While the underlying brain and behavioral characteristics that create that capability to be racist are present in all of us, it seems like sometimes the word becomes an excuse rather than a path to a solution.
Scientific evidence seems to document that we are all hardwired to instinctively draw distinctions between "we" and "others" (see discussion in "Syria & Ukraine - Thoughts on Tribalism" published at this site 3-12-14). Everyone is inclined to put themselves and people like them in the "us" category and adopt stereotypical views about everyone else in the "other" category. Does racism, or sexism or religious bigotry exist in America? Unquestionably, and every other country, and it always will. But calling people racist solves nothing, and explains nothing.
The Grand Jury decision, and accompanying vandalism and looting, in response to the decision not to prosecute the police officer who shot Micheal Brown in Ferguson Missouri brought this to mind.
I tried to ignore what was going on in Ferguson, because American media are useless when it comes to understanding problems and developing solutions. Facts are boring. But emotions and opinions stir people up, so the media hands the microphone to advocates willing to use strong language and state unequivocal opinions. Little effort goes into developing facts and what few facts are developed get buried in a blizzard of opinion and innuendo. But, I got caught up and have since been stewing about it.
On the one hand were the commentators characterizing the shooting as a regrettable incident, a police investigation into a petty theft that went badly wrong because the very physically imposing young victim became aggressive. The facts that are available provide some support for this view. The victim was a young man 6'4" tall and about 290 pounds. A very big man. Having tussled with other young men a bit when I was that age I have no doubt a man that size could kill me - and most of us - with his bare hands if that was his goal and he caught us in close quarters where we couldn't use greater mobility to stay out reach or reach a weapon. The physical evidence and the Grand Jury testimony seem make it pretty clear the victim was acting aggressively, then trapped the police officer in his car, punched him and tussled with him over the officers gun. So clearly the officer had reason to be afraid. But this view makes one wonder why the officer pulled his car sideways, essentially trapping himself, and why he didn't have a taser or other non-lethal defense option for close quarters. This suggests not racism, but bad police training and equipment.
On the other hand were the commentators characterizing the event as a shooting of an unarmed black teenager sparked by white America's racism toward black America. I don't think I saw or heard a single comment that didn't link "an unarmed black teenager" with the victims name. Technically correct, Micheal Brown did not seem to have a weapon, but the description is a misleading characterization considering the aggressiveness he demonstrated and the threat his size presented
Both views seemed to ignore some part of reality. The November 29th issue of the Economist brought out a number of facts that helped crystallize my thinking about what was bothering me. So here are some facts, largely gleaned from the Economist.
The town of Ferguson is run by white Republicans who seem to follow conservative principles. They evidently don't like taxes, are not keen on spending money for city services. The city council has 5 white members and one black member. The police department has 50 white officers, 3 black officers. The second biggest source of funding for town operations, 20% of the towns revenue, comes from fines and asset confiscations imposed by the criminal justice system. The amount collected averages to $124 in fines paid each year for each of the 21,135 residents of the city. Last year the municipal court in Ferguson issued 32,975 arrest warrants last year, 1.5 times the number of arrest warrants as their are city residents, mostly for traffic violations. 86% of the traffic stops are of blacks.
The Economist cited the story of one woman who was stopped by police because she had "a black looking car". The officer asked whether she had any marijuana, she replied no, perhaps a little to vehemently. She ended up with three tickets, one for car windows tinted too dark, one for slowing down to much at a traffic light, and one for disrespectful behavior towards a police officer. Three tickets carrying, presumably three fines. Paying fines can involve standing in line for hours, if you don't have the money to pay the fine you may incur jail time and more fines. It is hard to avoid the implication much of what police do in Ferguson has more to do with bringing money into the city than protecting and serving the residents.
These are the sorts of facts that cause people to say the problem is the whites being racist.
Here is my problem with citing racism as the problem. It makes the problem a function of white behavior. But 67% of the population of Ferguson is black. Yet turnout for the last election of city officials was 12% of the eligible voters. A Washington Post analysis of the election found that white citizens were three times more likely to vote than black citizens. If we use that figure as accurate it means that significantly less than 5% of the eligible black voters bothered to vote.
That mirrors the recent congressional election across the country where only 37% of the eligible voters voted, the lowest percentage since 1942 when many voters were overseas fighting WW II. California actually had a significantly higher voter turnout, so that means much rest of the country probably had less than 37% of the eligible voters participate. Conservative Republicans (mostly white) almost always vote. Most Blacks, mostly Democrats, apparently are too busy or otherwise engaged to vote. So Conservative whites run Ferguson, and the country.
I recognize that who we each are today is strongly influenced by the ancestors we descend from, from whom we take much of our outlook on the world, and the black population of this country has a legacy of slavery, then second class citizenship in the south, and poverty. I also recognize we all, of every race or creed, have to constantly fight the tendency to lump people we don't know into categories and create expectations based in stereotypes. But in my experience the vast majority of white America see blacks as persons of equal citizenship stature. They may sometimes still engage in black stereotyping, but they also stereotype Muslims, and at times even people from France, or fans of rival football teams.
As conservative Republicans are prone to say, freedom isn't free. As the Bible says, God helps those who help themselves. I have no power to help folks who can't take the time to vote, so I have no patience with folks who still think calling folks racist is solving a problem.
Wednesday, December 3, 2014
Monday, November 24, 2014
Should Government Pay for Art?
Media stories here in the San Francisco Bay Area lately been covering a movement among artist's (under-employed in their view) for a repeat of the Government subsidies of Art that occurred during the Great Depression.
San Francisco and other older parts of the Bay Area are full of Art from the Great Depression, particularly murals on public buildings. I love them. I could live without them easily, sometimes I stand right by or under a mural oblivious to its existence, but still from time to time I have contemplated a mural and enjoyed it as an emotional expression of the views of a particular time in history.
But in my estimation government sponsorship of Art is generally inappropriate and unwise because of the nature of Government and the nature of Art.
First, Government is inherently coercive. Even in our democracy, you have to pay your taxes. We tolerate this coercive nature of government because for many things only government effectively address needs for the common good. But government is also very susceptible to individual groups of people using political power to bend government to what is in their interests rather than some clearly defined common good.
Second, Art is fundamentally personal expression. Art can be a form of play that is very healthy and necessary, particularly for children, or it can be an expression of deeply rooted emotions, but in either case Art is primarily created to make the artist feel good about himself.
To me, Art that is timeless, is generally created by people for whom self expression is more important than money. They see the world through their emotions and their Art allows them to express those emotions. Many great artists did not achieve much financial success during their lifetimes because they did not cater to the current fads in art, or did so within the context of exploring deep and timeless emotional worlds in their own soul.
But there is another world of Art - Art as a business - filled with intelligent people who have good social skills and are primarily motivated by financial and social success. This world is about our logical brain, not our emotions. It grows out of one of the characteristics of human behavior that becomes more prominent as life gets easier. When we feel secure about basic needs some people become willing to pay inordinate amounts of money to buy designer clothes or handbags as a status symbol to assure themselves they are more special than everyone else around them. When everyone can buy designer jeans, those with more money turn to Art to be special. It is the world where Andy Warhol paints a Campbell's Soup can and sells it for millions, because he is perceived as a little more cool than everyone else. Art as business isn't about exploring deeply held emotions, its about current fads. Its about looking at what everyone else thinks is the latest cool thing in art, then trying to figure out how to do something just different enough to be perceived as clever and cooler.
I used to live in an upper middle class university city. It is a great town, filled with intelligent, highly educated people, I doubt there is a nicer place to live in the world. That city has been buying public art and putting it around the city for years. It is abysmal. I never had any involvement in how the art was chosen, but have talked to a few local politicians about it at social events so I have a suspicion what happens. It is Art as business. Successful politician's generally build their life around figuring out what society thinks is good and supporting it. Art is good so supporting the arts becomes an important goal, particularly in and upper middle class city where meeting basic needs has never been an issue for most people.
Politician generally are not going to encounter a moody starving artist focused on self expression, nor have the background to recognize artistic genius. But they are going to encounter lots of the Art as business people because the Art as business people are going out lobbying for public money. So the art as business folks get the public money. In that city I lived in that has resulted in a town full of public art that to me has no more emotional appeal than a banana peel on the sidewalk, and is often tacky in its efforts to use color to give an installation some meaning. Most of it I find not particularly pleasant to look at nor is it capable of sparking any kind of coherent emotion.
I am sure there are lots of folks who view themselves as artists in that city who think the local public art is great. That's fine, or it would be if they had paid for it. But my tax dollars apparently were used to pay for something that I, and I suspect many other taxpayers, consider inappropriate and/or ugly. I have no problem with the Art as business folks building a whole industry out of selling stuff to people with too much money, but I do have a problem with Art becoming just another lobbying group trying to advance their interests at the public trough.
When all the hungry people have been fed, and all the old folks taken care of, and all those who aspire to be educated have been educated, maybe then I would consider government getting involved in paying for public art.
San Francisco and other older parts of the Bay Area are full of Art from the Great Depression, particularly murals on public buildings. I love them. I could live without them easily, sometimes I stand right by or under a mural oblivious to its existence, but still from time to time I have contemplated a mural and enjoyed it as an emotional expression of the views of a particular time in history.
But in my estimation government sponsorship of Art is generally inappropriate and unwise because of the nature of Government and the nature of Art.
First, Government is inherently coercive. Even in our democracy, you have to pay your taxes. We tolerate this coercive nature of government because for many things only government effectively address needs for the common good. But government is also very susceptible to individual groups of people using political power to bend government to what is in their interests rather than some clearly defined common good.
Second, Art is fundamentally personal expression. Art can be a form of play that is very healthy and necessary, particularly for children, or it can be an expression of deeply rooted emotions, but in either case Art is primarily created to make the artist feel good about himself.
To me, Art that is timeless, is generally created by people for whom self expression is more important than money. They see the world through their emotions and their Art allows them to express those emotions. Many great artists did not achieve much financial success during their lifetimes because they did not cater to the current fads in art, or did so within the context of exploring deep and timeless emotional worlds in their own soul.
But there is another world of Art - Art as a business - filled with intelligent people who have good social skills and are primarily motivated by financial and social success. This world is about our logical brain, not our emotions. It grows out of one of the characteristics of human behavior that becomes more prominent as life gets easier. When we feel secure about basic needs some people become willing to pay inordinate amounts of money to buy designer clothes or handbags as a status symbol to assure themselves they are more special than everyone else around them. When everyone can buy designer jeans, those with more money turn to Art to be special. It is the world where Andy Warhol paints a Campbell's Soup can and sells it for millions, because he is perceived as a little more cool than everyone else. Art as business isn't about exploring deeply held emotions, its about current fads. Its about looking at what everyone else thinks is the latest cool thing in art, then trying to figure out how to do something just different enough to be perceived as clever and cooler.
I used to live in an upper middle class university city. It is a great town, filled with intelligent, highly educated people, I doubt there is a nicer place to live in the world. That city has been buying public art and putting it around the city for years. It is abysmal. I never had any involvement in how the art was chosen, but have talked to a few local politicians about it at social events so I have a suspicion what happens. It is Art as business. Successful politician's generally build their life around figuring out what society thinks is good and supporting it. Art is good so supporting the arts becomes an important goal, particularly in and upper middle class city where meeting basic needs has never been an issue for most people.
Politician generally are not going to encounter a moody starving artist focused on self expression, nor have the background to recognize artistic genius. But they are going to encounter lots of the Art as business people because the Art as business people are going out lobbying for public money. So the art as business folks get the public money. In that city I lived in that has resulted in a town full of public art that to me has no more emotional appeal than a banana peel on the sidewalk, and is often tacky in its efforts to use color to give an installation some meaning. Most of it I find not particularly pleasant to look at nor is it capable of sparking any kind of coherent emotion.
I am sure there are lots of folks who view themselves as artists in that city who think the local public art is great. That's fine, or it would be if they had paid for it. But my tax dollars apparently were used to pay for something that I, and I suspect many other taxpayers, consider inappropriate and/or ugly. I have no problem with the Art as business folks building a whole industry out of selling stuff to people with too much money, but I do have a problem with Art becoming just another lobbying group trying to advance their interests at the public trough.
When all the hungry people have been fed, and all the old folks taken care of, and all those who aspire to be educated have been educated, maybe then I would consider government getting involved in paying for public art.
Saturday, November 22, 2014
What does Net Nuetrality Mean?
There is a big fight going on the Washington right now about whether what is apparently the current policy of Federal Regulations, "net neutrality" should be changed to allow Internet pricing according to use. I've been getting periodical emails from outraged folks claiming this is a Comcast, ATT, Verizon power grab - that we are all going to be pawns of these big corporations extorting money from us.
It is complicated and hard to understand what it is all about, and it is not helped by the term "net neutrality" which seems to have been chosen to be one of those nice sounding buzz words that will create a positive perception without regard to what it is actually about.
Then I heard the other day that some enormous percentage of the band width in the entire world is used up by Net-flix. It was a mind boggling number, I want to say somewhere around 50% of all the worlds bandwidth is used by Net-Flix, apparently one of the biggest opponents of "Net Neutrality". It began to make sense to me, I believe. I could reduce it to a simple, easy to understand principle I could use to make a decision, to wit:
That people that use the net pay in proportion to the how much band width they use.
This changed my whole view of the argument, from leaning toward supporting net neutrality toward being pretty dubious of it being a good thing. I basically believe good economics requires that the people that use something need to pay for it in proportion to their use, and that not following that system warps both behavior and economics for the worse.
It appears to me that the supporters of Net Neutrality are people who enjoy an unfair economic advantage under the current system, who want to keep it. Internet entertainment companies can offer entertainment options at prices so cheap people use them much more than they would if they had to pay more to reflect how much they are hogging the bandwidth. The people whose whole lives revolve around the net and electronic media are riding on the backs of all the companies and people that use the net as a part of their business, or life, but not the central part.
Not being well versed in the law Congress enacted that provides the underpinning for the current regulation of the Internet, beyond the perception it is nonsensical and way to complex, I have no way of knowing if the proposed rule would give an unfair benefit to Comcast, AT&T, Verizon, or other companies through whose system the Internet operates. But if it does I think we need to address that unfair benefit with oversight of their activities rather than continue to enshrine a rule based on a fundamentally wrong principle as a basic operating premise of the Internet.
Maybe net neutrality was justifiable in the early days of the Internet to jump start use of the Internet. It kept prices low to encourage people to take advantage of the benefits of the Internet. But the Internet is no longer a fledgling, the biggest companies in the world are now tech companies largely built around the Internet. Time to start letting market forces make decisions, not regulators.
It is complicated and hard to understand what it is all about, and it is not helped by the term "net neutrality" which seems to have been chosen to be one of those nice sounding buzz words that will create a positive perception without regard to what it is actually about.
Then I heard the other day that some enormous percentage of the band width in the entire world is used up by Net-flix. It was a mind boggling number, I want to say somewhere around 50% of all the worlds bandwidth is used by Net-Flix, apparently one of the biggest opponents of "Net Neutrality". It began to make sense to me, I believe. I could reduce it to a simple, easy to understand principle I could use to make a decision, to wit:
That people that use the net pay in proportion to the how much band width they use.
This changed my whole view of the argument, from leaning toward supporting net neutrality toward being pretty dubious of it being a good thing. I basically believe good economics requires that the people that use something need to pay for it in proportion to their use, and that not following that system warps both behavior and economics for the worse.
It appears to me that the supporters of Net Neutrality are people who enjoy an unfair economic advantage under the current system, who want to keep it. Internet entertainment companies can offer entertainment options at prices so cheap people use them much more than they would if they had to pay more to reflect how much they are hogging the bandwidth. The people whose whole lives revolve around the net and electronic media are riding on the backs of all the companies and people that use the net as a part of their business, or life, but not the central part.
Not being well versed in the law Congress enacted that provides the underpinning for the current regulation of the Internet, beyond the perception it is nonsensical and way to complex, I have no way of knowing if the proposed rule would give an unfair benefit to Comcast, AT&T, Verizon, or other companies through whose system the Internet operates. But if it does I think we need to address that unfair benefit with oversight of their activities rather than continue to enshrine a rule based on a fundamentally wrong principle as a basic operating premise of the Internet.
Maybe net neutrality was justifiable in the early days of the Internet to jump start use of the Internet. It kept prices low to encourage people to take advantage of the benefits of the Internet. But the Internet is no longer a fledgling, the biggest companies in the world are now tech companies largely built around the Internet. Time to start letting market forces make decisions, not regulators.
Sunday, November 16, 2014
Global Warming and Nuclear Power Plants
Nuclear Power plants require enormous amounts of water to cool reactors. So engineers often put them at or near sea level, often literally at the seashore, where abundant water can be drawn in and discharged.
What happens if the sea level rises 200 feet? Despite the scientific certainty of the early 50's, we have never developed a safe process for getting rid of spent nuclear fuel rods, our best solution is burying them miles under a mountain out in the desert somewhere. What will happen to the Nuclear Power plants located near sea level all over the world if the sea levels continue to rise? How will we deal with all the fuel rods? Will the physical structure that is the reactor core become a source of radiation in sea water?
Here in California I am thankful we have largely rejected Nuclear Power development over the years. Within the State there is only one active Nuclear Power Plant, Diablo Canyon on the Central Coast near San Luis Obispo. Attempts to locate Nuclear Power plants at Bodega Bay, Sun Desert and on the Stanislaus river were defeated before construction was begun. Plants at Humboldt Bay, San Onofre, Rancho Seco and Vallecitos were built and operated for some period of time, but decommissioned after mechanical problems (typically problems with getting cooling water to the reactor core) generated a lot of bad publicity. Rancho Seco was closed after approval of the voters of a ballot proposition which pretty much closed the door to future efforts to locate Nuclear Power plants in California.
But virtually every one of the power plants in California were at low elevation, and are near major urban areas.
What is the risk? Will the closed Rancho Seco contaminate the bay that will created in the area around Sacramento? Will the closed San Onofre plant contaminate the shoreline that will be where much of coastal Southern California is now? Will Diablo Valley contaminate the coast from Hearst Castle down to San Luis Obispo (beachfront property with a 200 foot sea level rise) Pismo Beach and beyond.
I don't know, and the problem is even sincere efforts by science to predict the risk have to be taken with a grain of salt. Far too often science has made pronouncements about reality that turn out to be false. Scientists, like all of us, are prone to forgot that, paraphrasing the immortal words of Donald Rumsfeld (quoting others before him) - we don't know what we don't know.
What happens if the sea level rises 200 feet? Despite the scientific certainty of the early 50's, we have never developed a safe process for getting rid of spent nuclear fuel rods, our best solution is burying them miles under a mountain out in the desert somewhere. What will happen to the Nuclear Power plants located near sea level all over the world if the sea levels continue to rise? How will we deal with all the fuel rods? Will the physical structure that is the reactor core become a source of radiation in sea water?
Here in California I am thankful we have largely rejected Nuclear Power development over the years. Within the State there is only one active Nuclear Power Plant, Diablo Canyon on the Central Coast near San Luis Obispo. Attempts to locate Nuclear Power plants at Bodega Bay, Sun Desert and on the Stanislaus river were defeated before construction was begun. Plants at Humboldt Bay, San Onofre, Rancho Seco and Vallecitos were built and operated for some period of time, but decommissioned after mechanical problems (typically problems with getting cooling water to the reactor core) generated a lot of bad publicity. Rancho Seco was closed after approval of the voters of a ballot proposition which pretty much closed the door to future efforts to locate Nuclear Power plants in California.
But virtually every one of the power plants in California were at low elevation, and are near major urban areas.
What is the risk? Will the closed Rancho Seco contaminate the bay that will created in the area around Sacramento? Will the closed San Onofre plant contaminate the shoreline that will be where much of coastal Southern California is now? Will Diablo Valley contaminate the coast from Hearst Castle down to San Luis Obispo (beachfront property with a 200 foot sea level rise) Pismo Beach and beyond.
I don't know, and the problem is even sincere efforts by science to predict the risk have to be taken with a grain of salt. Far too often science has made pronouncements about reality that turn out to be false. Scientists, like all of us, are prone to forgot that, paraphrasing the immortal words of Donald Rumsfeld (quoting others before him) - we don't know what we don't know.
Thursday, November 13, 2014
Do Low Tax Rates Really Encourage Investment?
Now that Republicans have taken control of both houses of Congress there is once again talk of boosting the economy by cutting taxes.
It made me realize that in the 20 years or so I have been reading the Economist I have regularly seen the assertion that low taxes encourage investment, sometimes by the Economist quoting Republicans, sometimes by the Economist theorizing or editorializing. But I have never seen any data to support the assertion.
Looking back over the last 40 years I have a harder and harder time accepting that assertion as true, and am certain it is not true for all situations.
Recent economic history has made it pretty clear that the theories of human motivation that the science of economics has been rooted in is to reality what a stick figure drawn by a 5 year old is to the reality of human anatomy. This assertion that low taxes encourage investment is beginning to look to me like economic theory based on this stick figure understanding of human motivation. It assumes every person is motivated by money above all, and that nobody ever feels like they have enough money to focus on other things.
This assumption doesn't square with my life experience or research findings I have seen.
A research study from a couple years ago found that for most people about $70,000 a year is enough, beyond that figure money doesn't motivate them. I'm sure there are people who want far more, but I can't imagine that there is anyone that doesn't have a point where they feel their needs and wants are met, at least in what money can buy. So for most humans who reach the point where they have enough, if they continue working it is not for the money.
So what is it? I think there are lots of potential explanations.
I came out of law school just about the time Ronald Reagan took office. Within a couple years he started the rash of tax cuts that have characterized the last 40 years of government policy. When I first started practicing law lawyers expected to make good money, but it was only part of the reward. As they built up their practice they hired staff so they could work reasonable hours and have a life as their practice expanded.
I left the practice of law nearly thirty years ago, but am in touch enough to know the practice has changed dramatically. It is all about money. To compete big law firms require their lawyers work incredibly long hours. The have downsized the amount of support staff enormously. In the law business it is pretty clear to me the primary result of tax cuts has been longer hours for those driven to succeed, layoffs of the staff that used to lighten their load, and more money in the pockets of the most driven individuals.
For the lawyers in big firms I don't think it is all about the money. It is about prestige, accomplishment measured against your peers. To the extent it is about the money its not fundamentally about what they want to buy, it is that how much money you have is the marker of how successful you are.
Back in the early 1950's, partly to pay off the debt of WW II, Congress created really high tax rates for people that made a lot of money. If you were hauling in vastly more than most other people each year the dollars at the top end your pile of money were taxed at 70, 80 or even 90% of what you took in.
The logical response of the very wealthy at that time was to limit the amount of money they took in personally, so they focused on building empires. They hired lots of people, started new companies. Instead of paying high taxes to Uncle Sam they plowed money into building for the future. The following couple decades are now viewed by economists as the golden years. Low unemployment, high wages, a health economy.
Contrast that with the last couple decades of boom and bust and asset inflation. Big companies are currently rolling in money but they are generally not hiring or starting new businesses, they are kicking out the money in enormous salaries for the top executives, or using stock buy-backs to pump up their stock price, making both the top management and shareholders wealthier. Low taxes on individuals make this an economically rational choice.
Individual wealthy people also generally aren't starting new businesses and hiring people. They are trading in stock, real estate, art, classic cars - building their personal wealth and in the process inflating asset prices. The assets aren't improved, no value is added. The price just keeps going up because the people with lots of money are swapping them back and forth, both as an easy, low maintenance way to store your money, and as a way to evidence their high status in society. But it is not generating productive economic activity.
It seems to me our tax cutting policies of the last 40 years have stood motivation on its head. The 1954 Tax Code, with its high marginal rates discouraged what I would describe as frivolous earning and spending to encourage people to invest in real productive activity. The 1954 tax code also had a provision called income averaging, so the people who were just making lots of money for the first time could average their income over the last five years for tax purposes. This provided a ladder for people to get up to that position of comfort before the really high tax levels kicked in. Income averaging disappeared with the Reagan tax cuts in the mid-1980's.
I think if we really want to rebuild an economy that works for everyone we need to start looking at high personal tax rates that kick in at some point on the income scale to make overbuilding your short term personal fortune less attractive than building long term investments.
It made me realize that in the 20 years or so I have been reading the Economist I have regularly seen the assertion that low taxes encourage investment, sometimes by the Economist quoting Republicans, sometimes by the Economist theorizing or editorializing. But I have never seen any data to support the assertion.
Looking back over the last 40 years I have a harder and harder time accepting that assertion as true, and am certain it is not true for all situations.
Recent economic history has made it pretty clear that the theories of human motivation that the science of economics has been rooted in is to reality what a stick figure drawn by a 5 year old is to the reality of human anatomy. This assertion that low taxes encourage investment is beginning to look to me like economic theory based on this stick figure understanding of human motivation. It assumes every person is motivated by money above all, and that nobody ever feels like they have enough money to focus on other things.
This assumption doesn't square with my life experience or research findings I have seen.
A research study from a couple years ago found that for most people about $70,000 a year is enough, beyond that figure money doesn't motivate them. I'm sure there are people who want far more, but I can't imagine that there is anyone that doesn't have a point where they feel their needs and wants are met, at least in what money can buy. So for most humans who reach the point where they have enough, if they continue working it is not for the money.
So what is it? I think there are lots of potential explanations.
I came out of law school just about the time Ronald Reagan took office. Within a couple years he started the rash of tax cuts that have characterized the last 40 years of government policy. When I first started practicing law lawyers expected to make good money, but it was only part of the reward. As they built up their practice they hired staff so they could work reasonable hours and have a life as their practice expanded.
I left the practice of law nearly thirty years ago, but am in touch enough to know the practice has changed dramatically. It is all about money. To compete big law firms require their lawyers work incredibly long hours. The have downsized the amount of support staff enormously. In the law business it is pretty clear to me the primary result of tax cuts has been longer hours for those driven to succeed, layoffs of the staff that used to lighten their load, and more money in the pockets of the most driven individuals.
For the lawyers in big firms I don't think it is all about the money. It is about prestige, accomplishment measured against your peers. To the extent it is about the money its not fundamentally about what they want to buy, it is that how much money you have is the marker of how successful you are.
Back in the early 1950's, partly to pay off the debt of WW II, Congress created really high tax rates for people that made a lot of money. If you were hauling in vastly more than most other people each year the dollars at the top end your pile of money were taxed at 70, 80 or even 90% of what you took in.
The logical response of the very wealthy at that time was to limit the amount of money they took in personally, so they focused on building empires. They hired lots of people, started new companies. Instead of paying high taxes to Uncle Sam they plowed money into building for the future. The following couple decades are now viewed by economists as the golden years. Low unemployment, high wages, a health economy.
Contrast that with the last couple decades of boom and bust and asset inflation. Big companies are currently rolling in money but they are generally not hiring or starting new businesses, they are kicking out the money in enormous salaries for the top executives, or using stock buy-backs to pump up their stock price, making both the top management and shareholders wealthier. Low taxes on individuals make this an economically rational choice.
Individual wealthy people also generally aren't starting new businesses and hiring people. They are trading in stock, real estate, art, classic cars - building their personal wealth and in the process inflating asset prices. The assets aren't improved, no value is added. The price just keeps going up because the people with lots of money are swapping them back and forth, both as an easy, low maintenance way to store your money, and as a way to evidence their high status in society. But it is not generating productive economic activity.
It seems to me our tax cutting policies of the last 40 years have stood motivation on its head. The 1954 Tax Code, with its high marginal rates discouraged what I would describe as frivolous earning and spending to encourage people to invest in real productive activity. The 1954 tax code also had a provision called income averaging, so the people who were just making lots of money for the first time could average their income over the last five years for tax purposes. This provided a ladder for people to get up to that position of comfort before the really high tax levels kicked in. Income averaging disappeared with the Reagan tax cuts in the mid-1980's.
I think if we really want to rebuild an economy that works for everyone we need to start looking at high personal tax rates that kick in at some point on the income scale to make overbuilding your short term personal fortune less attractive than building long term investments.
Tuesday, November 11, 2014
The Problem Isn't God
For decades the Middle East has been full of dedicated warriors of God convinced God wants them to fight non-believers. That mind-set has now developed to what is perhaps its logical conclusion. ISIS, the self proclaimed Caliphate of the Levant, essentially kills or enslaves anyone who disagrees with them.
In India millions have been killed since the country achieved Independence as different religious sects wrap themselves in their religious beliefs and attack others with different beliefs.
In the US, for last couple decades politics has been dominated by people who believed God wanted them to punish homosexuals, even though their religion reveres the ultimate man of tolerance and peace.
The transparent injustice of people wrapping themselves in religious belief to judge and punish others causes some folks to reject the whole notion of God. But the void left by the rejection of God is often replaced by other ideologies that, in the end become logic obsuring naked self interest. ISIS is oddly reminiscent of the Kymer Rouge in Cambodia a couple decades ago, who slaughtered all those of who did not accept their rule in the name of communism, a doctrine that explicitly rejected God.
The problem isn't God, it is our hubris. A basic truth is that we cannot know the exact nature of reality, we can only infer from what we can perceive about the world. Even with Science we regularly see yesterdays truth superseded by a different and more nuanced reality. But imprecision can spark indecision, so we follow leaders whose personalities reject imprecision by adopting a plan that creates rules for action. God becomes the logic that fills the void to the personal advantage of the leader (and by association the like minded followers). God becomes a tool for pushing those who are not us down for the benefit of us.
All the major religions have enjoyed periods of peace and tolerance. But when times get tough our tendency to frame our view of God in a reflection of our own needs and desires produces persons impatient with inaction who rally others of like mind to political action, or violence.
Ironically, the most dedicated religious folk often reject the notion that Darwin described reality with his theory of evolution. Then they adopt religious views that are in essence a reflection of Darwin's fundamental tenant, survival of the fittest. Life is a battle and God is on our side, we are chosen to lord it over others.
If one believes the history of the evolution of human society reflects the influence of God it becomes obvious that whatever force it is that we call God favors, above all else, that we cherish and respect our differences, instead of using them as catalyst for battle. Societies based in survival of the fittest among competing religious groups tend to foster turmoil and conflict, societies based in respect and cooperation tend to foster peace and prosperity.
Democracy is in one sense fundamentally consistent with the notion God favors respect and tolerance. A functioning democracy requires a degree of respect and cooperation. Like the proverbial canary in a coal mine, if democracy is wobbly, or cannot survive it is a reflection of the fact the society is still fragmented into groups in survival of the fittest mode.
In India millions have been killed since the country achieved Independence as different religious sects wrap themselves in their religious beliefs and attack others with different beliefs.
In the US, for last couple decades politics has been dominated by people who believed God wanted them to punish homosexuals, even though their religion reveres the ultimate man of tolerance and peace.
The transparent injustice of people wrapping themselves in religious belief to judge and punish others causes some folks to reject the whole notion of God. But the void left by the rejection of God is often replaced by other ideologies that, in the end become logic obsuring naked self interest. ISIS is oddly reminiscent of the Kymer Rouge in Cambodia a couple decades ago, who slaughtered all those of who did not accept their rule in the name of communism, a doctrine that explicitly rejected God.
The problem isn't God, it is our hubris. A basic truth is that we cannot know the exact nature of reality, we can only infer from what we can perceive about the world. Even with Science we regularly see yesterdays truth superseded by a different and more nuanced reality. But imprecision can spark indecision, so we follow leaders whose personalities reject imprecision by adopting a plan that creates rules for action. God becomes the logic that fills the void to the personal advantage of the leader (and by association the like minded followers). God becomes a tool for pushing those who are not us down for the benefit of us.
All the major religions have enjoyed periods of peace and tolerance. But when times get tough our tendency to frame our view of God in a reflection of our own needs and desires produces persons impatient with inaction who rally others of like mind to political action, or violence.
Ironically, the most dedicated religious folk often reject the notion that Darwin described reality with his theory of evolution. Then they adopt religious views that are in essence a reflection of Darwin's fundamental tenant, survival of the fittest. Life is a battle and God is on our side, we are chosen to lord it over others.
If one believes the history of the evolution of human society reflects the influence of God it becomes obvious that whatever force it is that we call God favors, above all else, that we cherish and respect our differences, instead of using them as catalyst for battle. Societies based in survival of the fittest among competing religious groups tend to foster turmoil and conflict, societies based in respect and cooperation tend to foster peace and prosperity.
Democracy is in one sense fundamentally consistent with the notion God favors respect and tolerance. A functioning democracy requires a degree of respect and cooperation. Like the proverbial canary in a coal mine, if democracy is wobbly, or cannot survive it is a reflection of the fact the society is still fragmented into groups in survival of the fittest mode.
Sunday, November 9, 2014
Global Warming - Why We Won't Muster An Effective Response
One of the reasons I am operating from the assumption no significant response will happen to slow down global warming is because almost any response by individual countries will be ineffective if it isn't simultaneously adopted in every major industrial country in the world. That won't happen due to the realities imposed by countries economically competing with one another. An example is the proposed Carbon Tax intended to encourage a reduction in greenhouse gases.
Here's a hypothetical:
USA.Inc and China.Inc both manufacture widgets. It costs both $1 to produce each widget.
The US imposes a carbon tax that adds $.05 per widget to USA.Inc's cost per widget. The US also imposes a border tariff on incoming widgets of $.05 per widget, so USA.Inc and China.Inc, in theory, remain equally competitive within the US.
But USA.Inc is no longer competitive anywhere outside the US, because their fixed cost on every single widget they manufacture is now $1.05 and China.Inc's fixed cost per widget is $1.00. So USA.Inc's market share outside the US will plummet, while their market share inside the US will remain static, so they will sell fewer widgets. This undermines their economies of scale, over time driving their fixed costs per widget up even higher. At the same time China.Inc's market share is rising, they may be experiencing greater economies of scale so their cost per widget may continue to come down over time.
USA.Inc won't just stand by and sink into bankruptcy. Their only real solution will be to move their manufacturing facilities to another country so they don't have to pay the tax, and only pay the tariff on widgets sent to the US.
So the net effect of a unilateral carbon tax adoption by the US will be more US companies moving operations out of the country, fewer jobs in the US, and a slowed down economy, while boosting the economy of countries that are not addressing global warming.
If we adopt a carbon tax will other nations also adopt one out of the goodness of their heart or to avoid our tariff? Short answer is No. It is hard for me to imagine, for example, China's leadership, having suddenly been handed the gift of a huge industrial competitive advantage over wide swaths of US industry would upset that situation. (Or our Congress doing anything if China suddenly made their industries less competitive). They would take about it, and might eventually, dawdling around for 10 or 15 years to let their industries get thoroughly entrenched as market leaders, but by that time the damage to the US economy will be considerable, and probably very little will have been accomplished in reducing greenhouse gases.
So in essence to effectively address the problem we have to get much of the world to agree to the solution, simultaneously. Will Russia, a oligarchy built on oil wealth, or any country whose political stability depends on selling petroleum to the rest of the world, jump on board? Will teetering governments in developing countries who would have to tell their people they have to wait to achieved the access to stuff they see on electronic media be able to put the whole country on the path of delayed gratification?
I hope to be proved to be an excessively cynical old Grinch, but I put that hope in the same category as my hope to discover the fountain of eternal youth.
So in essence to effectively address the problem we have to get much of the world to agree to the solution, simultaneously. Will Russia, a oligarchy built on oil wealth, or any country whose political stability depends on selling petroleum to the rest of the world, jump on board? Will teetering governments in developing countries who would have to tell their people they have to wait to achieved the access to stuff they see on electronic media be able to put the whole country on the path of delayed gratification?
I hope to be proved to be an excessively cynical old Grinch, but I put that hope in the same category as my hope to discover the fountain of eternal youth.
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