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The Conflucian policy advice to Hillary Clinton on economics

It’s a bit much for one dragon.

She didn’t ask for my opinion but she’s getting 200 advisors to tell her theirs. The problem she is facing is how to rebalance the country in terms of income inequality without, you know, pissing off the ultra wealthy. I’m not sure it can be done. A little bit of a snit is to be expected in all likelihood. Although, maybe she could have someone from Vox put together one of those cool and groovy graphics that demonstrate that no matter how hard the vanishing middle class works, we will never be able to afford our own yachts. That might bring a tear to the eyes of the 1%. The graphics should show how big a boat you can buy on a lifetime of $32000/year (if you’re lucky enough to get that these days) compared to what Steve Ballmer can buy.

Ok, so what would I recommend? Well, the rich are not going to like this but I’m not really interested in how the rich feel about these things. I’m only interested in bringing back prosperity, income security and innovation to the American middle class. It’s not all about them, except they are behaving like greedy dragons sitting on a giant pile of gold. If they’d just get off the stash we wouldn’t have any problems with the rich. I don’t envy their wealth and don’t want to be like them. I just want to be fairly compensated without feeling like I just got a handout that i didn’t deserve.

What I see as the biggest obstacle to income equality is what I call “exploitative profit mining”. That is the idea that Americans  can be harvested for various wealth through rents, fees and deregulation. I don’t want to feel like a crop anymore. The number one biggest policy initiative that I would propose is to eliminate the incentives to take advantage of everyday Americans simply because there is no one making sure it doesn’t happen. Than means reregulation. I can already hear the screams and howls from the flaming swamp monsters of the ridiculously rich. We can start at Wall Street. Let’s stop rewarding excessive financialization and risk taking. Maybe this would mean that Wall Street bonuses have to be capped at no more than 15% of income. That’s right, give those guys a straight salary. Maybe this would mean you can’t work an analyst to death at 100 hours a week. Go through every industry and increase the compensation to all stakeholders, not just the shareholders. Hire good managers and stop making CEOs co-owners who have an incentive to increase the values of their options at everyone else’s expense. That’s not socialism. That’s fairness.

Speaking of shareholders, I would like to see an alternative to the 401K. Americans should not be forced to gamble their retirement savings at a global casino. It’s immoral to require non-wealthy Americans to do this. Sorry, I’m not into it. I don’t like risk, especially when I’m going to have to live on that money. Plus, the 401K system undermines industries and innovations that create jobs. We have all seen investments gain in value when jobs are eliminated. The work still has to be done but it’s sent overseas or heaped onto the backs of people who are left after the lay off bloodbath. It’s inefficient and it destroys wealth of the middle class. Again, shareholders are not the only people who count. Bring back defined benefit pensions.

Medicare for all. There I said it. It’s ridiculous that anyone in this country has to be at risk of losing everything they’ve worked for all of their lives because cruelty is the flavor of the day on TV and radio. Let’s stop beating people when they’re down. If there are going to be sacrifices, everyone should have to make them, including the people getting rich on hip joint replacements and hospital beds. If you can’t get Medicare for all, at least impost cost controls and uniform fee schedules. Insurance companies shouldn’t have to negotiate different payments for each course of treatment based on how much profit providers think they can reap. Obamacare is not the wonderful panacea it’s been made out to be and it was never supposed to control costs. Let’s stop lying about it.

For god’s sakes, do something about long term unemployment. We’ve been hanging out here for too long. The jobs numbers are not telling the whole story. There are too many part time positions, too many temp positions and salaries are too low. Plus, ageism is rampant. Those of us who have decades to go before we can retire need to live on something. In the meantime, our lives are on hold. We can’t spend money because we don’t have it. That’s a drag on the economy and it depresses the wages of everyone else. People in the sciences especially need help. There’s a blighted generation that needs to be working. Set up some  private-public research labs, pay us a living wage and let’s get on with it already. We’re being wasted out here.

Those are some of my suggestions. I can think of a zillion more. We need to work on infrastructure, especially broadband. We need to gradually free ourselves from fossil fuel. The lefties will make climate change the reason but I’m just as interested in loosening the control of the super rich oil barons on the rest of our lives. Their price manipulations affect everything from mass transit initiatives to food prices. We should be allowed to choose whether we want to be owned by oil. I choose not to.

By the way, I don’t want profit sharing. I want a nice, steady income with a living wage. I’ve seen profit sharing schemes and they’re not serious. They are no substitute for stability. Our corporate overlords have a different value system than average Americans. Some of us do not want to be our own bosses, aren’t particularly turned on by playing capitalist games and just want the sweet relief of a regular paycheck. Recognize this. It’s important. Let’s stop measuring success in terms of how many yachts we can buy. Success can mean many things from discovering a new drug to being the best baker around. It’s not all about money.

I invite other Confucians to chime in here. What would your advice be to Hillary?

Finally, here is a video from one of my favorite straight talking Australians, Jane Caro. Caro has a background in advertising but she has been a popular speaker on education and feminism as well. In this video, Caro speaks about Dangerous Ideas. Her bit on quotas for women on boards and other institutions is brilliant. Not to be missed. So, I would add as a final suggestion to Hillary to institute a Gender Glasses program like they have in Finland. That is a government office that actually gathers cold, hard statistics from workplaces that demonstrate whether there is discrimination that prevents women from succeeding. No more “he said/she said”. If statistics are good enough in sports, they’re good enough to prove sexism in the workplace. Let’s measure everything. This country is way too deferential to men’s needs and ignores the economic impact on women’s lives.

Fast forward to about the 3 minute mark to Jane’s introduction.

The fate of civilization is in the hands of air traffic controllers

There are some pretty good posts this morning that really should be read.

Avedon Carol writes about the wealthy and well connected and the centrists who deceive for them.  In “Did I say ‘overlords’?, I mean ‘protectors’ (Avedon is a Chiron Beta Prime fan), she writes :

The arch-conservatives believe that the rich – the aristocracy – should run everything, and the rest of us should be “losers” who are poor and miserable and have to live a hard-scrabble existence in which we literally have to beg them for jobs, alms, and mercy. They recognize that the world can be ordered differently, that there can be democracy and freedom and a decent living for everyone, they just think it shouldn’t be that way, it should be their way, because they are morally better than us and should be able to lord it over us. They have worked tirelessly (and effectively) for more than 30 years to undo democracy, and they knew just what they were doing.

The Centrists, by their statements and position papers, believe this choice no longer exists – that the “new rules” of “globalization” mean that democracy and a better life, decent wages, worker safety and all that jazz are just no longer possible. We will have to live according to the desires of the arch-conservatives – not because it is morally right, but because there is simply no other option. We are no longer in an aberrant situation where democracy can be a realistic hope and workers can be treated like human beings. We “have to” “compete” with China, and that’s that. Somehow, these centrists have all managed not to notice more than two centuries of American and European history and thousands of years of world history, not to mention many changes in their own lifetimes. They have failed to read any economic charts or to make any coherent conclusions about the direct and visible results of policy choices.

Avedon goes on to suggest that the Centrists in charge are being deliberately deceptive or they wouldn’t be doing this because it’s stupid.  I’m not so sure about that.  I think the problem is that the nation became stratified when we weren’t paying attention.  I noticed it when I visited the executive office building half a mile away from the labs.  The suits aren’t like you and me.  They have no idea what we do and how much they depend on us.  Well, they might get a clue if they are ever diagnosed with a cancer whose program was disrupted by multiple mergers and layoffs and stupid pet MBA tricks, but I digress.

There is a class system in the US.  It started with the financial overlords and is now filtering its way down to everyone.  I blame Jack Welch.  He started the ridiculous “rank and yank” performance system that major corporations and Enron have taken such a shine to.  That system supposedly rewards competitiveness and drive but what it really rewards is loyalty.  The more you suck up to the person who ranks you, the better the chances that you will keep your job.  And the people who rank you are more likely to reward people like themselves.  It’s human nature.  So, the corporate aristocracy tends to make corporate aristocrats.  When it gets to the labs, it gets really ugly because then people start to hoard resources.  Stabbing colleagues in the back to make them look bad so you can look good to the people who can reward you becomes a real art form in the lab.  The problem is that all this politicking doesn’t lead to any real work.  When your livelihood depends on where you went to school and what your pedigree is, it doesn’t matter so much what you do once you get a job.  It’s a self perpetuating caste system.  America did not become a great nation by using a caste system.  It became great by breaking it.  Some of our best innovators weren’t even college graduates.  Think Edison and Steve Jobs and Mark Zuckerberg.  Today, those guys couldn’t even get an entry level position in their own companies.

So, the stratification and castification of American culture has been happening right in front of us but we haven’t seen it, mostly because we don’t come in contact with the classes very often.  I didn’t know that the executive building cafeteria served gourmet entrees and had a registered dietician on staff to customize your lunch.  I didn’t know that they could still send packages internationally at vastly reduced costs through the company mail system but that the lab rats couldn’t.  And I didn’t know how snippy and insulting the purchasing department could be until one of its members humiliated a PhD biologist for having the temerity to ask what SAP stood for during a presentation of the kludgy application during a NEW, new purchasing procedures rollout.

Those people up the road don’t know who you are.  You work with your hands or you deal with customers or you’re in a smelly lab with gross ecoli thingies, whatever those are, and they don’t see you, especially if they don’t have to.  And the centrists come from this class of people.  Things get done and chickens get shrinkwrapped into neat, sterile packages and drugs get synthesized but those people up the road have compartmentalized the process and do not associate *people* with the outcomes.  I recently met a former pharma advertising person working in an apple store.  He can’t find a job after his layoff (but I’ll bet his severance package was much more generous than mine) so he works at apple part time.  He says he was laid off because there was nothing in the company pipeline.  I will venture that he had never until that day ever met someone who had worked on that pipeline.  I was that person.  So, I asked him if maybe there was nothing in that pipeline because of all of the mergers and re-orgs and laying off people like me meant that research was broken?  Did he even know that 100,000 of us scientists were laid off right now, NOT working on the pipeline?  He got a funny look on his face.  I think he finally got it.  But it takes a guy losing his cube in the executive office building and who now works at an apple store for the classes to finally get to know one another.

The other two posts are by Matt Taibbi who I think might even come from the 1% but has a conscience in spite of it.  Well, he seems to have grown a conscience since 2008, for which we can be grateful but we are still stuck with Obama.  Anyway, he comes down hard on Obama and Tim Geithner in Government-Enron Style where he writes:

In other words, Geithner and Obama are behaving like Lehman executives before the crash of Lehman, not disclosing the full extent of the internal problem in order to keep investors from fleeing and creditors from calling in their chits. It’s worth noting that this kind of behavior – knowingly hiding the derogatory truth from the outside world in order to prevent a run on the bank – is, itself, fraud!

This is exactly the mindset that led Lehman to the abuses of the “Repo 105” accounting trick, in which loans were disguised as revenues in order to prevent the outside world from knowing the dire state of the bank’s balance sheet.

Now Obama and Geithner are engaged in the same sort of activity, only they’re trying to prevent a run not on an individual bank, but the entire American financial services sector. Geithner seems really to believe that if fraud were aggressively policed, and the world made aware of the incredible extent of the illegality in our markets, that international confidence in the American financial sector would plummet and our economy would suffer – and suffer, incidentally, on Barack Obama’s watch.

Better, apparently, the Band-Aid the problem now, and let the real mess happen later on, on someone else’s watch, or at least in a second term, when there’s no need to worry about re-election.

I’m particularly worried about this since so much of my savings is tied up in my 401K and as far as I can tell, the 401K system is a racket.  It’s the way middle class people can get a tax break, now, in exchange for putting their life savings, and all of the extra money they have, in the hands of sociopaths with a pathological gambling addiction.  Remember, they don’t know us because they never bother to meet us so all that money has no real meaning to them.  It’s just like the instant $200 Monopoly money given to them through our paycheck withdrawals.  It’s an automatic “Pass Go and Collect”.  It just shows up in the accounts.  The brokers don’t wonder how it got there.  They don’t think about what workers had to give up in real time to put away those hundreds of dollars a month for the future.  The future happens to other people.  Finance people live in the present.  They deny themselves nothing.

The other Matt Taibbi post is about the clueless plutocrats in A Christmas Message from America’s rich.  Some of these insults from the 1% have appeared elsewhere but Taibbi drills down to the real message the rich are sending us:

People like Dimon, and Schwarzman, and John Paulson, and all of the rest of them who think the “imbeciles” on the streets are simply full of reasonless class anger, they don’t get it. Nobody hates them for being successful. And not that this needs repeating, but nobody even minds that they are rich.

What makes people furious is that they have stopped being citizens.

Yes, that’s the problem.  The rich have stopped being citizens.  They see themselves as citizens of the world.  They can move their pawns around a global chessboard and so far, the nations of the world have been unable or unwilling to stop them.

That got me thinking about a proposal I have floated before.  If they’re not going to act like citizens, do we really have to let them live here?  I wouldn’t want to propose violent actions, because that would be wrong and no one wants another round of the French Terror.  Ok, some people do but not me.  No, in fact killin’s too good for some of them.  What I would prefer is if they had an extended vacation to some tropical destination, like, oh, I don’t know, the Cayman Islands, perhaps?  In fact, why don’t we let the union first screwed by the 1% and their bought and paid for president have the first crack at this?  When ever a 1%’ers private jet checks in for a landing, divert the plane to the Cayman Islands.  Let’s let the rich hobnob with their own class.  They can spend more time with their money.  And they don’t really need satellite or underwater cables to carry their internet traffic.  Just cut them off.  Let the predators play a game of real-life Survivor on Grand Cayman where they can fight each other for the best views and snorkel sites.  in fact, why not relocate the support staff?  It’s not their fault the rich have to go somewhere.  Then the bankers and brokers and investment class can clean their own toilets and administer their own antibiotics and mow their own golf courses and maintain the water treatment plants.

Well, it’s a start.  We still have to figure out a solution for the yachts, though those yachts ain’t going nowhere without a crew.  If I were a crew member, I would revel in my new found power.  While the rich dudes are asleep in their sleek, mahogany paneled staterooms, just cut the engines and abandon ship.  Yeah, take the only lifeboats with you and the keys to the helicopter.  Pull the fuses out of the electrical panels and consign them to the watery deep. Disable the GPS devices.  After you take the best wines and delicacies, dump all of the food overboard.  Let them float for a few days.

If they’re really as smart and successful and productive as they claim to be, they’ll figure out a way to get out their predicament.  But while they’re working on that, we’ll have time to blockade their way off the islands and bar their entrance to any port.

If they’re not going to be good citizens, they can’t have a country.  We’ll lease the Caymans to them for $500,000,000,000/year.  After a few years, they should be reduced to the economic status of Haitians.