Anti-Racism talk isn't nearly enough - talk is cheap

(c) by Mark Dempsey

 “New Orleans provides a useful illustration of the limitations of contemporary antiracism as a politics. Antiracist political critique failed abysmally after Katrina to mobilize significant opposition to elimination of low-income public housing or to the ongoing destruction of public schools. - (from actual African-American Adolph Reed,)

One of my friends recently got scolded by members of a local Democratic club for making comment they thought was racist. He said "black face," which some present heard as "blackface." 

When he made the comment at a club leadership meeting, no one present was a person of color, but several of the white folks present felt compelled to feel uncomfortable on behalf of the (not present) other races. Perhaps inhibiting speech has a point, but this seems awfully weak tea given the structural racism in everyday American life.

To me, promoting just politically-correct speech seems an awfully poor way to make concrete changes in people's circumstances much less to recruit Democratic voters. Yes, it makes a difference to acknowledge how insulting racial epithets diminish the human spirit, but it does nothing to change the enormous differences in economics, health, justice, wealth and education between people of color and the white folks. Democrats apparently still haven't learned that simple lesson: talk is cheap. This applies even with the current pandemic.

“The Republican message couldn’t have been clearer: Workers should be able to show up, clock in, earn a normal paycheck, pay the rent and feed their kids. Democrats were telling the same workers that we need to listen to science, reopening is premature, and the economy can’t be fully restored until we beat the virus. Correct! But how does that help when rent was due last week?”

  From Professional Democrats (Still) Need to Learn How to Make Alternative Narratives” [Mike the Mad Biologist

Besides the nod to people's spirit offered by promoting politically correct talk, the focus on talk alone does literally nothing for their material circumstances.

Democrats are great at this. The Clinton presidency gave us the "end of welfare as we know it," transforming AFDC into TANF. Thanks to that "end," roughly a half million people lost food stamps. Before that "end," 76% of those who needed public assistance got it; after: 26%. 

Poor people of color had recently become eligible for such assistance thanks to the bipartisan civil rights legislation passed in LBJ's administration, and I'm sure they feel ever so comforted that they won't face verbal insults as they scrape by in their newly impoverished circumstances. But talk alone isn't enough.

The fixation by the Democratic establishment on speech and symbolism simply beggars description. Obama couldn't be a racist...why he's black! Yet he built the infrastructure Trump used to cage the undocumented and separate them from their children and tripled the deportations of his predecessor. 

The upshot of this kind of tribalism is a rash of "Judas goat" candidates--Judas goats lead the cows to the killing floor of the slaughterhouse--who betray their own kind, conspiring with that persecution. Members of our political tribes are willing to overlook all kinds of misbehavior as long as a fellow tribe member does it. It's like the mafia. "We don't care if Luca Brazzi is a psychotic killer! He's part of our gang!"  So it was OK for Obama to bomb Libya (a war crime) or to authorize extra-judicial killings-by-drone. Yep, we can even overlook murder, because he's on our team!

If you call these things to the attention of even the "liberals," and you'll be excoriated for not being a team player. I have even been scolded--and there still is no cure for the common scold--by loyal Democrats for citing candidates' failings during a Democratic primary! That's right. We're supposed to be living in a "democracy" that legitimizes dissent, but the Democrats wanted me to shut up and be a team player.

The Nexus of Local Corruption: The Unearned Increment

(c) by Mark Dempsey

The late Sacramento County Supervisor, Grantland Johnson, once told a room full of his constituents that it's widely acknowledged throughout our state that local governments in the Sacramento region are the most in developers' hip pockets. This is not a contest we want to win.

The source of the fortunes made in land speculation--a more accurate description of developers' actual activity--is the "unearned increment." The unearned increment comes from a political favor granted by those local governments. The speculators can option farmland for a few thousand dollars an acre, and then, when the local government grants them the right to develop that land, they can sell it to builders for as much as 100 times the option price. 

Meanwhile, the Sacramento region has 20 years worth of undeveloped infill. Why on earth do we even consider developing outlying farmland when there is plentiful infill now? The answer: it produces no egregious profit for the speculators.

Perhaps the worst example of this near Sacramento is North Natomas--twenty foot underwater floodplain surrounded by weak levees. This is land so unsuited for development that one provision in a federal grant to increase regional sewage treatment capacity said there would be a six-million-dollar penalty if that increased capacity served development in North Natomas.

The speculators did not hesitate. They went to then-vice-president George H.W. Bush, who made that six million dollar penalty payable in a more palatable pay-as-you-develop installment plan. For lagniappe, Bush also arranged for a $43 million grant to improve the North Natomas Levees to pre-Katrina standards.

Most of North Natomas is built out now, and the speculators were able to sell that land for roughly 100 times what they had paid for it. That's a 10,000% gross profit, called the "unearned increment." 

We can attribute all of the unearned increment to local government's decisions, too. And if the speculators exchange their land for other income-producing real estate, they defer paying income tax on this gigantic profit indefinitely.

Meanwhile, North Natomas levees do not meet post-Katrina standards, and Sacramento remains second only to New Orleans in catastrophic flood risk. Several hundred million dollars are needed to strengthen those levees, but the residents of the now-built-out North Natomas will be paying for that, not the speculators.

This is not the only way to develop land. In Germany, the developers have to sell the land to the local government at the farmland price, then buy it back at the upzoned price. Local governments get all of the unearned increment.

And German public amenities are very nice indeed. In addition to single-payer healthcare, Germans enjoy first class infrastructure--our engineers rate U.S. infrastructure D+. German higher education is tuition-free, even for foreigners. The arts budget for just the City of Berlin exceeds the National Endowment for the Arts for the entire U.S.A.

This corrupt dynamic, selling our patrimony for a mess of poorly developed floodplain, is what drives the speculators to back local government candidates. These candidates are easy to spot: they have the biggest signs. The developer-backed candidates will try to reassure local environmentalists that Sacramento's designed-to-fail (and working as designed) transit must be included in any outlying development, but this is cold comfort.

What they won't do is shorten commutes, diminish the CO2 from those commutes, or quell the climate catastrophe barreling down the tracks toward us. Even as local officials complain about the shortage of public money, building outlying development ensures infrastructure maintenance will be roughly double the cost to maintain compact infill infrastructure. 

What the speculators' candidates will not do is give the benefit of the unearned increment to the public. 

Mark Dempsey is a former Realtor who sat on a Community Planning Advisory Council for the County of Sacramento for nearly a decade.

When Obama Met Frederick Douglass

 

When @BarackObama met Frederick Douglass pic.twitter.com/6BEeJPfYPe

— Eli Valley (@elivalley) December 4, 2020

Did racism drive voters to Trump? Not really...

(c) by Mark Dempsey

To many of my Democratic friends, and to the "liberal" media, racism was the determining factor in Trump's victory. It was influential, but the real story includes much more than just racism. After all, literally millions of those who voted for Obama voted for Trump. If racism was the only voter motivation, that switch would have been at least unlikely, if not impossible.

In my view, a more accurate reading of what elected Trump is the same thing that elected Obama: voters' disgust with the outcomes of the previous president's policies. Obama's voters were disgusted with the naked imperialism of the Bush 43 presidency, and the disasterous war on Iraq. Obama won the Democratic nomination largely because Hillary Clinton voted to authorize the Iraqi war and he did not. American voters actually like peace, when given a choice.

But, after giving Obama a try, the American public was again disgusted. Not only did Obama refuse to prosecute the war crimes of Bush / Cheney, he promoted the people who supervised torture and prosecuted the whistleblowers. Thanks to Bill Clinton's collusion with Newt Gingrich's congress to deregulate Wall Street, and Bush's negligence, Obama inherited the subprime/derivatives fiasco—arguably the largest theft in human history. Obama's response to nine million families losing their homes was to let the thieves go with a slap on the wrist. Nobody went to jail; heck, nobody even lost his job. Republican pollster Frank Luntz reports that the first time he witnessed people weep about politics in his focus groups was during the Obama administration as they lamented Wall Street bailouts while Main Street suffered the loss of homes and pensions.

So...why 70 million votes for Trump in the 2020 presidential election? Says Thomas Greene (from Noteworthy): “Trump will not be defeated by educating voters, by exposing his many foibles and inadequacies. Highlighting what’s wrong with him is futile; his supporters didn’t elect him because they mistook him for a competent administrator or a decent man. They’re angry, not stupid. Trump is an agent of disruption — indeed, of revenge.....Workers now sense that economic justice — a condition in which labor and capital recognize and value each other — is permanently out of reach; the class war is over and it was an absolute rout: insatiable parasites control everything now, and even drain us gratuitously, as if exacting reparations for the money and effort they spent taming us. The economy itself, and the institutions protecting it, must be attacked, and actually crippled, to get the attention of the smug patricians in charge. Two decades of appealing to justice, proportion, and common decency have yielded nothing."

Disappointed by the conventional parties, Trump voters are willing to take a chance on a "disruptor" who his own party initially rejected. Meanwhile, Republicans are adaptive  enough to embrace him as long as he helps them maintain their grip on power.

Don't get me wrong: racism is a part of a very old playbook, too. Harry Anslinger served as the first commissioner of the U.S. Treasury Department's Federal Bureau of Narcotics during the presidencies of Hoover, Roosevelt, Truman, Eisenhower, and Kennedy, He criminalized marijuana in hopes of arresting more Mexicans. So yes, structural racism exists and powerful interests exploite it to distract the population from the failings of the oligarchy. For one thing, Herbert Hoover blamed the Great Depression on the Mexicans—ignoring the actual culprit: Wall Street.

As long as tribal allegiance trumps good sense, Democrats will excuse the likes of Obama and Biden for their cultivation of Wall Street, and Republicans will cultivate racists and nominate the likes of the "anti-Obama" (Trump). Public policy needs to come from something other than team red vs. team blue, or it will never fix the genuine problems.

And as long as political discussions fixate on racism as what determines election outcomes, we're bound to lurch from crisis to crisis, rearranging the deck chairs on the Titanic as the ship of public policy slowly sinks beneath the waves. If the Democrats don't crack down on the financial sector's corruption and the exploitation of workers, they will be discarded in disgust too.

Ted Rall on Biden's appointments

 

Threading the Needle of History

By my lights, historian Heather Cox Richardson engages in some questionable interpretations of history in her newsletter. She says that "leaders of both parties believed that deficits should reflect emergencies and that debt should be held at a low percentage of the nation’s Gross Domestic Product....It was to pay down the national debt that the Republican Party created national taxation, including the income tax, during the Civil War, and that Republican Dwight Eisenhower kept the top income tax bracket at 91% during his administration. Eisenhower was the last Republican president to balance a budget."

Orthodox economics has  been trying to prove large national debts are a problem for some time now. The most high-profile recent attempt to do this was Reinhart and Rogoff's paper that concluded debts above 90% of GDP tend to inhibit the economy. This kind of thinking intimates that if the debt gets too big, the bond markets will charge interest premiums to nations trying to sell their bonds. Meanwhile, Japan has a debt-to-GDP ratio of roughly 240% and their bonds sell for no such interest premium (roughly 0% interest is their yield!).

Other economists examined this paper and found Rienhart and Rogoff cherry-picked their historical examples. A graduate student even discovered the spreadsheet they used to calculate their results had an erroneous formula. One might think R & R's credibility as economic advisors after such sloppy research would be in shreds. One might also be wrong: they remain respected by both the political right and left, and the anxiety about national 'debt' remains unabated. Both major parties declare they are dedicated to reducing the 'debt,' and their advisors (e.g. Larry Summers) continue to try to revive that bankrupt argument (here, for one example)

Treating currency creators like households is at the root of this problem. "Tax and spend" is the phrase that describes how households work--they get their income not from printing money but from revenue gained elsewhere. However, such a sequence is an impossibility for a currency creator. Where would tax payers get the dollars to pay taxes if the government didn't spend them into the economy first? 

Taxes create the demand for dollars, they do not, and cannot, provision government programs since spending must precede taxation. So it must be "spend first, and retrieve some dollars in taxes later." The operational nature of reality demands it. 

And what do we call the money left out in the economy, not retrieved in taxes? Answer #1: the dollar financial assets of the population (i.e. their savings). Answer #2: national 'debt.' Both answers describe exactly the same thing. It's analogous to your bank account. To you, that account is an asset, but to the bank it's a liability. Marching down to the bank to demand it reduce its debt (i.e. make your account smaller) is clinically insane, but reducing national debt remains a popular public policy demand.

Meanwhile, did Republicans really initiate national taxation? Aren't tariffs a form of national taxation? Tariffs surely predated Republican efforts to nationalize tax charges just before the Civil War, or even the existence of the Republican party.

The Republicans did pass a 3% tax on incomes over $800 in 1861, but Congress repealed that  income tax in 1872. The 16th amendment enabled a modern income tax and that passed when (Democrat) Woodrow Wilson was in office.

As for Eisenhower balancing a budget: "[Eisenhower's] final 1960 budget was  balanced. Admittedly, it was aided by a bit of luck and one big gimmick. The good fortune: The recovery from the 1958 recession turned out to be more vigorous than expected. The  gimmick: A large contribution to the International Monetary Fund was artificially moved forward into 1959 so it would not count against the 1960 budget." (from Rudoph G. Penner [CBO director from 1983 to 1987])

So, without such "gimmicks," the last Republican to balance a budget was actually Herbert Hoover. Either way, a "balanced" budget from a creator of money has not boosted the economy, historically. Every time public policy makers have treated the currency creator government as though it was a currency-using household, and "balanced" the budget with significant deficit reductions, a Great Depression-sized hole in the economy appears shortly. (See here for the footnotes) 

Remember: Great Depressions occur every time significant deficit reductions occur!

And did "leaders of both parties" really want to cut debt and deficits? Maybe both parties give "Fiscal Responsibility™" lip service, but they sometimes actually say otherwise. Republican vice president Dick Cheney famously said "Reagan proved deficits don't matter," and Republican strategist Jude Wanniski advised his party to run up as big a deficit as possible when in power and complain as bitterly as possible about national 'debt' when out of power. So...hypocrisy, not truth, guided policy.

Reagan took Wanniski's advice, cutting the top marginal tax brackets roughly in half, claiming the economic revival it sparked would actually increase tax collections--something that didn't happen, although that didn't keep Reaganites from blaming Democratic "spending like a drunken sailor" for the increase in deficits. 

Less well publicized was that, between Reagan and his successor, payroll taxes increased eightfold. For lagniappe, the Reagan administration also cut the federal affordable housing budget 75%. Isn't it a puzzle why income inequality and homelessness haunt us today?

The supposedly exceptional Reagan recovery dubbed "Morning in America," by the Wall Street Journal turned out to be an average business cycle recovery, with lower-than-average capital investment. 

Here's a graph from the Bureau of Economic Analysis:

 

Notice the large spikes at the beginning of this graph for the New Deal and that large public works project known as World War II (when the government took over roughly 50% of the U.S. economy). That's when government spending was large relative to GDP, too. The Reagan "miracle" of the early '80s is roughly in line with the remaining ups and downs of subsequent business cycles, although subsequent recoveries were more muted than when taxes were higher.

Ms. Richardson even attempts to correlate government 'debt' to stagflation, ignoring the real cause of the '70s economic distress: oil shocks. U.S. oil production (pre-fracking) peaked in 1971. Price per-barrel then: $1.75. Distressed by the Yom Kippur war in 1973, the Arab nations in OPEC decided to curtail oil exports. 

This was the first time the U.S. couldn't produce its way out of a shortfall in the supply of oil, and petroleum prices soared four-fold almost immediately, peaking at $42/bbl in 1982. Reagan was lucky enough to get the benefit of Alaskan oil coming online after that, and the price subsided to around $10/bbl. 

A critical commodity like oil is an enormous influence in our economy. The U.S. doesn't even have solar agriculture. Michael Pollan reports U.S. agriculture burns 10 calories of petroleum for every one calorie of food produced. So oil shortages had knock-on impacts in many more sectors of the economy than just energy. Trying to relate these impacts to government spending amounts to a distraction, in my humble opinion. It's straining at a gnat while swallowing a camel.

Ms. Richardson correctly surmises the Republicans want to continue to cut taxes (and regulation!), and want to blame Democrats for the deficit if they try to pass social spending or infrastructure programs. Unfortunately this public policy direction opens a Pandora's box of troubles. Republicans are cavalier about handing tax breaks to the wealthy, but continue to believe that crushing the bottom 90% of incomes under the burden of increased payroll taxes and diminished social services will not spark the kind of backlash that led voters to reject the Republican establishment's candidates and "vote with their middle finger" for the likes of Trump. 

Unfortunately, the Democrats have not promised the kind of social spending required to revive the working class's incomes. Their leadership remains loyal "Pay-Go" fans--promising to raise taxes for any new programs.

I actually heard a local Republican leader say he regrets his party has not done more to curtail national 'debt.' If he is an orthodox Republican, he still would balk at raising taxes to reduce people's savings...I mean the deficit. And if he subscribes to current Republican orthodoxy, he would not cut the defense spending that remains six times higher than China's, or more than the next 14 nations' defense spending combined. 

But since 85% of federal spending goes to the military, Social Security and Medicare, what he's really regretful about is that we're not cutting Social Security and Medicare. That's the agenda.

And why attack social safety net programs? Claims that there is no alternative to austerity have been a bipartisan exercise for generations now. Besides the hypocritical Republican allegiance to balanced budgets, Democrat Bill Clinton signed the "end of welfare as we know it" passed by Newt Gingrich's Republican congress. That immediately threw a half million adults off of food stamps. Before that "end" 76% of those needing public assistance got it; after: 26%. Federal welfare expenses amounted to a rounding error on the trillion-dollar budgets, but Democrats can't even claim to be the party of the poor any more.

Why attack safety nets? Two words: Labor discipline. It sends the message that "You had better take whatever crappy job is on offer, or you will suffer the indignities of poverty, perhaps even homelessness and starvation. And if you're extra ornery, we'll put you in a cage." One is reminded of the old French maxim that "The law in its magnificent equality forbids rich and poor alike from sleeping under bridges, begging in the street and stealing bread."

We're coming to the end of the effectiveness of labor discipline. People are attacking the police because their circumstances are so desperate, and defunding the police is actually being considered. You may even see outraged citizens climbing on the furniture at local City Council and County Supervisors' meetings. 

The current Republican motto remains firmly in place, though: "The beatings will continue until morale improves."

The Two “Reigns of Terror”

(From A Connecticut Yankee in King Arthur’s Court)

By Mark Twain

(It is not generally realized that America’s most beloved humorist was deeply stirred by the sight of social injustice, and many times went out of his way to give voice to his feelings. His recently published biography shows that influences were at work during his lifetime to repress him, and it would seem that such influences are still active after his death. It was found impossible to obtain the publishers’ permission to quote a passage of 176 words, which was to have appeared at this place in the Anthology. The passage in question is from the thirteenth chapter of “A Connecticut Yankee in King Arthur’s Court.” It points out that there were two “Reigns of Terror” in France; that the evils of the “minor Terror,” that of the Revolution, have been made much of, although they lasted only a few months, and caused the death of only ten thousand persons; whereas there was another, “an older and real Terror,” which had lasted a thousand years, and brought death to hundreds of millions of persons. We consider it horrible that people should have their heads cut off, but we have not been taught to see the horror of the life-long death which is inflicted upon a whole population by poverty and tyranny)


THERE were two “Reigns of Terror,” if we would but remember it and consider it; the one wrought murder in hot passion, the other in heartless cold blood; the one lasted mere months, the other had lasted a thousand years; the one inflicted death upon ten thousand persons, the other upon a hundred millions; but our shudders are all for the “horrors” of the minor Terror, the momentary Terror, so to speak; whereas, what is the horror of swift death by the axe, compared with lifelong death from hunger, cold, insult, cruelty, and heart-break? What is swift death by lightning compared with death by slow fire at the stake? A city cemetery could contain the coffins filled by that brief Terror which we have all been so diligently taught to shiver at and mourn over; but all France could hardly contain the coffins filled by that older and real Terror—that unspeakably bitter and awful Terror which none of us has been taught to see in its vastness or pity as it deserves.