Perry Glasser

Archive for December, 2017|Monthly archive page

REICH AND THE RESISTANCE

In Economy, Politics, ROBERT REICH, SOCIAL MEDIA on December 28, 2017 at 2:14 pm

Dollar$ apologizes for departing from its usual mission to analyze finance and instead articulate a political opinion. Lord know we don’t need another internet opinion, opinions being like rear ends—everyone has one, and everyone is sure theirs looks and smells better than anyone else’s.  But it is time Professor Robert Reich be called out. Enough is enough, and in this case enough is too much.

Professor Reich professes at U Cal Beserkely where California in 2016 paid him $263,000 to teach a class or two each year—that’s about $25,000 per lecture. That arduous duty is assisted by graduate students, also paid for by the U Cal system. That leaves the former Secretary of Labor plenty of time for speaking engagements at $40,000 a pop.

It’s not hard to be productive if you have a crew of graduate teaching assistants in your personal blog mill. Professor Reich produces 3 to 5 social media posts and short videos per day  and peddles a series of lectures on Netflix.

He lectures on wealth inequality in America.

Dollar$ is not waiting for the professor to start turning back his salary to Californians.

Professor Reich had high expectations that he’d return to the corridors of power with the elevation of Hillary Clinton to the presidency. That presumption afflicted plenty of coastal intellectuals who thereby fumbled the election by neglecting to campaign in several swing states such as Ohio and Wisconsin, places former President Obama won, twice.

In Reich’s case, the shock of loss has precipitated two responses:

  • Reich wrote a book called Saving Capitalism, which at his levels of compensation suggests the question “Save it for whom?”
  • Reich has positioned himself as the leader of The Resistance, the enemy being President Trump.

In the pictures above, can you guess, which is the real resistance fighter?

Dollar$ is no fan of Donald Trump, who in his personal history proves himself to be a lout and whose public utterances and Twitter-babble are a national embarrassment.

That said, Dollar$ points out to Reich and others that history is non-malleable fact (except at universities where professors who scoff at notions of “fake news” also posit that we live in a world where Truth is a matter of perspective).  Importantly, History is not a metaphor. That stuff happened to real people, and it was often less than pretty.

No one doubts that all internet arguments devolve into comparisons to Hitler, but until Professor Reich and other “resistors” show evidence that American citizens in the 21st century are being tortured and strangled with loops of piano wire, can we hope to no longer see a reference to the Resistance in WW2?

It’s not fun; it’s not persuasive; it’s not appropriate. And other than being a hope concerned citizens will send Professor Reich a few bucks, Reich’s Resistance has absolutely no program.

All the posture does is insult brave men and women whose sacrifice and courage should not be trampled for a cheap political point.

 

Advertisements

BITCOIN IN WONDERLAND

In Business, Economics, EDUCATION, Finance, Personal Finance, Political Economy, Wall Street, Wall Street Journal on December 22, 2017 at 2:52 pm

“Curiouser and curiouser!’ cried Alice (she was so much surprised, that for the moment she quite forgot how to speak good English); ‘now I’m opening out like the largest telescope that ever was!”

Bitcoin Speculator

Bitcoin Speculator

Whenever Dollar$ believes the Bitcoin mania is safely dead, someone nibbles a few crumbs of Bitcoin Cake and we hauled back to Looking Glass Land where mad creatures believe strongly that “Jam yesterday, and jam tomorrow, but never jam today,” is an economic promise and not an explanation the White Queen offers Alice.

The Queen said. ‘The rule is, jam to-morrow and jam yesterday – but never jam to-day.’
‘It MUST come sometimes to “jam to-day,”‘ Alice objected.
‘No, it can’t,’ said the Queen. ‘It’s jam every OTHER day: to-day isn’t any OTHER day, you know.’

Beware of strange substances that are labeled Eat Me.

A Silicon Valley startup called Xapo is the White Queen of BitcoinLand.

If you think gains like these are sustainable or represent some sort of value, you must have been eating Alice’s cakes. Maybe you’ve got some of that jam from yesterday. You might also wish to contact Dollar$ who just happens to have shares in the Brooklyn Bridge he can be persuaded to sell to you, a once in a lifetime opportunity.

BTC-2010-lin

 

Xapo is headquartered in Hong Kong, safely away from pesky US regulatory agencies. Sure, they’ve got offices in California, but so does every other financial firm in the world. The Board of Directors boasts former bankers from Argentina and Brazil, not exactly world beaters for stable currencies.

Magic Beans

The bitcoin business proposition is like the story Jack and the Beanstalk. (When it comes to bitcoins, metaphors from fantasy and fairytales are unavoidable.) Give us your real cow, and we will give you magic beans! Overnight they will grow to the sky! When you get up there, you’ll probably encounter a voracious giant ! To survive the giant, you’ll need to be a thief and run like Hell! All you need is the heart of a thief!

The Xapo Proposition

Xapo claims to have constructed physical vaults, “the company says are in mountainous regions.” There are no physical coins, of course. What will be down there will be computers Xapo promises will never be connected to the Internet–you know, like your laptop with no wifi.  If so, that means an army of people doing data entry on a army of disconnected laptops, in mountainous regions that cannot be approached easily. The mountain locations are, naturally, top secret.

If this does not strike you as the premise of a James Bond plot to bring down the world currency markets, what does?

goldeneye_oddjob007_reloade

Bitcoin Security

Liquidity

The bottomless credulity of the cyber-community originates with vitamin deficiencies caused by a steady diet of cold pizza and Red Bull for breakfast, watching Goldfinger too many times, the conviction being that one can get rich without ever getting out of a chair, if armed with an unshakeable libertarian belief that the arms merchants, sex traffickers, and drug dealers MUST have an untraceable non-government issued currency for money laundering.

Bitcoin Banker

Bitcoin Banker

 

TAXE$ AND COMMON CENT$

In Business, Economics, Economy, Finance, Personal Finance, Political Economy, Politics, TAXES on December 21, 2017 at 4:24 pm
bert-lahr-imdb-630x459

SCHOLAR OF THE SUBJUNCTIVE

Dollar$ resents and excoriates finance writers who write in the subjunctive mood. For readers who stopped paying attention to their English teachers in the 8th grade, that means a statement that is conditional. Correctly constructed, the sentiment expresses and a condition that is either not yet true, will never be true, or the speaker wishes were true followed by an outcome that is also not true.

 

If this be treason, make the most of it! – Patrick Henry

In our times, the greatest use of the subjunctive mood is for Romance, handy for lovers unwilling to commit but nevertheless compelled to express what resides in their hearts. Is there a better love song than If I Loved You?

Many speakers flummox the niceties of this important use of mood, and while it is not Dollar$ purpose today to deliver a grammar lesson, he earnestly hopes readers will be afflicted with the dry heaves should they come across ersatz prophets who preserve deniability and protect their alleged expertise by abusing the subjunctive mood. Yes, the stock market may go up, a bold prediction that allows deniability. It may also go down. Dollar$ also notes in passing that Patrick Henry was not speaking archaic English when he addressed the Virginia House of Burgesses, but was properly employing the subjunctive mood of the verb to be. If you still don’t get it, consider that the Cowardly Lion of Oz fame sings “If I were King of the Forest.” Now you know why Bert Lahr never sang was.

THE 2017 TAX BILL

chicken-little-sky-is-falling-1a

SOCIAL MEDIA EXPERT

Dollar$ has until now said zero about the proposed tax bill because it was proposed. Details were open to negotiation. That, however, did not prevent the doyens of social media to claim the sky was falling and suggest that passage of the tax bill would end civilization as we know it.

FACTS IS FACTS

The corporate tax rate has dropped from 35% to 21%. Lest you read Robert Reich, the former Secretary of Labor so startled he is not advising Hillary Clinton in the White House that he has taken to Facebook to lead “The Resistance,” let’s note that despite Professor Reich this tax cut is does not pick the pockets of the poor to give money to the rich. After all, 35% of nothing remains nothing, not coincidentally the amount of taxes paid by Apple Computer and many other multinational American-based companies that have disincentives to bring their profits back to American shores.  The new tax law is a hope to repatriate funds, an overdue program first called for by John F. Kennedy. Short version: US corporate taxes now align with the rest of the industrialized world.

Apple and other corporations can bring billions back to our shores and suffer no financial penalty for doing so. The Tax Policy Center noted in 2014, “Despite its relatively high corporate tax rate, the United States raises slightly less revenue from corporate income taxes as a share of GDP than the average of other countries.”

TRICKLING.4.19.1-figure2_0
Facebook economists who took time from photographing their cats and their breakfast (or cats having breakfast) have been told repeatedly that Trickle-Down Economics does not trickle.  Dollar$, however, notes that several organizations have as of this morning announced raises for line workers and hikes in their minimum wage. Dollar$ is certain those responses are due to more than a rosy picture of future profits precipitated by a tax cut. Fact is, labor is getting scarce; like other valued assets, if you want to keep trained and skilled workers, you have to pay for them. That’s how markets work.

The Koch brothers may have a social agenda, but Facebook economists smugly predicting that the new tax codes will so reduce revenue that Social Security and Medicare will have to be sharply reduced may want to note that neither of those programs is funded out of general revenues but from separate trusts funds. That’s why your annual pay stub has separate boxes for Medicare and Social Security, Binky. They ain’t general revenues. Dollar$ bids good luck to any weasel who lays a hand on those monies, but since the first rule of weasel life is to remain a weasel, Dollar$ is losing no sleep over that possibility.

Similar dire predictions about how the poor will suffer because so many itemized deductions are now disallowed stagger Dollar$ for the hypocrisy or ignorance of how taxes work.

Itemized deductions are

  • also known as loopholes
  • seldom used by citizen taxpayers who do not own a home

LITTLE OLD LADY WHO LIVED IN A SHOE

woman-livedinashoe

TAX PLAN BENEFICIARY

The Little Old Lady who lived in a Shoe had so many children she did not know what to do will, if she itemizes, will get $2,000 per kid where she used to get $1,000. Unless her shoe is worth more than $750,000, her mortgage interest will remain a deduction. Chances are, however, since more than 60% of all taxpayers already use the Standard Deduction, the Little Old Lady will avail herself of that tax simplification because the SD has near doubled. That is, should she choose to itemize, she’d be a damned fool to do so unless he has more than $24,000 in deductions, something highly unlikely for any who works for wages.Look, that redoubtable working family never paid taxes anyway, and at year’s end looked forward to cashing a tax refund check, the sum of all that withholding tax. Under the new tax plan, her refund will indeed be less because week to week and month to month the Fed will be withholding less of her money. Maybe she can build an addition on the shoe, a playroom in the heel, perhaps.

If any of her kids are planning college, despite the dire warnings of Facebook economists, the deductibility of tuition remains untouched.

So do her medical costs above a certain level—the same as the way things are now.

FLIES IN THE OINTMENT

Okay, Dollar$, a few of you still awake might ask what happens by 2028? Don’t these individual tax breaks phase out? That’s when we’ll be screwed, right?

Dollar$ asks the professional pessimists where it is written that a Congress controlled by Democrats in, say 2024, can’t tweak or change tax law? We change appropriations annually (it’s called a budget).

That is to say, Binky, if you think it is in your best interest, vote your convictions, but stop screaming like Chicken Little. Dollar$, you pestiferous fool, this tax law will raise the deficit!! We are going to hell in a handcart!” (Be careful though, you may start to sound like a Republican advocating fiscal responsibility.)

We have for a decade endured GDP growth in the 2% range, and we hunger for greater. Three percent is not unreasonable; up around 4% you can get a nosebleed and bet we are losing ground to inflation. But should the economy grow more quickly than it has, the deficit goes down. Bill Clinton demonstrated that by riding out Ronald Reagan’s tax cuts.

A country near 100% employment can afford a few risks, and if for a few years we put money in the hands of citizens, should we sweat it?

 

 

$$$

TREES DON’T GROW TO THE SKY or WHY RHETORIC WILL LEAVE YOU BANKRUPT

In Business, Economy, Finance, FINANCE FOR THE CLUELESS, Personal Finance, Wall Street on December 17, 2017 at 2:11 pm

Simple Truths

  • The stock market neither advances nor retreats–though prices indeed go up and down.
  • For every buyer, there is a seller.
  • When buyers and sellers agree to prices, they set asset values.
  • Buyers buy with the expectation of future profit; sellers sell when they believe continued ownership of an asset constitutes a risk no longer commensurate with possible reward.
  • No one in a free market is under compulsion.
  • Wall Street is neither a battleground for territory, nor  an adversarial contest.
  • It’s a market.

Wizards require small investors to believe that generals understand the battlefield and so deserve your trust and your fees because they otherwise have nothing to sell.  Internet access to mutual funds, closed-end funds (CEF) and  exchanged traded fund (ETF) has made giving professional advice a media game.

Sell newsletters, attract viewers, collect advertising dollars.  You need not be wise or even right. Scare the piss out of customers, and they come back anyway, thrilled that you were wrong. If God-forbid the doom-saying prognosticators prove to be right, customers will come back chastened and ready to listen.

Market Sentiment

Basically, after getting in the game buy buying 3 to 5 broadly diversified vehicles, you should do nothing. In 2017, if you followed that strategy, so far you are making a mere 20%. Since the vast majority of investing operations on Wall Street are performed by networked machines that monitor every price tick and move great mountains of capital for millions of worldwide financial vehicles, there is no human sentiment involved.

When you as a small investor get the news of sharp price movement, it is too late to act, unless you think and make decisions at light speed and are plugged directly into markets.

  • Machines do not agonize over decisions such as Buy, Sell or Hold.
  • Machines have no hearts. Machines do not succumb to sentiment. Machines do not read the newspapers.
  • Machines do not hold on to send their kids to college.
  • Machines do not save pennies to accrue the down payment on a house.

Nevertheless modern Wizards want us to believe market sentiment exists and that t hey are plugged into that sentiment.

Yeah. Sure. Right. Got it. Roger that.

How do TV Wizards get away with recommending buying or selling new assets every day?

kramer7

Sells perpetual panic and urgency

The fact is that while our money trickles into pension funds, 401ks, college funds, health insurance funds, and all the rest of the vehicles invented by Wizards to lure us with illusions of safety in an uncertain world, machines–owned assets are being sold.  There’s a buyer for every seller, Binky. Remember that.

Machines sell in torrents. We pray for 7 to 10 percent each year, are happy to get 3%, but when the algorithms indicate “Sell,” prices drop 20 to 50 percent in minutes.
Sentiment? Level playing field?

A Warning

Dollar$ is aware that sharp price moves can be precipitated by events and non-events such as national elections. If you think the US is going to hell in a handcart, do you also believe that after crap hits the fan that the money you buried in the backyard will buy a can of tuna?

This is why reasoned investors await blood on the floor before buying, and unless you are within 5 years of a financial goal–retirement, your kid’s first year of college, that down payment on your house–sit tight, never sell.

  • Buy and hold.
  • Ignore alleged “corrections.”
  • Sleep at night.

ZERO-SUM TAX POLICY

In Business, Economics, Economy, Political Economy, Politics, TAXES on December 12, 2017 at 12:52 pm

Five players sit down to play cards, poker for example. Each brings $100 to the table, and because of a peculiar tradition of the Dollar$ Casino, no player is allowed to introduce additional money into the game. If one player has sufficient skill, after some time that player will have $500 and the other four players will have $0.

That’s a zero-sum game.

In the social realm, that’s another way of saying that no player can be allowed to accrue more wealth without a second player becoming poorer.

This is assuredly NOT how the economy works, nor can it be the basis of Tax Policy. Perhaps for the simple-minded who find their checkbook to be an overwhelming problem in higher math, but let’s hope that political and economic policy are not tailored for the least able among us.

THE ZERO-SUM ECONOMY3032348.large

In reality, players in a card game can bring welcome new money to the table by:

  • dipping into a vault where old money has been snoozing,
  • innovating when some whippersnapper creates new
    • logistics (drone delivery, anyone?),
    • desirable products (cats do love their roomba rides),
    • organizational efficiencies that squeeze every nickel out of every process

On the Left, the “I don’t got it and you do so you must give it up” social justice warriors are out there, demanding that your children have to split up shares of an ever-shrinking pie. On the Right, the tax proposal now undergoing reconciliation between the House and Senate limits Research and Development tax (R&D) credits out of some misguided effort to cast a political illusion of “fairness.”  Fairness in tax policy usually means “the other guy should pay more.”

Dollar$ readers with a lick of sense will see this for what it is—an attempt to disallow new money to be brought into the game. Dollar$ is no champion of trickle-down economics, but hopes we can all acknowledge that faith in the future is not blind faith, but a realistic assessment of economic history. If it were not, Malthus would have been right and we’d all have become cannibals by now.

AN OBJECT LESSON

Twenty years ago, the world was supposed to be out of oil by now. Petroleum cartels (OPEC) were supposed to have sucked up all the money in the world. An entire genre of popular films was developed depicting a desert world where fuel was so scarce that warlords took women, water, and weapons based on how much fuel they could steal. Mad Max was a nightmare born of shortages and the lurid fantasies of adolescent boys.

If tax policy had been based on that scenario, and gasoline taxed to conserve an ever-diminishing resource, the cost of gasoline would today be sky-high instead of the roughly adjusted for inflation stable price of the past 25 years – the sole exception being those years when OPEC states manipulated prices by manipulating supply under the false impression that no innovation could ever occur—which it did.

OPEC’s hold on the world economy was busted by hybrid cars and oil from shale extraction coupled with the discovery of 80% of the world’s accessible shale in the United States. It may not be clean and it may not be pretty, but after the picketing is done, you can be sure some whippersnapper will find a way to make it prettier and cleaner.

THE R&D TAX CREDIT

Let’s keep the whippersnappers in business!

 

 

 

 

WHINING – A HOW-TO FOR MILLENNIALS

In Business, Economy, Political Economy, Politics on December 9, 2017 at 2:26 pm

One of the more frequent themes Dollar$ reads on social media is the ongoing complaint that the generation born between 1945 and 1970, those rotten Baby Boomers, are a bunch of louts who deliberately loused up the economy for everyone who came after them. Selfishness is something you develop by smoking weed through a bhang and

HENDRIX

SELFISH BABY BOOMER

listening to Jimi Hendrix. If they would all only die, housing would be cheap and jobs would open, easy, high-paying jobs with benefits that require no experience.

This theory explains why that kid who lives in your basement on a three-legged couch incessantly watches pornography on his cellphone. All the jobs out there are soul-sucking crushes, fruitless and stupid wastes of time. Even looking for that job is a waste of time. Fixing the couch isn’t worth the trouble, either. Glue? Nails? It’s all too complicated.

Facts

Facts only obstruct a good theory, but Dollar$ is not yet of the party that deems feelings should be the basis of policy because facts are no more than the legacy of the dying culture called Western Civilization, but our hearts never err and can only lead us to a better world. As Donald Trump and deconstructionist professors have taught us, facts are relative.

However, some facts are numbers.

  • In November 2017, the US economy created 228,000 new jobs
  • The jobless rate for non-high school graduates is 5.2%
  • The jobless rate for the overall US economy is 4.1%, the lowest it has been since the dot-com bubble burst in 2000.
  • After years of lackluster growth of 2%, the economy is now growing at nearly 3%, a pace that means business expansion will require ever more new employees and—gasp—will need to pay entry-level employees well to compete for their heads and hands.
(figures from The Wall Street Journal, Dec 9, 2017)

By the way, Dollar$ also notes that the economic expansion these figures suggest is worldwide. The stock market is soaring because that confidence in the future is shared most everywhere. If Finance Buccaneers don’t screw it up by inventing products that have no basis in reality and then leverage that fantasy 100-fold before selling those vehicles to municipal retirement accounts, regional banks, and other suckers, your BitCoin Futures, for example, we are in for some good years.

Good news upsets ideologues who prefer to complain about their ongoing, constant anxiety even though that anxiety, at least in the economic sphere, is misplaced. Sure, things can go wrong, and eventually will, but the quality of life has never grown in a straight line. When things suck, wait a while. They will turn around. You don’t really need to check under the bed each night.

For example, Robert Reich, the Beserkely professor, former Secretary of Labor, and Facebook columnist, checks under the bed three to four times each day with columns and videos. His trauma at not being reintroduced to the corridors of power when Hillary Clinton failed to be elected must have been acute. Instead of running the world, he is on the sidelines where he generates a tsunami of media whose final point is that whomever is doing whatever, Professor Reich could do it better. He has the time to do this because California pays him in excess of $400,000 per year, requires him to teach no more than one or two classes, pays the salaries of a cadre of graduate students to assist him with his onerous work, collects $40,000 for speaking engagements, and has published a book called Saving Capitalism, which, if Dr. Reich’s situation were typical, would seem to need no saving at all.

At least not for him.

Baby Boomer Failures

  • The safe and cheaply available birth control that makes hook-up culture possible on that basement couch, thus eroding the moral fiber of our culture.
  • The internet that delivers porn directly to the basement couch.
  • The virtual elimination of several diseases, such as polio and smallpox.
  • The virtual elimination of famine because of advances in agriculture and the successful world distribution of crops like winter wheat.
  • The Civil Rights Movement of the 1960s.
  • The Women’s Rights Movement that began again in the 1970s.
  • Passenger jets. How else can a Millennial go backpacking in Nepal before taking residence on the sofa?
  • Cell phones, that device that permits Millennials to snap selfies, cat photos, and up-to-the minute data on any Millennial’s location should they venture from the basement, all forms of narcissism previously never seen on our planet.
  • Digital special effects that bring believable visions of world apocalypse and intergalactic warfare to that cell phone or the game box beside the couch facing the flat screen TV on which HD pornography plays most of the day.
  • The rising preponderance of women in higher education as students, teachers, and administrators.
  • Automobiles that cost more because they are built to new standards of safety, airbags, seatbelts, and the like for passengers who strangely wish to live through collisions. Those doodads are constructed with materials other than steel to keep vehicles lightweight enough to conserve fuel. slow global warming, preserve energy, and keep that basement comfy.

Why are These Failures?

Dollar$ is glad you asked.

The work, you see, is not yet done. Those damn Boomers selfishly left the world imperfect. Some kids may have to get off the couch and build better infrastructure, get us renewable energy sources, find better batteries, silence jet engines, create hologram entertainment, and take the US out of rubber, concrete, and petroleum logistics.

You know, work and innovate.

Effort sucks.

Totally.
download

 

 

 

Tulips and BitCoins

In Business, Economics, Economy, EDUCATION, Finance on December 7, 2017 at 9:00 pm

Tulips

In 1636, Holland discovered the tulip. They were imported. People went crazy for them. Everybody wanted them. No one could get enough of them, and the more rare they seemed, the more valuable they became. The cost of tulip futures for some bulbs rose to prices worth more than 20 acres of land. I am not making this up.

It’s easy to laugh, but open your closet and count your Beanie Bag Babies stash. How many collectibles have you bought recently? Holy bananas, have you been buying fake money and stamps with baseball players on them from small Caribbean states as family heirlooms?!?

But God forbid, have you considered BitCoins?

The Wizards on Wall Street are fainting. They notice that Bitcoin rose above $15,000 this week, and is up from $800 a year ago.  Remember, always that Wall Street Wizards invest in nothing, but they want a piece of every transaction. They earn profits when money changes hands, and if that is when your kid’s college education turns to dust, well, that’s a shame.

BitCoins are an imaginary currency backed by the full faith and credit of nothing, not nobody, not nohow.  The dollar, on the other hand, is a currency backed by the full faith and credit of the United States, which Dollars$ admits may not be all that much more, but has to be worth more than a few beeps and blips on some kid’s garage in a Tokyo sub-basement. Sorry, Binky, but the gold in Fort Knox has not been seen for decades. Every bill in your American wallet is a promise to pay–later.

The US dollar is also the standard for several other currencies, small countries, mostly, that cannot risk having speculators manipulate their money. In  the currency markets where money floats, the US dollar is relatively stable.  On the other hand, people who invest in Bitcoins either live too far from a decent casino or think Monopoly money is tricky stuff. They plan on being the last person through the exit when the inevitable collapse occurs, but do you know what happens when all the elephants try to get through the door at the same time?

BitCoin is the preferred currency among drug dealers and computer hijackers, those rascals who are the cousins to that Nigerian prince who offer you millions if you’ll send just a few thousand. The Prince makes that offer by email; the BitCoin pirates fly the Jolly Roger  while sailing through cyberspace.

You get your choice.

bitcoin

look that them digits!

jolly roger

WEALTH INEQUALITY

In Business, Economics, Economy, EDUCATION, Finance, Political Economy, Politics, TAXES on December 5, 2017 at 10:40 pm

bossy sisterWhenever my big sister played Monopoly, if the game was going against her she would toss the playing board in the air. My hotels and houses would scatter across the living room carpet as she shouted, “Salugi!” (a New York-ism pronounced “suh-LOO-gee”)and lunged across the table to confiscate most of my deeds, especially Boardwalk and Park Place.

When I was able to read the rules of the game, I learned there was no allowance for tossing the game in the air or confiscating my property. My sister was cheating! But since I was 8 and she was 14, she was able to meet my accusation by beating me up.

The History of Wealth Redistribution

My sister was a revolutionary.

To be sure, Dollar$ reminds readers that rebels object to rules, but revolutionaries rewrite them. Rebellions are common; revolutions are rare.

The folks who threw the board in the air in the past have cried, “Justice!” not “Salugi!” They had names like Washington, Lenin, Mao, and Castro.

Note that political persuasion—Left or Right—has nothing to do with revolutionary status. Mao and Washington might have discussed military tactics, but Dollar$ suggests they would have come to no agreement about economic systems or the function of government.

The Function of Governmentpreamble-20532-20120118-55

It’s less complicated than Monopoly.

We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.

Washington (the dude on the $1) believed that the function of government was primarily to protect the rights of the individual, rights that most often needed protection from government itself. If no military personnel have been billeted in your living room, thank Washington.

Washington may have noted that to promote the general welfare required some redistribution of wealth to insure equal opportunity and to insure domestic tranquility, but that does not guarantee equality of status among citizens.

Washington’s pal was the first Secretary of the Treasury, Hamilton (the dude on the $10). Hamilton understood that wealth concentration in institution like banks were a social good, provided the bank used that concentration of wealth to fund the visions of a greater society, lending money to visionaries and giving stability to the economic infrastructure by protecting wealth from being squandered by a ruling class on personal indulgences. Hamilton, an orphan at 11 and the illegitimate son a British West Indies plantation owner, would likely not endorse a notion that the function of government was to protect the rights of the filthy rich to become obscenely rich.

The Situation Today

Some of Dollar$’s best friends sink into fuzzy thinking when talk comes around to how wealth is created and distributed in the United States. They lose sleep fearful that someone, somehow, somewhere, is leveraging assets to optimize profit.  They simple-mindedly believe that economics is a zero-sum game and cannot imagine economic growth. If an organization makes a dollar, someone must be a dollar poorer.

No. That simply is untrue. If it were so, you and I would enjoy the same standard of living as Washington and Hamilton. But the fact is that economies grow.  At issue is how they grow, not whether they should grow at all, though there are indeed some who think that a good idea, too.

The deluded friends of Dollar$ from time to time propose bold programs to redistribute wealth, programs they understand as pursuing Justice.

There two reasons those cannot and should not work.

1. Nowhere in the US Constitution will one find the word corporation. True, we reserve the right to free assembly, but that does not elevate any assembly of citizens devoted to profit a guaranteed right to speak lies in its advertising or compensate its directors and executive officers so rapaciously that shareholders who hope to partake of the boons of the system see their profit participation reduced by rapacious Buccaneers.

Oliver-Wendell-Jr-Holmes-9342405-1-402
Not Sherlock; not Mycroft, just Oliver

2. Oliver Wendell Holmes, Jr. noted Taxes are the price we pay for a civilized society. The idea is carved in stone on the IRS building in DC., but let’s note that corporations do not pay taxes, they collect them.  If you think they do not, you are submitting to a distraction. Dollar$ hastens to explain that citizens are consumers. Tax us, and we bleed money. Bleeding, we consume or save less, neither of which are good things, though it does not follow consumers should not be taxed. Civilization is messy, but must be purchased. But to a corporation, taxes are a cost of doing business, like labor, supplies, and logistics.

Raise corporate tax rates, and corporations will only raise their prices.

Guess who pays the difference?

Today’s  Lesson

Remember, friends, we cannot pursue social justice by confiscating wealth. We can, however:

  • Limit executive compensation by law to some multiple of the lowest worker in an organization;
  • Create progressive income tax brackets that limit the shift of American wealth to the rich from the poor;
  • Lower repatriation taxes so that companies that keep their money off-shore are encouraged to bring it home where they can invest in more factories and create jobs here–better to collect 15 percent of something than 30 percent of nothing;
  • Demand that higher education is a matter of national security, and so to insure the blessings of liberty are  free to all;
  • To insure the blessings of liberty on ourselves and our posterity, give tax breaks to organizations that train employees instead of demanding that future employees borrow so much money to gain perceived needed skills that students have no choice except a life of indentured servitude;
  • Regulate publicly traded corporations by disallowing aggregation of profits as cash without paying shareholder dividends, a means to share in that profit. Can we stop the nonsense that hoarding cash is good corporate financial strategy when all it does is spike share prices that are subsequently used to calculate executive performance compensation? (Are you listening Apple Computer?)
  • Return to personal income tax rates that  reflect the needs of our society. Under Eisenhower, we built the interstate highway system and taxed marginal income as much as 92 percent.

We don’t have to throw the game board in the air to start over again: all we need to do is play by the rules.

DEMONIZE THE OTHER GUY

In Business, Finance, Political Economy, Politics, TAXES on December 4, 2017 at 5:50 pm
screwed1

Citizen

Dollar$ sadly notes that social media has reduced American political discourse into rabidly demonizing the other guy. I wish we could say Dollar$ is surprised.

If you dislike the proposed tax bill, it cannot be that in 500+ pages there is not a line or page you admire. If you admire the new tax bill, it cannot be the in 500+ pages there is not a page that is wrong-headed.

Here’s a challenge: call your representative and ask him or her what he or she likes (or dislikes) about the bill. Make them reverse field. Watch them cry.

Real-world logic allows for conversation and (gulp) compromise. Instead, we see Republicans who simply walked away from their responsibilities for the final year of President Obama’s tenure and refused to act on anything at all; we now have Democrats who think what citizens want is for them to do the same, to get even.

You know, like a kid in a school yard with a grudge.

Wake up, ladies and gentlemen who  represent us—none of us voted for you to do that.

Is it any wonder that Congressional approval ratings linger under 15%? Think of it, 6 of 7 Americans think their representatives are a bunch of horses’ asses.

Guess who is getting screwed?

Congress at work.

Congress at work

WUBBA-WUBBA – IT’S TAXES!!!!

In Business, Economy, EDUCATION, TAXES on December 2, 2017 at 1:57 pm

Monster1My friends (Dollar$ has a few) who are academics are running in small circles and tearing at their hair because both tax plans coming from Congress will require graduate students to declare their free tuition as real dollar income. Sesame Street’s Grover would respond to stress by running in small circles and tearing at his hair while crying “Wubba Wubba.”

Maybe the blue Muppet is a professor.
Academics aren’t as smart as Muppets, so we should charitably give them a bit of latitude. Many seem to believe that graduate education in America is done, another victim of a vengeful carrot-topped president who despises anyone with an IQ above room temperature.

But the same folks who picket and bemoan how their institutions exploit graduate students and adjuncts should be celebrating this tax reform.

Glad you asked. Let’s think before we run in circles and cry, “Wubba-Wubba.”

Suppose (God forbid) you are the president of Big Ass University (BAU), a research institution. Down in the labs they are doing unspeakable things to rats and monkeys; in the Humanities they are lying on tattered divans reading books, rising only to apply for grants to allow them to lie on European divans read European books; every two or three years the faculty reorganize the required curriculum to reflect the newest political orthodoxy. As the head honcho at BAU, you spend most of your time gazing at the blueprints for the next architectural triumph that will mark your legacy, residence halls to rival the Marriott, gymnasia, and perhaps a library, albeit one with as few books as possible insofar as the digital age puts texts and other documents in the hands of students’ smartphones. Books are high maintenance; get rid of them and you can be rid of librarians, as well. The renderings of these oncoming innovations hang on the walls near your office, granting you bragging rights before a single spade of earth is turned. The local construction unions have gifted you with a decorative hardhat.

Your most difficult chore is to staff several thousand classrooms with teachers. It’s a real challenge. The people who write checks to BAU have come to expect something more than a 4-year cruise with aerobics, bull sessions, and yoga classes.

Your noteworthy faculty would prefer to remain unmolested by such niceties. Their important research absorbs their time, so they heartily endorse a system that brings your cheap labor to the front of lecture halls. You hire that cheap labor by paying with scrip, that scrip being free tuition and fee waivers that cannot be ported to any institution other than your own. They can’t pay the butcher with it; they can’t pay a landlord for some close-to-campus vermin infested hovel. The resemblance to the Company Store in a 1930s coal town in West Virginia to BAU should evade no Dollar$ readers.

Note carefully, the dollar value of their pay is calculated by you and has little or nothing to do with their time, labor, or even intelligence—it is a figure calculated by what you are NOT collecting.

Now up steps the Fed with its infernal new tax plan. The Fed will insist your employees declare the scrip that you give them to be income, just like they expect you to declare your limo, clothing allowance, and the two cellphones that come with the job. The Fed now expects to extract taxes from graduate student income in the same way.

How will you ever staff those classes?

PAY THEM WHAT THEY ARE WORTH!

If your professors can earn $100,000 by teaching six or eight classes in a year, they are earning at least $12,500 per class. If a graduate teaching assistant teaches 2 sections in Fall, 2 more in Spring, and 2 more in Summer, at $12, 500 per section, they are good for a salary of $75,000 per year.

What? You say that’s too much? That graduate teaching assistants were meant to be exploited? Wasn’t that you Dollars$ saw on the picket line demanding equal pay for equal work?

What? You fear people will stop going to graduate school and so to cover lower division classes BAU will have to create more tenure-track jobs??? How will adjuncts in dead-end careers stand it? Job openings????

Wubba-wubba, wubba wubba wubba..