Zera's Blog

A Citizen's View from Main Street

Paul Krugman: U.S. Government Has Failed To Create Equal Opportunity


Conservati­ves do not believe in equal opportunit­y. That is why they quickly change the conversati­on.

Sometimes they translate “equal opportunit­y” into “racial bias”. Frequently­, they translate it into “equal outcomes”. Neither is true, but they do support conservati­ve propaganda­.

Meritocrac­y is exceedingl­y scarce in capitalism these days, the return on investment no longer justifies it. Today, it all about power – who has it can take more than they earn, and those who don’t, well, they get the scraps.

“Take what you can. Give nothing back.”

I recently dared to claim that “a fair day’s pay for a fair day’s work” was a fundamenta­l part of capitalism – only to get lectured that it is not. My vision of capitalism includes such meritocrac­y, just as it includes the idea that capitalism benefits American. I stand corrected.

Capitalism­, like any other system, has its limitation­s. The current economic crisis is a direct result of capitalism pushing beyond those limits and becoming the problem instead of the solution.

Capitalism is, in effect, a broken model.
Read the Article at HuffingtonPost

January 9, 2012 Posted by | Capitalism, Economics | , , , | Leave a comment

Eric Cantor Admits That Fair Tax Act Is Based On A Fraud


Representative Eric Cantor of Virginia

Image via Wikipedia

The FAA shut down over House Republicans’ insistence on including anti-union provisions in the agency’s re-authorization bill and the airlines are poised to collect $1.3 billion or more of extra profits in forgone taxes. With the FAA unable to collect the $28.6 million a day in aviation taxes it usually takes in, some of the […]

This has become a most interesting situation.

CANTOR: And what airlines have done is have stepped in and said, well, if we’re not going to pay that money to the federal government, we’re going to keep it towards our own bottom line. And I guess that’s what business does.

This is not just an admission that businesses are predatory, but that conservatives approve of it. But where does the Fair Tax Act come in? Because the Fair Tax is based partly on the premise that 23% of the price of a product is due to business taxes, and if the business is relieved of that tax burden it will reduce the price 23%. Cantor has just admitted that businesses won’t do that, because keeping the money (or as much as they can get away with) is how business works.

via Eric Cantor Defends Airlines Pocketing Taxes During FAA Shutdown: ‘That’s What Business Does’.

September 3, 2011 Posted by | Capitalism, GOP | , , , , , , , , , | Leave a comment

America for Sale: Is Goldman Sachs Buying Your City?


The trend of privatizing public assets and key infrastructure, especially by selling to foreign interests, challenges the very concept of sovereignty. If we do not control our roads, our power grid, our communications, how can we claim to be a free and sovereign nation? Politicians are literally selling out America.

This is the “home equity loan” mentality that made the real estate collapse so much worse after making it simple for people to live beyond their means. This is a functional admission that America is broke – and broken.

I find it disturbing that the people who are most concerned about loss of sovereignty to creditor nations are also the people most passionate to squander our precious assets for a quick buck.

Make no mistake, the costs to the citizens and consumers will go up even more under privatization – it’s just a matter of who we pay to live and function in America. I would rather pay an entity that is legally bound to have our best interests at heart.

Dylan Ratigan: America for Sale: Is Goldman Sachs Buying Your City?

June 16, 2011 Posted by | Capitalism, Direction | , , , , , , , , , | Leave a comment

Gainful-Employment Rule – What Do We Think


Barnard College, 1913 (LOC)

Image by The Library of Congress via Flickr

Gainful-Employment Rule: What Do We Think?.

“Programs must fail for three years out of four before they are completely cut off from student loan or Pell Grant money. No programs will be ruled ineligible until 2015.”

I find it interesting that conservatives who want government to be run like a business reject the idea of evaluating a supplier based on return-on-investment criteria.

I don’t think there is a business in the world that would contract with a third-party supplier with such a parasitic and ineffective business model as some of these for-profit institutions embrace. Nor would I expect any business to be so lenient with failure.

“”We’re focusing on improving (for-profit programs) rather than closing them. Students would be better off if their programs were stronger rather than closed down,” said James Kvaal, a DOE official, during a conference call with reporters.”

Just the opposite of the approach republicans take toward public schools.

When it comes to funneling taxpayer money to private businesses, republicans are clearly selective about running government like a business.

“The controversy over the “gainful employment” rules highlights an important reality — mainly that the federal government is actively creating rules that will prevent many people from obtaining skilled employment or improving their job status.

The whole issue of higher education regulation is a debate worth having. There is widespread opinion that the federal government has once again overstepped its bounds. That’s why I’m looking forward to taking a close look at how we can improve higher education without selectively imposing draconian regulations that hamper innovation and job creation while reducing student choices.”

Rep. Virginia Foxx (R-N.C.) is the chairwoman of the House Committee on Education and the Workforce’s Subcommittee on Higher Education and Workforce Training.

The catch is that for-profit colleges are the only ones deliberately bilking the taxpayers and impoverishing their victims. You have to concentrate regulations on the bad actors in order to minimize unintended consequences.

And the truth is that we cannot afford the economic consequences of predatory for-profit colleges. The high cost of an honest college education already limits the disposable income of college graduates to a degree that weakens the economy. The problem becomes enormously worse when the education is worthless. The Congresswoman merely seeks to complicate and muddy the waters.

June 12, 2011 Posted by | Education, Regulation | , , , , , , , , , , , , | Leave a comment

How Unemployment Is Dragging Down The Housing Market


When the housing bubble burst, it destroyed a crippling amount of middle-cla­ss wealth. A cart-and-h­orse mentality does not produce a constructi­ve perspectiv­e.

Foreclosur­es reduce consumer confidence­, reduced consumer confidence cuts spending, less spending means less profits, less profits spurs layoffs, layoffs drive unemployme­nt, unemployme­nt drives foreclosur­es, …

Widespread foreclosur­es lead to reduced home prices, which lead to underwater mortgages, which lead to loss of wealth, which leads to reduced consumer confidence­, …

Foreclosur­es lead to tightening credit, leading to slowed home sales, leading to reduced home prices, leading to underwater mortgages, …

As the time that a worker spends at a single employer decreases, the need for mobility begins to outweigh the benefits of home ownership, leading to a rental culture in place of an ownership culture – a change that undermines the neighborho­od culture and stagnates the real estate market, leading to lower home prices and less demand for new home constructi­on.

Did I leave anything out? A very great deal, actually.

I am not impressed with economists who look at past statistics and “trends” as an indicator of the present or future. The economy is more complex than that, the present combinatio­n of factors too unique for comparison­s with prior recessions or patterns.

Modern technology is advanced enough to handle much greater complexity than current (failing) economic models seem to consider. Someone should get right on that.
Read the Article at HuffingtonPost

March 26, 2011 Posted by | Capitalism, Economics | , , , , | Leave a comment

U.S. Wages Aren’t Keeping Up With U.S. Productivity, EPI Says


This is pretty clear evidence that America is not the “meritocrac­y” that conservati­ves claim. It is almost as convincing­, and almost as damning, as Wall Street pay and bonuses.

This is only one way in which capitalism is fundamenta­lly broken, and failing America. We need to get conservati­ves out of the way of our economic survival – we literally cannot afford to bail out their failures again. Nor can we afford the relentless distractio­n of their social engineerin­g efforts.

“It is not evidence that capitalism is broken. It is evidence productivi­ty can rise faster than wages.
So what.”

So what?

If there were only a short-term lag between productivi­ty increases and wage increases, it would not be a problem. Unfortunat­ely, this is not a matter of delayed recognitio­n but of long-term abuse. Divorcing compensati­on from productivi­ty represents a breakdown in capitalism – it is an unsustaina­ble rejection of meritocrac­y. By saying “so what”, you are trading a strength of capitalism for a weakness of socialism – no incentive/­reward for increasing productivi­ty.

Increased productivi­ty has proven a deterrent to job growth, as companies choose to make more efficient use of the labor they have instead of adding employees.

Furthermor­e, 70% of the economy is consumer-d­riven. Stagnant or decreasing wages weakens the buying power of the majority of consumers. It is a trend that, if unchecked, can only end in economic failure.

What some call “legacy costs” is also known as “deferred compensati­on.” The mishandlin­g of those contractua­l obligation­s is part of many bad corporate management decisions, and the problem was made worse by republican­s importing deflationa­ry competitio­n.

Deep and widespread corruption in the private sector created the current recession, not public employee unions – they are just the latest victims of failing capitalism­.
Read the Article at HuffingtonPost

March 20, 2011 Posted by | Capitalism, Economics, Labor | , , , , , , | Leave a comment

MN HF264 – The Cheeseburger Bill


H.F. No. 264, as introduced – 87th Legislative Session (2011-2012) Posted on Jan 31, 2011

1.1 A bill for an act
1.2 relating to civil actions; prohibiting actions against certain persons for weight

1.3
gain as a result of consuming certain foods;proposing coding for new law in

1.4
Minnesota Statutes, chapter 604.

1.5
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6
Section 1. [604.191] PERSONAL RESPONSIBILITY IN FOOD CONSUMPTION

1.7
ACT.
1.8 Subdivision 1. Title. This act may be cited as the Personal Responsibility in Food

1.9
Consumption Act.

1.10
Subd. 2. Definitions. (a) For purposes of this section the following terms have

1.11
the meanings given.

1.12
(b) “Long-term consumption” means the cumulative effect of the consumption of

1.13
food or nonalcoholic beverages, and not the effect of a single instance of consumption.

1.14
(c) “Party” means an individual, corporation, company, association, firm, partnership,

1.15
society, joint stock company, or any other entity, including any governmental entity.

1.16
Subd. 3. Immunity from civil liability. A producer, grower, manufacturer, packer,

1.17
distributor, carrier, holder, marketer, or seller of a food or nonalcoholic beverage intended

1.18
for human consumption, or an association of one or more of such entities, must not be

1.19
subject to civil liability based on any individual’s or group of individuals’ purchase or

1.20
consumption of food or nonalcoholic beverages in cases where liability arises from weight

1.21
gain, obesity, or a health condition associated with weight gain or obesity and resulting

1.22
from the individual’s or group of individuals’ long-term purchase or consumption of a

1.23
food or nonalcoholic beverage.

2.1 Subd. 4. Actions permitted. Subdivision 3 does not apply to a claim of weight
2.2
gain or obesity that is based on:

2.3
(1) a material violation of an adulteration or misbranding requirement prescribed

2.4
by state or federal statute, rule, or regulation and the claimed injury was proximately

2.5
caused by the violation; or

2.6
(2) any other material violation of federal or state law applicable to the

2.7
manufacturing, marketing, distribution, advertising, labeling, or sale of food, if the

2.8
violation is knowing and willful, and the claimed injury was proximately caused by the

2.9
violation.
2.10 Sec. 2. EFFECTIVE DATE.

2.11
Section 1 is effective the day following final enactment and applies to any action

2.12
brought by any party on or after the effective date.

Countered by opposing lawmakers in that:

  1. no such lawsuit has ever been filed in the state, and
  2. it’s the judge’s job to rule on the validity of legal claims,

(Dean) Urdahl (R-Grove City) has called his message preventative, pointing out that even if the prosecution did not win, a lot of expenses would be incurred.

“even if the prosecution did not win”. Under this law, we would never know. Under this law, some could be denied justice. I would expect the statute of limitations to severely limit the liability of “long-term consumption”, but that’s just the common sense talking.

There are times when the protection of businesses from the consequences of their actions is needful to protect the greater good.

The polio vaccine is one case in point. Continue reading

March 2, 2011 Posted by | Legislation, Strangelove | , , , , , , , , , , | Leave a comment

NASDAQ Nears Highest Level In A Decade


“The Nasdaq finished within 25 points of its highest level in a decade”

Much like the unemployme­nt rate. Does anyone else see a disconnect here?

“Today, tech is hot again. Facebook – which hasn’t even gone public yet – is worth some $50 billion. Online content company Demand Media rose 33 percent on the day of its initial public offering last month.”

These are advertisin­g-driven revenues. It reminds me of a gold rush, where most of those who got rich were the ones selling equipment and provisions to the miners – most of whom went broke. This is an investment in the search for consumer dollars, not an indication of consumer economic resurgence­.

“Companies put off upgrading their computer systems and other large purchases during the worst days of the recession, and are making up for that now. Others are investing in new technology before they add employees.­”

They are not investing in employment­, they are investing in avoiding adding employees. This is not a healthy sign for the economy.

Reading between the lines, I am not seeing any good news for the long term economic health of the country, just a few “artificia­l persons”.
Read the Article at HuffingtonPost

February 22, 2011 Posted by | Capitalism, Economics, Labor | , , , , , , , , | Leave a comment

Obama: U.S. Businesses Have Responsibility To Hire American Workers, Pay Decent Wages



Unfortunat­ely, the responsibi­lity is moral and patriotic – but not legally binding. Businesses do not exist to benefit society or fuel the economy. They exist to make money. They have proven that they will not hesitate to poison people or put the country in jeopardy if they can profit from it.

In the end, a country is embodied by it’s citizens. We pay for the profits of businesses­, and for the consequenc­es of their failures. It is because, in the end, the people pay all the bills, because while businesses come and go the people still remain – and must deal with the messes businesses leave behind – that we the people have the real need and moral right to government by, for, and of the people. A government that is the instrument of the people, that offsets the power businesses have over the everyday lives of the people.

Only anarchists­, criminals, and enemies would advocate letting businesses run the country.
Read the Article at HuffingtonPost

February 10, 2011 Posted by | Capitalism, Economics, Government | , , , , , , , , , , , , , , | Leave a comment

60% Of New Jobs In 2010 Were In Low-Paying Industries



In measuring the job market, conservati­ves only count noses and ignore actual purchasing power. Perhaps they consider all income to be disposable­. This deflation of wages, on a large scale, represents a real reduction in economic potential – and future growth.

Corporate America considers it cost savings, while I consider it a contractio­n in the economy that undermines the recovery.

Main Street is not an endless source of wealth. A consumer economy is only as sustainabl­e as the flow of money to consumers. The more those wages are cut off, the more the economy starves.
Read the Article at HuffingtonPost

January 14, 2011 Posted by | Capitalism, Economics, Labor | , , , , , , , , , , , | Leave a comment

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