Monday, April 30, 2012

Horses, Racing, and Slot Machines

One of the most famous horse races in American history took place near Nashville, Tennessee in 1806.

A local lawyer, judge, gambler and slave plantation owner was trying to get out of debt. Andrew Jackson was profligate with his own wealth but a stern disciplinarian with slaves and horses. After losing heavily on prior champion, he saw the potential in Truxton and bought him to train.Truxton then took on the reigning Tennessee champion Greyhound in 1805. Truxton and Jackson won, "winning Jackson $5000 cash on the spot. Had he lost he might have been jailed for debt and sunk into poverty. His training of the horse had made the difference. Truxton also became a good source of revenue from stud fees. Thus Andrew Jackson became the best known horse trainer, racer and gambler in Tennessee." [Internet Biography of Andrew Jackson]

In 1806 Truxton beat a new comer, Ploughboy, by forfeit when Ploughboy went lame before the race. Debts incurred by the losers led to Jackson assaulting another lawyer, Thomas Swann. In hopes of recouping their losses, Ploughboy was run again against Truxton. This time it was Jackson's over-trained horse that was lame before the race. Jackson, possibly out of pride but probably for the money, ran Truxton anyway. Truxton won the first heat, but now both limped on his hind leg and had a lame front leg. To win the bet Jackson needed to win two of three heats, so Truxton and Ploughboy were forced to race again. Truxton won the second race, and is justly famous for it.

Andrew Jackson soon killed Charles Dickinson in a duel related to the Truxton race. Jackson went on to kill many white men and American Indians, win the Battle of New Orleans, create the Democratic Party, and serve for eight years as President of the United States.

Now it is as if Jackson's ghost is back to haunt us in our increasingly barbaric era. For the most part people who race horses love them. They are prized possessions that are well cared for. I see nothing inherently wrong in horse racing, as the horses themselves seem to like to race.

Yet in the last couple of years something has gone horridly wrong in the horse racing industry, which is supported by fans wagering on the races. Injuries to horses (and jockeys) were already unacceptably high two years ago, but they have grown at an alarming rate recently. At one race track alone, the Aqueduct in New York City, 30 horses have died in less than a year, doubling the number that died in the same period a year earlier. [New York Times, "Big Purses, Sore Horses, and Death," April 30, 2012] Typically the horses are not killed by the racing accident itself, but are put down afterwards.

Race tracks have been under business pressure for years. Thirty years ago they were one of the few legal forms of gambling in many states. As casinos proliferated across the states more and more gamblers abandoned horses for craps tables and slot machines. As a result the money available for purses (the prizes that go to the owners of the horses) declined, as did race track profits.

Most, but not all, states have now legalized attaching casinos to race tracks. There is a tendency for the horse racing to be an event that draws people to the sites, with the real money made from the 24/7 availability of slot machines. There are less horse breeders and trainers than there used to be 30 years ago when there was more money to be won. So to stage races the racetrack/casinos have started using casino profits to increase purses.

As a result winning purses has become more important than pride for many professional horse owners. They are doing the Andrew Jackson: training horses to the maximum, which helps them win races, but is also bad for their health and leads to accidents on the tracks.

No one in the industry wants to see injured horses. But clearly that is the consequence of the system that has evolved.

Free market theorists would probably suggest that the situation will resolve itself. Attracted by larger purses, more those who race horses will breed and train more. Then they won't need to race the older horses that are most prone to injury.

I believe the risk to horses should be minimized, while still allowing racing. The industry should not wait for a free market fix that may exist only in theory.

Whenever a horse has an accident the owner should get a hefty fine. The money should fund an independent organization that monitors the training of race horses and disqualifies owners that do not comply with humane standards. Greedy, cruel owners would then pay most of the bills for the monitoring system.

If the industry cannot regulate itself to insure a reasonable degree of safety and dignity for its horses, then local, state, and yes the dreaded federal government should establish regulations to protect the horses. Or we could just close the industry down.

Disclaimer: In the past I have done some paid consulting work for investors in the racing industry, mainly related to legal Internet betting on races. At this time none of my clients, to my knowledge, is invested in the industry.

Saturday, April 21, 2012

Gardening, Veganism and Death

Our first burst of warm weather on the Mendocino County Coast has led me to accelerate my gardening activities. I am nursing seed sprouts along, clearing up weeds, chopping up decaying wood for my acid-loving plants, and watching my fruit blossoms for signs of the dreaded fire blight.

My thoughts turn to urban city dwellers who have never tried to grow food. Most just eat whatever, but the vegans would be shocked to know how much animal death is in their diets.

Vegans don't eat any animals, alive or dead, nor are they supposed to eat animal products like honey. Veganism, like most isms, has its interpretations, but most vegans I have talked to about it see it as more than an extremist form of vegetarianism. The ideology is that man should not exploit animals, but there always seems to be a huge concern about health and at least a dash of spiritual concern. Killing animals seems, to vegetarians, to be a likely source of karmic backlash. Veganism is associated with, but not identical to, certain schools of Buddhism and Hinduism that believe in reincarnation, and to the ideology of nonviolence.

Which is all fine, until you see the vegan sausage being made. As, for instance, in a food garden.

I hate free-market capitalist ideology, but in a garden I am in competition with a whole lot of animals that show absolutely no respect for private property. It is them or me. They must die so that I can eat fruits and vegetables. I am not under the illusion that the food in the supermarkets, or organic coops, guiltlessly consumed by vegans, is any different than that from my garden. A trail of animal death leads to that pretty apple in the bin.

Most of my competitors are, of course, insects. It isn't like I have to kill puppies to grow apples or lettuce. Every year, however, I kill hundreds of caterpillars with my own hands. They are especially a problem for my pear trees. Once for a couple of years I had problems with coddling moths, which are the most common kind of apple-worm, but once I began doing dormant sprays, which were really to prevent fungus, the worms (caterpillars) and adult moths died out.

Aphids must also die by the thousands or millions each year if I am to eat. Grasshoppers and other types of insects must be crushed in smaller numbers. I don't use insecticides. I don't kill non-destructive insects.

Then there are the higher animals, of varying degrees of cleverness. Deer are now fenced out. Our local scrub rabbits are small enough to jump right through the "deer and rabbit" fence, but they eventually tire of being chased by my dog, Hugo, and so the damage they do is contained. Birds can do a surprising amount of damage. In particular my garden is terrorized by a vicious gang of quail. The first few years I had Hugo, he chased them away, but then they realized he just was not fast enough to be a danger. He just ignores them now, so I have to encase their favorites like kale in chicken wire cages if I want any for my table.

Possums, raccoons, gophers, moles, half a dozen rodent species: much as I would like to kill them, I hope that Hugo and the neighborhood cats and fox will keep their numbers and thefts down to acceptable levels.
Turn the ground with a spade and you are sure to kill earthworms and grubs and strange creatures that might be in any of a number of animal families.

I don't grow grain, but vegans are really in trouble if they think there are no animal deaths involved in their wheat, rice, oats or weird substitutes. Grain fields are rodent heaven. Fail to kill rodents and you have no crop. Plowing a grain field kills lots of the little furry cuties, but plenty will survive to eat us all out of house and home.

Would it not be easier to agree that death is part of life and part of nature? Denying it does not make death go away. Insects die, mammals die, humans die.

It caterpillars kill my pear trees there will be less pollen for the bees (honey bees, bumble bees, fly's evolved to look like bees, various strange solitary bees). Even to have a garden and orchard I had to kill a lot of native plants.

Being kind to animals, and to other human beings, is a good practice. But fail to kill the weeds and the vegans will starve. Fail to kill the rodents, and we all will starve, holy vegans and practical omnivores alike.

If you are a vegan you need to get grounded. You need to get real. Embrace the earth, embrace nature, embrace the energy flow as the living eat the living. I admire your trying to be good. But you were created by a natural cycle of a billion years of life and death, of composting and birth, of joyful life and ravenous appetites. You are a billion years of death, a brief life, and another billion years of death.

Death, animal and human, should neither be worshipped nor denied. Death has its place whether you like it or not. Enjoy your life. Eat vegan if it suits you.

Don't think that animals are not dying to feed you. They deserve recognition for the contributions they have made. Hopefully some day you too will return to the soil and the plant and animal cycle, rather than being entombed forever alone in a casket.

Monday, April 16, 2012

Roman Catholic Peace Plan of 1941

More history no one wants you to know, because no one comes out looking good.

Cordell Hull, Secretary of State under Franklin Delano Roosevelt, in his Memoirs recounts the plan proposed by certain American Roman Catholics, and probably vetted by the Vatican, for peace between China, Japan, and the United States [pages 991-994]. This Roman Catholic plan, in my opinion, was not a bad plan, and if adopted would have prevented war between the U.S. and Japan. However, in the context of the overall global Catholic Plan for 1941, it appears to be Catholic diplomacy to help insure they would win the war.

Consider the world broken into five great empires in 1941, each oppressive in its own way. The Catholic Empire is usually equated with Adolf Hitler, or the Nazi Party of Germany, and included basically all of Europe, with influence in much of South America. The Communist Empire was mainly the Soviet Union, running from eastern Europe to the Pacific Ocean. By far the largest and most oppressive empire was run by the British, who controlled Great Britain, most of Africa, Australia, Canada, and the Indian subcontinent (now India, Pakistan, Bangladesh, and Burma) and more. The American Empire was confined to the Americas except for the Philippine Islands and Hawaii.

Roman Catholics were making a bid for total global domination, which of course p.o.'d the other empires. Led by Pope Pius XII and Adolf Hitler, having massacred or placed in concentration camps most European atheists, agnostics, Jews, and Protestants (except Lutherans, who were being merged into the Catholic Church in Germany), Catholic armies went plunging into the atheist Soviet Union beginning on June 22, 1941. [See also: Atheist Holocaust]

The Catholics [often called by their political term, Fascists] had long flirted with the government of Japan. Japan was a democracy and not at all Roman Catholic, having repelled Roman Catholic invaders in the late 1500's. However, the government had come to be dominated by a military faction that wanted Japan to copy the other empires by expanding, enabled by a liberal faction that justified expansion by believing they were liberating other Asian nations from domination by Great Britain, France, the United States, and the Netherlands.

Any expansion by Japan could be beneficial to the Catholic military campaign, since it would come at the expense of one of the other empires, with one big old caveat. If America entered the war on the side of the British Empire and the Soviet Empire (who normally were enemies, but were both being attacked by the Catholics), that would make Hitler's job harder.

The Fascist Catholics had a Fifth Column in the United States that had kept the U.S. from declaring war on Germany (and earlier, from aiding the democratic government of Spain when it was attacked by the most Catholic General Franco). Catholic voters were a crucial voting block in the Democratic Party, then the ruling party in the United States. The Catholic Church hierarchy had, on a number of occasions, shown they could influence those voters.

The crew chosen to come up with a peace plan and sell it to the governments of Japan and America consisted of Father Drought, Bishop James Edward Walsh (Superior General of the Catholic Foreign Mission Society) and Postmaster General Frank C. Walker.

The Catholic Peace Plan presented had many dimensions, but the focus was on the old bone China, that had been fought over by international hyenas for over a century. China had been coming under U.S. control due largely to the U.S.-educated Madame Chiang's influence on her husband, Generalissimo Chiang Kai-shek. Chiang acted like a dictator, trying to rule through his Kuomintang Party, but in fact he was simply head of a snarling gang of warlords. The Japanese, trying to restore order and prevent a British-American takeover of China, had staged what eventually became an invasion starting in the 1930's. Chiang's number 2 warlord, Wang Ching-wei, had decided to ally himself with the Japanese and actually ruled a larger, more prosperous territory than Chiang did by 1941. The U.S. Marines, who had helped Chiang when they were not to busy helping American capitalists help themselves to China, were already being withdrawn before superior Japanese strength in 1941, but the U.S. air force was already bombing Japanese
troops under the guise of the American Volunteer Group.

The Plan was really simple. Chiang Kai-shek and Wang Ching-wei would form a joint Chinese government. The Japanese would withdraw their troops and negotiate a peace treaty with the new government. The independence of Manchukuo would be recognized by China and the United States. There would be no large-scale Japanese emigration to China. China would allow for free trade, so U.S. and Japanese commercial interests would be on an equal footing. In addition, the U.S. would end its embargo of Japan.

The immediate problem with the Catholic Plan was that Roosevelt and his crew had long had their eye on the Far East. They already planned go to war with Japan and Germany as soon as the U.S. military was ready. They knew the U.S. economy was ten times as large as Japan's, and they knew the Japanese knew that. Roosevelt could take East Asia when he was ready, as history would prove (although the Japanese fought better and longer than expected).

The Japanese accepted the Catholic Peace Plan. So the Roosevelt-Hull response to the Catholics was to demand that any peace plan had to start with the Japanese removing their troops from both China and Manchukuo. They knew the Japanese would never agree to that.

In the end things worked out well for the Americans, but not for the Catholics or Japanese. Hitler was supposed to have conquered the U.S.S.R. by December 1941, but instead ran into walls of steel in front of Moscow and Stalingrad. The Japanese won the Battle of Pearl Harbor (Hull says the U.S. ambassador to China warned him of the attack plan almost a year in advance: see page 984) even as a large U.S. invasion fleet was steaming across the Pacific towards the Philippines.

America got dominance of Asia. Hull and Roosevelt claimed the U.S. was helping Asian nations against Japanese imperialism, but after winning the war the Asian nations were returned to their European imperialist masters.

In retrospect, no one looks good. Every major player was motivated by greed and willing to use massive violence to achieve their ends. Everyone committed war crimes and crimes against humanity.

The Pope should have been tried for war crimes and crimes against humanity, but became increasingly pro-American as Hitler and Mussolini's armies were defeated. Basically, Roman Catholic voters in the U.S. saved his hide, and he was allowed to take up anti-atheism, anti-Communism under the new guise of free-market liberal Catholicism and the Cold War.

Wednesday, April 11, 2012

Korea, What is Wrong?

The government of North Korea is trying to launch a satellite into orbit. Since by U.S. definition North Korea is evil, it is assumed by our corporate security state apparatus and their loyal followers that the launch is just a practice for an offensive, inter-continental ballistic missile with a nuclear warhead.

A little bit of historical review may put the matter in perspective. Despite having an advanced civilization, Korea has always been caught between two more powerful advanced civilizations, those of China and Japan. After the U.S. went on a bullying expedition to Japan in 1854 [See Commodore Perry and the Opening of Japan] the Japanese decided they had to modernize or be swallowed up like other Asian nations had been by imperialistic predators.

By then the predators were carving up their rival China, and so Japan took advantage of Chinese weakness to regain "stewardship" [my word choice] over Korea. This took three steps. After Japan won the Sino-Japanese War in 1895, China granted clear independence to Korea. Then Japan won the Russo-Japanese War in 1905, and Japan made Korea a protectorate. The U.S. went along with that because we had just massacred about 2 million people in the Philippine Islands and did not want an increasingly powerful Japan taking advantage of the situation there to gain control of U.S. sugar plantations there. [See U.S. Conquest of the Philippines]

Of course all along most Koreans wanted an independent nation, and multiple underground independence organizations existed. When World War II came along they became particularly hopeful. Their hopes were inflated by promises from the Allies that after Japan was defeated Korea would at last take its place among the world's independent nations.

After the Democratic Party of the United States dropped two atomic bombs on Japan, and the Japanese surrendered unconditionally (they had been trying to surrender conditionally for months), the Japanese military prepared to return to Japan from Korea and Manchukuo (Manchuria). The Korean independence organizations began talking about how a new Korea would be run. U.S. commercial interests, the Pentagon and Harry Truman did not see it that way. U.S. troops were rushed in, ostensibly to accept the surrender of the Japanese troops in Korea. Because Russian troops had been fighting in Manchuria, just north of Korea, the U.S. agreed that they could temporarily occupy the northern half of Korea.

Then the Russians and U.S. each decided that instead of allowing the Koreans to govern themselves in a unified country, the occupiers would pick winners and losers among the political groups in the regions they occupied. Korea was divided in half, which none of the Korean nationalists liked. But Korean communists got control of the north, and U.S. puppets got control of the south. Moderate, pro-democracy groups were shunted aside in both the north and the south.

When the Russians and Americans finally withdrew their troops, the communists in the north decided to re-unite the country. They easily won a civil war with the fascists in South Korea. But that was politically unacceptable to Harry Truman. The U.S. invaded South Korea. We had the blessings of the United Nations, but then again the U.N. had been set up to further the agendas of the U.S., and the French and British empires.

The Viceroy of Japan, Douglas MacArthur, had the Koreans whipped, but made the mistake of moving to invade China to re-establish war lord Chiang Kai-Shek as its, well, war lord. The Chinese reminded Douglas that white people don't automatically win wars (MacArthur had executed a couple of Japanese generals as war criminals for the crime of having defeated him in battle back in World War II.) After a lot of people died, the U.S. ended up with just half of Korea. The Chinese withdrew from North Korea, but the U.S. occupiers stayed.

So you have to ask yourself, even if you are an American, who is in the wrong here? The foreign invaders, the Americans, or the natives? Are North Koreans, or Koreans of any kind, sitting armed to the teeth on America's borders? I know of none. But U.S. troops, armed to the teeth, sit on North Korea's border. Has Korea ever invaded the United States? No, but the United States has invaded Korea.

I admit the communists have made a mess of the situation, but then they were put in a very weird situation. Their country was torn asunder, and most communist soldiers and party members were killed by U.S. troops during the Korean War. In the south communists and even non-communists who did not walk right were simply rounded up and slaughtered. So Kim Il-sung and a bunch of idiots started bossing Koreans around. They had to allocate a disproportionate share of their economy to defending their southern border. There was nothing inherent in communism that led the nation to economic disaster. China's Communist Party has proven that communism can develop an economy just fine.

So Kim Jong-un is now supreme leader. Maybe, instead of being just an idiot with an inheritance, he is smarter than we think. Maybe with his advisors they can figure out a way to make North Korea livable. My point would be that the U.S. has no business there. Let the Koreans in the south work out their future with the Koreans in the north as best they can.

As to nuclear weapons, again I remind you that only one political party on earth has ever used them, and that party, the Democratic Party, used them against large numbers of civilians living in two urban areas. If there were a world government interested in justice and peace (I don't think the U.N. constitutes such a government), its priority would be to take atomic weapons away from the U.S. first. And send all U.S. troops home. And try Barack Obama, George W. Bush and their crews for war crimes.

See also: The U.S. Conquest of Korea

Tuesday, April 10, 2012

Corporations Are Alcohol, Not Persons

There is a bit of a movement about these days to abolish corporate personhood. The modern version of corporate personhood in the United States is not that old, dating just from 1886. The contemporary movement to abolish corporate personhood can be said to date from 2000. [See Santa Clara Blues: Corporate Personhood versus Democracy, 2000]

Suppose corporate personhood is abolished. What then are corporations? I have argued in the past that they are property: "Slavery is the fiction that a person is property. Corporate Personhood is the fiction that property is a person." [quoting myself circa 2001]

But it is never that simple. What kind of property are corporations? Under the original U.S. constitution, slaves were property, but a peculiar kind of property that could be tried as criminals if they broke the law.

The Constitution does not mention corporations at all. For practical purposes business corporations (as opposed to say a city or non-business organization considered as a corporation) were left to the individual states to create and regulate.

What does the Constitution say about property? One interpretation of the creation of the Constitution is that it was all about protecting private property. Certainly that was an important consideration for the rich white men who wrote the original Constitution, but property is protected mainly by protecting the political power of the colonial elite. Looking to the Constitution itself:

The Preamble does not mention property, but then it was clearly meant as rhetoric.

Congress can give "Authors and Inventors" exclusive rights to their works for a limited period of time. We now call this intellectual property; I don't see corporations as a form of intellectual property.

So not only are corporations left out of the original Constitution; property, specifically as property, was also left out. That people have property and that laws affect property was an assumption so common that no one felt it necessary to make specific reference to property. We must look to the Amendments to see anything about property.

The original Constitution does not mention alcohol either, but it does (in Article I, Section 8) give Congress "Power to lay and collect Taxes, Duties, Imposts and Excises." This was soon shown to include the power to lay an excise tax on alcohol.

In the Bill of Rights, in Amendment III, the government is forbidden to house soldiers in private houses without the consent of the owners. Houses, of course, are a particular type of property, usually personal property but sometimes belonging to the government or corporations.

In Amendment IV the government is forbidden to search houses and "effects" without a search warrant, which provides a certain type of protection for property, and makes certain properties, houses, a shield for persons.

In Amendment V the government cannot "deprive" a person of "property" without due process of law. "Nor shall private property be taken for public use without just compensation." Of course, taxes (including excise taxes) are assumed to be the exception to this.

That is it. It is assumed that people, including judges and Congress, know what private property is, and what boundaries it may present to federal power.

Alcohol comes up twice in Amendments: in XVIII "intoxicating liquors" are made illegal. That's Prohibition. In Amendment XXI this prohibition is repealed, although individual states may continue with their own Prohibitions.

So why do I want Corporations to be treated as Alcohol? They have many of the attributes of alcohol. They can let people get out of control in a destructive manner, unleashing greed that is destructive to the ethics and economy of the American people. They can do some good in certain situations. I believe, for instance, that the beer (one bottle) I drank last night helped me to relax, and was good for my health. In other words, judgment is involved.

That alcohol is a form of private property that can be regulated and taxed was made really clear, really early under the new Constitution. Alexander Hamilton, the first Secretary of the Treasury, proposed the first excise tax on alcohol, which Congress passed in 1790. Western farmers (back then western Pennsylvania was the West) produced whiskey from their crops because it retained the value of the crop but was easier to transport and sell to the fun loving early Americans of the east coast. They started protesting the tax in 1791. As is typically case, protest got nothing done, so they essentially rebelled. George Washington road at the head of an army to suppress the Whiskey Rebellion.

Only a handful of rebels were killed, but the ability of the Feds to tax and regulate whiskey was firmly established.

I think that corporations need oversight. They are too important to our society to let them run around willy-nilly like a bunch of anarchists or hippies. Of course some corporations need more oversight than others. Mom & Pop corporations probably need no federal regulation except in extreme circumstance. Goldman Sacks probably needs two federal officials looking over the shoulder of every employee to keep it in line.

If you want to help abolish corporate personhood, check the MoveToAmend site to find an organization you can join. In the meantime, think about my Corporations are Alcohol idea.

Monday, April 9, 2012

Cicero, Desert Revelations, and Virtue

I started reading Cicero's de Officiis (On Duties), during brief breaks, only because I ran out of better things to read. I have long had an old used Loeb Classical Library copy, with the Latin on left pages and English on the right. I once aspired to learn Latin, but now admit that is a low priority.

I am finding a lot of good stuff in Cicero. I feel like Cicero was a wise and basically modern guy, despite being pre-Christian. Whereas talking to Rick Santorum and crew I feel like there really might be demons about; how else to explain their irrational thought processes?

Today I came across Cicero quoting Prodicus in Xenophon: "When Hercules was just coming into youth's estate ... he went out into a desert place. And as he saw two paths, the path of Pleasure and the path of Virtue, he sat down and debated long and earnestly which one it was better for him to take." That made me think of Jesus, who is after all a Jewish Hercules, also spending his famous 40 days in the desert, where he was tempted by Satan. Jesus and Hercules had a lot in common, including rising from the dead, although Jesus's miracles tended towards healing, and Hercules' were feats of strength. Since they were both supposed by their followers to be sons of God, I suppose that would make them brothers.

I once spent several weeks, more than 40 days, alone in a desert. Nothing much came of it. No voices spoke to me. I did not see visions. The plus of that is for all my faults, I am apparently not inclined to schizophrenia. I only made one important decision in the desert. I decided to finish college. I had dropped out of college for lack of funds and out of exhaustion. I then started working in restaurants, which was a lot easier than going to college. Plus, I had some money to spend for the first time in my life. In college every dime went to tuition, textbooks, my room and cheap carbohydrate-rich foods. Being out of college was way more pleasurable than being in. Still, I decided to go back, so I hitchhiked to Rhode Island and got a job to start saving enough money to enroll again.

Cicero, on the same page as the Hercules quote, is talking about the various ways careers are chosen, and things are not much different today. "We each copy the model he fancies, and we are constrained to adopt their pursuits and vocations. But usually, we are so imbued with the teachings of our parents that we fall irresistibly into their manners and customs."

My parents had been professional terrorists, employees of the U.S. government. My older brother followed their path into the Marine Corps, and while he was not much of a combat guy, he did his logistical role in bossing Islamic people around.

I decided to write novels, which turned out to mean working in restaurants or offices, with an occasional income boost from journalism or technology work. I did finish several novels, but gave that up over a decade ago now.

The more obvious dichotomy in our society than pleasure versus virtue is money versus virtue. Money has for centuries been the mad passion of American society.

Virtue is harder to define. Some let religion define it for them. The world is a complex place, and so too virtue is complex. What is virtuous in one situation may not be virtuous in another. Cicero's world was not brimming with 7 billion people who all want central heating and air conditioning. We all need to think more about virtue in this new context. We might even want to practice it now and then, as the occasion arises.

Sunday, April 8, 2012

Income Taxes and the 2012 Election

It may be a coincidence that I am working on writing notes to Cordell Hull's memoirs just before the 2012 income tax deadline. Cordell Hull claims that when he was a young member of Congress he initiated the plan to use income taxes as the main source of federal revenue. It is probably true, because most people would not boast of such a thing. [See Introduction of the Income Tax]

Taxes, in particular income taxes, will be a big issue in the 2012 election. As usual, the real battles will be in the congressional districts, but to keep it brief we can use the major party Presidential candidates, Barack Obama and Mitt Romney, as surrogates for their parties. Mitt Romney will say he can lower everyone's taxes, with the key point being that everyone includes rich people. Barack Obama will claim to lower taxes overall while shifting some of the burden from "middle class taxpayers" to the rich.

The problem with the Obama stance is that is just a plain old lie. The Democrats held the Senate, House and the Presidency for two years, 2009 and 2010, but did not even reverse the Bush era tax cuts for the rich. They also promised, when running in 2006, to end the war in Afghanistan and the destructive military and homeland security expenses, but they did not do that either, even though they gained control of the House and could have done it.

Mitt Romney probably genuinely believes that even lower taxes on the richest Americans would allow them to keep more of their gains, thus allowing them the capital they need to build more factories in China and datacenters in the U.S. to sell Chinese goods to those few Americans who can still afford them. Of course the reality is that since 2008 most rich Americans, most of the time, put most of their wealth into government bonds, not the stock market or new businesses. [See Where have all the Capitalists Gone?]

Whatever their campaign rhetoric , whoever is elected President will be looking at both an unprecedented national debt and a large by any standards annual deficit. Ever escalating medical costs are eating a hole in the economy even greater than defense spending. Short term, the economy is recovering from the Great Recession, but long term, disruptions are going to happen.

So you can plan on no one reducing taxes, except in specific cases where very large campaign donations are made. The temporary tax breaks of the recession are likely to disappear. On the other hand, general tax increases, even for the rich, are highly unlikely.

So, why not present my fantasy, Log Tax Plan. It is based on a simple idea. Incomes have become so disproportionate between ordinary Americans and our economic Overlords, we need to start using a logarithmic scale. I assume, since this is a fantasy, that all income will be taxed equally, including capital gains and dividends. Stock market gains will be marked to market annually.

Under $200,000, things stay about as they are.
From $200,000 to $1 million the new rate would be 40%.
From $1 million to $10 million, the rate would be 50%.
From $10 million to $100 million, the rate would be 60%.
From $100 million to $1 billion, the rate would be 70%.
From $1 billion to $10 billion, the rate would 80%.

Only those making over $10 billion a year would pay the new maximum rate of 90%.
I can hear the ghost of Steve Jobs crying out: that's unfair! Of course Steve paid almost no taxes in his lifetime, as most of his income was from capital gains. Capital gains are only recognized when stocks are sold. Since he died with his fist closed around most of the Apple shares he ever owned, he never paid taxes. Since he had clever lawyers (who for instance kept him out of jail for backdating stock options), he probably paid little in taxes even in death.

Steve Jobs was a hero for our age, a Silicon Valley Robber Baron who kept his eye sharply focused on the mighty dollar while almost half of Americans lost most of what they had in the Great Recession.

But ask yourself: would you rather make $30,000 and pay about $5000 dollars in taxes this year (mostly Social Security and Medicare), or $10 billion and have the government take away all but two billion? I'm guessing most of you are for the 80% tax rate, and would be happy to pay the 90% rate if you make more than $10 billion in 2012.

Sunday, April 1, 2012

Corporate Security State Declares Victory in 2012 Elections

After an extensive analysis of the situation, the United States corporate security state declared a victory in the November 2012 Presidential election, in an internal March 31st memorandum circulated by analysts to key figures.

"We are now that certain that, barring extreme circumstances, either Barack Obama or Mitt Romney will be the next President of the United States," a source who saw the memo told me.

But which of the two men did they favor? "We almost always prefer Democrats, as long as they are firm supporters of our security agenda, as Obama is. Democrats are good at heading off troubles among poorer Americans. Throw people a few food stamps and you don't have to worry about them getting very out of line."

Wouldn't any of the Republican candidates have been acceptable? "Mitt Romney was the best of the lot. He really wants to be President, just like Obama, so he'll be easy to control. Santorum gets people too whipped up over religion and morality, which is a security concern. Newt is, well, a time bomb waiting to go off. Ron Paul was a real danger because he would have tried to close down our global empire."

Aren't Democrats cutting the military budget? "Our own analysis showed the economy would crumble under current spending projections. We are reining things in to assure our long term prosperity."

What about withdrawing from Afghanistan? "We decide how to prioritize our missions. The President can help with that, but it is not his final decision. Not if he doesn't want to be Kennedied."

How about Congress? "During an election year in certain districts they have to moo about being concerned about Afghanistan or military spending. We want them to be re-elected. Let them moo."

Not even Norman Solomon, running for Congress in northern California? "Having a couple of people in token opposition in Congress keeps our control system credible. We don't think Solomon can win, and if he does we don't think he'll be a problem. He spent his younger years using nonviolence as a bludgeon against Marxists and Anarchists. These last few years he's been a big help in destroying the Green Party in California. We can work with him. We can show him off as proof that we are a democracy."

So no problems at all? "We are keeping an eye on Derrick Jensen and his attempts to inspire a new generation of eco-terrorists. We keep an eye on Occupy. We keep an eye on a lot of people. But we are not going to overreact to a bunch of amateurs. Frankly, the greatest danger to the corporate security state is that our own people will get too greedy and cause our temple to collapse under its own weight."

I am not venturing an opinion. They have an eye on me. I am just reporting what my source said.