Markets Need Governing

Lots of politicians still make decisions based on the the ideological position government should stay out of markets.  It is a view that celebrates ideology over reality.  Governments are far from perfect, they are composed of people after all, but markets are also composed of people and are equally imperfect.

Markets push individual companies seeking competitive advantage to pay as little wages as possible, even though when all companies are doing the same thing it is shrinking the consumer base that supports the economy.  It's in everyone's interest to insure that markets spread the wealth through the population to insure maximum circulation of money but more often than not market mechanisms do the opposite.

It is in the nature of sellers in markets to seek a monopoly. If we allow monopolies even the companies that gain a monopoly lose.  They may in the long run have more wealth in comparison to others but their wealth will be as a percentage of a smaller economy.  Government needs to preclude monopolies.

Corporations and financial markets love mergers even though they defeat the competitive nature of markets that make them work.  Much of the time the main purpose of a mergers is to try to skate as close to a monopoly as you can.  A competitive market requires government oversight of business mergers to control the market efforts to achieve monopoly.

In a true free market there would be no such thing as a corporation.  Corporations are fictions invented by government which grant collections of individuals special powers and protections.  Maintaining a vibrant democracy and a strong economy requires that we recognize that corporations are not people, they are organizations created by government and can and should be regulated by government.

Voters should boycott Presidential Debates

The Presidential debates are not about policy, they are entertainment that suits the purposes of the campaigns and the media hosts.   The format is about performance and entertainment not critical examination of ideas and issues.

Most of the time the candidates are smothering us in platitudes and glittering generalities rather than real substantive facts and analysis.  The rest of the time they are pandering to the prejudices of voting blocks they are trying to capture.  They are a beauty contest, where the winner is going to be determined by appearances and mannerisms - or who is having a bad day.

For the media they are an opportunity to have 50 million listeners and make a bundle from advertising.  The moderators generally may try once or twice to ask a halfway probing question, but even when they do the candidate talks around difficult issues and then the moderator moves on.

Presidential debates focus our attention on superficial aspects of the campaign.  If you aspire to more serious policy understanding, I suggest you don't pollute your mind with the debates.  If enough folks boycott perhaps we will get a format that is meaningful.

The Crime of Illegal Immigration

There are laws that are intended to protect people from one another.  Murder, robbery, assault, theft, rape, for example. This type of law needs to be taken very seriously to maintain a civil society.  We need to do all that we can to prevent their occurrence and punish the wrongdoer.

Then there are laws that are about organizing society.  Telling us where we can or can't park.  How fast we can go on the freeway.  When we can cross the street and when we can't.   They second type of law is not so serious.  Sure we need to enforce them to prevent anarchy.  But in fact if we are honest with ourselves almost all of us break these types of laws from time to time.   We speed so we won't be late to an appointment.  We park illegally because we need to do some quick errand.  Maybe we exaggerate the value of a deduction on our tax return.

Here in the San Francisco Bay area if I go out and run errands I am mixing with immigrants from many countries, some legal, some illegal. They are just people, trying to live their life, raise a family, build a better life for their kids.  Someone speeding is much more of  threat.  Someone double parked on a busy street while they run an errand is more irritating and inconvenient.

Economists who have studied immigration seem to have no doubt immigrants pay far more in taxes than we spend on social benefits they receive from the government.  Immigrants usually do jobs none of us will do because they are hard work and they pay little.  The damage caused by illegal immigration seems to be largely rooted in speculative generalizations. 

It's hard for me to imagine Donald Trump never drives faster than the speed limit, never exaggerates a deduction, never breaks any law whatsoever.  

Brings to mind Jesus's admonition.  Lot of stones are being cast in the immigration debate.

The Donald - The Republican Reward

Oh, the delicious irony.  For decades Republicans have played the us against them game,using illegal immigrants and Gays to stir up resentment and harvest votes.   Along with abortion they use these issues to stir up lots of anger and get themselves elected, despite the fact that when they controlled all the levers of elected government from 2000 to 2006 they invaded Iraq and then blew up the economy.  

So they have pounded on the table about illegal immigrants, even as, year after year, they stymied any congressional efforts to reform the immigration system.  Immigration was evidently too valuable as a problem to allow a solution to happen.

But you can't get many people angry about gays any longer.  So for stirring up emotions it's down to abortion and immigration.  But after the last election, it is apparent to the Republican party bigwigs that continuing to rely on stirring up anti-immigration anger will lead them off a demographic cliff.   National Republicans could become just as irrelevant as California Republicans became after alienating California Hispanics.  So the Republican party is trying to pivot slowly away from disparaging immigrants while still keeping those anti-immigrant voters angry enough to get out and vote for Republicans. 

Then along comes the Donald, heating the pot back to boiling, stealing the anti-immigrant base the party has cultivated for so long and hoped to fool into voting for the party as the lesser of two evils.

It is enormously entertaining political theatre.  If it causes the Republicans to implode and get pounded at the next election all the better.  Then maybe some Republicans could start getting elected who realize that compromise isn't a sin, it's what makes democracy work, and that solving problems is better than exploiting them.

Mass Shootings and Guns

The Economist took a look at the increase in mass shootings in the United States (August 1 edition, page 26)  As always they focus on data and produce some statistics to raise ones eyebrows.   

Mass shootings have occurred at an average of one per day this year (citing data from http://shootingtracker.com).

A recent FBI study looked at 160 mass shootings between 2000 and 2013.  Most ended when the assailant killed himself or fled, only one was ended by a civilian armed with a gun.  On the other hand the Violence Policy Center says that Americans who legally carry concealed weapons are far more likely to perpetrate mass shootings than to prevent them, it counts 29 such events since 2007.  

Broadly speaking Republicans think the path to stopping gun violence is to have everyone packing heat (even in church according to some Republican candidates).  Democrats think the answer is to get rid of guns.  I'm a pretty middle of the road guy so I look at data.

Statistically although in some cases having a gun saves a persons life or stops a crime, for every positive outcome there are many more cases where the guns people own kill a curious child, or go off accidently and injure someone, or are used against the owner, or where a disturbed gun owner shots someone else.  Statistically it is a bad idea to own a gun.

Some gun owners are wise and careful about their weapons.  For those individuals the statistics perhaps don't reflect the likelihood of actual outcomes.  However from the statistics one has to conclude there are many people who are neither wise nor careful with their weapons.  So how do we know who is who?  If you are a wise and careful gun owner does having the right to own guns make you safer?  Or are you and your family more at risk from the neighbor you don't even know has guns who is neither wise nor careful than you are from remote possibility of an actual armed intruder?  

The data I really can't get past is the fact the United States has much higher levels of violent crime and gun violence than any other mature democracy in the world.   Our levels of gun violence per 100,000 persons are about the same as Mexico and Argentina, 2 to 5 times higher than any European Country or Japan and 10 times higher than Australia.  If we have gun policy right why are we so much less safe from gun violence than folks in Australia? Or Bulgaria?  Sure we come from a relatively recent frontier past where a gun was necessary for survival for many.  But we seem to be getting more violent, not less.  The wild west really came to an end when people stopped packing a six-shooter - largely because towns began regulating guns in public.  Is our goal now to go back to the wild west?

I can't help but conclude the notion that greater peace will be won by having more people carrying guns is ideological nonsense that ignores data and history, and is driven in large part by lobbying groups representing folks who make lots of money off guns.

Repubs or Dems - Who is best for the Economy

The conventional wisdom, at least according to polling data, is that most voters give the edge to the Republicans on building the economy.

This is curious when one looks back in history.  The two biggest economic collapses in the last 100 years occurred after a decade long period of Republican control of Congress.  (Republicans controlled both houses of Congress from 1919 to 1932 and from 1995 to 2006).   Equally as curious, these were the only two long periods of Republican dominance of Congress in the last 100 years.   It's hard to swallow the notion it was just an accident of fate these periods of Republican control  correlate so exactly with the two worst economic collapses in the last 100 years. 

I believe voters mistakenly believe if folks are good at making themselves rich they must know how to make everyone else rich.  In fact history suggests the opposite is true.

Republican economic theory is all about getting government out of the way so the selfish can pursue their self interest on the assumption everyone will benefit.   But, as we saw in the great depression, and in the recent great recession, that's not what happens.  The rich get proportionately richer as they suck up more and more, but the people who actually buy things to drive the economy have less and less money.

There are many ways to become rich, but few that I am aware of involve dedicating yourself to the good of others.   The factory owner who pays his employees a generous salary is not going to get near as rich and may get put out of business by a competitor that pays his employees as little as possible and thereby drives his costs of doing business down.  In a business negotiation, the person most willing to take advantage of the other person in any possible way is probably going to be the most successful.   

Good government is absolutely essential to building a good economy.  A good economy is built on trust and stability, and that stability is rooted in everyone being along for the ride.  Good government allows those with drive and ambition the freedom to build businesses, but sets up rules that make sure they bring the rest of society along with them, rather than climbing over others to achieve their goals.

Income Inequality and War

The statistics say that there was a big surge in income inequality in the early 20th Century that culminated in WW II.  After WW II income inequality fell for 40 years or so, and during that 40 years the world was relatively peaceful, other than proxy wars between the US and the Soviet Union.  Income inequality then began to rise again and now we are back in a time where income inequality is high and conflict is bursting out all over the globe.

Common sense supports the notion that income inequality would feed into rising conflict.  Money left in the hands of rich people is more likely to buy an existing asset than take a chance on creating something new that needs to be grown or manufactured (and thus creates jobs).  So as more money accumulates in fewer hands less money is available to support jobs.  Young people are normally disproportionately hurt by a lack of jobs and young people with no future are more open to the notions of the angry and ambitious - from Hitler in the1930's to ISIS today.  

Is the World drifting toward some version of WW III because of our inability to consider income inequality as a real problem?  The people that have a lot of wealth see the whole notion of considering income inequality to be a threat - a ploy for the less wealthy to nibble away at the wealth of the most successful.  The reality is the extremely wealthy are relatively unaffected by war.  In fact it may be a tool they can use to become wealthier.  

The impact of war falls disproportionately on those of us who are not wealthy.  Our children fight the war, and in countries surrounded by other countries (not surrounded by oceans) its often the homes of the regular folks that form the battleground.

Many wealthy people will spend lots of money and work really hard to make sure income inequality is not even a discussion item on a political agenda.  We shouldn't let that happen.