American society is dead. Long live American society

The problem with American politics is that too many members of the electorate believe they live in an actual society. A population of 315 million diverse individuals, a significant number of whom cannot trace their lineage to any of the nation’s founding fathers much less the country these founding fathers descended from, doth not a society make. Politicians have been getting away with this scam artist narrative for centuries.

It’s time to replace the narrative with something more realistic. What then is America? A confederation of individuals with nary a history in common held together by laws that favor the expansion of corporatism, the hoarding of capital, and high returns for those who hold the most capital.

Prissy-miss progressives insist on guilt-trippin’ individuals into mass redistribution of wealth based on the current false premise that we are one people. Yahoo bubba conservatives promote an economic philosophy that goes directly against their individual and societal interests, wondering why their lot has not improved even after eight years of George Bush and five years of GOP control of the House of Representatives and a cantankerous GOP minority in the Senate.

The moral arguments of one nation, one society continually hustled by zoot-suit wearing black political strategists and clerics, arguments eloquently made by Dr. Martin Luther King and other civil rights leaders sixty years ago, ring hallow today as these impostors are seen merely as Jesse Jackson knock-offs and wannabes and quite frankly no one is listening to Jesse anymore.

The arguments made by the Rush Limbaugh/Sean Hannity/Bill O’Reilly types are so tinged with bigotry and upper-class snobbery that they only hold sway with the fringe twenty percent of Americans who believe Ronald Reagan was Moses and Elvis Presley the reincarnation of Jesus Christ.

So how should men and women who prefer the level-headed, reasonable path navigate America’s resistance to firming down an identity beyond worship of celebrities, football players, and talk show host fucktards? By acting as truly free individuals; by being what I refer as a “by-law.” A by-law rejects narratives forced upon him or her by Madison Avenue, K-Street, Pennsylvania Avenue and Constitution Avenue. They make and play by their own rules and strategically connect with the individuals that can help get them from point A to point B on the survive and thrive path.

The media won’t like by-laws. By-laws would require that the media move away from its messaging model, a model designed to manipulate reader behavior, and move toward a boring, bland, NPR/PBS News Hour format where readers and TV watchers actually get data that can help them make an individual, informed decision.

Politicians hate by-laws for the similar reasons. Individuals who make and play by their own rules pursue disruptive business models i.e Facebook, Amazon, etc., and are hard to control much less understand.

Today’s technology assists the by-laws in furtherance of social and business disruption, making outside thought viral, catching the old school off-guard. More and more people can stay connected without having to follow the rules and false narratives of the old guard, including the sales pitch that we are all one nation. We may be connected by technology but socially we are increasingly disconnected.

If there ever was an American society it’s now dead. America is no longer connected by values. It’s connected by football teams and reality TV. We shouldn’t fear this, however. Instead we should take advantage of its porous nature and take advantage of the newer and truer freedoms it affords us….

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Presidential candidates not demonstrating that they can lead in a world without work

Derek Thompson recently wrote a piece in The Atlantic about how technology could erase millions of jobs and asked whether that would be a good thing.  While Mr. Thompson explored the benefits of more Americans enjoying the freedom of more creative work or pursuits spawned when technology replaces drudge work, I wonder when this campaign season’s presidential aspirants will determine whether it’s a good thing to tell Americans about the new world order that they should be preparing for.

According to Mr. Thompson the world Americans should be preparing for a world of both cultural and economic breakdown.  “The sanctity and preeminence of work lie at the heart of the country’s politics, economics, and social interactions”, says Mr. Thompson.

The major cultural impact would be that technology not only puts downward pressure on wages, but also the share of workers with full-time employment.  When people ask, “what do you do for a living”, the response maybe akin to “a little of this, a little of that” for more and more people.  Work is more than a paycheck.  Work goes to one’s identity and place in society as a contributing and participating member of community.  Idleness and a sense of not belonging are unemployment’s negative consequences.

In addition, culture will take on three distinct characteristics when it comes to work, according to Mr. Thompson.  First, labor will further its losses to capital as the amount of labor demanded and income going to labor continues to decline.  Second, the number of unemployed men and underemployed youth will increase as technology takes away jobs that have been best suited for men and labor markets continue hiring educated younger workers at lower wages.  Third, the dexterity of machines cannot be predicted.  One year your phone is just a voice communicator.  The next year it’s your pocket CPA, librarian, and Yellow Pages replacement, taking three or more direct jobs with it.

Workers may find themselves in three distinct boxes: the consumption box, where some workers devote their time to leisure activities; the communal creativity box, where other workers, according to Mr. Thompson, build communities outside of work; and the contingency box, where people try to put together a living with whatever gigs they are able to find here and there.

I haven’t heard any of the candidates discuss or describe this new world order that knocks louder at our political economy’s door.  Take a look at Bernie Sanders’ interpretation of American labor’s dilemma.  Mr. Sanders core argument on the economy is that the middle class is not doing well because the vast majority of the country’s wealth and income is going to the top one percent of income earners.  Mr. Sanders does not discuss the structural changes in the economy, particularly the current impact of technology on the workplace and how this impact is expected to be amplified over the next few decades.

Hillary Clinton does no better than Mr. Sanders.  She defines America’s major economic challenge as the need to increase middle class incomes.  Mrs. Clinton harps on strong growth, fair growth, and long-term growth, but again does not discuss how structural changes in the economy and work in particular will impact the three pillars of her economic policy.

Republicans are doing no better in defining the future most American workers face.  Jeb Bush lays part of the blame for the malaise in the American workforce on Obamacare.  He argues that Obamacare is a job killer because the mandates and taxes imposed on businesses are keeping them from hiring workers.  Mr. Bush also argues that approximately 7 million American workers are stuck in part-time employment because rules issued by the Obama administration have put a damper on hiring decisions.  While promising 4% growth and an additional 19 million jobs should he become president, Mr. Bush does not explain to Americans how this can be possible in an economy that apparently puts less value on full-time workers.

Donald Trump, the billionaire competitor for the Republican nomination, hasn’t provided much insight into developing a political economy for the rest of the 21st century.  In neither his speeches, his websites, or social media platforms does Mr. Trump lay out a detailed plan for creating jobs in this changing structural climate.

Campaigns are typically not the forum for educating the public about economic realities.  They are about manipulating the public’s existing perception of the world around them.  If the public perceives their plight as a result of an upper class taking advantage of the lower classes. a candidate will seize that scenario and package a message that feeds the perception while garnering votes.  Policy is the last thing on the campaigners agenda.

The approach of ignoring policy will be abandoned when one of these candidates takes office in January 2017.  Based on what they are showing me today, I don’t expect them to have an economic policy addressing the new world of work ready to implement at that time.

Posted in American society, Bernie Sanders, Donald Trump, economics, Economy, Election2016, government, Hillary Clinton, Jeb Bush, labor markets, Political Economy, unemployment | Tagged , , , , , , , , | 1 Comment

On #religiousfreedom and #gaymarriage

For my slightly right of center friends who are still sucking down Pepto Bismol after today’s Supreme Court ruling:

You are conflating “right to religious principles” with wanting the rest of the world to be submissive to your religious narrative. Today’s decision doesn’t tell religious people how to relate to their “god.” What it does is say how the State should relate to those who choose to be a part of an institution, marriage, created by the State; an institution for which a citizen needs a license issued by the State before they can partake in it. Gay marriage doesn’t stop people from sending telepathic messages to Shango, Thor, Jah, Jehovah, or Odin….

It’s ironic that some churchgoers are more concerned about a section of the populace that want to enjoy increased inclusion in American society at no cost to the majority versus a small but dangerous portion of the populace that walks into churches and kill people because they believe that a certain race shouldn’t be a part of American society….

….the irony ….

Posted in civil rights | Tagged , | 1 Comment

Of ‪#‎WhiteSupremacy‬ and Domestic ‪#‎Terrorism‬

I believe that apartheid South Africa and al-Qaeda have provided white supremacists a blue print for not only gaining control of substantial portions of American territory but for governing it. The splinter cell model used by Islamic terrorists is flexible enough to disrupt transportation and communications hubs in the U.S.

Terrorists do not fit a physical description, much to the chagrin of most Americans who choose to remain naive about domestic terrorism. Timothy McVeigh, Terry Nicols, and now Dylann Roof have squashed the theory that terrorists are all a bunch of rag-heads.

Let’s face it. A fraction of the estimated 300,000 white supremacists in the U.S. as cited in the article below could, if properly armed and supplied, wreak havoc in cities like Atlanta, Baltimore, Jacksonville, and Miami. I get nervous sitting in traffic on I-75/85 for this reason. A few armed asswipes with automatic weapons could take out hundreds of drivers. Supremacists could easily put a hit on a black church in West End Atlanta and escape unscathed even with a police precinct in the neighborhood. I believe we take our safety for granted.

I lived in Maryland during the DC sniper attacks. To this day if I’m sitting at a light and I see any type of flash, I get jumpy. I still recall walking in a zig-zag from my car to the courthouse in Rockville hoping that my pattern would throw off a sniper; hoping I’d get home to my toddler son. A couple years later, the violent gang, MS-13, would leave its impact along the I-270 corridor, raising concerns for law enforcement and the public at large.

Terrorism is real. Combine its threat with a changing economy that is leaving more people disenfranchised and I believe you create something similar to an emergence of Hitler’s brown shirts. White men, especially lesser educated and unskilled, may allow themselves to fall victim to the hate-filled narrative that their circumstances are the fault of black and brown peoples. Today’s technology allows the hate to spread faster. Just imagine if Hitler had the internet to spread “Mein Kampf”?

Yes, we can all act like the line from Don Henley’s “All She Wants to do is Dance” and keep our heads stuck in the sand or we can start taking the initiative to seriously address hate in the United States. Ignoring it or being emotionally reactive with calls for prayer time won’t cut it. Many of these white supremacists are carrying bibles and singing “We Shall Overcome” as well. It’s just that their lyrics are a tad different….

Posted in American society | Tagged , | 3 Comments

My last comment on #RachelDolezal

Rachel Dolezal’s “misappropriation” of black identity raises this question: What does it mean to be “black”? That Ms. Dolezal was able to “pass” as black, both culturally and physically should have members of society asking how substantive it is to base cultural, social, and political identity on physical appearance and word phrases. In a society where identity politics is so rampant, Ms. Dolezal’s outing should be no surprise.

For example, could she have gotten away with saying she was West Indian? Physically, yes, but she would have failed almost every other test because being West Indian goes way beyond how you get your hair “did” and using a few cultural phrases.

If black or African Americans want to maintain a bottleneck on who gets to be called “black”, then a redefinition or refinement of the membership criteria for who can claim being a part of the African Diaspora in America is in order. As long as membership is this permeable, then “blacks” in America should get used to seeing more Rachel Dolezals….

Posted in American society, black American | Tagged | 2 Comments

Waiting to hear Hillary Clinton’s plan on how to rescue the middle class

From press accounts it seems we won’t hear much substance on economic issues from Hillary Clinton during tomorrow’s campaign rally in New York City.  The framework appears built on creating opportunities for the middle class according to articles in The New York Times and The Wall Street Journal.

While I expect to hear some populist buzzwords thrown around, I don’t expect Mrs. Clinton to harp on the banks or large businesses. Banks still lend financial capital and corporations, large and small, still deploy capital.  Without capital moving to areas of opportunity, there will be no incentives to hire a labor force capable of managing that capital.

Nor do I expect Mrs. Clinton to ask the middle class to be accountable for their share of the blame for the economic morass some find themselves in.  This includes failure to stay ahead of where labor and financial markets were heading; decisions to borrow and spend on non-income generating assets; and a failure to stay politically engaged beyond the usual two-year election cycle.

The middle class expects to be coddled and Mrs. Clinton may give them a little of that tomorrow as she swears that she is the candidate that can best “fight for them.”

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Jeb Bush should try viewing Putin as a corporate raider

Jeb Bush has been sharing his thoughts with German leadership and the European press about Vladimir Putin and his aggressive moves on the Crimean peninsular. The New York Times reports Mr. Bush referring to the Russian president as a “bully” and Mr. Bush as saying that Mr. Putin’s moves should be dealt with “resolutely.”  Mr. Bush believes that Russia will do what it pleases if left unchecked and Russia’s leadership, not its people should bear the brunt of the penalties issued by the West.  Mr. Bush went on to define the appropriate response to Mr. Putin as one that should show the Russian president what the consequences of his aggressive actions would be versus a response that was warlike or “bellicose.”

It may be a bit too late to show Mr. Putin the consequences of his prior bad acts.   According to a report in The Economist, Mr. Putin has gotten most of what he wanted and has given concessions to the West over the past year.  Mr. Putin has formally annexed Crimea, introduced instability into Ukraine making the nation toxic enough for the United States to avoid, he has avoided serious economic sanctions, and his popularity has increased.

Heck, even some U.S. congressmen have expressed admiration for his boldness versus the passivity of President Barack Obama.

Mr. Bush’s views are vague which should come as no surprise given that the U.S. is under 17 months out from the presidential elections.  What is also not surprising is that Mr. Bush’s views on Russia in general and Mr. Putin in particular are in line with other GOP hopefuls with the exception of probably U.S. Senator Rand Paul who has shown an aversion to anymore military adventures.  Rather, I think Mr. Bush and his GOP posse should start treating Mr. Putin’s moves the way a corporation that loses a bidding war to acquire a company treat the new competition.

Let’s face it, that’s what Mr. Putin’s takeover of Crimea is.  Mr. Putin calculated the rents he and his large state bureaucracy could receive from Crimea, including the claims to revenues stemming from the peninsular’s bank assets.  Consider this quote from another piece in The Economist:

“In an era when most wealth comes in the form of financial securities rather than physical resources, wars of conquest would seem to be a losing proposition. Why take over territory, when its value pales in comparison to that of a few credit default swaps? The Russian treatment of Ukrainian banks in Crimea suggests an answer: the conquest of physical territory can be leveraged to acquire financial assets, such as claims to revenue from car leases.”

That Mr. Putin was able to conclude that the discount rate applied to the future rents stemming from the invasion would not be increased by a high risk premium showed his prowess in assessing America’s lack of clout with Europe and the distraction in the Middle East.  It’s simply too late for Mr Obama or the next president to jack up the risk premium on Crimea. As discussed earlier, Mr. Putin already has what he wants.

If Mr. Bush became president, he would be stuck making the same half-assed moves as the current president.  He could try to make Mr. Putin’s newly obtained assets toxic by trying to disrupt Russia’s energy markets, but the big buffer would be America’s European allies who are more dependent on Russia’s oil exports than the U.S.  Expending the political capital necessary to get Americans to go along with any moves against Russia would require that Mr. Bush persuade the public that what Russia does in Crimea directly threatens U.S. citizens, an argument neither he, Mr. Obama, or any declared or undeclared candidates have yet to make.

 

 

 

 

Posted in Barack Obama, Crimea, Economy, Elections 2012, foreign policy, Political Economy, Ukraine, Vladimir Putin | Tagged , , , , | Leave a comment

Of ISIS, Vietnam, Iraq, and jingoism

Retired Army General Anthony Zinni, appearing moments ago on the PBS NewsHour responded to Barack Obama‘s decision to send an additional 450 military advisers to Iraq, raising the issue that ISIS poses a minimal threat to the U.S., a threat that is likely a lot less than Mexican drug lords on the U.S. border.

This move is similar to the decisions of presidents Dwight Eisenhower and John Kennedy to increase the number of advisers in Vietnam, according to Professor Andrew Bacevich, a retired Army colonel and professor at Brown University. “We know how to do this. We did it in World War II” was the rally cry for sending advisers to Vietnam and this gung-ho narrative is being echoed by supporters of Mr Obama’s decision.

Unfortunately, according to the Professor, after eight years in Iraq, the U.S. has not demonstrated that it can “do this” because if it were successful, the U.S. would not be having this discussion in the first place.

Fortunately for Mr. Obama, this decision to send more advisers comes in the middle of his second term versus the end of his first term and prior to a general election. Like Johnson he would have found himself being shown the door by his fellow Democrats. Instead, they, especially his supporters in the electorate, turn a blind eye preferring to keep the demigod on a shaky pedestal versus urging reason in order to properly ground his foot stool…..

Posted in Barack Obama, Iraq | Tagged , , , | 1 Comment

If Elizabeth Warren wants to promote labor, she should protect entrepreneurs

For the past three or four months there has been a lot of jawboning over the Trans Pacific Partnership (TPP) trade agreement.  The Administration touts the agreement as necessary to the United State’s ability to compete in an emerging Asia-Pacific market.  According to the Administration:

“President Obama’s trade agenda is dedicated to expanding economic opportunity for American workers, farmers, ranchers, and businesses. That’s why we are negotiating the Trans-Pacific Partnership, a 21st century trade agreement that will boost U.S. economic growth, support American jobs, and grow Made-in-America exports to some of the most dynamic and fastest growing countries in the world.”

The Obama administration believes the TPP will aid American business sales of product in the Asia-Pacific region by reducing tariffs on both sides of the Pacific Rim, in some cases to zero.  Think of a tariff as a tax schedule on products entering a country.  These taxes can make selling products overseas a bit onerous because the taxes will increase the price of the goods faced by the overseas end-user.

The Administration also hopes to increase transparency of laws and regulations in the Asia-Pacific market which, they believe, will facilitate entry into these markets by small and medium-sized enterprises (SME).  The Administration argues that small businesses account for two-thirds of new jobs created in the private sector and that easing entry into new markets will serve to maintain SME contribution to the American economy’s growth.

Regarding labor, the Administration’s focus appears to be on how labor is treated overseas versus ensuring against job losses here in the United States.  Critics, such as Senator Elizabeth Warren, Democrat of Massachusetts, argues that the President’s trade agenda does little to protect U.S. workers.   As an example, Senator Warren, in an opinion piece for The Washington Post, observed that under proposed provisions of the TPP, a Vietnamese company could challenge American labor law in an investor-state dispute settlement court, basically a panel of international arbitrators.  But if an American labor union wanted to challenge wage practices in Vietnam, it would have to go through Vietnamese courts, thus tilting the advantage to multinational corporations.

Mrs. Warren continues to place too much emphasis on labor as some protected class and not enough on the true economic engine, the entrepreneur.  Labor is an activity, a resource that is applied to capital to generate returns and income.  Demand for labor is driven not just by derived demand by consumers for goods and services but by what capital has determined to be the necessary skills and knowledge possessed by labor to deliver those goods and services.  Demand for labor is driven by the value labor brings to the capital the entrepreneur deploys.  Until Mrs. Warren and other progressives start understanding this, their arguments about the plight of the “labor class” will be invalid.

Where Mrs. Warren’s emphasis should be is on the benefits TPP would bring to the very entrepreneurs that will do the hiring of the labor Mrs. Warren wants to protect.  Employer firms with less than 500 employees employed 48.5% of workers on private sector payrolls in 2011, according to data cited by the Small Business and Enterprise Council.  You can’t talk about labor without talking about increasing access to markets by entrepreneurs.

What is missing so far from the TPP conversation is a substantive discussion on capital access and formation.  I don’t see this discussion on the part of the Administration and it is definitely missing from Mrs. Warren’s rhetoric.

Posted in Economy, entrepreneur, Political Economy | Tagged , , , , | Leave a comment

Is capital abandoning the entrepreneur as well?

Where small firms have suffered low rates of business formation, lukewarm employment growth, and near stagnant growth in employee wages, is there public policy that can reignite entrepreneurship?

Politicians on the left and right have been touting the virtues of small businesses as “job creators for the past four election cycles during which time the United States has been trying to dig itself out of the 2007 recession.  According to the Small Business and Enterprise Council, 99.9% of all U.S. businesses had fewer than 500 employees and firms with less than 20 workers made up 98% of all U.S. businesses.  In 2008, small businesses accounted for 46% of America’s gross domestic product, down from 48% in 2002.

And out of the 100 friends you may have, roughly 18% of them are likely employed by a firm that employs less than 20 people.  Out of those same 100 friends, 35 of them probably work for a firm hiring fewer than 100 employees.

But small businesses have been on the decline, not living up to the narrative politicians and policymakers have painted around them.  According to a report by Goldman Sachs, during the period 2007 to 2012, 600,000 small businesses and 6 million jobs associated with them have disappeared.  In addition, job growth, usually attributed to small businesses, has been sourced by big companies, along with increased revenues and wage growth.  While job growth averaged 42,000 a month between 2010 and 2012 for companies with more than 500 employees, small firms saw employee losses of 700 per month during the same time period.  Income growth has been near stagnant for small companies as well.

So what’s to blame for this change in small business fortune?  Goldman Sachs argues that part of the fault lies in new bank regulation.  New bank regulations have made business credit scarce and more expensive.  Banks find it less cost effective to finance smaller businesses and small businesses don’t have ready access to the less expensive public capital markets as their large business competitors do.

This reality check on capital availability for the entrepreneur has me asking if capital is abandoning the entrepreneur?  If banks are tightening lending to small businesses and the decline in small businesses is occuring at he same as the decline in lending, are there then any alternative capital markets that small businesses can turn to?

According to a report from Oliver Wyman, a consulting firm, government can use public policy tools to create an environment that offers alternative capital market mechanisms for flowing capital to small businesses.  For example, with the decline in the number of initial public offerings entered into by small and medium business enterprises, government sponsored clearinghouses can provide investors transparency regarding equity and debt issued by small business enterprises and tax incentives for investors holding publicly-traded shares in small business.  Government can also provide education to small business enterprises on the environment for issuing debt or equity.

Other benefits that government could provide include reducing capital gains taxes for investors who hold debt or equity issued by a small business enterprise and reducing the costs of regulatory compliance faced by small business enterprises that seek the efficiencies provided in capital markets that financial markets don’t provide.

Encouraging greater access to capital markets by small businesses provides benefits to businesses and investors.  The capital markets are more efficient than banks.  Capital markets distribute risks more efficiently and promote economic stability that results from immediate feedback that the markets provide to investors and businesses alike. By encouraging the use of capital markets, especially by reducing the costs to access the markets, government can make it easier for a business to access additional pools of funding.

Posted in business, capital, economics, Economy, entrepreneur, entrepreneurship | Tagged , , , , , | 1 Comment