Archive for the ‘Economics’ Category

Coal Country Comeback

April 18, 2017

I am not sure if this is actually good news.

Hazard, Kentucky is one of those small coal-mining towns with one main road snaking through the hollow. Both sides of the road are lined with a handful of retail stores and restaurants. The windows on about half of those stores are now covered with newspaper. The signs out front say, “closed.”

That’s what happens in a one-industry town when the president turns against that industry. Carla Hall at tiny Feltner’s Barbershop, right on the main road, knows that too well.

“My business went down tremendously,” she said.

Like Carla, everyone in town, from the insurance salesman to the waitress at the coffee shop, is ultimately connected to money that comes out of the mine.

“When they start getting laid off, they stretch out the haircuts,” she said.

However, there is a new sense of optimism in coal country and that is linked to a new president who, from the campaign trail, frequently bellowed: “We are going to put our miners back to work.”

I love mining coal,” Carlos Sturdill said 250 feet underground in the E4-1 mine in Hazard. That mine shut down in the Obama years. There are many factors that allowed the mine to re-open and people like Sturdill to get back to work.

For starters, the entire economy has seen a bump. That has created a demand for steel. The high-quality coal that comes out of Appalachia is well suited for making steel.

“I’m glad to be working. I’m thankful I’ve got a job again,” Sturdill said. Then you have President Trump who started rolling back regulations early in his time on the job. One of Trump’s early executive orders was to roll back the Stream Protection Rule. The SPR was created in the 11th hour of the Obama presidency and it would have placed a burden on coal companies to test streams before during and after mining. Trump followed up by undoing the 2015 Waters of the US rule, which broadened the definition of a body of water.

Obviously, it is a good thing that people are getting their jobs back and Hazard’s economy is reviving, yet it seems to me that it is more than a little sad that these communities depend on something as difficult, dangerous and dirty as coal mining for their livelihood. Shouldn’t they aspire to something better for their children than coal mining. Besides, the reprieve is only temporary, as some residents of Hazard realize.

No one expects coal jobs to come back to their heyday. Some of the causes can be pinned on former President Obama.

Under pressure to get away from coal, some power plants shut down. Some were retrofitted to burn natural gas. Now that officials spent the money, they won’t go back — especially because hydraulic fracturing makes natural gas available and cheap.

“So, a lot of that chunk of the market has been taken away,” said Dr. Anthony Szwilski of West Virginia’s Marshall University. “Even though coal is coming back and there will be employment in the future, they are unlikely to go back to where it was 10-15 years ago.”

Technology has also advanced. The reality is this: you can get more coal out of the ground now using fewer people.

I think that advancing technology will make the use of fossil fuels obsolete, probably sooner than most people expect. Coal will probably be phased out soonest because of environmental concerns. Even if there continues to be a demand for coal, there will likely be an increased use of machines to dig the coal. Why risk the lives of miners when a machine will do it, and cost less than paying people to go into the mines? Obama may have been waging a war against coal, but he was only really accelerating a process that was already occurring. It might be better if the town of Hazard could make the transition to something more sustainable and healthier than coal mining sooner than later.

But what are communities like Hazard, Kentucky to transition to? These towns in the Appalachians are too remote and inaccessible to attract much industry. There may be some potential for tourism. I don’t imagine many people would care to visit coal mines, except as a sort of museum, but there are many places in the region that might have enough natural beauty to attract visitors. Even so, tourism will never replace coal mining as a source of income. If it weren’t for the coal mines, it is possible that towns like Hazard would never been settled at all. When coal mining is no longer there, perhaps there will  be no reason for people to live there. Is it the fate of Hazard, Kentucky to become a ghost town, an abandoned reminder of a past era in American history? Or can the people of Hazard make a better future for themselves? I hope they will find a better future for themselves.

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Stamping Out Freedom of Speech

May 26, 2015

Ben Cohen of Ben & Jerry’s Ice Cream has a new project he’s been working on. Unfortunately, it has nothing to do with ice cream but involves repealing or amending the first amendment to end our free speech protections. This might seem like a stretch and certainly Ben doesn’t believe that he is doing any such thing, but he may not have thought through what his efforts to get the money out of our politics might actually entail.

Hi, fellow MoveOn member!
This is Ben Cohen, the “Ben” of Ben & Jerry’s ice cream. For the past few years, I’ve run a national, grassroots campaign to get Big Money out of politics.
It’s called Stamp Stampede. And the way it works is simple: activists around the country stamp—and then spend—dollar bills with a simple message, such as “Amend the Constitution—Stamp Money Out Of Politics.” Want a stamp?

Just click here, donate $10 or more to help MoveOn’s campaigns to stamp money out of politics, and I’ll send you a stamp!

Stamping dollar bills is one of the most fun—and subversive—ways you can demand a revolution in the way we fund campaigns. (And yes, it’s totally legal. Our lawyers have confirmed it.)

It’s also like a petition on steroids. The math is pretty incredible. Here’s how ordinary people can give billionaires a run for their money:

  • Every bill we stamp is seen by over 875 people.1
  • If just 5,000 MoveOn members (out of 8 million of us) get a stamp—and stamp one bill every day for one year—our message will be seen 1.6 billion times.
  • Each dollar bill that’s stamped directs people to a website where they can join the fight to overturn Citizens United.

Together, we can get our message in front of millions of Americans and bring in droves of new money-in-politics activists each year—which is what it’ll take to win this long-term fight.

Click here to get your stamp for a donation of $10 or more—and help build the movement.

Once you start stamping money, you’ll find it’s pretty addictive. You can spend your stamped money with pride. And let people know that this dollar is not to be used for bribing politicians (you’ll be surprised by how many new friends you’ll make!)

Thanks for all you do.

–Ben Cohen, Stamper-In-Chief

What does money have to do with free speech and why would getting the money out of politics threaten it? Well, to start with, it costs money to run for public office. Either an aspiring candidate may spend his own money to fund his campaign or he may solicit others to donate money. There are not many people wealthy enough to spend their own money to fund a political campaign on the national or even the state level and most people would consider a government made up of only the very wealthy to be undesirable, therefore there will always be a need for politicians to request donations from those who for various reasons are willing to give them money. No campaign finance legislation can change that simple reality. In fact, most proposals for getting the money out of politics seem to be aimed at getting the other side’s money out of politics. We are funded by small donations from ordinary people who wanted to make this country a better place. They are funded by millionaires and billionaires who want to protect their own greedy interests. Somehow, for all the fuss the progressives make about the nefarious Koch Brothers, they never seem to be bothered by the money George Soros spends on politics.

o-STAMP-STAMPEDE-facebook

 

The first amendment guarantees our freedom of speech. It does not require anyone to provide us a forum for our speech. If an individual or a group wishes to have some impact on the political process by speaking for or against a given policy, law, or candidate for office, they must spend money to get their message out. They must purchase advertisements in printed periodicals or on broadcast media. They must print pamphlets, create audio visual media, etc. They may have a staff of volunteers, but at some point, they may find it desirable to have people working full time on the cause. These people have to be compensated for their time and efforts. More recently the rise of the Internet and digital broadcasting and published has made the process of getting a message out cheaper and more democratic. You do not need to own a newspaper or television station to influence events anymore. Still, if you want to be really effective, you still need to spend some money.

Free speech is not free.

Yes it is. Free speech is not free.

 

Like the politician seeking office, an individual or group seeking to get a political message out can spend their own money or solicit donations from people who support the individual or group’s goals. If the government can control and limit the funding of any political advocacy organization, it can effectively control and limit its speech. It does little good to guarantee freedom of speech if you prevent people from using that freedom in any sort of really effective manner. Indeed, this is a far more effective method of controlling dissent than the gulag. What good does it do to have the freedom to speak out if the only audience you are permitted to reach is a small circle of acquaintances? A dissident in a gulag may still be somewhat dangerous since he gets some attention and can even be regarded as a hero. A dissident who no one ever hears of is no danger to anyone.

Ben is probably sincere in  his desire to limit the influence in our politics but there will be money in politics as long as their is politics simply because politics requires money. Attempting to control the flow of money in politics will always tend to benefit some factions and parties at the expense of others. Controlling the money used to publish speech can be used to control the speech. This is not to say that we should have no campaign finance laws, but, as in everything else good intentions do not justify bad results and you must be on the lookout for unintended (or intended) consequences. Ben should stick to making ice cream.

Death , Taxes, and Ice Cream

May 15, 2015

Ben and Jerry, of Ben and Jerry’s Ice Cream, have a petition from Moveon.org that they want me to sign.

Dear MoveOn member,

It’s Ben and Jerry—the co-founders of Ben & Jerry’s Ice Cream—and we need your help.

We want to pay our fair share of taxes, but Republicans in Congress are trying to pass an unnecessary tax giveaway to America’s wealthiest citizens. We don’t want, need, or deserve this tax cut—which is why we’re asking you to sign

our petition to Senate Democrats that states:

If Senate and House Republicans have their way, they will eliminate the estate tax, which affects only the wealthiest 0.2% of taxpayers. Repealing the estate tax would hurt our economy and be fundamentally unfair. Senate Democrats: Stand with us—and stay united against the repeal.Sign Ben & Jerry’s petition

Here’s the truth: We don’t need this stupid tax cut.

As we recently wrote in an op-ed in USA Today, we’re wealthy thanks to the good fortune of our efforts—but also because of many other societal factors that contributed to our wealth.1 The estate tax is one of the ways that the wealthy pay forward so the next generation has the opportunities we had.

The estate tax, which the U.S. has had for more than a century, currently affects Americans with estates worth at least $5.4 million, or $10.8 million for a couple—only 1 out of every 500 taxpayers.2 And yet, it’s been a target of right-wing lawmakers, working on behalf of their wealthy donors. 

Click here to sign our petition calling on Senate Democrats to stand united and stop this Republican giveaway to the superrich.

Congress has shrunk the estate tax in recent years—and now the Senate and House, in advisory votes largely along party lines, have voted to repeal it entirely.3 The votes are only advisory, for now, but when the Republicans press this issue again, Senate Democrats will need to be ready to beat back the repeal and block this latest Republican giveaway to the superrich.

We know this may not be as fun as helping us choose names for ice cream flavors—but it’s critical to send a message that Congress shouldn’t be working on behalf of only the wealthiest Americans but should get back to the people’s business. Wages have been stagnant for decades.4 Young people are carrying around anvils on their backs called student debt.5 Our public infrastructure is falling apart.6

Good grief, Congress. With all this going on, are you really going to give another tax break to those of us who need it least?

Sign our petition—tell Senate Democrats to stand united and ensure that Republicans don’t give multimillionaires and billionaires even more tax breaks.

Thanks for all you do.

–Ben and Jerry

I always find it fascinating when millionaires and billionaires write editorial pieces demanding higher taxes for themselves because it is such an obvious exercise in hypocrisy. They want to get credit for a generosity and benevolence they do not really have. If Ben and Jerry think that they are not contributing enough with the taxes they pay, they are perfectly capable of writing a check for any amount they want. If they sincerely believe the the federal government can make better use of their money than they can, they can give away their entire fortune. It’s their money that they have earned. They can do what they want with it. It may be that other people who have been successful might believe that they have contributed quite enough already and that they can do better things with their money than give it to the federal government. Ben and Jerry don’t seem to want to give them that option. Seen that way, Ben and Jerry’s offer to pay higher taxes shows not a generous giving of their own substance, but a desire to impose their own priorities on others.

An estate or inheritance tax is simply a tax levied on wealth that is transferred by inheritance. This tax is assessed when the owner of the property to be transferred dies and his will takes effect, hence the estate tax is often called the death tax, especially by those opposed to it. The estate tax levied by the U.S. government does not affect many, only 0.2 percent of the population and it is not a major source of revenue for the government. The receipts from the estate tax makes up less than one percent of the total revenue collected by the government. It isn’t likely that repealing the estate tax will cause a fiscal crisis. In fact, it is possible that the estate tax, as it is currently configured is not worth the effort of collecting it. It may be that if the heirs to an estate were permitted to keep the entire estate, the wealth they would generate through investments, etc word yield more tax revenue for the government through the income and capital gains taxes than the revenue from the estate tax. I imagine that is the thinking behind the efforts to repeal the estate tax.

I do not know if this argument is valid, since I am not any sort of expert on tax policy. Even if the analysis is true, it does not necessarily mean the estate tax should be ended. The current estate tax in the U.S. was enacted in 1916 not so much to generate more revenue for the federal government as to prevent the emergence of a hereditary class of the super rich who would pass down an ever increasing share of the nation’s wealth from generation to generation. Oddly, even many of the wealthiest men in the country supported the idea of an inheritance tax at the time it was enacted. Andrew Carnegie argued against rich men leaving large fortunes to their children on the grounds that it was doing them no favor to allow them to coast through life as the idle rich on their father’s inheritance. Carnegie and others of his class had worked their way up from the bottom and they believed that their children should have the same opportunity to work to get ahead.

I am not sure that the estate tax, as it is currently configured really accomplishes this goal. As Ben and Jerry pointed out, only amounts above a certain limit, $5,430,000 in 2015, are subject to the estate tax which is assessed at a progressive rate from 18% to 40%. If I were to die and leave an estate worth $100,000,000 to my heirs, they would still get roughly half of the estate after taxation In fact, the administration of the estate tax seems to be very complicated, if the Wikipedia page is any indication, and it is possible for a clever person to arrange his finances in such a way as to pay little or no estate tax. If we really wanted to discourage large inheritances, the estate tax ought to be raised, perhaps to confiscatory rates above a certain level of wealth and we would tighten up the rules regarding gifts given before death and trusts.

There is a persistent myth in politics that the problems of this country have simple, commonsense solutions that everyone would agree to if it were not for the selfishness and greed of special interests. In fact, even people with the best will can disagree over policies. I think the debate over the estate tax proves the lie to this myth, since there are very good arguments both for and against it. Any issue can be debated over matters of fact, whether or not repealing the estate tax will improve the public finances, and matters of values, which is more important, economic growth or economic equality. Matters of fact can be resolved fairly easily but arguments over values tend to be intractable. If you believe the government should promote equality, you will probably favor keeping the estate tax. If you believe economic growth is more important and can be promoted by lowering taxes, you might favor repealing it. Both sides have different opinions on what is important or desirable and both sides may well be trying to do what is best for everyone. One need not assume that they only want to give away money to the wealthy, as Ben and Jerry do, or have nefarious plans to redistribute all the wealth in this country, as some of  President Obama’s critics seem to believe.

As I said, there are good arguments on both sides and I do not know enough about tax policy to really have a strong opinion on the estate tax. I do think that Ben and Jerry should stick to making ice cream.

Let Them Eat Cake

April 13, 2015

To start with, Marie Antoinette never actually said it. The phrase is actually found in Jean Jacque Rousseau‘s autobiography, Confessions where at one point he claims that “a great princess” upon learning that the peasants had no bread made the famous statement. Rousseau couldn’t have been speaking of Marie Antoinette, however, because his Confessions, although not published until after his death, was completed by 1769 when Marie Antoinette was still a girl living in Vienna. Which great princess, if any, Rousseau was actually referring to is unknown and since Rousseau adhered to the”fake but accurate” school of historiography so beloved by progressives it is possible that he simply made the whole thing up. In any case, the statement was actually out of character for Marie Antoinette. Despite the caricature of the callous, out of touch aristocrat created by the French radicals, Marie Antoinette was aware of the plight of the French poor and gave generously to charity. She was extravagant in her spending and could be somewhat clueless about what political advisers would call today the “optics” of the royal administration.

 

Archduchess Maria Antonia of Austria, the late...

She didn’t say it  (Photo credit: Wikipedia)

 

Even if she did say it, Marie Antoinette didn’t really say, “let them eat cake”. That is poor translation of the actual statement in French, “Qu’ils mangent de la brioche“. La brioche is not really cake but a kind of  bread made with eggs and butter to give it a light texture and rich flavor. Brioche was more expensive than the plain flour and water bread that the French poor subsisted upon, so perhaps a more exact translation might be, “if they don’t have the plain bread, let them eat the fancy pastries”. Somehow, that just doesn’t have the same ring to it.

 

Not cake

Not cake

 

 

 

 

 

The meaning behind the words let them eat brioche may not be quite what it is generally assumed to be. It generally is taken to refer to a ruler or government callously unconcerned about the poor, but the pre-revolutionary French monarchs were greatly concerned about the welfare of the French people over which they ruled. As I said, the French poor depended on cheap bread to survive and the French government tightly regulated the supply of grain and flour to ensure that they had a steady supply of bread. There were strict regulations and inspections to ensure that bakers did not adulterate their bread to save money on flour. The price of the cheapest bread was set by the government to be affordable to the poor. Since bakers might be tempted to produce only a limited supply of the cheapest bread, and concentrate on more expensive and profitable pastries like brioche, French law required that if a baker ran out of the cheap bread, he was obliged to sell his more expensive wares at the set price for cheap bread. So, if Marie Antoinette had said let them eat cake, what she meant was that if there was a shortage of the cheap bread that was the staple of the poor, they should the have more expensive bread made available to them.

 

This system worked well enough in times of plenty, provided that the government set the price of the cheapest bread at a level that ensured that bakers could make a profit. If there was a bad harvest, however, the price of grain and thus of flour would increase. Since the price of bread was set and could not be changed, bakers could find themselves selling bread at a loss. The bakers were supposed to be compensated for their losses when good harvests return,  but they had no way of knowing when that might be. Under the circumstances, they might well decide to not to bother making any bread at all, leading to worse food shortages.

 

Now, a free market advocate might suggest that the French government ought to have ended its price controls on grain and bread and let the free market determine the cost and supply of bread. Over the long term, the equilibrium between supply and demand would ensure a stable supply of bread at a reasonable price. In fact, that was exactly what was happening in the early years of the reign of Louis XVI. Influenced by the writings of the French school of economics known as the Physiocrats, who advocated free trade and free market economics, and by Louis’s  minister Turgot, the French government had been slowly dismantling the system of price controls and strict regulation of bread in the early 1770’s. Unfortunately, this was also a period of bad harvests which drove the price of grain and then bread to a level beyond the reach of many of the poor. Given time, the market would have righted itself but that was small comfort to the poor who found themselves unable to feed their families. Rioting broke out all over France in 1775, leading to what has been called the Flour War, a sort of pre-revolution. At first the rioters attacked grain merchants who they suspected of hoarding grain, but it wasn’t long before they were fighting with Royal officials. Both the traditional view of the King as protector of his subjects and the free market economics endorsed by Turgot were discredited in the chaos and Turgot was obliged to resign. King Louis XVI  restored the price controls on bread and organized relief for the areas most afflicted by hunger. By the summer of 1775 the Flour War was over, but in hindsight this the beginning of the end of the French ancien régime.

 

Let them eat cake, then, is not really so much the rallying cry of an uncaring and callous elite as it is for a regime that enacts well-intentioned reforms to help everyone but because the unintended consequences of such reforms are not carefully considered they end up causing more harm than good. This is a lesson many contemporary Louis XVIs and Marie Antoinettes  would do well to learn.

 

 

 

Money Doesn’t Grow on Trees

February 3, 2015

Growing up, you might have heard your mother or father saying something like that when you wanted some expensive toy. Maybe you listened to them and learned something about where money does come from. The progressives who are pushing for minimum wage increases do not seem to have listened to their parents. At least it doesn’t seem to occur to them that if the government creates an increase in the cost of business, such as raising taxes or requiring higher wages, the money to pay for the increased costs has to come from somewhere. Either a business must pass on the increased cost to its customers by increasing prices, adjust its practices to reduce impact of the higher costs, perhaps by employing fewer workers, or accept a reduction in profits. For many of the unthinking, the last option is the most desirable, since it is all too commonly believed that profits are somehow selfish and evil. They do not realize that a business’s profit is what the owners of that business get to meet their own expenses and is the repayment for the expenses and risks of starting and running the business. This is especially true for the small business person who is the sole owner of his business, but it is also true for the stock holders of a major corporation. It a business cannot make a profit it must eventually cease to operate and close its doors. It really doesn’t require a PhD in economics or business administration to understand all of this, only the ability to think things through, an ability sadly lacking in all too many. Consider this example, brought by ABC News, of a bookstore in San Francisco, closing due to an increase in the city’s minimum wage.

Independent bookstores have faced tough times for quite a while. In San Francisco, neighborhood businesses have been passionately protected, so it’s hard to believe that an initiative passed by voters to raise the minimum wage is driving a Mission District bookstore out of business.

San Francisco’s minimum wage is currently $11.05 an hour. By July of 2018, the minimum wage in San Francisco will be $15 an hour. That increase is forcing Borderlands Bookstore to write its last chapter now.

When actor Scott Cox took a job at Borderlands Books he didn’t do it for the money.

“I’ve been a longtime customer of the store,” he said. “I love the people, I love the books.”

The work let him squeak by while nourishing his passion for sci-fi and fantasy.

“Everyone who works here does this because they love books, they love stories, and they love being booksellers,” said book store owner Alan Beatts.

That’s why store owner Beatts found it so tough to post a sign in the front window that the store is closing. “We’re going to be closing by the end of March,” he said.

Borderlands was turning a small profit, about $3,000 last year. Then voters approved a hike in the minimum wage, a gradual rise from $10.75 up to $15 an hour.

“And by 2018 we’ll be losing about $25,000 a year,” he said.

Money doesn’t grow on trees. Alan Beatts cannot simply go to his money tree and shake off a few extra bills. He must come up with the money to pay the higher wages somehow. He cannot increase his prices. Small, independent book stores have long been squeezed by large chains such as Barnes & Nobles who are now being squeezed by Amazon, so any increase in prices will simply drive customers away. I doubt it his bookstore is so overstaffed that he can afford to let many employees go. He cannot continue to run his bookstore if it loses money, so the bookstore must close.

This doesn't really exist.

This doesn’t really exist.

The next part of this article is priceless.

It’s an unexpected plot twist for loyal customers.

“You know, I voted for the measure as well, the minimum wage measure,” customer Edward Vallecillo said. “It’s not something that I thought would affect certain specific small businesses. I feel sad.”

I would say that Mr. Vallecillo wasn’t thinking at all, but then neither were the people in San Francisco’s Board of Supervisors when they decided to let people vote on increasing the minimum wage.

Though it’s caught a lot of people off guard, one group that wasn’t completely surprised was the Board of Supervisors. In fact, they say they debated this very topic before sending the minimum wage to the voters.

“I know that bookstores are in a tough position, and this did come up in the discussions on minimum wage,” San Francisco supervisor Scott Wiener said.

Wiener knows a lot of merchants will pass the wage increases on to their customers, but not bookstores.

“I can’t increase the prices of my products because books, unlike many other things, have a price printed on them,”

Wiener says it’s the will of the voters. Seventy-seven percent of them voted for this latest wage hike.

“Borderlands Books is an phenomenal bookstore, I was just in it yesterday,” Wiener said. “I hope they don’t close. It’s an amazing resource.”

But Alan Beatts said he can’t see a way to avoid it.

Mr. Wiener should have thought of that before, unless they repeal the increase in the minimum wage, Borderlands Books will have to close. The voters voted for the increase. Now, they will have to deal with the consequences.

Business owners don't really have money bins.

Business owners don’t really have money bins.

 

The Razor King

February 2, 2015

Anyone who shaves on a regular basis owes King Camp Gillette a debt of gratitude. King Camp Gillette, yes that was actually his name, was the founder of the Gillette Safety Razor Company in 1901 and the inventor of the disposable safety razor. Before this invention, men  shaved using a straight razor that had to be sharpened on a leather strop. These razors were expensive, needed sharpening often and were not especially safe or easy to use. There had been attempt to create safety razors out of forged steel in the nineteenth century but they were also expensive and hardly disposable.

English: Front page of Gillette's razor patent.

English: Front page of Gillette’s razor patent. (Photo credit: Wikipedia)

King Camp Gillette  was a salesman for the Crown Cork and Seal Company, which made bottle caps for soft drink bottles, and he noticed that people would throw away the bottle caps after opening the bottles. He thought that if bottle caps could be disposable, why not razors? Working with two machinists, Steven Potter and William Emery Nickerson, Gillette designed a cheap, disposable safety razor using stamped steel. The razor was an immediate success and since Gillette’s portrait was on the packets of the razor blades, he became recognizable all over the world. Gillette’s big break come with America’s entry into World War I. Gillette contracted with the government to provide razor kits for American servicemen. Despite his success, King Camp Gillette died in poverty in 1932. He lost control of his company to a fellow director, John Joyce, though the company retained the Gillette name. Gillette spent much of the money he gained from the sale on property and when the Great Depression struck, the shares of the company lost their value.

King C. Gillette

King C. Gillette (Photo credit: Wikipedia)

The Story of King Camp Gillette could be read as a great American success story or a rags to riches to rags story. What I find most intriguing about Gillette, however, are his social and political views. The Wikipedia article about Gillette describes him as a “Utopian Socialist” who wrote a book in 1894, advocating that industries should be nationalized and controlled by a single corporation owned by the public. It may seem incongruous for a capitalist to argue for socialism, but Gillette believed that capitalists were the natural choice to run the nationalized industries, since they already had the necessary experience. Gillette, then was a democratic socialist rather than a Marxist. He wanted a socialism that benefited everyone in the nation, not a class struggle and revolution.
Gillette’s views may seem radical, but this kind of democratic, corporatist socialism was very popular at the time. In 1888, Edward Bellamy (cousin of the Francis Bellamy who had devised the Pledge of Allegiance) had published a utopian novel titled Looking Backward, in which a man from 1887 falls asleep Rip van Winkle style and wakes up in the socialist utopia of 2000. In his novel, Bellamy had advocated the same sort of corporatist socialism as Gillette and many others. Looking Backward was a best seller and almost immediately after its publication “Nationalist” clubs sprang all over the country hoping to enact such policies. Ultimately some form of this National Socialism was adopted by Benito Mussolini in Fascist Italy and certain aspects of Franklin Roosevelt’s New Deal.

I have to wonder how otherwise intelligent men could imagine that creating a publicly owned monopoly to control an entire nation’s industry could possibly be a good idea or, in any way compatible with any idea of a free country. One of the major concerns of the late nineteenth and early twentieth centuries was the growth of monopolies and trusts owned by such men as John D. Rockefeller or Andrew Carnegie. Many observers believed that such men practiced unfair and anti-competitive policies which gave them a disproportionate influence over the American economy and ultimately of the government. It seemed obvious that economic power should not be concentrated in the hands of a few men. Why then, was the solution to this concern considered to be the concentration of economic, political, and legal power in the hands of a few. The National Corporation that Gillette and others envisaged would be owned by the public, but the public wouldn’t be administrating the corporation on a daily basis. There would have to be some sort of committee of directors with perhaps a sort of CEO. Such directors would have far more control over the economy and the government than any private businessman. They would effectively own the whole country, even if nominally it was owned by the public. Even the most benevolent saint would be tempted to abuse such power, to benefit his friends, and the people who would aspire to such positions would not likely be saints.

I have similar reservations about the people who seem to believe that a bigger, more expansive government is the solution to all the nation’s problems, the sort of people who are always proposing new laws and regulations believe that a new government program is always the answer. I can understand that giving more power to the state will allow it to do more good for everyone, but why can they not see that it will also allow the state to do more evil. Given the defects of human nature, which inclines more to evil than to good, my personal preference is to leave the good undone rather than risk the evil that will certainly be done.

The Election of 1832

January 26, 2015

There were essentially two issues on which the election of 1832 was decided. One was the fate of the Second Bank of the United States. The First Bank of the United States was chartered by Congress for a twenty year term in 1791 at the proposal of Alexander Hamilton, who believed that a national bank like the Bank of England was essential for the economic development of the new nation. Hamilton hoped that the Bank of the United States would improve America’s credit and foster economic growth, particularly in manufacturing. Jefferson and the Democratic-Republicans loathed the idea of a national bank, believing it to be an unconstitutional expansion of the federal government. They were also suspicious of banks and the financial industry as being the creation of a moneyed elite who cheated the common people out of their hard earned money. The only honest money was that which was earned through the labor of your own hands (or that of your slaves). When the charter of the First Bank of the United States terminated in 1811, President Madison and the Democratic-Republican Congress declined to renew it.
As a result, President Madison found it extraordinarily difficult to pay for the War of 1812, which broke out the following year. The Democratic-Republicans became converted to Hamiltonian economics and in 1816 chartered the Second Bank of the United States with a twenty year term.

Andrew Jackson hated the Second Bank of the United States as much as Jefferson disliked the first, and for much the same reason. Jackson presented himself as a Westerner and a man of the people fighting against the moneyed interests back East. If re-elected, Jackson promised to veto any renewal of the Bank’s charter and in the meantime, he would work to reduce the Bank’s influence. This dislike and distrust of a moneyed elite would be a feature of populist politics in future elections.
The second great issue of the election of 1832 was Andrew Jackson himself. President Jackson had played a far more active role in governing than any of his predecessors who had generally deferred to Congress. Jackson believed that while a Congressman was elected by his district and a Senator by his state, the President was elected by the whole people and should act as a Tribune protecting the people against particular interests. His opponents didn’t see matters in quite that way and accused Jackson of plotting to make himself a king or a dictator.

The campaign for the presidency began in September 1831 with the first nominating convention in American history, held the Anti-Masonic Party, the first of many “third parties”in American politics which would be organized around a single issue, gain temporary popularity and then fade away. The Anti-Masonic Party was, obviously, against the Freemasons and other secret organizations out of the fear that their membership were involved in a secret cabal to overturn republican government and substitute the rule of an elite. This seems rather paranoid, but it was something that many people were worried about. In any case, the Anti-Masonic Party held their convention in Baltimore Maryland and nominated former Attorney General William Wirt for President and Amos Ellmaker for Vice-President.

Jackson’s opponents, the National Republicans, also met in Baltimore in December 1831. They nominated Kentucky Senator Henry Clay for President and Clay’s friend John Sergeant from Pennsylvania for Vice-President.

The Democratic-Republicans, or Democrats as they can now be called, met in Baltimore in May, 1832 and to no one’s surprise, nominated Andrew Jackson for a second term. Jackson’s Vice-President, John C. Calhoun was not selected as his running mate. Jackson and Calhoun did not see eye to eye on a number of issues, particularly on the issue of state’s rights. Calhoun believed that the states had the right to nullify federal laws that were not to their liking, especially the tariffs which were unpopular in his home state, South Caroline. Jackson was a strong nationalist and threatened to send the army into South Carolina if they resisted or nullified any federal tariff. Jackson selected New York Senator, Governor, and his Secretary of State, Martin van Buren.

It was a nasty campaign, like the one before it, fought over personalities and the Bank. It was actually Henry Clay who brought the Bank into the campaign by persuading Nicholas Biddle, the President of the Bank to apply for a renewal of its charter four years early, in 1832. Clay hoped that Jackson would veto the renewal, dividing the Democrats, some of whom were actually for the Bank and winning Pennsylvania, where the Bank was located in Philadelphia. Biddle applied for the renewal of the charter and President Jackson promptly vetoed it. Events didn’t work out quite as Clay hoped, however. Jackson’s veto thrilled his supporters and burnished his populist credentials and made the contest one between the people and the elite. It didn’t help that Biddle and the Bank spent thousands of dollars funding anti-Jackson newspapers, pamphlets and other political activities.

Clay and his supporters made good use of these funds, accusing Jackson of arbitrary rule and dictatorship in cartoons and speeches, but the Jacksonians proved to be far more organized with meetings, parades, and Old Hickory clubs exhorting the voters to support their champion. In the end, Jackson won reelection easily.
Jackson got 701,780 votes, giving him 54.7% of the popular votes. Clay and the National Republicans got 484,205 votes with 36.9% of the popular vote. The Anti-Masonic party managed to get 100,715 votes with 7.8% of the popular vote.

Jackson won sixteen states all over the country for a total of  219 electoral votes. Clay only won his home state, Kentucky, Delaware, Massachusetts, Connecticut and Rhode Island with 49 electoral votes. Wirt and the Anti-Masons won Vermont with its 7 votes. John Floyd, a supporter of Calhoun’s got South Carolina’s 11 votes. South Carolina was the last state to have its electors chosen by the state legislature rather than by popular vote. Maryland’s 10 electoral votes were divided with 3 votes for Jackson, 5 for Clay and two electors not voting.

The Election of 1832

The Election of 1832

 

With these results, President Jackson could claim a popular mandate for his policies and he began to withdraw government assets from the Second Bank of the United States. The new era of popular, Jacksonian, democracy had begun.

 

Imagine

January 5, 2015

I have always rather liked the melody of John Lennon’s Imagine. I cannot say, however, that I especially like the lyrics, expressing as they do every idiot left wing idea imaginable. It turns out that I am far from the only one who finds the lyrics objectionable. Mark Davies, the Catholic Bishop of Shrewsbury in Birmingham, England expressed his objections to the song in his Christmas sermon.

John Lennon’s famous song “Imagine,” which pines for a Marxist utopia devoid of property and religion, lyrically promotes the “ill-founded belief” that “religion is the cause of wars,” when the devastatingly brutal wars of the 20th century were “largely inspired by secularist” and “openly anti-Christian ideologies,” says Catholic Bishop Mark Davies in his scheduled Christmas Day sermon.

Bishop Davies oversees the Catholic Diocese of Shrewsbury in Birmingham, England.  This 2014 Christmas marks the 100th anniversary of a Christmas “truce” during World War I when British and German soldiers, after an appeal by then-Pope Benedict XV, ceased fighting for a day and actually exchanged greetings and gifts and played soccer on the battlefield.

“Why did this happen?” says Bishop Davies in his homily, as reported in the Catholic Herald. “What could have drawn enemies from their entrenched positions to greet each other as friends?”

“[I]t was surely a light which first shone with the birth of a child born in Bethlehem, a Savior given to all humanity who turns our minds to thoughts of peace,” says the bishop.

“The events of Christmas 1914 give the lie to the lazily repeated assertion that ‘religion is the cause of wars,” says Bishop Davies.  “John Lennon would give voice to this ill-founded belief in the lyrics of his song ‘Imagine.’”

“This becomes a heart-chilling vision in which Lennon imagines a world with no hope of heaven and no fear of hell,” says the bishop, “And he adds, ‘no religion too.’ Only then, he suggests will ‘all the people’ be ‘living life in peace.’”

The bishop continued, “Yet the fact is, the wars of the century past, bringing with them atrocities and destruction on a scale never seen before, were largely inspired by secularist and, indeed, openly anti-Christian ideologies. In reality, it is human sin which lies at the root cause of war.”

The idea that religion is the cause of war has been heavily promoted by the so-called New Atheists to justify their anti-theist positions. It is a simplistic idea and easy to believe. It is not true, however. Religion is often the pretext for war. It is not so often the sole cause of war. A quick survey of the many wars throughout history shows relatively few wars are really over religious differences. The Peloponnesian War, the Hundred Years War, the American Civil War, World Wars I and II and many, many others had little to do with religion, even if the combatants believed that God was on their side. Even wars that are fought over religion, such as the Wars of Religion during the Protestant Reformation, on closer examination reveal other motivations, political or opportunistic, are at work. The German Princes who supported Luther were genuinely opposed to the abuses of the Catholic Church, but they were also inspired by German nationalism and a desire to maintain their own power against the imperial pretensions of the Hapsburgs. The Islamic hordes who burst out of the Arabian Peninsula may have been religious fanatics, but they were also attracted by the prospect of booty.

But, I think there is more to object to John Lennon’s song than just the anti-religion themes. Consider the lyrics.

Imagine there’s no heaven
It’s easy if you try
No hell below us
Above us only sky

Imagine all the people
Living for today

Imagine there’s no countries
It isn’t hard to do
Nothing to kill or die for
And no religion,

Imagine all the people
Living life in peace

You may say I’m a dreamer
But I’m not the only one
I hope someday you will join us
And the world will be as one

Imagine no possessions
I wonder if you can
No need for greed or hunger
A brotherhood of man

Imagine all the people
Sharing all the world

You, you may say I’m a dreamer
But I’m not the only one
I hope someday you will join us
And the world will live as one

John Lennon may have been a dreamer, but he doesn’t seem to have been much of a thinker. He wanted everybody to live in harmony together, yet he sings against the institutions that help people to live together in peace.

What if there were no countries? Would all the people live together in harmony? In Stone Age cultures people do not live in countries, or nation states or formal government. They effectively live in a state of anarchy recognizing no loyalty higher than that of the clan or tribe. People living in such primitive culture tend not to live peaceful lives.Their lives are far more violent than that of people living in more advanced societies. How could it be otherwise? When there is no higher authority to settle disputes between tribes, they often must fight feuds. When there are no police, courts or jails, the only way to assure justice is the threat of revenge by kinsmen. When people began to organize into cities and kingdoms, their rulers found it expedient to discourage private violence by adopting law codes and having the state administer punishment for crimes. When the nations of Europe began to coalesce into centralized nation states in the fifteenth and sixteenth centuries, one major concern of kings was to eliminate the private wars that was the nobility’s prerogative in the Medieval Period. The kings fought wars against each other but their subjects had to be at peace. The result was larger, but fewer wars. In the last few decades, we have begun to develop ways of mediating between nations and a somewhat crude form of international governance which has made war between the major powers almost unthinkable. Perhaps this idea should be taken to its logical outcome and a world government instituted to keep the peace, but I think that the disadvantages far outweigh the advantages of such a system. The point is, that the development of nations and countries has actually made life more peaceful for most people throughout history. A world of people living in anarchy would not be harmonious.

What about possessions? If we had no possessions would there be no hunger or greed? I don’t see how it would be possible to avoid starvation. Food is, after all, a possession and if there were no possessions there would be no food. And why would anyone take the trouble to grow more food than he needed to feed himself and his family if there were no way to pay him? Why would anyone want to do anything? Maybe John Lennon meant that everything would be held in common. Would this lead to harmony?

Aristotle understood more than 2300 years ago that private property is essential for maintaining peace and prosperity. As he put it, people are naturally self-interested and so more interested in caring for and improving what they perceive as belonging to them, while neglecting the affairs they see as others’ responsibility. Private property creates a more harmonious society since things held in common tend will be fought over. Everyone would naturally take as much as they need from the commune while contributing as little as they could get away with. No matter what system would be set up to distribute the common goods, someone would be sure to feel they are not getting their fair share. There is peace when property ownership is clearly defined with clear laws protecting property rights and commerce. Most of the rich countries of the world have such laws and are relatively peaceful and stable. Most of the poor countries lack such laws and are unstable and turbulent.

I am afraid that John Lennon’s dream would not lead to a world of everyone living together in harmony. It would lead to a Hobbesian nightmare of all warring against all and lives nasty, brutish and short. Maybe we should imagine less and think more.

 

Child Labor on the Farm

December 17, 2014

I got an e-mail from Watchdog.net, I think they are affiliated with either moveon.org or demandprogress, I am not sure which. Anyway they are asking me to sign a petition to outlaw child labor on tobacco farms.

Dear David Hoffman,

US law prohibits selling cigarettes to children — but it has no problem poisoning them on its tobacco farms.

The world’s largest tobacco companies buy US-grown crop, 90 percent of which comes from North Carolina, Kentucky, Tennessee, and Virginia.

In these four states along, thousands of children, some as young as seven are working long hours in extreme heat without shade, breaks or protective gear, choking on pesticides and exposed to acute nicotine poisoning that can lead to cancer, problems with learning and cognition, and reproductive health issues.

Child are by far the most vulnerable to these poisons, and the lack of child labor laws surrounding farming has gone on long enough.

We call on the Obama administration to endorse regulations to make it clear no child should work on a tobacco farm, and for Congress to enact laws to give underage farmworkers the same protections as all other working children.

PETITION TO PRESIDENT OBAMA AND CONGRESS: Endorse regulations to make it clear no child should work on a tobacco farm.

Click here to sign — it just takes a second.

Thanks,
— The folks at Watchdog.net

Actually, the situation is worse then they are describing. It is not just tobacco farms that employ child labor and exposure to nicotine is not the only thing they have to worry about. When you sit down to eat your Christmas dinner, there is a very good chance that the fruits and vegetables you will be eating were picked by the children of migrant farm workers who worked right alongside their parents in the fields. As the e-mail mentioned they are often exposed to levels of pesticide considered toxic to adult males. The work they do is often backbreaking and can be dangerous.

How does this happen in twenty-first century America? Well, as it happens child labor laws are a good deal less stringent for agricultural work than for any other industry. In most cases, children are not permitted to work until the age of 16 and there are restrictions on work conditions and number of hours worked until the age of 18. There are no such restrictions on agricultural workers. This is, I suppose, to keep farmers from being arrested if they make their children do chores. It also happens to create a huge loophole that  makes the employment of the whole family possible with the conditions described above.

Should I sign this petition? Should child labor on farms be outlawed? I think that any decent person’s first reaction would be to say yes. But first reactions may be wrong reactions. The problem may not be so easily resolved.

The parents of these children are not bad parents. They do not necessarily want their children to work in the fields and if they had any other option they probably wouldn’t have their children in the fields. They don’t often have other options.Migrant farm workers do not get paid very much. Often they are paid by piecework, or amount of crop picked, rather than hourly, so they could be paid less than minimum wage. The average yearly income for farm workers is around $11,000. This means that they cannot afford any sort of daycare for their children. During the school year, the children can go to school, although working on the fields after getting home from school doesn’t do much for their academic career, but what are they going to do in the summer? If the children were not allowed to work in the fields not only would there be the cost of hiring a babysitter, etc, but they would lose the income the children’s labor provides.

Of course if the farmers who employed these migrant workers would pay them more, then they would not be so badly off. The problem here, is that few farms are very profitable, really only the biggest. Small farms often have very little to spare for decent wages for the people who work in the fields.

You can see then how a measure meant to help people may end up making conditions worse for them. I really don’t know what the solution is. Children ought not to work in tobacco fields. The children of migrant workers ought to be able to grow up and do something better. At the very least, there ought to be some sort of regulation on what sort of work minors are permitted to do on a farm. Maybe I will sign the petition, for whatever good it might do.

Game Over for the Planet

November 19, 2014

Here is another message I just received from Moveon.org.

Dear MoveOn member,

In just hours, the Senate will vote on whether to push forward the Keystone XL pipeline—a disastrous and dangerous proposal that would, in the words of leading climate scientists and environmentalists, be “game over for the planet.”1

Either the Senate will send President Obama a Keystone pipeline bill TODAY—and we will need him to promise to veto it; or the Democrats will defeat the measure by one vote, which means that in just seven weeks, a new Republican majority will send him the pipeline—and we’ll need him to veto it in January.

Either way, President Obama is our last line of defense. So we’re joining with allies to mobilize grassroots support demanding that the president commit to vetoing the pipeline bill—today or early next year.

Will you chip in $3 to help stop the Keystone XL pipeline—and to push Democrats and President Obama to be bold in the fights ahead?

Yes, I’ll chip in.

We’ve already begun fighting back. We’re helping organize rallies outside wavering senators’ offices. We’re mobilizing calls to senators. And we’re providing organizers on the ground with access to MoveOn tools and connections to MoveOn members.  

We’re mobilizing because this is a hugely important fight on its own—and it’ll set the stage for the next two years.

When the Republicans take control of the Senate in January, we can expect a rush of right-wing, anti-climate, anti-science bills: a rollback of President Obama’s efforts to regulate carbon, bills to undermine his climate change agreement with China, and bills that give rein to the extractive practices of frackers, Big Coal, and Big Oil.

Following the midterms, some Democrats are feeling nervous—and they are hearing from the usual chorus of consultants and pundits who advise them that the way to win is to be more like Republicans. This is the kind of horrible advice that lost many Democrats their election—yet conservative Democrats continue to listen! And they won’t stop unless they feel sustained, passionate pressure from their grassroots base—the folks who they need to inspire in order to win future elections.

Will you chip in $3 to help us make sure Democrats stop the Keystone XL pipeline, stop listening to big oil and bad consultants, and fight for progressive values?

Yes, I’ll chip in to help stop Keystone XL and fight for progressive values.

This fight isn’t just a preamble to other environmental attacks—it foreshadows the large range of issues that the right-wing Republican leadership intends to tackle. We’ll face similar assaults on health care, women’s rights, equality, decent wages, Social Security, and civil rights.

In fight after fight, Republicans will push forward a radical agenda and then attempt to pick off a few Democrats to give them the supermajority they need, as well as the veneer of “bipartisanship.”

The only way to preserve affordable health care, see humane reforms in our immigration policy, ensure women make their own decisions about their health, and fully invest in Social Security is to make sure Democrats stand strong. And when the Democrats in the Senate falter, it will come to President Obama to be bold in the use of his veto pen.

Following the midterms, many Democrats are nervous. It’s our job to make them realize that the path to a stronger America, and to future electoral victories, isn’t through caving in—it’s through standing up for our shared values.

Whatever happens in the Senate today, we know one thing for sure: We’re going to need to be stubborn, strong, and stiff-spined for the next two years.

Can you chip in $3 to help us defeat the Keystone pipeline—and prepare for the fights ahead?

Yes, I’ll chip in.

Thanks for all you do.

Anna, Jo, Brian, Corinne, and the rest of the team

Are they serious? According to the geologists, this planet has been in existence for 4.57 billion years. In that time it has survived collision with an object the size of Mars, creating the Moon many other asteroid strikes including the one that caused the extinction of the dinosaurs, whatever caused the extinction of ninety-five percent of all life at the end of the Permian Era, ice ages, climate changes, and who knows what else; only to be finally destroyed by a single pipeline.

The trouble I have with the Greens, besides their bullying and obvious lust for power, is that they seem to have some idea that the Earth has existed in a delicate, stable equilibrium from the beginning and that now Man has arrived to upset the balance. I think they get their ideas about nature from Bambi. The truth is that the Earth has changed drastically over the eons, in terms of climate, atmospheric content and even geography. For instance, during the Mesozoic Era (the Age of Dinosaurs), the level of carbon dioxide in the atmosphere may have been as much as five times present levels, even without the nefarious activities of carbon polluters, causing a warmer Earth. Somehow life on the planet survived and even flourished. We have had ice ages over the last several millennia in which the glaciers extended not far north from where I am sitting, but the worst ice age, the glaciers extended almost to the equator. The only thing constant in the history of the Earth is that it is a dynamic, ever changing system. Even if everything the worst alarmists say about climate change were true, it would not mean the end for the planet. We might make ourselves very uncomfortable, perhaps even extinct, but the Earth will survive anything we could possibly do to it.

I should add that Canada is going to develop the tar sands regardless  of what we decide. If we don’t want the Keystone pipeline extended, they can just as easily sell the crude oil to China. I wonder which is a safer method of transporting oil, a pipeline or tankers. I should also add that if there is one thing needed to accomplish the goals Moveon.org says it wants, it would be a robust American economy powered by the recent surge in the energy industry. Rich countries with growing economies can afford to worry about decent wages and equal rights. Poorer countries mired in economic stagnation have to worry about surviving.


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