Showing posts with label Economy. Show all posts
Showing posts with label Economy. Show all posts

Saturday, January 22, 2022

Health Care Costs Continue To Rise

Because many people who supported the PPACA, both popularly and derisively known as Obamacare, did so from moral fervor and political partisanship (as did many opponents, often with the added fecal nugget of racism dropped in) they were utterly uninterested in any epistemological or evidence based evaluation for the claims that Obamacare would lower premiums, deductibles, and health care costs. 
Supporters took it as an article of faith that Obamacare would do all of those things. And if you questioned that belief or wondered if there were a better way of lowering health care costs, lemming like supporters squealed that you were a dummy, a useful idiot for Republicans, or worst of all some sort of hateful right-wing conservative cretin misogynist misandrist who just wanted people to die.
Silence heretic!!!!
Well.

Friday, May 7, 2021

SALT Deduction Cap Fight

I play chess. I hate when my opponent manipulates me into a situation with no good choices. I don't think that former President Trump and his merry band of sycophants are good chess players but they did box in the Democrats on an issue that divides people along class and regional lines. 

I am referring to the 2017 tax law which capped the individual federal tax deduction for state and local income and property taxes or SALT at $10,000. This deduction was previously unlimited

So before 2017 someone who owned a mansion or other expensive property as their primary residence could deduct the entire state or local property tax or income tax owed from his or her federal income tax liability. But they can't do that today.
 
Some people who pay high local income and property taxes don't like the new law. Not one bit. Many of the people most impacted are well off or wealthy Democrats in politically Democratic or "blue states".  

It's ironic because much of the Democratic messaging is that the well off should pay their fair share, which is in part what the SALT $10,000 deduction cap does, even though that's NOT why Trump and Republicans put it into place. I think the issue is probably the perceived unfairness that someone with a million dollar home in say Texas or Alabama is, all else equal, paying less in overall taxes than someone with the same priced home in California or New York. 

Friday, May 17, 2019

GM Lordstown Plant Closing

When people are discouraged, prevented and/or excluded from serving in positions of power they often show an intense, even obsessive, interest in putting one of their own in the Big Seat, however it is defined. And the people who have one of their own in the Big Seat, often show an intense, even obsessive, interest in keeping that spot, even if they receive little to no material benefit from having one of "theirs" in the top spot. This is just human nature. I don't think it will ever truly change. 

However it continues to be worthwhile to point out over and over again that simply putting a black face in a high place or putting someone in charge who can wear skirts and heels instead of pants without changing the power structure and the nature of the economic relationship is ultimately not worthwhile-at least not worthwhile for anyone except the individual who is making the big money in the top spot. Mary Barra is the Chairman (Chairwoman?) and CEO of GM. 

She is also the first woman to hold that position at GM and any other global automaker. When she ascended to the spot this was heralded as a good thing for women executives, women employees, women in general and the nation in general. Barra makes $21 million/yr in salary. I am sure she has the stock options, deferred compensation, retirement plans, bonus incentives and all of the other benefits that any  major league executive in her position would receive.

Barra also oversaw the recent announced closing of the GM plant in Lordstown, Ohio. This will devastate that community and increase the problems of opiate addiction, homelessness, economic inequality, job loss and other issues that plague American workers. The union contract GM signed apparently both forbade closing the planet and/or required additional worker benefits if the plant was closed.


Tuesday, March 26, 2019

Democrats, Heartland Cities, and Monopoly Capitalism

The 2016 Presidential election still vexes Democrats. Few pundits thought that Trump could win. Most experts argued that not only would the electoral "blue wall" of upper Midwest states prevent a Trump victory but also buoyed by demographic change as well as gender solidarity, Clinton would win in states that had long been Republican leaning-i.e. Georgia, Texas, Arizona and North Carolina.

We know what happened. Clinton won the popular vote but lost the election. Trump became President. Some Democrats still blame Jill Stein and Bernie Sanders. Others blame Russians. And so on. Democrats blame a number of people or events besides Clinton for Trump's victory. But lately more people want to blame the country's political institutions and rules: the Senate, the Electoral college, the voting age, separate state elections, etc. As discussed before some people are furious that Wyoming and California have the same number of Senators. They're irked that running up the popular vote count in one state (as Clinton did in California and New York) is not helpful to winning the Presidential election. Some Democrats want to make the Senate representation proportional by population (if not jettison it entirely), and eliminate the Electoral College. 

Friday, February 8, 2019

Trump Tax Hike on Middle Class

Some Trump voters are shocked and upset that the Trump Tax Cut is hurting them.

It’s February which means it’s officially everyone’s favorite time of year: tax season! And while most of us will be putting off tracking down our W-2’s until early April, some people have already managed to file their taxes. And among those early birds, many in the middle class have been shocked to find that instead of the nice little chunk of change they were expecting with their return, they actually owe money to Uncle Sam. What’s the reason for this financial switcheroo? 

It stems from President Trump’s tax reform, which was passed in 2017 and was touted by Trump and the GOP as a win for the middle class. However, with the new tax system now in place, Americans are discovering that most of the tax relief from the bill is actually being experienced by corporations. 

Meanwhile, many people are seeing an increase in taxes due to the bill eliminating many of the deductions that were used by middle-class families in order to lower the amount of taxes they were required to pay. Most notably, the tax reform placed a cap on deductions for taxes on both state and local levels.


Thursday, January 3, 2019

Do You Want A Cashless Society?

If you went to pay your bill at a restaurant or wanted to buy something at a grocery store would you be put out of sorts if the business didn't accept cash? I think I would be. I don't always want to put items on credit cards. For me it's far too easy to spend more money than I intended to spend if I use a credit card.

There is also the case that I may not always want the bank issuing the credit card to know where I was or what I was purchasing. However more businesses are starting to refuse cash. Not everyone is happy about this.

Sam Schreiber was mid-shampoo at a Drybar blow-dry salon in Los Angeles when someone from the front desk approached her stylist with an emergency: a woman was trying to pay for her blow-out with cash. “There was this beat of silence,” says Ms. Schreiber, 33 years old. “She literally brought $40.” 

More and more businesses like Drybar don’t want your money—the paper kind at least. It’s making things awkward for those who come ill prepared. After all, you can’t give back a hairdo, an already dressed salad or the two beers you already drank. Ms. Schreiber was tempted to wait and see how the Drybar employees would handle the situation with the customer, who had no credit or debit card with her; instead, she intervened from the shampoo bowl. “I said, ‘I can just pay for her and she can give me cash or Venmo me,’ ” she says.

A few moments later, one of the employees came back to hand her the $40 and expressed thanks on behalf of the stranger. 


Thursday, December 6, 2018

French Fuel Tax Protests

"Let me tell you how it will be/It's one for you and nineteen for me. Because I'm the taxman." 
-Taxman
The Beatles
It's very hard to determine ahead of time when people have had enough. Often the  fuse is lit but no one knows when the bomb will explode. Governments and dissidents alike would love to have the answer to that question. It would make their work a lot easier. If you're a repressive but smart government official you might want to keep the proverbial pot warmed just enough so that the frog doesn't realize he's being cooked.

If you're a dashing would be freedom fighter you don't want to waste your time, good looks, energy, youth and life trying to rally apathetic people to the barricades who would rather be home watching sports or downloading NSFW material. In France recently we had a reminder of what happens when governments get a little too far ahead of what populations will accept. After three weeks of protests and riots which saw three people die as French police and civilians attacked each other with hammers, tear gas and water cannon, the French President Macron announced that there would be a six month suspension of a 25 cent gasoline tax increase. This tax was sold in part as a green initiative required by the Paris Climate Accords but because Macron has cut taxes on the rich this tax wasn't exactly popular with people of more modest income or wealth or those who live in rural areas and have less access to public transportation. 

Friday, October 19, 2018

Republican Tax Cut Doesn't Work: Republicans Threaten Social Security

The problem with voting is that there are a lot of stupid, gullible, or downright hateful people who vote. Their vote counts just as much as yours does or mine does. To be fair they may very well think of me or you in the same terms which I just used to describe them. That's politics. That's never going to change. If we accept that every citizen has a right to vote and pursue his or her own interests as he or she defines them then we also must accept that sometimes people will make objectively sub-optimal decisions.

This brings us to the impact of the Trump tax cuts. You may recall that the majority of economists across the political spectrum predicted that the tax cuts would not create enough growth to shrink the deficit. The tax cuts would increase the deficit. And just about every economist or political theorist on what's rather broadly defined as the left, argued that that once the increased deficit became obvious Republicans would smartly pivot and without missing a beat argue that programs such as Medicare, Medicaid and Social Security had to be cut in order to bring down the deficit. 

Republicans would weep copious crocodile tears as they congratulated themselves on their willingness to cut benefits to people who weren't invited to the tax cut party in the first place. It's classic bait and switch. It's one of the oldest cons in the book. With ever increasing frustration Nobel Prize winning economist Paul Krugman has been warning about the tax-cut/deficit con and predicting the Republican response since before the tax cut became law. This isn't new. It's what Republicans do-or at least what the upper class/business class Republicans do. The middle-class/lower-class Republicans aren't necessarily supporting the party for its dedication to cutting taxes and slashing social programs (at least those used by whites) so much as they are supporting the party for racial and cultural resentments. 


Friday, July 6, 2018

Modern Day Loansharking and Obama Treasury Secretary Timothy Geithner

Mister Banker Mister please, how much does money mean
Won't you reconsider Mister Won't you do this thing for me
Mr. Banker 

-Lynyrd Skynyrd
I've written before that if you were a criminally minded sort in today's environment you'd be a fool to join the Mafia or other illicit organizations. These days, the benefit is no longer worth the cost. Working outside the law you have to worry about informants, violent paranoid co-workers, electronic surveillance up the wazoo, and long prison terms. That's no good. If you have wicked urges be smart and work inside the law. For example, if you want to assault or kill people, become a cop. You will be virtually untouchable.

If you want to help people gamble away their cash so that you can make a profit, open a liquor store and run the state sponsored lottery. People will give you money for nothing and thank you for the opportunity. And if you want to loan money at extortionate rates, changing or reinterpreting contract terms to your benefit while emptying your client's sucker's pockets, then do what former Obama Treasury Secretary Tim Geithner did and open up/run a finance company that markets predatory loans to impoverished and/or desperate people.

The check arrived out of the blue, issued in his name for $1,200, a mailing from a consumer finance company. Stephen Huggins eyed it carefully. A loan, it said. Smaller type said the interest rate would be 33 percent.

Way too high, Huggins thought. He put it aside.

A week later, though, his 2005 Chevy pickup was in the shop, and he didn’t have enough to pay for the repairs. He needed the truck to get to work, to get the kids to school. So Huggins, a 56-year-old heavy equipment operator in Nashville, fished the check out that day in April 2017 and cashed it.



Saturday, January 27, 2018

States Rebel Against Republican Tax Plan

The Republicans changed tax law so that starting in 2018 there will be a upper limit of $10,000 for state and local tax deductions to federal taxes (SALT). If you happen to be impoverished, low income or live in a relatively low tax state the impact of this change on you will probably be small or non-existent. If you however live in one of the relatively high tax coastal states and/or happen to be somewhat well off then the impact will be a bit greater. And it may not be a very nice change. Unless the states make other changes, placing a limit on federal deductions for local taxes means that all else equal some people will pay more in federal taxes. Or to put it another way, the federal government will no longer help shield you in toto from your state's tax policy. States will then have less money available for local initiatives.

This delights many Republicans for at least four reasons. (1)They really do believe in low taxes for the wealthy and low services (at least for the poor and middle class). (2) They deeply resent their perception of federal underwriting of higher tax bases in Democratic leaning states. (3) They enjoy watching people who claim to support higher taxes on the wealthy in general turn around to fight effective higher taxes on their wealthy. (4) Most of the states impacted are "blue" states, not "red" ones. Here it's very important to point out that the cost of living/housing can vary widely from state to state. Someone in say SE Michigan with a household income of $180K and a home valued at $500K may be better off even before taxes than someone in New York City with a household income of $250K and a home valued at $700K. Generally the South and Midwest are lower cost regions than the Northeast and West coast.



Friday, October 20, 2017

Trump Tax Plan

President Donald Trump and his team of economic advisers recently released their plan for tax "reform". You can read some of the highlights here


On September 27, 2017, the Trump administration released its tax reform plan. The Unified Tax Reform Framework would cut income tax rates, lowering the top rate to 35 percent. It doubles the standard deduction but eliminates personal exemptions. The plan would reduce the corporate tax rate from 35 percent to 20 percent. It allows a one-time repatriation of corporate profits earned overseas.

The Framework would lower the maximum corporate tax rate from 35 percent to 20 percent. The United States has one of the highest corporate tax rates in the world. But that doesn't hurt large corporations. Most of them don't pay more than 15 percent. That's because they can afford tax attorneys who help them avoid paying higher taxes.

Trump's plan lowers the maximum tax rate for small businesses to 25 percent. That includes sole proprietorships, partnerships, and S corporations. Many of those are real estate companies, hedge funds, and private equity funds. As a result, 85 percent of the tax cut benefits the top 1 percent of earners. Most mom-and-pop small business won't benefit from the reduction. They don't earn enough to qualify for the top tax rate. The Framework does not mention increasing the tax on some profits, called carried interest. That's taxed at 15 percent instead of the income rate. It benefits private equity funds. Trump campaigned on making them pay their fair share.

Trump's plan would almost exclusively benefit the extremely well off. The people that Trump sent out to defend this plan couldn't speak with a straight face about the plan's benefits to the middle class or working class. There are few benefits to the working class or middle class.This plan is warmed over supply side trickle down economics, which is the discredited but never truly dead idea that if we would only reduce taxes on our "betters" then they would be inspired to open more businesses and hire more workers, and not instead buy another vacation home or more stocks or bonds.

Tuesday, September 5, 2017

Detroit Little Caesars Arena Hiring

One of the greatest challenges in a post-civil rights movement society is to translate black political power into black economic power. I think it's fair to say that given the stats around black unemployment, wealth and income that just giving black people the right to vote isn't enough. Just electing black politicians (or white politicians beholden to black interests) isn't enough. We need something stronger to change economic realities. I was recently reminded of this by some of the latest news concerning the construction of the new Little Caesars Arena in Detroit. This arena will be a venue for concerts and for games by the Pistons and Red Wings. The arena will be city owned but will be managed and operated (and profited from) by Olympia Entertainment, a sub company of Ilitch Holdings. The Ilitches, a local billionaire family, own Little Caesars, The Detroit Tigers, The Red Wings, a local casino, and several other venues and properties in and around Detroit, including the famed Fox Theater. If you're working in sports or entertainment in the Detroit area, chances are excellent that you're going to rub shoulders with the Ilitches at some point. 

The Ilitch family was one of the few well known Caucasian run large private businesses to maintain a continual presence in Detroit during some very lean years in the eighties and nineties. They have given charity to many (including late civil rights legend Rosa Parks) and provided good pr for the city. They have also profited nicely from some sweetheart deals, including the financing of the new arena with taxpayer backed bonds, some of which was money supposed to go to public schools. Silly me. I thought that if you were a billionaire you could finance your own arena but maybe you don't become or stay a billionaire by needlessly risking your own money. 

Friday, March 31, 2017

Illegal Immigration and Discrimination Against Black Americans

With Donald Trump's election there has been a sharp shift in interior and border enforcement against unlawfully resident foreign nationals (illegal immigrants). Per Trump's directives, most of the people detained so far by ICE have been people with felony records and/or previously existing orders of removal. Many people, American or not, fiercely oppose the new Administration's policy changes. Some folks demand that there be not a single more deportation. Others have dropped their pretenses and now insist that the US have open borders. Scarcely a day goes by without one of the major newspapers of record (New York Times, Washington Post, The Wall Street Journal, etc) featuring a story, editorial or column decrying the possible removal of illegal immigrants. Some people have drawn analogies between deportations and the US enslavement of Africans or the Holocaust. There have been multiple demonstrations and even a few disturbances here or there. But many people have overlooked the impact that illegal immigration can have on American citizens. This is a story from December of 2016 but it's still quite timely in my view. 

A group of African-American men filed a lawsuit Tuesday in Chicago federal court alleging systematic discrimination by a temporary staffing agency and several of its clients they say passed over black applicants in favor of Hispanic workers. The alleged discrimination took place at MVP Staffing's Cicero branch office, which the lawsuit claims was directed by clients not to send African-American workers to their companies for assignments.
Those wishes allegedly were communicated using code words, according to testimony from former dispatchers and on-site representatives given in prior cases and attached to the filing as evidence. For example, according to the lawsuit, "guapos," which translates to pretty boys, would be used to refer to African-Americans to suggest they don't want to do dirty work. The terms "feos" (translated to mean "dirty ones")," "bilingues" (bilinguals) and "los que escuchan La Ley" (referring to people who listen to Spanish-language radio station La Ley) were used to refer to Hispanic laborers, the lawsuit alleges.



Tuesday, December 15, 2015

Detroit Water Bills Redux

Another day, another bad story out of Detroit concerning payment of bills. We've discussed this before. Not much has changed. There is still a big mess. It's a perfect storm of massive unemployment and underemployment, poverty, bad consumer decision making, poor record keeping and accounting by the Water Department and malicious gamesmanship by landlords and speculators. All of this has meant that there are some people who simply won't pay their water bills because they have had the accurate perception that they can get away with not doing so mixed with a population of people who simply don't have the resources to regularly pay their water bills. Poverty is real and limits people's ability to enjoy life. Perhaps some of the people in this latest story should not be shamed but rather all of us should be ashamed for having built a society in which large numbers of people have no opportunity to get ahead. It doesn't matter how much moral opprobrium you vent at someone for their life choices. If they don't have the money, they don't have the money. But public utility bills must be paid. I have little sympathy for someone who makes sure that their cable bill is paid but the water bill isn't. When someone does that they're telling you loud and clear what is most important to them. And it's not the water bill. If you use a service you should pay for it. Without everyone agreeing to that basic deal, society doesn't work. Things fall apart. People at the higher end of the income and wealth spectrum start to resent paying for those they see as deadbeats and freeloaders and become more receptive to the idea of starving the public sector of funds (except for military and police and fire). And people at the lower end of the income and wealth spectrum become more receptive to the idea that virtually every "need" should be provided for by the government free of charge. Throw in some racial resentments around gentrification and the idea that the Water Department has devious reasons for shutoffs and demanding payment and you get  this situation. How do you survive without running water for more than two years? First, get a trash can. Put it under the roof to collect water to flush the toilet. Then, get a bucket and remember what your grandparents taught you in the early 1950s, before indoor plumbing reached all of rural America. “You use your brain. You scramble. You survive because you’re used to dealing with nothing,” said Fayette Coleman, 66, who grew up fetching water from wells in Belleville. She hasn’t had running water in her Brightmoor house since May 2013. The crumbling home is one of at least 4,000 in Detroit — and perhaps many more — whose water was never turned back on after massive shutoffs attracted international attention last year. 

The outcry faded, but the situation hasn’t. Within a block of Coleman’s house on Fielding near Lyndon, at least three neighbors have endured shutoffs, including one who spent months walking up the street, twice a day, to fill buckets at a friend’s before service resumed in mid-November. Citywide, a third of all residential accounts in Detroit— 68,000 of 200,000 — are at least 60 days past due, city records show.
The water issue is coming to light as a special panel studying water affordability is expected to present its plan to the Detroit City Council in January. The group expects to consider recommendations — including lower prices for low-income residents — when it meets for the last time Tuesday. Help is available, said Gary Brown, director of the Detroit Water and Sewerage Department. Some 39,000 residents are on payment plans, and the city has nearly $1 million available in payment assistance. “If you come in and say you are having an issue, we can find ways to help people,” Brown said. “But you have to come in.” Coleman gets by using bottled water for drinking, much of which she gets from charity. She heats water for sponge baths and flushes the toilet only after bowel movements. Otherwise, she does without.

             

LINK

Wednesday, October 14, 2015

Recap: The First Democratic Debate

Five democratic candidates for President of the United States took the debate stage in Las Vegas last night to face off over the issues for the very first time. Lincoln Chafee, Jim Webb, Bernie Sanders, Hillary Clinton, and Martin O'Malley introduced themselves to the American people and then got down and dirty in the political mud.

No topic was off limits. Gun control. Hillary Clinton's Emails. Benghazi. Syria. Russia. The Economy. Black Lives Matter. The candidates covered it all. Well, at least some of them did, and that is where we have a problem, if you don't like your candidates chosen for you.




Hillary Clinton and Bernie Sanders clearly had more debate prep than any of the other candidates on the stage. And by debate prep I mean Clinton's failed 2008 run when she endlessly debated then Senator Barack Obama despite having no chance at the nomination, and Clinton and Sanders' storied histories in the halls of Congress. As for the other candidates, they barely registered in the key arguments being put forth in the debate. It was the Hillary and Bernie show.

One of the most contentious issues early on was gun control. The gloves came off between the old Senate fellows. Hillary Clinton said Bernie Sanders wasn't tough enough on gun control. Bernie tried to argue that there is a difference in the perception of guns in rural areas versus more urban areas, and while he is technically right, that technicality doesn't matter when you consider the students and teachers of Sandy Hook were teaching and learning in a rural area when they were massacred by a madman.

The debate on gun control quickly devolved into a debate about war and who would be a better Commander in Chief. Hillary Clinton was painted as too quick to press the button considering her voting record on Iraq. Bernie Sanders was painted as a pacifist, and the other three candidates pontificated about how they would have voted had they been in Congress, and what they will do once they become the President of the United States. Only Jim Webb could really speak about what it's really like to be at war considering his Marine background, but he squandered his chance to silence, and then complained that he didn't get enough time to speak.

From war the natural progression of the debate led to Syria, Russia, and Benghazi. This brought the marquee moment of the debate when Senator Bernie Sanders exclaimed, "We're tired of hearing about the damn emails." Hillary Clinton appreciated the vote of support from her socialist rival. The debate carried on and came to two of my favorite topics. Let's start with the economy.

On this topic the Democrats did what the Democrats always do. They blamed the Republican. In this case they blamed Bush. The campaign tactics of 2008 and 2012 when Obama ran were employed in earnest with a couple new twists. When the conversation turned to restoring Glass-Steagall all the candidates supported the move except Hillary Clinton. I wonder why? The obvious and only reason that Mrs. Clinton cannot support the restoration of the one piece of legislation that would keep investment banks separate from commercial/community banks is because it is the key piece of legislation her husband took pride in dismantling in the name of deregulation, trimming the fat, cutting the tape, and balancing the budget. While I'm sure President Clinton was well meaning in his actions back in those roaring 90s, it got us Millennials a lot of heartache in the aughts.

Instead of supporting the restoration of Glass-Steagall Mrs. Clinton promoted the failed pansy bill that is Dodd-Frank and promoted progressive capitalism with checks and balances. Bernie Sanders called her on her B.S. and Martin O'Malley, Lincoln Chafee, and Jim Webb wept. Or at least they should have for their silence.

Last night's debate was hosted by CNN in conjunction with Facebook. That means questions were taken from real people to see if the candidates truly know what's going within the pulse of the country. The first question posed was a simple one, but an important one (especially to this here blogger) "Do Black Live Matter or Do All Lives Matter?

All of the candidates stated why Black Lives Matter. Whether they believe in the movement and goals of the grassroots civil rights campaign or not they gave politically correct answers. All except for maybe Jim Webb. He stumbled around his work with the Black community and came up with I've been working with African Americans and their situation... Mr. Webb, what exactly is our situation?

The Black Lives Matter questions raises a broader issue, not just among the Democratic candidates but for the entire 2016 campaign on both sides of the aisle. Unless the next President is Ben Carson, then our next President will be forced to have a "black agenda." An agenda President Obama could not, does not, and can not outwardly have for the simple fact that he is Black. For the first Black President to have an explicitly Black agenda, while necessary, will be to some too explicitly racist and at very least pandering. I know. The psychology of our country is backwards. However, what Obama had to do through Attorney General Eric Holder, and now Attorney General Loretta Lynch Hillary Clinton, Bernie Sanders or Donald Trump can do on their own. They can put forth a plan to promote the equality of minorities among the greater hegemony and by "pandering" if you will they get the minority vote they are looking for.

It's still a long road to go for both the Democrat and Republican ticket, and though I hate to admit it Hillary Clinton was the strongest candidate at the podium last night. I don't like her sense of entitlement, and I don't care for her deceptive scandals but she did make several compelling arguments and the other candidates, save for Bernie Sanders didn't put up much of a fight against her machine. Especially Martin O'Malley. He's running for Vice President. I'm sure of it.


Questions:

1. What did you think of the Democratic candidates' debate performance?
2. If the election were today who would you vote for?
3. Do there need to be more candidates in the race?

Monday, April 27, 2015

President Obama, Liberals and TPP

"L'etat c'est moi"
President Obama recently invoked a surly and petulant tone when he lashed out against critics of the proposed Trans Pacific Partnership fast track trade deal (TPP). TPP is a so-called free trade agreement that would theoretically increase economic integration among twelve Pacific Rim countries with the notable exclusion of China. President Obama claimed that the critics of the legislation didn't know what they were talking about. President Obama said that if this deal wasn't good for working Americans he wouldn't support it. It's ironic that at the same time President Obama was telling Senator Warren that she didn't know what she was talking about and angrily denouncing anyone who would question his advocacy of certain trade deals that he also had temporarily to break stride and apologize for bombing and killing people who shouldn't have been bombed or killed. In other words he made a mistake. He was wrong. I might discuss the drone situation sometime later but contrary to what the Boxers among us might think, Napoleon President Obama is not always right. Like many corporate bosses when things go well, (Bin Laden is dead), the President takes credit. When things go wrong some supportive media suddenly releases detailed information on how the drone program doesn't need the President's signoff for every target and so mistakes really aren't the President's fault. Fascinating. The President might want to remember that just because he supports something doesn't mean other people need to accept his judgment without question. The President's interests are not synonymous with America's interests. If he was wrong about something like a drone program, he just might be wrong about a trade deal. President Obama's good intentions do not necessarily make something good. There was no need for President Obama to make policy differences personal, but I guess when you don't have to run for election again you can drop certain masks. So it goes.


It's alternately amused and irritated me that President Obama tends to save his most biting personal criticisms not for the open racists on the right, who have continuously insulted him, his wife, father, daughters, and mother in the ugliest and most personal of terms but for people on the left who question his policies. In what universe does it make sense for President Obama to compare Senator Warren to Sarah Palin? TPP, divorced from economic and historical reality, might sound good in theory. But like everything else the devil is in the details. Of course we don't know all the details because those are secret. We do have some general outlines though. It's safe to say that just as with NAFTA, the TPP is not as much about free trade as it is about increasing the ability of corporations to exploit labor and sidestep restrictions on profit making activities across nations. It's about wage arbitrage. TPP would reduce the ability of governments at all levels to "interfere" with corporations as they pursue their happiness. This is a good thing if you happen to be a corporation, a lobbyist, a trade or patent attorney, or perhaps someone at a high level who works for the aforementioned entities. But if you're not in that group you might want to consider if the TPP is a good thing for you. Hint, it's not. You also might want to review how median income has done over the past fifteen years. You might wonder if helping corporations to outsource more jobs from the First World and raise drug costs in the so-called developing world really is the path we ought to be taking. You might want to go down to your local clothing or electronics store and see how many goods you can find that are still made in the US. You might wonder how it is that so many jobs have moved overseas and what that means for American workers.

But if you want to know the answers to these questions and have your Senators and Representatives debate and discuss them openly the President will accuse you of not knowing what you're talking about. People like MSNBC analyst Chris "tingle up my leg" Matthews will say you're a protectionist. Well someone who does know what he's talking about and is not a protectionist is Nobel Award winning economist Joseph Stiglitz. Over a year ago he sounded the alarm here. And he hasn't changed his tune, pointing out that those in favor of these deals are all corporations and wealthy capitalists. This isn't news to the people on the streets. The working class, the people of all colors who are most impacted by crappy trade deals, isn't buying it. And some members of the Congressional Black Caucus, which as a group has often given cover to the President's more centrist or rightist agenda elements, may have found a limit to how far they will go.
To make up for what could be dozens of Republican No votes in the House, the administration may need to persuade 20 or more House Democrats to vote Yes. The White House hopes some of those votes will come from members of the black caucus. But the going has not been easy. Rep. Yvette Clarke of Brooklyn is a loyal Obama supporter, but she found she couldn’t say yes earlier this month when the president engaged in some personal lobbying. Ms. Clarke promised to “go back and have a conversation with my constituents,” she said, recounting the conversation. But she isn’t optimistic: “The people in my district—they are radically against” the Pacific trade deal, Ms. Clarke said in an interview. But by last week, Mr. Rangel sounded pessimistic about finding common ground with the Obama administration. He said the White House hadn’t offered him anything concrete that would assure jobs—at least “nothing that I could explain to my voters.”
Two-thirds of the House members in the caucus signed a letter to Mr. Obama complaining that any trade deal would need to do more to strengthen workers’ rights. And only Rep. Gregory Meeks (D., N.Y.) is on record in favor of the fast-track legislation, and Rep. Eddie Bernice Johnson (D., Texas) is thought to be a swing vote.
“There’s too much downward pressure on wages,” said Rep. David Scott (D., Ga.), a frequent ally of businesses who said he has made clear that the White House shouldn’t even bother trying to win his vote.
President Obama should know that snark and sarcasm are no substitute for facts and transparency. Various corporations have been able to see the text of the TPP. Duh! They're the ones writing it! If, as President Obama claims, the TPP is a great deal for workers, then as Senator Warren suggests, declassify it. Let's have it openly debated and discussed. Perhaps the President is correct. Once we all know the details maybe there will be hundreds of thousands of $14/hr American workers marching in the streets demanding passage of the TPP. American IT workers may rejoice at the prospect of training their Pacific Rim lower cost replacements. Maybe American workers in general think that they have too much safety in their job and want their boss to have more flexibility to replace or fire them. But I doubt it. I think that the TPP is just the latest in a long line of moves by corporations and the wealthy to reduce labor costs and limit democratic oversight of business. Senator Warren is right. President Obama is wrong on this one. He needs to be fought tooth and nail on this. And he needs to lose.

Saturday, January 17, 2015

Oil Prices and You: Winners and Losers

Although I happen to know a few people working in the financial industry who are peeved about the fall in oil and gasoline prices, I am delighted about the drop. My weekly commuting costs have been cut in half. That's more money to pay down debts, build savings, increase emergency funds, invest, assist relatives or perform any number of other Shady approved initiatives which are of much higher utility to me than spending $15-25 on gasoline every day from Sunday through Thursday. The drop in gas prices has a similar impact to a tax cut or pay raise. For people who drive 200 miles/week or more it's a virtual godsend. I am amused that the conspiracy theorists who come out to blame the Trilateral commission, the oil companies or THEM when oil and gasoline prices are high are nowhere to be found when prices are low. But there is no such thing as a free lunch. These low prices hurt producers. There are some very real winners and losers. I don't much care about the losers but it is worth thinking about because low prices may have bad results down the road. The reason that prices are low is the interaction of supply and demand. Higher oil prices gave US and other producers greater incentive to seek oil through fracking and new drilling, thus increasing supply worldwide. Domestic oil production doubled over the past six to seven years. The US is currently producing about 9.1 million barrels of crude each dayThere is a ban on US oil exports but the greater supply still indirectly reduced the global prices. It did this via the mechanism of US production crowding out foreign imports which had to seek new markets. The fact that much of the world is still mired in a slowdown or very weak expansion also caused demand to drop. 

So increasing supply combined with weak demand means that oil prices fell to levels not seen since 2009. Now usually under such circumstances the largest oil producing and exporting countries, many of whom are part of the OPEC cartel, would have a sitdown and arrange for everyone to cut production proportionately in order to boost prices to what they feel are reasonable levels. Don Corleone would give his protection in the east and there would be the peace. So far these reasonable steps haven't happened.


One of the reasons that production hasn't been cut is that Saudi Arabia, who holds the largest oil reserves and the most ability to withstand lower prices for long periods of time, is playing chicken with North American and Russian oil producers. Saudi Arabia would like nothing more than to take US energy independence and fracking off the table completely. And if they can harm their Iranian rivals while doing so and punish a few other OPEC members with reputations for cheating then so much the better. Many of the Gulf Arab states feel the same way. So Saudi Arabia and its supporters won't countenance cuts in production. In fact they have had the cheek to suggest that the US cut production. The US is not upset to see Russia have budget issues at a time when US sanctions are starting to bite. All of this means that countries like Russia, Iran, Nigeria, Venezuela among others are in deep trouble. Their budgets and internal income transfers are based on oil prices remaining within a certain range, say $70-100/barrel. Oil that remains at $47/barrel, which is the current price, could cripple their economies. There are some obvious political repercussions here. For example some of the funding from the Gulf states to ISIS could decline or dry up completely. Governments which purchase internal loyalty or stability via high oil prices could destabilize. Other losers could include North American oil producers who only expanded or entered their business because their forecasts predicted high oil prices for the foreseeable future. Obviously no one knows what the future holds. It may take more time for the ill effects to be felt. But if oil prices stay low we will see increasing and ongoing employment losses in such states as North Dakota, Texas, Louisiana and Oklahoma, throughout 2015 and perhaps even into 2016. At that point production will have dropped enough for prices to recover somewhat.

But it's not just people directly involved in the oil and gasoline business who may be facing economic or political problems from lower oil prices. When gas prices drop as much as they have done, consumers tend to lose interest in electric cars, hybrids or super efficient smaller vehicles and start to purchase more full size vehicles, particularly SUVs and pickups. The auto companies like this because they make thousands of dollars more profit per unit on the larger models. However the auto companies also have CAFE standards to meet. It is more difficult for them to do this selling larger vehicles. In general lower energy costs for fossil fuels don't align with decreased carbon production and pollution. There may well be more friction between certain government mandates and market realities. It's ironic that the end to fracking and drilling in pristine areas, something that is high on the agenda of many environmentalists may well occur because of market signals as opposed to social activism or new laws. And although by some lights, now would be the perfect time to increase the gas tax, there probably isn't much political support for that move.

So in any event, enjoy the lower prices while they last. I know I will. But keep in mind that lower prices are causing other people some hardships. We're all connected on some level. And there ain't no such thing as a free lunch.

How have the lower gasoline prices impacted you?

How much longer do you think these prices can last?

If you're saving money, what are you doing with it?

Monday, October 6, 2014

President Obama Sells Out Workers

We all are hypocrites in one way or the other. It's just part of being human. Nobody is consistent across the board on everything. However I am amazed by the fact that the Obama Administration has managed to maintain so much support from labor and many members of the working class when it continues to display that it is not necessarily a big friend of the working class. Its rhetoric doesn't match its actions. One of the critical employee rights which we are supposed to have in this country, whether we are union or non-union, white collar or blue collar, is that if you work for someone else you should be paid for the time you're at work and the tasks you complete. There are a few marginal exceptions to this. The exempt professional worker usually does not automatically get time and a half overtime pay for more than 40 hours of work per week. Such pay might be made but it's much more likely to be compensated (if at all) in additional time off at some later date. Possibly. Maybe. It depends on your company's policy and boss's needs. Obviously in some professions, working 40 hours per week is considered slacking. You don't become partner at a law firm, trading boss at a hedge fund, or head surgeon at the hospital by only working 40 hrs each week. The flip side of that though is that if a salaried professional leaves early one day because they're sick or have a family emergency or just want to see a playoff baseball game, their next paycheck probably won't include a line item for pay docked. So in theory it balances out.

Still whether professional or not, if the company says you must do X as part of your job duties chances are you will do X as part of your job duties, if you want to continue getting paid. And getting paid is the key thing here. The company shouldn't be able to obtain work or time from you for free. Of course companies are amoral and increasingly want to do just that. And for some strange reason the Obama Administration is siding with the companies.
After his 12-hour shifts at an Amazon warehouse in Las Vegas, Jesse Busk says, he and 200 other workers typically waited in line for 25 minutes to undergo a security check to see whether they had stolen any goods. Upset that the temp agency that employed him refused to pay workers for that time, Mr. Busk sued. On Wednesday, the Supreme Court will hear oral arguments about this hotly contested issue. The nation’s retailers are paying close attention because such security checks are common. The Supreme Court is to determine whether the check and related waiting time were part of Mr. Busk’s regular, compensable workday or, as the temp agency argues, were time after his workday and not compensable.

In its brief, the temp agency, Integrity Staffing Solutions, argues that the security check and the related waiting time are part of the “preliminary” or “postliminary” activities that are not compensable under the Portal-to-Portal Act, which Congress passed in 1947.  Mr. Busk’s lawyer, Mark R. Thierman, disagreed. “The antitheft check is integral and indispensable because the company said you have to do it,” he said. “If the company tells you to do it, it doesn’t matter whether it’s related to what else you do on the job.” The Obama administration has filed a brief backing Integrity Staffing. 

Some pro-labor groups voiced surprise that the administration was backing Integrity Staffing. “The administration says it’s time to put more money in the pockets of workers who work long hours with low pay,” said Catherine Ruckelshaus, general counsel for the National Employment Law Project, an advocacy group for workers. “Their position in this case is contrary to what they’ve been saying.”

LINK
Ok. Let me get this straight. The company pays its workers chump change and then is concerned that some of the workers will make up the difference by "liberating" some company merchandise for resale. It's a reasonable worry. The company could address this problem by raising everyone's pay so that getting busted for stealing some crap from a warehouse wouldn't be worth anyone's trouble. Unrealistic I know. Well. What to do then? Ooh! Ohh! I know! I know!! The company could maintain its security procedures, demeaning and insulting though they are, and PAY the workers for the extra time that they are spending at work being shaken down for possible stolen goods. This search is part of their job. Mr. Busk could not say "No, I'm not going through those searches tonight" and reasonably expect to have a job the next morning. This is not something that was externally imposed by the municipal, federal or state government where the company and/or the subcontractor could argue that they had no responsibility. And no this is not something where the Obama Administration is being forced by those "wascally Rethuglicans" to do something which is against its better nature. The Obama Administration, in the form of the Labor and Justice Department, is siding with the U.S Chamber of Commerce, the Retail Litigation Center and several other pro-business anti-labor groups. If the President didn't want this he could use his celebrated pen and phone to tell Labor Secretary Perez and Attorney General Holder to withdraw Administration support from the company's side of this dispute. This really is a watershed moment. As much as anything else this tells you which side the Obama Administration is on when it comes to conflicts between capital and labor. Hint, not labor's.

As mentioned, under the logic being pushed by Integrity Staffing Solutions and the Obama Administration, a company could order an employee to do ANYTHING after or even during his shift and then refuse to pay the employee by claiming that the task was not integral to work. So a boss could theoretically order someone to go pick up his dry cleaning and then refuse to pay because after all, retrieving your supervisor's laundry is not really a key task. But if you don't you're fired. Right. If the Supreme Court sides with the company you will see many corporations transfer more and more unpaid tasks to workers under the fallacious idea that these tasks aren't integral. Worker income will continue to stagnate or fall. Corporate profits will continue to rise. Under the current Supreme Court who can predict what can happen. But I will bet that Scalia and Thomas will side with the company and with President Obama. 

What do you think the right thing to do here is?

Why has President Obama sided with the company?

Have you ever been in a situation where your employer tried to extract unpaid work?

Friday, June 27, 2014

Delinquent Water Bills, Detroit and The United Nations

I do my best to pay my bills on time. I expect the same from others. If I use a service I pay for it. If I loan money I want the money returned. I don't think that's too much to ask from other adults. Things can get a little tricky with relatives or other intimates because the relationship warps our understanding of money. So I avoid loaning money to people in those categories. If they need assistance I will give it to them, if I can. But people close to me know that I like my money very much and don't like giving it away. So that preserves the balance.
But where there's no personal relationship there is no misunderstanding of what money means. With people who lack a personal relationship with me there is never any expectation on my part that money loaned won't have to be repaid, regardless of who is the creditor and who is the debtor. My bank expects monthly mortgage payments. The bank is entirely uninterested in my problems making that payment. All they want is their money. I work for pay at my company, not because I enjoy the witty repartee. So, as is incredibly obvious to most adults, when you make a deal or purchase goods or services, you are supposed to live by the deal or pay for the goods or services you bought. Unfortunately in my home town of Detroit, the Water Department is running into some pushback as it seeks to either obtain payment from delinquent customers or shut their water service off. 

The reason for the Water Department's new aggressiveness in going after delinquents is probably related to the city's bankruptcy. Not only has the Emergency Manager made it clear that business as usual can't continue but of course the Detroit Water Department can't be privatized or merged into a regional service provider unless it shows that it can actually get customers to pay their bills.  I mean would you invest in or purchase a business where customers used the product but refused to pay for it? No you wouldn't. These decisions make sense for the entire organization but inevitably there are going to be some people that get hurt and may not even be deadbeats.



On July 1, the department is planning to relaunch its dormant financial assistance program with the help of the Heat and Warmth Fund, also known as THAW. The program is funded by 50-cent donations from paying water customers. More than $800,000 is available.THAW will help determine how much customers who qualify for assistance must pay. DWSD officials stressed that all customers will have to pay something toward their bill. Water service to 7,556 Detroit customers was cut off in April and May, according to the department. Now, the department officials said enough shutoff crews are in place to halt service to 3,000 delinquent accounts per week.

The overall effort to collect on more than 90,000 active accounts owing $90.3 million past due has drawn criticism from activists and a coalition of welfare rights groups. On Tuesday, U.S. Rep. John Conyers, D-Detroit, called the shutoffs inhumane and “economically short-sighted.” The department’s shutoff campaign is targeting customers — residential and commercial — who are more than 60 days late on their bills and who owe at least $150. The average monthly bill for water and sewer service in Detroit is $65, according to the department. An 8.7% increase effective next month is expected to increase bills by $5 a month. The rate hike was partially blamed on delinquent bills. City Councilman Gabe Leland, who supported the rate increase, said the financial assistance program’s availability next month — about three months after the shutoffs began — reveals how the DWSD sets its priorities. “It seems like right now the department is taking no prisoners,” Leland said, adding that people should pay their bills. “To shut people off, that’s one thing. Let’s do it with some more preparation.”

LINK
Of course this being Detroit, a welfare rights organization even attempted to get the United Nations involved on the theory that water is a universal human right or that disparate impact theory showed that the people harmed by shutoff notices would be mostly black and thus therefore the shutoff policies were racially discriminatory. This kind of logic makes my head hurt. I'll leave that to lawyers who are actually qualified to discuss it. Bottom line as I see it is if you use a service you pay for the service. All else is folly and laziness on an individual level. If you want to collect water in your backyard from the rain and use that water to brush your teeth, go to the toilet, clean your body and for your drinking needs you go right ahead and do that. But if you want to have clean safe treated water that runs the gamut of your preferred temperature range delivered instantaneously to your home, well you need to pay for that, just like everyone else does. Now, all of that individual responsibility stuff out of the way there are at least three systemic issues here:

1) What happens when an economy simply doesn't need as many people as it used to? Unemployment in Detroit is chronic. This is in large part because the high-wage, relatively low skill auto jobs that built and sustained the middle class in Detroit have vanished thanks in part to automation, globalization and departure for the suburbs or southern states. This didn't happen overnight but honestly there is nothing the current President or either political party is doing to change employment patterns in the "inner city". You can have all the individual responsibility you want to but if you lack money, some bills get dropped. It's a related issue that I haven't touched on for a minute but this is also why I am opposed to "immigration reform". There are too many American citizens that are falling by the wayside. We can't provide jobs for our own and we want to bring in more people? But seriously, what if late model capitalism simply doesn't require the workers that its predecessor model used to? How do we handle that as a society?

2) Isn't there some residual pride left in people? Is it really a human rights violation to have your water shutoff? Again, we may decide that it is. But in that case we will all have to pay additional taxes to provide water "free" of charge to all. I have no issue doing that for seniors or people of extremely low means. But for your run of the mill American, poor or not, I would balk at doing that until I had more information on their circumstances. Housing in Detroit is not exactly expensive. 


3) Related to number one, a black man with an associates degree has roughly the same economic chances as a white man with a high school diploma. Education pays for everyone but it pays better for some people than for others. Again, if we (that is the US) have through history and current practice shut large out numbers of people from the employment market then we're going to end up with some unknown proportion of them not being able to pay water bills. So again, we need to provide jobs for people, even those who do not have a college degree. And the highest need for jobs is in the black community.


I don't have all the answers on this. I think that we have to distinguish between the truly destitute, for whom we can find assistance, and the person who simply doesn't think his or her water bill is something they have to pay. Unfortunately the only way to make that distinction is to shut off service to delinquents. If they want the service, they'll pay their bill. If they can't step forward and let's have a discussion about what happens next. I am sympathetic, especially as the Detroit bureaucracy has a well deserved reputation for notoriously bad record keeping and organization. There will definitely be a high number of false positives caught up. But there will be many more folks who just got used to paying late and are screaming because the free ride is up.

What's your call on this situation?

Saturday, February 15, 2014

Tom Perkins: Return to Aristocracy

There has been a lot written of late about inequality. Unsurprisingly people on the Right tend to defend inequality in general and the massively increased inequality of the past 40-50 years as a good thing. People on the Left tend to consider increased inequality a bad thing while some go so far as to consider virtually any inequality as problematic. The Right, or at least corporations and the monied class have been winning this argument for a very long time. To the extent there is increased energy on the Left about this it's a last ditch stand or cynical media posturing by politicians who'd like to change the subject from their own complicity in the workings of the machine while keeping those campaign contributions rolling in. But there are some people of the Right who are not content with being wealthy, not content with paying relatively low taxes by historical American standards or by the standards of other First World industrialized nations, and not content with having money treated as speech and having political bribery virtually legalized. Some people, aristocrats in all but name, are starting to wonder why those damned peasants have the right to vote at all.

I mean if you're so awesome and so intelligent that you've built or expanded multinational corporations, discovered new medicines, increased the limits of knowledge about the universe, or at the very least made yourself and your family more money than could be spent in one lifetime, is it really fair that some sap who hasn't even made a million dollars gets the same vote as you do? Some rich people think that they should have more say in society while more of us peasants should have no say. Venture capitalist Tom Perkins, last heard from comparing the wealthiest 1% Americans to Jews hunted and exterminated during the Holocaust, is such a man.

"The Tom Perkins system is: You don't get to vote unless you pay a dollar of taxes," Perkins said. "But what I really think is, it should be like a corporation. You pay a million dollars in taxes, you get a million votes. How's that?" 

The audience at the Commonwealth Club reacted with laughter. But Perkins offered no immediate indication that he was joking. Asked offstage if the proposal was serious, Perkins said: "I intended to be outrageous, and it was."






It is hard to overestimate how profoundly undemocratic and unAmerican this proposal is. There is always a tension between the private sector in which the boss can more or less operate as he sees fit (especially without unions) and the public sphere of democracy and a republican form of government in which everyone has a say and both private power and public power are limited by constitution and law. Evidently Perkins doesn't like our system any more. Perhaps he should consider leaving the country and resettling in a place like Afghanistan or Somalia where whatever the local Big Man says, goes. He might be much happier. The entire swath of American political history has tended towards expanding the franchise, not limiting it.

Perkins offers no reason as to why it would be a better thing if only rich people voted or had even more of an outsize impact on elections than they already do. I guess to him it's self-evident. But I think he's going to have to come up with a better argument than "I'm rich and dislike the current President."
An aristocratic system tends not to last if you have other elements like an educated middle class, social safety nets, unions and other non-government support groups, etc. Because sooner or later people without the vote or with limited political say realize that they greatly outnumber the rich and have no need to bow and scrape before them. But to be an American is not to bow and scrape before anyone NOR to want anyone to do that before you. Perkins should learn how to be an American. I think he was apparently born in the wrong country and wrong century. If nothing else, Perkins should realize that a society that moves too far towards plutocracy and autocracy eventually gets balanced out by a Robespierre...