Cats with jobs

 

pic.twitter.com/tZ2t2cTr8d

— cats with jobs 🛠 (@CatWorkers) April 18, 2024

China Builds A Temporary Bridge In Seven Days: Baltimore Will Take Years To Rebuild Theirs

 

Seven days to build a temporary bridge, after the Lixinsha Bridge in Guangzhou was broken by a ship. The temporary bridge was opened this morning. pic.twitter.com/mUThVKNB9E

— Sharing Travel (@TripInChina) March 3, 2024

 From Ian Welsh:

I know I’m a broken record on this, but it’s important. China is dynamic. They’re higher tech in general than America or Europe and they have an engineering culture and a belief in technology which we have lost.

The ability to do this sort of thing just doesn’t exist outside of China, to the best of my knowledge. They’re not just better than everyone else, they’re miles better.

The Chinese have automated delivery vehicles all over the place. Robots in retail outlets and restaurants. The world’s largest high speed rail network.

The future doesn’t happen in America any more, it happens in China. According to people who visit, there’s also essentially no homelessness.

More than that China is willing to regulate: when delivery workers were abused, China stepped in and mandated better treatment. They also, publicly, built recreation and rest stations for them. During the pandemic they put up temporary hospitals in a week.

And more and more they design at home. This is similar to the switch from Britain to America in the 19th century: at first the Brits kept the design jobs, but increasingly they moved to the US. Of course in that case it was helped by the immigration of engineers and scientists, especially Scottish ones, but the Chinese are doing just fine, now, without a lot of Europeans and Americans. (Though there’s still an idealization of whites, if you’re an engineer or a scientist who wants a job in China and can speak Mandarin, you’ll have a job fast.)

It’s not our world any more. It’s the Chinese.

The Sports Team Con

(c) by Mark Dempsey

Most economic studies say that economically, pro sports are a wash. Teams cost their cities at least as much as they produce in revenue. And speaking of costs...Sacramento's Kings got a $70 million loan from the City when they first moved to Sacramento so costs are often at the expense of the public, whether people attend games or not. Sure, your roads may be full of potholes, but at least you've got a team of mercenary athletes to represent your city!

Big league teams regularly move, or threaten to move, unless they get subsidies or stadium financing. The pro football Oakland Raiders got subsidies from Oakland, then Anaheim, then Oakland again and finally Las Vegas. George W. Bush bought into the Major League baseball Texas Rangers with some borrowed money, then persuaded Arlington Texas to finance their stadium, and later sold it for a handsome profit. The rate of return is difficult to calculate since he didn't invest any money. The profit was capital gains, too, so it was not fully taxed. That little score comprises an estimated 75% of Shrub's net worth.

After they had been in Sacramento for a while, the NBA Kings threatened to move and the City of Sacramento magically produced a quarter billion dollars for a newer, City-owned stadium. No tax revenue for the City, and no stake in or veto on the team's movements. And--bonus!--if the team threatens to move again, they could extort still more from a City beleaguered by the beggar-on-every-corner economy it currently enjoys.

Why we can't possibly get a quarter billion dollars to house poor people, we must subsidize the wealthy! Forbes reports the team is now worth roughly double what the plutocrats who bought it paid, and, by design, the City shares in none of those profits.

One foundation of this particular extortion racket is that, in the US, pro sports teams are exempt from antitrust prosecution. A city cannot create a new team and still play in the major leagues. UK sports franchises have no such exemption, and there are reportedly 13 soccer stadiums in the City of London, which exist without extracting public money.

In one public appearance, then-mayoral-candidate Darryl Steinberg proclaimed he was proud to have been part of the state's legislative effort to set aside environmental constraints and build the Kings' new stadium downtown. The Kings, in Steinberg's words, were an "asset," despite their questionable economics, the potential for extortion he set up, and despite a poll at the time that said 70% of Sacramento City voters opposed any subsidy for pro sports.

The Romans had bread and circuses--certainly more cruel than pro sports like football where a mere 30% of participants report brain injuries. And that didn't prevent the fall of Rome. Meanwhile, Steinberg's mayoral stint is expiring, and he's reportedly considering higher office.

In better news, the Sacramento Bee paused its cheerleading for pro sports coming to Sacramento to publish an opinion piece that was at least ambivalent about the possibility of the Oakland's A's moving to town. But the piece only accuses the A's team owner of being "un-woke," and it ignores the costs of promoting entertainment over civic virtue.

Finally, a word about what kind of role models these high-achieving athletes are. They are often drug addicts, or insanely obsessed with just their sport. These are supposed to be providing role models for youth. Better to have public servants cognizant of the consequences of promoting bread and circuses.

AB2200 - Single Payer Healthcare Committee Comments close 4/16/24

Here's my letter to the legislature about AB2200 (the California Guaranteed Health Care for All Act (also known as CalCare) single-payer healthcare for California.

You can still write them (or just copy/paste what's below) by Tuesday, April 16, at this link. Just select AB2200 as the bill on which you'll comment. 

My note:

The US currently pays roughly double the cost of healthcare in single-payer Medicare-for-all nations with worse healthcare outcomes. A World Health Organization study in 2000 ranks US health outcomes (life expectancy, vaccination rates, patient satisfaction, infant mortality, etc.) 37th in the world, between Costa Rica and Slovenia. The Sacramento Bee said, "It's as though we have the health care of Costa Rica and pay six times more for it."

Our current health care also means the US experiences more than a half million medical bankruptcies annually. Canada and France--single-payer countries with similar demographics to the US--have none. Perhaps related: The US incarcerates at five times the world average, seven times more, per capita, than Canada and France. So are French or Canadian crime rates worse than the US? Nope. About the same or less.

Could making more than a half million people desperate every year generate more crime? There's even a Netflix series ("Breaking Bad") that describes how a chemistry teacher starts cooking meth to pay hospital bills. Sure, that's fiction, but it's not too much of a stretch to believe desperation drives people to crime.

We could continue the beatings until morale improves, but we've already tried more policing and incarceration. Between 1982 and 2017 US population increased 42%, but spending on policing increased 187%. 

How about we try treating people well? The all-sticks-no-carrots approach works so poorly. Cops only solve an estimated 15% of crimes, and less than half (40%) of the murders in California. The "copaganda" so ubiquitous on TV says Perry Mason always gets the bad guy, but that's a Hollywood illusion. Let's try something that really works: taking care of people.

Why don't we have single-payer healthcare now? When Harry Truman proposed it in 1948, the southern senators ("Dixiecrats" - now switched to Republicans by Richard Nixon) opposed the bill. They were concerned they might have to share their hospitals with people of color. 

Racism! The gift that keeps on giving!

Happy Dog

 

Happy dog.. 😊 pic.twitter.com/waaQZ0ZOPx

— Buitengebieden (@buitengebieden) April 5, 2024

Political Economist Mark Blythe Analyzes the Economy

 In a wide-ranging conversation, political economist Mark Blythe analyzes the European and American economies, including Modern Money Theory (the only legitimate objection to it I've encountered to date):

How asset managers came to own everything and you failed to notice

Mark Blyth, Rhodes Center for International Finance and Economics:

 

 

The Davis Vanguard Wants to Sacramentorment Davis Housing

(c) by Mark Dempsey

Editor David Greenwald's recent Davis Vanguard commentary "Housing Production Continues to Fall Well Short" is critical of Davis, but--bizarrely--touts Sacramento as the housing producer to emulate. Greenwald also wants less multi-family housing, and more single-family homes in Davis. Sacramento is still well short of the housing production goals it proposes by half or less, but it builds far more single-family housing. Wisely, I say, Davis builds almost none.

Davis is almost out of infill to develop, says Greenwald. He doesn't mention the Sacramento region has 20 years worth of unbuilt infill and yet continues to approve outlying development, which, in turn, means longer CO2-emitting commutes and infrastructure with roughly twice the maintenance costs of infill development.

Greenwald also does not mention the density needed to have working transit rather than long single-occupant car commutes. According to Berkeley planner Robert Cervero that density is roughly eleven units per acre at the lower bound--approximately that of the least dense attached dwellings, duplexes. Typical suburban neighborhoods don't have enough residents to support neighborhood commerce, or enough potential riders to support a bus stop. But we must have more single-family homes!

Incidentally, the most valuable real estate in the Sacramento region is pedestrian-friendly, mixed-use (residences, offices, commerce, etc.) McKinley Park. Buyers pay premiums to live in a neighborhood roughly twice as dense as most single-family developments, yet the Sacramento region builds precious few such neighborhoods.

Worse still, if locals build at lower densities than eleven units per acre, development consumes more land and favors the Central Valley's big business: land speculation. Davis doesn't favor land speculators, but Sacramento does. In fact, the City of Sacramento approved the poster child for bad development: North Natomas. 

Before it was built out, North Natomas was a twenty-foot-under-water agricultural floodplain surrounded by weak levees. It was so notoriously unsuitable for development that a federal grant to increase regional sewer capacity contained a $6 million penalty if that additional capacity served North Natomas.

The speculators didn't fret. They went all the way to then-vice-president G.H.W. Bush and got that prohibitive, up-front $6 million penalty transformed into a more palatable pay-as-you-develop fee--and they also got $43 million in grants to bring those substandard levees surrounding North Natomas up to pre-Katrina standards.

Pay $6 in installments, and get $43! Where do I sign? But wait, there's more!

The speculators bought, or more likely optioned, that ag land for roughly $2,000 an acre. Once they received permission to break up those 40 and 80-acre agricultural minimums for residential/commercial/industrial uses, they sold some to builders for roughly 100 times more. So...a 10,000% profit! Wow! But wait, there's more!

If the speculators exchange their land, once it has that value-added entitlement to develop, for some income-producing property like apartments or shopping centers, they defer income tax on that egregious profit indefinitely. So...10,000% profit, tax-free!

These policies still impact North Natomas residents even today. The levees had to be upgraded after Hurricane Katrina proved they might be inadequate, but the speculators were long gone, so the North Natomas homeowners have to pay more money in their property taxes to shore up those levees.

There are alternatives to these speculator-happy policies. Curitiba Brazil embraced one. The city bought the floodplain and turned it into parks. Curitiba is not rich, so they also got the municipal sheep to keep the lawns trimmed. Still, a poor city got large parks, and doesn't have maintain levees.

Another alternative is what Germany does. Those proposing outlying development must sell the land at the agricultural land price to the local government, then purchase it back at the upzoned price. The entire "unearned increment" (that 10,000% gross profit) benefits the public. 

And public amenities in Germany are very nice indeed. Unlike the US, where engineers grade our infrastructure a stunning "D+," and every so often a bridge collapses, German infrastructure is in good shape. Germans have single-payer healthcare, but they also offer higher education without tuition, even for non-native Germans. The arts budget for just the City of Berlin exceeds the US of A's National Endowment for the Arts.

Meanwhile, from another story about the future of Sacramento City's housing: "Building this [higher] density in proximity to high-frequency transit hubs … prioritizing infill development, that’s really where we’re gonna see us achieving housing affordability." You mean...like Davis?

So...I'd suggest Mr. Greenwald find some other jurisdictions to admire when it comes to housing policies. Sacramento has a long way to go before it can do as well, or as sustainably as Davis.

--

The author of this piece spent nearly a decade on a Sacramento County Planning Advisory Council (CPAC) and observed the above and many other dismal Sacramento planning practices.

Stephanie Kelton Wraps Up Her Australian Tour of the film "Finding the Money"

Ever wonder where all that noise is coming from?

 

The owner recieved noise complaints from neighbours when she was at work so she set up a camera This is what she saw pic.twitter.com/sDjQ2YpIbN

— B&S (@_B___S) March 19, 2024

The US is addicted to militarized Keynsian stimulus

Here's an interesting take on capitalism as a support for huge military budgets: Marx observed that real, competitive capitalism tends to drive profits downward. We can't have that! So, unproductive military spending is one answer. I'd call it a stupid answer, but it would have to rise several levels before it reached stupid.... but that's what we have.

Meanwhile, military contractors have spread their operations out so many states' employment depends on them. A job guarantee could address this political maneuver, but until there's something to deal with out-of-work defense plant employees (and fossil fuel workers) we're going to be stuck with big military budgets (and many coal mines).

The latest Copaganda on retail theft

 

Even New York Times (and Atlantic, NPR, LA Times, and many others) debunked this nonsense. It was a cash grab by cops and retailers to socialize corporate security, increase police budgets, deflect from labor practices, and promote anti-online legislation. https://t.co/PONRPmYZzu

— Alec Karakatsanis (@equalityAlec) March 20, 2024

Nice! Robot Weeder

 

Meet EcoBot the professional weeder.

The Machine Learning, Solar powered apparatus that can run for the entire day pulling weeds.

Replaces expensive in every possible way, herbicides. pic.twitter.com/6dR68Zj5g0

— Brian Roemmele (@BrianRoemmele) March 18, 2024

A quick review of the "Dune 2" sequel

(Full disclosure: My wife and son loved Dune, but hey, they're drama queens. And yes, I read the book. Not my cup of tea then, either.)

My take: If you want to spend nearly three hours watching dark, depressing landscapes, with dark, simple-minded, depressing mood music behind it, and not even the tiniest bit of levity, or humor...this is the movie for you. 

Oh yes, and don't forget: planet Arrakis has gigantic worms that make "spice"--a drug that allows you to see into the future (essential for interstellar travel)! But you're supposed to already know this.

And sure, every desert creature on earth is small because the hot sand doesn't provide much to eat, but heck, this is fiction, so all bets are off. Still, the gigantic worms were a blow to my willing suspension of disbelief. Sand is apparently a gigantic worm super-highway--they zip to and fro, sometimes with riders and cargo. Never disclosed: How do they load the cargo, and how do they dismount? I'd call that a plot hole you could drive a gigantic worm through.

So ... the movie itself hit me with an audible "thud"--like that anvil that plagues Wile-E-Coyote--and simply did not impress at all as entertainment. I actually love some of the cast. In Guardians of the Galaxy Dave Bautista masterfully and hilariously plays Drax the Destroyer but he's wasted as Glossu Raban (a bad guy) in Dune 2. In Guardians, he's delightfully clueless. In Dune 2, he's just clueless.

If you want palace intrigue, like Dune 2 attempts to explore, go to Youtube and watch The Story of Yanxi Palace (Chinese with subtitles). It's ten times more clever than Dune (the book or the movie) and has a spunky heroine to boot.

In summary: Two thumbs down. Oh, and I'm disappointed in myself, too -- some people (like me) never learn. Dune 1 was, if anything, worse.

"Fiscal Restraint is Dead"...and I say "thank goodness!"

(c) by Mark Dempsey

The following is an email sent to Debra J. Saunders (dsaunders@reviewjournal.com), whose editorial appears in the March 17, 2024, Sacramento Bee (Headline: "USA IOU. Brother, can you spare a trillion?") and starts with what is quoted first in my email.

Dear Ms. Saunders,

I read your editorial in today's Sacramento Bee, the one starting with "Fiscal restraint is dead" and that includes the clever characterization of Biden's fiscal policy "Call it: Tax and Spend More--and Still Borrow More." It's cute, succinct, and, unfortunately, sadly misguided.

In effect, you ask us to believe dollars grow on billionaires, and the federal government must get its dollars from the population. That would make federal debt the equivalent of household debt. But, unlike a household, the federal government creates dollars. It can make as many as it needs at the direction of Congress. Federal debt is nothing like household debt. It's like bank debt.

Your bank account is your asset, but thanks to double-entry accounting, it's also the bank's liability–the money the bank owes you. Getting the bank to diminish that debt would simply make your account smaller. Not very sensible.

You also cite the sequence of federal fiscal events as "tax and spend." Where do people get the dollars to pay those taxes if the monopoly creator of dollars doesn't spend them first? The correct sequence is "spend first, then retrieve dollars in taxes." Since the spending logically must precede any tax revenue, it cannot be provisioned by taxes. The taxes are important to create the demand for dollars, but they do not fund federal programs.

Incidentally, what do we call the dollars spent, but not retrieved in taxes? You know...the ones in your wallet? Answer #1: the dollar financial assets of the population. Answer #2: national debt. Both answers describe the same thing, just as your bank account is your asset, but the bank's liability.

Like most fans of "Fiscal Responsibility™," you also seem to believe we'll run out of dollars if we continue on this path. Do you also believe the Bureau of Weights and Measures will run out of inches, or the scorekeeper at the ball game will run out of points?

No less than former Federal Reserve Chair Alan Greenspan says the federal government "cannot become insolvent with respect to obligations in its own currency. A fiat money system, like the ones we have today, can produce such claims without limit."

Here's Greenspan lecturing Paul Ryan about the same thing:

 

Deficit scolds want to cut federal spending, especially the programs responsible for 85% of federal outlays–the military, Social Security, and Medicare. Military spending is seldom cut, but social safety nets enjoy no such immunity. Cutting those is especially cruel since these programs are not particularly generous now and 65% of seniors have only Social Security and Medicare to fund their retirement.

The real intent of this proposed austerity, then, is "labor discipline." That's the message that you had better take whatever crappy job is on offer or suffer the indignities of poverty, even homelessness and starvation. If you're extra rebellious, we'll put you in a cage. As a consequence of our allegiance to labor discipline, with 5% of the world's population, the US has 25% of its prisoners.

The austerity is cruel and completely unnecessary. Treating people well even reduces crime. The US incarcerates at five times the world's average, per-capita, seven times more than Canada does, even though Canadian crime is actually less than US crime (per-capita). But, unlike the US, Canada doesn't have medical bankruptcies. The US has half a million every year.

What you're promoting is, in effect, the whip in the hands of the plutocrats--perhaps the ones for whom you work. Is that really what you want to do?

Debunking (Conventional) Economics

by Mark Dempsey

Unfortunately, conventional economics is bunk. To explain that statement, I've conducted a CSUS Renaissance (senior education) Zoom class recently that goes into some detail about why conventional economics gives intellectual respectability to some of the worst human impulses, and to discuss what realistic alternatives exist. 

Economics itself is a social science whose scope spans everything from psychology to mathematics, so it's pretty comprehensive, and is often the justification for public policies we currently enjoy. 

Recommended: If you want to clearly see the slides in the presentation, click on the icon in the bottom right of the video screen.

Here are links to the full class recordings. Each video is about 90 minutes:

Class #1 Recording - Introduction, technical Zoom matters, and a bit of psychology
Class #2 Recording - More psychology and a brief examination of the complexity of the subject
Class #3 Recording - Money, its origins and definitions, Modern Monetary Theory (MMT)
Class #4 Recording - a (brief) look at conventional economics, and its history and shortcomings
Class #5 Recording - Government, public money, and what spending it gets. Banking
Class #6 Recording - Recaps previous classes, and concludes with an alternative narrative to what's currently on offer.

If you prefer text to videos:

The Slides

Class Text

My blog

The effect of sanctions on Russia (Hint: no biggie)

From Michael Roberts' blog. Contrary to Western predictions, Russia has weathered the sanctions imposed by the NATO allies without a significant downturn (see the graph below)

Excerpt:

Over the past two years of war, Russia has managed to steer through sanctions, while investing nearly a third of its budget in defence spending. It’s also been able to increase trade with China and sell its oil to new markets, in part by using a shadow fleet of tankers to skirt the price cap that Western countries had hoped would reduce the country’s war chest. Half of its oil and petroleum was exported to China in 2023. And it became China’s top oil supplier in 2023, according to Chinese customs data. Chinese imports into Russia have jumped more than 60% since the start of war, as the country has been able to supply Russia with a steady stream of goods including cars and electronic devices, filling the gap of lost Western goods imports. Trade between Russia and China hit $240 billion in 2023, an increase of over 64% since 2021, before the war.

Contrary to Western forecasts, Russian industry has grown due to war-related production, while demand for domestic manufactures has also increased due to a fall in imports because of sanctions. The automobile industry – which was hit hard initially, as Western and Japanese car manufacturers left Russia en-masse – has been recovering strongly month by month, as Chinese companies have stepped in.

....And the Russian economy remains fundamentally natural resource linked. It relies on extraction rather than manufacturing. Mining accounted for around 26% of gross industrial production in July 2023, and three industries – extraction of crude petroleum and natural gas, coke and refined petroleum products manufacturing and basic metals manufacturing – made up more than 40% of the total. “The regime is resilient because it sits on an oil rig,” says Elina Ribakova, a non-resident senior fellow at the Peterson Institute for International Economics. “The Russian economy now is like a gas station that has started producing tanks.”

War production is basically unproductive for capital accumulation over the long run. And Russia’s potential real GDP growth is probably no more than 1.5% a year as growth is restricted by an ageing and shrinking population and low investment and productivity rates. The profitability of Russian productive capital before the war was very low.

The Russian war economy is well placed to continue the war for several years ahead if necessary, but when the war is over, Putin may face a significant slump in production and employment.

....

Meanwhile, a contradiction from Foreign Policy: Claims That Sanctions Hurt Europe More Than Russia Are Wrong

Big news: Victoria Nuland resigns....And Synema elects not to run

 Ms. Nuland supervised the US-encouraged Ukraine coup that occurred in 2014, helped select the new Ukraine government (no messy democracy needed) and has cheerlead the war ever since. That she's resigning, and being replaced by the ambassador who was in place when the US withdrew from Afghanistan is a faint glimmer of hope for peace.

For more, see commentator Gilbert Doctorow's article: Victoria Nuland resigns: what can this mean for U.S. policy on Ukraine?

Also: Comment from Naked Capitalism... and Glenn Greenwald

One of the single most psychotic and bloodthirsty warmongers to serve in the US Government in decades:

Far beyond serving as Dick Cheney's top advisor for the Iraq War, and overseeing NATO expansion for Bush - including Ukraine - she then ran Ukraine for both Obama and Biden. https://t.co/JdirscPP65

— Glenn Greenwald (@ggreenwald) March 5, 2024

Also: Kyrsten Synema elects to not run.

We do not have a fractional reserve banking system. Banks create deposits out of thin air.

Answering the question "Does the U.S. have a fractional reserve banking system?"

From Quora::

No. The U.S., as well as pretty much every other country, uses what is better described as a credit creation system.

In a true fractional reserve system, banks collect and then lend out 'hard' currency, in the way we have all learned from the old story. It is easiest to think of hard currency as coins – the bank has 100 coins; it can lend out 90, and keeps 10 on hand in reserve. The next bank collects those 90 coins; they can lend out 81, and keep 9 in reserve, etc., etc., until you end up with the same 100 coins in existence, plus 900 in bank accounts. Bank lending is limited by the amount of hard currency in existence. By extension, cash withdrawals are limited as well.

The way banks actually operate is by creating credit on ledgers. Loans are “funded” 100% with credit; if you take out a $1000 loan with $200 in interest, your bank simply marks up your account by $1000, and holds your promissory note, nominally worth $1200, as their asset. M1 has just increased by $1000, and bank equity has (nominally) increased by $200. The loan, and the funding, are complete at this point. When you write a check that is deposited at a different bank, reserves (“hard” currency, liabilities of the central bank) are transferred from your bank’s reserve account to depositor’s bank’s reserve account, your account is marked down, and depositor’s account is marked up. This transaction is financially neutral for all parties.

This is where you will get an argument from fractional reserve people. Since the bank ends up transferring hard currency, isn’t this just a more complicated way to describe FR banking? Well, no. The bank didn’t need to collect reserves before making the loan; reserve requirements are calculated days after the loan was made. Also, the central bank will always supply enough reserves to banks, so hard currency isn’t a limiting factor. Finally, if you picture two banks, each creating identical loans that get deposited in the other bank, no reserves will be transferred, yet $2000 has still been created. Which is pretty much what happens on a large scale every day – the amount of loans created every day is far greater than the net amount of reserves that must be transferred in settlement at the end of the day. In our credit creation system, reserves are merely settlement funds. If you dissolved the central bank/settlement agent tomorrow, banks could still operate just fine settling up among themselves, using mostly bank-created credit to do so. If things got really unbalanced, they could then settle up using other assets. No “hard currency” required for loans or transactions. The central bank is now merely a useful tool for settlement, funding government spending, and backstopping banks in crisis.

This paper by Richard Werner explains the three theories of banking in good detail:

The Bank of England's paper on the subject, is a more technical read.

Charlie Munger criticizes conventional economic thinkers

As a partner of Warren Buffet, Munger has been a spectacular success, out-performing market averages often. He points out the following are flaws in typical economics (from talk nine in Poor Charlie's Almanack) and MBA thinking:

1. Fatal Unconnectedness, leading to man-with-a-hammer syndrome, often causing overweighting what can be counted.

2. Failure to follow the fundamental full-attribution ethos of hard science.

3. Physics Envy (hard form efficient markets theory - too much precision in physics-like formulae)

4. Too much emphasis on macroeconomics (the fallacy of composition fools even Munger, or he's trying to distract from systemic problems)

5. Too little synthesis (with other disciplines. Raising prices can sometimes psychologically convince buyers the product is better..Also: conventional thinking omits higher commissions, in effect bribery!)

"Why did Max Planck, one of the smartest people who ever lived, give up on economics? Planck's answer is "It's too hard. The best solution you can get is messy and uncertain."

6. Extreme and Counterproductive psychological ignorance.

7. Too little attention to second and higher order effects. (consequences have consequences, economics ignores gaming the system[s])

8. Not enough attention to the concept of febezzlement (functional equivalent of embezzlement --leads to false feelings of prosperty)

9. Not enough attention to virtue and vice effects - "The cash register did more for human morality than the Congregational Church....guilt, dervied from religion, has been a huge driver of a reliability ethos, which has been very helpful to economic outcomes for man...to function best,  morality should sometimes a pear unfair, like most worldly ougcomes. The craving for perfect fairness causes a lot of terrible problems in system functions."

10. Not enough attention to embedded Ponzi schemes

"It's not bringing in the new ideas that's so hard. It's getting rid of the old ones." - Keynes

Housing first can work

See Housing First Can Work If Done Right (worth reading the entire thing)

Excerpt: 

"Despite enjoying decades of bipartisan support, Housing First programs have become a target in the culture wars. Housing First provides housing and wraparound services that are not predicated on sobriety or psychiatric treatment. Conservative critics challenge this approach, arguing instead that people should be required to work and participate in abstinence-based addiction treatment or faith-based programs to be eligible for housing.

"These opponents of Housing First begin from the flawed premise that human pathology is the root of homelessness. By contrast, research clearly shows that housing shortages, wage inequality, and high rents—not mental illness, substance use, or even poverty—are its real causes. These structural factors explain why homelessness is more common in Seattle and San Francisco than in Detroit or Oklahoma City, where there is still plenty of addiction and mental illness, but where people with these conditions spend their time indoors."

Good public policy related to homelessness, is not necessarily cheap, but it's cheaper than building bigger jails. (from the above link) "It is true that by keeping people in homes and out of emergency rooms and jails, Housing First programs can reduce costs in overall municipal expenditures. Yet many of those who experience homelessness do not cycle through ERs or have costly health issues. Housing this part of the population might be the right thing to do, but it won’t necessarily save money.

"Cost is also tied to city-level housing markets and regulations. Houston has worked miracles with Housing First, but Los Angeles has floundered. The difference lies in the fact that Houston has abundant housing supply and few restrictive zoning laws. In Los Angeles, efforts to build new units have been thwarted by NIMBYism, high costs, and the uncertainty that surrounds all construction projects in California. To make progress in addressing homelessness where housing is in short supply and construction delays are inevitable, we need to invest in short-term shelter options while taking steps to expand the housing supply in the long run."

Also see:the previous post, Even Good Public Policy Struggles with Sabotage

How to talk to mainstream journalists

 

"I despise the Prime Minister"@SamCoatesSky speaks to @georgegalloway from the Workers Party of Britain as he wins the Rochdale by-election.

Listen ⬇️

🔗 https://t.co/UwP1r4C8mZ

📺 Sky 501, Virgin 602, Freeview 233 and YouTube pic.twitter.com/McUg7Wldx9

— Sky News (@SkyNews) March 1, 2024

Even Good Public Policy Struggles with Sabotage

This account of Oregon's attempt to adopt an "enlightened" de-criminalized approach to drug addiction documents how its execution sabotaged its success. Its failure has been widely touted as proof that you just can't be too nice to addicts. Why it failed is a little more relevant. Just handing an addict a ticket, without making sure addicts have an alternative (rehab) is ineffective, and that's what the Oregon cops were doing.

This is reminiscent of the "enlightened" approach to mental illness. The Kennedy administration closed the big one-flew-over-the-cuckoo's nest federal asylums, saying they would fund alternative, smaller transitional housing...and then didn't fund the alternative. Reagan closed the big California asylums, too.

Now the homeless are demonized as addicts and mentally ill--and there are certainly addicted, mentally ill homeless--but the real story for the majority of the homeless is that rents have been rising faster than incomes. The problem isn't one of resources, either. The US has more vacant homes than homeless. The resource distribution is misguided too.

 

People take note of these policy failures. One "Dead-Head" (hippie) Oregon woman who was a fan of decriminalization thought "it was wrong to respond to addiction with criminal punishment. But now she feels decriminalization 'wasn’t the best idea.' But why? Because America is not a place 'where there’s a lot of public assistance.' In other words, we’re too cruel and stingy to actually help drug addicts, so the only option is to throw them in prison!....

"But even if Oregon did increase addiction services and get the police to actually try to help people, there are still some foundational assumptions behind the state’s decriminalization plan that have to be questioned. First, the very idea of relying on police is questionable. I agree with the law’s critics that a system where police give meaningless citation tickets to drug users is not going to do very much. But why are police the ones we expect to deal with people affected by substance use? The system should be designed so that police aren’t interacting with these people at all, but rather unarmed aid workers who are actually trained in how to convince a person with a substance use problem to seek treatment. (Police are mostly trained on how to use force to ensure compliance with legal rules.)

"Second, even providing good, free services for substance use disorders and connecting people with them successfully doesn’t address some core reasons for widespread drug use. In his powerful book about the War on Drugs, Chasing the Scream, Johann Hari argues that it’s not just that drugs are made of addictive chemicals, but that being poor, lonely, and traumatized increases people’s likelihood of using:

Chemical hooks are only a minor part of addiction. The other factors, like isolation and trauma, have been proven to be much bigger indicators. Yet the drug war increases the biggest drivers of addiction—isolation and trauma—in order to protect potential users from a more minor driver of addiction, the chemical hook. If we legalize, somewhat more people will be exposed to the chemical hook in drugs—but the even larger drivers of addiction, trauma and isolation, will be dramatically reduced.

"Legalization does not necessarily substantially reduce trauma and isolation, however, even though we know prison worsens these problems. We still live in a very isolating society. A strong social support system is important, and legalization alone doesn’t make America a less atomized society. We have a loneliness crisis in this country that makes it harder to address drug use crises." (from the initially linked article, well worth a full read)

Update #1: The Oregon legislature just re-criminalized drugs.

 

This misguided approach is not just confined to "justice-related" items. Here's an article demonstrating the sabotage, ignorance and arrogance infects even infrastructure development too. 

Update #2: Sabotage is everywhere: Utility fraud and corruption are threatening the clean energy transition. Excerpt:

At a press conference last month, flanked by sheriffs and attorneys, Ohio Attorney General David Yost announced the indictments of two utility executives who allegedly tried to “hijack” state electricity policy for their own corrupt ends by paying $4.3 million in bribes to Sam Randazzo, then chair of the state Public Utilities Commission. The two men stand accused of trying to bilk taxpayers out of $1.2 billion on behalf of their former employer, FirstEnergy.

The "Finding the Money" Documentary draws some attention...

 

Think about this. https://t.co/bR8VIrvd1Z

— Stephanie Kelton (@StephanieKelton) February 21, 2024

The State of COVID + Generous Rich Peeps

 

Stranger in drugstore: Why you wearing a mask
Me: Don’t want Covid
Stranger: LOL it’s here to stay
Me: Why you buying sunscreen, isn’t the sun here to stay?
Stranger: What
Me: Why you buying hand sanitizer, aren’t germs here to stay? Why you—
Stranger: Fuck this pic.twitter.com/LIdtc42RYF

— 🐀 (@Guiness_Pig) February 13, 2024

one of the biggest scams in america is celebrity philanthropy. i know it’s in your nature to want to believe there’s rich people out here doing good by regular folks but…that’s rarely the case. once u see how the non profit scene works u will get insanely jaded pic.twitter.com/Wxx9sinQmR

— lil h (@bigsnugga) February 14, 2024

Tucker Carlson's Putin Interview

 

Here's a complete transcript (English + Russian)

Naked Capitalism's reaction.

Ian Welsh's reaction.

Gilbert Doctorow's reaction. 

Larry Johnson's reaction...cites US press reactions.

I confess I'm partial to the transcript rather than the video. Ian Welsh is my favorite link for reactions.

Pretty much the universal consensus among those reactions: Putin is at the top of his game, and obviously more intelligent and coherent than any Western leader, although Doctorow criticizes him for starting with a history lesson. (One might expect a country whose form of polite address names ancestors--e.g. Vladimir Vladimirov--would value historical explanations.)

I'll add that electing weak, even senile leaders serves the portion of the population that wants a weak state. These people are the wealthy elite who often got that way through fraud or deceit, or inherited from those who did ("Behind every great fortune lies a great crime" - Honore de Balzac). They have found strong states serve too many people, and threaten the fortunes this elite can extort from the population with impunity.

US vs. China

 

This is an interesting study by Europe's Centre for Economic Policy Research (CEPR) that demonstrates that much like "the US is the world’s sole military superpower" (spending more on its military than the ten next highest spending countries combined), China is now "the world’s… pic.twitter.com/IaCyzt4as3

— Arnaud Bertrand (@RnaudBertrand) February 4, 2024

Warren Mosler (a Modern Monetary Theory Founder) explains how money works

 

Sacramento's Supervisorial Candidate: These candidates are vying for 4th district supervisor

by Ariane Lange
alange@sacbee.com  

With Sue Frost retiring  as the supervisor representing  northeast parts of  Sacramento County, her  4th District seat is up for  grabs in the 2024 primary  election on March 5.  

The 4th Supervisorial  District is a boomerang shaped  district that includes  parts or all of Citrus  Heights, Folsom, Orangevale,  Antelope, Rio Linda,  Elverta, Gold River, Rancho  Murieta, North Highlands,  Carmichael, Foothill  Farms and Fair Oaks.  

Three candidates -  Rosario Rodriguez, Braden  Murphy and Bret Daniels  - are campaigning for the  seat.  Though the Board of  Supervisors  doesn't  always  attract the  same level  of attention  as other  local government  bodies, it  wields tremendous  power and  controls a  budget  approaching  $9 billion.  Five  board members  oversee  the  agencies  that provide  health and  human  services for  all county  residents.  

In unincorporated  areas, county agencies  also provide additional  services, such as parks,  road maintenance and law  enforcement via the Sacramento  County Sheriff's  Office. The Sheriff's Office,  which reports to the  board, runs the two county  jails.  

The Sacramento Bee sat  down with each of the  candidates to discuss their  positions on three critical  issues facing the Board of  Supervisors and county  residents. All three called  for an audit of homelessness  spending. Here's  who they are, and where  they stand, with the election  now less than two  months away:  

BRET DANIELS  

Daniels, a registered  Republican in the nonpartisan  race, began his  Citrus Heights political  career in 1999 when he  was elected to the City  Council. He became mayor  in December 2004 and  resigned in November  2005. Although he took  some years off from the  council, he was again  elected to that body in  2016, and he's now serving  as mayor.  He is an Air Force veteran  and a former sheriff's  deputy. He has backed  multiple efforts to prevent  taxes from being raised in  Citrus Heights.  Daniels was censured by  the Citrus Heights City  Council in 2018 after police  reports accused him of  stalking and harassing an  old girlfriend. Police determined he had not committed a crime, and Daniels  denied the woman's  reports, The Bee wrote at  the time. He also told the  council that even if the  woman's reports were  true, it was "a private  matter." When asked late last year about the allegations,  he declined to comment  further.  

BRADEN MURPHY  

Murphy is a political  newcomer. He is registered  as a Democrat and  stressed his commitment  to fiscally responsible  governance.  A Folsom father of four,  Murphy was a presence at  multiple supervisors meetings  in 2023 as he campaigned  alongside unionized  in-home supportive  services workers fighting  for a higher wage. Those  workers provide critical  care for elderly and disabled  people, including  Murphy himself, who has cerebral palsy. Keeping  people out of poverty,  Murphy said, is more  cost-effective than providing  services after people  fall into deep poverty and  possibly become homeless.  

ROSARIO RODRIGUEZ  

Rodriguez, who is registered  as a Republican,  served as mayor of Folsom  in 2023. Voters elected her  to her City Council seat in  2020, and she was  appointed to a one-year  term as mayor by the City  Council in December  2022. She's lived in Folsom  since 2008, where  she also owns Sutter Street  Taqueria in the city's historic  district.  

She is a founding member  of the Folsom Alliance  for the Unhoused. Before  joining the City Council,  she spent three years on  Folsom's Historic District  Commission, and she was  a board member of the  city's Chamber of Commerce.  The outgoing rightwing supervisor, Frost, has  endorsed her.  

WHERE THE  CANDIDATES STAND  

The Bee asked the three  candidates in the race for  the 4th District to address  some of the key issues before  the board.  

Homelessness  

The county has said that for every one person who exits homelessness in  Sacramento County, three  more will become homeless.  

In a recent survey commissioned  by the board,  county residents overwhelmingly  described  homelessness and the high cost of housing as the two  most serious local  problems. The county is  responsible for the services - particularly health,  substance use and mental  health services - provided  to homeless people across  the county, as well as  additional services for  homeless people in unincorporated  areas.  

The board oversaw  $177.5 million in homeless  spending in the 2022-2023  fiscal year.  

[Editorial note: Skyrocketing rental prices remain a top contributor to the rise in homelessness. The report finds that 58 percent of former leaseholders experiencing homelessness lost housing due to economic conditions, most of whom point to high rent costs as the primary cause of their homelessness. Aug 21, 2023 ... So... which candidate talks about rent rises, not "mental health"?]

Here's what the candidates  said they would do about homelessness.  While each had different  approaches, all of them  called for an audit of  

• Bret Daniels: "One of  the things we don't do in  Citrus Heights is we don't  allow encampments and  stuff like that to form and  to create blight," Daniels  said. "We created what we  call a high-impact team.  Their job is to get out  there and find these  things, contact people.  And then we also have a  navigator team. And that  team gets out there and  finds out: What services  do you need? ... Can we  give you a hand up into  something? Or are you just  a miscreant and need to  go to jail?"  

Although Sacramento  County has interpreted a  court ruling narrowly  enough to allow sweeps to  continue at a steady clip, it  is illegal to criminalize  homeless people for being  homeless in public when  there is no alternative  place for them to go. The federal ruling in Martin v.  Boise came down in 2018.  

Daniels said he was happy that Senate Bill 43  was signed into law by  Gov. Gavin Newsom in  October- the law expands  the definition of  "gravely disabled" to  make it easier to place  Californians with substance  use disorders into  mental health conservatorships,  which generally  put the conservatee's  health care decisions in  the hand of a conservator.  

"That is going to give  them a tool to be able to  use with folks whose addictions  have gotten to  that point to make them  gravely disabled," Daniels  said. "There's no compassion  and allowing people  to walk around on the  streets, when they can't  take care of themselves."  

• Braden Murphy:  "The way to stop the  bleeding on homelessness  is to make sure that low income  renters are able to  stay where they're at,"  Murphy said, referencing  the fact that the county  says people are becoming  homeless three times  faster than they're getting  off the streets.  

Renter protections,  Murphy said, are "the  most fiscally responsible  way to make sure that  people are taken care of  when we're talking about  government dollars. If  somebody's rent is raised,  or they're unjustly evicted  from a low-income apartment,  now they're homeless.  They're going to be  much more expensive to  take care of, to help. And  so when you're in a housing  crisis, you have got to  be making sure that renters  are taken care of. And  the county is not always  siding with low-income  renters. It's amazing to  me, because they're piling  on further to the problem  that they already cannot  deal with."  Murphy said the moment  calls for bold policy.  

"If the housing is specifically  designed for low income  people, then until  we have the amount of  affordable housing or  shelter to house everybody  that's on the streets, rent  should not be able to be  raised at all," he said.  "You may say, 'Oh, that's  a really progressive policy.'  But again, no, that is  the cheapest way." It is a strategy that would avoid  tax increases, he said.  "I know we live in these  left-right hyperpartisan  times," he said. "And I am  proud to say I'm the only  non-Republican in the  race. But also, we need to  be looking at it from a  reasonable standpoint:  The cheapest thing we can  do is keep people off the  streets."  

• Rosario Rodriguez:  Without a coordinated  regional approach, Rodriguez  said, homeless people  get shuffled between  different jurisdictions  without ever getting meaningful  help. She mentioned  the city of Sacramento's  "Incident Management  Team," announced  in 2023. "It  didn't fix the problem,"  she said. "It just shifted  where people went. And  so all right around the  time that the IMT was  beginning to make the  movements and beginning  to move camps, we (in  Folsom) are now seeing a  major influx of transients."  

"We need to look at the  homeless approach from a  perspective of a process of  improvement and identifying  what is working out  and what is not working  out," she said. "But what  we currently have right  now is every city is doing  their own thing. And so all  we do is shuffle the  problem of homelessness."  

She said the entire  homelessness system  needed to go through a  training on Kaizen, the  Japanese business philosophy  of efficiency. She also  said she is "not a fan of  housing-first," which is  the evidence-based principle  that getting people into  stable housing should be  prioritized over other  services and goals, including  mental health  treatment and sobriety.  Housing-first is supported  by the federal Department  of Housing and Urban  Development.  

Jail conditions and expansion  

In August, the Sacramento  County Board of  Supervisors voted 3-2 to  spend close to $1 billion  on a new intake and  mental health annex at the  downtown Main Jail,  which is overseen by the  county. The board cited a  2019 settlement that was  the result of a federal class  action lawsuit as the reason  for the new annex.  The board would have to  take more steps to actually  begin spending that  money. Supervisors Phil  Serna and Patrick Kennedy,  whose seats are not up  for reelection in 2024,  voted against the expansion.  The lead plaintiff in the  class action lawsuit, Lorenzo  Mays, spent more  than eight years in solitary  confinement. As a result  of the lawsuit, the county  must improve conditions  in the jail, particularly  around suicide prevention,  medical and mental health  care, disability accommodations  and the use of  solitary confinement.  But more than four  years after the settlement,  the county is still not in  full compliance. If it remains out of compliance  the county risks seeing the  jail forced into a federal  receivership in which the  court would appoint a  third party to control the  implementation. The  county would then have to  foot the bill for whatever  the appointee deemed  necessary.  

• Bret Daniels: Regarding  the $1 billion investment,  "It's impossible for  me to say to the level of  appropriateness," he said.  "It sounds like it goes too  far. But that's not part of  my life - I'm not intimately  connected to, are  they doing what they were  told they have to do, or are  they doing something  above and beyond?"  

Daniels, who used to  work for the Sheriff's  Office, said, "It should not  be the jail's responsibility  to deal with people who  are mentally ill. They  shouldn't even be in jail,  probably. They probably  did something that went  to the level of a crime,  obviously. But the real  problem isn't that they want to be a criminal. The  real problem is they're mentally ill, and sitting in  a jail is not gonna get  them better. And so they  need to be in some other  type of facility."  

That point has been  raised by many supporters of the Mays litigants: Significantly reducing the jail  population and diverting  many mentally ill people  into treatment facilities  would go a long way toward  meeting the requirements  of the consent decree,  they argue. But Daniels  does not believe that  the county should stand  up such a facility, although  the county is responsible  for mental health services  under the law. "That  shouldn't be on the shoulders  of the county," he  said. "That's a societal  problem. That's a state  issue."  

The Bee informed Daniels  that the county is  formally responsible for  mental health services.  Daniels said again that the  responsibility should fall  on the state.  Daniels also noted that  he is against sentencing  reform that has kept many  people out of jail. He said  he is so frustrated with  California's criminal justice  reforms, including  those that reduced punishment  for certain drug  offenses, that it's contributed  to his desire to move  out of the state.  

Reducing the number of  people in the jail is a key  part of compliance with  the Mays Consent Decree.  The Board of Supervisors  has already formally  adopted jail population  reduction plans in response  to the decree. Multiple  parts of the plan  include mental health  treatment, including diverting  people to the county-run Mental Health  Treatment Center, a 50-bed locked facility.  

• Braden Murphy:  "They're taking out a  billion-dollar loan for the  jail expansion - a billion  dollars they don't even  have that's gonna go on  the backs of middle class  taxpayers to pay for a  bigger jail that they don't  even need," Murphy said.  He referenced the connection  between poverty,  homelessness and incarceration:  A 2022 Sacramento  County Jail Study  found that 30% of people  being released from the  jails were possibly  homeless. Homelessness prevention he said, would help reduce the jail population by keeping people's lives on track. "We need to avoid having  people go to jail by allowing  them to stay in their  apartments where they're at."  

He also said that voters  should question the priorities  of a supervisor who  would direct so much  money toward expanding  the jail.  "If we are going to (get  a loan for) a billion dollars,  we should use that billion  dollars to build affordable  housing and/or mental  health facilities in Folsom  and Citrus Heights and  Rio Linda where people  need them, so that they  don't have to get arrested  and go to jail to get the  services they need," he  said.  His plan, he said, would  lead to "saving taxpayers'  money, getting people off  the streets, and really,  frankly, sanity at the same  time. I mean, people  should ask themselves, do  they want elected leaders  that are supporting raising  their middle-class taxes to  expand the jail size? Or  should we elect somebody  working to keep people  from going to jail in the first place by stopping that  from happening with common-sense services?"  

• Rosario Rodriguez:  Rodriguez was not sure  whether $1 billion was an  appropriate amount of  money to spend on expanding  the jail. "I'm a  data-driven person," she  said. "I need data to make  that decision."  

But she did have  thoughts about diverting  people with mental illness  away from the jail. The  2022 Sacramento County  Jail Study found that 55%  of people in the jail had  behavioral health conditions,  and people with  serious mental illness  specifically made up a full  third of jail bookings. A  full quarter of people with  a serious mental illness  were also homeless. Rodriguez  observed some of  that firsthand.  

"I did a tour of the  county jail a couple of  months ago," she said in  December. "And this is  what I walked away with:  There are people with  severe mental health issues that are homeless  that are negatively impacting  public safety and the jails."  

"One of my big wish  lists as I work through homelessness is to identify  those with severe schizophrenia,  severe psychosis,  and get them off the  streets," she said.  The government has a  legal mandate to house  disabled people under its  care in the least restrictive  setting possible. The U.S.  Supreme Court ruled in  1999 that "unjustified  institutional isolation of  persons with disabilities is  a form of discrimination."  

Rodriguez's dream, she  said, would be to create a  mental health institution  at the Boys Ranch, a remote  property near Rancho  Murieta which used to  hold a juvenile detention  treatment facility. "I think  it's our responsibility as  government," she said, "to  ensure that we have them  in a place where they are  not going to harm themselves  or others."  

Ariane Lange:  916-321-1039,  @arianelange

[One added note...even if mental illness is not the primary cause of homelessness: " After the deinstitutionalization movement began in California in the 1960s, many state mental health hospitals closed, forcing many folks who needed a lot of care onto the streets. Without those facilities, many mentally ill people ended up in jails and prisons which are not set up to provide safe, compassionate care for brain illnesses. But in 1981, when President Ronald Reagan deinstitutionalized the mentally ill and emptied the psychiatric hospitals into so-called “community” clinics, the problem got worse." from here]

Supervisor Frost Strikes Out Again

 (c) by Mark Dempsey

Having just received Supervisor Sue Frost's recent newsletter, I'm shaking my head in disbelief that anyone could propose such counter-factual, counter-productive senselessness. Frost is a fear-monger--and apparently only Sue can protect us! 

The opening paragraph of the newsletter reads "I’m weary of news reports about criminals who prey on our citizens...." and the email goes on to tout legislation that would increase incarceration--she's "tough on crime" despite generations of evidence that incarceration and increased policing does nothing to prevent crime, and ignoring the fact that despite the panicky headlines, crime has been declining in recent years.

Ms. Frost has allied herself with police/sheriffs and would increase the estimated 70% of the county's budget that's already "justice-related," most recently by voting to spend nearly a billion dollars to enlarge the County Jail. And...bonus!...she's "Fiscally Responsible™"..."No new taxes" was her campaign slogan. And if you believe spending a billion dollars on a jail won't impair the County's ability to fix damaged roads, or deal with health and climate crises, well, I've got some floodplain in Florida to sell you.

True the jail is full, but 60 - 80% of those detained are guilty of nothing more than being unable to afford bail. That's right, it's not "innocent until proven guilty" in Sacramento County, it's "guilty until proven wealthy." Does Ms. Frost consider programs like supervised release, or no-cash bail, or decriminalizing drugs despite such programs' proven successes elsewhere? Nope.

US population increased 42% from 1982 to 2017 while spending on police increased 187%--yet Ms. Frost doesn't appear to feel more than four times safer. The US is the world's champion of incarceration too, with 5% of the world's population, it has 25% of the prisoners. That's five times the world's per-capita average, seven times Canada's per-capita incarceration, and Canadian crime is insignificantly different from US crime.

What is different about Canada, and most other lower-incarceration rate countries is that they don't have medical bankruptcies. The US has more than a half million such bankruptcies per year. There's even a Netflix series where a high school chemistry teacher starts cooking meth to pay his hospital bills. Could treating people better actually reduce crime? There are certainly studies that say so--see "New study shows welfare prevents crime, quite dramatically" for one.

I've cited this before, but it bears repeating:

"If you want policies that actually work, you have to change the political conversation from 'tough candidates punishing bad people' to 'strong communities keeping everyone safe.' Candidates who care about solving a problem pay attention to what caused it. Imagine a plumber who tells you to get more absorbent flooring but does not look for the leak." (from "The Root Cause of Violent Crime Is Not What We Think It Is," NY Times) 

Despite Hollywood's "copaganda" that says police solve all crimes and only bad people go to jail, "today, less than half of violent crimes in California are cleared. For property crimes, only one in ten reported incidents leads to an arrest. While California's rates are better than those nationwide, an unsettling proportion of crime in our state goes unresolved." (from here) Consider one community's experience: from 2010 to 2021, San Francisco's police budget increased by 15%...and although reported offenses were up (+28%) crimes cleared (-33%) and total arrests (-41%) both declined. Knowing this should make the public at least skeptical of the effectiveness of those massive investments in punishment.

Doing the same thing repeatedly and expecting a different outcome is the definition of insanity. That's why I'm recommending counseling for Ms. Frost.

Today's Bee Letter: About National Debt

RE the Bee's (republished Bloomberg) editorial 1/17/24 "US Debt is now $34 trillion, but don't worry. Seriously." p. 10B

Finally, the Bee published an editorialist who is not a deficit scold! Claudia Sahm, a former Federal Reserve economist reminds us that "[t]he government can service its debt because of its unlimited taxing authority and ability to issue more U.S. Treasury securities to repay maturing securities. Conversely households can't just increase their incomes to a desired level at will...."

"Politics is the real threat, not the level of borrowing. A country that prioritizes the size of the federal debt  has bad priorities."

This means the hand-wringing about Social Security and Medicare, all the doomsaying about how this debt will crush future generations is baloney.  It marks a new era when people understand that government can actually help people. After all, 65% of retired seniors have only Social Security and Medicare to fund their retirement, and there is literally no obstacle to increasing those benefits and lowering the FICA payroll tax.

The US Debt Is Now $34 Trillion. Don't Worry. Seriously.

[This is the first editorial ever published by the Sacramento Bee that doesn't describe national debt as a problem. Note: the Bee's editorial is heavily edited, omitting, among other things, any mention of Modern Money Theory's Stephanie Kelton. This is the complete text from Bloomberg]

Fiscal hawks who say borrowing is out of control only undermine a constructive conversation about the right priorities for the country.
January 12, 2024 at 2:00 AM PST

By Claudia Sahm
Claudia Sahm is the founder of Sahm Consulting and a former Federal Reserve economist. She is the creator of the Sahm rule, a recession indicator.

It’s a world of debt.

US federal government debt ended 2023 at a record $34 trillion. The worries are bipartisan, with both Republicans and Democrats hearing about out-of-control borrowing from their constituents. In fact, almost six in 10 Americans say reducing it should be a top priority, according to a survey by the Pew Research Center. So, it’s not a surprise that Congress is moving closer to passing a budget for fiscal year 2024 that would cap spending at $1.59 trillion which is a bit less than the $1.7 trillion in fiscal 2023.

But many of reasons why lawmakers and voters have concerns about the size of the nation’s debt – concerns that have been around for many decades - are misguided and undermine a constructive conversation about the priorities for the country. Debt is neither inherently good nor bad. As such, the question is not what’s the right level of borrowing, but rather what’s the economic return on the borrowing or the societal goals it advances.

Take the child tax credit. When the Biden administration increased borrowing to expand the deduction to as much as $3,600 per child from its previous amount of $2,000, the child poverty rate tumbled to as low as around 5% in 2021 from almost 13% in 2019, making it easier for families to provide the basics, such as food, clothing and school supplies. When the program expired at the end of 2021, the rate shot up to 12.6%. Or consider the tens of billions of dollars in grants and contracts the government handed out help fund the development of mRNA technology that was used in the Covid-19 vaccines. The return on that investment to society is incalculable. And would the economy have been so surprisingly strong the past few years without the extra borrowing, avoiding a damaging recession that would have thrown millions out of work?

For an example of deficit spending that might be viewed as bad, research suggests that tax breaks for companies, which decrease tax revenue and thereby increase the budget deficit, may exacerbate income inequality rather than the intended outcome of encouraging companies to boost capital spending to strengthen their businesses and the economy.

Regardless, the amount of US debt must be put in context. Yes, $34 trillion is big number, but $142 trillion is even bigger and much more important because it represents the total wealth of Americans —a massive resource that helps fund government debt and deficits.


 

The pessimists will counter by pointing to the amount of interest the government is paying to service its debt. In fiscal 2023 that ended Sept. 30, the figure was also a record - $882.6 billion, to be exact. Again, context matters. Although the amount has doubled since 2016, it was a manageable 3.4% of gross domestic product, less than the 4.3% level of the late 1990s when the government was running budget surpluses instead of deficits like now, according to data compiled by Bloomberg.

Sure enough, whenever there’s a debate about government borrowing, it’s inevitably put in the context of the financial constraints faced by households. But the correct context for how the federal government makes decisions about debt is not the same as how households make decisions about debt. Stephanie Kelton, professor of economics at Stony Brook University, rightly argues that this is one of the many “myths” embedded in the discussion about the federal debt. The government can easily service its debt because of its unlimited taxing authority and ability to issue more US Treasury securities to repay maturing securities. Conversely, households can’t just increase their incomes to a desired level at will.

Rather than the level of borrowing, political gamesmanship over the federal debt is a far greater risk to the economy. The United States has earned what’s known as an “ exorbitant privilege” in the post-World War II era, meaning that there is always demand from investors around the world for US Treasuries in good times and bad. That privilege was earned by the US promoting a dynamic economy, adhering to the rule of law and being a stable democracy. As such, the dollar accounts for around 60% of global foreign-exchange reserves, three times that of the No. 2 reserve currency, the euro.


More important than reducing the debt or balancing the budget would be efforts by lawmakers to protect the US’s exorbitant privilege. Those in Congress creating high drama over the nation’s borrowing and budgets have caused some to question whether Treasuries are really the world’s safest assets. In stripping the US of its AAA credit ratings, both S&P Global Ratings and Fitch Ratings cited concern about rising political dysfunction following several debt-ceiling standoffs.


Politics is the real threat, not the level of borrowing. A country that prioritizes the size of the federal debt has bad priorities.