Ideals, the Communications Revolution, and Consumerism

Once I’d spent time as a political staffer and then as an administration appointee in the federal government, it became more than clear to me that, for the most part, what passes for leadership in the federal government is nothing of the sort. It’s more like followership.

Even the Founding Fathers were responding to their background and education, but that wasn’t entirely bad because they at least knew history and had thought over what government did well and what it did poorly, and they also, as best they could, tried to craft a governmental structure they hoped would survive despite human greed, stupidity, and unbridled ambition. In doing so, they only had to hammer things out between themselves, and even that was dicey.

Also, they didn’t have to deal with the continuous pressure of public opinion and pressure created by the modern electronic media. Yes, there were totally scurrilous newspapers, and false and misleading broadsheets, but it took time, effort, and money to use them, at a time when money was limited, and when writing letters was severely limited by lack of time, money, and education.

Government was limited, by funds and the necessity of the times, to more basic aspects of governance, such as a system of laws, national defense, trade and foreign policy, including tariffs, and providing an overarching structure for often squabbling states.

Today, anyone who wants to know can find out what happened in government within hours, if not minutes, and can make their feelings known. Part of the great communications revolution we’ve undergone in the last generation means that media pundits and media idiots can frame issues and positions and broadcast them everywhere, drowning out more thoughtful voices, simply because, in our world, nothing is as simple as it seems, and simple appeals to people more than thoughtful, because thoughtful considerations of volatile issues usually require more complexity and time for reflection and analysis.

On top of that is that as technology has advanced, human abilities have increased, and that means that any action has more repercussions than in a simpler society. Those repercussions can’t always be foreseen, and even when they are most people who don’t like the forecast oppose any action to mitigate future problems. That means society and government become more and more reactive because it’s difficult to get a consensus to act until after the problems surface, and while government is dealing with the old problems, advancing technology is creating more.

Then add in the fact that the United States has become a consumer nation. Everything is a consumer good. News certainly is; it’s become entertainment for ratings, pandering to the views of various segments of the population, with fewer and fewer real facts.

A college education isn’t about learning to consider and think; it’s considered a vocational passport to a higher-paying job. Most college students, no matter what they say, think of education as an entitlement, and one that they deserve in order to get into a higher paying job or, sometimes, into the profession they want to enter, whether they’re qualified or not. This also means that a great number of supposedly educated people can’t or won’t really think. But all the communications technology and systems we have allow them to bombard their elected representatives with their views… and heaven help the representative who disagrees with the majority of his or her constituents, even if what they believe is at odds with the facts.

Today, a great many “idealistic” issues aren’t about ideals at all. They’re about political promises of goods and services, and there’s little substantive or realistic discussion about how to actually pay for and implement such promises.

Healthcare for everyone? It can’t exist. What they really mean is a certain level of basic medical care for everyone, that level being decided by the system, because potential healthcare costs are unlimited. For those who have effectively no healthcare, it’s a great improvement. Everyone else will pay, one way or another. Those who are wealthy, regardless, will have more. Is any politician really saying this? Hell, no. They’d be crucified.

Free college isn’t about education, it’s about a good. If you want better college education, limit admission to the top 20% of students [after finding a way to eliminate wealth/family structure bias] and make it free for all of that group. But that won’t happen because it will be viewed as discrimination. Instead, all the liberals are clamoring to give higher education to everyone who wants it, even though it can’t work financially.

At the same time, there’s very little discussion about supporting training in practical computer use, electronics, electrical work, heating and air conditioning, and all the skilled trades and fields that require specialized training (and often pay more than “college-educated” fields). Who is actually addressing this shortage?

Maybe the best way to address all this would be to ban all media news programs and political commentary, and limit the airwaves and the internet to either pure entertainment or verified facts, but that’s a “solution” worse than the problem, besides which, then people would find a way around that as well, most likely using verified facts in misleading ways.

So… I really don’t see any true leadership, not so long as the media and social climate reward followership more than realistic leadership, and government is regarded more and more as a provider of goods and services rather than a structure setting the rules for others to provide the goods and services.

—:  July 5th, 2019Blog Feed     3 Comments »
Assumptions

A great many problems facing the United States today are the result of the unthinking acceptance of various mantras or beliefs by large groups of people.

For example: College is good for everyone. No, it’s not. Post-high-school education or training is generally beneficial, but there are all too many people in college today who don’t belong there, either because their abilities don’t lie in the areas benefitted by college or because they won’t do the work. That doesn’t include students who incur massive debt in obtaining degrees that won’t ever repay those obligations. This assumption also doesn’t take into account that every year twice as many students graduate from college as there are jobs that require a college education.

Ultra-liberal politicians seem to think that the “rich” can and will pay for massive federal programs. Guess again. While the rich underpay taxes massively, the U.S. federal deficit is currently close to a trillion dollars, and that doesn’t include any of the costs of what the far left is proposing. Right now, the top one percent of all taxpayers, some 1.4 million, in total, reported gross income of slightly over $2 trillion and paid $540 billion in taxes [about 27%] If we took 70% of the income of the top one percent, that would amount to $1.4 trillion, leaving, after paying off the deficit, some $400 billion. That sounds like a lot, but it’s not, given what the far left is proposing.

Take free college tuition. Tuition here at the local university is around $8,000 a year, far below that at most state schools. There are currently 20 million undergraduate students in U.S. colleges. That works out to $160 billion annually… Nationally, the average in-state tuition is $10,230, according to the College Board, and at that rate, “free college” will cost over $200 billion a year, and that’s just one program.

The New York Times asked a number of economists and think tanks to cost out the increased costs of “Medicare for all.” The lowest estimate suggested a $2 trillion increase, the highest $3 trillion. Given that estimates are almost always low for government programs, these costs can’t be paid by just the top one percent of taxpayers, or even the top ten percent.

And we’re not even talking about our overwhelmed immigration system or our underfunded schools or our crumbling infrastructure.

Nor our National Park System, which doesn’t have the funds to repair everything and is operating with roughly 20% fewer rangers at a time when visitor numbers are higher than ever.

But everything will be all right once we really tax the rich.

—:  July 1st, 2019Blog Feed     7 Comments »
NEW COMMENT POLICY

IN THE INTERESTS OF BREVITY, I WILL NOW BE EDITING ALL COMMENTS THAT EXCEED ROUGHLY 250 WORDS. I WILL ALSO REMOVE SUBSEQUENT POSTS THAT APPEAR TO BE AN EFFORT TO GET AROUND THAT LIMIT. COMMENTS ARE WELCOME, BUT TOO MANY HAVE BECOME LONG PHILOSOPHICAL EXPOSITIONS, AND SUCH LENGTHY EXPOSITIONS SUBVERT THE PURPOSE OF COMMENTS.

—:  June 28th, 2019Blog Feed     1 Comment »
Hard Choices

In any society, some individuals will succeed… and some will fail… and some, for various reasons, will only make a minimal effort, if that. In the so-called natural state, which never completely existed, the results would be obvious. Those who failed or could not or would not work hard enough to survive would die.

For all of human history, such a totally natural state has never existed. Fossil and other remains show that all societies have assisted people, at least at some stage of their life, who would have died much sooner otherwise. So every society has faced the question of who gets help and under what circumstances. Because humans are incapable of surviving without assistance for years after birth, all societies help the majority of infants, but not always all of them.

Only in the last century or so, however, have societies embarked on large-scale, societally-wide programs of assistance. Some programs, such as many of those involved in Franklin Roosevelt’s New Deal, were designed as much as economic stabilization efforts as assistance efforts, but the creation of the Social Security system was definitely a program of assistance for the elderly.

Over the seventy or so years since then, U.S. federal government assistance and support programs have grown enormously, to the point that so-called assistance “entitlement programs” comprise roughly 42% percent of total federal spending and are projected to increase yearly, yet last year almost 30% of federal spending had to be borrowed, i.e., deficit spending. Over any length of time, that much of a deficit can’t be financed without catastrophic economic impacts

The largest assistance programs are Social Security and Medicare. Without an SSA tax increase of some sort, the Social Security Trust Fund will be exhausted in 15 years, and under current law, benefits would have to be reduced by roughly 20% because incoming SSA taxes would only cover 80% of benefits. The situation with Medicare is worse, given the skyrocketing costs of healthcare.

While many people like the idea of wealth taxes and higher income taxes on wealthy individuals, such taxes, even if they were enacted in a fashion that disallowed subsidies and selective taxable income exemptions and cuts, which is not at all certain, couldn’t make up the current deficits, let alone future ones, without effectively confiscating the majority of income from the upper middle class and upper classes, and I seriously doubt that most of them would stay around for such taxes to take effect.

So any realistic reform is going to have to include significant but not confiscatory tax increases, especially on the wealthier members of society, coupled with spending cuts and reforms in a vast array of programs. The political problem is that no one wants his or her benefits/programs cut, and everyone, including the rich, wants someone else to pay for it.

All the rhetoric – on both sides – won’t change this reality. But people and politicians, being what they are, will insist that their one-sided approach will solve the problem.

Welcome to the 2020 political misrepresentation season.

—:  June 27th, 2019Blog Feed     4 Comments »
Taxes and Income

Over the past two years, there’s been an incredible furor over income and wealth inequality, which has been compounded by the fact that the U.S. government has been running huge deficits, because Congress doesn’t want to tax people enough to pay for what Congress wants the federal government to do. Then add to this the fact that the incomes of most American families, i.e., those in at least the bottom sixty percent of all families, have on average stagnated or declined. Add to that the fact that government inflation measures don’t include all costs of living.

As a result, liberal politicians are pushing for programs to benefit those hurt most by stagnant or declining incomes, pressing for increasing taxes on the rich and especially the “super rich.” Those proposals include higher tax rates on those with incomes over, say, $10 million annually, or even annual wealth taxes.

Conservatives, in response, cite figures that show that the top ten percent of all earners pay 70% of all income taxes and that the top one percent of earners pay more total taxes than the bottom ninety percent combined.

And both sides are wrong, in a number of different ways. First, both sides are either not understanding the tax system or misrepresenting it, if not both. Second, concentrating on taxable income ignores the fact that the rich have ways of legally under-reporting their actual income, ways that are not open to taxpayers less well-off, as well as the effect of vast wealth. Even without taking into account that under-reporting, the top one percent, on average, only pay effective federal income tax rates of about 23%.

The 70% marginal tax rate on incomes over ten million dollars means just that. After you’ve made ten million, you would only get to keep $300,000 out of every subsequent million. It doesn’t mean that the government gets 70% of your first ten million, although a lot of people on both left and right, from what I’ve read, seem to think that’s what it means.

More important, a lot of that purported revenue won’t get collected. Why not? Because if the income arrives through capital gains or qualified dividend checks, the tax rate is still only a maximum of 20%. Or if the income qualifies as “carried interest,” or… [a good tax accountant can fill in all the other exceptions, but that’s the idea].

Right now, the tax code is riddled with so many exceptions, variable rates for different sources of income, and credits for various types of investments [often justified under the dubious rationale that such investments create jobs that wouldn’t otherwise exist] that changing rates will do very little to affect the income taxes paid by the top one percent. They will have an effect on well-paid professionals in the top five percent who are moderately well-off, but not well-off enough to benefit much from the tax avoidance available to the super rich.

What tends to get overlooked in concentrating on income and tax rates is the impact of wealth. In the last thirty years the share of wealth held by the lower 90% of the population has dropped by ten percent, so that now the top ten percent hold almost eighty percent of the nation’s wealth, while the top one percent hold half of that, forty percent. That stock of wealth is held in various means, but it all produces, over time, income that is taxed at a far lower rate than income earned by working. This is one of the principal [pun intended] reasons behind the old saying that the rich get richer. If you make more money than anyone else and you’re taxed at a lower effective rate than the hard-working professionals in your company… of course, you’re going to get richer.

But the bottom line is simple. Under the current tax structure, fiddling with rates won’t raise that much more money, and that includes lowering them, Laffer Curve enthusiasts to the contrary. The only thing that will increase tax revenue is eliminating all the subsidies and loopholes, and varied rates for the same amount of income (based on its source)… and then see what happens. Right now, no one really knows just how much tax revenues have been bled off through those devices, but it’s definitely substantial.

But until Congress actually works on the tax structure by eliminating all the special treatments of various types of income and by eliminating all of the exemptions and tax credits, merely changing marginal tax rates won’t address the real problems or the deficits, no matter what the rhetoric is.

—:  June 24th, 2019Blog Feed     2 Comments »
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