On the economic front, the Unites States faces a double problem – a huge continuing federal deficit and a weak economy, not to mention the fact that taxes will jump considerably in less than three weeks, and a number of federal income support payments will be cut off, unless the President and the Congress can work out something.

From what I see, almost no one is looking at the overall problem. They’re all concentrating on the symptoms, and each group is focusing on its particular interests and wants.

One of the questions that’s been raised is how can the economy be so weak when business and corporate profits are so high. Although industrial profit margins vary considerably from year to year, on average, regardless of how profit is calculated (on equity, sales, revenue etc.),the profit margins of the S&P 500 have more than doubled over the past thirty years, rising from around five percent to between eleven and fourteen percent. In 2012, corporate profits as a percentage of sales hit an all-time high, while the percentage of Americans working dropped to the lowest level in 30 years. Wages and salaries are now at the lowest percentage of gross domestic income (GDI) since statistics have been kept, and have dropped from the historic range of around 55% of GDI to just over 44%. That amounts to a massive shift in income away from workers to owners and businesses, roughly $1.5 trillion annually – and that’s money that’s not being taxed or spent at near the rate it would be if it went to workers.

Not only that, but the additional corporate profits aren’t funneling back into the economy, either through increased dividends or increased employment. All this results in significant loss [more accurately, a lack of growth] in federal tax revenue at the time when federal spending is increasing. Those who demand a corresponding decrease in federal spending seem to fail to understand that the vast majority of the increased federal spending has gone to prop up the economy in one way or another, either through increased joblessness benefits, food stamps, or the financial community bailouts. Without that additional federal spending we would be, not in a great recession, but in another great depression.

What the large corporations fail to acknowledge, as noted in the previous blog, is that their cost-cutting and “efficient” personnel management techniques, are contributing significantly to the problem. Since the United States is essentially at best a self-contained economic system, because we are not a net exporter of goods and services, but a net importer, we cannot sell massive amounts of goods abroad to compensate for domestic economic weaknesses. That means that when wages and salaries go down – or stagnate with a growing population – so does domestic demand for goods and services. That means companies strive for greater efficiencies, and those efficiencies come largely from “employee efficiencies.”

One of the fastest rising employee costs is health benefits, and the larger corporations have addressed this through automation, fewer employees per unit of output, and greater use of part-time employees who are not paid benefits. The Affordable Health Care Act attempted to address the growing number of Americans without health benefits, but the way in which it was finally passed appears to impact disproportionately, as many Republicans have noted, smaller businesses. In effect, large corporations, through their management practices, have effectively shifted their past health care costs onto small business and government (i.e., all taxpayers). This, unhappily, isn’t anything new. Business has always attempted to shift costs onto someone else, whether environmental, infrastructure, or social costs, and always trumpets “jobs” and “free enterprise” as a rationale for not paying for the costs it imposes on society.

At the same time, U.S. tax policies, particularly corporate tax policies, have only made the situation worse. Although the United States has the highest “official” statutory tax rate of any OECD/industrialized nation in the world at 35%, the effective corporate tax rate for U.S. corporations averaged 12.1% in 2011 – and that was lower than all but one nation out of the top 34 industrial nations. That 12.1% rate is the lowest effective rate for U.S. corporations in the last 40 years. How does this happen? Tax breaks, subsidies, and a tax structure that does not tax overseas profits until or unless those profits are transferred back to the U.S. – where they’ll likely face the 35% rate [since they’d already have been transferred if the corporations had any way to tax shelter them]. Well… if you can’t or won’t transfer those billions, if not trillions, of dollars in overseas profits back to the good old USA, what can you do with them? Build more facilities overseas, of course. Since business tax breaks and subsidies are largely legislated on a political basis, this also results in economic inefficiencies. All this doesn’t exactly help the U.S. economy… or American taxpayers.

Then there’s the financial sector, whose indiscretions, greed, and mass speculation created the economic crisis, and whose major players are still reaping multi-million and multi-billion dollar bonuses… and a significant portion of whose income is taxed at a lower rate than that of most middle-class wage earners.

So… what can be done?

Knowing that no policy-maker will ever have the nerve to suggest anything along the lines of what follows, I’ll still suggest a general framework that I believe would work, not that workability has a damned thing to do with political feasibility… but who knows… someone might actually get desperate enough to try some of these.

First, stop tying tax increases to political rhetoric. Instead of demanding a 4% increase on higher earners, just ask for 1%… and cap their personal deductions in the range of $35,000-$40,000, while eliminating the alternative minimum tax. What no one mentions is that these folks are already going to pay a 4% additional tax on all their investment income beginning in 2013, as required by the Affordable Health Care Act. Second, drop the statutory corporate tax rate to 13-15% — and repeal every single exemption and subsidy. Then allow them to send profits back to the US – but credit them with a dollar for dollar reduction in tax liability for every dollar paid to another country in income/profit taxes. Third, impose a sliding-scale part-time employee surtax on every corporation with more than 100 employees, that surtax being based on the number of part-time employees not receiving health benefits. Couple that with a sliding scale tax credit for small businesses [20 or fewer employees], allowing a credit of some additional percentage of health care insurance costs per employee. Fourth, and this is an idea floated by Eliot Spitzer, impose a transaction tax of between ¼ and ½ of one percent of the value of every financial transaction in the securities and commodities markets. This would raise at least $200 billion annually, and might actually recoup some of the costs that the financial sector dropped on everyone else. It also might reduce the millions of computerized speculative trades made to try to profit on second-to-second price changes. Fifth, tax all dividend, interest, bonuses, and carried interest income [and any other “preferred” income] at the statutory rates, but allow the current lower tax rate for dividend and interest income to remain for the first $50,000-$100,000 [indexed to inflation]. That way, those middle-class individuals who scrimped and saved for retirement wouldn’t be penalized for their thrift, but multi-millionaires wouldn’t be paying absurdly low rates on massive income.

Anyway… those are my suggestions, not, as I said, that anyone in Washington is likely to listen.

A number of our friends, acquaintances, and even at least one relative are victims of the new discrimination.  They include a university lecturer, a Walmart employee, a professional classical pianist, and a daughter who works with the disabled… and there are millions of Americans like them.  Who are they?  They’re the part-timers, the nearly thirty million plus Americans who work less than full-time, the majority of whom do not receive benefits, particularly health benefits. And the number of part-time employees in American business rises every year, so that part-timers are approaching twenty percent of the workforce.

More disturbing than this is the fact that, according to the Bureau of Labor Statistics (BLS), almost all the increase in part-time employment since 1969 has been involuntary, in that employers have only offered those additional jobs as part-time, and in the majority of cases, employers are creating multiple part-time jobs rather than fewer full-time positions. There’s an economic rationale behind this, as shown by a 2012 BLS study that indicates full-time employees’ average hourly pay is some 60% higher than that of part-timers.

Over the past ten years the number of part-time jobs has doubled, while the number of full-time jobs has decreased by around nine million positions.  Even the current “positive” numbers in the decline of joblessness mask the fact that full-time jobs are continuing to decline, while part-time jobs are increasing at a rate faster than the decline of full-time positions.

Much of this change in the composition of employment is the result of computerization and statistical managing, because better data and software allow employers to use only the staff they think they need, and with the emphasis on profitability and the cutthroat nature of retailing in particular, the costs of fluctuating demand fall almost entirely on the part-time employees, rather than on management or permanent full-time employees.

In addition to financial costs, the increasing reliance on part-time employment creates stress and uncertainty among the part-timers. For example, a 2011 study of retail establishments in New York City showed that fifty percent of employees were part-time, and only about ten percent of the part-timers had fixed schedules on a week-to-week basis. The other problem with this increasing “management efficiency” in managing labor costs is that it makes it harder and harder for part-timers to cobble together two part-time positions in order to make ends meet because there’s less and less certainty in when they will work and for how long. This impacts everything from what they can afford to dealing with children and childcare.

While there’s a perception that temporary and part-time employment is largely confined to the retail and service industries, and to people without advanced training and education, that’s a complete misconception. Despite the growth of colleges and universities, and the increasing number of students graduating, the faculty composition over the last generation has shifted from being roughly 70% full-time to almost 70% part-time (or adjunct faculty), and with the passage of the Affordable Health Care Act, most state colleges and universities will have to either reduce the hours that existing part-time faculty teach and hire more, and likely less qualified adjuncts, if they can find them because the total compensation will decline, or add more full-time faculty, which the states cannot afford to fund.  This same problem will also affect hundreds of thousands of businesses as well.

Temporary employment in jobs requiring technology, business, computer, and other higher education skills has almost tripled in the last 30 years, and the temporary staffing and employment field was the largest growing employer segment in the United States over the last three years.   More and more businesses are laying off full-time skilled people, but hiring them, or others, back part-time as consultants.

The bottom-line?  American business – and higher education — will do anything to minimize labor costs, and that means – unless government gets more involved in labor policy and regulation – that more and more American families are going to see either a stagnation or a reduction in their real standard of living.  This has enormous implications for everyone, not just for those part-time employees.

What business and the politicians don’t seem to realize is that, as they move to a more “efficient” part-time workforce, there will be fewer and fewer full-time employees, and given the cost –pressures, and the threat of replacement by part-timers, even the full-time employees will be, and are, except for top management, compensated at a lower “real” level.  Both full-time employees and especially the growing ranks of part-time employees will have less and less money to spend on the goods and services that they provide.  Consumer demand over the past five years has been supported by a level of government borrowing that cannot continue indefinitely, or even for more than a few years. The only people immune to or insulated from this down-sizing of real income will be a comparatively small number of individuals with skills or positions of power.

Yet, the process of each business maximizing its labor “efficiency” results in a diminution of overall baseline purchasing power… and, unless the question is addressed on a society-wide basis, could result in an economic death spiral… if the social unrest created by the results of such headlong pursuit of “employee efficiency” doesn’t result in violent political upheaval first.  We’re already seeing signs of this in the growing support for Obama’s position on taxing the top two percent, because what most people don’t realize is that this is the first time ever in American history that a majority of the people have been in favor of tax increases on the well-off.

Will anyone in power really read the handwriting on the wall?

The other day, I came across a reader review of one of my books, which described it as formulaic.  And I’d agree… and I’d also call the reader who wrote the review either lazy or an idiot, if not both.  All books are formulaic, at least all books that more than a handful of people want to read.  Books require the formula of passable style and grammar, although better style and grammar are definitely a plus.  They require the formula of a plot of some sort.  They require the formula of some sort of resolution. In short, a book is an organized formula for providing entertainment or information, and possibly a great deal more.

So what do lazy idiots who use the term “formulaic” really mean?  According to A Handbook to Literature, “formulaic” is a term “applied to a work that relies excessively on set patterns of plot, character, sentiment, and language.”  The problem with this definition is that all fiction relies on patterns of plot, character, sentiment, and language, and that there is no standard for defining “excessively,” except in the mind of the reader or reviewer.

As a writer, once I’ve set the parameters of a story, I try to make the systems and the characters true to themselves, if you will.  The magic systems or technology are consistent throughout.  The characters develop more as the story progresses, but those developments are a result of who they are and what happens to them. This, frankly, creates a problem for some readers, because people behave like people.  They seldom do strange things, and when they do, it’s for very good and logical reasons, at least to the character in question, and much of what shock there is in what I write comes from characters taking situations and abilities to their logical ends in order to accomplish what they feel is necessary. Formulaic?  I don’t think so, because I don’t find it “excessive,” and most of my readers don’t seem to… or if they do, they like that kind of order and organization.

Part of determining what is “excessive” is strictly a matter of personal taste.  While technically I think George R. R. Martin is a good writer, I find his use of violence and brutality excessive, and I could claim that his best-selling series is “formulaic” on those grounds.  The same could be said of Piers Anthony and his Xanth books, given the incredible overuse of puns.  And I, or any other well-informed reader, could make a similar case for any number of well-known and even critically acclaimed writers.

As in the case in many instances of comments about books, the use of the term “formulaic” may reveal far more about the reader or reviewer who uses the term than about the book being reviewed because, as I said at the beginning of  this commentary, in the broadest sense of the word, all books are formulaic.

Last week the Utah congressional delegation all affirmed that they would be true to their principles and oppose any tax increase for anyone, rich or poor. That got me to thinking, as such sweeping generalizations often do.  Over the years, there’s been a current of approval, in commentary and even in popular song, for people who have insisted on being true to their principles.  I have a problem with this.

In 1861, the leaders of the Confederacy decided to be true to their principles, those of states’ rights embodying the idea that states had the right to hold people of color in slavery and to buy and sell them as property. Following those principles, they led their states into secession.  Earlier, the Catholic Church held to the principle that torturing and killing people to “redeem their souls,” and then officials of the Anglican Church retaliated in various ways based on various principles. Then there was this fellow by the name of Adolf Hitler, whose principles included the idea that people who weren’t of Ayran genetic heritage were inferior, especially Semitic peoples, particularly the Jews, and that ethnic cleansing and mass extermination were principled.  He was certainly true to his principles to the end, even using railroads and troops to continue killing Jews when they could have been used to fight against the allies invading the lands he had earlier conquered.

I may just be an iconoclast, but I guess I just don’t see much virtue in being true to principles that are either suspect – or wrong.  Now… I know, “wrong” is a judgment on my part, but we do have to make judgments in life.  The problem, of course, is determining a moral basis for such judgments, and that gets into a detailed discussion that has consumed much time and effort, both on this blog and throughout human history.  Still, there are some areas of consensus, such as the fact that human slavery is wrong and that killing people solely because of their religious beliefs is as well… and there are certainly others. Likewise, there are the cases where valid moral values clash – which is what makes the abortion debate so thorny [if human life is sacred, and the mother will die without having an abortion, how does one choose without destroying one “sacred life”?].

In the pending “fiscal cliff” political situation, one side’s principles state that “rich” people should pay more – or at least they shouldn’t pay lower effective tax rates – than poor and middle class families because the society in which they live has allowed them to receive more.  The other side’s principles state that, in effect, that tax rates shouldn’t be increased on just those who make more.  Both sides are insisting on being true to their principles while the country faces a possible return of recession if the issue isn’t resolved and long-term financial crises if the overhanging issue of excessive deficit spending isn’t resolved.

Perhaps I’m just being a curmudgeon, but I don’t see much moral value in either side “being true to their principles,” particularly since both sets of principles being touted are flawed.

Why do people vote the way they do… and believe what they do?  A growing number of studies show a link between attitudes linked to heredity and political beliefs.  The issue has gotten hot enough that one U.S. congressman spearheaded an amendment to the National Science Foundation budget last May to cut a billion dollars. While the amendment failed, Congressman Jeff Flake’s second amendment to the NSF budget – one that banned any NSF funding of political science research – did pass, because Flake did not want the NSF funding research into the biological roots of political behavior.

According to a recent article in the British New Scientist, “there is a substantial body of data suggesting that conservatives and liberals really are different tribes, divided not by opinions so much as by temperament and even basic biology.”  Also interesting is the fact that the article and research were written by Americans and published in a British science magazine.  The article itself is comparatively even-handed, pointing out correctly that most research in the field is conducted by liberals and that there are difficulties with some studies.  But one of the underlying problems is that, by temperament and biology, the majority of scientists in most fields, excepting those involving engineering and directly related fields, tend to be “liberal” in outlook and politics.

All that said, more than 25 years of study indicate that political attitudes have a high degree of inheritability, and such studies include identical twins raised in totally different environments, who are far more likely to share political attitudes than do fraternal twins or genetically unrelated family members.  As a rule, but not invariably, conservatives are more likely to prefer people of their own ethnic background, straight people, and high-status groups.  Liberals are more comfortable than conservatives with those of different ethnic and cultural backgrounds, as well as with members of ethnic or sexual minorities. Liberals tend to be more morally offended by inequality, while conservatives tend to be more morally offended by betrayals of the in-group, by disrespect for authority, and by signs of sexual or spiritual weakness or impurity.  These characteristics have been linked to anatomical differences in the size of various brain structures.  Conservatives have a higher need for certainty, while liberals tend to revel in mental challenges.

In this regard, I’ve always had the feeling that conservatives can’t find the truth because they’ve known it all along, whether it’s true or not, and liberals will never recognize it because they’re so involved in looking for the next thing that they’ll look right past it.

What is clear about all this research is that all of us are biologically inclined in a certain direction in what might be called our social outlook, some more so than others, whether that direction be conservative or liberal.  What is also true is that each of us does have the ability to examine those predilections… and to decide whether blindly following our feelings makes sense in any given situation or whether we need to examine what we feel more closely. Obviously, both outlooks are necessary in human society… or those with one inclination or the other would have been weeded out or marginalized, and given the near equal polarization in political outlooks in the United States, that hasn’t happened… and that means, again, blind insistence on doing either just the “conservative” thing or the “liberal” thing is counterproductive.  Working out a compromise is necessary.

Unfortunately, I don’t see many signs of this happening in our political situation here in the United States at the moment… and it’s something that needs to occur.  As a society, we can’t afford to follow blindly just one of the genetic predilections that evolved to make us successful hunter-gatherers. Nor can we turn our back on what science is revealing about who and what we are. Those are recipes for disaster in a high-tech complex world.