Archive for the ‘taxation’ Category
A powerful essay from George Monbiot.
I do so because in a world where much of the media is ‘bought’, and do understand that I use the term loosely, solid and trustworthy correspondents are to be applauded and, in turn, their views shared. Mr. Monbiot is a classic example of someone who adheres to a truthful perspective. I am more than grateful for the blanket permission given to me by GM for the republication of his essays.
Deviant and Proud
August 5, 2014
Do you feel left out? Perhaps it’s because you refuse to succumb to the competition, envy and fear neoliberalism breeds.
By George Monbiot, published in the Guardian 6th August 2014
To be at peace with a troubled world: this is not a reasonable aim. It can be achieved only through a disavowal of what surrounds you. To be at peace with yourself within a troubled world: that, by contrast, is an honourable aspiration. This column is for those who feel at odds with life. It calls on you not to be ashamed.
I was prompted to write it by a remarkable book, just published in English, by a Belgian professor of psychoanalysis, Paul Verhaeghe (1). What About Me?: The Struggle for Identity in a Market-Based Society is one of those books that, by making connections between apparently distinct phenomena, permits sudden new insights into what is happening to us and why.
We are social animals, Verhaeghe argues, and our identity is shaped by the norms and values we absorb from other people. Every society defines and shapes its own normality – and its own abnormality – according to dominant narratives, and seeks either to make people comply or to exclude them if they don’t.
Today the dominant narrative is that of market fundamentalism, widely known in Europe as neoliberalism. The story it tells is that the market can resolve almost all social, economic and political problems. The less the state regulates and taxes us, the better off we will be. Public services should be privatised, public spending should be cut and business should be freed from social control. In countries such as the UK and the US, this story has shaped our norms and values for around 35 years: since Thatcher and Reagan came to power (2). It’s rapidly colonising the rest of the world.
Verhaeghe points out that neoliberalism draws on the ancient Greek idea that our ethics are innate (and governed by a state of nature it calls the market) and on the Christian idea that humankind is inherently selfish and acquisitive. Rather than seeking to suppress these characteristics, neoliberalism celebrates them: it claims that unrestricted competition, driven by self-interest, leads to innovation and economic growth, enhancing the welfare of all.
At the heart of this story is the notion of merit. Untrammelled competition rewards people who have talent, who work hard and who innovate. It breaks down hierarchies and creates a world of opportunity and mobility. The reality is rather different. Even at the beginning of the process, when markets are first deregulated, we do not start with equal opportunities. Some people are a long way down the track before the starting gun is fired. This is how the Russian oligarchs managed to acquire such wealth when the Soviet Union broke up. They weren’t, on the whole, the most talented, hard-working or innovative people, but those with the fewest scruples, the most thugs and the best contacts, often in the KGB.
Even when outcomes are based on talent and hard work, they don’t stay that way for long. Once the first generation of liberated entrepreneurs has made its money, the initial meritocracy is replaced by a new elite, which insulates its children from competition by inheritance and the best education money can buy. Where market fundamentalism has been most fiercely applied – in countries like the US and UK – social mobility has greatly declined (3).
If neoliberalism were anything other than a self-serving con, whose gurus and think tanks were financed from the beginning by some of the richest people on earth (the American tycoons Coors, Olin, Scaife, Pew and others) (4), its apostles would have demanded, as a precondition for a society based on merit, that no one should start life with the unfair advantage of inherited wealth or economically-determined education. But they never believed in their own doctrine. Enterprise, as a result, quickly gave way to rent.
All this is ignored, and success or failure in the market economy are ascribed solely to the efforts of the individual. The rich are the new righteous, the poor are the new deviants, who have failed both economically and morally, and are now classified as social parasites.
The market was meant to emancipate us, offering autonomy and freedom. Instead it has delivered atomisation and loneliness. The workplace has been overwhelmed by a mad, Kafka-esque infrastructure of assessments, monitoring, measuring, surveillance and audits, centrally directed and rigidly planned, whose purpose is to reward the winners and punish the losers. It destroys autonomy, enterprise, innovation and loyalty and breeds frustration, envy and fear. Through a magnificent paradox, it has led to the revival of a grand old Soviet tradition, known in Russian as tufta. It means the falsification of statistics to meet the diktats of unaccountable power.
The same forces afflict those who can’t find work. They must now contend, alongside the other humiliations of unemployment, with a whole new level of snooping and monitoring. All this, Verhaeghe points out, is fundamental to the neoliberal model, which everywhere insists on comparison, evaluation and quantification. We find ourselves technically free but powerless. Whether in work or out of work, we must live by the same rules or perish. All the major political parties promote them, so we have no political power either. In the name of autonomy and freedom we have ended up controlled by a grinding, faceless bureaucracy.
These shifts have been accompanied, Verhaeghe writes, by a spectacular rise in certain psychiatric conditions: self-harm, eating disorders, depression and personality disorders. Of the personality disorders, the most common are performance anxiety and social phobia; both of which reflect a fear of other people, who are perceived as both evaluators and competitors, the only roles for society that market fundamentalism admits. Depression and loneliness plague us. The infantilising diktats of the workplace destroy our self-respect. Those who end up at the bottom of the pile are assailed by guilt and shame. The self-attribution fallacy cuts both ways (5): just as we congratulate ourselves for our successes,we blame ourselves for our failures, even if we had little to do with it.
So if you don’t fit in; if you feel at odds with the world; if your identity is troubled and frayed; if you feel lost and ashamed, it could be because you have retained the human values you were supposed to have discarded. You are a deviant. Be proud.
1. Paul Verhaeghe, 2014. What About Me?: The struggle for identity in a market-based society. Scribe. Brunswick, Australia and London.
What powerful observations; what common-sense written by Paul Verhaeghe, and beautifully reported by Mr. Monbiot in an incredible essay.
You have probably guessed where I stand! ;-)
Further reflections on Tom’s essay Is Climate Change a Crime Against Humanity?
This further postscript is founded on a recent email from Dan Gomez that included two stories that seemed relevant to the theme. I’m going to reproduce the email as Dan sent it to me.
Idealism, Pragmatism, Irony and Hypocrisy
Two short stories attempting to explain why everyone should think twice about their leaders, their promises and their intent regarding climate change and money:
The guy who just made the big global warming/climate change announcement, President Obama, today [Dan's email was dated 7th July] flew into Los Angeles at around 5PM, rush hour. At a cost of $6M and unbelievable amounts of expended carbon matter, one B747 and two C-141 four-engined jets landed at LAX. LAX TCA [Terminal Control Area] was tied up for hours. And this is to say nothing of the traffic disruption caused by multiple street shut-downs as everyone headed home.
The C-141 delivered Marine One, Obama’s helicopter; a Sikorsky SH-3 Sea King. After assembly, Obama flew 12 miles to a hotel in Beverly Hills. This only cost several thousand dollars and just a bit more hydrocarbons.
Why did Obama come to LA? To raise Money. Really? Millions to raise a million?
At a Beverly Hills hotel, and after several SUVs, also flown in, dropped off the support team, Obama and his entourage delivered a dinner speech to many wealthy Hollywood types to raise money for the Democratic Party. Most expensive “donation” – $38,500 per plate. Just think, all this public money spent for a partisan political campaign revenue event.
This is the guy who the day before claimed that “climate change” and CO2 contributions were causing the destruction of the planet. In one event, over a couple of hours, he wasted millions of tax payer dollars and injected a shit load of carbon into the atmosphere to wine and dine a few very wealthy party donors.
Why the press does not point out this obvious hypocrisy, I’ll never know.
Why the public and climate idealists who live the dream cannot understand that their leaders are as greedy, corrupt and egocentric as any Wall Street Hedge Fund Manager, I’ll never know.
Anyway, this is the guy who everyone loves and ostensibly believes has the best interests of his constituency and the future of the world at heart. Right.
Last week, Toyota announced it was vacating California for Texas after more than 50 years running its USA business from Torrance, CA. Taxes and local EPA regulations finally drove them out. Over the years, all of Toyota’s production lines were developed in other business friendly states. With HQ finally debouching, 3,000 good paying jobs are gone, mostly due to strict environmental regulatory laws harder and harder to comply with.
Now, Tesla, the new, tax-payer supported, alternative car company, who has declined to build any manufacturing plants in California is being aggressively wooed by Governor Brown. Brown wants Tesla’s battery technology to be manufactured here. Fits with his idealistic view of California’s future. Only thing is, Tesla wants no part of this due to the same issues that Toyota, a conventional auto builder, has stated. It’s too expensive in California with too many regulations and unknown future regulations. California’s predatory regulatory agencies are now “bending” all the rules to try to get them to come into California. Irony and hypocrisy, all rolled up in one.
Reminds me of the old saying, “There are lies, damn lies, and politicians!”
It also reminds me of that wonderful Irish response to a young Englishman who was asking an elderly local how to get to Tipperary in Southern Ireland. The old Irishman pulled at his grey beard for a while, looked the young man full in the face and said, “I’ve been thinkin’ about it and have to tell ‘ee, me young man, that if I were going to Tipperary, I wouldn’t been startin’ out from here!“
So whatever the rights and wrongs of Dan’s two stories, core issues, as in deeper, more fundamental concerns, override them both.
More on the theme tomorrow.
An essay from George Monbiot that highlights a world most would rather not think about.
It was past 4pm when I realised that I didn’t have a post for tomorrow (today!). I went through my email folder that I devote for potential blog posts and came across this recent essay from George Monbiot. Some time ago George gave me a general permission to republish his essays here on Learning from Dogs.
As it happens, this essay from George resonated unpleasantly with an article that I read this morning on the Permaculture Research Institute website. It was called 10 Ways to Prepare for a Post-Oil Society. Take this extract, for example:
2. We have to produce food differently.
The Monsanto/Cargill model of industrial agribusiness is heading toward its Waterloo. As oil and gas deplete, we will be left with sterile soils and farming organized at an unworkable scale. Many lives will depend on our ability to fix this. Farming will soon return much closer to the center of American economic life. It will necessarily have to be done more locally, at a smaller-and-finer scale, and will require more human labor. The value-added activities associated with farming — e.g. making products like cheese, wine, oils — will also have to be done much more locally. This situation presents excellent business and vocational opportunities for America’s young people (if they can unplug their iPods long enough to pay attention). It also presents huge problems in land-use reform. Not to mention the fact that the knowledge and skill for doing these things has to be painstakingly retrieved from the dumpster of history. Get busy.
When I read the full piece it made me feel angry that those in power both sides of ‘The Pond’ display no focus or interest in the future of modern societies over the next 25-years; well none that I can pick up! Yet when you speak to friends, neighbours and people one meets when out-and-about, almost without exception people are nervous about just where it’s all heading – and that’s even before Russia and the Ukraine comes up!
Read George’s essay and see what comes to your mind. Oh, and do leave a comment!
How the media gives Big Tobacco everything it wants.
By George Monbiot, published in the Guardian 18th March 2014
Almost everything is fake. The brave proverbs with which we were brought up – the truth will out, cheats never prosper, virtue will triumph – turn out to be unfounded. For the most part, our lives are run and our views are formed by chancers, cheats and charlatans. [Ed. my emphasis!]
They construct a labyrinth of falsehoods from which it is almost impossible to emerge without the help of people who devote their lives to navigating it. This is the role of the media. But the media drags us deeper into the labyrinth.
There are two kinds of corporate lobbyists in the UK. There are those who admit they are lobbyists but operate behind closed doors, and there are those who operate openly but deny they are lobbyists. Because David Cameron has broken his promise to shine “the light of transparency on lobbying in our country and … come clean about who is buying power and influence” we still “don’t know who is meeting whom. We don’t know whether any favours are being exchanged. We don’t know which outside interests are wielding unhealthy influence. … Commercial interests – not to mention government contracts – worth hundreds of billions of pounds are potentially at stake.” (All that was Cameron in 2010 by the way)(1). At the same time, the media is bustling with people working for thinktanks which refuse to say who is paying them, making arguments which favour big business and billionaires.
Perhaps the most prominent is the Institute of Economic Affairs. Like most groups of this kind, it refuses to disclose its funding. But there’s a trail of smoke. We now know that it has been taking substantial sums from British American Tobacco (BAT), Japan Tobacco International, Imperial Tobacco and Philip Morris International(2,3). BAT has funded the institute since 1963(4). By pure coincidence, the IEA has fiercely defended the tobacco companies from efforts to regulate their products.
In their indispensable new book A Quiet Word, Tamasin Cave and Andy Rowell explain why corporations want other people to front their campaigns. “The third party has the credibility of looking independent; seems to be motivated by something other than self-interest and profit; and therefore has a much greater chance of being believed. Credibility, authenticity and the impression of independence are key. It is about separating the message from the self-interested source.”(5) While many controversial companies use this tactic, it is particularly important for tobacco firms; first because no one trusts them; secondly because they are banned from seeking to influence public health policy, under the Convention on Tobacco Control, which the UK has ratified(6).
Last year a presentation made in 2012 by Philip Morris International (which sells Marlboro and other brands) was leaked(7). It explained how the company intended to fight the proposed plain packaging rules in the UK. Plain packaging is a misnomer: the packs show only horrible photographs of medical conditions caused by smoking. The evidence suggests that they’re a powerful deterrent(8). Philip Morris listed the arguments that should be made in the media to try to prevent the government from introducing plain packaging, identified the BBC as a key outlet, and named the Institute of Economic Affairs and the Tax Payers’ Alliance as potential “media messengers”(9).
So you might imagine that the media – and the BBC in particular – would exercise a certain amount of caution when interviewing think tanks funded by tobacco companies about the regulation of tobacco. Such as disclosing that they are, er, funded by tobacco companies. You would of course be wrong.
At the end of last year the BBC’s Today programme interviewed Mark Littlewood, the head of the Institute of Economic Affairs, about plain packaging(10). It failed to inform listeners that the IEA has received funding from tobacco companies. Mark Littlewood used two of the arguments recommended by Philip Morris in that leaked document: there’s no evidence that plain packaging affects the number of people who smoke, and it stimulates a black market in cigarettes.
I encouraged readers to complain, on the grounds that the BBC’s failure to disclose his interests in the issue he was discussing flatly contravenes three of its editorial guidelines. The BBC’s responses astonished me. First it claimed that it was not “appropriate or necessary” to include this information, on the grounds that the IEA doesn’t publish it(11). In other words, if you’re not candid about who funds you, you’re off the hook. Then, as the complaints continued, it maintained that “all we have to go on are newspaper reports. In the absence of any independent verification therefore, it remains an allegation”(12).
When the BBC was told that tobacco companies have admitted funding the IEA, the reasoning changed again. Now it argues that it would be wrong to assume “that an organisation adopts a particular position on an issue because it receives funding from an interested party”: it might have formed the position first and received the money as a consequence(13). That’s true, though it’s hard to see what difference it makes: if think tanks survive and prosper because their position just happens consistently to align with the grimmest of corporate interests, the politics of the relationship don’t change very much. In either case, surely listeners should be allowed to make up their own minds. Who would not wish to be told that an organisation whose spokesperson is defending Big Tobacco on the Today programme receives money from Big Tobacco? What kind of broadcaster does not see that as relevant information?
Since then, the IEA’s staff have been interviewed by the BBC about tobacco eight more times(14). In none of the interviews I have listened to are their interests declared. It’s all about to blow up again, as the government’s review of plain packaging reports at the end of this month, and the thinktanks will be trundling all over the media(15). The petition I published on change.org, calling on the BBC to disclose its contributors’ financial interests, has 11,000 signatures so far(16). If they reach 20,000, I’ll present it.
Stories like this remind me that much of life is a struggle against disappointment. Perhaps I’m an idiot, but I expected a world that was so much better. I still believe it’s possible. But getting there requires a daily struggle against those who would mislead us.
4. As above.
5. Tamasin Cave and Andy Rowell, 2014. A Quiet Word: Lobbying, Crony Capitalism and
Broken Politics in Britain. Bodley Head, London.
6. Article 5.3. http://whqlibdoc.who.int/publications/2003/9241591013.pdf
8. Crawford Moodie et al, no date give. Plain Tobacco Packaging: A Systematic Review. Report for the Department of Health by the Centre for Tobacco Control Research, University of Stirling. http://phrc.lshtm.ac.uk/papers/PHRC_006_Final_Report.pdf.
10. Today, 28th November 2013. BBC Radio 4.
11. BBC Complaints, 4th December 2013.
12. BBC Complaints, 9th January 2014.
13. BBC Editorial Complaints Unit, 19th February 2014.
Won’t be the first time, nor the last time, that I mention the need, the critical need, for human society to learn the value of integrity: the quality that we see coming from our animals day-in; day-out!
Civilizations die from suicide, not by murder. Arnold J Toynbee
I’m not sure where to start but as a result of finishing a particular book, plus a recent essay on Tom Dispatch, then another recent essay from Simon Johnson of Baseline Scenario fame, there were so many thoughts bumping around this aged brain that I had no alternative than to offer them to you, dear reader. You should also be warned that this is going to be two posts, covering today and tomorrow.
So let’s start with the book: The United States of Fear by Tom Engelhardt. To be brutally honest, I purchased the book more as a gesture of support to Tom who has been very supportive of Learning from Dogs, in particular allowing me permission to reproduce any essays that were published on TomDispatch, as a number have so been. What an error of judgment! Tom’s book provided another one of those rare but inspirational occasions where you know the world will never look quite the same again!
The back cover page of the book sets out the theme, thus,
In 2008, when the US National Intelligence Council issued its latest report meant for the administration of newly elected President Barack Obama, it predicted that the planet’s “sole superpower” would suffer a modest decline and a soft landing fifteen years hence. In his new book The United States of Fear, Tom Engelhardt makes clear that Americans should don their crash helmets and buckle their seat belts, because the United States is on the path to a major decline at a startling speed. Engelhardt offers a savage anatomy of how successive administrations in Washington took the “Soviet path”—pouring American treasure into the military, war, and national security—and so helped drive their country off the nearest cliff.This is the startling tale of how fear was profitably shot into the national bloodstream, how the country—gripped by terror fantasies—was locked down, and how a brain-dead Washington elite fiddled (and profited) while America quietly burned.
Think of it as the story of how the Cold War really ended, with the triumphalist “sole superpower” of 1991 heading slowly for the same exit through which the Soviet Union left the stage twenty years earlier.
One of the fascinating aspects of the book is that it was put together from 32 essays previously published online by Tom; the complete list with titles and dates is on pps. 205 & 206. So giving you a real feel for the book is easy! I’m going to do that by linking to one of those essays available in the archives of TomDispatch here. That essay was called Washington’s Echo Chamber and appears in the book starting on page 170 under the sub-heading of Five Ways to Be Tone Deaf in Washington. Let me quote you a little,
So much of what Washington did imagine in these last years proved laughable, even before this moment swept it away. Just take any old phrase from the Bush years. How about “You’re either with us or against us”? What’s striking is how little it means today. Looking back on Washington’s desperately mistaken assumptions about how our globe works, this might seem like the perfect moment to show some humility in the face of what nobody could have predicted.
It would seem like a good moment for Washington — which, since September 12, 2001, has been remarkably clueless about real developments on this planet and repeatedly miscalculated the nature of global power — to step back and recalibrate.
As it happens, there’s no evidence it’s doing so. In fact, that may be beyond Washington’s present capabilities, no matter how many billions of dollars it pours into “intelligence.” And by “Washington,” I mean not just the Obama administration, or the Pentagon, or our military commanders, or the vast intelligence bureaucracy, but all those pundits and think-tankers who swarm the capital, and the media that reports on them all. It’s as if the cast of characters that makes up “Washington” now lives in some kind of echo chamber in which it can only hear itself talking.
As a result, Washington still seems remarkably determined to play out the string on an era that is all too swiftly passing into the history books. While many have noticed the Obama administration’s hapless struggle to catch up to events in the Middle East, even as it clings to a familiar coterie of grim autocrats and oil sheiks, let me illustrate this point in another area entirely — the largely forgotten war in Afghanistan. After all, hardly noticed, buried beneath 24/7 news from Egypt, Bahrain, Libya, and elsewhere in the Middle East, that war continues on its destructive, costly course with nary a blink.
That was published by Tom a little over 18 months ago! Seems as relevant today as then! Let me stay with perspectives from 2011.
On the 24th August 2011 Noam Chomsky wrote an essay entitled American Decline: Causes and Consequences. Chomsky, as Wikipedia relates, is Professor (Emeritus) in the Department of Linguistics & Philosophy at MIT, where he has worked for over 50 years. Here is how that essay opens,
In the 2011 summer issue of the journal of the American Academy of Political Science, we read that it is “a common theme” that the United States, which “only a few years ago was hailed to stride the world as a colossus with unparalleled power and unmatched appeal — is in decline, ominously facing the prospect of its final decay.” It is indeed a common theme, widely believed, and with some reason. But an appraisal of US foreign policy and influence abroad and the strength of its domestic economy and political institutions at home suggests that a number of qualifications are in order. To begin with, the decline has in fact been proceeding since the high point of US power shortly after World War II, and the remarkable rhetoric of the several years of triumphalism in the 1990s was mostly self-delusion. Furthermore, the commonly drawn corollary — that power will shift to China and India — is highly dubious. They are poor countries with severe internal problems. The world is surely becoming more diverse, but despite America’s decline, in the foreseeable future there is no competitor for global hegemonic power.
So, according to Chomsky, it’s not as ‘black and white’ as Engelhardt sets out. But do read the full essay.
Nevertheless, the idea that the USA is ‘fiddling while Rome burns’ is supported in an essay published by Mattea Kramer on TomDispatch on the last day of September. I’m going to end Part One by republishing the essay in full. (Note that this is being published here after the first ‘debate’ had taken place.)
Tough Talk for America
A Guide to the Presidential Debates You Won’t Hear
By Mattea Kramer
Five big things will decide what this country looks like next year and in the 20 years to follow, but here’s a guarantee for you: you’re not going to hear about them in the upcoming presidential debates. Yes, there will be questions and answers focused on deficits, taxes, Medicare, the Pentagon, and education, to which you already more or less know the responses each candidate will offer. What you won’t get from either Mitt Romney or Barack Obama is a little genuine tough talk about the actual state of reality in these United States of ours. And yet, on those five subjects, a little reality would go a long way, while too little reality (as in the debates to come) is a surefire recipe for American decline.
So here’s a brief guide to what you won’t hear this Wednesday or in the other presidential and vice-presidential debates later in the month. Think of these as five hard truths that will determine the future of this country.
1. Immediate deficit reduction will wipe out any hope of economic recovery: These days, it’s fashionable for any candidate to talk about how quickly he’ll reduce the federal budget deficit, which will total around $1.2 trillion in fiscal 2012. And you’re going to hear talk about the Simpson-Bowles deficit reduction plan and more like it on Wednesday. But the hard truth of the matter is that deep deficit reduction anytime soon will be a genuine disaster. Think of it this way: If you woke up tomorrow and learned that Washington had solved the deficit crisis and you’d lost your job, would you celebrate? Of course not. And yet, any move to immediately reduce the deficit does increase the likelihood that you will lose your job.
When the government cuts spending, it lays off workers and cancels orders for all sorts of goods and services that would generate income for companies in the private sector. Those companies, in turn, lay off workers, and the negative effects ripple through the economy. This isn’t atomic science. It’s pretty basic stuff, even if it’s evidently not suitable material for a presidential debate. The nonpartisan Congressional Research Service predicted in a September report, for example, that any significant spending cuts in the near-term would contribute to an economic contraction. In other words, slashing deficits right now will send us ever deeper into the Great Recession from which, at best, we’ve scarcely emerged.
Champions of immediate deficit reduction are likely to point out that unsustainable deficits aren’t good for the economy. And that’s true — in the long run. Washington must indeed plan for smaller deficits in the future. That will, however, be a lot easier to accomplish when the economy is healthier, since government spending declines when fewer people qualify for assistance, and tax revenues expand when the jobless go back to work. So it makes sense to fix the economy first. The necessity for near-term recovery spending paired with long-term deficit reduction gets drowned out when candidates pack punchy slogans into flashes of primetime TV.
2. Taxes are at their lowest point in more than half a century, preventing investment in and the maintenance of America’s most basic resources: Hard to believe? It’s nonetheless a fact. By now, it’s a tradition for candidates to compete on just how much further they’d lower taxes and whether they’ll lower them for everyone or just everyone but the richest of the rich. That’s a super debate to listen to, if you’re into fairy tales. It’s not as thrilling if you consider that Americans now enjoy the lightest tax burden in more than five decades, and it happens to come with a hefty price tag on an item labeled “the future.” There is no way the U.S. can maintain a world-class infrastructure — we’re talking levees, highways, bridges, you name it — and a public education system that used to be the envy of the world, plus many other key domestic priorities, on the taxes we’re now paying.
Anti-tax advocates insist that we should cut taxes even more to boost a flagging economy — an argument that hits the news cycle nearly every hour and that will shape the coming TV “debate.” As the New York Times recently noted, however, tax cuts might have been effective in giving the economy a lift decades ago when tax rates were above 70%. (And no, that’s not a typo, that’s what your parents and grandparents paid without much grumbling.) With effective tax rates around 14% for Mitt Romney and many others, further cuts won’t hasten job creation, just the hollowing out of public investment in everything from infrastructure to education. Right now, the negative effects of tax increases on the most well-off would be small — read: not a disaster for “job creators” — and those higher rates would bring in desperately-needed revenue. Tax increases for middle-class Americans should arrive when the economy is stronger.
Right now, the situation is clear: we’re simply not paying enough to fund the basic ingredients of prosperity from highways and higher education to medical research and food safety. Without those funds, this country’s future won’t be pretty.
3. Neither the status quo nor a voucher system will protect Medicare (or any other kind of health care) in the long run: When it comes to Medicare, Mitt Romney has proposed a premium-support program that would allow seniors the option of buying private insurance. President Obama wants to keep Medicare more or less as it is for retirees. Meanwhile, the ceaseless rise in health-care costs is eating up the wages of regular Americans and the federal budget. Health care now accounts for a staggering 24% of all federal spending, up from 7% less than 40 years ago. Governor Romney’s plan would shift more of those costs onto retirees, according to David Cutler, a health economist at Harvard, while President Obama says the federal government will continue to pick up the tab. Neither of them addresses the underlying problem.
Here’s reality: Medicare could be significantly protected by cutting out waste. Our health system is riddled with unnecessary tests and procedures, as well as poorly coordinated care for complex health problems. This country spent $2.6 trillion on health care in 2010, and some estimates suggest that a staggering 30% of that is wasted. Right now, our health system rewards quantity, not quality, but it doesn’t have to be that way. Instead of paying for each test and procedure, Medicare could pay for performance and give medical professionals a strong incentive to provide more efficient and coordinated care. President Obama’s health law actually pilot tests such an initiative. But that’s another taboo topic this election season, so he scarcely mentions it. Introducing such change into Medicare and the rest of our health system would save the federal government tens of billions of dollars annually. It would truly preserve Medicare for future generations, and it would improve the affordability of health coverage for everyone under 65 as well. Too bad it’s not even up for discussion.
4. The U.S. military is outrageously expensive and yet poorly tailored to the actual threats to U.S. national security: Candidates from both parties pledge to protect the Pentagon from cuts, or even, in the case of the Romney team, to increase the already staggering military budget. But in a country desperate for infrastructure, education, and other funding, funneling endless resources to the Pentagon actually weakens “national security.” Defense spending is already mind-numbingly large: if all U.S. military and security spending were its own country, it would have the 19th largest economy in the world, ahead of Saudi Arabia, Taiwan, and Switzerland. Whether you’re counting aircraft carriers, weapons systems, or total destructive power, it’s absurdly overmatched against the armed forces of the rest of the world, individually or in combination. A couple of years ago, then-Secretary of Defense Robert M. Gates gave a speech in which he detailed that overmatch. A highlight: “The U.S. operates 11 large carriers, all nuclear powered. In terms of size and striking power, no other country has even one comparable ship.” China recently acquired one carrier that won’t be fully functional for some time, if ever — while many elected officials in this country would gladly build a twelfth.
But you’ll hear none of this in the presidential debates. Perhaps the candidates will mention that obsolete, ineffective, and wildly expensive weapons systems could be cut, but that’s a no-brainer. The problem is: it wouldn’t put a real dent in national defense spending. Currently almost one-fifth of every dollar spent by the federal government goes to the military. On average, Americans, when polled, say that they would like to see military funding cut by 18%.
Instead, most elected officials vow to pour limitless resources into more weapons systems of questionable efficacy, and of which the U.S. already owns more than the rest of the world combined. Count on one thing: military spending will not go down as long as the U.S. is building up a massive force in the Persian Gulf, sending Marines to Darwin, Australia, and special ops units to Africa and the Middle East, running drones out of the Seychelles Islands, and “pivoting” to Asia. If the U.S. global mission doesn’t downsize, neither will the Pentagon budget — and that’s a hit on America’s future that no debate will take up this month.
5. The U.S. education system is what made this country prosperous in the twentieth century — but no longer: Perhaps no issue is more urgent than this, yet for all the talk of teacher’s unions and testing, real education programs, ideas that will matter, are nonexistent this election season. During the last century, the best education system in the world allowed this country to grow briskly and lift standards of living. Now, from kindergarten to college, public education is chronically underfunded. Scarcely 2% of the federal budget goes to education, and dwindling public investment means students pay higher tuitions and fall ever deeper into debt. Total student debt surpassed $1 trillion this year and it’s growing by the month, with the average debt burden for a college graduate over $24,000. That will leave many of those graduates on a treadmill of loan repayment for most or all of their adult lives.
Renewed public investment in education — from pre-kindergarten to university — would pay handsome dividends for generations. But you aren’t going to hear either candidate or their vice-presidential running mates proposing the equivalent of a GI Bill for the rest of us or even significant new investment in education. And yet that’s a recipe for and a guarantee of American decline.
Ironically, those in Washington arguing for urgent deficit reduction claim that we’ve got to do it “for the kids,” that we must stop saddling our grandchildren with mountains of federal debt. But if your child turns 18 and finds her government running a balanced budget in an America that’s hollowed out, an America where she has no chance of paying for a college education, will she celebrate? You don’t need an economist to answer that one.
Copyright 2012 Mattea Kramer
Let me close with another quote from Arnold J. Toynbee:
Of the twenty-two civilizations that have appeared in history, nineteen of them collapsed
when they reached the moral state the United States is in now.
Part Two continues tomorrow.
A powerful guest post from Patrice Ayme on where next for American energy.
I must have spent an age musing over what to call this Post. Patrice called it simply ‘Energy Question For The USA’ and it’s a highly appropriate question. But in the end I chose the title ‘Questions are never stupid’ because I was mindful of the well-known saying, “There is no such thing as a stupid question, only a stupid answer!“
So the smart question raised by Patrice is not only very highly appropriate for 2012, it’s also a question that just has to have a smart answer. Because we are on the brink of it being too late to be flirting with stupid answers. What many scientists are saying, in one form or another, is that if we don’t embrace the journey of moving away from carbon-based sources of energy for society now and find those alternate sustainable sources by the end of this decade then the laws of unintended consequences will kick in with a vengeance. The end of the decade is eight years away!
Here’s a picture of my grandson who was one-year-old just a week ago.
That picture reminds me of the comment early on in James Hansen’s book, Storms of my Grandchildren, where he writes ‘I did not want my grandchildren, someday in the future, to look back and say, “Opa understood what was happening, but he did not make it clear.“
So on to the Guest post from Patrice. It’s not an easy, quick read but I’ll tell you what it is! It’s the sort of ‘wake-up’ call this fine Nation and this even finer Planet should be getting from countless politicians and leaders. So do read it and, even better, add your comments, and wonder why we seem so content on fiddling while Rome burns!
Energy Question For The USA
THE AGE OF OIL PRODUCED THE AMERICAN CENTURY. NOW WHAT?
No Vision, No Mission, No Energy
Another editorial of Paul Krugman firing volleys at republican “paranoia” for accusing Obama of driving up oil prices. As he observes in “Paranoia Strikes Deeper“: …“the president of the United States doesn’t control gasoline prices, or even have much influence over those prices. Oil prices are set in a world market, and America, which accounts for only about a tenth of world production, can’t move those prices much. Indeed, the recent rise in gas prices has taken place despite rising U.S. oil production and falling imports.”
American households tend to borrow as much as they can. Thus, when oil prices increase markedly, Americans have to cut in crucial budgets, such as house payments. I said at the time that it would lead to a peak in housing prices, and it did.
Why such a drastic influence of oil prices on the economy of the USA? Because Americans, except in a few places such as New York, commute by private car to work. So Americans have to feed the car, if they want to feed themselves.
It was not this way a century ago, or so. At the time public transportation systems using electric tramways and trains were found all over, even in Los Angeles. Car companies put an end to that outrage in the late fifties by buying, and then destroying, all the public transportation system they could put their greedy hands on. Fossil fuel plutocrats were delighted.
But let’s set aside Krugman’s fake indignation. He is smart enough to know that Romney will do what Romney needs to do to win the Obama, I mean, the election. Waxing lyrical about Romney doing as Obama, does not beat going lyrical about sunrise.
Gasoline prices in the USA are way down in real dollars to what they used to be, decades ago. And so is the gas tax. This means that, far from adapting to the gathering multiply-pronged world ecological and energy crisis, the USA has gone the other way, denying there is any crisis. “What? Me worry?” That’s got to be anti-American indeed. No, real blooded Americans are all into strip searches and the death panel at the White House.
In Europe, gas prices are more than twice that of the USA, thanks to heavy taxes (stations in France have sported two euros a liter, that is 8 euros per gallon, or more than $10.50). [UK unleaded petrol price, as of today, is the equivalent of $8.70 per gallon, Ed.]
This means that far from being down and out, Europe is efficient enough to operate at that high price level. It also means that Europe is much more motivated than the USA to get much more efficient. In other words, high gasoline prices in Europe are a safety margin. The high prices force the European free market to adapt to a situation that the free market of the USA will encounter someday. Adaptation takes decades: new energies take on the average, historically speaking, 50 years to become dominant. Same, one would guess, for energy efficiencies.
Basically, if oil prices doubled from here, gasoline prices would double in the USA. Whereas, even if the Europeans decided to keep the same high taxes, gasoline prices would only augment by 50%. And, in the much more efficient European economy, with plenty of public electric transportation available, the noxious effects on the European economy would be much less than one would expect from a 50% oil price rise.
The world gets 55 × 1018 joules of useful energy from 475 × 1018 joules of primary energy produced by fossil fuels, biomass and nuclear power plants. That tremendous inefficiency (less than 13%!) needs to be corrected. It will be, if, and only if, prices are kept high. Thus energy taxes are necessary to adapt to the looming penury.
Why looming penury? Because the reserves of other fossil fuels may have been vastly overestimated (by a factor of 5 in the case of coal). Various fossil fuel lobbies have an interest to over-estimate the reserves (because it keeps the world addicted, as they present their industry as a long range solution, which it is not).
Looking at the raw production numbers, as exhibited below in the graphs, paints a completely different story: production from existing fields is going down dramatically (at 5% rate, per year). In other words we are in the treachorous waters between the catastrophe of CO2 poisoning and the disaster of running out of energy to burn.
The unavoidable rise of fuel prices will be less grave in Europe than in the USA, because many Europeans would opt for the available electric-based public transportation system (the combination of much more efficient electric motors and central generation is much more efficient than distributing oil to put in SUVs all over, as done in the USA; SUVs, because there are too many holes in the asphalt. A problem partly related to high oil prices!).
Yet, the increase of the cost of imported oil corresponds exactly to the Italian deficit ($55 billion). Although that deficit increase had many causes, oil price increase was by far the most important. And the same for other Southern European countries. So the rise of oil prices was the barrel that broke the back of European debt.
In the USA, ten out of 11 post WWII recessions were followed by oil price spikes. Why are American minds so closed up to the looming strangulation of their economy by oil? Because the fossil fuel plutocracy is on a rampage in the USA. It uses a red hot propaganda to persuade the vast American public of undifferentiated sheep that there is no CO2 ecological crisis, and no energy crisis. (Although the latest polls indicate that two thirds of the public, in a splendid turn-around, believe that there is indeed a man-made climate change crisis; never mind that the New York Times had the latest tornado rampage, with 40 dead, presented as discreetly as possible.)
Why are the fossil plutocrats hysterical? Well we are past Peak Cheap Oil. Moreover, the “majors“, the world’s largest oil companies, have been pushed out of more and more countries, and replaced by national oil companies. Desperate, the majors have gone for riskier and riskier drilling in the deep ocean. Now Chevron, and Transocean, after a 4-day leak off Brazil, see prosecutors asking for lengthy prison sentences and enormous fines.
Most of these oil companies are American, so they have pushed forfracking (destroying the underground with poisons to extract fossil fuels). Superficially, it works: USA imports of fossil fuels went quickly from 60% down to 40%.
However, that did not make a dent in the world price situation, because the demand keeps rising, but the world, overall, is PAST PEAK OIL (as I have long argued and the Nature article alluded to below confirmed, using the obvious argument found in the graphs).
So, basically, American fracking finances Chinese oil consumption. Here are some graphs extracted from Nature and the USA government:
When the horrid sun of diminishing resources rises over the parched American oil desert, while fracking reveals itself to be an unfathomable catastrophe, the howling is going to be very great, and one more reason for a depression will blossom.
Much of the USA’s superiority, in the last 150 years, has come from abundant and cheap oil. First in the North-East, then down to Oklahoma, Texas, Colorado, California. Compare with Western Europe, which had basically no oil.
Oil was not just a question of cheap, convenient energy. Oil has, short of nuclear energy, the highest energy density of any material (OK, nuclear energy is millions of time more energy dense).
Oil gave the USA enormous diplomatic and conspiratorial leverage. American oil plutocrats helped Lenin and Stalin develop their colossal fields in the Caucasus and Caspian. One of those plutocrats, Harriman, son of a railroad magnate, and brother of another Harriman, was one of the main operators of the democratic party. Let alone banker to Hitler. He was decorated both by Stalin, and by Hitler. He then went on as U.S. ambassador to major European capitals, and stayed one the main operators of the government of the USA for decades. “Democrats” have long been impure.
Interestingly, I searched the Internet for a document mentioning Harriman’s Stalino-Hitlerian decorations, but could not find it (I have seen the pictures in the past). All I could read is how much Harriman resisted Stalin each time they met, and that was all the time (a total lie that Harriman resisted Hitler, or Stalin: Harriman was an accomplice of Stalin, and helped give him half of Europe, in exchange for manganese and other stuff. But now Internet agents are obviously paid to reconstruct a truth where American plutocrats look good, knights in shining armor, fighting Stalin or Hitler, each time they met for tea, dinner, lunch, breakfast, and interminable conferences, for years on end, decade after decade).
A famous example of the clout oil provided the USA with: Texaco fueled Hitler’s conquest of the Spanish republic (this one is hard to hide, because the U.S. Congress slapped Texaco with a symbolic fine, well after the deed was done). That used to amuse Hitler a lot (Hitler gave elaborated reasons to his worried supporters for being in bed with American plutocrats; as the Nazi Party was officially socialist, and anti-plutocratic, that awkward situation may have led him to declare war to the USA on December 11, 1941, to ward off the German generals’ argument that he was just a little corporal in above his head).
Another example: Mussolini was hanged from an American gas station in Milan. Italian communists hanged him from his sponsors’ works.
The fueling of the fascists by American fossil fuel companies helped bring the American Century to the world in general, and Europe in particular. Without Stalin and American plutocratic oil, Hitler’s Panzers could not have moved in 1939 or 1940.
The dignified Elie Wiesel, instead of crying crocodiles tears, wondering how such a thing as Auschwitz was possible, should ask how and why the Nazi extermination machine was fuelled by American plutocrats, and how come he, himself, never talks about that.
Wiesel got the Nobel Peace Prize, just as Jimmy Carter (who launched the American attack on Afghanistan). Was it for disinformation? (And how come waging war in Afghanistan is a big plus for the Peace Prize? Is it related to the same mood which made Sweden help Hitler before and during WWII, and never having a serious look at that, ever since? I know the prize is ostensibly given by Norwegians.)
Wikipedia is big on the notion of “weasel words“, and rightly so. Deeper than that is what I would call weasel logic. And ever deeper, weasel worlds. To talk about Hitler without ever wondering who his sponsors were, and what they were after, is to live in a weasel world.
I like Elie Wiesel personally. Yet, just as I like Krugman, Obama, and countless others, such as the infamous Jean-Paul Sartre, he likes power even more than truth. OK, It is unfair to put Sartre, who really espoused the most abject terrorism, with the others… As long as individuals prefer power to truth, the spontaneous generation of infamy is insured.
Total oil sales, per day are about 100 million barrels (in truth the cap is lower, see graph above), at, say $100, so ten billion dollars a day, 3.6 trillion a year. The USA uses about 25% of that. Some have incorporated the price of the part of the gigantic American war machine and (what are truly) bribes to feudal warlords insuring Western access to the oil fields, and found a much higher cost up to $11 a gallon.
Ultimately, and pretty soon, in 2016, specialists expect oil prices to explode up, from the exhaustion of the existing oil fields. Then what?
Moreover, in 2016, the dependence upon OPEC, or, more exactly Arab regimes, is going to become much greater than now. What’s the plan of the USA? Extend ever more the security state, and go occupy the Middle East with a one million men army? To occupy, or not to occupy, that is the question.
Is it time for a better plan? And yes, any better plan will require consumers to pay higher energy prices. As consumers apparently want the army to procure the oil, they ought to pay for it.
Note 1: Flying cost at least ten times more in CO2 creation than taking a train. And jet fuel is not taxed, at least until the carbon plan of the European Union starts charging next year, in 2013. In spite of the screaming from the USA and its proxies: it’s funny how attached to subsidies American society can be.
Note 2: Refusing to pay for necessary military expenses through taxation and mobilization, was a big factor in the downfall of the Roman Principate.
The Principate then tried to accomplish defense on the cheap, by using more and more mercenaries. Many of these mercenaries or their children and descendants were poorly integrated in Roman republican culture (say emperors Diocletian or Constantine, let alone Stilicho the Vandal, a century later), so they established theDominate, itself a negation of the Roman republic. Amusingly the Western Franks, those salt water (“Salian“) Franks remembered the Roman republic better than all these imports from the savage East… who could not remember it, they, and their ancestors, having never known it.
Guess what? The USA’s army presently employs 300,000 “private contractors” (aka, mercenaries). Curiously, in that case, it’s not so much to save money, than to extract more money from the system (but that’s another story). Still, it will have the same effect.