Saturday, October 27, 2012

Mitt's magical apology tour

What on earth?

[I apologize(!) to my readers for excessive focus on politics... this election should be over soon.]

In the last debate, on foreign policy, Mitt Romney was even more muddled and brazen than in the prior ones. He agreed with every substantive point Obama made, yet claimed that somehow he would do things better and differenter. He wanted to get tougher on Iran, while assuring everyone he didn't want to get into any wars or anything. He wanted to start a trade war with China, despite having been busy shipping jobs and capital there over the years. He wanted more peace in the Middle East, but by using the attitudes and policies of the Bush administration. He wanted to "help move Pakistan in the right direction", but agreed with the US troop pullout from Afghanistan and our aid policies to Pakistan. And as usual, he wanted to spend more money on the military, and much more on tax breaks, and magically balance the budget as well. It only makes sense if he is lying about everything except his self-confidence. He wants to be president very badly, but apparently being a stuffed shirt for the ongoing class war by the severely conservative right is about as high as his policy ambitions go.

But, among all the crocodile tears, what was most grating was his repetition of the "apology tour" meme. This vitriolic invention of the FOX cesspool, which Romney picked up and used as a title for his campaign book, is one of those primitive psychological constructions the Republicans are so adept at, like tax relief and death panels. During the debate, Romney said:
"We're also going to have to have a far more effective and comprehensive strategy to help move the world away from terror and Islamic extremism. We haven't done that yet. We talk a lot about these things, but you look at the - the record, you look at the record. You look at the record of the last four years and say is Iran closer to a bomb? Yes. Is the Middle East in tumult? Yes. Is - is al-Qaida on the run, on its heels? No. Is - are Israel and the Palestinians closer to reaching a peace agreement?"

Now, how would one actually go about moving the world away from extremism and towards something like, say, the Arab spring? One might take a tour of Arab countries and talk about universal values of human rights, democracy, and self-determination, while subtly making it clear that the Bush administration has been succeeded, via orderly and democratic means, by a quite different administration, no less focused on US national interests, but less bellicose about bulldozing other countries to get there, and possessing a vision of US interests as compatible with peaceful coexistence and mutual respect rather than "You're with us or you're against us".

Rhetorically, Romney wanted to double down on all the good things that Obama has done, (you almost thought an apology was coming for saying all those bad things otherwise!), but in a way that takes us right back to the bluster and sabre-rattling of the last administration which was so offensive and counter-productive. We have more friends now in the Arab world than when Bush was in office, particularly among the people rather than the dictators, because of better foreign policy.

Certainly, much remains to be done. For instance, the Palestinian peace process, which Romney explicitly blamed Obama for not advancing, isn't going to be helped by the US being Israel's lapdog, which is Romney's official policy. That isn't a vision of strength, as far as I can see. Just like our last president, Romney seems to have a rather immature horror of apologizing for anything, and something of a toy soldiers approach to world affairs, not to mention a tin ear for diplomacy, as we saw in Britain. We can do better.

[As a final note, there must be some good omen in a World Series between two of the bluest cities around.]

"... Hitler managed to override the usual objections to stimulus."

Saturday, October 20, 2012

Wealth creates poverty

Inequality isn't just not nice, it is destructive.

In my reading about ancient Rome, author Michael Parenti (The Assassination of Julius Caesar) had a snappy phrase about economic dynamics: "wealth creates poverty". . (See it on youtube)

It got me wondering why this is such a durable theme and how it works in detail. Classical history is instructive as a perpetual contest between wealthy elites and the plebian masses. Rule by aristocrats was the rule, (property restictions were almost universal as tests for office and voting), but when they went too far, they faced revolt by the masses they depended on to till the fields, row the ships, and fight the wars. Several times the plebians of Rome took the civilized approach of seceding- "going galt", as it were. In contrast, aristocrats can not secede because they can not support themselves. They depend on their position in a working social system to be able to parasitize upon it.


The aristocratic elite had one tool in antiquity that they no longer have, which is education and training. With our diffusion of education, especially writing, reading, and related communication technologies, there is much less differentiation conferred by the kind of education that was once available to only the upperest of upper crusts. As we see painfully in this campaign season, our candidates may be very smart, but are not particularly well-learned compared to an average person with a bit of motivation. Nor is their rhetoric any kind of model, as was supposedly that of the ancient Romans. (Though to my mind, Cicero seems more a windbag than a model of eloquence.)

Education was often confused with birth and inborn nobility, gentility, etc. But the more we know about human genetics and the vast amount of intermixing going on all over our history / prehistory, the less of a case one can make for inborn lineage differences that are truly distinctive and significant. (Just look at that Royal family!) Perhaps now with our more thorough assortive mating via intelligence testing, high school tracking, and university admission, there may be longer term effects, but I doubt that as well.


Debt is perhaps the most powerful direct weapon, and a constant source of misery and conflict in ancient Rome. Given the relatively limited needs of the rich, (who after all are rich because they spend less money than they have), there are far more people willing to be employed than needed, (especially once the rich have captured all the land), leading to labor competition, leading to low wages. Low wages lead often enough to the inability to maintain even the low existence workers are accustomed to, leading to a need for debt, like payday loans, credit cards, etc.

The rich do have money and may be willing to lend it, but typically impose onerous terms, as well as a legal system that supports their ability to collect. In ancient Rome, this meant debtors selling themselves or their children into slavery to satisfy debts. Today, it merely means countless families stripped of their assets and prospects by way of predatory mortgages, and a bankruptcy regime made significantly harsher just in time for the current crisis.

Many cultures have tried to restrict usery, or even outlaw lending entirely, such as early Christianity and Islam up to the current day. Not terribly practical, but on the other hand, regulating lending is (or would indeed be) a very powerful way to restrict this perennial source of opportunism and class entrenchment.


Similar to debt, there are a wide range of other business practices by which the rich get richer. The hedge fund 2/20 payment system is an example, raking in money to managers who rarely provide commensurate benefits, while fleecing the slightly less well off in this case, rather than the outright poor. The investment world is full of such scams, from excessive mutual fund fees to nano-second arbitrage by Goldman Sachs, and insider trading. Of course is possible for poorer business people to fleece the rich as well. But they have less means to take this path, using, for instance, the professional assistance of high-priced lawyers. And the overriding power relations dictate that the poor are held more strictly to account in the legal and social system.

In Rome, the patricians basically stole the public lands that had been cultivated by the poor, through a combination of debt peonage, purchase, and outright force. Employing slaves instead on their new villas, they left the poor free Romans with little to do other than join the army or mill about in the slums of Rome.


Briefly, since I have discussed this elsewhere, the rich are rich in part because they save what they get rather than spending it. Excessive saving leads to low economic activity, squeezing those who work for a living, lowering wages, creating a spiral of depression- one of the most damaging economic phenomena. Being rich in antiquity often meant making gifts to the public- statues, temples, baths, games. But as the Roman empire ground on, such public spirit seems to have declined, and the rich became richer, building ever-larger gated communities (i.e. villas, the precursor to the feudal estate) and piling up their wealth, which was often only recirculated through political witch hunts, murders, and expropriations. Progressive taxation and inheritance taxes seem a more civilized method!


As touched on above, if the judicial system is run by the rich, and public policy is run by the rich, then it is likely to serve the rich. The Roman consitution went through several iterations where the people demanded powers, were placated by institutional reforms, which were eviscerated by later aristocratic innovations. When plebians were allowed into the Senate, their allegiance to their class (via the tribunate) slowly died and they became part of the ruling economic as well as social class. After Julius Caesar upended the Republican system by the threat of long-term dictatorial and popular rule, the ruling class first assassinated him and then came to a grand bargain with his successor Augustas in which he maintained their economic and social position, without any bothersome populism.

The current moment is vexing in this respect. The Republican party is commonly known to be the party of the rich. It is also well known to have authored the current economic crisis, by relaxing an entire ecosystem of regulations which then set the stage for mortgage fraud, underwriting fraud, credit rating agency fraud, and a variety of other predatory banking practices, after which the Republican party was principally responsible for showering money on those same institutions and same managers to bail them out.

One would think that their popularity would be low. But instead we appear to have a squillionaire Republican presidential candidate promising explicitly to relax financial regulations yet again and to forgive yet more taxes for the rich, all sold with the mantra that they are "job creators" who, by some magical means, if they are made as rich as Crassus, will trickle a little bit back down to the masses, rather than, say, building more gated McMansions for themselves as they have in the past, and off-shoring the remainder to the Cayman islands. And this candidate is polling at even odds to win. It is unthinkable in a true democracy.


Which brings us to ideology. Even more than politics, if one controls the ideology and narrative of a society, (via the corporatized media in our age, and the intellectual and historian elite in Rome), then one does not have to resort to crass fraud and armed robbery maintain one's privileged position. Genteel fraud and robbery will do. In Rome, we still inherit the historical prism of the aristocracy, who were the only historians. Thus we regard the fall of the "Republic" as a catastrophe, even though it had relatively little to do with democracy as we understand it today, but as largely a Senatorial oligarchy atop a virtually fascist state.

In our day, the Republican war on the inheritance tax offers an object lesson. Repealing it is another item on the Republican candidate's agenda, as though freedom and the American way depend on liberating super-wealthy families from the specter of this "death tax". Yet why should the children of the rich inherit great wealth? While we may "celebrate success" as the Republicans reminded us during their convention, they want their children excused from exertion or the need for success of any kind, putting to the lie their professions of faith in "equal opportunity", an "opportunity society", and the like. In my book, inheritance taxes should be 100%.

So there is a contest for the wealth of a society, usually won by those who are already rich. The economic and other elites try to fleece the lower classes as docorously and thoroughly as possible while getting their services as cheaply as possible. They have many advantages, leading to the general historical rule that societies become more unequal with time unless specific policies (of redistribution, debt forgiveness, and other amelioration) are devised, or until a revolution occurs (France), or until the inequality so ripens into economic sclerosis that ruins the society utterly (Rome).

  • Oligarchies self-destruct when they get too greedy.
  • Must the lying be so mindless? What do Romney's problems with arithmetic say about our educational system?
  • Tax cuts for job creators don't create jobs. And if they are revenue neutral on the wealthy- i.e. not actually tax cuts- they wouldn't do anything even in theory. So who buys this stuff?
  • Watch the hands... Romney's hands in action. 
  • Bill Black launches into an ocean of mixed metaphors.
  • Fraud at Bain- who would have suspected at such an upstanding company!? An object lesson in how the rest of us are screwed by those with the most money to throw around.
  • Debating a psychopath- probably not so easy. But psychopaths are really not so bad!
  • IBM makes a business of breaking employment laws to become company of poorly paid Indians and highly paid US chiefs (plus US servants, as needed).
  • Let's kill high frequency trading.
  • Luck, economics, and just deserts.

Wednesday, October 17, 2012

Romney lets a cat out of the bag

Special post on the presidential debate.

Personally, I thought the president was equally incisive and together in the first debate. But obviously the media has its own frame to fill, and shouting down others and bullying seem to be the "presidential" qualities du jour. It plays to Mitt Romney's strengths, but saddens and disturbs me. This after a period when we heard so much about the badness of bullying. How ironic.

Anyhow, Mr. Romney made a statement that was very important. Not new, but I hadn't heard it quite so clearly before:
"But your rate comes down and the burden also comes down on you for one more reason, and that is every middle-income taxpayer no longer will pay any tax on interest, dividends or capital gains. No tax on your savings. That makes life a lot easier.
And I will not -- I will not under any circumstances, reduce the share that's being paid by the highest income taxpayers."
 [Editor's note.. the comments below provide significant context to this quote, in that Romney added that his no-investment tax promise applies only up to middle-income taxpayers.]

If Obama were paying attention, he might have answered with something like:

"Mr Romney just said that in his plan, taxes on capital gains, investment income, and dividends would be eliminated. What would that do to his own taxes? Right now, under the Bush tax cuts, Mr Romney pays about 14% in taxes, which is lower than most middle class families and which I regard as disgraceful. Under his own plan, he would pay zero in taxes. Zero in taxes, because pretty much all his income is investment income.

Now there is no way to make up for this with deductions, credits, and loopholes, because he would already be paying zero taxes. Deductions and loopholes would have no effect. Extrapolating out to everyone in his position, again, there is no way to make up all his proposed tax gifts to the rich with deductions, credits, and loopholes.

Mr. Romney may be doing quantum mechanics or something. Frankly, I don't understand a lot of complicated math. But if you use arithmetic, there is no way to make all this add up. No way to make up for the enormous and explicit tax gifts Mr. Romney proposes for the rich with any amount of deductions, credits, and loopholes. 

And I believe it is insulting to you as listeners and citizens that Mr. Romney stands here and says otherwise, without having the detailed plan and math to back him up. His statements about making sure the rich pay their share are pure hot air, contrary to everything the modern Republican party stands for, and to everything he said during the campaign up until a few days ago.

Add in the elimination of the alternative minimum tax and the estate tax, and, when you are looking at Mr Romney, you are looking at a future of the rich in America getting richer and the poor getting poorer, in perpetuity. Of Mr. Romney and people like him, stomping on the face of the average American, forever."

Saturday, October 13, 2012

Cut the cable!

Over the air broadcasting works great.

Sick of paying through the nose for cable? The transition to digital TV improved reception in most of the US for old-fashioned over-the-air (OTR) television. For the price of a modest antenna and a contemporary TV with a digital tuner, (or a tuner box), you can be be in business getting scores of channels in most metropolitan areas.

Cable TV began as a community solution to bad OTR reception. Communities would set up an antenna on a hill, and feed cables down to residents in the reception shadows. This turned into a lucrative business, and then with the advent of cable-only channels, into its own ecosystem of nation-wide TV content, from the bass fishing channel to ESPN.

The pricing model is very curious, however. Cable providers typically have monopolies in their service areas, competing only with OTA broadcasters and lately with satellite providers. So there is a competitiveness problem from the start. Secondly, they bundle all sorts of channels into only a few pricing tiers, leaving consumers with very little real choice. They have used their monopoly position to fund forays into other businesses, like content, movie studios, and internet service, which is again a quasi-monopoly. They transmit all the same advertisements from the OTA broadcasters they carry, so the consumer is in some sense paying twice for those channels.

Remember how during the recent Olympics, getting any significant internet coverage required having a cable subscription showing that you really didn't need internet access after all? Despite the obvious capability of carrying advertisements on internet video, the corporations in charge thought it more important to fence in their cable franchises than to extend viewership in the new medium. (Ditto for Hulu.)

If it were all rigorously regulated in the public interest, these failures of competition might be rationally corrected, but obviously, the cable companies are far more profitable than they would be in such a scenario, and send some excess dollars back into the political system in support of right-wing causes and their own continued deregulation & monopoly position, as well as into ancillary industries to build up even bigger monopolistic positions.

Anyhow, so there are reasons to dislike the cable incumbents, and look at other alternatives. The internet provides one avenue to a variety of more obscure interests, (at least until the cable industry kills net neutrality!), which cable TV serves so haphazardly with its fringe fare. And the OTA broadcasters are still there, churning out waves to all who want to watch.

Really, setting up an antenna can be a lot simpler than setting up a cable system. Digital TV happens in the UHF and high-VHF radio bands. The low VHF channels like 2 to 5 have been dropped, though you will still see channels called #2 whose actual radio frequency has been shifted upwards under the covers. This means that the largest, most unwieldy elements of old-fashioned TV antennas are no longer needed. So, while rabbit ears may be quite enough in urban areas, for roof-top or attic use you need only a pretty modest antenna to get digital TV:

Most broadcasters in this digital world offer not only their main channel that you are used to, but 2 or 3 (or even 20) side channels with miscellaneous programming. In all, I can pull in about 57 channels in the San Francisco Bay area, including many in fascinating languages I do not understand.

Obviously, you would not know about this from most of the media. We are inundated with come-ons from the cable companies with insulting teaser rates. No one advertises for OTA TV, even while they enthusiastically advertise on it. The cable companies have tried to kill internet TV in various ways, and seem to have successfully restricted options for people to record OTR content on modern DVRs. Very few such machines are available, other than the higher-end TiVo boxes, which again require their own subscription, not to mention sending detailed viewing data out into the ether.

So, there is a better way. Drop the OWN channel, and get in touch with your local grass roots, by surfing those amazing waves over the air.

  • Verizon's bid to compete with cable dies- will join the cable-o-poly instead.
  • Put a nickel on the drum, pay for Republican indoctrination.
  • George Eliot, leading atheist.
  • Plutocrat "wins" debate by lying with gusto and shouting down "moderator". Next debate, knives and brass knuckles.
  • Romney doesn't know what he is talking about, or else has an astonishingly low opinion of the electorate ... as usual.
  • Romney becomes mayor of Sesame Street.
  • Our financial regulatory system is toothless and broken.
  • Simon Johnson, begging for bank reform.
  • Woodward hates Obama for some reason having to do with use of the telephone.
  • Austerity, Bowles-Simpson, monetary necrophilia.. call it what you will, it is wrong.

Saturday, October 6, 2012

Government is the killer app

The punic war, and a little more on group selection.

I've been reading a bit of Roman history, the Punic wars and the late Republic in particular. If you want to learn about group selection, this is a great place to start. The cohesion of groups was paramount, as was their judicious leadership. Make too many errors, and your city was razed and your population massacred. Or perhaps it was sold off into slavery. The price of communal failure was harsh, the rewards of success vast, whether one was close kin or not kin at all.

Rome excelled at pretty much one thing- government in all its forms. The typical activity of well-to-do Romans was a mix of law, soldiering, and politics, which they honed through hundreds of years into an ornate legal system, bloodthirsty militarism, merciless slavery, and stolid architecture. Their constitution was a mess, involving numerous bodies and elements, all in somewhat confused relation. It had, like its devoted student Britain, a mass of unwritten traditions and ever-evolving common law.

Early Rome was characterized by an extremely cohesive ruling class which occupied the senate, combined with modest input from a nominally sovereign popular assembly. Their consistency of judgement and constant aggressiveness allowed them to proceed from very unillustrious beginnings under the thumb of Etruscan monarchs to a Mediterranean-wide empire. Romans had very modest intellectual and artistic attainments, feeling perpetually inferior to Greece in this respect. They were cruel, practical, superstitious, fair in many dealings, and saw rhetoric as their highest art.

But with success and expansion, something about this republic went haywire, as the riches flowing in sapped the unity of the ruling class and bred corruption, the enormous armies in the field bled power from the senate to its appointed generals, and the nominal sovereignty of the assembly became real after the partial breakdown of the unwritten clientela system that fed senatorial dominance (in part displaced by the grain dole). Corruption grew and political violence, previously unheard of, ripened into senatorial murder squads, mob actions and civil war. The senatorial faction (optimates) evidently lost ideological control of the masses, and murdered a long series of popular leaders. Consul after consul edged closer to dictatorship until finally Julius Caesar swept the Senate aside for good. Ultimately, the senatorial class settled for political toothlessness in the empire of Augustus, in exchange for his careful preservation of their economic and social interests.

It is the usual story of aristocratic oligarchies challenged by members who take up the mantle of far-overdue popular reform, who through the vitriolic and murderous opposition of entrenched powers are forced into the position of dictators, which they eventually find rather amenable, (Julius Caesar, Napoleon, Lenin, etc.), leading to reversion to an even starker form of status quo aristocratic power as emperors, Fuerers, party chairmen, etc.

I see it as a lesson in two ways. First, in the importance of government, as against the Republican refrain of the last few decades where government is always "the problem", must be smaller, must always serve the rich, etc. and so forth. And second, in the importance of good government. Sure, if one governs badly, (certain recent Republican presidents come to mind), then government is going to be the problem.

But we humans have little power to do anything useful without our social institutions, and while private enterprise has its significant place, we also have many needs for common action that can not be filled by individual greed / voluntary enterprise alone. It is truly remarkable how thoroughly we have been dumbed down and deceived through this ideology of late, taking for granted the work of centuries and millennia.

Fittingly enough, the US Senate is, in our day, leading the way to institutional breakdown and corruption. Each Senator is known to think of her- or himself as presidential material, and they have devised ways to make themselves mini-presidents, at least of a negative variety, with the ability to block, veto, and filibuster any action. Executive appointments go unfilled, needed reforms are anonymously blocked, and the public's business is held hostage to unseen special interests and fringe agendas.

We are not at the point of armed gangs going from chamber to chamber in the US capitol, clubbing people to death. But we should take a hard look at the breakdown of our intitutions, at the heart of which is corruption by money and the unconstitutional arrogation of power by the Senate through its internal "rules". Our system is easily as oligarchical as Rome's, in the sense that the Supreme Court has deemed money to equal speech. While Rome had its attachment to rhetoric, tradition, circuses, and privilege, we have ours to the miracle of modern advertising methods, sound bites, and astroturfing- the alchemical transformation of money into power.

So don't look to the iPhone to save our civilization. The focus should be on the East coast, not the West. For all the communication we are now swamped with, how much of it counts? How much of it makes the world a better place? Who runs our TV systems and pours content into those fat pipes? Who makes the rules? Who tells the politicians what to say? Can we turn our gaze from the navels of Facebook out to the collective system that controls so much of our fate? Can we put people back into politics, instead of money?

  • The Cato institute says it draws its name from a series of British pamphlets called Cato's letters. But more likely they draw inspiration from the ultra-conservative and pretty much fascist Catos the elder and younger of ancient Rome. The elder ended each speech with "Furthermore, I believe that Carthage must be destroyed."
  • From the Cato letters ... "In all these cases, ’tis abundantly the interest of a nation, to promote credit and mutual confidence; and the only possible way effectually to do this, is to maintain publick honour and honesty; to provide ready remedies for private injustice and oppression; to protect the innocent and helpless from being destroyed by fraud and rapine."
  • Also note letter 108 on morals and indeed animal rights. "I will suppose, for once, a dialogue between his Holiness and a lion ..."
  • TED talk on trust and sharing ... and online reputation capital.
  • Voting is a tiny step in a much larger process.
  • Speech should be free- all of it.
  • The great barrier reef is half as great, over the last three decades.
  • Bikes are back, in Italy.
  • Messiahs- more common than you might think.
  • A Fed official lies for ideology.
  • Bill Mitchell, plea of the week:
"The damage that arises from excluding the youth from the labour market is life-long and then some. This cohort will carry the disadvantage throughout their lives and typically endure unstable and low-paid work interspersed with lengthy periods of unemployment when the business cycle turns down.
But even more damaging is that they will find it harder to form stable relationships and if they do their children will inherit this disadvantage arising from the exclusion at this time of their parent(s).
It is unfathomable why this is not an absolute policy priority and the Euro leaders announce immediate job creation programs through the Eurozone targetted at youth, if they cannot bring themselves to introduce an unconditional job guarantee for all workers.
The costs of this folly are so large and so enduring that there is no fiscal justification that can be mounted to not introduce such a plan.
And if you think about it from a conspiracy theory perspective – that the EU elites are trying to destroy unions and the welfare state – it is still a pretty weird strategy to undermine the prospects of the future workforce in an era when dependency ratios are rising and there is a greater need than ever for increasing productivity growth."