How Much Equality Do You Want? – Animal Farm?

The Power of Words

Ayn Rand authored several books that captured the attentions of whole generations of rational American readers during a cataclysmic battle between individualism and collectivism.  She was born Jewish in Russia in St. Petersburg, in 1905; prophetically, this was a year of Revolution that began with the tsar’s Imperial Guard firing on a peaceful workers’ demonstration, killing 200, wounding 800, and ended with the formation of the first Duma (lower house of parliament).

The turmoil continued with the people and the aristocracy battling over the supremacy of the tsar.  Ayn grew up during the First World War, the rise of the Bolsheviks, the fall of the Tsar, the death of Lenin, and the union of the communist soviets.

She graduated from Petrograd State University in 1924, 2 years into the formation of the Soviet Union.  She came to the United States in 1926, and became a US citizen in 1931. She witnessed the collectivism of the USSR, and the rise of Stalin, from America, as the global depression suffocated economies and hope; as the world precipitated into war.

Her plays and books advocated reason over emotion, and individualism over collectivism.  Among my favorites are “Anthem,” and “Atlas Shrugged.”  “Anthem” describes a world in which there is no word for “I” or “me;” “mine” or “yours.”  All personal pronouns are collective.  She demonstrated the power of language in controlling the minds of people.

The Myth of Equality = Good

“Atlas Shrugged” tells the story of talented, creative, productive people whose individual efforts and contributions benefit average citizens; they profit personally from their efforts.  When these people are hounded and what they produce is confounded, and impounded, they escape to a hidden, peaceful, prosperous place populated by others like themselves.  They were “inequal” in the parlance of today.  Their society lost the benefits of their gifts.

George Orwell wrote a book, “Animal Farm,” which was required reading in my high school English class.  It tells the story of farm animals taking over the farm because of inequality.  They establish 7 commandments of “Animalism,” the seventh of which was “All Animals are Equal.”  The operation of “Animalism” proved very unequal.

A Call to Collectivism

Now we have lots of vague talk about “inequality.”

Question:  Where and when have equalities ever existed among humans?

Certainly, humans have been born all over the globe and across a wide spectrum of attributes, but nothing has ever been equal on any measurable attribute.  The only “equality” experiments I know of are utopian communes, and communist governments, none of which have had durable successes, except perhaps, to spread poverty and suffering equally among members and comrades.

The most glaring example of equality today, is North Korea.  I am sure the average American pines and prays to have that thrill of starvation and repression in the name of equality.  Oh, and some comrades are more equal than others.

The Absence of Definition & Context

The term “income inequality” is not a recent invention.  Jean Jacques Rousseau wrote Discourse on the Origin and Basis of Inequality Among Men, in 1754.  He describes two types of inequality:

Natural, Physical– differences one human’s body and another

Ethical, Moral – wealth, nobility, power, personal merit.

He proposes that natural, solitary man is a savage who lacks language, reason, and society. He is not motivated by fear of death, because he cannot conceive of it. He is only corrupted by social association with other men, causing:

  • Competition – best dancer, singer, strongest, fastest, handsomest, smartest
  • Self-Comparison with Others – ranking, e.g. second-best, IQ, “the Joneses”
  • Hatred – envy, jealousy, covetous, fear, anger
  • Urge for Power – dominance, entitlement, control

This led to the source and basis of inequality:  private property.

Angus Maddison, a respected economic historian tracked global income inequality of 25 nations since 1820.  His findings show increases in globalization were the major factor in disparity of incomes.  Retreats from globalization resulted in lower inequality.

The recent rants about “inequality” sound like envy to me.  Envy is not constructive.  The authors neither define equality nor any acceptable level of inequality; they also omit the context, methods and means of achieving less inequality; the ranters do not appear to have a clue about the sources of wealth, business success, or any idea what they are proposing.  This is evident from the example they have chosen to shock the reading public.

The Eight Richest People on Earth have wealth equal to half the people on Earth.  Sounds amazing, until one does the math or looks at who these men are.  Wealth is defined as: $Assets – $Debts.  It does not mean income.  These eight men have $485 billion dollars’ worth of valuable assets more than what they owe*.

Who What Arena Billions**
Bill Gates * Microsoft Computer Software           91.0
Amancio Ortega* Zara and Inditex Fashion Retail           71.2
Warren Buffett* Berkshire Hathaway Investments           73.6
Carlos Slim Helu* America Movil Telecom           49.4
Jeff Bezos* Amazon Computer Retail           67.2
Mark Zuckerberg* Facebook Computer Social Media           50.8
Larry Ellison* Oracle Computer Software           41.8
Michael Bloomberg* Bloomberg Investments           40.0

*Created their own companies

**Bloomberg reports as of 12/31/2016

I am not astonished at these numbers, nor that six of the eight are Americans, nor that five of the eight are in technology.  Look at what they have built.  Think of the services and products they have created and distributed to willing buyers.  Their wealth is the result of creating value for others.  All of them created the companies that represent most of their wealth.

What astonishes me is the fact that 3.6 billion people, (including children) own an average of $135 each.  Who do you know who has $135 total wealth?  Think; who owes more than they own?  Anyone who has a job, rents an apartment, has no savings, uses credit cards, and borrows money to buy a car, or go to college.  During the recent recession, plenty of people were “under water” on their mortgaged homes.  That is here in America; I am sure Asia, the Middle East, India, Central America, South America, and Africa have plenty of poor people with no prospects for improvement.  Whose responsibility are they?

It is unclear what the article is suggesting, but the point is lost on me.  It sounds like envy.

The only thing this article suggests to me is, that if you took every penny from the world’s 8 richest people, and distributed it among the 3.6 billion poorest people, they each would have $135 more than they have now, and we would not have the services and goods these eight produce.

Our Glass House

One thing that stands out about the debate over equality is the way Americans limit their geographic boundaries.  We seem to talk about inequality only within national borders.  Income and wealth disparity is greatest among nations.

If you want to silence a discussion of inequality, mention this: The USA has 4.5% of the world’s population and owns 33.2% of the world’s wealth. We Americans would have to give up 86.4% of what we have, to equalize wealth with the other 7.2 billion people in the world.  Is that what the authors propose?  I doubt it.

One estimate of the total wealth on our planet is $255 quadrillion dollars.  That would mean about $36,000 per person when divided by 7.5 billion people.  However, infrastructure, education, access, communications, logistics, culture, climate, security, resources, health, age, and many other elements are not evenly distributed or available.  Some societies do not allow women to own property or have money unless it is controlled by a man.  Other societies are so corrupt that what they have is stolen from them at every turn.

History suggests that even if all assets were evenly distributed, the money would soon be redistributed to the few who provide the goods and services for the many.

Bloomberg’s listing of billionaires includes 197 whose total wealth is $3 trillion.  I do not know what percentage of the world’s population that matches, but it is about 15% of the $20 trillion national debt of the USA.  That would be $2.86 for every person in the world; $62,700 for each man, woman, and child in America.  What would be the average wealth of an American if we subtracted $62,700 from their net worth to pay the debt?

A Bigger Pie

Consider this:  those who decry inequality pose it as a problem, but offer no solutions.  What would the authors of the inequality protest recommend to raise the wealth of the earth’s inhabitants without confiscating the value created by others?

Whining the Election – Trumpled Aspirations

Over the 52 years and 13 presidential elections I have been eligible to vote, I have never seen such sore losers, and humble winners.

I am disappointed with the disparate responses to the results of the 2016 presidential election.  Smug expectations from pollsters and pundits seem to have set a trap for Hillary’s disciples, and set a stage for impetuous, righteous indignation.  Rejection, disputation, refutation, spoilsport language, protests, and denial among disgruntled Clinton supporters is “over-the-top,” and “unpresidented.”  “He is not my president,” spake Gloria Steinem, Wednesday morning.  (Ironically, in the past, she also said, “The truth will set you free, but first it will piss you off.”) 

Why have Mrs. Clinton’s avid proponents gone off the rails into the deep waters of denial and despair?

I believe the presumption that Hillary Clinton had a commanding lead over Donald Trump was their downfall.  Belief in optimistic statistics led to haughty attitudes and supercilious sneers on the faces of Hillary’s fans.  The extreme vanity of the oracles’ predictions led to nasty, braggadocios, arrogance.  When pride met gravity, the indignity of the pratfall magnified the embarrassment of hubris. The expectations of overwhelming victory were shredded, by the unexpected appearance at the polls of hordes of angry, underserved workers.  The ambush of the uncounted, disenfranchised citizens prevailed.

The carefully crafted deception of optimistic unemployment statistics did not fool the people who took discounted wages and lesser jobs over the last eight years.  These voters had no voice among Democrats who applauded the “champion of hope” for his rescue of the economy, and restoration of the American Dream.  They were not deceived by or grateful for their thinly disguised demotions and the smiling, dismissive, carefully worded denigrations spun by an accommodating media on behalf of the Obama administration.

The scales did not fall from their eyes, because no scales formed as they lost their jobs, houses, cars, and pride.  The Affordable Care Act did not replace the healthcare insurance they lost when their employer dropped their health coverage; when they lost their jobs, their hopes were dashed by the failure of the “marketplace” to make personal health insurance and their out-of-pocket costs affordable.  Instead, they found themselves ravaged by astronomical premiums, deductibles, copays, and incredible prescription prices.  Hospitals and pharmacies raised their nominal, private pay prices to offset the discounts demanded by insurance providers.  The uninsured were left with impossible choices.

Promise after promise lay fallow by the roadside.  Example after example of the USA borrowing trillions of dollars to pay for the rest of the world’s problems and defense festered, while Americans suffered from the Great Recession.  Pact after pact, treaty after treaty left us at disadvantage.  Military efforts left us looking weak, as we shrank from conflicts under cover of spin.  Former allies spat disparaging invectives on our leaders.

Did Hillary’s followers believe she could pull us out of the ditch of weakness and doubt created these past eight years?  Did her apostles think her baggage and prevarications would evaporate by inauguration?  No wonder they were blindsided when Trump won.

Press Magnet – Postive & Negative

I have never seen a person draw so much negative press as Donald Trump in the 2016 presidential campaign.  Anyone who wants and article to draw “hits” will just put “Trump” in the title.  He is a lightning rod for every fear traditional politicians can imagine.  He is like an extraterrestrial to the powers-that-be.

The only possible exception is Hillary Clinton; she embodies the body politic, but does not have the confidence of the people.  Her ingrained, “House of Cards” mentality, leaves doubt about her at every turn.  After all, she is not the most qualified candidate for president, ever, no matter how many times her supporters proclaim it.

And so it is; article after article, interview after interview, debate after debate, no substantive idea can stand the blizzard of hysteria the press and the parties have created.

The failure of either party to produce a clear-thinking, charismatic, appealing candidate is sad.  We are partisan couch potatoes, stuck in our recliners, left with a broken remote, stuck on the TV reality show, “Survivor, White House.”

I have read dozens of online articles naming Trump and Clinton without finding anything valuable or substantive.  Opinion, after opinion, after opinion.  The absence of information without spin is a yawning chasm.

I have seen diatribe, tirade, harangue, ad hominem attack, denunciation, fulmination, polemic, condemnation, censure, invective, and criticism – about what?  Inflated imbroglios and peccadillos?

On top of that, I have grudgingly witnessed both candidates bloviate about themselves without humility, honesty, or remorse.

“Wasted days and wasted nights,” as the song goes.

We are in trouble no matter who wins this election; neither candidate is forthright, honest, and humble enough to lead our government.  Why?  Because no really good candidate will run the gauntlet that politics has become.

Warnings in the News

Warnings in the News

The Great Recession has lasted so long that people do not remember inflation.  But, three recent statements, one from the meeting of the world’s central bankers, and two from the G20 Summit in China, ring the alarm bells warning us that inflation is on the way:

August 28, 2016 – JACKSON HOLE, Wyo. (Reuters) – Central bankers in charge of the vast bulk of the world’s economy delved deep into the weeds of money markets and interest rates over a three-day conference here, and emerged with a common plea to their colleagues in the rest of government: please help.

 In a lunch address by Princeton University economist Christopher Sims, policymakers were told that it may take a massive program, large enough even to shock taxpayers into a different, inflationary view of the future.

“Fiscal expansion can replace ineffective monetary policy at the zero lower bound,” Sims said. “It requires deficits aimed at, and conditioned on, generating inflation. The deficits must be seen as financed by future inflation, not future taxes or spending cuts.”

Translation:  We are going to spend our way to prosperity with inflation.

 September 4, 2016: U.S. President Barack Obama and Chinese President Xi Jinping agreed that both countries would “refrain from competitive devaluations and not target exchange rates for competitive purposes. at the G20 Summit held at the Hangzhou International Expo Center.

Translation:  We are going to lower the value of our currencies through inflation.

September 6, 2016: Leaders of the Group of 20 economies meeting at the Hangzhou International Expo Center pledged to use spending to improve infrastructure and the global economy.

Translation:  We are going to spend our way to prosperity with inflation.

In plain language, global economies are weak and weakening.  Governments can no longer stimulate their economies with lower interest rates, because they at or near zero.  They cannot afford to raise interest rates for fear of pushing us back into recession.  What can they do?

Inflation.  They are going to make money out of thin air and spend it to mollify their people.  At the same time, we will wiggle out of our mounting debts & Social Security obligations because inflation will let us pay in cheaper and cheaper dollars.

How will they do that?  Borrow money from themselves and spend it under the guise of “rebuilding infrastructure,” “investing in our future,” and “making America great again.”  So what if prices go up a year from now, and the year after that, etc.

Tax Reform will be like Robin Hood; tax the rich, give to the poor; “equality” and redistribution.  But it will not tax enough, or cut spending enough to balance the budget, or reduce the national debt.

Globally, it will be about which countries can inflate their currency faster to gain trade advantages, and reduce any debts they have from other nations.

Domestic inflation example:  You earn $100,000 per year and a house costs $250,000.  You borrow $200,000 to buy the house, and pay 25% of your income ($25,000) per year for your mortgage.

Suppose inflation doubles prices and wages.  Your salary might have to increase to $200,000 just to buy the same amount of food, gasoline, clothes etc. because prices have doubled.  You would be no better off in lifestyle, but your $250,000 house would be valued at $500,000.

However, your mortgage would still be $200,000.  You used to pay 25% of your $100,000 salary to cover the mortgage ($25,000 per year).  Now, $25,000 is only 12.5% of your $200,000 salary.  Inflation has cut your debt in half, as a percentage of your income.  And just look at the $300,000 of equity you have in your house!

Inflation would also lighten the government’s $1 trillion annual deficit s and $19 trillion national debt load and allow government to continue to borrow even more.

Think it cannot happen?  When I came to Texas in 1977, house prices were going up so fast that people were “flipping” homes like pancakes.  Of course, mortgage interest rates were double digit, and CD’s rates were too.  And federal debt jumped 17% that year.

Just look at the inflation we have experienced in the past.

The chart below shows 100 years of history.  The Consumer Price index (CPI-U) for January 1913 was 9.8.  The CPI-U for September 2013 was 234.149.  This means that something that cost $9.80 in January of 1913 would cost $234.15 today!

http://inflationdata.com/Inflation/Inflation/Cumulative_Inflation_by_Decade.asp

The average annual inflation rate in the 1940’s was 4.86% in the 1970’s it was 6.5% and the 1980’s was 13.5%. Each of those decades were especially hard economically for people trying to make ends meet while prices increased and wages didn’t keep up.

Perspective on Inflation

Inflation Unemployment Average Income Average House Multiple of Income 4yr College Multiple of Income
1960 1.4% 5.50% 5,200 16,500 3.17 8,000 1.5
1970 6.5% 3.50% 7,700 23,400 3.04 16,000 2.08
1980 13.5% 6.00% 16,700 64,600 3.87 30,000 1.80
1990 5.4% 5.60% 28,700 122,900 4.28 38,000 1.32
2000 3.4% 4.00% 41,500 169,000 4.07 47,000 1.13
2010 1.6% 9.60% 48,700 221,800 4.55 69,000 1.42
2015 0.5% 5.30% 53,700 296,200 5.52 78,000 1.45

 

This time, it looks like inflation could really hurt most people because wage increases and inflation adjustments for fixed income Social Security retirees probably will not keep up with rising prices.  That will make buying a home even more difficult, in that prices are already a bigger multiple of income than they have ever been.

Middle-Class Families Robbed by Obamacare – Before and After Taxes

The New York Times just published an article claiming that middle-class families are better off financially.  They blithely overlooked the greatest tax increase in recent memory and the greatest increase in medical cost Americans have ever seen.  We have been robbed blind.

Many employers dropped or reduced their health insurance benefits and left their employees to shop Obamacare market places.  Not only are the premiums higher and the benefits lower, but now they must pay with after-tax dollars.  Insurance premiums paid by employers is exempt from payroll and income taxes.  Any of the premiums employee pays must come from earnings that have been taxed at about 8% for Social Security, Medicare taxes; the employer pays the same amount in matching payroll taxes.

But that’s not all; the employee also pays income taxes on the earnings – at least 15%.  So 8% + 15% is 23% fewer dollars in the employees’ pockets just to get the money to pay for healthcare insurance.  Since Obamacare started, health insurance for middle-class families has roughly doubled.  They get no government subsidies; they have fewer choices of doctors and hospitals; the deductibles and copays empty the bank accounts.  People who have worked hard, have been nicked by the recession.  They may be working for a fraction of their former incomes.  Families are now strapped for cash, and struggle to find medical providers that will accept their healthcare insurance.

Ask yourself, is the New York Times right?  Have we increased our incomes enough to rise above the tax grab and the insurance double-cross?  Our economic anemia verges on leukemia; Obamacare is the pathogen, not the cure.

The Fight for Eyes

Political parties beware: the 2016 presidential election could stimulate American fact-checking and critical thinking – or not.  Why?  Could It be, we are awake and paying attention?  Could it be, we just want to be “right?”  Could it be, “We’re as mad as hell, and we’re not going to take this anymore.”?

In 2016, American information media reflect our mindsets.

  • We have boundless channels of 24/7 content battling for “eyes,” and “market share.”
  • We are so numb, it takes lurid, “mind bites” of “shocking facts” to get our attention.
  • Our jaded, fickle brains are addicted to “breaking news and “editorial reporting.”

Then comes the election.  How do we decide?  The battle lines are drawn.  The news media have abandoned objective balance in the fray.

It is natural for people with strong political bias to seek news sources that support their current views, and to ignore, avoid, or distain sources that reflect contrary, or impartial thinking.

Lord knows, we have enough choices (e.g. newspapers, magazines, radio, television, internet, social media).  Which do we choose: “bread and circuses,” or brains?  Do we swallow our favorite- flavored propaganda, or chew on the tough, tasteless truth?

Seven questions we can ask about what we call “news:”

  • Which sources provide complete, unbiased information and analysis?
  • Which sources provide incomplete, biased information and editorials?
  • Can we discern where information stops and persuasion starts?
  • Did we get all the information we need to understand?
  • Do we know enough to understand the context and importance of the information?
  • Do we have enough sources to verify or complete the information?
  • Do we care?

Few of the major news organizations remain credibly neutral or balanced.  Here are 10 news sources accepted as trustworthy by people across the political spectrum.

  1. The Wall Street Journal
  2. The Economist
  3. BBC
  4. Google News
  5. The Guardian
  6. Associated Press
  7. Reuters
  8. C-SPAN
  9. ABC
  10. USA Today

Here is an informative graphic from    showing the political positions of the various major news outlets.

news politics

Good thinking everyone.

What if Trump Wants to Lose? – Reality TV at its Finest

Interesting; both candidates for President are set for life, no matter who wins.  Aside from political ambitions, what other consequences can we think of?  Speaking engagements, books, endorsements; contributions to “selected” organizations, trust, foundations?

I think that is why Trump keeps upping the ante.  He is probably just as surprised as the pundits that he is the Republican candidate for president.  He is geared to parlay events that favor him into big wins.  But what if he does not want to win?  Could he be testing the limits of our national appetite for trash talk?

And, what about his campaign team?  In mid-August, Donald shrugs off the RNC “sheeps clothing” and resumes his “Wolf of Pennsylvania Avenue” regime.  An experienced manager tries to get him to smooth public dismay, and assume RNC campaign strategies; Trump demotes him and resumes fraying the tightrope to the White House.

Back to the show without protagonists; it must be amusing and frightening to watch our silliness.  All our military power, all our amazing creativity, dimmed by this imbroglio.

Timid, cowering politicians, showing everyone we have no cohesion, no clear direction, no acceptable answers to quell the “masses” who intuit the vacuum of power in our country.  Since 9/11 we have been “dazed and confused;” what should we do, whom should we trust; whom should we fear?

Flaying with “Shock and Awe;” useless, ignorant “boots on the ground” in places rich in resources, but impoverished in modernity.  We have shown our naiveté by superimposing our values and culture on 7th century tribal people.  Iraq was not even a country before Churchill drew a line around three feuding ethnic groups and assigned a titular government.  Afghanistan is the graveyard of many invading armies.

Donald Rumsfeld’s endorsement of Donald Trump is emblematic; the man who almost single-handedly emasculated Americas military, feebly blesses a novice in military affairs.  Sad, sad, sad.

I always thought of America in superlatives; strong, honest, forthright, steadfast, resourceful, courageous, and blessed come to mind.  Our moral infrastructure is in such disrepair, that we cannot stand for anything as a nation.  We have such weak bonds with each other, that we waste our energy and resources on things of little consequence in the world.  We blame each other for problems no one could create or solve.  We are frustrated with the impotence of government to do what it cannot.

  • Are we still recovering from the shock of a homeland attack?
  • Have our imaginations and fortitude been diverted to virtual reality?
  • Are we happy that we chose two weak candidates for President?
  • Are we that detached from reality?
  • Do we think this is just another show on TV?
  • Is our decline that obvious to the rest of the world?
  • Are Russia and China taking advantage of our frazzled reticence?
  • Where are the serious leaders we need?

We need citizens to accept individual responsibility and to participate in the things that matter – the true threats and vital problems; not bathrooms and weddings.

As in the TV series House of Cards, the voters are not in charge of anything. If we remain the audience for a reality TV Show, it should be called Decline.  You are never fired; in fact, you are stuck in a job you cannot afford to lose.  We could wake up like Gregor Samsa in Kafka’s Metamorphosis; no control over, and less understanding of what is happening to us.

Saul Alinsky was an important personal mentor to Hillary; his books are modern, grass roots, activist versions of Machiavelli’s The Prince, and Karl Marx’s Manifesto of the Communist Party.  Listen to the rhetoric of semi-incumbent,Hillary Clinton, and parse out the words that are not in Rules for Radicals.  She does not have any answers that were not available to another Alinsky apostle, Barack Obama; how can anyone believe she can do what he could not?  Not that Trump has any silver bullets either; but voting does not have to be rational; and so it is not.

Kizr Khan waved the Constitution on TV, but he must not have read the powers of the Congress, the President, and the Supreme Court. Had he read and understood Articles I, II, and III, he would know that all these sweeping promises candidates make are not within the powers vested in the Presidency.  If they could have, they would have.  Obama has stretched every possible executive power; what can any president do without Congress and the rest of the nation?  Read the Constitution and the Bill of Rights.

But I digress.  Just think; what if what Donald Trump never intended to become President. It has cost Donald Trump virtually nothing to become a famous world figure and a national icon.  He definitely, upset the powers-that-be in the RNC.  He awakened an army of citizens who have suffered too long from economic and government impoverishment.  Even if the presidency goes to the second most unpopular, and widely distrusted candidate, both she and Trump are set for life.