Innocent Fraud
If Facebook didn’t refresh your news feed every page load, I would know what started this comment. But it was on the years starting with Reagan and his Voodoo economics until recently. The data shows that Reaganomics has produced results exactly opposite of what the experts said and still say it should. The rich have gotten richer and the rest of the 90-99% income has been stagnant. That is even with more 2 breadwinner families over those years and at least 2 asset bubbles that increased earnings but bubbles that pop don’t reinflate.
That reminded me of another article where the author quoted John Kenneth Galbraith as coining the term Ïnnocent Fraud.” In that essay on Aeo written my Nicholas Carr, he liked the term to the promise of the internet. But Galbraith was talking about those numbers. We have been taken by, and I think Galbraith is being very polite, an Innocent Fraud
By cutting taxes for the rich and allowing business more freedom to for monopolies, move jobs overseas and recognize profit in any country the want. It has cut the revenue for the government which has meant more debt and fewer services except for certain industries. The States and local governments are in worse shape because they cannot print money. The can borrow money and there are examples in Matt in Griftopia where local village treasurers invested in the derivatives backed by mortgages. Yields have been near zero and most assumptions on the cost of money is higher than that so everyone was chasing the yields on these contracts. And from there, greed takes over and logic is thrown out and it is a mob mentality.
All this time government spending did not drop and the annual budget only balanced a couple of years. I was always taught that the people have to pay for war throught higher taxes. And I was raised in a Republican house. But Bush did the opposite using the same disproven rationale that rich people will expand business and create jobs. Yea, maybe in Mayberry but in NY they invest in what is gambling not investing. They don’t make the higher returns by buying GM and waiting for it to turn around. And it can go to trading in currencies, or anything. Real estate in other countries. Rich people are not creating jobs. It is a childish view of how the economy works. Its the people through crowdfunding help companies get started. And the point Galbraith was kindly pointing out that the promise of these economists that are still in vogue, was never delivered and yet was repeated as the solution. They come to belive their own errrors. But they know its a lie. And the fraud is that it takes from those that are voting and its given to coprorations that can spend money on elections. That is the other thing rich like to do now, buy elections or get on TV.
Like it or not (my DMV experience was so fast, I did even need my iPad), government which is us, does things that individuals can’t or don’t. For example, respond to disaster floods and fires to the local library. California started with proposition 8 or sum number that cut taxes. As one politician was quoted, you should never try to explain math to the public. Despite productivity has gone up faster than incomes the gain was going to the owners and top executives.
An Answer and then there’s reality.
Profit sharing plans were much more common when unions were active. There is really no reason not to include all employees in the gains throu©h stock ownership or profit-sharing payouts. Companies are counting on employees not complaining as they do more for less. They can go to congress and tell them to give out more green cards for people coming from countries without clean water, pollution controls and they will take the job for half. Since Americans have been convinced unions are bad they tell themselves they are lucky to have a job at all. We humans follow the incentives and are good and figuring what they are and how to satisfy them. So it is good business sense to share in the gains. Instead, year after year after year, benefit plans are cut back. Pay increases were big if they hit 3%. I don’t care what the
Pay increases were big if they hit 3%. I don’t care what the offical figures are, if you have to buy a car, or major item or food, you know prices went up and sizes got smaller. The economics I learned had assumptions that are not proven in reality. Companies consistently set cost control goals and HR was always asked to lower the costs. You can change assumptions, find somebody that can earn more on investments; or, tell everybody the good news, with an exciting new healthy plan!!! All the rules change, if your doctor is not in ANY of the plans?? That could cost you your entire retirement savings. BOOM! And you healthy eaters on organic kayle juice with potatoe peelings, yoga … And hats off to you people out there: but don’t dare tell me you can control the 10 shit happens.
SHIT HAPPENS!
You have been screwed big time by the most stubornthat meant another new benefits plan with a single beneift Summary was over 100 pages and you have 2 weeks to guess your risks. Are there meetings where questions are answered? No. For all we know, there are just computers doing this. It would be hard at all. I just got the idea that Plus there is outsourcing so we are competing with lower income, lower cost workers. I have not seen a real increase in what computer programmers get paid for 25 years. Notwithstanding the hot data scientists right now. So families should have been falling behind and starting to make noise. But people were in denial.
I just got the idea that that is how the machines keep going. Identify repetative simple jobs and its not to hard to figure out the cut something every year rule. You don’t need humans. Computers read the law and its principles and then obvserves the data and starts to spin. I get these computer responses to internal postions I submit for and ours is set at 5 for humor and 10 for optimism. Of course truth is not a user selected option. Plus there is outsourcing so we are competing with lower income, lower cost workers. I have not seen a real increase in what computer programmers get paid for 25 years. Notwithstanding the hot data scientists right now. So families should have been falling behind and starting to make noise. But people were in denial.
A few asset bubbles has helped families as has having two breadwinners in the household. The dot.com bomb/bust. I remember my barber and I saying Yahoo can keep doing that. People are going to get burn, meanwhile, it kept going up. Then the massive real estate bubble that should be a very slow moving asset but Wall Street made up a way for those mortgages could be aggregated which would lower the overall risk of the banks. And then they created a way to “guarantee”if Joe Bloe defaults on his mortgage or like 3 in 100. But just in case, more than that default, you can buy insurance to cover your loss. Then they allowed investors to treat this insurance as if you take out fire insurance on that guy’s house down the street or the guy homeless begging. If this is sounding crazy it was. Nobody knew what these did or how risky they were. So these just trusted that the market(Lets all praise the free market for solving any problem for us)
priced everything correctly. And since there were NO regulation on AIG to have enough money to pay claims when losses started AIG had no capital to cover all the losses. From there it was just a spiral downward.
Then beyond belief, the Government that refused to do its job, was asked to pay the Banks all back, 100 cents on the dollar, for being so stupid. What did the government do, these financial giants like Greenspan? They DID NOT say “Tell you what, we can’t let all you idiots go out of business. Even though you fucked up everything we will cover half your losses. You will just have to cut those million dollar bonuses for a couple years. Welcome to life.
One would think that 36 years of this would tell the really smart economists that advise the politicians that we need to change our approach. But the politicians have committed to the point of signing a private citizen’s Pledge to never raise taxes in any form and, of course, the people love the idea of more money in their pockets.
Not drastic Enough
So their explanation is they haven’t been drastic enough! Its hard to believe that people that become lawyers are such idiots. After 40 years in business, incentive is what drives peoples behavior. We’re emotional, respond like mice to a lever that gives them coke or food. They think,”what will provide the most money”. And therein lies the whole problem.
So instead of raising taxes to fund services a society needs and worked for, we will continue on with policies that will destroy the planet and make us all poorer. I mean 98% of us. Way too many leaders have accepted Voodoo economics and the failure is in not going further with its concentration of wealth and power in a few; ignoring infrastructure, education and all public services and selling public assets to private companies to keep their dirty energy going.
They all know that it doesn’t work as promised but instead has been a disaster for the country and democracy. But they stick with it because it has benefited them. Wall Street gets to rape the country and politicians don’t equate the donation with his attitude towards Wall Street. So it is repeated as the truth “innocently”. I think Galbraith considered those that support this economic theory as innocent because they have no conscious guilt. What is funny, perplexing and sad are the people hurt the most, worship Reagan.
The media has not helped but hurt the country during this time. Their policy of treating everything as having equal value, thus they are objective” has left the door open to completely subjective. Worse is Fox News that out-an-out lies, is divisive, radical, selfish and just plain crap has that tag line…looking it up…”Fair and Balanced”is out of Goebells propaganda book and 1984.
There will be no change in following this failure of policy until there is a very, very bad depression when people start panicking that our leaders are so incompetent they decide to take their money out of the banks or lose faith in the virtual finance structure. What we do need is regulations on wall street to stop the insane gambling and synthetic products they create and trade. We also need higher tax on the people that can most afford it. The government is us and this part of us is disgusted and angry and sad.