Archive for the ‘Politics’ Category

Rich People, Rich Companies, Rich Government, and Jobs

June 15, 2012

There’s a peculiar dichotomy in the discussion on “the rich” creating more jobs by getting tax cuts.

When we talk about the wealthy, we have to be aware that “taxation on the rich” takes two very different paths; one is regarding tax upon the upper-level management that’s getting paid in millions of dollars regardless of the performance of the company. The other is tax on corporate profits.

Clearly, if an individual is sitting on a pile of cash, then there is no job creation going on there. If the money is invested in stocks, it’s accomplished little more than raising that stock’s artificial value for someone else. This is not job creation. Two stock owners can buy and sell stock back and forth until the stocks have doubled in price. All they’ve succeeded in doing is tying up their profits in inflated stock prices. When the stock market is doing great, cash is being tied up to inflate the prices; this cash is not creating jobs.

Likewise, the concern about taxing profits on companies is totally irrelevant if the company is actually using their extra money to create jobs. in which case their profits will be very small and they will pay very few taxes.  If you think about it, high corporate taxes could, in fact, encourage corporations to reinvest heavily in themselves and in job creation – they maintain corporate growth, new jobs, and thus investors to jack up their own stock prices.

But if we look back over the last thirty years, the tax on the wealthy has been lower than ever so there’s been less of an incentive to dodge taxes by reinvesting in job growth without the company. The job situation is worse than ever. The government, collecting less money, has the worst deficit problem ever, escalating every year for the last 30 years or so (excepting Clinton’s time in office – we can only assume he raised taxes). The jobs that the government created by taxing the wealthy went away with their tax cuts.

Contrary to conservative beliefs, lowering taxes eliminates jobs. The government tends to spend ALL of the money they bring in, as everyone has noticed, and when they spend it, they create jobs.

So if CEOs have a pile of cash to burn, what are their choices? Sit on the cash, that’s an option. Invest in stocks, inflate stock prices, thus tying up the cash? Or expand their companies.

Expanding their companies only makes sense if there’s a demand. So in a depression or recession, there’s zero incentive, no matter how low you make their taxes, to invest in creating jobs. Think about it…put yourself in the CEO’s position. It’s pretty simple math.

So what options are we left with in  a recession? Tax breaks for the rich…no, that clearly doesn’t work. Compare unemployment when peak tax rates were  90% to current times. Pretty obvious, isn’t it? And if the government has this tax money, what do you think they’ll do with it? Put in in stocks, spend it in China on cheap labor, or make jobs for Americans?

VOTING – The Lack of Representation for Distributed Minorities

July 23, 2010

It’s an odd character of our politics that it’s possible for a 30% minority, a hundred million Americans, to have nobody in Congress to represent their interests.

Think about it. Say you’re in a group representing 15% of the US citizens. Now, you’d think in any sort of democracy with any sense to it, 15% of the folks representing us in Congress would have this same opinion. But that’s not the way it works, unless the members of this group all happen to live in the same state. A case in point is Humanists, or non-believers in general, who do actually make up about 15% of the US. But there’s only one Representative who professes to be a nonbeliever, and no Senators at all.

It’s easy to see how this happens. If every community in the US is 1% Buddhist, 2% Jewish, 15% Humanist, 1% Wiccan, 1% Moslem, and 80% Christian, then you’re going to have a Congress that consists of 100% Christians. Likewise, if 49% of every community were gun-owners, and everyone voted, they would have zero representation in Congress.

This goes for every minority opinion. In a perfectly mixed society, the minority will not have significant representation in Congress. This isn’t always the case, of course, since societies often segregate themselves based on their interests; the Deep South is chock-full of conservatives, and the east and west coasts are liberal. Different races tend to clump together, too. So people that stick together can get represented. But those minority-opinions that distribute themselves evenly throughout the population don’t.

How could a democracy that believes in voter representation allow this, or more importantly, how could we correct this?

First of all, we could toss out the concept of districts, and thus eliminate redistricting and gerrymandering. Then create a pool of eligible candidates that post their positions and opinions on-line. Make it fairly easy to get into this pool; you want a diverse group of individuals that represent a lot of opinions. Then, let everyone in the US vote for whomever they wish to represent them.

Currently each member of the House of Representatives represents, on average, about 750,000 people. So getting back to our hypothetical solution, when any person in the pool reaches 750,000 votes, Shazam! they’re an official Representative. You’d end up with the same number of Representatives, but hey, they’d actually be representing the people who voted for them. Wouldn’t that be unusual!

Naturally, this would have a couple of bugs to work out, like how to sidestep all the irate special interests and corporations who wouldn’t be able to control the voting anymore. That’d be tough.

But we still have to figure out how to deal with those idiots in the Senate.


March 27, 2010

While the whole idea behind voting is pretty simple, the dynamics, politics, and results are quite complex. The biggest problem, I think, is the 51% majority. Think about it. You now have a policy that allows laws to be passed that disenfranchise nearly half the people in the country. This is stupid.

I don’t believe that any law at all should be passed unless 80% of the people in the country agree on it. Yes, a law against murder would be a shoe-in. Against thievery, you bet. Raising taxes to fund a war in a foreign country, less likely. Legislation concerning religion would cease to exist; in fact, legislation for any subgroup of the population that constituted less than 80% of the population would cease to exist, unless there was a large portion of the population sympathetic to a minority’s cause. People who just hated a minority would be out of luck. Sympathy, accepted, hatred, rejected.

Furthermore, there are already a lot of laws on the books that were instituted on a very narrow (51%) majority that shouldn’t be there at all. If 30-50% of Americans think something is okay, then chances are you should not be making a law banning it. So I’d propose allowing laws to be eliminated on a 40% vote of Congress. Get rid of all the crap laws on the books. You want smaller government and lower taxes? There it is. You want laws that actually reflect the will of America, truly representing the blended society that it is? You can have it.

If there’s a close split in society, you should find a way to make the two sides understand and accept each other. One side isn’t “wrong,” they just have a different social norm in such a case. If you can get 80% of the legislature to agree on laws providing that interface between the two groups, that would make a hell of a lot more sense than ostracizing the minority, wouldn’t it? Smoking, for example; there are laws in place that keep one group from impinging on the airspace of the other; you can likely get smokers and non-smokers to buy-in on such laws. You might even get laws approved that require cigarette companies to spring for lung cancer treatments.

Getting the pro-life and pro-choice people to actually think about what would make both sides content with coexistence would be painful but finally productive. Get them to the table together to pound out a solution to both their concerns, not just try to legislate each other out of existence when their turn in power occurs.

Clearly the current state of affairs sucks. The Republicans get into power, they revoke Democratic legislation and vote in their own. The Democrats get into power, and the opposite occurs. Can American survive in such an atmosphere of divisiveness? There should be no law passed that the two groups can’t agree on by a mega-majority. Anything else is just idiocy.