Category Archives: Gov’t Policy

#383 Job Creation to Address Climate Change

25 Monday May 2020

Posted by in Affordable Solutions, Common Sense Policies, Economics, Gov't Policy, Societal Issues

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Readers: this blog is set in the future (sometime after the year 2020). Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution. More about the Revenge Revolution, a list of earlier revolutions and the author, Entry #1.

Periodically I write a “sense check” to assess whether in the next few years, a revolution in the US is still possible or whether the entire exercise is based on a statistical aberration — i.e., a roughly 50-year cycle between major upheavals in the US.  Most recent sense check, Entry #365.  

Some of the entries are part of a series.  Several series are available as easy-to-read booklets for download:

Prelude: I’ve concluded Trump is a lunatic and the administration filled with lapdogs save a couple of people at CDC.  Instead of wasting time commenting on actions by Trump, I thought it more productive to begin discussing what happens in the US once the coronavirus is more under control.  #378 began the series. At this point not sure how many entries.  Comments and suggestions welcome.

ENTRY #383 BEGINS: Is there a simple, understandable way to get virtually everyone in the United States to support actions to address climate change? Secure support from the left, right, center, techies, climate deniers, etc.?

My conclusion is, “yes.” The simple approach is to link climate action to job creation.

Post-CIVID-19, the US is likely to experience an unemployment rate of 10+% for at least five (5) years, if not longer. Many pre-COVID-19 jobs will be lost permanently.

How does the US re-energize the economy post COVID-19? Focus on creating jobs associated with technologies that will reduce carbon emissions. Not just jobs installing solar panels and putting up wind generators but a wide range of jobs.

There are numerous technologies that could be implemented to reduce carbon emissions. Why point fingers about who’s right and who’s wrong about the causes of climate change? If you think climate change is fake news, then you need to talk to people worldwide in coastal cities. If you think climate change is just part of the earth’s natural warming and cooling cycle, then take a hard look at the chart of temperature change just since 1950.  Now imagine that same amount of increase by the end of the century.

OK, even if you don’t believe the climate data, the US still has a major problem – and that long-term economic growth. Don’t believe the economy is going to return to pre-COVID days. Look in your history books and study what’s happened after every major economic disruption or war – things change dramatically. Post-COVID-19 will be no different.

So let’s begin thinking about how to create new products and new jobs that also reduce the impact of climate change. If you’re still in denial about climate change, then just focus on the job creation part.

Yes, science is sometimes difficult to understand. Science denial is also a major talking point with many politicians.

Job creation, however, is not hard to understand. Jobs generate income and help people to a better life. Job creation also appeals to both sides of the political aisle. Rather than blaming someone else, why not start asking, “Is there a way to stimulate the economy long-term and address climate change? Is there a way to ensure a better lifestyle for our children and grandchildren”?

In this discussion, seems that scientists might be better off to spend less time on CO2 PPM, mean temperature – for many people it is difficult to understand or appreciate what a couple of degrees Celsius means – loss of amphibians, greater intensity of hurricanes, etc. Important topics? Yes. But not a front-line topic when you’re out of a job, which many people are going to be for some time.

Making the message about actions to address climate change more positive and less about how people must be prepared to “sacrifice” is also not necessary. With the right technology, people won’t experience sacrifice.

What’s the sacrifice with a more efficient HVAC? An electric lawn mower? (I use a manual push mower and time to cut is about the same as the neighbor’s gas-powered mower.) An electric car? Attractive solar panels on the roof that look like shingles? More trees? And many other ways to reduce CO2 that are not “sacrifices” and can be configured as fun, new products.

Some groups are working on taking a more jobs-focused approach to help gain support for actions to address climate change. I’m part of such a group. Let me know if you’d like to learn more. Comments welcome, as always.

#379: Healthcare Quagmire: We Gotta Get Out of This Place (Part 2)

25 Saturday Apr 2020

Posted by in Affordable Solutions, Benefits of Revolution, Common Sense Policies, Gov't Policy, Possible Solutions, Societal Issues, Uncategorized

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Readers: this blog is set in the future (sometime after the year 2020). Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution. More about the Revenge Revolution, a list of earlier revolutions and the author, Entry #1.

Periodically I write a “sense check” to assess whether in the next few years, a revolution in the US is still possible or whether the entire exercise is based on a statistical aberration — i.e., a roughly 50-year cycle between major upheavals in the US.  Most recent sense check, Entry #365.  

Some of the entries are part of a series.  Several series are available as easy-to-read booklets for download:

Prelude: I’ve concluded Trump is a lunatic and the administration filled with lapdogs save a couple of people at CDC.  Instead of wasting time commenting on actions by Trump, I thought it more productive to begin discussing what happens in the US once the coronavirus is more under control.  #379 is the second entry and addresses healthcare cost. At this point not sure how many entries.  Like #378 this entry is a bit long.

ENTRY #379:  At the end of part 1 of this series (#378), I indicated suggestions to help address inequities in society would be forthcoming. Let’s start with what appears to be the closest to a practical solution, affordable health care for everyone.

The chart indicates the increase in medical care cost in the US as a percent of GDP. Since 1960, medical costs have increased from about 5% of GDP to more than 18% in 2018. These percentages include “discounts” offered to insurance companies and Medicare.

The impact of medical costs on a family vary widely. For families with health insurance partly or fully funded by an employer, the costs are relatively low. Yet, even with subsidies from employers, for most every family medical costs have increased faster than family income.

Until the Affordable Care Act passed under the Obama administration, families which did not have subsidized insurance, faced premiums that could be breathtakingly high, especially for those over age 50. In addition, many who had any one of a range of “pre-existing” condition often were unable to secure any coverage for the pre-existing condition.

The Affordable Care Act, aka Obamacare, made considerable progress in filling the “unaffordable insurance hole” in the societal safety net and for getting coverage for pre-existing conditions. While Obamacare included some coverage gaps, in part to ensure passage in Congress, the AFA did significantly reduce the number of people without medical insurance.

For example, immediately prior to AFA coverage taking effect, about 18% of the US population was uninsured. That percentage continued to drop through 2016:Q4. Immediately upon taking office in 2017:Q1, the Trump administration repealed many features of the AFA.

The Trump administration has continued to eliminate features, including many insurance exchanges, through which uninsured people could at least buy some coverage. The result of Trump’s policies has been a sharp uptick in the number of uninsured. While the chart stops at 2018, the latest projection for 2020 is 45-50 million people in the US will be uninsured.

Opposition to broader insurance coverage seems to focus on two issues: (i) potential elimination of the option to buy additional private insurance; (ii) additional taxpayer cost with expanded coverage for everyone. Both issues are solvable, if opponents will listen.

A Medicare-for-All (MFA) type coverage does not preclude availability of private insurance that would offer an additional level of service or benefits. In some metro areas, selected medical practices offer what is promoted as “concierge service,” ensuring quick access to physicians and more private facilities for many procedures.

While the initial cost for a MFA program could be somewhat higher as people formerly uninsured begin to address issues, longer term the cost could be less. Much of the cost savings could be from eliminating “unproductive” costs. While estimates vary because of different assumptions, overhead costs for Medicare appear to be about 50% less than overhead costs for private insurance. (NYT article)

Currently hospital costs and therefore healthcare insurance premiums include some amount for emergency room visits by the uninsured and those without financial resources. ER visits are far more expensive than office calls. In addition, people who have no insurance often wait until an illness or situation becomes extreme before visiting ER, thereby increasing the cost of treatment.

Opponents to Medicare-for-All should think about medical cost in the same way they think about maintenance on their personal vehicle. Routine maintenance, such as changing oil regularly, is much less expensive than doing no maintenance and eventually replacing the engine. In many ways, the human body operates much your car’s engine; preventive maintenance is much less expensive.

Getting Congress to agree to some form of Medicare-for-All should be much easier following the United States’ experience with the coronavirus. There has not been an event in most everyone’s lifetime that has demonstrated the importance of medical care for all citizens. Recent estimates indicate those without insurance infected with COVID-19 will face medical bills of $50,000-$75,000. Even those with insurance could face medical bills of $25,000 or more.

For those who still think the US cannot afford such coverage, the chart lists healthcare costs per capita by country. Note the cost per capita for highly developed countries. The cost in the US is 75% HIGHER than Germany, the next most expensive country. OK, if you’re still concerned these countries don’t offer the same level of care as the US, then buy the additional-cost option.

Addressing the Naysayers. Any effort to implement a Medicare-for-All type system will be met with vigorous opposition from the right. Following are some likely questions as well as suggested answers. I recognize no answer, however logical and supported by facts, will satisfy the hard right. But given how so many people have been affected by COVID-19 so far, and how many are likely to be affected in the coming months, the voice of the naysayers may be heard less and less, especially when facts are presented to support a Medicare-for-All type system.

Comment #1: The US has the best healthcare system in the world. Don’t mess with it! Leave it alone.

Response #1: Let’s look at the expected lifespan in the US compared to other countries. The US ranks 47th behind such countries as Sweden, Germany, China, Taiwan, France, Korea, Canada, UK, Costa Rica, French Guiana and a host of other countries and ranks just one ahead of Cuba. If the US has such a great healthcare system, why does it rank 47th?

Comment #2: Those countries don’t have as many immigrants as the US. Those immigrants are what’s causing the problem here.

Response #2: Take a look at life expectancy among whites, blacks and Hispanics. Whites have the longest life expectancy but the others are not bringing the US total down by much. You also realize that life expectancy in the US declined under the Trump administration, don’t you? The decline was the first since WWII.

Comment #3: Why should I pay for someone else’s healthcare? There are lots of slackards out there who don’t pay income taxes. Paying for their medical care is not fair to me.

Response #3: First, anyone who has worked, whether or not they pay income tax, contributes to funding Medicare. In addition, the vast majority of Medicare recipients paid while working and continue to pay a monthly premium in retirement.

Comment #4: Medicare-for-All will create another inefficient government bureaucracy. The private sector is always more efficient. Why waste my hard-earned dollars?

Response #4: The bureaucracy supporting Medicare already exists. Plus, overhead for Medicare is substantially less than for private insurance. While there are different estimates for overhead, there is almost universal agreement that overhead costs for Medicare are substantially less than for private insurance. Most estimates are savings for Medicare of 50% or more. Medicare is more efficient at administering care than private companies. Why should people have to pay 2x the administrative costs for private insurance as they do for Medicare?

Comment #5: How are the doctors going to make any money? Medicare screws them on pricing.

Response #5: One adjustment with Medicare-for-All might be to weight payment to doctors more toward prevention rather than procedures. The change should also generate cost savings. In addition, if necessary, fees to doctors could be increased. The area needs further analysis.

SUMMARY: Some form of “Medicare-for-All” with an option for additional-cost coverage seems an ideal solution to help us address “we gotta get out of this (healthcare quagmire)  place.”  Obviously there are some issues to be worked out in order to implement a Medicare-for-All type program. However, most of the issues have been solved with existing Medicare programs and the Affordable Care Act prior to the Trump administration cuts.

Enough discussion for now about a practical solution to addressing healthcare costs. Likely more later.

 

#378. US Societal Quagmire: “We Gotta Get Out of This Place” (Part 1)

19 Sunday Apr 2020

Posted by in Causes of the Revolution, Gov't Policy, Societal Issues, Uncategorized

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Readers: this blog is set in the future (sometime after the year 2020). Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution. More about the Revenge Revolution, a list of earlier revolutions and the author, Entry #1.

Periodically I write a “sense check” to assess whether in the next few years, a revolution in the US is still possible or whether the entire exercise is based on a statistical aberration — i.e., a roughly 50-year cycle between major upheavals in the US.  Most recent sense check, Entry #365.  

Some of the entries are part of a series.  Several series are available as easy-to-read booklets for download:

Prelude: in a couple of preceding entries I tried to address the seemingly endless number of inconsistencies in information from the Trump administration about the spread of the coronavirus and/or actions to mitigate the spread. After some reflection, I decided that was futile.  Trump is a lunatic and the administration filled with lapdogs save a couple of people at CDC.  Instead of wasting time on Trump, I thought it more productive to begin discussing what happens in the US once the coronavirus is more under control.  At this point not sure how many entries.  The first one is a bit long.  

ENTRY #378 BEGINS: In the 1960s, there was a song by The Animals that included the lyrics, “We gotta get out of this place if it’s the last thing we ever do.”   While not written as a protest against the Vietnam War, the song was often used as a protest against the US participation in Vietnam.

Even though the song is more than 50 years old, the title seems appropriate today. The place we have to get out of is the economic and social quagmire in this country. The economic and social quagmire has been gradually getting worse with each decade. And while the Trump Administration has not been the sole cause, decisions by Trump with the support of the Republican Party have made the quagmire far worse.

Another perspective on the same situation is the US is sitting on an economic and social time bomb with the timer clock getting close to zero hour and ready to explode. What’s creating the time bomb is pressure from multiple sectors:

  1. Decades of limited earnings growth for middle and lower-income workers. The result has been greater income inequality.
  2. More medical risk. Fewer employers are providing company-paid medical insurance, thus leaving families to fund their insurance.
  3. Less job certainty. The uncertainty has been growing for some time as more organizations hire workers as contractors. Organizations are also automating an ever increasing number of functions of blue-collar and white-collar workers.
  4. More societal polarization with focus on one’s political party rather than with focus on solving problems. The shift began with the Reagan administration, when Reagan repeatedly declared, “Government is the problem, not the solution.” Trump’s public animosity toward anyone who does not support his views, however controversial, convoluted and even unconstitutional, has taken party loyalty over policy to an unprecedented level.

The four forces squeezing the US population are like hands squeezing a balloon. The coronavirus has intensified the squeeze, leaving little time before the balloon bursts. Reactions to state governors’ actions to control the spread of the coronavirus generally have been positive although some on the far right have protested. Apparently far-right Republicans think they have immunity to the virus.

The stay-at-home directives, closing of businesses and social distancing seem to have allowed the nation to pause and begin rethinking previously held assumptions. For example, prior to the coronavirus, certain jobs were considered relatively unimportant and, therefore, not worthy of much compensation. Such jobs included non-degreed healthcare workers, grocery store staff, transit workers and workers at food-processing plants.

Interestingly, the coronavirus changed those assumptions. People began to realize how important these jobs were to a functioning society. During the coronavirus those working in healthcare, grocery store and food-processing, among others, were categorized as “essential.” At the same time, many college-degreed, higher-paid white-collar jobs, including many executives, were categorized as “non-essential” and mandated to work from home.

Further, many “non-essential” businesses were ordered to close. The result was a huge spike in unemployment. Over a four-week period ending mid-April 2020, more than 22,000,000 workers in the US filed for state unemployment benefits. Over the next few weeks, the total will likely increase significantly since many unemployment offices were overwhelmed and furloughed workers unable to file.

How many of those currently furloughed will be re-employed post-coronavirus is uncertain. At a minimum, there likely will be a major disruption to the pre-virus job-status hierarchy. Many lower-paid “essential” workers could receive a pay increase and many white-collar workers deemed “non-essential” could be reclassified to lower-paid positions or jobs eliminated.

The COVID-19-related shutdown of the US economy has brought to the forefront social and economic inequities. Prior to COVID-19 these inequities often were discussed in the abstract since most of the people discussing the inequities were not affected directly. COVID-19 has reframed the conversation. Most of the public now realizes how fragile their jobs are and how the safety net for furloughed workers has a huge hole, starting with unemployment benefits and medical coverage.

Now that this “hole” in the safety net has been discovered, what steps will elected officials take to make repairs? The task of repairing the hole may be more complicated than policymakers realize. While anyone losing a job or being furloughed without pay suffers economically, the impact of that loss may be markedly different for different age groups.

Historically, as workers aged their families had been able to accumulate financial resources that could help cushion economic downturns. Thus, older workers furloughed because of COVID-19 should be in a better position economically than younger workers. But are workers today, older and younger, able to weather an economic downturn?

How do economic resources of today’s workers compare to workers at the same age say 25 years ago? Do today’s workers age 45 have the same relative assets as workers who were age 45 in 1995? What about assets of workers say age 25 in 2020 compared to those age 25 in 1995? Are workers today, older and younger, at a disadvantage economically compared to previous age cohorts? The answer is, “yes.” And that disadvantage has grown with each generation.

Over the last 50-60 years, there has a fundamental deterioration in affordability of key factors that help a family accumulate assets. Since roughly the mid-1960’s each succeeding age cohort has been faced with:

  1. Housing prices (and rents) increasing faster than income
  2. Medical costs increasing faster than income
  3. College tuition increasing at a rate much faster than inflation and income
  4. Retirement savings burden transferred to employees as employer-funded defined-benefit retirement programs have been eliminated

The economic pressures caused by each one of these factors probably could be managed by most families. For example, since 1960, when adjusted for inflation, housing prices have increased about 125%, rent about 75% and income only 25%.  However, when the increases in all factors are combined – each one has a similar curve – the result in a significant erosion in disposable personal income.

A story that hit me like a 2×4 to the forehead was an interview with a family trying to survive under the crush of these economic pressures. The interview was during the recent PBS News Hour. The subject was an ER- vehicle technician in New York.

The technician was describing the mental and economic pressures associated with the coronavirus. The ER technician earned about $40,000. As anyone familiar with cost of living in any of the NY boroughs, $40k for a family is tight. He also had a second job. What really struck me was the ER technician’s employer, apparently a contractor to the City of New York, did not provide health insurance.

Here’s the guy taking you to the hospital to get treated for coronavirus (or some other emergency) but the ER technician does not have employer-paid health insurance. Even worse he can’t afford private health insurance because the Trump administration eliminated many features of Obamacare and eliminated insurance exchanges. So, Trump and Republicans, the guy taking you to the hospital to save your life is risking his life and risking financial ruin if he contracts the virus from you. Does that seem fair?

Longer term, the impact of the coronavirus on the United States will likely end up changing permanently a number of aspects of society. The post-coronavirus United States will likely be forced to address the medical and economic inequities that have been building for the past 50-60 years. In addition, the US might begin to address the need retrain workers as more technology is integrated into the workplace.

The likely result of the coming technology tsunami? Many blue-collar and white-collar workers of all ages are going to be faced with possibly accepting a lower standard of living. (See booklet titled Technology Tsunami for more discussion and possible solutions.)

Will workers of different age cohorts be affected differently? Workers currently age 50 and older, even though they should have more resources, may be hit harder by the technology tsunami since many are less familiar with advanced technology and they have fewer years before retirement to try and recoup lost earnings.

But the technology tsunami is only one tsunami facing current workers. Another tsunami headed toward US shores is the retirement tsunami. What we as a society don’t talk about and certainly what has not been addressed at the Federal level is how unprepared for retirement workers are.

The retirement tsunami has been caused by the elimination of employer-funded health and retirement programs. The potential impact of the tsunami has been made worse by erosion of personal income from the accelerating cost of housing, medical and college tuition. Workers have nothing left over to save for retirement.

In a recent poll by Center for Retirement Research at Boston College, 75%, or 3 out of 4 people age 50-62 had jobs that fell into a “non-traditional” category — meaning, those without employer-provided retirement plans and health insurance. According to the report, workers in non-traditional jobs can expect their retirement income to be as much as 26% lower than that of people who spent their 50’s and early 60’s in positions with full benefit packages, according to the center’s findings.  (Update: NYTimes article about older workers without adequate retirement savings moving in with children, 20 05 03 NYT Underfunded Retirement Parents Moving in with Children) 

What about the impact of higher costs and the technology tsunami on younger workers? Don’t they have 30-35 years to recoup lost earnings from a coronavirus economic slowdown and the technology tsunami? Unfortunately, a greater percentage of younger age cohorts are likely to be even less prepared for retirement than those currently age 50-62.

If costs for housing, medical, education and retirement continue to exceed gains in income, the cumulative effect will further erode disposal personal income. Unless there is a fundamental change in how health care costs, retirement programs and advanced education are funded, more and more people will be underfunded for retirement.

What will make a bad situation worse is a prolonged economic slump associated with the coronavirus shutdowns. The rate at which people have been furloughed is unprecedented – 22,000,000 in four weeks and likely another 10,000,000 in the next four weeks.

Few people in business, few economists and much of the general public does not expect the economy to bounce back once the restrictions associated with the coronavirus are lifted. Even if employment in the manufacturing increases over the next 24-30 months as companies begin bringing jobs back to the US, overall economic growth will be very slow.

Some portions of the service sector employment seem likely to experience a permanent loss of jobs. After “stay-at-home” restrictions are lifted, how many consumers will immediately return to restaurants, attend sporting events, go to shopping centers or travel by plane – and especially take cruises? Consumers are likely to remain cautious until an effective vaccine has become widely available – probably as long as 18-24 months. Even with the vaccine will the public’s behavior be changed permanently?

During the next 18-24 months and maybe forever, how much of structure of service sector will change? Many formerly employed in the service sector have no employer-funded health insurance and even fewer have an employer-funded retirement program. Where do these former employees turn for help? Their jobs are gone, or at least not coming back for some time. Finding another job will be extremely difficult since the economy is growing slowly at best.

Now you see why the theme of this entry is “We gotta get out of this place if it’s the last thing we ever do.” This place is a dead end. We’ve got to find something new. The pressure to “get out of this place” seems like the spark for the Revenge Revolution.

The hardships associated with coronavirus seems to be awakening the middle class to realize how long they have been screwed by Republican policies of tax cuts for the wealthy and denying affordable medical care for all. Workers over 50 are realizing the need to return to employer-funded retirement programs and/or increased Social Security retirement benefits. Such programs are widespread in other developed countries so there is no excuse for not implementing.

When will the Revenge Revolution start? I think we’ve started. The coronavirus seems like an event that could trigger a revolution. The pace and magnitude of the job losses are unprecedented. The Revenge Revolution could spread as quickly as the coronavirus.

As more and more people realize “we gotta get out of this place” the more pressure on Washington to address the social and economic inequities. People are not going to be satisfied with Trump blaming China, the WHO or someone else for the coronavirus. People want concrete steps to fix the hole in the safety net, help train people for the coming technology tsunami, make healthcare affordable for everyone and make sure people have adequate resources for retirement. (Next few entries will offer some solutions.

#375 Leadership in a Crisis: Chaos or Confidence?

21 Saturday Mar 2020

Posted by in Causes of the Revolution, Economics, Federal Budget, Gov't Policy, Stupid Is as Stupid Does, Uncategorized

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Readers: this blog is set in the future (sometime after the year 2020). Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution. More about the Revenge Revolution, a list of earlier revolutions and the author, Entry #1.

Periodically I write a “sense check” to assess whether in the next few years, a revolution in the US is still possible or whether the entire exercise is based on a statistical aberration — i.e., a roughly 50-year cycle between major upheavals in the US.  Most recent sense check, Entry #365.  

Some of the entries are part of a series.  Several series are available as easy-to-read booklets for download:

Prelude: there is an endless number of inconsistencies in information from the Trump administration about the spread of the coronavirus and/or actions to mitigate the spread. Rather than beat a dead horse, I’ve chosen a few that are representative but not necessarily the most egregious.

ENTRY #375 BEGINS: During the Great Depression FDR understood that instilling hope in people would help bring the country together and help reduce the likelihood of societal chaos. FDR started his first term by stating, “The only thing we have to fear is fear itself.”

FDR followed his inaugural address with a series of “fireside chats,” during which he outlined problems and proposed solutions. (If you’ve never heard any of the “fireside chats,” they’re available on the internet.) The fireside chats helped build confidence in the capabilities of the Roosevelt administration and a foundation of hope in a time of great uncertainty.

The umbrella for recovery from the Great Depression was called the “New Deal.” The New Deal included a series of programs to provide work and income (and self-respect) for all types of unemployed workers. The New Deal work programs – WPA, CCC, and many others – included significantly expanding infrastructure in the United States, which laid the groundwork for economic growth for many decades to come.

The lesson of FDR’s understanding of creating hope and maintaining self-respect seems to have been lost on the Trump Administration. Whereas the cause of society’s uncertainty today is different than during the 1930’s, the importance of instilling hope in society and avoiding instilling fear remains the same.

Unfortunately, since day #1 in office, Trump has promoted chaos and fear. Even cabinet members who were selected because of a relationship with Trump, have been cast aside for daring to disagree with Trump. As noted in several previous entries (#374 is an example), the result of Trump‘s management style has been a cabinet that is filled with incompetents.

Trump has also consistently displayed incompetence on substantive issues. The combination has reduced people’s confidence in the ability of government to manage crises. What about the public’s confidence in the competence of the White House in dealing with the coronavirus? Did Trump take the approach of FDR and layout problems and proposed solutions?

In a press conference March 20, 2020, a reporter asked Trump and Mike Pompeo, Secretary of State, when the administration first learned of the extent of the coronavirus problem in China. Pompeo asked the Homeland Security director to answer – the reply was “January 3.”

Did the Trump administration convey such information to the public? Did the administration take any action to ensure critical medical supplies would be on hand should the virus spread to the US? No, not even outside the public purview. As recently as March 3rd – two months after learning about the major problems in China – Trump declared publicly the coronavirus was a hoax.

When cases started appearing in the US, Trump claimed there were only 15 cases (there were at least 60). And of the 15 cases, Trump claimed only one or two were serious. A few days thereafter, Trump declared the virus would magically disappear, like some miracle. According to Trump, the US, unlike other countries, had the coronavirus under control.

On March 19 information became available that the Senate Committee on Intelligence had been briefed on the severity of the problem in February. The chairman of the committee, Richard Burr (R-NC), used the information to sell stock in industries that might be affected and to warn a small group of high-dollar donors about the growing problem. Did Burr inform the public? No. (Gee, I wonder what the outcry would be from Fox News, Lindsey Graham and other Trump lapdogs if Burr were a Democrat?)

Despite declarations from King Trump, the number of people infected in the US kept increasing exponentially. Then after several governors and mayors had implemented severe restrictions on travel and gatherings, King Trump declared, “I always knew this would lead to a pandemic.” Right Donald – liar, liar, pants on fire.”

Aside from the bonehead declarations by the president, the performance of the Trump administration this past week or so has been better, but remains mixed. Public confidence in the Center for Disease Control (CDC) seems to have improved as doctors have begun telling the truth about the intensity of the coronavirus and how citizens should behave. Comments from CDC personnel often have directly conflicted with claims made by Trump, even when Trump is standing next to the CDC spokesperson.

In addition, state and local officials have continued to provide guidance. Examples include governors of Michigan and Washington as well as governors/mayors in the New York tristate area. There are still some bumps in these declarations and differences of opinion but action is being taken.

As far as calming fear, Trump might have convinced the hardcore supporters he’s competent, but no one else seems convinced that he or key White House staff/cabinet officials knows what to do. Once the public began to understand more about they could be affected by the virus and then began to understand proposed government programs to respond, mild panic set in.

People rushed to buy food and staples. Stocks of toilet paper were depleted because people were concerned the material used to make facemasks would stop production of toilet paper. A simple explanation of manufacturing capacity for TP, and lead times from factory to food stores would have mitigated most concerns. A similar explanation for many food products would have helped. But as of this date, nary a word from the White House about supply chains.

The uncertainty also spooked investors, who hate uncertainty. The result has been a frenzy with huge daily swings in the market, mostly down. The major indexes, Trump’s personal barometer of job performance, have declined to a point where all the gains realized since inauguration have been wiped out. In less than two months the major indexes have fallen 25-30%.

The near freefall of the stock market has affected consumer confidence as has the projection of a double-digit drop in GDP in 2020:Q2, and double-digit unemployment. The trifecta hit on confidence will exaggerate the virus-related slowdown in purchases of durable goods as well as home sales and construction.

The run-up in the stock market proceeding the recent crash also left the public with another headache – an additional $1,000,000,000,000 Federal debt. The 2017 tax cut was essentially a wealth transfer program to the rich, making them even richer. Think of it as socialism for the rich. Little, if any of the tax cut actually filtered down to the middle and lower-income categories.

The end result was the rich got considerably richer and everyone else got stuck with the bill — $2,700+ for every man, woman and child in the US. For a family of four, they should think of the tax cut as their gift of more than $10,000 to the very wealthy. (For more about the fallacy of trickle-down economics, which was used to justify the wealth transfer, see blog entry xxx.)

While an economic stimulus will help some people pay bills in the short-term, the real issue is mitigating the effects of the virus. Because currently there is no vaccine (forget Trump’s claim) and no known cause, there is no way to stop infections. The government’s plan is to “flatten the curve” of the rate of infection so the number of people needing hospitalization stays within the capacity of the hospital system.

Actions to “flatten the curve of infection” include restricting the number of people who can gather together. In some areas, the restriction is 100 people, some areas it is 50 people and some areas 10 people. Surprisingly, as of 03/18, about 10 states had no restrictions, including Texas.

The flip side of restrictions on crowd control is the negative impact on commerce. Restaurants, bars, hotels, gyms, movie theaters, theme parks and even religious institutions have been ordered to close. Sporting events have been canceled or delayed. Airlines have cut back flights by 50% or more.

Even such mundane tasks as garbage pickup have been affected. In our neighborhood, the sanitation department also picks up twigs, leaves and other yard waste. This week the yard-waste truck was about an hour late because, according to a man on the truck, they could not take off because of the 50-person restriction and had to wait for the sanitation workers to leave the building. (Yard waste pickup has now been suspended.)

The effect of these restrictions will be a significant increase in unemployment and decline in GDP. Although some believe the jump in unemployment will be temporary, my belief is that any rebound in employment will leave many unemployed as organizations realize how to operate with fewer employees by implementing more technology. The depressing effect on employment could last for a number of years. (For more information about the effects of technology on potential unemployment, see ”Tech Tsunami Booklet with Supplement” )

While both economic and medical programs are needed, most proposed actions by the White House seem more focused on the economy and less on ensuring medical care is available for those affected. An example is the proposed payment of $1,000-$2,000 per family for some period. The intent seems worthwhile, helping to address income shortfalls for many service workers.

The effect of such programs on confidence is more problematic. The proposed program would link the amount of payment to family size and family income. Thus, the more income one earned (there’s a cap), the bigger the check from the government. Does anyone in the Trump administration or the Republican Senate understand basic economics? People with lower incomes who get laid off have no savings. At least give everyone the same amount.

Doubtless the irony of the proposed economic program has been lost on the White House and the Republican Senators. Isn’t giving away money directly to families socialism? Only a couple of weeks ago Republicans were characterizing as socialism any Democratic proposal for income support or student-loan forgiveness. Or, as often stated by Trumpsters, maybe such programs were really like communism. Well, aren’t socialism and communism the same?

Okay, the idea of supplementing income in the short-term makes economic sense. But there’s no need for a tax cut for corporations. In case Trump and Republicans don’t understand, taxes first require revenue and then a profit. If the public is not working there’s no demand and no revenue – and duh, no profit or tax due.

The proposed programs also have a flip side. #1, the proposed program would increase the federal debt in FY2020 at least another $1,000,000,000,000 and closer to $2,000,000,000,000. Thus, by the time Trump completes four years in office, the Federal debt will have increased more than $3,000,000,000,000…and likely more. The increase is remarkably high given that unlike Obama, Trump inherited a very strong economy that should have resulted in a smaller annual deficit and possibly annual surplus. Like I asked earlier, does anyone in the White House, Trump’s cabinet or the Republican Senate understand basic economics?

So where have all the Republican fiscal conservatives been while Trump ran up the federal debt? Apparently in hiding and waiting for a Democratic president so they can begin screaming about the level of federal debt. The scream will be the Federal debt needs to be reduced with cuts to payments for Social Security and Medicare.

Another area that can contribute to the thinking-public’s lack of confidence is the Trump administration’s effort to eliminate Obamacare. During the 2016 presidential campaign and then during three years in office, Trump has made every effort to kill Obamacare. Any Obamacare-like program was bad — oops until the coronavirus. Now many programs being proposed by the Trump administration are absolutely consistent with the purpose of Obamacare and suggest that the US would be better off with a national healthcare system. Such change in policy will only increase frustration among the populace as well as increase the lack of confidence in government.

Adding fuel to the “no-confidence” fire was Trump’s claim at a oppress conference Friday, 03/20/2020 that his administration inherited a broken healthcare system from the Obama administration but that he (Trump) had fixed it. Obviously, not everyone agreed. The lead doctor at CDC put his head in his hand as Trump spoke.

Where does all the inconsistency and uncertainty lead? Uncertainty, as discussed in a number of previous blog entries, is often a precursor to a revolution. The US might get lucky and avoid a 5th revolution by voting out Trump and most of the Senate in the November 2020 election.

As of today, even though the coronavirus crisis is still in the early stages, the public seems more than willing to accept Depression-era types of programs to help stimulate the economy and begin to help reduce the income inequities that currently exist. Such programs are more consistent with the Democratic Party and would seem to bode well for the election of Joe Biden.

However, if for whatever reason Trump is re-elected, then the level of chaos and uncertainty experienced during the first term is likely to intensify. While the hard-core Trumpsters might be satisfied, the majority of the population will not be. The extreme discord between the hard-core Trumpster and rational people will increase the probability of a 5th US revolution.

As described throughout the blog, the revolution will be some type of revenge against the elite that Trump continues to support. The revolution – the Revenge Revolution – also will include many of the hard-core who finally wake up to the reality of how much Trump has screwed them.

#373 Where Do We Go from Here?

01 Sunday Mar 2020

Posted by in Gov't Policy, Stupid Is as Stupid Does, Uncategorized

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Readers: this blog is set in the future (sometime after the year 2020). Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution. More about the Revenge Revolution, a list of earlier revolutions and the author, Entry #1.

Periodically I write a “sense check” to assess whether in the next few years, a revolution in the US is still possible or whether the entire exercise is based on a statistical aberration — i.e., a roughly 50-year cycle between major upheavals in the US.  Most recent sense check, Entry #365.  

Some of the entries are part of a series.  Several series are available as easy-to-read booklets for download:

ENTRY #373 BEGINS.  Some readers are old enough to remember the TV show “Laugh In.” The show included a segment titled, “That Was the Week that Was,” which was a satirical review of recent news.

“That Was the Week that Was” seems to have returned, unfortunately not as a spoof, but as a series of real actions by the Trump Administration.  In a classic example of “stupid is as stupid does,” the White House, and Trump in particular, played down the potential impact of the coronavirus.  The virus has been spreading rapidly worldwide.  Yet Trump proclaimed the spread of the virus was under control in the US.  Further, according to Trump, the virus was just like a miracle, and would disappear one day.

During an evening press conference this past week designed to address concerns about the virus and outline plans to mitigate risk to the US populous, the White House staff, better named the Gang-that-Couldn’t-Shoot-Straight, apparently did not coordinate who was going to say what.

Trump, who spoke first and rambled endlessly, kept claiming there were only 15 cases of coronavirus in the US.  Then, Trump suggested, most of those had been cured or not serious. So, in fact there were only a couple real cases, and maybe just one.  You know, whatever.

The CDC doctors who followed, preceded by an interlude featuring Trump naming VP Pence the corona czar – virus, not beer – followed by Pence praising Trump for his leadership, said they knew of 60 cases. Furthermore, according to the doctors, everyone should prepare for many more cases.  The issue was not if the US will be impacted by the coronavirus, but when the US will be impacted and how severely.

In typical Trumpian rationale, the president claimed the public hysteria associated with the virus and the plunge in the stock market – more than 10% in a week – was the fault of the media and the Democrats. Republican stalwart Rush Limbaugh told listeners that the virus was nothing more than a common cold.

On top of these brainless statements, the White House initially proposed funding any extra costs associated with addressing the virus by diverting funds from programs aimed at helping the poor. The poor you know, must really have been the cause of the virus and, therefore be punished.

What kind of idiotic Administration is running the country? The craziness is never ending.  Yet, most Republicans don’t seem the least bit concerned by such events as Trump’s truly incoherent statements during the press conference or, by his even more incoherent claim about the virus being under control in the US.

Worldwide, major events are being canceled. The Geneva Auto Show being but one of many examples. While the US has restricted travelers from certain countries from entering the US, the State Department allegedly overrode a recommendation of the CDC and allowed people who had been on a cruise ship and considered highly contagious, to enter the country, then head home without being quarantined. Why did these people get special treatment? Apparently phone calls from the White House.  If true, who knows the real reason?

On another mind-numbing note, the White House acting Chief of Staff, Mick Mulvaney, chastised the media for, among other things, not reporting more about Trump’s positive relationship with his son Barron. Barron’s mother, also known as the first lady, had asked the press to continue the long-held tradition of not reporting most activities of presidential children.  But, oh, why would the Acting Chief of Staff, or anyone in the White House and the Trump Administration want to spend five minutes to check just a bit of history?  Doing so would be such a waste of time.  History is such a boring topic.

Normally, I get concerned but don’t rail about many actions taken by the gang of incompetents in the Trump Administration, the most notable incompetent being the president.  Doing so would consume much of the day and be too depressing.

However, what does seem worth railing about is why and how so many people continue to support Trump and don’t seem to appreciate or understand what a risk his actions are to our democracy. As noted in several other blog entries, these people seem to have been brainwashed.  What can we do to get them out of their fog and wake up to reality?  Where do we go from here?

 

#369 Climate Change. Who’s Right about the Cause? Doesn’t Matter.

02 Sunday Feb 2020

Posted by in Common Sense Policies, Gov't Policy, Societal Issues, Uncategorized

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Readers: this blog is set in the future (sometime after the year 2020). Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution. More about the Revenge Revolution, a list of earlier revolutions and the author, Entry #1.

Periodically I write a “sense check” to assess whether in the next few years, a revolution in the US is still possible or whether the entire exercise is based on a statistical aberration — i.e., a roughly 50-year cycle between major upheavals in the US.  Most recent sense check, Entry #365.  

Some of the entries are part of a series.  Several series are available as easy-to-read booklets for download:

ENTRY #369 BEGINS.  Recently, a longtime colleague sent an article from a local paper about a series of speeches he’s been giving focused on electric transportation and climate change. The article noted his position about the increase in the earth’s average temperature was due to natural causes, and not due to actions by humans, such as burning fossil fuels or deforestation.

In the speeches, he argued because the change in temperature was due to natural causes, society should continue to burn coal, gasoline, natural gas, etc. He stated the CO2 generated from the burning would not be harmful to the environment and, in fact, could be could be helpful – e.g., more CO2 could increase agricultural production.

While I agree that the average temperature of the earth and CO2 ppm have varied over time due to natural causes, the changes have occurred very, very slowly, often taking hundreds if not thousands or even tens of thousands of years. In addition, in periods with very high concentration of CO2, all evidence suggests that humans didn’t exist.

I’m a big supporter of science-based decisions. However, the science doesn’t matter about the cause of climate change. What matters is how to mitigate the potential damage associated with the rapid increase in the earth’s temperature.

You don’t need to have a degree in climate science to know that if the earth’s average temperature continues to rise more polar ice will melt. Actually, a 3rd grader can understand the problem. What happens when all the ice melts? Oceans will rise. (Much of the ice is on land.)

Let’s say the ocean level increases 12-18” inches over the next 50-100 years, which is not an unreasonable estimate. Well, that amount of increase in ocean levels would be goodbye to much of Florida as well as goodbye to many coastal cities in the US and around the world.

In addition to the rising seas and the millions of people displaced, we are likely to see oceans as a less productive food source. There would also be a major disruption to agricultural production since many crops would not grow in the current location. The transition in agriculture could result in major shortages of food for years, possibly decades.

Regardless of the cause of climate change, the risk of doing nothing could be catastrophic. So let’s not get our panties in a wad about who’s right or wrong.  Instead, let’s figure out what it takes to mitigate the effects of higher temperatures and capitalize on any opportunities.

An obvious action that can start now is to accelerate the elimination of fossil fuels. And why not? Why not add solar panels to roofs? Add solar panels even in areas where the sun shines say only 50% of the days per year. While the electricity generated in the 50% areas won’t match electricity generated in Arizona, the cumulative effect of all houses in the 50%-sunny area would be an enormous amount of electricity over time.

Why not reduce the number of animals raised for meat? Cows are great for hamburger but they’re also a methane machine. Increased use of plant-based “meats” would have a positive impact.

My colleague was trained as a nuclear engineer. Despite his belief the increase in earth’s temperature is the result of natural causes, he is an advocate of migrating from using fossil fuels to nuclear power to generate electricity.

I’ll not argue the burn-fossil-fuel-and-switch-to-nuclear logic and agree with using more nuclear fuel as long as the industry chooses the least damaging and easiest to manage nuclear fuel. Based on very limited research I think that thorium would be a better choice than uranium, although I’m not a hundred percent sure.

Many other changes can be made to reduce CO2 emissions. As many of us are experiencing in the auto industry’s migration to electric-powered vehicles, the change can be challenging but also exciting fun. The changes are very likely to spawn a plethora of new technologies and create many new jobs.

The first step in this journey, however, is to have both sides quit pointing fingers about who’s right and who’s wrong. Folks, it does not matter. The consequences of continuing to do nothing are bad and worse. Consequences are the issue. Forget about who’s correct about the cause.

And, oh, what if the average temperature starts to fall in the future because of natural causes? Mmm, what has been lost by all the efforts to reduce CO2 ppm?? Absolutely nothing, nada, zero. In fact, the earth will be have cleaner air, more productive citizens and some new jobs. Not a bad thing to have happen.

So, to all the so-called “climate-change deniers” and to all the so-called “climate-change extremists”, let’s shake hands, go grab a coffee and start working on solutions, together. Something productive might get accomplished.

#367 Prescription? Conscription for All. Steps to Implementation. (Part 2)

19 Sunday Jan 2020

Posted by in Common Sense Policies, Gov't Policy, Societal Issues, Uncategorized

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Readers: this blog is set in the future (sometime after the year 2020). Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution. More about the Revenge Revolution, a list of earlier revolutions and the author, Entry #1.

Periodically I write a “sense check” to assess whether in the next few years, a revolution in the US is still possible or whether the entire exercise is based on a statistical aberration — i.e., a roughly 50-year cycle between major upheavals in the US.  Most recent sense check, Entry #365.  

If you want to a diversion, there are easy-to-read booklets for download.  These include:

ENTRY #367 BEGINS.  Blog entry #366 proposed reinstituting conscription and expanding it to include women.  Doing so makes sense only if those “conscripted” can be productive and the output benefit many US citizens.

If implemented, the goals of conscription would be:

  1. Improve understanding with a broader swath of the population how to:
    • Work in teams
    • Work with people who have different skills
    • Work with people from different socio-economic backgrounds
  2. Provide reasonably skilled labor for major government projects, such as rebuilding infrastructure. Think of the 1930s and how the WPA was used for building roads, dams, and other infrastructure throughout the United States.
  3. Create a sense of having served, and being proud of having served the country. Less than 1% of citizens currently serve in the military. In addition, of those who volunteer for the military, most are from families whose members have also served. The current military is supported by a very narrow segment of the population. The current enlistment model is likely unsustainable over time.
  4. Create skills that allow those discharged to find meaningful employment in the private or public sectors.

Key components of a broad-based conscription program would include:

  1. Everyone subjected to conscription at age 18.
  2. Minimal exemptions from serving.
  3. Being able to serve other than in the military. Individuals would have the option to select the military or other agency. If after joining the military, the individual could not meet the physical requirements, the individual would then transfer to a non-military assignment.
  4. Assignments would be throughout the United States, not just near the individual’s hometown.
  5. Assignments outside the US would be available for certain categories.
  6. Basic training would be required for everyone, even those not serving in the military. For anyone who has served in the military, basic training is a memorable experience. For those who have never lived away from home, basic training is an opportunity to begin to understand how the world operates.  The non-military basic training would not be as intense as the military but would have many of the same components: (i) being trained with people of disparate backgrounds; (ii) living in “barracks” for a certain period, including some KP. Total basic training for non-military would be maybe 8 weeks. Advanced training would vary by general assignment but likely not exceed 8 weeks. Depending on assignment, likely additional OJT.
  7. Meaningful tasks. During the time in service, members should be taught a skill that can be used in a meaningful job as well as a skill that can be transferred to the private or public sector once discharged.
  8. Uniform for all serving. While the uniform for non-military assignments would be different from the various military uniforms, requiring a uniform during working hours would help to: (i) designate who is serving their country; (ii) reinforce to the participant that he or she is a member of a team.

US Departments/Agencies where trainees could work include:

  1. Defense – optional. However, if DOD does not meet its recruiting quotas by branch, then some trainees could be assigned to help meet quotas.
  2. Interior.  Participants would work in national parks, for example.
  3. EPA.  Monitor pollution in and sources of pollution in lakes, rivers, air.
  4. Education. Could work at federal facilities – Native American schools, e.g., state facilities – academic institution, or local – neighborhood school. Dep’t of Education would be overall coordinator and manage selection of location.

Time Required to Serve. Two (2) years active service plus four (4) years reserve duty. Reserve would allow government to recall key individuals in critical situations.

Reenlistment. Participant could re-up for an additional two years, including seeking a higher-level position.

Years of Credited Service. Number of years would transfer with the individual if he or she transitioned to a government job, whether federal, state or local level.

Options of When to Serve. All individuals would be expected to begin service not later than age 23. Participant could join immediately after high school, at age 18 to 19. Program would include option to defer service until after college, with a maximum deferral of five years.

Exclusions from Serving. Minimal reasons for not serving.  Bone spurs would not qualify for exclusion. Few would be categorized as “4F.” Even those with physical handicaps would be expected to serve, unless the level of physical handicap was deemed extreme. Every effort, for example, would be made to include people using wheelchairs. For those who are handicapped there might be different level of training and jobs might be somewhat different. Nonetheless, every effort would be made to include them in the “corps.”

Autism Spectrum. To the extent possible all but the most extreme on the autism spectrum would be expected to serve in some capacity. Like those with physical disabilities, training routine and the type of job might be different.

While some might argue against including people with special needs, the service requirement would: (i) help train the individual with some transferable job skills; (ii) help reduce the stigma often associated with some type of perceived disability; (iii) help reduce the long-term cost of care since many will be employed following service and become taxpayers.

Non-Citizens in the US. Would be eligible to serve. Serving would be a path to US citizenship.

While the devil is in the details for large-scale projects, much of the framework to implement a conscription program is already in place. The US military has systems and procedures that could be modified. In addition, a “conscription-for-all” program could be implemented in phases, allowing inevitable kinks to be worked out before the program is expanded to everyone turning age 18.

An argument can be made that with such a low unemployment rate, a “conscription-for-all” program would make finding employees more difficult.  Well, if you look behind the numbers of the unemployment rate, its not as rosy as what the White House promotes.  Many counted as “employed” are in fact workers with low-paying, part-time jobs.

In addition, the economy is not going to grow forever.  There will be another recession, possibly depression. While the likelihood of a depression is the topic for another blog entry, there is ample historical evidence that supports a sharp economic downturn following a period of rapid concentration of wealth and “bubbles” in the financial markets.  Both conditions exist today.

Another reason to support “conscription for all” is to help mitigate the impact of the coming “technology tsunami.”  The tech tsunami will cause a major disruption to the workforce.  For more about the technology tsunami and the likely impact, download Tech Tsunami Booklet with Supplement.

Now, how to get the House and Senate to pass a bill to expand conscription.

#366 — Prescription? Conscription for All. (Part 1)

12 Sunday Jan 2020

Posted by in Common Sense Policies, Gov't Policy, Possible Solutions, Societal Issues, Uncategorized

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Readers: this blog is set in the future (sometime after the year 2020). Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution. More about the Revenge Revolution, a list of earlier revolutions and the author, Entry #1.

Periodically I write a “sense check” to assess whether in the next few years, a revolution in the US is still possible or whether the entire exercise is based on a statistical aberration — i.e., a roughly 50-year cycle between major upheavals in the US.  Most recent sense check, Entry #365.  

If you want to a diversion, there are easy-to-read booklets for download.  These include:

Start of Entry #366.  With the new year, I decided to try, emphasis on try, and get back to outlining practical solutions to complex societal problems. Ideally all of the topics in the coming blog entries will be related to factors that could contribute to the 5th US Revolution, the Revenge Revolution.

Some topics will be more obviously linked to the projected revolution; some less so. Doubtless, there will be entries that are more a reaction to some recent event inside the Beltway, or some inane comment or action by Trump. However, one of my resolutions for 2020 is to keep “reactionary” entries to a minimum, or at least put the entries in a broader context.

A societal issue that seems to generate little discussion but one that has long-term implications for a stable US democracy is how to staff the military. In a previous entry (#293), I recommended conscription be reinstituted in the US. I also recommended that satisfying requirements of conscription could be expanded beyond service in the military. One could satisfy requirements by serving in any number of government agencies – Federal, state, local – as well as serving in certain jobs outside the US – embassies, e.g.

The general benefits of conscription include: (i) exposing “draftees” to jobs, people and activities they would likely never experience otherwise; (ii) providing an excellent way to train people for work in the private sector. Many of the jobs skills learned while serving, especially non-military assignments, would have direct applicability in the private sector; (iii) helping people understand how to build a highly functioning team from a group of individuals with disparate backgrounds. Such an understanding should help reduce the polarization that continues to worsen in this country; (iv) maybe the most important, allowing people to state rightfully and proudly they served their country.  Under the proposed conscription system, let’s change the term “draftee” to “patriot.”

Conscription would help overcome what is a growing problem for the military – a very narrow segment of the population volunteers to serve. According to an article in the New York Times (20 01 11 NYT Makeup of Military Recruits), less than 1% of the US population serves in the military. Further, nearly 80% of the current recruits come from families where someone has served, and 30% of the recruits come from families where one or both parents have served in the military.

The current volunteer system limits the personality profiles of people in the military. While some might find this comforting, my experience has been limiting personality types in a group can result in distorted thinking and/or distorted behavior. Expanding the type/personality profiles of individuals serving in the military can have a moderating influence on “group think” behavior. Such moderation seems especially important for members participating in units subjected to extreme training and precarious assignments – special forces and Navy SEALs e.g. Members of these units may find having a moderating force in the ranks would help mitigate the difficulty in transitioning to civilian life.

Admittedly, the number of former special forces personnel I’ve worked with in say the last ten years is limited. However the actions of each suggest a problem in the transition to civilian life. Of the four (4) in various special-forces units, one was a convicted felon, two were extortionists, and one was a seemingly “normal” individual but who also maintained a significant cache of weapons, including several .50 caliber rifles. Folks, .50 caliber rifles are not for hunting. They’re for armed warfare.

The military seems to be trying to address the most egregious misbehavior of personnel in special forces. Recent examples include the Navy’s conviction of Edward Gallagher, a high-ranking NCO SEAL, and the Army’s refusal to restore a Special Forces tab for Major Mathew Golsteyn, who had been accused of killing an unarmed Afghan suspected of bomb making.

Unfortunately, the efforts by the military have been thwarted by Trump. Trump, who has zero military experience and apparently no appreciation of the need for discipline within the system, pardoned both men and hailed them as true “warriors,” thereby undermining the military justice system.

Whereas reinstituting conscription won’t necessarily stop egregious, even criminal behavior by those in special forces, it will increase the appreciation among a wide swath of citizens, including those inside the Beltway, of what is required to operate a military that can be model of integrity for other countries worldwide. A credible, well-disciplined military with proper, separate oversight is also critical to a functioning democracy.

For “patriots” who serve in government organizations other than the military, the organizations will benefit by being exposed to a workforce with fresh ideas and skills that should be especially useful as more technology is integrated into these organizations. The “patriots,” in many respects, will be like interns in the private sector. Having “patriots” as workers allows managers of the government organization an opportunity to evaluate performance and then potentially recruit the higher performing individuals for employment following discharge.

Reinstituting conscription needs to be fair and equitable. Some ideas in the next entry.

 

#340 Abbott Awards Costello the Presidential Medal of Freedom

23 Sunday Jun 2019

Posted by in Economics, Gov't Policy, Societal Issues, Stupid Is as Stupid Does, Uncategorized

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Readers: this blog is set in the future (sometime after the year 2020). Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution. More about the Revenge Revolution, a list of earlier revolutions and the author, Entry #1.

Periodically I write a “sense check” to assess whether in the next few years, a revolution in the US is still possible or whether the entire exercise is based on a statistical aberration — i.e., a roughly 50-year cycle between major upheavals in the US.  Most recent sense check, Entry #332.  

Begin Entry #340.  Somewhat buried in this past week’s news was that Bud Abbott awarded Lou Costello the Presidential Medal of Freedom. Well, okay, it wasn’t really Abbott and Costello, but it might as well have been.

The actual players were Donald Trump and Arthur Laffer. If you don’t follow the players in the field of economics, you might not recognize the name Laffer. In the mid-1970s, Arthur Laffer, then working in the Nixon/Ford Administration, but previously a member of the faculty at University of Chicago, outlined for Messrs. Rumsfeld and Cheney (the same two as in the Bush 43 administration) a curve to illustrate the theory that government revenues could be maximized at certain marginal tax rates.

According to Laffer, too high a marginal income tax rate would be a disincentive for people to work and/or invest and tax revenues would fall. If the margin tax rate were too high, then lowering the tax rate would result in the economy expanding with overall tax revenues increasing despite the lower maximum rate.

The Laffer Theory, commonly referenced as the Laffer Curve, was cited as justification for large cuts in tax rates under Presidents Reagan, Bush 43, and Trump. In fairness to Laffer, his theory, which had been discussed earlier by other economists, could be true where a country had exceptionally high tax rates – although too high a tax rate has never been defined – and there was no compelling societal need justifying the higher rates.

Laffer’s Theory should also be considered the foundation for what is known as “trickle-down economics.” However logical Laffer’s theory and “trickle-down economics” might seem, to my knowledge there is no empirical evidence demonstrating the theory is correct.

In the 1950s, for example, maximum marginal income tax rates in the US were 70%. Yet during the 1950’s the labor-force participation rate was very high and the economy was strong. One might argue – and I think fairly – that the very high marginal tax rates were justified by a societal need. The US needed to pay down some of the enormous debt the US incurred during WWII.

More recent tests of Laffer’s theory include the Reagan, Bush 43 and Trump Administrations. What happened to government revenues when the Laffer Curve was used to justify lowering income tax rates in each of those administrations? The economy grew some but income taxes remitted to the Federal government never increased enough to offset the rate cuts. The result was a sharp increase in the Federal debt, both nominally and as a percent of GDP.

The Laffer Theory has been tried in other venues. In 2012 the Republican governor of the State of Kansas, to whom Laffer was an advisor, convinced the legislators to reduce maximum marginal tax rates. The project result, according to Governor Brownback, would be a rapidly growing economy and enough additional revenue to the state to offset the reduced tax rates.

What happened was just the opposite. Like the experience of the Federal government, tax revenues in Kansas plunged. The difference between the State of Kansas and the Federal government is a critical one. Unlike Washington, the State of Kansas is constitutionally required to balance its budget and does not have a Treasury Department that can print money. The only alternative for Kansas was to raise taxes and substantially cut expenditures in such critical areas as education and infrastructure.

Bush 41 called “trickle-down economics” that emanated from the Laffer Curve, “voodoo economics.” The voodoo economics label seems to be widely shared among most well-respected economists, with more than 95% of professional economists rejecting the Laffer Theory.

So why did Laffer receive the Presidential Medal of Freedom? The president has wide discretion in awarding the medal. A recent recipient, for example, was the golfer Tiger Woods.

What struck me as comical was the Administration’s justification for selecting Laffer. The White House press release indicated Arthur Laffer was “…one of the most influential economists in American history.” (Maybe true but “influential” does not equate necessarily to being correct.) Adding to the comedy of the press release were remarks by Trump, who claimed to have studied Arthur Laffer’s theory for many years.

Seriously? Studied for many years? Trump is anything but a student. He’s repeatedly demonstrated an appalling lack of understanding of basics taught in economics 101. While the examples are numerous, a couple of recent economic headscratchers include his claim that tariffs are paid by the country of origin – i.e., tariffs on goods shipped from China are paid by the Chinese. No, Donald, the tariffs are paid by the residents of the receiving country. The receiving country is called the United States and the tariffs are effectively a tax on consumers.

Another head-scratching idea is that world trade must be a zero-sum game; therefore, the US should work toward having a trade surplus with most all, if not all, countries. If that were true, then nearly every country worldwide would make and consume its own products. If I’m not mistaken, Trump’s theory went out millennia ago.   Maybe Trump should study more about such people as say, Marco Polo. Somehow I think Marco Polo was in the international trading business.

What about Trump’s approach to increase US GDP over the long term? Roughly 2/3 of US GDP is driven by consumer consumption. If you don’t increase the number of consumers and/or increase consumption per capita, then GDP is not going to grow and it will gradually decline. As the population ages, consumption per capita decreases and the economy can stall or start to slide — just look at what happened to the Japanese economy beginning in the 1990’s. In the US, the declining birthrate among native-born citizens will result in lower potential GDP growth unless some fundamental changes are made.

One change to help ensure sustained economic growth could be to increase the pool of younger consumers. How does the US expand the pool? The government can’t force families to have more babies. So what about more Immigrants? Wouldn’t more immigrants help offset the declining birth rate?

According to the Trump Administration, the US should not allow more immigrants, especially those entering without visas. Moreover, according to Trump, even the number of legal immigrants should be reduced sharply.

Mmm, this economics game is not so simple. Maybe Trump should have attended economics class more often. Economics seems something like a teeter-totter. Somehow the two sides need to be balanced for the system to work.

What’s the takeaway from this blog entry? Most everyone, well most everyone except Trump’s hardcore supporters, acknowledges Trump is uneducated about many subjects and his decisions are often arbitrary and conflicting.

Maybe the purpose of this entry is allowing me – and I hope some of you – to vent frustration and anger at Trump with his gang of incompetents and enablers. For many years, I’ve studied economics and had jobs where applying economic theory was a key part of a critical decision. In many of those decisions, the financial well-being of numerous families was affected. In my view, and one seemingly shared by many others, Trump’s decisions about lowering income tax rates mostly for the wealthy, efforts to influence the Federal Reserve, restructuring immigration policy could harm significantly the potential for sustained economic growth in the US.

Now, I hope I’ve made the case for why I cringed when Trump awarded the Presidential Medal of Freedom to someone like Arthur Laffer. I cringed not because of Laffer. He had no hand in this decision. I cringed at the thought of what’s going to be the next incredibly stupid decision made by Trump that will have lasting negative consequences for US citizens.

We should all be concerned, regardless of political party. As for Abbott and Costello, my apologies to them for being drawn into the discussion. Unlike the Trump Administration, even Abbott and Costello figured out who was on first.

Post Entry Update: In the week following publishing Entry #340, Eli Broad (rhymes with road), a multi-billionaire, published an Op-Ed piece in the NYT outlining why taxes on the very wealthy should be raised.  Unlike Trump, Broad views a higher-tax rate for the wealthy as necessary to help begin eliminating the growing economic inequities in the US.  Link to comments, 19 06 26 NYT Eli Broad OpEd re Asking to Raise His Taxes.

Comments welcome, as always. Thanks for your time.

 

 

 

#336 Policies to Address Tech Tsunami. Socialism? No. National Security.

19 Sunday May 2019

Posted by in Economics, Gov't Policy, Tech Tsunami

≈ Leave a comment

Readers: this blog is set in the future (sometime after the year 2020). Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution. More about the Revenge Revolution, a list of earlier revolutions and the author, Entry #1.

Periodically I write a “sense check” to assess whether in the next few years, a revolution in the US is still possible or whether the entire exercise is based on a statistical aberration — i.e., a roughly 50-year cycle between major upheavals in the US.  With all that’s happened lately in Washington, I wrote a special sense check, Entry #332.

This entry is a “wrap” to the technology tsunami series, at least for a while.  The format for this entry is conversational.  The character, Sandy (comments in quotes) is an ardent Trump and NRA supporter who has appeared in previous entries.  Like virtually all the characters that appear in this blog, Sandy is patterned after someone I know with very similar characteristics. The entire technology tsunami series, including this entry is available as a eBook. (19 05 19 Tech Tsunami Booklet)

Sandy: “I don’t buy all this BS that some so-called technology tsunami could wreck the US economy. Stuff like that only happens in socialist countries. Look at what happened in Venezuela.”

True that Venezuela was the richest country in South America and then tanked economically. The reason they went into free fall was not becasue of socialism but because of bad economic policies.

“Hold on Bubba.  I’m telling you those kind of economic problems are what happens to all socialist countries. If you don’t believe me look at what happened to the economies of Cuba and to Russia. You know I’m right. Admit it.”

You are right that Cuba and Russia have suffered economically. But in the most diplomatic terms, you’re wrong about why. Let’s not confuse communism, which is more political, with socialism, which is more related to economic policy.

“Communism, socialism. They’re the same thing to me.  I know one thing for sure.  You can’t have all those socialist policies and still have a democracy.”

Like I said, let’s not confuse socialism and communism. There are many countries you might label as being socialist that are democracies. All the Nordic countries, for example, have many government-controlled social programs. Other countries in Europe, including Germany, have some degree of what you’re labeling as socialism. Even Canada. Yet, all those countries are democracies.

“Well, what about Greece? They had all those government programs and they went under. Italy almost went under. Call them what you want.  I’m telling you government programs are what causes these countries to go under.”

OK, then let’s add one more country to the list of countries that almost went under.  In fact, this country has come close to going under twice in the last hundred years. Want to guess which country?

“Probably a trick question. Who?”

The United States. We came within a hair’s breadth of the economy going into free fall in 1932 and 2008.

“I’ll tell you why. Because of the Democrats. They’re the problem. Democrats FDR and Obama were coming into office when the economy tanked. Democrats are always the problem.”

Could you please put away the Sean Hannity/Rush Limbaugh drivel and look at this issue objectively. Bad government policies under the Hoover and Bush 43 administrations created most of the problems. Notice that I said most of the problems, not all. If you want to later, we can discuss which economic policies were the primary causes. But for now, my point is without sound government policies to counteract the coming technology tsunami, the country is likely to be faced with another economic crisis.

“When you say crisis, are you suggesting unemployment could shoot up to 20 to 25% and real wages fall, just like during the Great Depression?”

Yes. If you don’t think technology can have a devastating impact, look at what’s happened to companies and employment in industries where disruptive technology was introduced.

“You mean like the coal industry? I hate to laugh but I understand even the Coal Mining Museum gets some electricity from solar panels on its roof. Anyway, technology and economics have killed the industry. Unemployment in the coal industry is what, maybe only 40-50% of what it was just 25-30 years ago?”

Now you understand why strategic planning and good government policy are so important?  I hope you also have somne appreciation of the risk associated with bad  government policy. Bad policy presents a real risk to the US economy and the country’s future as a democracy.

“Gee, I never looked at government policy quite that way. The real impact of government is not whether Democrats or Republicans are in power. The real impact is whether government makes policies that can sustain the well-being of the country.  And, you know what?  Overturning Roe v. Wade seems far less important than these other issues.”

Sandy, I’m proud of you.  If more people had your attitude, the country could start to make real progress in implementing policies to counteract the coming technology tsunami.

“I think I get it.  What you’re suggesting is not just more government intervention, but government intervention to avoid a economic catastrophe. Really, the need to address the coming tech tsunami is more a national security issue.”

Now, if only the Trump Administration and some key people in Congress would “get it” like Sandy.