What If Our Economic System Conflicts With Our Human Nature?

What if much or even all of modern advances and wonders happened in spite of capitalism, not because of it?

What if social democracy and political democracy, if a free economy and a free society is ultimately in complete opposition to everything that has come to be associated with capitalism: hyper-individualism and aggressive competition, consumer-citizenship and worker-citizenship, neoliberal exploitation and resource extraction, theft of the commons and destitution of the masses, education and healthcare disparities, high inequality and economic segregation, rigid hierarchies and permanent under class, inherited and concentrated wealth, cronyism and nepotism, plutocratic ruling elite, psychopathic corporate model, corporatism and corporatocracy, oligopolies and monopolies, fascism and inverted totalitarianism, revolving door between big gov and big biz, law and policy determined by big money lobbyists, elections determined by big money donors, etc?

What then?

Income Accelerates Innovation by Reducing Our Fear of Failure
by Scott Santens

Studies have shown that the very existence of food stamps — just knowing they are there as an option in case of failure — increases rates of entrepreneurship. A study of a reform to the French unemployment insurance system that allowed workers to remain eligible for benefits if they started a business found that the reform resulted in more entrepreneurs starting their own businesses. In Canada, a reform was made to their maternity leave policy, where new mothers were guaranteed a job after a year of leave. A study of the results of this policy change showed a 35% increase in entrepreneurship due to women basically asking themselves, “What have I got to lose? If I fail, I’m guaranteed my paycheck back anyway.”

None of this should be surprising. The entire insurance industry exists to reduce risk. When someone is able to insure something, they are more willing to take risks. Would there be as many restaurants if there was no insurance in case of fire? Of course not. The corporation itself exists to reduce personal risk. Entrepreneurship and risk are inextricably linked. Reducing risk aversion is paramount to innovation.

Such market effects have even been observed in universal basic income experiments in Namibia and India where local markets flourished thanks to a tripling of entrepreneurs and the enabling of everyone to be a consumer with a minimum amount of buying power.

Children’s Helping Hands
Felix Warneken

Young children are also willing to put some effort into helping. Further studies showed that they continue to help over and over again, even if they have to surmount an array of obstacles to pick up a dropped object or stop playing with an interesting toy. We had to be inventive in creating distracting toys that might lower their tendency to help— flashy devices that lit up and played music; colorful boxes that jingled when you threw a toy cube into them and shot it out the other end. We decided that if we couldn’t sell the scientific community on our results, we could at least go into the toy business.

As noted, the behavior of our little subjects did not seem to be driven by the expectation of praise or material reward. In several studies, the children’s parents weren’t in the room, and thus the helping cannot be explained by their desire to look good in front of Mom. In one study, children who were offered a toy for helping were no more likely to help than those children who weren’t. In fact, material rewards can even have a detrimental effect on helping: During the initial phase of another experiment, half the children received a reward for helping and the other half did not. Subsequently, when the children again had the opportunity to help but now without a reward being offered to those in either group, the children who had been rewarded initially were less likely to help spontaneously than the children from the no-reward group. This perhaps surprising result suggests that children’s helping is intrinsically motivated rather than driven by the expectation of material reward. Apparently, if such rewards are offered, they can change children’s original motivation, causing them to help only because they expect to receive something for it.

The Case Against Rewards and Praise
A Conversation with Alfie Kohn

by Sara-Ellen Amster

Rewards kill creativity. Some twenty studies have shown that people do inferior work when they are expecting to get a reward for doing it, as compared with people doing the same task without any expectation of a reward. That effect is most pronounced when creativity is involved in the task.

Rewards undermine risk-taking. When I have been led to think of the “A” or the sticker or the dollar that I’m going to get, I do as little as I have to, using the most formulaic means at my disposal, to get through the task so I can snag the goody. I don’t play with possibilities. I don’t play hunches that might not pay off. I don’t attend to incidental stimuli that might or might not turn out to be relevant. I just go for the gold. Studies show that people who are rewarded tend to pick the easiest possible task. When the rewards are removed, we tend to prefer more challenging things to do. Everyone has seen students cut corners and ask: “Do we have to know this? Is this going to be on the test?”

But we have not all sat back to reflect on why this happens. It’s not laziness. It’s not human nature. It’s because of rewards. If the question is “Do rewards motivate students? The answer is “Absolutely. They motivate students to get rewards.” And that’s typically at the expense of creativity.

Rewards undermine intrinsic motivation. At least seventy studies have shown that people are less likely to continue working at something once the reward is no longer available, compared with people who were never promised rewards in the first place. The more I reward a child with grades, for example, the less appeal those subjects will have to the child. It is one of the most thoroughly researched findings in social psychology, yet it is virtually unknown among educational psychologists, much less teachers and parents.

Is Shame Necessary?
by Jennifer Jacquet
Kindle Locations 626-640

Some evidence from work on moral licensing disagrees with this assumption that buying green is a good first step. People who buy eco-products can apparently more easily justify subsequent greed, lying, and stealing. A 2009 study showed that participants who were exposed to green products in a computer-simulated grocery store acted more generously in experiments that followed, but that participants who actually purchased green products over conventional ones then behaved more selfishly. 7 A 2013 study confirmed suspicions about slacktivism when research showed that people who undertook token behaviors to present a positive image in front of others— things like signing a petition or wearing a bracelet or “liking” a cause— were less likely to engage with the cause in a meaningful way later than others who made token gestures that were private. 8 This research suggests that linking “green” to conspicuous consumption might be a distraction and lead to less engagement later on. If this is true, we should not be encouraged to engage with our guilt as disenfranchised consumers, capable of making a change only through our purchases, and instead encouraged to engage as citizens. Markets might even undermine norms for more serious environmental behavior. In some cases, as has been noted in Western Australia, eco-labeling fisheries may even be giving fishing interests leverage against establishing marine protected areas, where fishing would be prohibited or more heavily regulated, on the grounds that protection is not needed if the fisheries in those areas are already labeled eco-friendly. 9 The market for green products might sedate our guilt without providing the larger, serious outcomes we really desire.

Strange Contagion
by Lee Daniel Kravetz
Kindle Locations 1157-1169

Grant’s research is at the forefront of work motivation and leadership. Oddly, despite teaching in a school dominated by economists, he’s landed at a surprising place in terms of the one social contagion he grudgingly propagates. “The study of economics pushes people toward a selfish extreme,” he tells me after his class lets out. More to the point, he says, “The scholarship of economics is responsible for spreading a contagion of greed.”

The Cornell University economist Robert H. Frank has discovered many examples of this, Grant says. Consider that professors of economics give less to charity than professors in other fields. Or that students of economics are more likely to practice deception for personal gain. Then there’s the fact that students majoring in economics routinely rate greed as generally good, correct, and moral. In fact, says Grant, simply thinking about economics chips away at one’s sense of compassion for others. Studying economics also makes people become less giving and more cynical. Students who rank high in self-interest might self-select for degrees and careers in economics-related fields, but by learning about economics they wind up catching more extreme beliefs than those they possess when they first register for class. By spending time with like-minded people who believe in and act on the principle of self-interest, students of economics can become convinced that selfishness is widespread and rational. Self-interest becomes the norm. Individual players within the whole unconsciously model and catch behaviors, in turn pushing ethical standards.

Trends in Depression and Suicide Rates

I just watched this video and recommend it.

Stephen Ilardi made two very important points.

First, depression is a disease of civilization. He spoke of research done on a hunter-gatherer tribal people. What the researcher found was that depression was almost non-existent among them. They lived a hard life and often hard deaths, but they weren’t clinically depressed. Nor did they have many of the other diseases of civilization, all of which are related to inflammation in the body.

He points out that studies have shown that depression is related to inflammation in the brain, at least partly caused by an unhealthy ration between Omega 6 fats and Omega 3 fats. Combined with the stresses and social isolation of modern society, clinical depression has become a massive problem.

Second, clinical depression is a growing problem. Each generation has higher rates of depression than the generation before. It correctly can be called an epidemic at this point and it increases as people age. The younger generations will as they age, if the pattern holds, have 50% or more experiencing clinical depression.

This gets at an issue I continually return to. Everything is getting worse for the young generation such as poverty, economic inequality, unemployment and homelessness. My generation is the first generation do worse than their parents in the 20th century. My generation as children had poverty rates not seen since the Great Depression and had the worst child suicide rates since such things were recorded. How bad does society have to get before even children become so desperate and hopeless that they kill themselves?

Most people in the older generations never personally experienced these kinds of conditions. Because of this, they have no tangible understanding, no sympathy. They can’t see how this is a systemic problem throughout society, a problem transcending individuals and even generations.

I’ve previously discussed this a bit in terms of capitalist realism (see here and here), but I’ve never gone into much detail about this before. The analysis behind the concept of capitalist realism is based on the collective inability to imagine alternatives and hence collective inability to perceive the problems of the present system. The individual is the product and the scapegoat of capitalist realism.

* * * *

I decided to look more closely at the increasing rate of suicide.

There definitely is something going on in society. It’s hard to make a simple assessment, but obviously particular demographics are hit really hard, specifically the youth demographic (also particular states and white men). A lot of it seems to do with the economy such as with peaks during industrialization and the Great Depression and then a slow rise during the era of globalization.  Overall national suicide rates go up and down. It is only with particular demographics that you see long-term trends.

http://www.haciendapub.com/medicalsentinel/homicide-and-suicide-america-1900-1998

http://www.suicide.org/suicide-statistics.html

U.S. Suicide Rates, 1950–2003
(per 100,000 population)

1950 1960 1970 1980 1990 1995 2000 2001 2002 2003
All ages, age adjusted 13.2 13.2 13.2 13.2 12.5 11.8 10.4 10.7 10.9 10.8
5–14 years 0.2 0.3 0.3 0.4 0.8 0.9 0.7 0.7 0.6 0.6
15–24 years 4.5 5.2 8.8 12.3 13.2 13.0 10.2 9.9 9.9 9.7
15–19 years 2.7 3.6 5.9 8.5 11.1 10.3 8.0 7.9 7.4 7.3
20–24 years 6.2 7.1 12.2 16.1 15.1 15.8 12.5 12.0 12.4 12.1
25–44 years 11.6 12.2 15.4 15.6 15.2 15.1 13.4 13.8 14.0 13.8
25–34 years 9.1 10.0 14.1 16.0 15.2 15.0 12.0 12.8 12.6 12.7
35–44 years 14.3 14.2 16.9 15.4 15.3 15.1 14.5 14.7 15.3 14.9
45–64 years 23.5 22.0 20.6 15.9 15.3 13.9 13.5 14.4 14.9 15.0
45–54 years 20.9 20.7 20.0 15.9 14.8 14.4 14.4 15.2 15.7 15.9
55–64 years 26.8 23.7 21.4 15.9 16.0 13.2 12.1 13.1 13.6 13.8
65 years and over 30.0 24.5 20.8 17.6 20.5 17.9 15.2 15.3 15.6 14.6
65–74 years 29.6 23.0 20.8 16.9 17.9 15.7 12.5 13.3 13.5 12.7
75–84 years 31.1 27.9 21.2 19.1 24.9 20.6 17.6 17.4 17.7 16.4
85 years and over 28.8 26.0 19.0 19.2 22.2 21.3 19.6 17.5 18.0 16.9
Male, all ages 21.2 20.0 19.8 19.9 21.5 20.3 17.7 18.2 18.4 18.0
Female, all ages 5.6 5.6 7.4 5.7 4.8 4.3 4.0 4.0 4.2 4.2

http://www.pbs.org/newshour/rundown/2013/05/chart-americas-rising-suicide-problem.html

http://news.msn.com/science-technology/us-suicide-rate-for-middle-aged-rose-28-percent-in-past-decade

Suicide rate: Chart.

http://www.theatlantic.com/health/archive/2012/06/chart-what-killed-us-then-and-now/258872/

historicaldeaths-615.jpg

http://www.newrepublic.com/article/113316/suicide-rates-rise-us-because-economy-not-culture

http://www.afsp.org/understanding-suicide/facts-and-figures

http://grerp.blogspot.com/2010/12/thoughts-on-fourth-turning-part-2.html

http://2020plus.net/Editorial-323-Mal-Fletcher-Middle-Age-Suicides-Does-X-Mark-The-Spot.aspx

http://www.onlineopinion.com.au/view.asp?article=14191&page=0

http://www.richardeckersley.com.au/attachments/YMHPbook_chapter_1.pdf

The Secret of Oz

Here is a documentary I highly recommend. It’s long, but extremely fascinating. If you ever wanted to understand L. Frank Baum’s The Wonderful Wizard of Oz, you’ll find this an intriguing analysis. Of course, the documentary covers much material besides just Baum’s writing. It’s the best explanation I’ve come across of the history of the US economy and banking system.

A 99’er Welcomes Death

A Disillusioned 99’er Shares His Disappointment With The American Dream, Welcomes Death

“Mark”, a member of the ever growing cadre of disillusioned, disenchanted and disgruntled millions of American unemployed, has written a letter shared by A Company of One, in which he explains the plight of 99’ers (those whose extended unemployment benefits are set to expire) in which he chronicles his plight and his terminal disappointment with the American system. One can only imagine how all the “99’ers” would feel if they did not have the benefit of living at least partially subsidized for 2 years in the socialist state of America. If Bahrain is any indication, where the government’s attempt to purchase the love of its people just failed today, pretty soon not even the 99 weeks of EUCs will do much to suppress what is an unmistakably rising anger among the broad US population.

From Mark’s letter:

To the unemployed, sick, disabled and poor:
Hello,

I’m unemployed over two years now, a 99er without any benefits for three months. I followed Unemployed Friends almost from its start, never posted until now, but am grateful for my time with you all. I did as asked with calls and e-mails, etc. I’ve a confession to make to you all. I’m a criminal.

I’ve obeyed the 10 commandments and all laws except: I’m unemployed and that’s now a crime, I’m poor and that’s a crime, I’m worthless surplus population and that’s a crime, I’m a main street American Citizen born and raised in the USA and that’s now a crime, and I’m euthanizing myself as I write this note — so arrest my corpse. This isn’t a call for help, the deed is done, it’s not what I wanted. Death is my best available option. It’s not just that my bank account is $4, that I’ve not eaten in a week, not because hunger pangs are agonizing (I’m a wimp), not because I live in physical and mental anguish, not because the landlady is banging on the door non-stop and I face eviction, not that Congress and President have sent a strong message they no longer help the unemployed. It’s because I’m a law abiding though worthless, long-term unemployed older man who is surplus population. Had I used my college education to rip people off and steal from the elderly, poor, disabled and main street Americans I would be wearing different shoes now — a petty king. Hard work, honesty, loving kindness, charity and mercy, and becoming unemployed and destitute unable to pay your bills are all considered foolishness and high crimes in America now. Whereas stealing and lying and cheating and being greedy to excess and destroying the fabric of America is rewarded and protected — even making such people petty king and petty queens among us.

Since the end of 2008, when corporate America began enjoying the resumption of growth, profits have swelled from an annualized pace of $995 billion to the current $1.66 trillion as of the end of September 2010. Over the same period, the number of non-farm jobs counted by the Labor Department has slipped from 13.4 million to 13 million — there is no recovery for the unemployed and main street. We taxpayers have handed trillions of dollars to the same bank and insurance industry that started our economic disaster with its reckless gambling. We bailed out General Motors. We distributed tax cuts to businesses that were supposed to use this lubrication to expand and hire. For our dollars, we have been rewarded with starvation, homelessness and a plague of fear — a testament to post-national capitalism.

Twelve years ago, I lost the last of my family. Ten years ago, I lost the love of my life, couldn’t even visit him in the hospital because gays have no rights. I fought through and grieved and went on as best I could. Seven years ago, I was diagnosed with Diabetes and Stage 2 high blood pressure with various complications including kidney problems, mild heart failure, Diabetic Retinopathy. These conditions are debilitating and painful. I am on over eight prescribed medications, which is very difficult without insurance and income. But I struggled on and my primary caregiver was very pleased with my effort overtime with my A1C at seven. Still these physical disabilities have progressively worsened, and I have had a harder and harder time functioning in basic ways. All the while, I give thanks to God because I know there are many more worse off than me — and I tried to help by giving money to charities and smiling at people who looked down and sharing what little I had.

I am college educated and worked 35 years in management, receiving written references and praise from every boss for whom I worked. Yet, after thousands of resumes, applications, e-mails, phone calls, and drop ins, I’ve failed to get a job even at McDonalds. I’ve discovered there are three strikes against me — most 99ers will understand. Strike one — businesses are not hiring long-term unemployed — in fact many job ads now underline “the unemployed need not apply.” Strike two — I am almost 60 years old. Employers prefer hiring younger workers who demand less and are better pack mules. Strike three — for every job opening I’ve applied, there are over 300 applicants according to each business who allow a follow up call. With the U3 unemployment holding steady at 9.6percent and U6 at 17 percent for the past 18 months, the chances of me or any 99er landing a job is less than winning the Mega Million Jackpot. On top of that, even the most conservative economists admit unemployment will not start to fall before 2012 and most predict up to seven years of this crap.

I believe the Congress and President have no intention of really aiding the unemployed — due to various political reasons and their total removal from the suffering of most Americans, their cold-hearted, self-serving natures. Had they really wanted to help us, they could have used unspent stimulus monies or cut foolish costs like the failed wars or foreign aid, and farm subsidies. The unspent stimulus money alone cold have taken care of ALL unemployed persons for five years or until the unemployment rate reached 7 percent if Congress and the President really wanted to help us — and not string us all along with a meager safety net that fails every few months. In any case, if I were to survive homelessness (would be like winning the mega-millions) and with those three strikes against me, in seven more years, I’ll be near 70 with the new retirement age at 70 — now who will hire an old homeless guy out of work for nine years with just a few years until retirement?

So, here I am. Long term unemployed, older man, with chronic health problems, now totally broke, hungry, facing eviction. My landlady should really be an advocate for the unemployed — she bangs on my door demanding I take action. A phone call and a “please” are not enough for her — she is angry. She is right to be angry with me, I am unemployed — as apparently everyone is now angry with us unemployed.

Two hundred and eleven and social services cannot help single men. Food banks and other charities are unable to help any more folks — they are overwhelmed with the poor in this nation. So I have the “freedom” to be homeless and destitute and “pursue happiness” in garbage cans and then die — yay for America huh? It’s the end of November and cold. A diabetic homeless older person will experience amputations in the winter months. So I will be raiding garbage cans for food, as my body literally falls apart, a foot here, a finger there. I have experienced and even worked with pain from my diseases — hardship I can face. I just cannot muster the courage to slowly die in agony and humiliation in the gutter.

I have no family, I have no friends. For the past two years, I’ve had nobody to talk with as people who knew me react to the “unemployed” label as if it were leprosy and contagious. I am not a bad person, in fact people really like me. But everyone seems to be on a tight budget these days and living in incredible fear. It is hopeless since we all are hearing more and more that we unemployed are to blame for unemployment, that we are just lazy, that we are no good, that we are sinners, that we are druggies, yet we are the victims who suffer and are punished while the robber baron banksters and tycoons become senators, congress, presidents and petty kings. So the only option left for me is merciful self euthanasia.

It is with a heavy heart that I have set my death in motion, but what I am facing is not living. So off I go, I have made peace with God and placed my burden on Jesus and He forgives me. This nation has become evil to the core, with cold-hearted politicians and tycoons squeezing what little Main Street Americans have left. It is not the America into which I was born — the land of the free and the home of the brave with kind folks who help neighbors — it is now land of the Tycoon-haves and the rest of us have-nots who march into hopelessness and despair.

Every unemployed person I have met over these past two years have been saintly. Sharing what little they have, and being charitable — being kind and patient and supportive. Isn’t it amazing that we Americans who suffer so much, have not taken to the streets in violence, riots or gotten out the guillotines and marched on tycoons and Washington in revolt as would happen in most other nations? But rather we plead with deaf politicians to please help us. We don’t demand huge sums — just 300 bucks a week, barely enough to cover housing for most. Most of all we say, please help us get a job, please allow us dignity.

I can’t help but juxtapose our plight to the tycoons and politicians. They are never satisfied with their enormous wealth, and always want more millions no matter whom it hurts. They STEAL from pension funds, banks, the people and government, and little Wall Street investors. Then rather than face punishment, they become petty kings in this world. They are disloyal to America, unpatriotic, and serve their own foreign UN-American greedy causes and demand more and more and more. I feel that this is not the nation into which I was born. I was born in America, the land of the free and the home of the brave. America, where people give as much as they receive. America, where all people work for the common good, and try to leave a better and more prosperous nation for the next generation. America, where people help their neighbors and show charity and mercy. This new America is alien to me — it is an America of greed and corruption and avarice and mean spirited selfishness and hatred of the common good — it is an America of savage beasts roaring and tearing at the weak, and bullying the humble and peacemakers and poor and those without means to defend themselves. I am not welcome here anymore. I don’t belong here anymore. It’s as if some evil beast controls government, the economy, and our lives now.

I must go now, my home is someplace else. Goodbye and God bless you all. God bless the unemployed and poor and elderly and disabled. God bless America and the American people except the tycoons and politicians — may God retain the sins of tycoons and politicians and phony preachers and send them to the Devil.

Mark

 

The US States as Countries (GDP)

Looking at each of the US states if they were their own countries – as The Economist recently did – reveals just how staggeringly big the US economy is. These are the ten biggest states in America (by population) and their equivalent countries (by GDP).
10. North Carolina = Sweden
9. Georgia = Austria
8. Michigan = Taiwan
7. Ohio = Belgium
6. Pennsylvania = Indonesia
5. Illinois = Turkey
4. Florida = The Netherlands
3. New York = Australia
2. Texas = Russia
1. California = Italy

Check out the interactive map at Economist.com
http://www.economist.com/blogs/dailychart/2011/01/comparing_us_states_countries

– – –

That is an interesting way to look at certain data. Showing that Texas GDP is comparable to Russia is probably an insult to one of those two but I’m not sure which.

I wish they had done such a comparison using the data on economic inequality. If they had done that, rich states like Texas and California would be more comparable to certain developing nations. Here is the previous data about state comparisons that I’ve posted:

https://benjamindavidsteele.wordpress.com/2010/08/31/10-states-with-ridiculously-low-unemployment-and-why/

https://benjamindavidsteele.wordpress.com/2011/01/25/the-10-most-and-least-tolerant-states-in-america/

MSNBC w/ Cenk: Reich – Middle Class & Wages

This video reminded me of why it doesn’t help the economy to give tax cuts to the rich and generally increase the wealth of rich while leaving behind everyone who isn’t part of the ruling elite. From just an economic perspective, there are three problems:

1) Increasing the wealth of the wealthy doesn’t necessarily increase investment. At some point, a person becomes so wealthy that further wealth becomes meaningless. This leads the super rich to gamble with their excess wealth which was one of the contributing factors to our recent economic crash. Financial gambling doesn’t make for a stable economy nor does it have any social value. So, if the government genuinely wants an economy that grows with stability rather than constantly crashing, they should create regulation and taxation that helps decrease wealth disparity so that excess wealth isn’t concentrated at the very top.

2) Most new jobs are created by small businesses, but the tax cuts for the rich mostly only help big businesses. Also, the bailouts help Wall Street while leaving Main Street to suffer. Why help the rich who helped break the economy while sacrificing the working and middle classes which are simply trying to get by? A lot of the working and middle class was in debt for the reason that wages were stagnating even as the rich were getting richer. So, if the government genuinely wants to stimulate job growth, they should ensure that wages grow as the economy grows and they should give bailouts to small businesses while breaking up corporations that are too big to fail.

3) Even ignoring all that, giving more wealth to the wealthy doesn’t stimulate the economy for some simple reasons. Assuming they don’t gamble it, the other choice the rich could do with excess wealth is simply to put it into savings. The middle and working classes, however, will spend any extra money they have which invests back into the economy. For good or ill, the US economy is based on consumerism and consumerism is based on working and middle classes that have money to spend. Let me explain why. A rich person spends several hundred or even several thousand on a pair of shoes. For the same amount of money, hundreds of working and middle class people could buy shoes. The purchase of hundreds of shoes stimulates the economy more than buying one pair of shoes even if it’s the same amount of money. So, if government genuinely wants to stimulate the economy, they should give tax cuts to the working and middle classes.

All of this assumes that those in power actually care about the economy as a whole and actually care about the average American. I suspect that this is a false assumption. It’s hard for me to believe that after all these decades intelligent people (including Democrats like Obama apparently) think that trickle down economics actually works. I think these people know that it just makes the rich richer. That is why they do what they do. Politicians are of the rich and have campaigns funded by the rich. Why would they help the lower classes? So, what if the economy collapses? The rich will always maintain their wealth. If the country gets bad enough, they’ll just move to a pleasant tropical island and take their wealth with them.

Here is another video that relates, but it’s from more of a libertarian perspective:

The author interviewed, Thomas E. Woods Jr, is criticizing the US military-industrial complex. Besides the moral argument, he mentions that military is not a very good investment. When we invest in military that is less that can be invested in other things such as education or infrastructure. Also, funding goes to defense research which uses up public tax money and wastes the most brilliant minds on discovering more efficient ways to kill people. Those same dollars and those same brilliant minds could be used for research to cure cancer or research into alternative energy.

Once again, the only people who benefit from the military-industrial complex are the defense contractors and the wealthy investors in these companies. Certainly, the average American who pays for these wars and dies in these wars aren’t benefiting. The only reason we have any interest in the Middle East in the first place is because of the oil that is there and those most interested in that oil is of course the big oil companies seeking profit from a dwindling resurce.

There were some comments below that last video which gave me some hope. Here is one from a user going by the name capitalist4life:

“I am a recovering neocon. I was converted through Dr. Paul’s gentle suggestion that our foreign entanglements may cause some foreigners to want to kill us. I found that reasonable and I became more anti-war as I saw Hannity and Limbaugh vicously attack that reasonable idea. The one thing that didn’t convince me was strong anti-war rhetoric. I had to be eased into it. Just keep that in mind. Don’t be aggressive and extreme. Gently ease our “conservative” friends into the anti-war way of thinking.”

But let me end with a different quote. One of the last truly moral Republican leaders was Dwight D. Eisenhower who, of course, is famous for warning about the military-industrial complex. He was far from being a pacifist liberal and for that reason his words are all that more important. He seemed to genuinely believe that politicians should serve all Americans and not just the wealthy. Here is what he said in a 1953 speech:

“Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. This is not a way of life at all in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron.”

US Currency: Gold & Guns

I was listening to Coast to Coast AM a couple of hours ago and the guest was discussing gold. The show in general attracts many right-wingers and libertarians which is why gold is a topic that would be discussed. I found the interview a bit educational.

At one time, US currency was backed up by gold (25% of each dollar was backed up). However, no one knows if our money is still backed by gold or not. Fort Knox still exists, but there has never been an audit of what is still kept there. Fort Knox has been used for many purposes including keeping safe items for other countries. Even if there still is gold in Fort Knox, it may be owned by private or non-American interests.

All of that is interesting enough, but the reason I wanted to write about it is that it got me thinking. The show guest mentioned that gold has little practical use. Isn’t that intriguing. Gold is valuable  because it’s worth is almost entirely subjective. Gold’s value remains stable because it isn’t dependent on any objective factors. Basically, gold is almost entirely worthless except for the fact that we pretend it’s worth something. It’s only value is that humans like shiny things.

It’s lack of any inherent value is what makes it such a good investment. Since it’s value isn’t dependent on objective factors or practical use, gold remains valuable and actually increases with value when the economy goes down. The only use gold had in the past was in making coins and jewelry. It has been used to back up currency because in the past it was used as currency and as bartering objects.

The show guest, of course, was recommending that people buy gold because it’s such a safe investment. I understood his argument, but I saw one problem. Gold will maintain its value as long as the economy is still functioning. However, if society’s infrastructure collapses, it’s pointless to own gold. In such a situation, it would be better to own stockpiles of guns and bullets that could be used for both protection and barter.

What makes gold a safe investment is exactly what would also make it completely worthless in a real emergency. If you’re truly worried about social collapse, you’d be better off building a cabin or bomb shelter in some secluded wilderness area. And, instead of filling your emergency shelter with gold, I’d recommend filling it with food and other practical supplies.

There was one other point the guest mention which really intrigued me. When the US decided to stop using gold, some Middle Eastern countries stated they wouldn’t sell us oil for mere paper money. US military might changed their opinion on the matter and they decided it was in their best interest after all to sell the US oil. What this means is that our currency is now backed up by guns rather than gold. This is the real reason the military keeps growing. The US has become an empire with military bases in countries all over the world.

It’s all rather ludicrous. All of the world’s economy is (or has been in the past) almost entirely based on US currency, but US currency is backed by nothing but guns and debt. Other countries buy our debt while we point guns at their heads. China, however, has bought our debt while becoming a military power itself. If WWIII happens, it will likely be because of this precarious gun-backed US currency. The US holds off debt at the end of a gun. Any country that challenges the US on this issue will be in a world of hurt.

Even more ludicrous is the fact that the very concept of debt is a complete abstraction. All currency and all of the world economy is based on fear of violence and trust that violence won’t be unnecessarily used. Everyone has to keep the illusion going for as long as possible, but eventually the illusion will collapse in on itself. The US deficit is ultimately meaningless. China owns most of US debt meaning all Americans are welfare recipients of the Chinese economy. Even so, there is no reason the US would ever pay China back. The Chinese government probably understands this, but they’ve used this relationship with the US to build up their own economy at the same time.

As long as there aren’t any major catastrophes to the world economy, the game can continue as it’s presently being played. If China decides to force the hand of the US government, then war will be inevitable. And if the US wins that war, all debt would be erased as if it never existed.

I don’t know what to make of all this. I just find it amusing. The economy, currency, and gold are all a game of make-believe.

10 States With Ridiculously Low Unemployment — And Why

I noticed this video a while back which shows how the economic problems mostly hit the coasts and the south first and then slowly moved to the interior of the country. Some of the midwestern and northwestern were barely impacted at all. I particularly paid attention to how Iowa remained strong as the states to the south, east, and north all descended into economic darkness.

I came across an article that explains some of this.

10 States With Ridiculously Low Unemployment — And Why

The 10 states are:

  1. North Dakota
  2. South Dakota
  3. Nebraska
  4. New Hampshire
  5. Vermont
  6. Hawaii
  7. Kansas
  8. Wyoming
  9. Minnesota
  10. Iowa

Some key elements that seem helpful:

  • diverse economy
  • agriculture or another strong sector such as tourism or industry
  • highly educated population

Iowa actually has a lower than average rate of higher education, but that is probably because of a split. There is a lot more agriculture in Western Iowa and a lot more education in Eastern Iowa (I read a few years ago that Iowa City has the highest per capita of highly educated in the country). Most importantly, Iowa balances all of this with a very diverse economy.

I had to check one other factor to see if the data holds up. I’ve recently written about income inequality because of reading the book The Spirit Level. As I expected, according to the data in the book, all these states are among the lowest in income inequality (and among the lowest in social problems). This once again proves the theory that income inequality is bad not simply because it leads to social inequality but because it leads to an unstable economy. Wealthy states like Texas and California were hit hard by the recession maybe because they have some of the highest income inequalities in the country.

The moral of the story: Even if you’re a selfish capitalist or a righteous social conservative, you should still help the poor because in helping them you are helping yourself. If you don’t help the poor, you and your entire community will suffer from your sins. So, quit being an asshole and help the poor.

Cenk Uygur on Tax Cuts for the Rich

Cenk Uygur has been slowly breaking into the mainstream for a while. He now has his own segment on Ratigan’s show.

It’s interesting that Cenk Uygur used to be a Republican. This makes obvious why he left the Republican party.

The question I wonder about is: What is the motivation for Republicans being for and Democrats being against tax cuts for the rich? Many like to argue that both parties are in the pocket of the wealthy elite. But if that were the case, Democrat politicians should support tax cuts for the rich as much as Republicans do.