Social programs. Money laundered through the Great Unwashed

America needs poverty. Poverty eradication proposals are head fakes. America, especially the America that was created right after the Civil War, would not be where it is today without poor people.

Since the industrial revolution, and definitely as America entered the information age in the 1960s, the products designed and built by highly educated, highly paid labor had to be consumed by a large mass of “dependents.” These people are typically wage earners who do not have the capability to be self-sufficient and hold little to no capital. The greater the mass of consumers, the larger the network used to deliver goods. The larger the network to deliver goods means the higher educated, higher paid laborer and entrepreneur faced lower costs for delivering goods.

Emancipation, reconstruction, and the Jim Crow era coincided with the growth of consumerism. The American political economy, not knowing what to do with freed slaves was willing, in lieu of distributing productive capital to them, to turn them into a mass of consumers, with a willing cadre of banks and bond holders willing to launder money through “social welfare” programs.

The food stamp program? An opportunity for bond holders to launder money by financing a program whose clearinghouses are administered by banks.

Affordable housing programs? An opportunity for bond holders to finance the construction of low cost homes with principal and interest guaranteed by taxpayers, many of whom are not in the upper ten percent.

Medicaid and Medicare? Again, bond holders are offered a guarantee that taxpayers will provide a backstop for premium payments while insurance companies collect fees for administering them i.e. WellStar and Medicaid in Georgia.

There is a reason why the poor are referred to as the Great Unwashed. It is because dirty money is laundered through their misery.

Should the Caribbean brace for a Federal Reserve rate hike? #Caribbean #trade

The Federal Reserve is expected to raise rates on its federal funds rate, the rate at which its member banks lend each other money overnight, at least three times during 2018. I see this move as having a potential negative impact on Caribbean immigrants here in the U.S. given their lower incomes relative to other immigrants and the U.S. overall, and the level of poverty among Caribbean immigrants. I see the Federal Reserve’s expected rate hikes having an impact on remittances as well because rate hikes, designed to control inflation could very well discourage employing Caribbean born labor.

The Federal Reserve has an overall positive outlook on the American economy. While growth is expected to continue, the central bank views the growth as fragile.

The Trump tax cuts are expected to provide the economy with an additional boost. The pay increases Americans are receiving as a result of the temporary cuts are expected to re-enter the economy in some form. Unemployment is at 4.1%, the textbook case for full employment, a point at which additional hiring and the resulting spending may create increases in prices for goods and services.

There is a 78% chance the central bank will raise intra-bank lending rates and in theory when this happens, the rates you pay for revolving loans and mortgages are expected to follow suit. On the other hand, the even with low unemployment, wage increases are expected to be sluggish.

Caribbean immigrants may bear a higher burden stemming from price increases versus other immigrants and the overall U.S. population. According to data from the Migration Policy Institute, twenty percent of Caribbean immigrants live in poverty compared to 19% of overall foreign born U.S. residents and 15% of the overall U.S. economy. Caribbean immigrant median income ($41,000) falls well below the overall U.S. median income ($55,000) as well as the median income of all immigrants ($49,000). Assuming Caribbean immigrants, like the overall U.S. population, has the bulk of its wealth in a house, poorer Caribbean immigrants will have less of a buffer protecting them from a credit-shortage induced recession.

As prices increase and access to credit is reduced due to rate increases, there may be a negative impact on the ability of Caribbean immigrants to send money back home as household budgets are reduced. Take for example remittances sent to St.Kitts-Nevis. According to data from The World Bank, remittances increased to $36 million in 2007 from $29 million in 2002.  Remittances climbed to $51 million in 2012, but have remained flat into 2017 where the amount of remittances was $53 million. All things being equal, interest rate increases could start sending these numbers in the opposite direction.

Rate increases could make importing products such as food and machinery more expensive for residents of St Kitts-Nevis or other Eastern Caribbean islands. In theory, a rate increase should depreciate the value of the U.S. dollar, making American imports cheaper. Some analysts would argue, however, that higher interest rates would make the American currency more valuable as foreign nationals seek higher yields on their capital and drive up demand for American currency. If the dollar becomes more expensive, the cost of purchasing could go up as well.

According to the U.S. Central Intelligence Agency’s World Factbook, 56.8% of St Kitts-Nevis’ imports come from the United States. As American goods become more expensive, St Kitts and other Caribbean countries that are heavily tourist dependent, may have to look for alternative and less expensive sources of food, a search that involves increased transactions costs or bite the bullet of increasing costs of American goods.

Trump uses broadband to shore up and keep his rural base

During a speech in Nashville, Tennessee, President Donald Trump announced that he had signed an executive order designed to increase broadband access to 23 million underserved residents of rural America. The initiative involves recommitting to prior attempts to use federal facilities as sites for commercial wireless broadband facilities. Streamlining siting policy for broadband infrastructure by using federal property is seen as a way to “reduce barriers to capital investment, remove obstacles to broadband services, and more efficiently employ government resources.”

Mr Trump’s announcement was made at the American Farm Bureau Federation’s annual convention just prior to the President heading further south to attend the national football championship game in the undisputed capital of the south, Atlanta. The southern flavor of the event is further flavored by the two southern teams that are playing, the University of Georgia and the University of Alabama. In my view, the convention, announcement, and attendance at the game is a great kickoff for the 2018 midterms, where getting out Mr Trump’s base will be crucial not only for the elections this November, but for the 2020 elections as well.

This may be the first of many salvos during the 2018 campaign. The connectivity and inclusion of rural America has also been the concern of Ajit Pai, chairman of the Federal Communications Commission.  Mr Pai is from the Midwest and has placed closing the digital divide high on his priority list arguably being a close second in priority to overturning the Commission’s net neutrality rules, which were repealed last month. He fervently believes that high-speed broadband access to the internet can level the economic playing field for rural residents.

The connectivity issue goes beyond technology and economics. According to an article in The Washington Post, rural Americans feel deeply estranged from their fellow Americans that live in urban areas.  Almost seven out of ten Americans living in rural areas find their values out of sync with the values of big city dwellers. The federal government is perceived by rural America as favoring urban dwellers over them.

And it doesn’t appear that rural Americans want to connect with urban Americans, broadband connectivity or not. They appear satisfied by their own social fabric, comfortable in their culture, one that sees each of them looking out for the other.

Broadband connectivity may improve their ability to move goods to markets, but it may also further enhance internal rural bonds. And given Mr Trumps penchant for social media, especially Twitter, rural America will be able to maintain a connection with the only urban dweller that matters to them.

West End Atlanta is a low value information commodity

Atlanta’s West End has no political power and appears to mirror the stagnant thinking of its representation on its city council. In the nine years that I have lived in the West End, I have yet to see how the power to “get what you want, when you want it, from who you want it from” has been applied to help its current citizens.

West End Atlanta should be the southwest version of Buckhead, especially given its proximity to City Hall, the downtown district, a MARTA transit station, and the airport. Instead, it’s the home of too many fast food restaurants, above average crime, and a high level of poverty. It doesn’t surprise me that West End’s city council member, Cleta Winslow, does not give the media interviews.  She would rightly be called to task about the state of poverty in her district. Not only the poverty, but the stagnation in mindset and lethargy in body language, the manifestation that stems from accepting less. It is very negative energy.

Blacks in West End give me the impression that they are just hanging around waiting to die.

If the 30310 zip code is going to improve, it won’t be as a result of current political leadership. After 23 years, Ms Winslow is merely a caretaker, or should I say undertaker. Individuals, particularly individuals of African American descent, are going to have to do this on their own.

One approach is to get more young, black producers to buy into the neighborhood. We need engineers and technologists to support and promote the attempts I see in the neighborhood to provide urban farming. The West End needs a self-contained political economy based on self-reliance.

Another, more important approach is to develop a tribal aspect to the West End’s social ordering. The West End needs to go from just a proclamation that “We here”, to an affirmation that, “We are here to stay. Let’s work.” The West End’s lack of progressiveness comes from a fear of being cohesive. This fear is a common thread running through most Black Americans. There is no conqueror mentality, just a “keep on, keeping on” mantra that adds to the lethargy of the West End’s inhabitants.

This attitude has made it easier for whites to gentrify the West End. It has been a slow and steady process. It is no shocker for me now to see mostly smiling white couples out walking their dogs or jogging along the Beltline while pushing a baby carriage. They are here, with conqueror mentality in tow.

In my title I asserted that the West End represents a low value information commodity. The West End Atlanta is low information value not simply because of the level of poverty, but because of the poor mindset and lack of cohesion. The most valuable information from the 30310 is that the area is wide open for plunder.

Looks like it’s Keisha and business as usual …

Keisha Lance Bottoms appears to have captured the crown in the Atlanta mayoral race by approximately 759 votes over Mary Norwood. Ms Norwood reportedly has asked for a recount. She lost by 714 votes back in 2009 and likely wants to ensure that she doesn’t spend any more evenings trying to fall asleep and seeing both numbers dance around her head like sheep.

I found Ms Norwood to be engaging as well as tough. She is a seasoned politician, but unfortunately for her she appears to have run up on a buzz saw called the Black Slate. It came out in just enough numbers, apparently, to give Ms Lance Bottoms the win.

What do I expect from Ms Lance Bottoms? She will likely continue Mayor Reed’s gentrification policies i.e. a strong police presence in the West End designed to keep the current Black population quiet while more whites move in and buy up shuttered properties. Meanwhile, development will continue in the northern part of the city with increases in transportation capacity to meet increased residential demand on that side of town. The Atlanta metropolitan area expects 2.5 million more inhabitants over the next two decades and will have to act now to provide adequate infrastructure to accommodate them.

Black elites will hold on to ceremonial power. I refer to it as ceremonial power versus political power because valid political power means the ability to direct capital to whomever the holder of political power chooses. If blacks did indeed have political power, gentrification and poverty would not be an issue. Whites and other non-blacks that control capital in Atlanta should, as usual, have nothing to worry about.

The new cyber society will see the poor pay more for government

I sense a major “cost shift” for tax payers over the next twenty to fifty years as the more affluent of United States citizens move more of their survivability activities into cyber society versus current brick and mortar society.

I believe one key will be the use of cyber currency by an increasing number of service providers and producers. Less dependence on fiat money and more reliance on a block chain that cuts out the middleman providing for faster payment systems. In addition, the affluent are re-imagining the use of public infrastructure by using it less frequently or more efficiently. Think drones, driver-less & fuel efficient vehicles, or the delivery of groceries via Instacart.

The affluent will also find more innovative ways to provide security, from improved security technology to private police forces. In short, as the affluent pursue an increasingly self-sovereign approach to life, they will make the case for dishing the traditional services of the State while arguing that their tax burdens should be less. Why support police and road services that hey hardly need. If anything, they will argue, let us reduce our tax bills by the amount that we spend on providing these services for ourselves.

For low income individuals and a large proportion of communities of color, they will experience the burden of the “cost shift” as tax jurisdictions pass on the costs of providing traditional State services to these communities. These communities will not be able to bear the burden given their low incomes. Services will be reduced as traditional government finds itself facing competition from non-State actors financed by the more affluent.

The State will react violently at first. It will create laws designed to slow down the affluent’s abandonment of the traditional State system. It may, ironically, use net neutrality laws to slow down deployment of the advanced networks necessary for delivering services to taxpayers leaving the system. It will further reduce renewable energy subsidies to residents that generate electricity at their residences.

I don’t expect the State’s attempts at holding sovereign individuals hostage will be successful. The attempts will invalidate the State’s arguments that it represents democracy when the actions to squelch freedom are the furthest from the truth.