  Thanks for Blaming it on the Black Guy.”

Make no mistake about it:  While there is all too much racism, bigotry and structural socioeconomic stratification in American business and society, this is by no means the whole story of the intense anti-Obama sentiment in certain circles like the Tea Party.  History is proving that Bill Clinton was a good president who actually succeeded in running a federal budget surplus in his last year in office, and yet the attitude of the right wing toward him was veritably supercharged with vituperative animosity, as evidenced by the drawn-out attempts to impeach him and cripple his presidency for his sexual improprieties with Monica Lewinski. 

The shrill anger of far right conservatism toward anything liberal has been hyped up using propaganda that manipulates public opinion and agitates people to the point that millions of poor Americans are deluded into opposing their own economic self-interest and the common good, and they vote in support of the corrupt agenda of billionaires and ideological extremists.  This is the crux of what the matter is with the U.S., according to historian Thomas Frank in his book What’s the Matter with Kansas.

Another Inequity Is Revealed

Another substantial inequity is being created in our economy that is markedly unfair to retired people and those who save money.  In response to the economic turbulence of recent years, the Federal Reserve has reduced interest rates to the lowest levels in 50 years.  The purpose of this strategy has been to stimulate the economy by encouraging borrowing, spending, investments, risk-taking, and real estate speculation.  This policy, in effect, causes a massive wealth transfer from savers to borrowers.  This is a current outcome of the “financial instability hypothesis” that Hyman Minsky described when he noted a cyclical progression in banking from safe lending practices to more intense competition to a speculative bubble frenzy of “Ponzi finance.” 

Extremely low interest rate policies now in effect constitute an estimated $350 billion annual penalty to savers and retired people.  The benefits of this policy go primarily to banks and investors rather than workers and common folk.  Banks make profits by leveraging the spread between the cost of funds and the charges they make for loans, so banks are primary beneficiaries of this policy, and banks never give borrowers the full benefit of reductions in their interest costs.

“Perversely, coming after a devastating financial crisis caused by companies and households that feasted on borrowing, ultra-low interest rates are now penalizing people who have paid down their debt and are trying to save.  It is also punishing those who rely on the proceeds of their nest eggs to pay the bills.”

                  --- “Debtors Feast At the Expense of the Frugal”, Graham Bowley, New York Times, 9/9/10

Germinating, January 1, 2015

Now that the Fed has got the stock market and real estate markets inflating again as the year 2015 begins, perhaps the time is ripe for an even more sure-fire plan.  It’s guaranteed to work in the short-term, because it honors the sacrosanct principles of supply and demand.  Here it is.  The Fed starts buying $100 billion in stocks in the S&P 500 every month for the next 5 years.  As soon as the S&P Average inflates by 25%, the Fed starts selling its stocks and applying its capital gains from the bold program to reduce the federal deficit.  Brilliant!  This is a bona fide flim flam plan, and even better than the huge bond-buying plan that the Fed engaged in for so many years, to the rational exuberance of stock investors.  It is better, of course, because there would be big public profits from the activity, unlike the bond-buying plan, where most of the profit is private.  (Lest anyone be fooled, I’m kidding.  When the new bubble created by this gambit burst, millions of people would be hurt.)

Reflections on Conflicting Goals of Consumers and Investors and Good Citizens

Federal government policies are practically schizophrenic in the way they treat competing interest groups in our societies.  These policies generally encourage overproduction and over-consumption, and not conservation or efficient uses or sensible allocations of resources.

The 2008 Farm Bill, for instance, was typical of poorly prioritized and misguided government policies.  The first Farm Bill had been enacted during the Great Depression to protect farmers against low crop prices and the environmental disaster caused by the devastating drought during the Dust Bowl of the 1930s.  Unfortunately, the Farm Bill has evolved into a massive subsidy program that mainly benefits large farm corporations, even when food prices and corporate agribusiness profits are high.  It is curious to see how life preservers that are thrown to the most vulnerable people in our society almost always eventually end up being grabbed by people who are the most affluent and best connected.  There is ostensibly no ‘women-and-children-first’ chivalry here!

In The Omnivore’s Dilemma, author Michael Pollan delves into the patchwork insanity that has evolved from early efforts by the federal government to help small farmers who were severely affected during the Depression by low crop prices and related losses of millions of family farms.  As seems to be the inalterable nature of our skewed and screwed-up political system, powerful special interests have exploited the Farm Bill to pervert it into a misguided misallocation of taxpayer funds. 

The net effect of Farm Policy is to subsidize the vast overproduction of a small number of crops like corn and soybeans.  Farm Policy also encourages a monoculture system of agriculture that is favorable to giant agribusiness corporations.  Undesirably, monoculture crops are much more vulnerable than more diverse crops.  Industrial agriculture systems are dependent on the extensive use of chemical fertilizers, pesticides, fossil fuels, and capital-intensive mechanized planting and harvesting.  A sad side effect of these policies is to drive many small farmers out of business.  Another consequence is that innovations in marketing and technology are developed that unwisely stimulate overconsumption of the food stuffs that are being overproduced. 

The unintended consequences of this industrial Farm Policy are far-reaching, and in many ways insensibly foolish.  The most serious impact that comes to mind is that we have, to an unprecedented extent, become a “fast food nation” in which obesity has basically become a costly national epidemic.

Let’s shift our frame of reference concerning the proper role of the federal government in our national policies.  The government is neither categorically bad, as the Tea Party crowd alleges, nor is it always better than poorly managed laissez-faire capitalism, as more liberal-minded people believe.  Neither unregulated private business activities nor rapid growth in federal government involvements in our economy are ideal.  And no collaboration of Big Government and Big Business is acceptable if it serves to maximize private profits while allowing many costs to be socialized.  A better, more proper, more providential balance is clearly required than the status quo.

When vested interests like banks and large corporations socialize costs to increase private profits, this is a form of “socialism for the rich”.  This form of socialism is more unfair, distorting and costly than entitlement “socialism”, which social conservatives rail about with increasing fervor these days.

Passionate arguments are made about an “invisible hand” of self-interest that guides aggregate outcomes toward the greater good.  Some people, like the philosopher/novelist Ayn Rand, propagated spin about the nobility of heroic industrialists.  But a simple fact remains:  whether or not one fervently believes that governments should have less involvement in the economy and people’s lives, or more responsibility and involvement, a deeper understanding of unintended consequences and more intelligently-prioritized principles is needed to ensure that our societies become economically stronger, fairer, more ecologically sound, and more likely to be sustainable.  There is a kernel of truth in every good argument, but this does not mean that the conclusions people reach are necessarily valid.  We need to find the best understandings!

A Perspective on Those who Oppose Ideas like These

Americans have been dishonest enough with themselves to allow anti-tax ‘conservatives’ to succeed in getting taxes reduced to multi-generational lows for people with the highest incomes.  We have effectively bought the story that cutting taxes will result in a shrinking of the size of the federal government.  The simple fact of the matter is that tax cuts have not even once resulted in less government spending in the past 50 years.  Instead, tax cuts have consistently contributed to large increases in the national debt. 

One consequence of deficit spending is a large “debt tax”.  This is the amount of interest expense incurred every year on the national debt.  Since our national debt is now almost $18.3 trillion as of July 2015, this creates a national vulnerability to a new episode of financial crisis.  We should face this fact and remedy the insidious risks created by such fiscal negligence. 

Anti-tax ideologies have crimped the budgets of state and local governments, and forced cutbacks in education, public services, law enforcement, first responders, court staffing, oversight of businesses by government agencies, and the maintenance of open spaces, State Parks, wilderness areas and our beautiful national parks.  These outcomes are deleterious to millions of people.  A better balance is needed in our efforts to control government spending without crippling the many good and necessary functions that governments serve.

The federal government’s efforts to stimulate the economy have alleviated the danger that would otherwise have prevailed if severe cutbacks in government spending and employment had been made during the credit crisis of 2008-2009.  The 6% annual rate of economic shrinkage in the last quarter of 2008 would have gotten much worse without economic stimulus spending and federal government bailouts of banking, insurance and auto industries.  And a much more severe economic recession would have resulted. 

Shrinking the size of government until it can be drowned in a bathtub, as advocated by the strict anti-tax ideologue Grover Norquist and his fat cat supporters, may appeal to some people, but it can be seen that en route to the dismantling of the public sector, a good portion of Americans would likely be harmed.  Deregulation, tax-cutting, privatization, laissez-faire governance, monopolies, the facilitating of rent-seeking activities, and the stimulation of increased leveraging may sound good in principle to some people, but the devil is always in the details.  As with anything not sensibly balanced, such things in aggregate can lead to highly undesirable consequences.

Established conventional wisdom is not necessarily right.  The dogma of deregulation, for instance, involves an almost religious regard for “free markets”.  But the failures of supposedly free markets are well known.  They include market instability, monopoly dislocations, extremes of inequality, cheap labor sweatshops, perverse incentives, irrational exuberance during speculative bubbles, paralyzing fears during economic recessions, cyclical levels of high unemployment and the socially irresponsible gambit of externalizing costs that can cause disastrous impacts on the environment.  Unfettered competition may result in low prices for consumers, but it can also encourage waste and create a “race to the bottom” by competitors who strive to evade environmental protection costs and to minimize wages and benefits for workers. 

Like deregulation, tax-cutting is an ideology fervently propounded by many wealthy people and other special interest groups.  This ideology has been disguised as a populist initiative, but in reality, it is a ruse by rich people to get outsized benefits for themselves by enlisting the gullibility, insecurity, anger and frustration of the masses in support of goals that are a boon principally to an extremely small proportion of the population. 

Any honest analysis of the effects of regressive changes in taxation that were implemented under Ronald Reagan and George W. Bush reveals that these changes have made life harder for most Americans.  These changes are an outright disaster for tens of millions of people who have seen the purchasing power of their wages decline, or have lost their jobs or savings or homes, or who are incarcerated in prisons, or who have been forced to choose to risk their lives fighting wars because it is one of few opportunities available to them.  Since tax-cutting has led to such large increases in the national debt, this narrow ideology is also decidedly negative to the prospects of all people in future generations.  Hell of a job, guys!

    “Push the frappe button again, man!”

                                                          --- Vinnie del Mar

Human nature intrinsically plays a defining role in our societies, economies and politics, so we should find a way of understanding human nature that is rational as well as intuitive and honest and true.  While human nature essentially remains the same, habits and behaviors can be profoundly influenced by public policies, for better or for worse.  We should be sure to strive for better outcomes!

Once again the need to implement socially and ecologically smarter incentives is accentuated.  People simply should be encouraged to do things that are advantageously consistent with the greater good.  Green taxes and properly-targeted disincentives should be enacted to discourage harmful activities.  Wrong-headed subsidies for industries that mine fossil fuels and provide war services should be cut.

It is high time that we begin acting with greater responsibility toward the generations that will follow us.  Politics oriented to the short term, along with “we win, you lose” partisanship, are becoming extreme disservices to the American people, now and in the future. 

Journalist Robert Kuttner makes a compelling observation in A Presidency in Peril – The Inside Story of Obama’s Promise, Wall Street’s Power, and the Struggle to Control Our Economic Future:

“Ideology is not some arbitrary penchant for clinging to stale ideas.  It is a principled set of beliefs about how the economy and society work, and should work.  To be a conservative Republican is to believe that markets work just fine, and that people mostly get what they deserve, and that government typically screws things up.  To be a liberal Democrat is to believe that market forces are often cruel and inefficient;  that the powerful take advantage of the powerless;  and that there are whole areas of economic life, from health care and Social Security to the regulation of finance, where affirmative government is the only way to deliver defensible outcomes for regular people.  The problem afflicting America is not ‘ideology’.  It’s the hegemony of right-wing ideology.”       

A new era of cooperative problem solving must be ushered in sometime soon.  Stubborn intransigence and extreme obstructionism are too counterproductive.  Step forward, Republicans.  Your dishonest spin and knee-jerk opposition are often not constructive, and in many ways they are sabotaging our nation.  This is not something about which to be proud.  Good governance is a better option!

An Evaluation of the High Cost of Low Prices and High Investment Returns

Fast-food workers conducted nationwide demonstrations demanding higher pay in December 2013.  Cheap food is cheap, Michael Pollan explains, partially “because the real costs of its production are hidden from us:  the exploitation of food and farm workers, the brutalization of animals, and the undermining of the health of the soil, the water and the atmosphere.”

There is an exceedingly high cost of low prices and artificially high profits.  Anyone who watches the documentary film Wal-Mart: The High Cost of Low Prices will be momentarily dazed and enlightened.  When a bright light is shined on specific follies of allowing costs to be externalized onto society, this stark illumination should motivate us to rise up and demand a new surge of better governance. 

Huge firms like Walmart and McDonald’s are notorious “for being brutally tough on their suppliers, forcing them to cut costs, and also for their opposition to unionization of their enormous, low-wage retail work forces, who often have very difficult working conditions.”

The litany of woes caused by Wal-Mart is staggering.  Their business model has destroyed thousands of small businesses and undermined the quality of life in many small towns.  It has radically upset the lives of countless owners of family stores.  Wal-Mart has engaged in ruthless monopoly practices and outsourced thousands of jobs to nations abroad that have cheaper labor and generally poor working conditions.  This behemoth corporation is the biggest employer in the U.S., so widespread ill effects prevail when it underpays its employees.  Its practices drive down retail wages, suppress collective bargaining rights of employees, discriminate against women, cheat workers out of overtime pay, exploit illegal immigrants, provide inadequate healthcare benefits to employees, and foist big costs onto taxpayers.  And it has even failed to take adequate steps to protect its customers in Wal-Mart parking lots from crime.  Wal-Mart is a primary driver in the “race to the bottom” that is hurting the American people and peoples abroad in many ways. 

Two Ohio Wal-Mart Superstores instituted a campaign around Christmas time in 2013 to get their employees to contribute desperately needed food -- to struggling, hungry Walmart employees.  ”That's right.  Walmart raked in $15.7 billion in profits last year alone, but apparently they don't feel any need to share that wealth with their millions of workers.  Instead, they stick them with poverty wages, and then send them off to ask government, food banks, or even each other for help.”  Outrageously, the Walton family has been unwilling to make generous contributions to this fund, even though it is the wealthiest family in the whole world.

What are the real costs of low wages?  Low wage earners receive an estimate $250 billion each year in food stamp assistance and Medicaid and other public benefits.  By underpaying retail and fast-food workers, big corporations force taxpayers to pay for these huge socialized costs.

A Plug for the Wisdom of Investing in Public Education and the Social Good

When budgets for higher education are cut, according to one professor, “it is like eating our seed corn”.  A strong case can be made that universities are among the most powerful engines of economic growth in every state, so their budgets should not continue to be slashed so deeply.  The prosperity of the U.S. today is, to a significant degree, based on technologies developed by government-funded R&D in universities, and by publicly-funded research institutes and the U.S. military and NASA.  Realizing this, it becomes clear that it is foolish to cut funding for higher education and research.

Only the most desperate farmer would eat seed corn that is critical to growing crops in future years.  Eating the seed corn is just so starkly shortsighted!  Such a course of action is even more foolhardy than letting one’s home fall apart by failing to maintain the roof or caulking, or risking a catastrophic fire by neglecting to keep functioning batteries in smoke detectors.  An extrapolation of this kind of myopia would be to let whole neighborhoods deteriorate, or entire communities, or the whole country.  Surely we can do better than this!

In thinking about the vital importance of seed corn, consider the strategies of corporations like Monsanto that obtain patents on genetically-modified seeds in an effort to create a monopoly on plant and animal life-forms themselves.  The creation of plants that produce no fertile seeds is a cynical strategy to make it necessary for farmers to buy new seeds every year.  The invention of sterile ‘Terminator seeds’ is a corporate ambition that is almost as potentially nefarious as efforts to privatize water supplies and create monopolies over fresh water sources.  These are insidiously exploitive methods of making bigger profits! 

I think it's time we stop, hey, what's that sound


Everybody look what's going down

                                                  --- Buffalo Springfield lyrics, For What Its Worth

It is important to understand that public universities are the most effective engines of social mobility.  From this perspective it is misguided to allow a good education to change from being a public good to a private commodity funded by big increases in burdensome personal debt.  Back in the late 1960s, most of the budgets for public universities were publicly funded.  Today, however, the federal government and various state governments provide only a small fraction of needed financing.  This is a change that reflects sadly on the wrongheaded nature of modern trends.  This is one of the “gradual and silent encroachments” that James Madison spoke about with such compelling acuity of insight when he warned Americans about the potential for people’s freedom to be violated by those in power.

Pope Francis has criticized the capitalist system by saying that people have “a crude and naive trust in the goodness of those wielding economic power.”  He was particularly tough in his words on ideologies that assume economic growth is a sufficient social goal and that deny governments an active role in humanizing free markets.  Rush Limbaugh jumped on these words from the Pope, accusing him of advocating “pure Marxism.”  Why the rancor?  Here the Pope was proposing deeper truths, and the leader of American “dittoheads” was practically apoplectic with fervor and conviction in promoting superficial untruths.  Limbaugh, of course, is paid exceedingly well for his maniacal diatribes, and he is required to pay very low tax rates on his ill-gained windfalls, in accordance with the politically determined tax system that treats high-income earners to historically low rates of tax.

As some of the hard working, hard-drinking, hard-living, hardscrabble whoring miners of old Wild West Colorado might have cautioned Limbaugh, “To Hell You Ride.”  Some things just gaily go hand in hand!

Paradoxes We Collectively Face

Daniel Goleman writes in Ecological Intelligence that “radical transparency” is needed to reveal to consumers the true environmental and social costs involved with the goods they buy.  It is Goleman’s hypothesis that once consumers know the extent of harmful impacts associated with every competing product, they will tend to choose ones that are greener.  Well, that may be true to an extent, but then again knowledge of true costs may not lead to significant changes in consumer behaviors.  The idea of greater transparency may be a good one, but I personally feel we need changes that are far more transformative.  We need to come to grips with the necessity of limiting waste and total consumption, and population growth, rather than merely trying to find ways to get people to buy things in slightly greener and more socially responsible manners.

If people in aggregate were to buy less stuff, it would help mitigate problems related to the depletion of resources and increasing amounts of pollution, toxic wastes and greenhouse gas emissions.  Such a development, however, would create an obvious paradox.  All national economies are largely predicated upon growth in consumption of goods and services, so a reduction in consumption on a per-capita basis, or a slowing in growth of the number of consumers, would crimp profits and could cause an economic recession, or worse.  Growth of government spending and borrowing would then become untenable, and Ponzi-like schemes of Social Security, Medicare and high government spending would falter.

This means that we are faced with a conundrum similar to the “paradox of thrift”.  This paradox recognizes the fact that, whereas it makes good sense for an individual to save some of the money he or she earns by spending less, if everyone were to do this at the same time, the overall level of spending would fall and businesses would cut back on production and lay off workers.  Individual thrift could thus cause increases in unemployment, and total savings might actually fall. 

The complexity of such interconnections makes it more necessary than ever to think in aggregate terms and to focus our public policy considerations on longer-term outcomes -- and to be scrupulously honest in our evaluations.  A new form of ecological intelligence should be embraced that emphasizes living on planet Earth in ecologically sound and sustainable ways.  To accomplish such a propitious goal, we surely need our political leaders to act much more fairly and sanely!

The Latest Perspective on the Paradox of Thrift

A “family belt-tightening” metaphor indicates that, during hard economic times, we should cut spending, save money, and pay down debts.  This metaphor is powerful because of its obvious validity at the level of individual household finances.  When a person loses their job, they either spend less money or incur more debt or eat into their savings.  This metaphor, however, is fundamentally misleading, and it can be a bad idea with regard to the national economy as a whole.  It turns out that what is smart for a family may not be smart for society.  This is true because of the paradox of thrift, in which belt tightening by everyone at once results in less spending in aggregate, and job layoffs, and a decline in total savings.  Everyone thus can become worse off.

When recessionary times occur and unemployment spikes, some form of collective action is needed -- like increased government investments and spending on necessary long-term projects.  A “winter on the farm” metaphor may be a better way to see things during hard economic times.  On a farm, when winter comes and many of the usual jobs do not need to be done, farmers keep busy with long-term projects like fixing machinery, repairing the barn, improving irrigation systems, or digging a new well. 

When the Great Depression took place, public works projects were undertaken that put millions of people to work by investing in national infrastructure improvements like roads, dams, bridges, firehouses, waterworks, airports, public transportation, electrical utilities, schools, libraries and parks.  Today, with interest rates at record lows and millions of people seeking jobs during a time of high rates of underemployment, and with a growing urgency to maintain and upgrade deteriorating roads, bridges and other infrastructure, it would seem like a no-brainer for us to once again make smart investments in needed national projects.

Since the U.S. has relied on enormous amounts of deficit financing in the past decade, government spending is under increasing scrutiny, and opposition is increasing to additional deficit financing.  So it is becoming important to find ways to stimulate the economy without borrowing more money.  And, sure enough, there is a good way.  Nobel Prize-winning economist Paul Samuelson proposed an idea in the 1940s:  a “balanced budget theorem”.  This idea held that if a government spent more on goods and services, and raised taxes by the same amount during a period of high unemployment, the national income would grow by the same amount as the tax, so after-tax income would be unchanged.  This would stimulate the economy without increasing the national debt. 

We should try this strategy.  We have given “supply-side economics” and the trickle-down theory credence for almost 35 years without any signs that they have any validity.  Trickle-down ideologies have created regressive tax changes and a dangerous spike in national debt, and radically widening disparities in wealth between rich people and everyone else.

Francois Hollande, today’s president of France, proposed an idea consistent with the balanced budget theorem to deal with high unemployment in his country when he first came into office.  He proposed a new tax on all incomes in excess of 1 million Euros per year (about $1.25 million).  The proceeds of this tax would be used to finance the hiring of 60,000 needed teachers.  The higher tax, plus the additional tax revenues from the teachers’ pay, would match the higher costs of the teachers’ wages, and investments in education would improve the skills and abilities of people in the workforce, giving the economy a future boost.

This balanced budget theorem makes sense.  It is much different theory than the trickle down theory, which rich people have been aggressively and disingenuously promoting for so many years.  Another result of trickle-down economics has been to erode the financial well-being of the majority of working people.  The trickle-down theory holds that tax cuts for the wealthy will result in rich people spending lots of money and investing their growing wealth, and that this will create jobs and trickle down to benefit everyone else.  This suspicious rationalization has become the main platform of the Republican Party, as it clamors to keep cutting taxes on people with the highest incomes.

Unfortunately, this ideology appears to be much more like a manipulative form of mass deception.  Yet somehow wealthy people manage to convince millions of people that this TRICKLE DOWN narrative is true -- or will someday soon surely prove to be true.

Government austerity measures are detrimental to economic growth, and they create political instability and heightened social unrest, as evidenced by upheavals in Greece, Spain and Italy.  National policies that create heightened stress on people, and more frustrations, and increased insecurity and more hardship, are proving to be misguided ways of managing our affairs.

People generally want good government, and they don’t want to spend their time and energy in worrying about whether or not the government will protect the best interests of the nation as a whole.  Americans don’t want a meddling, wasteful, fiscally irresponsible, privacy-invading, repressive or paternalistic government.  But they also don’t want one that discriminates against whole classes of people, or one that makes the majority of people less secure while enriching the wealthy. 

The Paradox of Profligacy

An even more complex conundrum confronts our civilizations in the form of a curious Paradox of Profligacy.  Economic growth is practically predicated on advertising-stimulated demand for products and services, and on conspicuous consumption, fashion obsolescence, wasteful uses of resources, the “wealth effect” of stimulated economic bubbles, inflationary monetary policies, the Keynesian stimulus of deficit spending, and a continuous growth in population.  But this profligacy will eventually and inevitably cause our Juggernaut of consumerism to crash headlong into limits inherent in finite resources and the natural carrying capacity of ecosystems for our needy and mindlessly greedy kind.

We have recklessly used up more resources in the last century than in all of the 200,000 years of our species’ existence.  This is made cogently clear in the thought-provoking and hauntingly beautiful film Home by the famous aerial photographer and ecologist Yann Arthus-Bertrand.  I strongly recommend that everyone check out this 93-minute-long film.   Watch it on YouTube.

It is madness to blithely pursue courses of action that deplete resources and harm the environmental commons that sustains us.  We collectively need to find some way to stop rushing blindly toward ecological collapse.  This increasingly likely outcome is not some doom-and-gloom expectation like mythological End Times prophecies in which God condemns humanity as retribution for supposed sins.  No, this is a more evidence-based understanding that we are gambling with the well-being of all people in future generations by our actions, both intentional and inadvertent. 

Our true salvation will be found in developing solutions to the overarching global challenges that face us, not in remaining ignorant or in denying greater truths, and not in slavishly obeying fears and embracing backward-looking dogmas.  We would be wise to courageously choose to honor the most honest and farsighted understandings and actions that will help create a safer and healthier future.

Questioning the Wisdom of Bubble Economics in Real Estate

Some friends and I had an interesting debate about whether or not it should be a national goal to have a booming real estate market.  The rapid inflation in home prices from 1997 to 2006 exceeded 10% annually in many regions.  Obviously it would have been better to have a smaller, steadier increase in home values, roughly keeping pace with inflation, rather than the volatility of a rapid appreciation and then a devastating bust. 

Home prices increased rapidly in the years after 1997 because Congress had enacted a very generous $250,000 capital gain tax exemption for an individual on the sale of a home, and a $500,000 exemption for a married couple.  This extraordinary encouragement stoked home prices and made real estate into an asset subject to economic bubble conditions.  The real estate bubble was engineered by banks, mortgage lenders, ratings agencies and Congress, among others, and it was aided and abetted by house-flipping speculators and the Federal Reserve.  Both the Clinton and Bush Administrations strongly promoted the expansion of home ownership.

After the bursting of the stock market dot-com bubble in March 2000, the Federal Reserve reduced interest rates to very low levels, creating even further speculative impetus in the housing market.  Banks eagerly and repetitively encouraged people to take out loans against their increasing home equity.  So, many people borrowed heavily, and this set up bigger risks of foreclosures when the market went bust.  Lax lending standards proliferated, just like economist Hyman Minsky said they would do in the late stages of an economic cycle.  This contributed to the severity of the bust.  Regulators also failed to prevent predatory lending practices, or to regulate subprime mortgages or mortgage-backed-security derivatives.

The real estate bubble also had significant undesirable effects on people who rent by causing rents to increase, making life more challenging for renters. And it contributed to the sprawling growth of suburbs, and forced more people into homelessness.  It also contributed to an increase in the national debt when Fannie Mae and Freddie Mac had to be bailed out. 

The fact of the matter is that homes physically deteriorate and actually depreciate as time passes.  Every homeowner is aware of this, because weathering and physical deterioration force them to make costly repairs.  Roofs must be periodically replaced, and new paint and maintenance are costly -- and these things are all too frequently needed.

In 2011, a stunning high of 28% of homeowners had negative equity, i.e. were “underwater”, according to Zillow, the online real estate database.  Taking into account the fact that Realtor fees are generally about 6% to sell a house, and a minimum 10% down payment is often required to buy another home, more than 50% of all mortgaged households in the U.S. were effectively underwater.  The real estate bubble trapped people into this position, and this has had highly negative impacts on the lives of millions of people.  As 2015 unfolds, real estate appreciation is again being strongly stimulated by continuing low interest rates, and this volatile cycle continues.

Another reason that home prices have increased so much is that average home sizes have gotten much larger.  The average house size was less than 1,000 sq. ft. in 1950, and it increased to more than 1,700 sq. ft. by 1980, and then to over 2,300 sq. ft. by 2010.  In housing, it seems, there is little respect for the idea that “small is beautiful”.  The realization that there is great virtue in simplicity and moderation has seemingly been lost.  The understanding that our possessions can come to possess us, and that oppressive debt is a form of bondage, are too often ignored.  And a fair-minded concern for the outlandish size of our ecological footprints is ridiculously slow in developing.

A Sensible New Proposal on Property Taxes

The average property tax rate in the U.S. is a startlingly high 1.38% of assessed home value every year.  That is a lot of money for millions of homeowners to pay.  The state of Hawaii has the lowest rate at .40%.  Texas has the highest rate at 2.57%.  What, are Texans really closet socialists?  (“There you go again, Tiffany!”)

Considering the fact that bigger homes use much more energy, water and construction materials than smaller homes, it would be a fair-minded plan to assess property taxes on a graduated basis that rewards owners of smaller homes for their ecological integrity, and simultaneously charges people more who choose to own excessively resource-consuming larger homes. 

Here is a fair-minded and forward-thinking proposal for all states to consider for property taxes on homes.  Such revisions in taxes would provide powerful incentives to reduce amounts of energy, fresh water and materials consumed in the construction, maintenance and use of mega-homes.  I suggest the following progressively-graduated changes in property tax rates, according to the size of the homes:

            House Size                         Proposed Change in Real Estate Taxes

      Under 1,000 sq. ft.                   Reduce current property taxes by 25%.

      1,001 to 1,500 sq. ft.                  Reduce current property taxes by 12%.

      1,501 to 2,000 sq. ft.                Leave tax rates unchanged.

      2,001 to 3,000 sq. ft.                 Increase current property taxes by 25%.

      3,001 to 5,000 sq. ft.                  Increase current property taxes by 50%.

      5,001 to 7,500 sq. ft.                  Increase current property taxes by 75%.

      7,500 sq. ft and larger               Increase current property taxes by 100%.

The net result of this change should be calibrated to result in a net increase in revenues from property taxes.  The additional revenues generated should be used to provide support for improvements in the physical infrastructure of communities, and to finance costs of first responders to emergencies.  A contribution should also be allocated to the maintenance of open spaces and local, regional and state parks.

Some communities have given eminently sensible consideration to a maximum limit on the size of homes, like a maximum of 15,000 sq. ft. in Aspen, Colorado and less than 2,800 sq. ft. in Crested Butte.  Since Americans love freedom to do as they please, a property tax plan like this would allow people the freedom to build monster homes, but sensibly require them to pay significantly more for the profligacy of that privilege and their lavish use of the Earth’s resources.

Another Angle in the Dysfunctionality of Political Problem-Solving

Almost every state in the U.S. faces budget shortfalls because of economic conditions and budget squeezes.  Opposition by conservatives to tax increases of any kind has caused most states to make draconian cuts to education, social programs and law enforcement.  By this refusal to find ways to responsibly raise revenues, conservatives are causing spending to be slashed on public services and programs that benefit important constituencies like children, college students, and poor people.  Better management and more sensible compromises should be made to solve such challenges.

California, which often leads the nation in trends, passed a ‘taxpayer revolt’ initiative in 1978.  Known as Proposition 13, the “People’s Initiative to Limit Property Taxation”, this law reduced property taxes by 57% at the time.  Now, more than 36 years later, provisions of this law have created bizarre inequities in real estate taxes.  New homeowners pay much more in taxes than their neighbors who have owned their homes for a long time.  This tax inequity also extends to commercial real estate, creating absurd tax unfairness for newer businesses.  This has a regressive effect of shifting a larger share of the tax burden from long-time homeowners and businesses to new homeowners, new businesses, younger people, and other taxpayers. 

Proposition 13 thus creates another form of ‘generational injustice’ that is somewhat similar to the federal government’s debt-financed mortgaging of the future and the aggregate squandering of natural resources.  Another seriously detrimental aspect of Proposition 13 was that the law included a provision that required a two-thirds majority of state legislators to approve any kind of tax increase in California, not just increases in property taxes.  This supermajority requirement has made it difficult to govern the state.  The impacts on cities and localities have been distinctly negative.  The devil being always in the details, what made sense in many respects in 1978 has become dysfunctional and calamitously unfair for millions of Californians today.  It has also contributed to the inability of politicians in the state to sensibly deal with problems.  If conservatives have their way, demanding tax cuts in response to almost every issue, California’s experience will become the norm for all states.

Larger and More Comprehensive Considerations

Big picture understandings should be cultivated so that we see more accurate assessments of the consequences of all public policies.  Unintended consequences abound in every national policy decision.  Consider, for instance, the North American Free Trade Agreement (NAFTA), which was signed in 1992 by Canada, Mexico and the United States.  This agreement resulted in a substantial increase in exports of corn to Mexico, a commodity produced cheaply by mechanized American agribusiness corporations that are highly subsidized.  As a result, an estimated 2 million jobs were lost on small farms in Mexico, and many of these farmers were forced in desperation to emigrate to the U.S., where they work for low wages and effectively push down wages for all wage earners.  

This massive influx of largely illegal immigrants has caused a wide range of problems and conflicts, and it has strengthened anti-immigrant sentiments.  It also undesirably stimulates the energy behind reactionary politics and empowers right-wing ideologues that use this issue to scapegoat immigrants, gain power and obstruct sorely needed progressive policies. 

Fair trade would have been a far better plan for almost everyone concerned than unfair “free trade”.  The negotiation of the NAFTA accord significantly benefited giant agribusiness corporations in the United States, and gave bigger profits to a relative few while causing high social costs that have adversely affected the lives of millions of people.  This is one more way that social instability and the ruthless aspects of competition and human nature are stimulated in our economic and political systems.  It is crazy to continue to encourage this “race to the bottom” that allows good citizen goals to be undermined and worker and environmental protections to be evaded. 

A good case can be made that gross inequalities and inequities are an inevitable part of the capitalist system.  A principal theme of Joseph Stiglitz’ excellent book The Price of Inequality is that inequities are also a result of political forces.  There are good reasons that capitalist societies should undertake a sensible partial redistribution of wealth in a just manner -- by instituting more steeply graduated tax policies.

While we are redesigning the incentives in our society, perhaps we should start by creating more effective incentives for politicians to make bipartisan compromises for the greater good.  People are getting tired of having their representatives continue to use the politics of inequity, division, fear and animosity, all to the detriment of the greater good.  This is a main reason that the approval ratings of Congress are at record lows.  I’ll bet we could come up with clever ways to prevent shortsighted expediencies and mean-spirited, elitist and self-serving politics from undermining our capacity to solve problems. Surely we could find better ways to create a more stable and stronger financial system and a healthier, fairer, more sustainable economy.

French economist Thomas Piketty concludes, in his epic book Capital in the Twenty-First Century, that unless something changes, the wealthy will keep getting wealthier at an accelerating rate.  He describes this outcome as being “terrifying”, for a variety of convincing reasons.  He is guided in his understandings by a good sense of history and economics, and a deep grasp of Enlightenment ethics.  These guiding lights have brought him to a better perspective on the genuinely terrifying implications of increasing inequality, and they have inspired him to propose a “global wealth tax”.  This great idea is consistent with the Fair Play Wealth Assessment plan recommended in Common Sense Revival.

The Positive Ramifications of Educating and Empowering Women

As these mega-trends play out, politics in the U.S. has become increasingly polarized.  In the past two decades, a culture of confrontation has replaced any semblance of working together to find consensus win/win solutions to problems.  Both sides of our American partisan political divide seem excessively preoccupied with gaining power and pandering to wealthy donors and corporations to retain their position, instead of being committed to actually enacting good solutions to problems. 

This undesirable aspect of intense competition has resulted in increasingly bitter partisanship and political gridlock.  It is principally because of this partisanship that we have had so difficult a time reforming our costly and unfair healthcare system, or enacting stronger regulations on banks and Wall Street financial institutions, or extricating ourselves from costly wars abroad. The dog-eat-dog character of our capitalist system amplifies this trend, and as a result, inequities and anxieties and stresses in our society are getting worse, and our national debt is becoming dangerously large.  At the same time, the competition for power and influence is getting more intense between conservatives and progressives, and it has become harder to enact policies truly oriented toward the greater good.

But it need not be this way.  One interesting idea was proposed by President Clinton’s first press secretary Dee Dee Myers, who makes a convincing case in her book Why Women Should Rule the World that very positive alternatives exist.  She writes that by taking steps to educate and empower women, we would likely improve cooperation in our societies and make our world more collaborative and peaceful.  This would be one form of salubrious ecological intelligence!

This makes me think of Woody Allen’s film Whatever Works.  The story presents a set of thought-provoking relationships that center around Boris, an eccentric New Yorker who is cynically realistic about life.  Boris is played by Larry David, the co-creator of the TV comedy Seinfeld.  Boris is philosophically cerebral, but after meeting an attractive young Mississippi woman who is sleeping on the street, he shares some meaningful interactions with her that brighten his life and help him realize that each of us should seek to be less judgmental of others and try to find greater meaning in our lives.  “Whatever works!”  A long train of entertaining developments takes place in the film before Boris concludes that each of us should seek whatever satisfactions and love we can find in our personal relationships in this challenging world. 

In addition to such wise sentiments, it seems to me that there is an overarching importance for us to find ways to ensure that we leave a thoughtfully fairer legacy to our descendents. 

On Economics and the Government

Economics is a field of speculation about the aggregate behavior of human beings, as reflected in markets, prices, and the production and consumption of goods and services.  It deals with issues like supply and demand, employment, monetary policies, resource allocation, theories of value, rational choices, opportunity costs among alternatives, and incentives and disincentives.  Microeconomics examines economic behaviors of individuals and businesses, while the larger picture macroeconomics addresses aggregate issues of unemployment, inflation, and monetary and fiscal policies.

Every nation in the world follows its own hybrid of private and public enterprise, of decentralized activities and centralized regulation.  Our goal should be to optimize this balance.  We need to honestly debate where this balance lies.  The fairest way for people in a democracy to find this balance is to objectively evaluate the evidence, listen well to those on the left and those on the right and those in the center, and to judge the merits of the various contentions, and to sort out the facts, and to discount ideas that are beneficial only to narrow constituencies.  The smartest compromises for the greatest good should then be implemented.  Common sense tells us that to achieve this goal, we should reduce the domineering influence of Big Money in our decision-making processes!

A Brief History of Economics

Economists have been called “worldly philosophers” because they seek to explain the most worldly of all of humankind’s activities -- the drive for wealth.  Economists seek to understand the expression of human nature that is reflected in markets and in the hard-fought struggle between capital and labor.  The first famous economist was Adam Smith, who in the year 1776 propounded his best-of-all-possible-worlds belief that the mechanisms of supply and demand should naturally lead to fair prices, proper resource allocations, and progress toward making everyone better off.  He optimistically believed that an “invisible hand” guides people by means of their natural self-interested human impulses and competitive striving.  He opined that this guidance tends to increase profits for both entrepreneurs and investors as well as wages for workers.

Adam Smith was right about this when private returns and social benefits are well aligned.  Such an alignment is not always the case, as when the pursuit of self-interest by bankers created a financial crisis that was exceedingly costly to billions of people worldwide.

Most worldly philosophers after Adam Smith were less sanguine and less optimistic than he was.  They recognized the risks of rapid population growth and systemic failures and resource depletion, as well as the anti-social nature of monopoly power, unfair competition, ruthless exploitation, rash risk-taking, and calamitous “tragedy of the commons” outcomes.  As economic thought evolved after Adam Smith, Thomas Robert Malthus pessimistically pointed out that, in the year 1800 at a time when there were just one billion people on Earth, human beings reproduce at such rates that human numbers would inevitable outstrip all possible means of subsistence.  Fellow economist David Ricardo saw bitter conflict between industrialists and workers and landlords, and he believed that only the narrow interests of landowners would have dominating force.

The early decades of the Industrial Revolution were characterized by extensive social ills, brutality and disruptive demographic upheavals.  In reaction, Karl Marx and Friedrich Engels wrote the Communist Manifesto in 1848, calling for workers to unite to triumph over capitalists.  They predicted that capitalism would inevitably collapse due to its big shortcomings.  These faults include monopoly abuses, a propensity toward the exploitation of workers by ruthless capitalists, and disruptive and damaging boom-and-bust cycles.  By the end of the nineteenth century, the conglomerate power of corporations had grown to such an extent that giant companies like Standard Oil had to be broken up during the trust-busting Progressive Era, and many fair-minded reforms were enacted to correct harsh working conditions and limit long working hours, child labor abuses, corruption and injustices.

Further changes in economic understandings and governance took place as a result of the cataclysmic Great Depression of the 1930s.  Far-reaching reforms were made to the banking system and labor laws, and a social security safety net was created to protect workers from the calamitous effects of speculative excesses and boom-and-bust cycles and increases in economic inequities.  After World War II, many initiatives were enacted like the G.I. Bill that helped build a stronger middle class.  These programs fostered a general prosperity during the 1950s and 1960s. 

By 1980, powerful interests reacted to the reforms that had limited their ability to dominate the economy and gain most of the benefits of economic activities for themselves.  Ronald Reagan launched his economic revolution, bringing a new ideology to dominance that advocated higher military spending and regressive changes in taxation that primarily benefitted the wealthy.  Unfortunately, his doctrines involved risky banking deregulation, union busting and large increases in deficit financing.  Since then, conflicts of ideas and the strife between powerful dominating interests and the common good have intensified.  Economic disasters have taken place due to deregulation and excessive speculation, yet it has proven extremely difficult to propitiously reform our dysfunctional systems.

Observations Concerning the Economic Doldrums

Ben Bernanke, the former Chairman of the Federal Reserve, once said that the search for the root causes of the Great Depression is an intellectual and practical challenge that is “the holy grail of macroeconomics.”  Bernanke was a scholar of the Depression and of the mistakes made at the time by the Federal Reserve Bank that caused the severe downturn to worsen.  The Fed at the time raised interest rates, tightened credit, and let thousands of banks fail. 

In order to cope with the severe 2008-2009 financial crisis, Ben Bernanke pursued policies that were the opposite of those used by the Federal Reserve during the Depression.  The Fed reduced interest rates, flooded credit markets with enormous amounts of money and bailed out big banks.  This was a strategy that eventually warded off the liquidity crisis, so Bernanke seems to have been the right man in the right place at the right time to deal with the risk-laden collapse of the amped-up real estate bubble and the confidence-shattering wake of associated credit availability problems.  He was quite flexible and creative, and even desperately improvisational, in acting to prevent the financial crisis from developing into a full-blown economic depression. 

Confidence, it turns out, is critically important to a healthy economy.  When customers feel secure enough to spend the money they earn, and lenders are willing to freely lend money, employers feel optimistic enough to hire more workers.  Financial markets, once disrupted, can enter a vicious spiral of self-fulfilling uncertainties that can result in constricted availability of credit and intensified systemic risks that tend to exacerbate an economic downturn.

But since Ben Bernanke’s success depended on flooding the system with newly printed money, he effectively laced the proverbial punchbowl with stimulative credit.  Congress reluctantly went along to stimulate the economy by spending hundreds of billions of dollars, increasing budget deficits and the national debt.  This bold strategy is having negative unintended consequences, and could cause future economic turmoil.  It will be a risky high-wire act to remove this debt-financed stimulus before the financial party gets out of control once again.  Alan Greenspan failed to do this, years ago, when his policies encouraged the inflation of the real estate bubble, and he did not take steps to prevent the bubble from getting too big.  So it will be a serious test of the effectiveness of the Federal Reserve to manage better in the coming months and years, as discussed in detail below. 

We have sown the seeds of the next crisis with all this unprecedented borrowing and spending.  I strongly believe the Fed should take a more courageous position on the inadvisability of enormous amounts of deficit spending and large increases in the national debt.  Unprecedented government stimulus spending and borrowing were the very remedies used by the federal government to prevent a worse recession, so such tactics will no longer be tenable if the next crisis is caused by too much debt and too much money in circulation.

The reason that shortsighted expediencies are likely to be the cause of the next economic bust is that China and Japan and other nations that help finance our deficits by buying American Treasury securities may eventually be forced to realize that the U.S. is unable to rein in its undisciplined finances.  If they stop buying these securities, interest rates would be driven up dramatically, causing a serious economic emergency.  This disaster could be avoided if we were to demonstrate an ability to more responsibly control government spending and enact more progressive taxation plans to reduce on-going deficits.  Our political representatives, however, seem committed to win/lose gamesmanship, which tends to make fair compromises less likely.  Change must come!

Do Deficits Matter?

John Talbott, the author of Obamanomics: How Bottom-Up Economic Prosperity Will Replace Trickle-Down Economics, wrote that the U.S. is hamstrung by its reckless reliance on the expansion of debt by individuals, corporations and government.  It is foolish to borrow so much money to finance rates of consumption that are not sustainable.  Talbott argued that since the federal government must print more and more money to finance its deficit spending ways, this inflation of our currency is “the only way to deflate the value of debts on everyone’s balance sheets at the same time.”  This strategy is risky because inflation has the extremely damaging effect of undermining real economic growth and true prosperity.  The U.S. has been irresponsible to base its economic well-being on shaky foundations like stimulated consumerism financed by inflationary monetary policies and ever-greater levels of borrowing.

We have backed ourselves into a desperate corner.  Addicted to bubble economics, we have gambled on getting the real estate and equities bubbles inflating once again.  This is essentially a way of doubling down on our bad past gambles --- a generally risky and unwise course of action!

Strategies that create boom-and-bust cycles lead to economic recoveries after recessions, and to big corporate profits before the next down cycle.  If we were to use this crisis to honestly address the problems that underlie our short-term oriented plans, it would be smarter.  Our economy should be restructured to bring into better balance the gains from productivity and the earnings from work efforts.  This would help ensure financial stability rather than causing periodic short-term-oriented booms and ruinous busts.

Deregulation of financial markets may provide high rates of return in the short run, but it helps create economic bubbles that inevitably burst and create severe economic instability.  The housing bubble was inflated by many means, for instance, and it may have been ‘great’ while it lasted, because sure enough it provided huge amounts of borrowing against increases in home equity.  This stimulated consumer spending and facilitated highly-leveraged investing, but it was a risk-filled course of action that resulted in devastating impacts on many homeowners.  Stimulating the real estate bubble had the collateral effect of making housing less affordable for millions of people, and it eventually caused the international economy to be destabilized, with extremely harmful consequences.  European countries, in particular, are still reeling in the aftermath.

High levels of deficit spending guarantee higher inflation in the long run, and this has the insidious effect of eroding the purchasing power of people’s savings, and acts as a hidden tax on everyone in the future.  This is why $100 today is worth the equivalent of only $20 in 1972 dollars.  The value of our currency has been deflated by this national policy, as set by the Federal Reserve in a tacit collaboration with our political representatives.  Inflation is regressive, like a flat tax, so it disproportionately affects the least prosperous people.  Inflation thus acts as an insidious force that is the opposite of fairer ideas like balanced budgets financed by more steeply graduated tax rates. 

Deficit spending and increases in the national debt have the effect of creating wealth for people today by borrowing money from people in the future.  This expediency, together with inflationary monetary policies, results in shortsighted and unfair outcomes, eventually stoking inflation and disproportionately affecting poor people and those in the middle class.  It also benefits capitalists and financiers at the expense of workers, whose wages are the last thing to increase during cyclical periods of high unemployment and inflation.

Our representatives would be forced to be more honest in making difficult spending decisions if we responsibly moved toward requiring a more nearly balanced federal budget.  They would need to decide what real trade-offs to make in our messy and poorly prioritized budget process.  We avoid making these hard choices by allowing the expediency of ever-growing deficits and national debt, but we should not make the mistake of thinking that in the long run this will be less costly than more responsible fiscal decisions.

If American citizens more clearly understood the correlation between the level of deficit spending and the long-term average rate of inflation, they would likely be more supportive of national mechanisms that mandate lower deficits.  Reining in deficit spending will entail hard decisions about spending and revenue-raising, and create challenging determinations of how to prioritize national spending.  Fiscal responsibility and respect for the rights of people in the future make it necessary that we stop using the short-term expediency of deficit spending all the time. 

Several years ago, a national newspaper presented opposing perspectives concerning the question of the risks of a rapidly growing national debt.  Respectable economist James K. Galbraith argued that deficit spending is nothing to worry about;  he contended, in fact, that the fear of deficits itself poses a greater danger.  An opposing point of view was proposed by Lawrence Grossman, a financial planner who claimed that the U.S. is a “negative-amortization nation”.  By this, he was referring to the fact that we are adding liabilities for government obligations and interest expense to the principal of our national debt every year.  “We as a country are heading for a fiscal train wreck”, he asserted.  Rapid increases in the national debt in recent years are risky, he noted, pointing out that the real national debt is much bigger than the official national debt because of obligations like Treasury bonds and huge unfunded commitments by the government to provide benefits like Social Security and Medicare far into the future.

My intuition tells me there is truth in both points of view, but that the latter one is more valid as a cornerstone of necessary precautionary action.  Tax cuts financed by money borrowed from people in the future are surely a form of inter-generational exploitation that is outrageously unwise and distinctly unfair to our descendents.

Perspectives of John Maynard Keynes

We have been irresponsibly avoiding making sensible decisions about the trade-offs involved in budgetary decisions, but we should begin to use deficit spending only in the way that the famous British economist John Maynard Keynes (pronounced ‘Canes’) originally recommended:  as a needed stimulus during economic contractions to mitigate the economic and social harm of recessions, and NOT as an acceptable policy each and every year even during economic expansions.  By allowing our representatives from both political parties to indulge in the expediency of deficit spending ALL THE TIME, we are choosing the insidious and regressive, but very real costs, of eventual higher rates of inflation or of a severe debt crisis.

John Maynard Keynes’ most influential work, The General Theory of Employment, Interest, and Money was published in 1936, during the Depression.  In it, Keynes argued "recessions don't fix themselves", so to correct the severe problems caused by downturns, a proactive effort by governments is needed to stimulate the economy.  This book helped establish Keynes as “the father of macroeconomics”, and his ideas still guide governments and fiscal policymakers worldwide to stabilize economies and to keep economic growth from being too fast or too slow. 

Keynes essentially suggested that, when the economy is growing quickly, governments ought to raise taxes and decrease spending in order to rein in inflation.  When the economy falls into a recession, he recommended that governments should lower taxes and increase spending to kick-start economic activities.  This concept of balanced growth, if followed, would likely have softened the blow of the Great Depression.  Such forms of government intervention continue to work reasonably well today;  the Fed still raises and lowers interest rates to balance growth and to moderate the rate of inflation.

Keynes was a participant in the conference that led to the creation of the World Bank and the International Monetary Fund.  These two institutions helped shape and stabilize the post-World War II global economy.  Keynes poked fun at conservative bankers in A Tract on Monetary Reform by saying that bankers strived “to shift public discussion of financial topics off the logical onto an alleged moral plane, which means a realm of thought where vested interests can be triumphant over the common good without further debate.”  Gee, this version of history seems to be repeating itself these days!

A challenge to Keynes’ theories came during the years of stagflation following the 1973 and 1979 oil shocks.  Keynesian theory had no appropriate policy responses to the oil supply shocks and the high rate of inflation during the 1970s.  The economist Milton Friedman argued convincingly that high rates of inflation were caused by rapid increases in the money supply.  One key to good stable policy is thus to reasonably and responsibly control the money supply.

The nature of our system, perversely, is that our representatives fight tooth and nail over which domestic priorities to spend money on, always cushioned by the expediency of deficit financing.  Our current national priorities, being unduly determined by corporate interests, are not generally consonant with the best interests of the majority of Americans.  Additionally, we never seem to consider the financial costs of the military and wars, which we commit to without adequate regard for how the costs will eventually be financed, and by whom.

Keynes is notorious for having observed, “In the long run, we are all dead.”  Sure, John Maynard, but we will have descendants, and we cannot neglect their interests in our excessive willingness to allow narrowly selfish constituencies to gain unfair and unaffordable advantages!

Cultivating a Better Understanding of the Federal Reserve

A big picture evaluation of mega-trends and overarching considerations is needed to assess the global economy and our addictions to growth in consumption and an increasing money supply and an ever-larger human population.  We need to clearly comprehend the aggregate risks associated with these strategies.  We need to see where we’ve been and what has happened with initiatives that eliminated common sense rules governing banks and other corporations.  We need to understand how economic bubbles have been inflated and why they have collapsed.  We also need a more accurate crystal ball and greater courage in the face of the astonishing force of inertia and the power of vested interest groups in dominating the rigged status quo. 

We should think like firefighters in a burning building, and we should simultaneously think like the fire chief who is responsible for mitigating the risks posed by conflagrations to come.  Better yet, we should think like leaders with responsibilities for bigger picture plans like fire safety codes, zoning restrictions, and the environmental impacts of real estate developments.

The “Lords of Finance” were the most influential bankers of the United States, Britain, France and Germany during the period from just before World War I through the Roaring Twenties and the Great Depression.  Their names -- Benjamin Strong, Montagu Norman, Emile Moreau and Hjalmar Schacht -- are practically unknown today, but these men had enormous power during some of the most turbulent times in the history of the world.  The Panic of 1907 had made it clear that a central banking institution of some sort was needed in the U.S. to deal with the systemic risks that capitalist economies faced when credit crises periodically occurred and economic bubbles burst and depositors made panicky runs to take their money out of banks. 

Congress created the Federal Reserve System in 1913 in response to the need made clear by such economic crises.  Just before the outbreak of war in Europe, the economies of the world were still anchored to fixed exchange rates and currencies backed by gold.  The enormous costs of the First World War were financed by debt and rampant printing of money by all the warring nations.  This led to crippled international finances and high inflation rates. 

After the war, Germany was saddled with enormous “reparations” obligations, so it continued to print vast quantities of money.  The German currency, the Deutsche Mark, had had an exchange rate of 4.2 to the dollar in 1914, and it depreciated to 4.2 trillion to the dollar by 1923.  This hyperinflation practically destroyed the German economy, so it is a cautionary tale that should motivate responsible central bankers to remain mindful of the risks of printing too much money.

The four main responsibilities of the Federal Reserve are: (1) to conduct monetary policy in a way that leads to stable prices and maximum employment; (2) to maintain the safety and soundness of financial institutions; (3) to limit systemic risk in financial markets; and (4) to protect consumers against deceptive and unfair financial practices and products.  Some say that by any sober assessment of the facts, the Fed has not been successful enough in ensuring the stability of the financial system, or in keeping economic bubbles from growing too large, or in creating maximum employment, or in protecting taxpayers from bailout costs or consumers from predatory banks.

The emphasis by central bankers on the growth of the money supply at the maximum rate that can be sustained without causing too rapid a rate of inflation actually serves to increase the potential for systemic crises.  A vigorous action of central bankers whenever deflationary pressures develop also creates systemic risks.  We should honestly strive to understand the trade-off between inflation and unemployment, and who the winners and losers are in Fed monetary policies. 

Economic uncertainties are beyond full comprehension, and the Fed may actually be doing a generally good job of managing capitalism within the constraints of our political system.  But the system itself has deep underpinnings of folly and unfairness.  The Fed’s sophisticated role in managing our economy by manipulating the money supply and interest rates can be seen as an official means of slowly expanding the money supply and causing an insidious inflation that diminishes the value of savings.  Not only does this act as a “hidden tax” on money saved, but it could also weaken the dollar relative to other currencies, with far-reaching ramifications and many less than desirable consequences.

In 2009, Congressman Ron Paul of Texas wrote in The Revolution – A Manifesto that when the Fed prints up more money, the increase in the total supply of money diminishes the value of all money already in the system.  This tactic has the effect of redistributing wealth from the poor and middle class to those who are politically well-connected.  This occurs because of the “distribution effects” of the inflationary process, in which big banks and other insiders are enriched at the expense of all others.  As prices increase, wages are the last thing to go up in response to inflationary monetary policies, so workers pay more for things long before their earnings increase.  Inflation thus disproportionately hurts workers, as well as those who save money or live on fixed incomes. 

Two hundred years ago, the founder of the House of Rothschild made the following observation:  “Let me issue and control a nation’s money and I care not who writes the laws.”  The Federal Reserve controls the money supply, so it is crucial we understand its role.  We should make sure that the Fed is effective in ensuring the common good -- and not just the best interests of bankers, privileged people, and self-serving constituencies.

To better understand just how our system has been rigged by the financial and political elites, I highly recommend watching Charles Ferguson’s documentary film, Inside Job.  Think about the situation of Brooksley Born, who was the head of the Commodity Futures Trading Commission in 1997.  She recommended regulatory oversight for complex financial derivatives like mortgage-backed securities and credit default swaps.  For her courageous advice, Ms. Born suffered rude and harsh criticism from financial decision-makers and insiders like Treasury Secretary Robert Rubin and Fed Chief Alan Greenspan.  The upshot was that these financial instruments were not regulated, and this failure was a causative factor in the extremely costly global economic meltdown of 2008-2009.  This outcome confirms that the crisis should truly be regarded as an inside job!  Bizarrely, no changes have yet been made to control these “financial instruments of mass destruction.”

A report issued in early 2011 by the Financial Crisis Inquiry Commission concluded:  “The enactment of legislation in 2000 to ban the regulation by both the federal and state governments of over-the-counter derivatives was a key turning point in the march toward the financial crisis.”  Deregulatory dogmas, in other words, helped spark risky speculation and inadequately limited leverage, and the accompanying lack of transparency increased systemic risks.  Requirements for collateral on loans were inadequate, and so were requirements for bank capital.  Four years after the depths of the financial crisis, the Financial Crisis Inquiry Commission Report stated:  “the U.S. financial sector is now more concentrated than ever in the hands of a few large, systemically significant institutions.”  The risks inherent in this state of affairs are numerous.

In April 2015, the valuations of technology companies in China’s stock market have been so stoked by speculative encouragements that price-earnings ratios are much higher than they were at the top of the tech bubble in the U.S. in 2000.  The rations of stock price to earnings reached 156 back then in the U.S., which was absurdly and unsustainably high, so now to see China’s tech sector valued at more than 200 times earnings send a cautionary signal.  A huge bubble seems destined to collapse, with ominous implications for economies worldwide.  We should have been positioning our national finances more securely in preparation for the risks to come, instead of running up our national debt up to dangerous levels.

Filmmaker Charles Ferguson says that before making Inside Job, he had “grossly underestimated the level of extraordinarily unethical and even fraudulent behavior that had occurred on such a large scale.”  Our prisons are full of people who commit small crimes, but it seems that those who think big and rip off the nation for enormous sums of money are never held accountable.  Here is another reason people with lots of money should be required to pony up more of their high-end gains in taxes, if only to finance the obscene costs of incarcerating so many people in prisons!

Audit the Fed!

Central bank monetary policies can cause misallocations of resources and distorted investment decisions.  The motives of private bankers and the Fed in getting the federal government to pursue the policies they do should be better understood.  Representative Barney Frank of Massachusetts and Congressman Ron Paul once sensibly called for an audit of Federal Reserve policies to determine the actual role of the Fed in the destabilizing Wall Street schemes of the last decade.  One can just imagine how politicized such an audit could become.  But it would be foolish to suppose that a high-level evaluation of Fed actions by a group of prominent economists of all stripes would not be a good idea for better planning, today and in light of the potential for future economic crises.  A detailed consideration of the impacts of Fed actions could provide clarity so that we would better understand the ways that private bankers provide benefits to elite segments of society at the expense of all others in our capitalist economic system. 

Such a blue-ribbon commission could make some valuable recommendations.  Maybe they would suggest that we pay more attention to fundamentals and simplify our laws and remove some of the favors and subsidies and complexities and dysfunctionality in our economic system.  As Thomas Paine expressed in Common Sense, “the more simple any thing is, the less liable it is to be disordered, and the easier repaired when disordered.” 

Does the Fed Contribute, by Design, to Booms and Inevitable Busts?

Federal Reserve policies are an art, not a hard science.  The Fed is supposedly independent within the government, and yet it serves the interests of the establishment, and not necessarily the interests of the common good.  The Federal Reserve is a prime enabler, for instance, of the overarching schemes of deficit spending and inflationary growth of the money supply and economic bubbles.

The Fed unquestionably operates within a complex constellation of competing objectives and powerful economic, social and political forces.  Federal Reserve officials make an arcane cost-benefit calculus in their decisions of how to use monetary policies to affect interest rates, inflation, employment, the money supply, the ups and downs of economic activity, behaviors of consumers and investors and bankers, and the stability of prices and the financial system itself. 

According to Friedrich August von Hayek, the 1974 Nobel Prize winner in economics, manipulations of interest rates and the money supply by the Federal Reserve “cause havoc throughout the economy, and set the stage for an inevitable bust.”  It appears that the policies of the Fed are boom and bust by design, whether or not the decision-makers admit this.  The Fed strives to avoid deflation at all costs, and to maintain a moderate rate of inflation that tends to benefit the rich, because the wealthy can exploit heightened opportunities for profit-making during good times and, if they are smart, they can also find ways of protecting themselves and doing well on the downside and the rebound.  Policies that contribute to economic busts create periods of high unemployment, so they directly victimize middle class workers and poorer Americans. 

The boom-and-bust nature of our economic system is directly related to the monetary policies of the Federal Reserve.  Inflationary increases in the money supply cause inequities and misallocations in the economy and an artificial prosperity in the short term.  When these activities eventually drive up interest rates, the higher rates have the effect of crowding out sensible investments and giving greater impetus to recessionary forces. 

The Fed rapidly increased the money supply during the 2008-2009 recession.  This guarantees that the economy will be whiplashed when the extremely low interest rates have had their stimulative effect of encouraging people to once again make unwise spending decisions and unsound investments.  The short-term false prosperity that is generated has the unfortunate adverse effect of assuring future dislocations.  Far from contributing to sustainable growth and wise investments, this aspect of casino capitalist systems is destabilizing, so it is not an acceptable strategy for long-term well-being!

By holding interest rates at extremely low levels, the Fed is effectively discouraging savings and penalizing frugal people.  It encourages wasteful spending and rash risk-taking, and creates the beginning of another series of misallocations of capital.  It is encourages market participants to take bigger risks than they would otherwise, so people make bigger speculative gambles and often wrong-headed investments. 

“Spending trillions of dollars trying to fix Wall Street is a fool’s errand.  Our hope lies not with the Wall Street phantom-wealth machine, but rather with the real-world economy of Main Street, where people engage in the production and exchange of real goods and services to meet the real needs of their children, families, and communities, and where they have a natural interest in maintaining the health and vitality of their natural environment.”

                                                                          --- David C. Korten, Agenda for a New Economy

Insightful journalist John Cassidy makes a similar argument in the well-considered ideas he presents in How Markets Fail – The Logic of Economic Calamities.  He analyzes all the ideological arguments of ‘Utopian Economics’ in Part One of this book, and then in Part Two he examines the provocative ideas of ‘Reality-Based Economics’.  It would be a better world if all members of Congress and think tanks were to read this book and take it to heart by heeding the ideas and recommendations it sets forth.

Financial markets can clearly be seen throughout history to be prone to the creation of asset bubbles, so regulators like the Fed, the Treasury Department, and the Securities and Exchange Commission should be given greater responsibility for seeing that economic bubbles do not grow too large in the future.  Speculative bubbles can be controlled by tightening the money supply and maintaining sensible margin and minimum capital requirements for speculators.  The amount of leverage and risk that market participants can employ should be more sensibly limited.  Smart and reasonable new regulations and government oversight should be implemented, especially of the tens of trillions of dollars of arcane unregulated derivatives like mortgage-backed securities and credit default swaps.  At the same time, unduly excessive regulations and bureaucratic red tape should be eliminated.

Cautionary Precedents

With our national debt at unprecedented levels and U.S. money printing presses running at full tilt, the Federal Reserve is continuing to indulge in highly stimulative monetary policies.

The Dow Jones Industrial Average began reaching a succession of new all-time highs in March 2013, finally exceeding its pre-recession record level set in March 2007. After setting that record in 2007, the Dow Jones had fallen more than 50% by March 2009, so the collapse and recovery involved dramatic volatility.  One analyst expressed the opinion that one of the next big problems is “how to normalize monetary policy without causing some bad fallout”.  In other words, how can the Federal Reserve take away its highly stimulative low-interest-rate policies and its lavish buying of Treasury securities, and slow the printing presses, without causing another economic recession and another big decline in equity prices.  The then Fed Chairman Ben Bernanke promised the Fed would “pick the right moment to begin removing accommodation and taking away the punch bowl.”  We shall see.

History provides us with a caution flag to see things in a bigger perspective, and to temper the excessive rashness of speculative exuberance in national planning.  Just consider the gambits involved in some early economic bubbles.  Two of the most colossal economic collapses in European history took place in 1720.  One involved the South Sea Company in England. This partnership of public and private interests was chartered to consolidate and reduce the cost of a large national debt incurred in connection with England’s involvement in the decade-long War of the Spanish Succession.  In this ill-fated scheme, the South Sea Company was granted a monopoly to all trade with South America, and it soon became a vehicle for speculation.  The company’s share price was driven up by disingenuous claims, scurrilous insider trading, political bribes and poor management.  Wikipedia elaborates: “The expectation of vast wealth from trade with South America was used to encourage the public to purchase shares, despite the limited likelihood this would ever happen.  The only significant trade which did take place was in slaves, but the company failed to manage this profitably.”  Nice going!

The value of shares in the South Sea Company spiked upwards in early 1720, but by the end of the year the bubble had collapsed, ruining many people and sending the economy into a recession.

Another instructive and cautionary episode took place in France in 1719 and 1720.  King Louis XVI had died in 1715, after a 72-year-long reign “that had begun in the glory of martial triumphs, the brilliance of literary masterpieces, and the splendor of baroque art -- and had ended in the decay of arts and letters, the exploitation and impoverishment of the people, and the defeat and humiliation of France.”  The new King, Louis XV, was only five years old at the time his great grandfather died, so Philippe II, the Duc d’Orleans, was chosen as Regent to lead France.  He inherited a heavily indebted government that was basically bankrupt, so he tried austerity measures and reductions in the size of the army, and he instituted tax reforms to get France back on its feet.  But the system was too corrupt to be easily fixed.  So the Regent “gave ear to a remarkable Scot, John Law, who offered him a new system of finance,” according to historians Will and Ariel Durant.

John Law advocated the magic of a credit system that used paper money instead of relying on reserves of gold and silver.  Paper money could be issued that was many times the value of reserves held in gold, so the gambit stimulated and facilitated commercial activities.  John Law’s central conception was to increase the employment of men and materials by issuing paper money on the credit of the state, and by lowering interest rates.  This strategy encouraged businessmen to borrow money for new enterprises and to more quickly exploit resources and innovative methods in industry and commerce.  By this means, paper money would stoke business activities, increase employment and production, and cause national revenues and reserves to rise.  More money could then be issued, and a beneficial spiral of prosperity would theoretically ensue.

Philippe agreed to let John Law establish a private Banque Générale in 1716 to accept deposits, pay interest, make loans, and issue its own bank notes.  These notes were the first regular paper money in France.  The initial steady value of this currency soon made the notes a preferred medium of exchange, and the Banque Générale basically became France’s first central bank.  The principles upon which John Law established his bank were more-or-less sound, just like the principles are of the Federal Reserve’s fractional reserve banking system today.  But that only remains true when there are reasonable limits on leveraging in place.  Doggone it, though, poor management and extravagant speculation soon drove the French economy to ruin.

Here’s how it happened.  John Law was given a monopoly in the Mississippi Company in the American South, and he began issuing shares that were hyped up in an effective marketing scheme.  Rash speculation ensued.  The shares gained value in a wild speculative bubble throughout 1719 and early 1720, gaining almost 2,000% in one year’s time.  But then this Mississippi Bubble burst, causing very high inflation in France -- 23% in the month of January 1720 alone.  As a consequence, the Regent was forced to abolish the bank and fire John Law, and France experienced renewed economic turmoil. 

Curiously, it was exactly 200 years later, in 1920, that the notorious scheme of con artist Charles Ponzi caused havoc in financial markets in the United States.  Ponzi hyped up a “rob-Peter-to-pay-Paul” scheme with a fictitious story about profits being earned on foreign postal reply coupons, and speculation became crazed.  By August 1920, however, the entire scheme collapsed.  One reasonably might wonder if the U.S. will be able to delay its own day of reckoning until 2020 before our own unwise national policies and depletionary enthusiasms lead to another severe economic crisis.

The Wisdom, or Folly, of Central Planning

Centrally-planned economies were proven to be much less effective than capitalist economies during the intense competition of the Cold War.  It is thus deeply ironic that we have allowed our monetary system, which is the very heart of our economy, to be centrally planned by a group of bankers at the Federal Reserve who game the system with favoritism of bankers and insiders, and unfair treatment of everyone else.

Former Fed Chairman Alan Greenspan made the observation in The Age of Turbulence that centrally-planned economies have been proven to be failures.  But this casts a curious suspicion on the wisdom of having the money supply and interest rates planned and controlled by a central bank.  The Fed is a centrally-planned regulatory institution in a jerry-rigged market economic system, and it has ironically been antagonistic in the past decade to sensible regulation of banks and Wall Street and financial derivatives.  The regulatory agency opposed regulation!  The Fed seems to oppose any form of central planning -- other than its own.  Even market fundamentalist Milton Friedman was in favor of abolishing the Federal Reserve System, so more thought should be given to the role of the Fed in our economy.

The ruthless competition between nations with free market economies and nations with centrally-planned economies during the Cold War gave proof through the fight that a relatively free market is better at motivating people to be productive than one planned by government bureaucrats.  Free market forces allocate resources in a more responsive way than in totalitarian economies because they respect the aggregate forces of supply and demand.  They also are much better at creating wealth.  For exactly the same reasons, it would seem that the control of interest rates and the money supply by a central bank is less desirable than letting market forces determine rates through supply and demand mechanisms.  It also seems probable that a stable money supply would be better and fairer in the long run than huge infusions during a crisis and then periodic reflexive retrenchments. 

The Fed should act with a greater overarching commitment to fostering sustainable economic growth, price stability, fair competition, and the safety and integrity of the banking system.  Some say the Fed does a good job at this, and that it is an unbiased and honest institution that is full of rectitude and propriety.  Others have a much more critical view of the Fed, and say that its policies are designed to help the wealthy, and that it gives inadequate concern to poor people, workers, the middle class and people in future generations.  The Fed definitely seems to work to perpetuate the status quo of a banking system that is dominated by big banks, which tend to treat small borrowers unfairly in the pursuit of ever-bigger profits.

The Goldilocks Syndrome and the Chairmen of the Federal Reserve

Investors hang on every word of the Fed chief, who is regarded as one of the most powerful people in the world.  Bob Woodward called Alan Greenspan ‘Maestro’ in his biography in the year 2000.  When the economic bubble was perking along just right, and banking deregulation and leveraging and risk-taking had not yet wreaked havoc on the economy, it seemed like Greenspan was a genius. 

Investors have a love/hate relationship with the Goldilocks gurus of the Federal Reserve.  As these supposed sages slowly inflate the money supply and manipulate interest rates, and print up money to finance the growth of the national debt, investments in equities seem to benefit from rising prices in the short term, and from the economic bubbles that this strategy facilitates.  This causes investors to feel confident that they can trust the Fed not to inflate the money supply too rapidly -- to do it “just right” -- and to staunchly prevent markets from ever actually undergoing any deflation. 

Alan Greenspan was regarded as the inscrutably wily apostle of economic brilliance and integrity during his tenure as Fed chief.  Wall Street investors lionized Greenspan, and latched onto his every pronouncement with awe and belief.  They loved his steady leadership because they had figured out how to profit from just the right amount of inflation in the money supply.  But then the eventual bursting of the hyped-up housing bubble revealed that his leadership and deregulatory enthusiasm had been contributory factors in rash risk-taking and a destabilizing growth in this bubble.  In clear-eyed retrospect, people have come to regard Greenspan’s policy-making as less smart or salubrious. 

Systemic risks introduced in the course of business-as-usual turn out to be occasionally too risky to justify allowing the status quo to remain unchanged.  Many people’s lives were seriously disrupted by the economic hardships, stock market decline, home foreclosures, high rates of joblessness and overly tight credit markets and deepening social stresses that resulted from the bursting of the housing bubble in 2008.  The brunt of these adversities was borne by workers who saw their wages stagnate, and people who lost their jobs or their homes.  These same people were then affected most adversely by cuts in outlays for social programs and increased in retirement insecurity.

When the boom turned to a bust, the system was shown once again to have been constructed so that profits are privatized while risks of bailing out the system are socialized.  In other words, when the costs are shouldered by taxpayers and people in the future who are saddled with the debt engendered by government largesse and emergency bailouts.  This is a negative outcome for most Americans.

“Almost 3 years after stepping down as chairman of the Federal Reserve, a humbled Mr. Greenspan admitted that he had put too much faith in the self-correcting power of free markets and had failed to anticipate the self-destructive power of wanton mortgage lending.”  He told the House Committee on Oversight and Government Reform, “Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief.”

Ben Bernanke, Greenspan’s successor as Fed Chairman, was named the “Person of the Year” for 2009 by Time Magazine.  His leadership of the Fed helped avert a potentially much worse global financial fiasco when the real estate bubble burst and the severe credit crisis ensued.  Bernanke seemed to be committed to doing the right thing, and I found his words to be cogently compelling when he said:

  “I want to be very, very clear:  too big to fail is one of the biggest problems we face in this

     country, and we must take action to eliminate too big too fail.” 

Eliminate too big to fail?  When, and how, will this be done?  Our political representatives appear to be much too weak-willed to make this happen.  Janet Yellen, the hope-inspiring new Fed chief, has yet to speak forcefully on this issue, indicating that policy makers “remain watchful for areas in need of further action.”

Instead of trust busting, the big trend today is mergers and acquisitions.  The severe financial crisis of 2008 made it clear that we should prevent firms from conglomerating to the point that they are too big to fail.  In 2009, while ordinary workers on Main Street struggled in the worst economic downturn since the Depression of the 1930s, financial firm employees on Wall Street had their most profitable year ever.  The insider investment firm Goldman Sachs had the best year in its 142-year history, and it paid its employees an average of nearly $600,000 each.  The top 25 hedge-fund managers raked in about $900 million each -- and they obscenely paid extremely low 15% capital gains rates on these ill-begotten windfall profits.

Here is another very good reason that our system of taxation should be reformed and made more steeply graduated, and that the outsized beneficiaries of our economy contribute a bigger share of their incomes to the enormous needs of running our civilization.  The Glass-Steagall Act should be reinstated to once again safely separate investment and depository banking, and to help prevent conflicts of interest that encourage too much risk-taking.  Banks and other corporate entities should be adequately regulated, and financial derivatives should be subjected to oversight and sensible rules to ensure the greater public good.  Our winner-take-all political system should be restructured to benefit the middle class rather than allowing the rich to grab the lion’s share of the wealth generated in our economy.

How can we bring back the spirit of Republican Theodore Roosevelt and the trust-busters of the Progressive Era to achieve these goals?  The Republican Party today seems to be too corrupt to even imagine taking a step in this direction.

“Quantitative Easing” Explained

An entertainingly funny six-minute YouTube cartoon video, Quantitative Easing Explained, became a surprise hit after Fed Chairman Ben Bernanke announced in November 2010 that the Fed would print up more money to buy as much as $600 billion in long-term Treasury bonds.  This action by the Fed is deceptively naked because, qualitatively, it is a creatively expedient move that has serious potential negative ramifications like eventually higher inflation, a weaker dollar, and a new economic crisis.

The move was dubbed QE2 because it follows a first round of similar stimulus in the form of a $2 trillion increase in the money supply in 2009.  That increase failed to have the intended effect of immediately promoting economic growth and increasing the number of jobs in the economy.  The move was partially responsible for stimulating bank profits and encouraging investments in riskier assets like stocks and commodities and gold, but it was a short-term oriented maneuver, not a sober and fair-minded policy.  Ben Bernanke promised that the Fed would pay attention as the economy heated up, and he reassured people that the Fed would dampen the stimulative effects of the increased money supply when necessary.  Stay tuned!

The Industrial Revolution, the Accumulation of Wealth, and the Conglomeration of Power

Ever since the Industrial Revolution gained a full head of steam, corporate conglomerates and top executives, industrialists and “robber barons” have seized advantages to make bigger profits for themselves, and wealth has become highly concentrated in the hands of the Few.  This process has taken place in benign ways by means of fair competition, technological innovation, economies of scale, greater efficiency and increased productivity, but it has also been accomplished by means of reprehensible business practices that are distinctly unfair and undesirable, including such gambits as monopoly practices, market manipulation, price fixing and other fraudulent activities, predatory banking, deceptive advertising, misappropriations of public funds, misrepresentations of evidence, trade libel, and institutionalized bribery.

In a vibrant and fair democracy, the people should be protected from underhanded business activities by rules of law that are well designed to satisfy greater good goals.  Instead, we have policies designed by corporations, lobbyists, and privileged people to provide loopholes and tax avoidance schemes, and practices have been embedded that facilitate shrewd schemes and fraudulent scams.

Egregious Instances of Corporate Abuses of Power

The Sherman Antitrust Act was passed in 1890 to deal with the unfair competition that had come to prevail in monopolistic industries like railroads, big oil and big tobacco.  The status quo had gotten so bad, back then, that workers and ‘muckraking’ writers and Progressive Era politicians managed to motivate President Theodore Roosevelt and then President William Howard Taft to use the Sherman Anti-Trust Act to break up more than 130 business conglomerates like Standard Oil.

Corporate lawyers and sycophantic politicians since then have made it more difficult to prevent business conglomerates from growing in size and power.  This has allowed corporate influence to dominate in our economy and across the globe.  Our entire market system has come to resemble one big ‘casino capitalist’ enterprise that violates the principles of fair competition.  This system creates extensive harm and wrong-headed priorities in most of the laws enacted either by Congress or by legislative bodies in the states.  Our government may be “the best government that money can buy”, as Mark Twain satirically observed, but as a consequence government entities often betray the public’s trust.  The system itself must be reformed!

One of the most egregious exemptions from anti-trust law today is one related to health insurance companies.  The McCarran-Ferguson Act of 1945 exempted these companies from federal antitrust regulations that theoretically apply to nearly every other industry.  Such rules had originally been designed to protect consumers from anti-competitive business practices.  The suspension of these rules has led to a dramatic consolidation in that industry, allowing health insurance issuers to engage in price fixing, excessive profiteering, bid rigging, and other monopoly practices.  The associated lack of competition is disadvantageous to the vast majority of Americans.  Partially as a result, the costs of health insurance have increased far faster than the general rate of inflation for every year in the past two decades.  This makes the lives of millions of people more challenging than necessary!

The anti-trust exemption for health insurance companies has allowed near monopolies to develop in many regional markets.  One or two companies control 75% to 95% of the market in many states.  This dominance leads to inadequate price competition and other negative outcomes. 

Senator Patrick Leahy of Vermont introduced a bill in 2009 called the Health Insurance Industry Antitrust Enforcement Act.  This law, if enacted, would have repealed the antitrust exemption for health insurance companies and fostered more competition.  President Obama stated that it was time to repeal the McCarran-Ferguson Act, and hearings were held in the Senate Judiciary Committee in October 2009.  Since then, however, the health insurance industry succeeded in using its powerful influence to the detriment of the American people to preclude such a sensible plan from being enacted, just as it has managed to torpedo a competition-fostering public option for health insurance.  It has also worked assiduously to subvert any really fair-minded reforms of our highly unfair healthcare system.  Smart single-payer universal healthcare?  Not a chance!

Since the rate of inflation in health insurance premiums has far exceeded price increases in almost anything else, it has contributed to the outrageous increase in profits at the largest publicly-traded health insurance companies in the U.S.  The profits of these companies increased an estimated 428% from 2000 to 2007.  The CEOs of these companies each routinely make more than $10 million per year, and the bureaucratic red tape for patients is absurdly costly.

The health insurance industry has prevented reform of its practices for too long.  This has cost Americans hundreds of billions of dollars and contributed to the deaths of tens of thousands of people every year who cannot afford health insurance.  The costs of healthcare have increased so much that they now account for almost 18% of all economic activity in the U.S. each year.  This system cries out for reform!  Unfortunately, our corporate-dominated system smart prevents reforms from being enacted that would be in the best interests of the majority of people.  

The 2010 “Lie of the Year” award was given by PolitiFact to the Republican refrain that the health care bill enacted by Congress (the Affordable Care Act) was a “government takeover of health care.”  PolitiFact stated that “it is inaccurate to call the plan a government takeover because it relies largely on the existing system of health coverage by employers.”  Not only is the plan NOT a government takeover of health care, but the new bill gives the profit-obsessed, red-tape-propagating insurance companies a central continuing role in health care by denying people the choice of a public insurance option.  Power once again triumphs over common sense!

The 2009 PolitiFact “Lie of the Year” concerned the ridiculous idea that there would be “death panels in Obamacare”.  It occurs to me that if any entity wanted to form real death panels, it would not be the government, which gives extra weight to the needs of old people who vote and to health insurance companies whose investors give generously to politicians.  The primary people really interested in denying critical care to people who cannot afford it are those who are apologists for profiteering corporations and the unlovely ilk of Republican politicians in Arizona, who are eager to externalize costs onto people other than rich people or residents of Arizona.

Why is it that people’s health has been the subject of more dishonesty than all other issues in our nation?  Read all about the billionaire Koch brothers’ fierce self-serving opposition to healthcare reform in Common Sense vs. Political Realities: An Anatomy of Dysfunctionality.

Astonishingly, and thanks again to political operatives and the greedy Koch brother billionaires, the “pants on fire” PolitiFact Lie of the Year in 2014 was the evidence-denying assertion that human-exacerbated climate change is a hoax.  Our children, and theirs, will see terrible consequences of this treacherous denial of how human activities are altering biotic conditions on Earth.

The Truth about Big Lies

The fact-checking organization PolitiFact analyzes political claims to separate rhetoric from truth.  They do so to enlighten voters and the general public.  While both the 2009 and 2010 “Lie of the Year” concerned healthcare reform efforts, there are far bigger deceptions than “death panels” and the “government takeover of health care.”  There are even Bigger Lies that distort our worldviews.

The “Big Lie” is a term first coined by Adolf Hitler in his 1925 autobiography Mein Kampf.   This term was made famous by Josef Goebbels, the propaganda minister for the German Third Reich.  The idea was simple enough:  if you tell a ‘big lie’ often enough, most people will come to accept it, as if it were the truth.  During World War II, the United States Office of Strategic Services (the predecessor of the CIA), described how the Germans used the Big Lie:  “Their primary rules were:  never admit a fault or wrong …;  never leave room for alternatives …;  never accept blame;  concentrate on one enemy at a time, and blame him for everything that goes wrong;  people will believe a big lie sooner than a little one;  and if you repeat it frequently enough people will sooner or later believe it."

The following is a summary of the most significant Big Lie deceptions in our world today.

Big Lie Number One.  Economic goals and environmental protection goals are not compatible.  The truth of the matter is that economic prosperity in the long run is entirely dependent on healthy ecosystems and uncompromised ecosystem services.

Big Lie Number Two.  It is a preposterous Big Lie to pretend that either the delegates to the Constitutional Convention in 1789 or our representatives who ratified the 14th Amendment in 1868 intended to give excessive power to large corporations and rich people at the expense of the common people.  The five "conservatives" on the Supreme Court, in chorus, may mouth the words, "Not true!”, but their corporate biases are so transparent as to be laughable.  Ha Ha!  Unfortunately, it is not at all funny that the corruption of our democratic republic by a small minority of apologists for the rich and powerful has so inimically affected the well-being of so many.  We Americans do not just want to eat our cake and have it, too;  we want real positive change, and greater social justice, and we want it NOW! 

Big Lie Number Three.  Some say that the “war on terror” is the most pernicious modern example of the Big Lie phenomenon.  The war on terror has been sold as an undertaking designed to make us safer.  Yet in truth this can be seen, in the larger context, to be a gambit to gain a global hegemony that is not unlike that of Adolf Hitler when he invaded a succession of countries.  The so-called war on terror has created a more dangerous world.  Our national actions since September 11, 2001 have been misguiding, and preemptive wars have been illegal under the Nuremberg Principles and other international laws.  The multi-trillion dollar cost of this broad war, and the extensive casualties that have been incurred, far exceed the actual threat of terrorism.  And the added debt associated with this rash, endless Orwellian war constitutes a significant threat to global well-being.  Resources and money could have been used in much better ways to make the world a fairer and more secure place.

Big Lie Number Four.  The economic health and the well-being of our country can best be achieved by reducing taxes on wealthy people so that benefits will trickle down to everyone else, and by using our military forces aggressively to protect U.S. business interests.  The opposite, in actuality, is true.

Big Lie Number Five.  The Social Security program is an entitlement program.  In fact, it is NOT an entitlement program.  Social Security is actually a retirement income insurance system that workers pay into over their working lives.  In treating the program as a kind of entitlement plan, every person that pays this insurance receives money back from current workers after they retire.  This insurance plan should properly pay out no more than is financed by payroll taxes.  And it should arguably be paid on a graduated basis to those who need it during retirement, not to every person no matter how much money they have.  A good proposal to provide a means of making the Social Security system truly secure and indefinitely sustainable is made in Radically Simple Ways to Make America Fairer, and to Fix Both Social Security and Health Care So We Can Move On to Address Much Bigger Issues.

      “When in doubt, tell the truth.”

                                                    --- Mark Twain

It is disturbing that our political leaders often resort so often to lies … or is it merely equivocation, tergiversation and prevarication? 

Mitt Romney, campaigning in 2002 for the office of Governor of Massachusetts, stated:  “I’m not a partisan Republican.  I’m someone who is moderate, and … my views are progressive.”  Was that the truth, or a falsehood?

Fast forward to February 2012.  The same Mitt Romney, then campaigning for the Republican nomination to run against President Obama, told right-wing activists that he had been a “severely conservative” governor of Massachusetts.  People can actually review his record and see that both of these characterizations are distortions of the truth.  What seems most clear is that he has flip-flopped more than almost any other politician in American history, like some rusty weathervane, creakily adjusting his positions to the direction of the wind, but doing so with a dissembling, self-serving, calculating, cluelessly unempathetic, hypocritical, contradictory, and dishonest attitude that willingly undermines women’s rights and gives special privileges to wealthy people in a rich-man’s cult-like ideology that seems excessively cold-hearted. 

 “Oh what a tangled web we weave

     When first we practice to deceive.”

                                                         --- Sir Walter Scott

The honesty of his character aside, Mitt Romney’s personal wealth is so large, and the rates of tax he personally pays are so low, that he has definite conflicts of interest when he advocates lower taxes on rich people.  This should have all but disqualified him from the position!  How could we have trusted that he would have served the country well?  Why would we have wanted to take that risk?

Politicians are not the only ones involved in wily deceptions.  The airwaves are dominated by often rude and argumentative talking heads like commentators on television’s Fox News and Rush Limbaugh on talk radio.  Mark Twain had his own humorous perspectives on deceptions and obfuscation.  He wrote in THE PUDD’NHEAD MAXIMS (Following the Equator, 1897):  “The principal difference between a cat and a lie is that the cat has only nine lives.” 

Fairness and the Nature of Shortsighted Expediencies

One pundit wrote this:  “Monetary policies are not and cannot be aimed at such big issues as the distribution of income, economic welfare, or social fairness.”  Accepting that it is true that the role of the Federal Reserve is not to address unfairness in our society, the President and Congress and federal courts are the entities that should assume this crucial responsibility.  Unfortunately, the people in these positions are too beholden to entrenched interests to significantly change our national priorities and policies.

Golden Rule fairness principles are at the heart of our democratic republic, and increasing extremes of inequality are fundamentally contrary to these principles. There are good arguments in favor of greater equality in our societies from the standpoint of opportunities and economic fairness and legal justice. There are even better arguments for a more fairly structured society from moral, religious and spiritual points of view.  A maximum number of citizens should be given as much control over their lives as possible, and be allowed as much say as is feasible over the direction their lives will take. 

This is a core principle of our American democracy.  This principle is sadly being subverted by the nature of our current economic and political institutions, which give big businesses and rich people too much power, and ordinary people too little power. 

Economic pressures often lead to political expediencies that are similar to our individual embraces of short-term-oriented courses of action.  The most powerful pressure comes from large corporations and rich people.  Corporations act in ways that are distinctly amoral because of the fact that their two primary legal purposes are to make profits and to shield their owners and executives from personal liabilities. Somehow we must find a way to refocus our political initiatives on healthier long-term priorities.

Political propensities to follow the easiest path are similar to people’s personal tendencies to follow expedient courses of action.  People eat fast food, for instance, because it is quick and cheap and easy, and it provides a burst of flavor and satisfies hunger.  But fast food is filled with inordinately large quantities of salt, saturated fat and sugar, so in the longer term it causes weight gain and many other negative consequences.  So fast food is a kind of foolish expediency.

Likewise, it is easier to let vested interests control our political system than to fight to change our system of institutional bribery.  It is easier to allow Big Business to prosper at the expense of society and the environment than to overcome the power of corporate money and dictate fairer terms in all legislation.  It is easier to encourage profligate usages of natural resources than to conserve them.  It is easier to maintain the status quo than to change it to be fairer and greener.  It is easier to use credit cards and borrow money than to pay cash up front, so millions of people run up large debts and incur exorbitant interest expense costs.  It is easier for the government to borrow money to finance wars and social programs and operations than to rigorously balance spending with income.  It is easier for the Fed to slowly inflate the American currency than to maintain a stable value for the dollar.  

And it is also expedient and easier for a superpower to resort to the use of force than to fairly and peacefully compete for limited supplies of resources.  It is easier to launch wars with borrowed money than to require people to pay today for such rash adventurism.  War is the ultimate expression of unbridled competition, and a good argument can be made that much of our international bluster and domineering actions are a reflection of our weak national commitment to Golden Rule fairness principles.  Wars are often launched with eager support from profit-seekers and ambitious politicians in the thrall of avarice and ego.

It is easier to fight wars with an “all volunteer’” army of paid soldiers than to impose a requirement on every citizen to serve a mandatory tour of military duty.  On the 40th anniversary of all-volunteer American military forces, David Kennedy wrote in The Modern American Military:  “In the years between 1945 and 1973, when there was a military draft, American forces were deployed overseas 19 times.  Since 1973, when the all-volunteer military came about, there have been 144 deployments.  The all-volunteer military has created a moral hazard.”

Our economic and political systems themselves are to blame for these adverse developments.  CEOs and managers who are responsible for the financial debacle of recent years should pay the price for the ‘moral hazard’ of having taken big risks to make enormous profits and bonuses.  But our leaders bail them out using taxpayers’ money and borrowed funds, and then once again allow them to make outsized earnings.  Banks are allowed to become too big to fail, and then they are bailed out instead of being let go into bankruptcy proceedings, despite the fact that such proceedings would be a more sensible and fairer way to get all involved parties to agree to compromises that would make these organizations leaner and more fit to survive. 

Every economic system is defined by rules.  In a simple barter economy, all participants are free to choose to make a trade or not, and to agree to terms of exchange.  The use of coercion is not acceptable in such primitive economies.  In a free market economy, likewise, the rules of law are theoretically designed to stimulate commerce in the fairest ways.  But because the political influence game is so tilted toward power-hungry insiders and rich people, those who have the most money have the most influence to rig the system to give them subsidies and unfair advantages.  Legislation that is enacted under these circumstances is generally regressive in its impacts.  This is undesirable!

Recognizing that human beings are motivated by impulses like envy, jealousy, avarice and pride, in addition to more noble virtues, we should sensibly take these things into account and redesign our systems so that they are fairer and oriented toward the longer-term best interests of all.

Ideas and Ideologies

The history of ideas is a vast and intriguing one.  The study of pivotal thoughts in the evolution of knowledge and perspective can be classified into broad domains.  There are ideas about the physical world, ideas about human nature, ideas about historical events, ideas about religions and philosophies, ideas in literature and art, and ideas about economics and politics.

The word ‘ideology’ was coined in the wake of the turmoil of the French Revolution by a French writer named Comte Antoine Destutt de Tracy.  It meant ‘the study of ideas’.  Comte Antoine was passionate in particular about notions such as individual liberties, fair societies, secular government, a free press, and freedom of thought and expression.  He held a high regard for logic, rationality, reason, and realistic understandings.  Bravo, Comte Antoine!

The meaning of the word ideology, however, has shifted over the years to a narrower sense.  Ideologies are now specific sets of beliefs and values that form the basis of an economic system or a political rationale or a religious orthodoxy.  Economic and political ideologies today are manipulative constructs that are often advocated to justify self-serving advantages and political partisanship.  This is true of ideologies that espouse laissez-faire capitalism, corporatism, trickle-down economics, and even socialism, fascism, communism, nationalism and militarism.

Not long after primitive barter economies evolved in the prehistory of humankind, trade no doubt became increasingly complex.  Some people chose to cooperate fairly and peaceably in trade, and others chose to follow more aggressive instincts and compete ruthlessly or use intimidation or coercion or violence to obtain what they wanted. 

The ruling classes of most nations use their influence and the propaganda of their self-interested ideologies to assert that the economic interests of the ruling class are identical to the economic interests of the entire society.  This is absurd!  It is about as ridiculous as a similar assertion that claims the best interests of big corporate entities are the same as the best interests of the majority of people.  Often, they simply are not!

Mainstream economics has become a science that is almost like a religion in its tenets of promoting

growth and justifying actions and policies that may be distinctly contrary to the greater good in the long run.  The misguided drive for growth in consumption is an artifact of dominant materialistic economic ideologies of modern times, which are becoming outdated as the need for more ecologically intelligent initiatives increases.  Prosperity cannot much longer rely so exclusively on activities that deplete resources and contribute to damages to the environment that supports us.

Ideologies are generally coherent systems of ideas that rely upon a number of basic assumptions about reality.  But these assumptions may not have any definite basis in actual fact.  These assumptions serve as the kernel around which further assertions grow, and they provide guidance for actions and behaviors and political initiatives or obstructions.  Ideologies are often fraught with one-sided thinking and the denial of opposing perspectives, and they often use emotionally manipulative kinds of spin to promote specific ways that believers feel the world ought to be organized.  And ideological arguments are generally used to get people to go along with narrowly focused agendas.

   “Reality --- What a concept!” 

Ideology is not the same thing as philosophy.  Philosophy is an open-minded branch of knowledge or academic study or speculative metaphysics that seeks to understand basic concepts and truths.  Ideologies tend to be focused more narrowly.  They can have positive features like passionate conviction and vigorous energy, but they also can have negative aspects like excessive and unwarranted certitude, stubborn rigidity, and misguided attitudes of domineering righteousness.

Philosophy is not mere intellectualizing or the propagation of an ideology.  Ideas can have important practical consequences, and it is vital that our ideas become broader, fairer and more accurate.

Liberality

When our American democracy fought against communism during the Cold War, it brought leaders to power who touted their anti-communist credentials and had little appreciation or respect for the virtues of liberal democracy.  Joseph McCarthy and Richard Nixon are two prime examples.  It is interesting that right-wing fascism presented the biggest threat to world peace during World War II, but then in the early years of the Cold War, the threat posed by ideology came from the left extremes of the political spectrum in the form of communism.  Today, the biggest ideological threats again come from the right, this time from free-market fundamentalists, Tea Party politicians and religious extremists, as well as in the form of unrealistic expectations of what military power can achieve.

“Liberalism is truest to its heritage when it rejects ideological thinking in favor of the idea that

   the first step necessary in changing the world is to understand it, as it actually exists.”    

                                                                                  --- Professor Alan Wolfe, The Future of Liberalism

Our Founding documents were based on the liberal ideas of the 17th century English philosopher John Locke and his philosophical follower, Thomas Jefferson, author of the Declaration of Independence.  John Locke insisted that government should be democratically based on the consent of the governed.  The core liberal principle of democracy holds that we should strive to maximize the extent to which a maximum number of people can exert control over their own lives. 

Procedural liberalism is valuable to everyone, whatever their views, because it supports rights and protections and rules of law that are enacted by representatives of the governed.  To scorn liberal ideas seems to me to be incredibly perverse.  Liberalism, after all, seeks to include rather than to exclude, to accept rather than to censor, to respect rather than to stigmatize, to welcome rather than to reject, and to be generous and appreciative rather than stingy and mean-spirited. 

Jesus was clearly a liberal in preaching greater fairness to the downtrodden, and in his opposition to the domineering emperors and high priests of the society in which he lived.  It is thus ironic that religious fundamentalists in the U.S. today join conservatives to oppose liberal ideas.

Conservatives often support the dysfunctional status quo, or alternatively advocate reforms that are regressive, repressive or unfair to the majority of Americans.  Social conservatives, swayed by the spin and manipulative propaganda of corporate interests and right-wing think tanks and religious fundamentalists, have managed to cast deep suspicion on liberal ideas.  They have practically made “liberal” a dirty word.  Modern radical conservatives sneer with seeming malice at liberals and liberal ideas and progressive plans, and they attack liberals with shrill invective and preposterous distortions like the disingenuous allegations of ‘death panels’ during the national healthcare debate.

The fact of the matter is that the United States was founded on liberal ideas such as concepts of fair dealings between citizens, and representative democracy governed by a constitution and rules of law, and rigorous constraints against tyranny and authoritarianism.  Because the U.S. Constitution was based on Enlightenment Era ideas, it is laughably absurd to see radical conservatives spinning it into strict-constructionist dogmas and retrogressive ideologies.

 “Out of the crooked timber of humanity, no straight thing was ever made.”

                                                                                                                   --- Philosopher Immanuel Kant

Rabbi Michael Lerner has called for the revival of the American liberal movement.  Provocatively, he says that it is nonsense to think only of what seems politically realistic.  He points out that we should not restrict ourselves to “what is realistic” as defined by the media and our elected officials.  “The most significant social changes have happened because the civil rights movement, the anti-war movement, the Women's movement, and the LGBT movement refused to be realistic in this sense.  And precisely because they refused to be realistic they succeeded in changing reality in dramatic ways.  Or to put it in terms that should be on everyone's banner:  you cannot know what is realistic in politics until you engage in a fierce struggle for your highest ideals, because what looked unrealistic before you engage in that struggle can suddenly become very realistic when others get the sense that it is safe for them, too, to fight for their highest ideals.  So, to our politicians, we must insist: Don't be realistic -- be principled, and even a little utopian -- because that is precisely what will make major steps toward a more humane, just, peaceful and loving society possible."  Hallelujah!

The Value of Big Picture Perspectives

Big picture perspectives can provide us with more accurate understandings.  This is a good thing.  Big picture understandings create more clarity, a deeper sense of context, and a truer connection to values that are more meaningful in our lives and work.  Accurate understandings can lead to better decision-making, wiser approaches, more optimal practices, and outcomes that are more positive for all concerned.  That’s the theory of it, anyway.

Take football -- please!  Football is the king of sports in the U.S., and NFL teams are generally owned by billionaires.  So when referees for professional football games were locked out of their jobs by NFL owners in August 2012, no one seemed to care too much, even though one of the replacement referees had actually been fired for incompetence by the Lingerie Football League.  Really, the Lingerie Football League!  Fired for incompetence!  I’m not making this up. 

In a Monday Night Football game between the Seattle Seahawks and the Green Bay Packers, the replacement referees ignored a blatant foul and ruled that, on the final play of the game, a Seahawks’ receiver actually caught a Hail Mary pass, rather than a Packers defender having intercepted it.  The ruling threw some $200 million in bets on the game’s outcome from those who had gambled on the Packers to those who had bet on the Seahawks.  Jubilation, and outrage, ensued.

This ruling made many football-loving Americans cry out in rage.  This put powerful pressure on NFL owners to come to terms with the referees’ union, which represents the union’s 121 professional referee members.  Many people have been bamboozled into thinking unions deserve to be demonized, and even that collective bargaining rights of workers should be eliminated.  But after replacement “scab” referees had made too many wrong calls, culminating in the travesty of the Seahawks/Packers game, suddenly millions of people took notice, and the wealthy owners were forced to negotiate in better faith and quickly agree to a fair agreement to end the three-week-long lockout.

“Truth is stranger than fiction, but it is because Fiction is obliged to stick to possibilities; 

    Truth isn’t.” 

                     --- Mark Twain

Here’s a big picture historical perspective.  The Industrial Revolution began about the same time as the 13 American colonies gained independence from Great Britain.  This was a technological, economic and social revolution that has featured a titanic struggle between capitalists and workers.  The Communist Manifesto of 1848 itself had been galvanized into existence because of the striking inequities involved in this strife between capitalists and workers.  The Gilded Age of the late 19th century witnessed many colossal conflicts between ruthless business owners and organizations of workers, and a surge of labor activism served to combat terrible working conditions and the harsh policies of corporate conglomerates, captains of industry and assorted robber barons of the times.

The need to deal more fairly with the many ills associated with industrialization and urbanization was glaring.  So was the need to make our economic system fairer, and to improve American society.   Great progress was made during the Progressive Era from the 1890s until the start of the first World War.  The important reforms that were made included the breaking up of monopolies and giant corporate trusts into less powerful organizations to ensure fairer competition.  Valiant efforts were also made to reduce the blatant political corruption that existed in those days. New laws were enacted to create safer products and safer workplaces, as well as a shorter work week, restrictions on child labor, collective bargaining rights, minimum wages, modernized schools, saner fiscal policy, more sensible business regulations, and a more secure banking system.  Numerous National Parks and urban parks were created, and a significant amount of national lands were protected.  Conservation initiatives and early protections of the environment were established.  Initiative and referendum processes were authorized to give citizens more power by allowing them to recall officials and introduce proposed laws that would be fairer to the people. 

This entire litany of hard-fought battles for expanded rights came into existence through hard fought struggles by millions of workers and families against ruthless business entities that have dominated this arena of strife for so long.  When the severe Depression came along in the 1930s, the serious shortcomings of capitalism were starkly highlighted anew, and wealthy people were forced to make concessions to make society fairer.  A New Deal was created that ushered in an age of more broadly shared prosperity after World War II, and gains in worker productivity were shared more fairly until 1980, when Ronald Reagan brought his folksy revolution along to reverse this progress. 

The rest of the story has been redundantly told in places throughout the Earth Manifesto.  Suffice it to say here that Dr. Tiffany B. Twain has thrown down the proverbial gauntlet, and wonders, “What heroes will pick it up and run with it?”

It appears to me, my dear Mr. Copperfield,” said Mrs. Micawber forcibly, “that what Mr. Micawber has to do, is to throw down the gauntlet to society, and say, in effect, ‘Show me who will take that up.  Let the party immediately step forward.’ ”

                                                                 --- Charles Dickens, David Copperfield

An Aside on Prohibition and Other Issues

Temperance movement activists early in the twentieth century were opposed to allowing people to drink wine, beer and hard liquor.  For a variety of social and health and religious reasons, they were against allowing people to enjoy alcoholic beverages.  In January 1920, these activists succeeded in getting the Eighteenth Amendment to the Constitution passed, making it illegal to manufacture, transport and sell all forms of alcohol.  This Prohibition assessed severe penalties against people who made illegal ‘bootleg’ alcohol.  As a result, organized crime became involved in the sale of various forms of alcohol, and rampant corruption took place among law enforcement agencies.  The law was extremely costly and unpopular, however, and it infringed upon and ruined many people’s lives, so it was finally repealed in December 1933 with the ratification of the Twenty-First Amendment. 

Social conservatives today generally support the federal government’s ‘war on drugs’, which is an attempt to achieve a kind of modern-day Pyrrhic victory against people who use marijuana and other drugs.  The ideology behind the drug war provides support for an intrusive government that prohibits things like medical and recreational uses of marijuana.  This impractically costly crusade against the use of cannabis ironically seems to actually encourage the use of this drug, judging from the higher rates of use in the U.S., where it has been harshly prohibited since 1937, as compared to its use in the Netherlands, where it is tolerated and practically legal.

The ‘war on drugs’ creates a black market for illegal drugs.  This policy ensures that the supply of drugs is provided in a dangerous and undesirable manner.  It also gives criminal sectors of society additional wealth, influence and power, and ruins the lives of millions of Americans by unnecessarily arresting them and forcing them to endure costly legal travails and harsh incarceration.  The insane escalation of public costs for the entire infrastructure of prison-building, prison administration and prison guards is absurd in the face of urgent needs for spending money on more common sense priorities.  There is an extremely high cost to society in arresting more than 700,000 people every year for drug-related offenses.  It is damaging to individuals and society to abandon the victims of these arrests to harsh fates.  Such Draconian prohibition-like initiatives are, from this perspective, rather dumb and quite counterproductive.

“The best way to tackle the problems of alcoholism and drug abuse would be to take bold steps

    to actually improve reality!”

                                            --- The underground Mole

Many people are accustomed to eating and drinking to excess in all kinds of celebrations and parties and get-togethers, particularly from Thanksgiving through New Year’s Day.  Alcohol is consumed by millions of Americans, and it is a social lubricant that is a distinctive feature of our culture.  Moderate consumption of wine, beer or cocktails can be quite pleasurable.  But alcohol does create significant social problems, especially when it is used in excess.  More than 100,000 people die every year as a result of cirrhosis of the liver and other afflictions associated with alcoholism.  Likewise, well over 100,000 people die each year of lung cancer caused by smoking cigarettes. 

Marijuana, in contrast, is not known to cause any diseases.  It can be providentially used to mitigate the pain associated with a variety of afflictions.  Its use sometimes enhances one’s pleasure and broadens one’s perspective, but it can also cause a variety of personal and social problems.  Those who overuse it with frequent use over long periods of time can become a bit dopey.  But marijuana prohibition laws are a costly anachronism of public policy.  Marijuana use should be decriminalized, and more sensible government policies should be formulated.  Sales of marijuana should be taxed, and its production and use should be fairly regulated.  The funds collected should be used to deal with problems caused by the abuse of this drug.  Such an approach would be much more in accord with the common good than our current Prohibition-like laws.

Marijuana, n.  Generically, a curiously intoxicating drug that produces madness in total abstainers

   and intolerance in born-again refrainers. 

                                                   --- Ambrose Bierce, The Devil’s Dictionary (paraphrased from Rum, n.)

Congress should reclassify marijuana from a Schedule I drug under a Federal Controlled Substances Act of 1970 to a Schedule II drug, in recognition of the fact that marijuana has accepted medical uses, as do other more powerful Schedule II drugs like morphine and opium.  By improperly classifying cannabis, the law preposterously implies that marijuana has a higher potential for abuse than much more addictive drugs.  This erroneous classification has led to absurd conflicts between federal and state drug laws.  Marijuana’s Schedule I status breeds widespread injustice and a lot of disrespect for government.  It forces the Drug Enforcement Administration to waste resources on such things as raiding the homes of people who have health afflictions.  It prevents testing to see which maladies really benefit from the use of marijuana.  The stigma of federal illegality deters some people from seeking help from a drug that could help make them feel better and suffer less pain.  And, really, shouldn’t law enforcement officers focus on protecting Americans from sociopaths and con men and predators rather than spending so much time and money on victimless crimes like marijuana use?

Organizations like Alcoholics Anonymous and various Rehab centers are much better suited to addressing problems associated with addictive behaviors than police forces.  Let’s leave the province of dealing with these problems to them, and cease using draconian punishments that cause costly consequences by imprisoning so many people!

A British study published online in November 2010 in the medical journal Lancet confirmed what should be crystal clear:  alcohol is far more harmful to society as a whole than marijuana use.  Researchers analyzed the extent to which substances are addictive and how they harm the human body, as well as other criteria like the amount of environmental damage caused by drugs and alcohol, and their role in breaking up families, and economic costs like health care and remedial social services and prisons. 

Alcohol, tobacco and caffeine are substances that happen to be conducive to workaholic behaviors or drowning the sorrows of workers, so society condones them, even in spite of the fact that they cause widespread harm and can be quite addictive.  Marijuana, on the other hand, seems to be prohibited partially because it is likely to make users less mindlessly accepting of work routine and materialistic consumerism.  These are hardly adequate reasons for the harsh suppression of cannabis use!  Huck Finn would chuckle to himself as he did in The Further Adventures of Huckleberry Finn, and declare that this viewpoint “ought to give the bullfrogs something to croak about for days, I bet.”

Marijuana was made illegal in 1937 based on lies, distortions, and the influence of yellow journalism.  An ambitious bureaucrat named Harry Anslinger was responsible for this criminal law.  Today, even with medical marijuana movements having passed partial legalization initiatives in more than 23 states and Washington D.C., the federal government is still prosecuting marijuana users.  It is time to revise federal laws related to marijuana use, and to reclassify it so that it is not a Schedule I Controlled Substance that supposedly has a high potential for abuse and “no currently accepted medical uses.”

In Cannabanomics: The Marijuana Policy Tipping Point, psychiatrist Glenn Fichtner explores the irrational politics that enshroud U.S. national policy toward cannabis use.  He asserts that this is a classic case of “social or mass psychosis”.  The war on drugs has deep undertones of racism in its highly discriminatory impact on black people and Latinos.  “The war on drugs just may be a bigger disaster than the war on terror,” says journalist Robert Koehler in a column titled Public Enemy No. 1.   

Robert Koehler asserts that “reefer madness” may be a case of sheer projection.  The true craziness is that of strict authoritarians who believe that it is sensible to enact and enforce harsh prohibitions against those who use marijuana.  Some of these people claim that smoking marijuana leads to mental derangement and violent behavior, so they support federal policies that harass people, arrest them, treat them as criminals, occasionally use shocking violence against offenders, and impose ridiculously severe punishments even against people who use cannabis for therapeutic and medical uses.

We can no longer afford the prison costs and social harm caused by the devastating impacts on the lives of millions of people due to current draconian drug laws.  Koehler notes:  “To my mind, this all smacks of the military-industrial metaphor that rules the American roost.  We’re quick to seize on something as the enemy and organize blindly around its destruction, never stopping to notice that what we’re really destroying is ourselves.”

Google “Watch High: The True Tale of American Marijuana” to see an educational documentary film on YouTube that provides a fuller understanding of the history of this modern day Prohibition-like war on cannabis.  One can watch this film for free;  well, subject to “limited commercial interruption”, including repeated ads for the erectile dysfunction drug Viagra.  What a bizarre world we live in!

Another stunning perspective on the misbegotten "war on drugs" can be seen on Netflix by watching The House I Live In.  This sobering documentary film tells many heart-wrenching stories and shines a bright light on this unnecessarily harsh national policy and its costly long-term impact on society.  The filmmaker, Eugene Jarecki, captures the stories of drug dealers, police officers, prison inmates and others affected by this crusade, which has cost $1 trillion in the last 40 years and resulted in the arrest of 45 million people.  The extent to which this wrong-headed crusade disproportionately affects black people and those in lower socioeconomic classes is made clear in the film, along with some of the odd injustices that have come to characterize our civil justice system.

It would be an excellent idea to legalize the use of marijuana for another compelling reason.  The legalization of marijuana would shift cultivation of cannabis to agricultural cropland that is more suitable to production than the public and private lands where it is secretly and illegally grown today.  Recent revelations have surfaced that illegal cultivation practices are causing serious environmental damages including forest clearing, stream diversions, shoddy road construction, and excessive usages of fertilizers and herbicides in places like the northern California counties of Mendocino, Humboldt and Trinity.  Legalization of marijuana would be a positive step because then cultivation would be regulated and taxed, and destructive practices would be radically reduced.

An Interim Conclusion of These Thoughts

It is time that we begin to make more rational, intelligent and honest public policy decisions that respect the greater good and the broadest interests of humanity.  These decisions should take into account various motivations and propensities innate in human nature, and should also give full consideration to the best understandings of scientists, philosophers, spiritual leaders and ecological economists.  One of our principal national goals should be to redesign our economic and political systems so that they are fairer to people now and in posterity. 

We would be wise to always measure public policy choices in the context of an awareness of the impact these actions will have on people today as well as in the future -- to our children and theirs, and theirs, and theirs, and theirs, and theirs, and theirs, not just to the fabled Seventh Generation, but indefinitely! 

Thanks for your consideration of these ideas!

    Truly,

        Dr. Tiffany B. Twain

             July 4, 2015

Disclaimer

I went to confession in a magnificent hilltop cathedral not long ago, and renounced all presumption, so readers can rest assured that it is only the slow pace of my editorial efforts that allows any of it to remain in the expression of these ideas.  I’m a gal who sees herself as distinctly unlike the teachers Christopher Hitchens describes in his English countryside boarding school, who he described as micro-megalomaniacs, or "those who are content to maintain absolute domination of a small sphere".  LOL … !

I have also made a commitment to my personal Muses to try and reduce the widespread redundancies that pervade the various Earth Manifesto writings.  I intend to scrutinize the tone and content of my expressed opinions to make sure they are more scrupulously fair.  Succinct, laconic and Spartan just do not seem to be in my makeup!  If brevity is the soul of wit, as Shakespeare asserted it to be in Hamlet, I must be witless.  Then again, Shakespeare’s character Polonius in Hamlet, who proclaimed this aphorism, had a personal propensity to give long and rambling speeches, so the joke may be on us all.  If brevity is the soul of wit, I’ll eat my hat!

Even more humbly I apologize for any tone or content that unfairly maligns or mischaracterizes any of the protagonists or villains in this serious and yet somewhat comedic farce.  The good news is that the natural selection of the passage of time is winnowing out some of the superfluous chaff from the vital seed, and I imagine receiving intelligent editorial feedback from readers someday that will allow a leap forward in conciseness and right perspective that will providentially strengthen the focus and force of these ideas.  Through the power of clarity and fair-mindedness, the transformative power of reasonable ideas may be given wing.  That’s the theory of it, anyway.

(Any volunteers to assist in this?  Help make history!)

 “Man's mind, once stretched by a new idea, never regains its original dimensions.”

                                                                                                                       --- Oliver Wendell Holmes

An Aside to Book Club Members

I challenge book club members to read and discuss Earth Manifesto ideas, and to provide me with incisive feedback.  I will make modifications, Wikipedia-like, for important, convincing points of view. 

I also encourage readers to review Recommended Reading for a Broader Understanding and Appreciation of the World in Part Five of the Earth Manifesto online for great thought-provoking books that explore some of the most compelling philosophical ideas in the history of the world.