Monday, July 27, 2020

Letters to the Bee

The Bee recently declared bankruptcy, and publishes stories about how it's previous owners, the McClatchy family, has now agreed to sell to a hedge fund... So the news is even more concentrated in the hands of the plutocrats.

Here are the letters they haven't published (yet):

RE:Bill Motmans letter "Unsurprised by Mayor Steinberg" 7/26/2020

One letter writer believes "[split roll] will be the first step in dismantling...Proposition 13" that eliminated lots of "stifling, burdensome tax" on our real estate. What he ignores is the loophole in Prop 13, that subsidizes commercial landlords at our expense now. If less than 50% of commercial property changes hands, it's not re-assessed like residential property. So Michael Dell (of Dell computers) can buy a Santa Monica hotel, splitting ownership between himself, his wife, and a corporation he owns, and the hotel retains its 1978 assessed value. Do commercial properties rent for less when they get this tax break? Nope. Landlords charge market rents regardless of their tax advantages. This loophole is just a way to funnel $11 billion a year away from public goods into the pockets of the plutocrat landlords. Gosh, I wonder why our infrastructure is so bad?

RE: Maybe Trump shouldn't save the Democrat-run cities besieged by violence - by Marc A. Theissen, Sacramento Bee Extra p. 40 7/20/2020

Marc Theissen blames weak-on-crime Democrats for a spate of recent shootings, but cops respond to crimes, they seldom prevent them, and cops certainly don’t lobby to arm the public like the NRA. He ignores that we have seen police misbehavior as often as riots from demonstrators (remember the Kerner commission?), or the fact that American police kill civilians at higher rates than in other wealthy nations. According to the Prison Policy Initiative, American law enforcement kills civilians at rates 3.4 times higher than Canadians and 67 times higher than Brits. U.S. police can only solve roughly 20% of crimes, too. Theissen’s quest for a forceful, even violent police response to protests might suggest that’s a cure-all, even as it ignores the causes for the demonstrations, but facts don’t support that point of view.

Re: California's high living costs make people poor, 7/19/2020 Dan Walters

As usual, Dan Walters cites the symptoms, not the disease, in his editorial about California's high living costs. Housing is more costly because low real estate taxes, and compliant local governments encourage land speculation, raising prices. The ones most favored by higher prices in housing are the lenders, who extract ~90% of that price rise. The cuts to Federal housing programs aren't helpful either. Nixon put a moratorium low-income homes, and Reagan cut 75% from the Federal housing subsidies. Energy costs are related because sprawl kills transit, and requires everyone to buy gas for their commutes. As for energy, public power (SMUD) remains cheaper and better-managed than private PG&E. Of course programs for the poor have already been cut to fund the army of occupation, er, I mean police. U.S. Population has increased ~40% since 1980, while police funding has risen by nearly double (187%).

Brandolini's law

'The amount of energy necessary to refute bullshit is an order of magnitude bigger than to produce it.' -
Alberto Brandolini

Friday, July 24, 2020

Supervisor Frost fathoms the depths of untruth...again!

Returning to her perennial lament, echoing President Trump, Supervisor Frost writes she is concerned that the recent move to release people from prison in the pandemic will lead to a surge in crime, and she certainly wants no sentence reductions as mandated by California's recent propositions 47 and 57. Yet the 7/6/2020 Sacramento Bee says: "The violent crime rate in the four-county Sacramento region fell to its lowest level in at least 35 years during 2019, according to new statistics from the California Department of Justice."... long after those propositions passed.

Despite that decline in crime, and a decline in arrests, Supervisor Frost recently voted to expand the County Jail --for $89 million!--even though she complains the County does not have enough in financial reserves.

And don't get me wrong, despite declining crime and arrests, the jail is full--or at least it was until the current pandemic. The trouble is that 60% of those in jail were convicted of nothing more than being unable to afford bail. Yep. It's illegal to be poor in Sacramento!

The trouble with Supervisor Frost's continual cry of "wolf!"...er, I mean "crime!" is not just that it's untrue, it's so manifestly unproductive. All she promises is that the beatings will continue until morale improves. Is there any crime, or perhaps an uptick for last week? Then we must increase our army of occupation...er, I mean police...and make penalties even more draconian! In this area, she is the one-trick pony of supervisors.

The trouble with "tough on crime" is that the U.S. has been trying it since Richard Nixon vied with Nelson Rockefeller for the Republican presidential nomination. New York recently repealed the Rockefeller drug laws, incidentally. But as a consequence of being "tough" on crime, the U.S. now has 25% of the world's prisoners even though its population is only 5% of that same planet. Per-capita, demographically-identical Canada incarcerates roughly one seventh as many prisoners as the U.S. So is Canadian crime so much worse that in the U.S? Nope. About the same.

As Anatole France once said: "The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, beg in the streets, and steal bread." Supervisor Frost proposes her one trick--increasing the beatings--at the end of a bipartisan, multi-generational effort to cut funding for social safety nets. No matter how many troops she calls in, people who have nothing to lose will always threaten her Karen-infested world. She can close her eyes to this, even stop up her ears, but being blind and deaf is hardly a winning life strategy, never mind the premise for good public policy.


Monday, July 20, 2020

The COVID-19 update


Meanwhile, Vietnam, with about a third of U.S. population, just reported its first COVID-19 case since April.

The U.S. has 5% of the world's population but 25% of the virus. This is after the CDC had its pandemic unit de-funded, and the Chinese CDC workers were let go. Gosh, I wonder why we've handled this so badly?

Friday, July 3, 2020

Changing History: Heterodox Economics to the rescue!

For those interested in the topic, there's finally a readable explanation of Modern Monetary Theory (MMT) in Stephanie Kelton's new book The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy. (The link is to my review).

For those who tolerate extreme economics wonkery, there's also another recent MMT publication: J.D. Alt's Paying Ourselves to Save the Planet: A Layman's Explanation of Modern Money Theory. This is a bit less readable, and discusses the actual "plumbing" of currency issuance...a topic that holds a limited amount of interest, at least for me. What is useful in Alt's book, however, is his estimate of the problems issuing money could solve.

Here is a summary of Alt's estimate of what the public sector needs to spend:

$30 trillion -- Universal health care
 $2 trillion -- Pay off student debt
 $1 trillion -- Child care centers
 $1 trillion -- Affordable housing for all
 $4 trillion -- Infrastructure rehabilitation
$60 trillion -- De-carbonizing and mitigating damage from our climate catastrophe

Total: $98 trillion (Note, this book's publication preceded the current pandemic, so add a few trillion for that, too.)

This figure is completely impossible for conventional economists to imagine government collecting in taxes, much less spending, but not for MMT.

If conventional economists have their way, we'll just have to deal with the catastrophe not addressing the above will cause. If you think riots and pandemics are no fun, steel yourself for more of the same if the austerity mavens of conventional, neoclassical economics have their way.

One final comment about Alt's calculations: His health care cost estimate figures none of the cost savings that are fairly uncontroversial. The U.S.' current system costs about double what single payer systems worldwide cost. How can we possibly afford something that's half as expensive? Gosh! I wonder!

Meanwhile, in a recent Heterodox Economics class one student asked me "How do we change history?"

The enormity of this question flustered me then. I answered "I don't know" immediately, rather than cleverly asking "You mean beside attending a Heterodox Economics class?"... But the questions is a good one, and as I've thought of it, one of most thought-provoking.

First of all, imagine what it took to ask it. The student lifted her gaze from her daily concerns to consider the fate of humanity. It was as though she envisioned herself on a bus with the rest of mankind, saw the bus driving toward a less-than-optimum destination, and asked the sensible question: "Where's the steering wheel on this thing?" It takes an advanced consciousness to even frame such a question.

Anyway, I don't have any wise answer for the way to change history, but the question has staying power. Napolean says it's families that read who will change the world. There are even people who speculate there are "laws" to the progress of history. In any case, that thought-provoking question, and others like it are why I continue to offer the Heterodox Economics class for CSUS Renaissance Society.

Monday, June 29, 2020

George Will, Pandemic Ignoramus

(c) Mark Dempsey

George Will's column today laments the degradation of American thinking. For example, the political class has an "infantile refusal to will the means (revenues) for the ends (government benefits) they demand."

Yet the (federal) government literally creates the money. It does not require revenue for new programs. It can't. Where would people get the dollars to pay taxes if government didn't spend them first, without waiting for revenue? It's not "tax & spend"...that's the fiscal policy for a currency user like a household, not a currency creator. Sovereign fiat currency creators spend first, then retrieve dollars in taxes.

What do we call the dollars not retrieved, still out in the economy? Answer #1: the dollar financial assets of the population. Answer #2: the national 'debt.' Both answers refer to exactly the same thing. It took a Republican (Dick Cheney) to say it, but "Reagan proved deficits don't matter."

Will goes on to say "disorganized families" are "entirely absent from current discussions about poverty, race and related matters." The point of this particular whine is to throw all responsibilities onto individuals and families, and ignore public policy that has been sabotaging them for generations now, as there's been a bipartisan effort to defund social safety nets. Will helpfully points out Black families are worse off than the good...er, I mean white ones.

Finally, Will laments that "a significant portion of the intelligentsia...cannot think....much of America's intelligentsia has become a mob." Will then goes on to lament the "groupthink" promoted by modern campuses.

I won't quarrel with that one. A mature society understands that an educated public is an asset--human capital, if you will. Therefore, it subsidizes education. Yet in the U.S, the federal subsidy for higher education has diminished 55% since 1972. States have cut their universities' budgets even more.

The rise in tuition and student debt was the result, but even more subtly, professors can no longer fail the incompetent for fear they will make their institution less financially viable. The net result is for our educational system to issue certificates rather than educate the competent.

Led by the likes of the Kochs, there has been a generations-long movement to de-fund not just health care and education but the public realm in general, not to mention de-regulating, and disqualifying any government claim to authority. Will's attacks on the "lumpen intelligentsia" is just part of this campaign. As a matter of course, Americans are now openly scornful of any government claim of authority, and wonder  why we lurch from systematic crisis to systematic crisis, with no remedy in sight. Here's a hint: only intelligent, timely collective action (i.e. government) can solve systemic crises.

Meanwhile, Thailand, which has roughly double the population of California, just recorded its sole COVID-19 case and it was from someone travelling there, while in California (up 33 cases just yesterday), and the U.S. (up 39,475 yesterday) infections are still on the rise.

Consistent with the attack on the public realm, Trump administration has been defunding the Centers for Disease Control, specifically disbanding its pandemic response team. Gosh, I wonder why a third world country is beating our pants off in pursuit of public health?


Letters to the Bee

The Bee recently declared bankruptcy, and publishes stories about how it's previous owners, the McClatchy family, has now agreed to sell...