Germany and Japan Slowly
Took Their Fair Share of Growth.
Then China and Great Recession Took More.
The Good: 70 Years of
"Stability and achievements being cumulative
young people of today will enjoy both past progress
and their own contributions.
US Economic Wellbeing
The Very Good
Lowest-paid workers wages rising fastest in more than
But this may not mean a higher standard of living. Median wage in the first quartile is still low—$11.50
in 2019, or 55% of the overall median wage. Around 46% of these
households have children.
and those receiving in means-tested public assistance programs (
70 percent of income before taxes and transfers according to a CBO
could lose benefits.
Isn't that what is supposed to happen?
1950's, 60's and 70's Turmoil
America to her Conservative Roots.
"Over the last few decades labor’s
bargaining power fell, corporate taxes fell, tariffs
fell, globalization increased, technology allowed for
greater scale and lower marginal costs, anti-trust
enforcement fell, and interest rates fell. These factors
have produced the most pro-corporate environment in
A Capitalist will
always try to get a bigger piece of the pie.
The secrete is to let them have just enough so they keep
their good work.
Some will always
want more for their special interest like military,
education, the safety net ...Someday, we will ask these
people to be more cost effective. Being ahead of
everyone else is not enough.
At large employers, it is now common for building maintenance, security,
kitchen, laundry and custodial staff not to work directly for the company they
report to each day.
Now the Trump administration has adopted a four-factor
assess whether an indirect employer is a joint employer that would bear legal
responsibility for violations of minimum-wage and overtime regulations. This is
a narrower standard for determining joint-employer status than the practice
that existed under
the administration of President Barack Obama, which expanded the
responsibilities of indirect employers in January 2016. The International
Franchise Association (the largest organization representing franchises
worldwide) argues that
the broader criteria previously in place
cost U.S. franchisees between $17 and $33
A Real Difficult Question
The Future of Work
Lawrence Summers 2015
"...the idea that you can just have better training
and then there
are all these jobs,
all these places where there are shortages and
need the trained people is fundamentally an evasion."
" The core problem is that there aren't enough jobs.
If you help some
people, you could help them get the jobs,
but then someone else won't get
the jobs. "
Why Have Wages
Been Stagnant for Many Workers?
Fact 1: The share of
economic output workers receive has generally fallen over the past
Fact 2: Wages have risen for those in the top of the distribution
but stagnated for those in the bottom and middle.
Fact 3: The education wage premium rose sharply until about 2000,
contributing to rising wage inequality
Fact 4: Globalization and technological change have likely put
downward pressure on less-educated workers' wages
Fact 5: Wages have grown for women and fallen for men.
Fact 6: Declines in the real minimum wage and union membership have
Fact 7: Workers have become less likely to move to a different state
or to a different job, reducing wage growth.
Fact 8: Business formation and closings have slowed wage growth.
How Strong Has Wage Growth
Been since the Great Recession?
Fact 9: Inflation-adjusted wage
growth was higher from 2007 to 2017 than it was during previous
business cycles Fact 10: Labor market slack has declined during the recovery
from the Great Recession, though some likely remains. Fact 11: Recent labor productivity growth has been slow,
restraining wage growth. Fact 12: In recent years, measured wage growth has been
depressed by changes in the workforce. Fact 13: Great Recession wage growth occurred for top
earners, but has since become more broadly shared.
Manufacturing Wages Moved Back to
Organized Labor Failed and We Have the Money
Wage GrowthCalculations Differ
to price index used to adjust wages for inflation.
Consumer Price Index for All Urban Consumers (CPI-U) deflator
implies lower real wage growth,
Personal Consumption Expenditures (PCE) deflator
implies higher real wage growth Technical issues also help explains wage measure differences.
Recently the CPI wagehas increased more
than the GDPproductivityincreased.
The deflator difference accounts for a third of the wage
versus productivity changes. The Atlanta Federal Reserve “Wage Tracker” for continuously employed workers shows
faster average hourly wage growth for all employees.
It still shows slower nominal growth than
in the pre-2007
John Mueller's1995 statement concerning
“... no matter how much better
the present gets,
the past gets better faster..."
Golden ages "...do happen,
but we are never actually in
they are always back there somewhere.”
is a very lumpy investment where
often there is little or no payoff from having a little bit more." ..."There
are big returns to the first years of education (the education where one gains
literacy) and big payoffs to the last years of education (a college or graduate
degree where one distinguishes oneself from the pack) but only small payoffs to
those years of education that move the individual from somewhat below average to
somewhat above average." 283 Sources
"Do not train a child to learn by force of harshness;
but direct them to it by what amused their minds
so that you may be better able to discover with accuracy
the peculiar bent of the genius of each."Plato
"Do not train a child to learn by force of harshness; but direct them to it
by what amused their minds so that you may be better able to discover with
accuracy the peculiar bent of the genius of each." Plato
Lead Economist William Emmons, Policy Analyst Ana Hernandez
Kent and Lead Analyst Lowell Ricketts - all with the St.
Louis Fed’s Center for Household Financial Stability -
recapped research presented at an event examining whether
college still provided a significant payoff in terms of
household income and wealth.
Overall, the evidence said that
college was indeed worth it.
“However, for recent generations and for non-white students,
the payoffs are somewhat lower than average," they noted.
“This is especially true for wealth accumulation.
Considering all of the evidence, we conclude that the
conventional wisdom about college is not as true as it used
is a very lumpy investment where
often there is little or no payoff from having a
little bit more." ..."There are big returns to
the first years of education (the education
where one gains literacy) and big payoffs to the
last years of education (a college or graduate
degree where one distinguishes oneself from the
pack) but only small payoffs to those years of
education that move the individual from somewhat
below average to somewhat above average." 283 The
Future of Capitalism: How Today's Economic
Forces Shape Tomorrow's World Source
Three Poverty Rate
on CPI data
safety net programs
on Consumer Expenditure Income inequality
rose in both the top and bottom halves of the distribution, but
increases in consumption inequality are only evident in the top
half. The differences are also concentrated in single parent
families and single individuals.
Poverty is Down Dramatically-Americans Should be Proud.
Amount of Decrease Depends on
The Congressional Budget Committee
should audit economic statistics and
report those that misrepresent wellbeing.
Should Poverty Rate be Renamed the Poverty Eligibility Rate?
Learn AboutPoverty DemographicsThe
See Decision 2020
The Batchelder Tax Plan
Replace estate tax with inheritance tax Inheritance
$1.4 trillion over
the next decade
Lily Batchelder New York University
law professor Brookings Institution
Little expected estate tax revenue
2019 inheritance: $764
billion received by taxpayers Easily avoided estate tax has rate of 40%
Expected tax rate paid: 2%
Estimated tax on earnings and savings is 15.8%
Married couple exemption
$23.2 million plus
Money easily moved to avoid taxed
Replace estate tax with an inheritance tax subject to income and payroll tax.
Lifetime exemption: $500,000
Ten-year revenue estimate:
Ten year revenue estimate $340
Closing many tax-planning loopholes
adding revenue to alternatives A
Trump's Tax cut makes avoiding taxes easier for billionaires.
'The tax cuts on corporate profits earned offshore — from 35 percent to a
one-time rate of 15.5 percent on cash and 8 percent on other assets — encouraged
companies to bring it home. By donating stock or putting stock into a trust,
income tax avoidance will be easier.
"Much of the money brought home went to a stock buybacks reported a
Reserve study. Buyback activity hit a record $1.1 trillion last
year and could surpass that level this year."
of Federal Debt 1. Bonds/Notes pay interest to owners.
Dollars pay no interest.
Transactions only occur in dollars which the FED prints as needed.
You Will Get Your FED Retirement Check.
It's value adjusts for inflation.
States Can't Print Money, Defaults Happen. You Might Not Get Your State
Fed Debt Has Risk:
Inflation, Exchange Rate,
Inflation usually follows printing too many
The Economics of Debt
Supply must keep up or inflation results.
Increasing productivity negates inflation.
World Production Oversupply Keeps Inflation Low.
The Political Economy of Debt
By incurring debt states
trade an element of sovereignty – ability to the
for spending excepted to the political minefield of raising
Beginning before WW1,the US has steadily gained the economic
to maintain her economic sovereignty.
"If readers take one lesson from this book, I hope it is
this: when it comes to financial crises,
in the grip of unseen and hopelessly complex forces.
Such crises are neither inevitable nor unpredictable.
Runaway private debt
and the resulting overcapacity
does a better job than
any other variable in explaining and predicting
It is our job to heed those danger
conservative "Greater Appalachia"
liberal "Left Coast,"
looking at these cultures sheds an interesting light on
America's political and cultural divides.
Selected Countries by value
China - $952.6 billion -
26.77% employed in agriculture
India - $381.7 billion - 43.86% employed in agriculture
United States - $204.9 billion -
1.42% in farming
Indonesia - $135.5 billion - 30.53% in farming
Nigeria - $83.4 billion - 36.62% in farming
France - $55.6 billion
2.6% employed in agriculture
Turkey - $46 billion - 19.2% employed in agriculture
Australia - $43 billion
employed in agriculture
Spain - $42.8 billion
-4.31% employed in agriculture
Unintended Consequences of Government Support
Government most socialist program
agriculture, health care, education or is in Oil?
Was the $6.4 Trillion
Spent on Terror a Good a Decision?
1) Early 20th Century
Government Ownership of All Means of Production.
Failed Utopian, Totalitarian System
2) Post WW 2
Government controls key industries such as
Classic socialism dominated after World War II
and still is believed
by many older Americans.
3) Current Perception
US has Mixed Economy
Government Helps Support Economic Safety Net:
insurance, retirement provisions, and
access to less expensive higher education.
This doesn't replace capitalism, it makes it more humane,
egalitarian, and more protective.
evolved the legal sphere of private actors
who can now pick and choose from legal systems of
England, New York state, and for corporate law you can add
The states is deeply involved in the creation of legal
privilege at every level of all markets. How private
parties use the coercive power to organize their private
affairs and bank on enforceability is instrumental to
understanding the financial crisis.
Protection of a property rights had been socialized.
20th century bank bailouts.
Replace the easily avoided estate tax with an inheritance tax
subject to income and payroll tax. Alternative A
Lifetime exemption: $500,000
Ten-year revenue estimate:
Affected: .02% Ten year revenue estimate $340
C Closing many tax-planning loopholes adding revenue to alternatives A
The lack of Institutional forbearance by a political party
under utilization of it's
Accepting another party's
follow the letter of the law.
How Democracies Die.
Demand Realties 1.
Hydrocarbons supply over 80% of world energy
2. A 2% decline in the hydrocarbon share of world
entailed over $2 trillion in cumulative global spending on
3. When the 3rd world’s poor increase energy use to
a third of
Europe’s, energy use global demand increase by twice
America’s total consumption.
4. A 100x growth in electric vehicles to 400 million
would displace 5% of global oil demand.
14.Batteries to store two-day’s of U.S. electricity demand
would require 1,000 years of production by
biggest battery factor.
Realities About Energy Economics
17. Over 30 years Investing $1
solar or wind produces 40 million and 55
shale produces 300 million kWh from natural gas
19. It costs <$0.50 to store a barrel of oil/natural
$200 to store the equivalent energy in batteries.
25. The shale revolution collapsed the prices of
gas & coal, but electric rates rose 20%
because of subsidies for solar/wind.
Energy Physics Realities 26.
Transforming the energy economy is not like putting
few people on the moon, it's like
permanently putting all
of humanity on the moon.
28. If solar power could be scaled like computer-tech,
a postage-stamp size solar array would power
29. If batteries scaled like digital tech, a battery
the size of a
book, costing three cents, could power a jetliner
31. Physics limit for solar cells (the
is a max conversion of about 33% of photons into
electrons; commercial cells today are at 26%.
32. No digital-like 10x gains exist for wind tech.
Physics limits for wind turbines (Betz limit) are
capture of 60% of energy in moving air;
turbines achieve 45%.
35. At least 100 pounds of materials are mined,
processed for every pound of battery
39. A battery-centric grid and car world means
gigatons more of the earth to access
nickel, graphite, rare earths,
cobalt, etc.—and using millions of tons of
oil and coal
both in mining and to fabricate metals and
40. China dominates global battery production with
70% coal-fueled: EVs using Chinese
create more carbon-dioxide than
saved by replacing
oil-burning engines. See
Inconvenient Energy Realities
1. Because Trump's policy smears our
foreign policy establishment,
bias concerning Trump's Foreign Policy is possible.
Read sources for opinions.
Of course Nixon ignored FP establishment.
Trump is much like Reagan. Both knew little theory and few statistics.
that capitalism was just better than Communism.
This led to conflicted Russian relations
as he called them and evil empire while getting along
with Gorbachev and pursuing arms reduction.
Questions: Why did the Americans know so little about Russia's
economic chaos? Why did conservative politicians and media create so much fear?
Is Trump being buddies
with Putin an attempt
at containment while the US hurts Russia with sanctions?
Trump's Military Spending Requires
The best navy in Asia has 114 warships and
45,800 volunteer personnel. It's fleet has fast, powerful
destroyers, thoroughly modern diesel-electric attack
submarines, and amphibious ships that can haul tanks and
other ground forces. It can hunt submarines, square off
against invasion fleets, and shoot down enemy ballistic
missiles. Despite all of that firepower, this is not in fact
a navy at all, but an armed cohort of civil servants.
Japan Approves Record Defense Budget
of 5.3 Trillion Yen ..
Millennials Aren’t Drowning
in Student Debt
Sixty-six percent of Millennials have no student debt
Most burdens are relative to their income. Borrowers
accumulate $28,500 in debt that can be paid back with monthly
payments of less than $200).
B, Akers, Manhattan Inst
Forgiving Student Debts Student receiving loan relief reduced
their use of
credit cards resulting in
debt reduction by 26%.
They were 11% less likely to default
on other accounts.
increased, more changed jobs,
increased by about $3000 over a three year.
Paper No. 25810. 6/19
M. Di Maggio,
V. Yaopurchase $5
A Personal Diary 1. I helped N.H. passes a 1970's Student Loan
2. By 1989, tuition grants at Franklin Pierce
$1,000,000. Grants go to most desired students, most
others pay closer to full tuition based on state/local loans,
grants, and scholarships.
4. Consulting firms searched the applicant pool to
which extra curricula activities will generate the most cash.
6. Loans to parents become the first choice of
councilors because they can be larger and attended
colleges are not held responsible for bad debts.
7. Increased Graduate school loans were caused when
year two loans could begin the summer of year one.
Economic Involvement began with
on building infrastructure to help business during Washington's
presidency. Soon on
minimal state liberalism
active state liberalism
expansion began in Ernst in the 20th century. Today
Conservatives and Progressivesdo battle to
control federal spending.
Charles Jones and Peter
proposes an interesting new measure of economic welfare. It
is by no means perfect, yet it is considerably more
comprehensive than median income, taking into account not only
per capita consumption, growth more is better changes in working
time. less is better life expectancy more is better and
inequality less is better.
Analysis:While U.S. has easily the most income per capita, UK is second
with 25% less, but is only slightly ahead in wellbeing.
Take long vacations and retire earlier, and so they typically work
fewer hours. Their higher life expectancy at birth (80 years in
2005, compared to 77 in the United States), presumably
reflects advantages with respect to health care, diet, lifestyle,
and the like. Their income and consumption are somewhat more equally
distributed than is the norm in the United States. Source:
wealth tax would be highly progressive, probably reduce national
saving and investment although capital inflows from abroad counter
the reduction. Exemptions for selected assets would diminish the
tax’s yield. Compliance and administration challenges and it might
be ruled unconstitutional . It would be simpler to increase in
tax progressivity through reforms of the income tax and estate and
Supreme Court Actions the Cause?
Redistricting Plans, Schools Integration/busing/housing,
Trouble began when Federal efforts went beyond stopping
Jim Crow laws.
2. Has Political Control Affected
Political Parties Began to
FDR kept control
of the Democratic Party by
excluded many poor southerners from New Deal.
Northern Democrats began catering to blacks.
LBJ sealed the change with the 1966 Civil Rights Act.
Roe v. Wade added fuel to the fire.
South became Republican, Coasts became Democratic.
Reagan sealed the breach and political polarity intensified.
Telecommunications Act of 1996 allowed multi-station company ownership
and national network developed.
As of 2011, Clear Channel Communications
(now iHeart Media) owned over 800
US radio stations and
Rush Limbaugh wealth eventually climbed to $400 million.
Citizens United v. FEC Allowed
Increased Political Contributions
Campaign funding increased and sponsorship
which supported both
Sports Trash Talking Went Public Mohamed Ali
practically invented this 1960's genre
as a boastfully Cassius Clay.
Athlete had been formal, cordial, and boring.
Ali changed everything with his elite out-of-ring bantering
which was only rivaled by his in-ring dominance.
and others soon followed.
by this Amanda
is irresolvable and will continue even when
the associated problems are solvable.
Social Psychologist Peter T. Coleman's book, “
about 1 in every 20 conflicts are this way.
“Once we are drawn in, they take control,” They enrage, trap frustrate, drain
our energy/critical resources, and will never go away.
1,000 Americans found 40 percent of both Republicans and Democrats thought the
other party was downright evil.
Five to 15 percent of both parties would support some level of violence against
their political opponents.
A minority of ‘... haters’ can have more influence than a majority of
his book “Emotions
In high conflict, our brains behave differently. Fear,
anger and hatred rule.
Sometimes anger can be useful. It can support reconciliation, taking risks in
Hatred assumes the enemy is unchangeable, irredeemable, and unimprovable. They
We can get the minority of haters to stop hating because a peace message lowers Americas’ support for
condemnation for the Charlottesville racist violence, violence support
dropped for partisan voters.
Joe Biden's similar peace
an Antifa attack on a conservative journalist also lowered support for
How to Reset a Mind Set
An ingrained negativity bias leads to a perpetual sense of crisis,
a feeling that things are getting worse—even when things are getting better.
The Wall Street Journal
I recently began adding
political economy studies to
Quick Notes Economics.
Studied were U.S. history and presidential politics.
Then came biographies of influential presidents.
Today I am studying the 4th populist-terrorist episode to
the post WW 1 United
Anxiety increased when blacks
increased their economic and political power.
They received more of our economic pie.
Then Asians got more pie followed in close proximity by women.
Fear from 9/11 amplified our anxiety.
White Christian middle class men and women were no longer the
center of society.
had long been acting as if the normal curve did
not apply to academic education.
It would be the great equalizer and solve most issues.
They were wrong. This failure added to our anxiety.
Then the Great Recession created many hardships in rural areas and the
Government efforts helped few-mainly
ambitious individual who had move to urban areas.
Equal educational opportunities were not enough.
More Education spending was not the answer.
Unbiased observers knew that nature and
nurture were not equally
Change was needed.
blame goes to the politicians, economists and other professionals.
Economic success and political stability from 1980-2000 fostered
often technocrats provided inadequate,
bias Information that was
not applicable to a particular issue.
There failures are the real
It is more dangerous than the
fake news coming from lies,
Great Society created a time bomb.
The explosion was delayed
by the Reagan Revolution and then by fifteen years of economic prosperity.
Then the dot com bubble ended prosperity and 9/11 lit the fuse.
Then Gay Rights put a psychological hurt on
many middle class white Christians.
Finally a black President’s health care plan took many back
to the beginning,
to their Great Society/ Roe v Wade animosity.
Trump's election signified a new
It is much like our
20th Century Populism episodes.
Democracy is supposed to be
troublesome. Those most unhappy raise Cain.
Oligarchs run the show and maximize their wealth from our ever growing economic pie.
Populism caused the Civil War, the Revolutionary War and the King Phillips War.
By accepting more responsibility, Oligarchs could avert a forth devastating event.
Baby Boomers are leaving
who may take control
what some consider a
Socialism emerged from the French Revolution as a powerful political force to serve the dispossessed.
It was relegated to the margins in the United States,
although economic conditions sometimes brought it to center court.
Attempt to Solve
"the" Scarcity Problem
In the Beginning
Socialism was a
moral movement of intellectuals who loathed inequality,
despised the intellectual shallowness of the rich, and
sought to bring life to their visions.
Capitalism is not especially
it is a reality of the industrial revolution.
Socialist imagined a socialist
Socialist believe political equality requires wealth equality.
Production is for the common good.
Some felt private control of
investment flawed capitalism
as wealth creation went to the rich who reinvesting for
highest capital return. This meant that low return of social
were neglected. Socialist believe this limited
The public, using
a democratic process, controls the state. States
should determine investment goals and resulting
strategy. This is accomplished by controlling
property and investment capital. Production will be for
the common good and not for state officials.
collective ownership of economic factors of
production and state management of equally distributed
developed after WW
in war torn Western Europe. The key
public ownership of key
transportation and communication
industries. It also has showed increased concerns
and spent additional resources to help the
Neoliberal economics was used by England's
Margaret Thatcher in 1979 to dismantled
England's brand of Socialism.
She was followed, in much of Europe. In 1981,
President Ronald Reagan followed her policies to reverse the social and
being won, often over the object of the Supreme
The expensive socialist programs of SS
Medicare/Medicate and tax-expenditures were not
only not touched- they were expanded.
Note: 19th Century Capitalism wealth
was managed by owners wanting the highest capital return.
They neglected the low return of social
goods. Democratic Socialist believe this limited
individual ownership of economic factors of
free competitive markets
of resulting production.
Recent Application Mixed Economy developed in the United States
late 19th century. Being a Republic, the people decided the economic
the distribution of wealth. Phase 1 had the people slowly took
more control value created by demanding health,
safety and wage concession from Gilded Age capitalists. Phase 2 was a response to the Great
a public/private partnership to help the unemployed-farmers,
began the regulation of banking-finance, and
created a safety net system led by social security. Phase 3 had LBJ adding to Medicare
Neoliberal economists led the fight to remove many
the mixed economy regulations designed
middle class suffering and they also cut back on
programs. These attempts failed and the
Great Recession may begin a new phase.
Capitalism Was Not
a reality emerging with
the Industrial Revolution.
It required investment and the reinvested of profit.
Its wealth creation soon dwarf that of European aristocracy.
Unlike socialism, capitalist did not contemplate
the virtue of wealth or the effects of industrialism on
the human condition.
Not an ideology, intellectuals did not defend it until
the 20th century
when Hayek and Friedman, among others, sought did so.
explainer Adam Smith wrote “The Wealth of Nations.” It described how
individual decisions, driven by self-interest,
culminate in an increased wealth of nations. In “The Theory of Moral
Sentiments,” Smith argument that
moral development resulted from appropriate management.
Capitalism maximized wealth, it did not limit inequality.
Investments were based on capital return expectations.
Capital would move toward maximum creation of wealth.
The process left some serving the system, excluding
Basic Characteristics Described by Adam Smith
Private property-individuals own resources
Freedom of enterprise-own a business
Freedom of economic choice-work/not work, spend/not
Role of self-interest
Competitive Market System
markets operate freely
Questionable Degree of
Government Involvement a concern
Capitalists creates wealth for a few, allowing
from diversified investor decisions.
the consequences and magnitude of poor decisions.
Capital devastation, not annihilation is the worst
Protecting the investment process allows recoveries from
Socialism places confidence
in public control of the state because
they public understands needs, but they are not sensitive to
Reallocation of capital investment to the state
would eases suffering
The state is an abstraction so decisions are made by
Civil servants or elected representatives having no
make the good democratically approved public good investments.
Having minimal power and
self-interest, they can
take the place of self-interested capitalistic
is a difficult fit for Pure Socialism
It evolves toward a Soviet
toward the oft-cited Swedish model which
allows private investment
while transferring tax money
to the state for the public good.
Pure Socialism Lost
to Mixes Economies
managed most civil servants with terror.
Very Socialist Sweden's
democratic process manages the desire for increased
social benefits with the need to maximize production
resulting from private capital investment.
The Economist Magazine
continuing poor decisions. When inefficiencies occur and
affected industries adjust or lose to new efficient
ones. Joseph Schumpeter called this “creative
destruction.” This efficiency may generate a rapid,
intense crises which may lead to social unrest, chaos,
and repression. Will Politics protect top 0.1%
Abolishing Greed and
Minimization fantasies aside,
the two systems have more or
Capitalists and socialists
both accept private
Both expect economic growth and more taxes paid.
Both capitalism and social democracy
imposed taxes to cushion crisis dislocations.
Unhappy With Both
Have Unhappy Voters
Regardless of system, paying taxes is hated and
receiving benefits loved.
Political system decides who pays taxes and
pander to voters.
Politician differ on taxes and purpose but
fearing anarchy, must balance the system.
As a result, modern capitalism
and social democracy distinctions are minimal.
socialism now a
Democratic Party consideration.
Donald Trump won the votes
of a dissatisfied
The Democrats had mistakenly replaced a New
Deal cohort with many cohorts.
Their current Mixes Economy approach to
meeting cohort needs will
determine their 2020 convention winner.
Discussion of socialism indicates a commitment to
unspecified radical change.
But the massive convergence between French Revolution
socialists and capitalism in the 19th and
20th century means there is little economic
system change available.
Editor's Note: Most
more G for infrastructure.
Some want more G for education.
Some want more G for entitlements.
Some want more G for the safety net.
Some want more G for defense.
All politicians are buying votes.
Until economic growth picks up, all sectors will increase debt.
Unhappiness Caused Populism
Politicians, the Media,
Professionals Can/Have Made
Much Money, Power and Gained Respect
by Influencing/Creating Negativity!
Knowing how the US poorly measures
I wants someone to determine exactly how well our poor live now,
have lived in the
recent past, and will live in the Future.
1. We just don't know if more math homework and experiments are a
good thing or not. 2. US policies and practices don't look all that different. 3. High-performing STEM countries aren't doing anything that's obviously
4. Almost all students lose
interest in math and science. Computers and experiments may
delay this decision, but they
also increase learning for a very few
by a very lot.
Homework may teach some to be more responsible,
but again it
learning for a very few by a very lot.
More money for teachers is usually good
but one of the best teachers I have
observed since 1950
almost all measures, a poor teacher.
Maximize a students reading ability
Teach a little practical math
Get out of the way
Postscript: We Used Debt to Pay for
1. Revolutionary War
2. The Civil War
3. WW 1
4. Great Depression Poverty
5. WW 2
6. War on Poverty
7. To Control the Great Recession/Financial Collapse
Today We Spend It On All Voters
Spending Creates Happy Voters
Who Vote for Incumbents
U.S. Has Succeeded Using Inflation
and Economic Growth to Postpone Economic Pain.
People loved dot-coms until
They loved credit default swaps until they blew up.
Now, with low interest cost, they love cash-burning companies.
“When the music stops for expandingliquidity,
will be complicated."
Chuck Prince on debt-fueled
private equity deals before
The years 1968, 1969, and 1970 had many
early baby boomers moved into their 20’s;
of Martin Luther King Jr. and Robert Kennedy;
movement; the draft lottery, the bombing of Cambodia,
unrest on college campuses. Woodstock, Stonewall...
Did any of these increase the impatience of the country in a
There are likely stories that could be woven, undoubtedly more
but it is unclear whether anything
could be tested.
The question is
probably too big,
but the fact is interesting.
Growing up in a rural 1950's Massachusetts
Elderly lived with their children, few had health
insurance or much income.
Poor Families lived in older house at the end of a dirt road.
Poor Children were skinny, often dirty, didn't finish HS,
pooped around and then went into military, found a trade or pumped gas.
Almost no one had air conditioning.
all benefited economically after WW 2 but
those in the bottom
were economically less well-off.
Retired in Rural 2003
Central Florida Observations
Elderly live on their own with Medicare and improved SS. Poor families lived in older lowland house or trailers. Poor Children, obesity a problem, most finish HS, try college,
go into one of many services, industry and live at home.
Poverty Rate Stuck,
which ignores the safety net,
is stuck at 15%.
Liberals misuse poverty data and Conservatives despise safety net.
Some Feel Rich Have Too Much of Our Wealth
Wealth of Lower
Income Cohorts should Includes
Medicare, Medicaid, Safety Net and
Help from Friends and Family.
Elderly and Children Receive Substantial
Eligibility Monthly Income
One person $1287 Gross, 990Net
Working Means Fewer
Determine When Income is Too High to Receive
For households with more than 8, add $4,320
for each additional person. Note:
Eligibility for premium tax credits in
coverage year 2019 is based on poverty
guidelines for 2018.
FPL = federal poverty
Instead of turning K-12 education into K-16,
governments should embrace the kaleidoscope of learning approaches.
There are several ways to boost on-the-job learning
in the U.S. labor market. One is to give companies more incentive to
provide worker training. To some extent this is already happening --
in 2017, according to
U.S. companies spent $90.6 billion on training, representing a
substantial increase from 2016 (though much of this may represent
training regarding sexual harassment and other bad behavior).
Government tax breaks and other incentives could encourage more
companies to train their own workers instead of relying on the
publicly funded education system to do it for them.
Apprenticeships are another approach. Widely
regarded as having been successful in
suggesting returns similar to those of other types of education,
these programs are catching on in the U.S., with about a
half-million people now in apprenticeship programs. Although
typically associated with manufacturing, apprenticeships can also be
jobs. Under a program from the Obama era, the Department of Labor
set up apprenticeships.
Standardized tests mean large profits to testing companies
Changing from a two-part Scholastic Aptitude Test to a
has made a lot of money for a lot of people.
"Kaplan, a unit of The Washington Post,
saw SAT-related sales jump up to 50% in the later half of 2004...."
SAT companies got a similar hike in 1994, when tests were last
New curriculums mean large profits for curriculum design
textbook companies and Standardized Testing companies..
The academics who advise these companies receive
substantial consulting fees plus ego enhancements.
Product Line Expanded
More than 25 percent of public high
school seniors graduating last May
took at least one AP test."
Four companies that dominate the business
of making/scoring standardized tests.
of 2011, Gaston Caperton, the president of
the College Board, nonprofit owner of SAT, was
paid $1.3 million.
Richard Ferguson, former executive officer of
ACT Inc., made roughly $1.1 million.
First we were losing to Russia, then
Germany, then Japan, then Europe and now China.
It has always been a battle.
It has usually always been a
battle of rivals maybe
adversaries, seldom enemies.
5-5. Key Questions
Are the Most Productive
Affected? When and How Will They Be
High-powered tax lawyer and now Trump’s IRS commissioner, warned
that the squad was conducting “the
audits from hell.”
In 2012 the
wealth team embarked on a contentious audit of
German billionaire businessman George Schaeffler.
ProPublica reconstruct the key points in the Schaeffler case.
Eventually they determined owed about $1.2 billion in unpaid taxes
t after seven years of grinding bureaucratic combat, the IRS
abandoned its campaign.
They would accept just tens of millions of dollars.
battle high-priced lawyers and accountants was too much.
"Typically, when you sell a stock for more than you
paid, you owe tax on the gain.
But thanks to a quirk in a
Nixon-era tax law,
funds can avoid that tax if they use the stock to pay
off a withdrawing fund investor.
Heartbeats come into play when there isn’t an exiting
A fund manager asks a friendly bank to create extra
by rapidly pumping assets in and out.
The Very Rich
Top 400 families have more wealth
bottom 60 percent of households,
while the top 0.1 percent own same as
bottom 80 percent.
Early Tax Proposals
A 10 percent surtax on the top 1/10 of the top one-percent " Our preliminary estimate
is that such a surtax
would raise roughly $75 billion in its first year of implementation
and roughly $800 billion in its first
Proposal from Ocasio-Cortez proposed
marginal income tax rate on $10 million and over to finance her
Green New Deal
affects 16,000 people with income of $245 billion.
$164-382 billion over
Another calculation from "Mazur calculates that it
could raise $720 billion over the next decade,
affecting 0.05% of the US population (around 16,000
although the estimate is likely to be much smaller
because of the changing behavior of the
Proposal from Warren's team says her "wealth tax,"
which would apply to people with more than $50
million in assets,
is projected to raise $2.75 trillion over a decade.
This is an
A Trump proposal
requiring the chained CPI to inflation-adjust the
official poverty line would,
over time, lower increases to the poverty line used
to qualify for means-tested federal programs.
President Barack Obama’s
apply chained CPI to Social Security benefits,
Protections for extremely low-income elderly people
were provided. Source:
Editor's note: Forty years ago protectors of
the SS fund tried to do this.
2. Is Foreigners US Debt
Ownership a Problem?
U.S. Buys Cars, Wine, Electronics ...
Foreigners Get $ and Buy U.S. Treasuries.
Japan Tried to Buy US Assets, Paid Way Too Much, and Stopped.
So U.S. Get Good Stuff at Low Prices,
Foreigners Mostly get U.S. Government IOU's.
When We Borrowed
Began With the Revolution
2. Mostly it was
3. Human Needs
by Hoover and FDR During
Great Depression and Continued with LBJ
Bush 2 and Obama continuing.
Trump's Unorthodox Tax Cut Step #1 of Trouble?
In an Already Expanding Economy
Really High Nominal Growth Will Be Needed
Entitlements Pose a Problem
Who Benefits from Most to
for the elderly
All benefit are the
same, high income earners pay most
health care cost difficult for many
Longer life especially for
poor people who now also have subsidized health care will increases
cost. Free cases poorer health.
Solutions, later eligibility, less coverage, higher deductibles
currently not acceptable to electorate.
income, partial at 62, max at 70,
earners receive ha higher investment return, some receive death and
spousal benefits See
Table 1 and
concerns until baby boomers die, retirement age raised or young people
SS Benefits are 100% Secure bur their real value depends on
Solution just time or later retirement but
politicians will not act until forced by electorate Increased negative
cash flow should add political pressure.
Legal deductions and
exemptions from income decrease tax collections
health insurance,401K, long-term capital imputed rental income, mortgage
interest, earned income tax credits, deferred income from controlled
Tax payers don't
their benefit (entitlements?)
Solution of decreasing them by a third is
unacceptable to electorate though this would have increase tax
collections $400 billion in 2015 when the deficit was $439 billion.
When forced to, politicians will sole the problem with the least
"...provides a first approximation of how correcting the 2013 poverty
rate for noncash food and housing benefits, refundable tax credits, and not
using the upward [inflation] bias of the CPI-U
would change the 2013 poverty rate. This adjusted poverty rate falls from 14.5
to 4.8 percent, making the 2013 rate roughly a quarter of the 1964 rate (19.0
percent). If we were to lower the poverty threshold for cohabiting couples to
match that for married couples the 2013 poverty rate would have fallen even
more."Examples of noncash benefits
include food stamps SNAP), discounted school lunches, subsidized rent, Medicaid,
and Medicare. See
SourceEditors Comments are
Work is Not Encouraged as Real
Minimum Wage Falls
Consequence of Safety Net Increases?
"We hold these truths to be
that all men are created equal,
that they are endowed by their Creator
with certain unalienable Rights,
that among these are Life, Liberty and the
pursuit of Happiness. —
That to secure these rights,
Governments are instituted among Men,
deriving their just powers from the consent
of the governed..."
Rights are natural. They preexist acts of
human will and can not be nullified by such acts. Therefore if
rights are natural, so to is government limited and government's
main purpose is to "secure these rights."
Human nature is permanent and statesmanship
is to develop a political system that is conducive to and in accord
with the nature of humans.
Everything is in flux with various human natures. Human nature that
is always in a state of becoming and statesmanship is the
understanding and directing of shaping forces.
Conservatives want the Founder's Thinking Preserved, Progressives
want directing of society's shaping
: the creative arena of human affairs is society which is distinct
from government whose proper function is to protect life/liberty
primarily for the individual's private pursuit of happiness. Now
called Conservatisms, it is the Jeffersonian spirit of Democratic.
New Deal Progressivism
of FDR saw society changing with the industrial revolution. A
Progressive, he believed in a changing human nature. He expanding
government beyond providing conditions for perusing happiness to
providing economics rights to supplement Political Rights. Determining the final arbiter is
always contested. Men say it's them, Relegion say it's God.
Who is the final arbiter on economic rights?
For now it is the Supreme Court
of the 1960's believed policy elite managers would direct government
operations from above and end the business cycles.
Engagement with “Fake News” on Facebook is Declining The National Bureau of Economic Resources measured the
diffusion of fake news stories on Facebook and Twitter between
1/15 and 7/18. False content rose steadily on both Facebook and
Twitter through the end of 2016 but dropped by measurably from
Facebook but not for twitter.
“teams” will accumulate grievances..."
"...lose any interest in communicating across party
"This happened in the 1850s: We
know what happened..."
"Things...could get plenty bad..." with a
"...serious recession or the stock market..." crash.
and ... as a nation we are no
longer capable of making preparations for such
There is a substantial partisan and
ideological divide on abortion,
much more likely
to say it should be legal in all or most cases.
This gap is even larger between liberal
and conservative Republicans:
Nearly nine-in-ten liberal Democrats (88%) say abortion
should be legal in all or most cases, compared with only
about three-in-ten self-described conservatives in the GOP
“partisan chaos” is a direct result of Roe v.
said Michael Barone.
The all-out war over Brett Kavanaugh’s
appointment to the Supreme Court would not be so
people on both sides didn’t think Roe might
be at stake.
In 1973, 16 states with 41 percent of the nation’s
had already liberalized their abortion laws,
and America would have had different laws in
depending on the democratic process.
But then seven justices
delivered “an unusually sweeping”
ruling that made abortion legal in almost all
and the country’s defining wedge issue.
While public opinion on
cultural issues like same-sex marriage
has shifted markedly this century, “opinion on
It’s hard to win converts on such a fundamentally
about “the way people live their lives”:
who are largely secular, think their “personal
is at stake, whereas pro-lifers, who are mostly
believe abortion amounts to “extinguishing human
Rather than settle the abortion debate, Roe inflamed
because neither side believes it can afford any
As a direct result, every Supreme Court nominee
has literally become a matter of life and death.
U.S very good Geography that is
productive and well protected.
Demography for high growth with
younger members spending and mature members earning and investing.
US doing well as baby boomers had the Millennials.
Financial burden of the US is relatively small as baby boomer
demographic will end while China, Japan, Canada, United Kingdom,
Germany, Italy, and Spain now have the highest tax paying work
force. Only Spain and GB are not past the point of Demographic
regeneration. French and New Zeeland may have a favorable
The others are "terminal countries."
because Obama did less than expected.
He acted as if he did not want to have conversations
Near the end he new how important factors were
How well is China's economy working.
Why Russia interfered with the election system.
Solar energy needs a backup.
What a good tax policy would look like.
But Obama did not
care enough to have related policies.
He had understanding but no policy.
With Trump, no understanding but a commitment to some
Which is worse? Actually, he is
following a neoconservative policy.
US has forced an acceleration
of world player adjustments.
1. Brexit as the European Union disintegration
2. China's needs US managing World security to maintain
3. Xi tries to cooperate as without free trade, China
will fall apart.
Withdrawing as world's protector means
Containing China is Japans
concern. Containing Iran a is concern for Turkey/Saudis. Nukes could be used, but not against the U.S. as no, one
except Russia, is a nuclear concern. Containing Korean delivery of nukes is a South
immigrants, globalization, and
created disruptions. America's 1990 dissatisfaction
spread to Europe causing two years of
volatile pubic fury. This compounded the possible of
disruptions to Europe/Western
Status and Social Cultural Apprehensions
contributed to these disruptions and caused many to lash
out in a
tribal like response.
US Led and Financed Post WW 2 Moderation Ended
1. Great power conflict has returned
to early Cold War levels
Declining world wide economic prosperity,
including the west Disruptions Could Last Years Axion
#3 Optimistic leaders thought and even hoped Trump, Brexit,
or something else
would helpmoderate disruptions.
Voter Anxiety and Migrating Immigrants Are Difficult
1. No forthcoming opposing force seems likely.
Aging and shrinking developed world's population
AI is increasing worker employment anxiety.
3. Climate change is increasing anxiety.
Plan: Hide Strengths and Bide Time was Replaced because
Xi now has more centralized political power
B. US decline continues and she will not overreact to
C. China now an indispensible global economic power for many
nations who will support/accept her increase power projection
D. Xi has grown impatient with slowness of Chinese
and relaxed nature of international governance "players"
shows Confidence, Independence, International Activism
Expanded South China Sea Militarism B. Build a New Silk Road to
1. increase trade
2. provide foreign investment
3. provide infrastructure C. Asian Infrastructure Development Bank launched
and capitalized D. Multilateral Diplomatic Activism
launch/participation in world-wide initiatives E. New Navel Bases in Sri Lanka, Pakistan, and
Military exercises with
In a liberal Democracy, this
is often done by business expansion.
In 2017 U.S. Invested > $100 billion in China alone. Source
U.S. - China Relations, North Korea & the Future of the Global
A Well Conceived Grand Strategy
Clearly defined policy purposes
B. Situation analysis, detailed and considers underlying
historical trends Recent Changes
role of Communist Party and Ideology
to counter China's lethargic corrupt state bureaucracy
1. Enhanced CP authority by replacing state control of Foreign
party controlled Foreign Relations Power
2. Strong Marxian, Nationalistic, Authoritarian model to
counter liberal democratic capitalism
3. Install Xi's concept of future world community
4. Invigorate a more creative diplomatic community centered on
Communist theory over policy.
5. New State Diplomacy with enhances State Capitalism
6. Pragmatism is gone, national interest must be enhanced with a
national vision B. Ideological Confidence increased because history now
favors Chinas according to Marxian dialectic analysis.
1. Nothing random about what is unfolding, it is the result
of the immutable laws
of economic development Based on a Marxian Dialectic Turning
Point indicated by
relative decline of US/West and China's rise.
2. Current historical juncture represents a strategic
opportunity for China.
3. How a one-party state ideate using political topic/lingua
important C) More Sharply Focused Chinese Diplomacy D) China to Lead Improve Global Government Reform
1. Impending struggle for the future of International Global
2. China must now control the reform of existing
a. organization like UN, WTO ...
b. US system of global alliance ensures her own definition
3. Change U.S. Control Global Governess now based on a
complex web of
world organizations using international based treaty law and
4. Global Governance Improvement
5. Reasons for success
a. Diplomacy based on Chinese Socialism will lead to more
fairness and justice
b. US Ignoring World Order, Paris Climate Accord, UN Refuge
6. Controlling international institutions is first step E) Is China Backing off a bit as Worlds, especially US,
Neoliberal globalization four processes:
1) accumulation by dispossession
4) upward re-distribution of wealth
Together they have increasedeconomic
insecurity and cultural anxiety by
1) the creation of surplus peoples
2) rising global inequality 3) threats to identity.
Anxiety from neoliberal globalization has armed right and left populists.
Neither Norris and Inglehart nor Laclau
adequately account for such insecurity
in their ordination of populism.
“the people” aredifferentially deployed by right and left and they
must be understood in terms of the respective enemies through which
“the people” is constructed, a decisive dimension
A. Finance does affect real economy.
B. Finance system can falter.
C. Many economist wrong because of politics..
Stability Requires Dollar Supremacy
A. World trade is stable because the world, through
completes the circular flow of dollars back to the US by
investing in U.S. companies.
B. Dollar investments dependent on high Intellectual
generated corporate profits and U.S. economic growth.
1. Substantial portion is in monopoly power companies
Apple, Google, Facebook, Pfizer and Johnson/Johnson.
2. Profits are politically dependent on intellectual
property rights which are dependent on trade treaties
C. Distribution of these profits has resulted into an
increase inequality of income.
D. Called the Trump astric, has many academics
E. Source: The New Financial
Geopolitics-Europe: Helper, Spoiler, Risk Generator?
Failures Caused Latest Popularism
Foreign Policy Failures of Developed Democracy enhanced by
foreign policy failures i.e. Middle East wars
Non-Liberal Democracy success,
Poor Liberal Democracy Performance
Understanding Right and Left
Populism Right populism
defines "the people"
as those confronting an
1) Islamic terrorism
3) the European Commission,
4) International Jewish conspiracy ...
Left populism defines “the people” as
1) state and capital that thwart its aspirations for
2) allows hospitality towards the other Right
populism defines the enemy
in personalized terms as believing insecurity and anxiety are
necessary, unavoidable, even a favorable
product of capitalist social relations. This generates acceptable fear
the stranger and apunitive state. Left populism
defines the enemy in terms of socio-economic structures
believing insecurity and anxiety are
caused by a dismantling of the welfare state and
These egalitarian solutions that can also turn authoritarian.
recorded 1,800 anti-Semitic crimes in 2018, a 20 percent annual increase.
Most were perpetrated by right-wing groups.
US Targets Varied
Racist Trend "White supremacy groups such as the Ku Klux Klan
(KKK), neo-Nazis such as the National Alliance, and
skinhead groups such as the Hammerskin Nation."
Anti-Federalist Trend The anti-federalist “militia” or “patriot” movement) in the
early to mid-1990s with new groups in Montana and Michigan.
Anti-government sentiments existed from the birth of the nation
were anti-taxation, gun rights, and a “survivalist”
lifestyle. The “farm crises” of the 1980s, and rapid
cultural, technological and normative changes, gun control and
environmental legislation caused a fairly ideologically cohesive
movement, as well as its rapid growth.2
Fundamentalist Trend Mainly Christian identity groups such as the Aryan Nations,
merges religious fundamentalism with traditional white supremacy
and racist tendencies. It promotes ideas of nativism,
exclusionism, and racial superiority via a unique interpretation
of religious texts that focus on division of humanity according
to primordial attributes.
The Iceberg Model and American Far Right Violence
In the early 1980s, the Israeli political scientist Ehud
Sprinzak published a paper on the irredentist Israeli
religion-political movement Gush Emunim (The Bloc of the
Faithful) entitled “The Iceberg Model of Political Extremism.”6
A study by Global Energy Monitor cited by
Corporate Knights estimates that the countries
covered by the Belt and Road initiative could
end up producing 66% of the world’s carbon
emissions by 2050. That would increase their
current level of accounting for 28% of global
CO2 emissions and would cancel out the rest of
the world’s efforts in restraining temperature
rises to 2 degrees Celsius.
Global electricity inequality is a tale of
two continents: Asian convergence & African divergence.
Decisions on financing & building infrastructure in Africa
will be made in the fossil-fueled offices of Washington,
London, Paris & Beijing
Global electricity inequality is a tale of two
continents: Asian convergence & African
divergence. Decisions on financing & building
infrastructure in Africa will be made in the
fossil-fueled offices of Washington, London,
Paris & Beijing.