Monday, September 29, 2014

THE RICH GET RICHER AND THE POOR GET...


I usually wouldn't use charts this big on this page, but the dates under each segment are important. As the chart title says, this is the distribution of average income growth during periods of economic expansion. What makes these data interesting is not so much that between 2009 and 2012 the top 10% grew massively while the other 90% had negative income growth. No, what makes this interesting is when you look at the top individual income tax rate during the early time periods.

In 1949 the top tax rate was 82.1%. In 1951 the top rate grew to 91% and stayed at 91% until 1963. Notice anything different about income growth during those years compared to the 21st century? Ya, the lower 90% of earners had actual significant growth in their income during those periods of incredibly high tax rates. Why was this so? Because the economy between 1951 and 1981 grew at an average rate of 3.7%, but between 1981 and 2013 it has grown by an average of only 2.8%.

So lets review. Not only do super high tax rates not hurt the middle class, but they also seem to do no harm to the growth rate of the general economy. And what significant event began in 1981, the year the economy and middle class income growth both started down? The so-called Reagan Revolution and the Trickle Down theory of economic growth. Facts is facts. Just sayin'.

Saturday, August 30, 2014

LITTLE LEAGUE MEMORIES



Summer brings so many memories. Maybe it’s the smells, or the heat, or the light as the day settles down to its Daylight Savings end. Whatever the cause the result is the same: Sights, sounds and even smells of things that happened many years ago intrude into the present and demand attention, without regard for my need and desire for an afternoon nap. Lately the play list seems centered around my years of playing Little League baseball.

Rolling Meadows, the Chicago suburb where I grew up, was a pretty well off place to live. We didn't actually know this until much later, but it seems that the average per capita income was above the average for the rest of the suburban landscape. In the late 1950s this didn't show up in day to day living, mainly because we didn't spend any time in the other suburbs so that we could make a comparison. We just thought that our Little League field was like every other field. Didn't they all have outfield fences and huge chain link backstops and concrete dugouts? Didn't they feature bleachers and manicured infields? Well if we thought about it at all we assumed the answer was yes. So please understand that while my Little League experience may not have been typical it was all I knew so it was typical for me.

My team was the Braves. We had gray flannel uniforms with all the matching accessories from caps to high rise wool socks to rubber cleat shoes. We looked good! I remember standing along the third base line as the National Anthem played from the speaker on top of the announcers/press box. Did I mention the announcers’ box? Anyway, the recording they used had a nice, un-embellished, vocal by a choir so we could hold our ball caps over our hearts and sing along at the top of our lungs. To this day, every time I hear the last line of the anthem I hear “and the home of the Braves,” since that’s the way we always sang it.

We had a pretty good team, too. I seem to remember that we won a lot of games in our particular division during my time on the team. This may have had something to do with the players that we could put on the field. Our first baseman was also one of our pitchers. He seemed to play all of every game and I guess that he was an okay player. He was also the manager’s son, but I’m sure that had nothing to do with this kid's playing time. We had three other memorable players who I’ll call Bill, Ed and Moose. I have to believe that these guys had shown their birth certificates when they signed up and that they were, thus, legal. But boy, were they big! I’m talking high school big. At least that’s the way they looked to a pudgy (I preferred husky, thank you) preteen wrapped in pinstriped flannel waiting to get into the game.

But big they were, and talented. Bill also pitched and played first base. Little League, even way back in the day, had strict rules for resting pitcher’s arms. This meant that we needed at least four pitchers to make the rotation. Anyway, Bill was a pretty good pitcher and could also hit the ball to get on base. Considering that he was a foot taller than the kid pitching to him I guess that shouldn't have been too surprising.

Ed was a tall, lanky redhead who could throw a mean curve ball and play better than most at shortstop. Lucky for us he had another talent. He could play catcher.

Which brings us to Moose. Moose was our regular catcher. He could catch anything the other three could throw and if an opposing player even thought about stealing a base that player learned that our Moose could also throw. Nobody ever stole a base on Moose. He was also big. Very big. Big like he shaved twice a day just to look scruffy. We really liked having Moose in the lineup.

Our Little League learned pretty quickly that tie-ins with local businesses paid off. The outfield fence was decorated with signs advertising the local Chevy dealer and dry cleaner and several others I can’t remember. From the players point of view, though, the best tie-in was with the local Pepsi distributor. The deal was that any player who hit a home run received a case of Pepsi. Understand, when I say case I mean a low wooden box with hand holds cut on each end, filled with 24 six ounce bottles of liquid rocket fuel. This was great motivation for 9 to 12 year olds to swing for the fences every time at bat, regardless of the Manager’s instructions. With Moose it didn't really matter.

When Moose stepped up to the plate he made the opposing catcher look like a toddler. Hell, he made the grown man umpire look like a preteen. Moose was walked pretty much every time he came to bat, either intentionally or because opposing pitchers lost any sense of ball control that they may have entered the game with. This boy was scary. But sometimes they had to pitch to him. Our dugout would get very quiet. We would sit or stand in rapt attention just waiting for what, to us, was the inevitable outcome. And sooner, rather than later, the crack of the bat signaled that outcome. Moose had hit another one out of the ball park. We were drinking Pepsi tonight!

That strict pitcher rotation that I mentioned meant that every couple of weeks or so we would run out of pitchers. So on those evenings we were treated to a very special lineup: Moose would have to pitch. This caused a few other changes in the placement of our fielding staff since the Manager learned early on that our backup catcher couldn't catch Moose. I mean, literally, Moose’s fastball would knock that poor ten year old back on his ass every time. And good old Moose only had that one pitch, a fastball right over the plate. We had a problem. After a quick huddle, and some hurried changing of gear, Ed was in a squat behind the plate and Moose took his place on the mound. It wasn't even close to a fair fight. Moose would twist himself into a not at all pretty corkscrew and let fly a fastball right in the sweet spot over home plate. The sound of that ball hitting Ed’s extra padded catchers’ mitt was like a gun shot. Two more gun shots and an opposing batter took his seat in the dugout. This was repeated, with an occasional foul ball by the braver kids, until another half inning ended and it was our turn at bat. The games that Moose pitched pretty much always ended in a Pepsi party too, since opposing teams just couldn't wrap their heads around walking the pitcher. They learned quickly how wrong they were.

So that was the team that I found myself a part of. I was not a regular starter for the Braves. I was not a starter at all, actually. In fact, had the league not had a rule that every player got to be in the game for at least three innings (out of the six we played) I doubt that I would have played at all. I was very, very bad at baseball. I had only two memorable games in the three years that I played. Ya, I was that bad.

When I came up to bat, usually once in the last three innings of a game, we would be ahead by several runs. Our trio of giants saw to that in the first three innings. I’d step up to the plate and the infield players would move forward to the infield grass while the outfielders would take up positions that looked like a regular infield. This was somewhat intimidating to chubby little me, but given my record at the plate, not really unexpected. My string of strikeouts was almost legendary. That is, until one game late in my final season.

We had a man on base when I took my place in the batters’ box. The fielders all made their shift to the “this guy can’t hit,” position and things went along pretty much as usual. I swung and missed the first pitch to no one’s surprise. I keep the bat on my shoulder for the second and received a called strike for my trouble. “Here comes number three,” I thought, but then, for reasons that I didn't understand then, or now, I stuck my bat out in a very poor attempt at a bunt. Man on base, advance the runner, those thoughts may have floated through my mind. Much to everyone’s surprise, including mine since I had closed my eyes, the ball made full contact with the bat, and took off as a pop up to short center field. An easy out for just about any fielder in the league. That is, any fielder in a normal fielding position. But all of these guys were in the infield. There wasn't anybody in the outfield to even make a diving catch at this ball. I stood in stunned silence for a second or two until the rest of my team screamed as one, “RUN.” So I ran. When I finely made it to first base, somewhat winded but no worse for ware, it struck me that I had a base hit. In an actual game. I was stunned. The rest of that game is a total blur. I don’t think that I scored, but it didn't matter. I had gotten a base hit!

The other memorable game involved the other aspect of baseball: Fielding. By now you might guess that I wasn't a great fielder. I wasn't even a good fielder. I stunk! My reward for being such a quality player was a permanent assignment to right field. Unlike the big leagues, where switch hitters can hit to whatever area of the field they want (assuming they get the right pitch), Little League players tend to hit to their dominant side: Right handed batters hit to left and center field while lefties hit to right and center. There being far more right handed people than left handed means that the right fielder gets very little action. A perfect place for a less than stellar player.

I didn't help matters, either. Being in right field turned out to be pretty boring. The action was all somewhere else, which lead to, shall we say, my mind wondering. I'd watch airplanes heading to who knows where. I'd count ants as they ran in and out of an anthill. I'd pretty much do anything but pay attention to the game. But then one day something changed.

I had staked out my usual spot. Sort of short right field sort of faded toward center. This was not because I knew anything about the kid at bat, but because it just seemed like a nice compromise place to stand. Right field was quiet that day. The wind must have been blowing the usual “Hey Batter, Batter,” chatter toward the infield so that it was just a dull hum. The sky was clear and perfectly blue, and I had no idea what the balls and strikes count on the batter was, or even how many outs there were. Heck, I didn't even realize that the batting team had runners on first and second base. A perfect day for ant counting.

Just then, out of the blue, the batter connected with a well placed pitch. The ball arched up into that perfect blue sky in the direction of short right field. In fact, the ball was hit right to the spot where I was standing. I raised my mitt, closed my eyes (I seemed to do that a lot), and the ball landed in my open glove. I had caught a fly ball! That felt really good, so with a huge smile on my face I chucked the ball to the second baseman, who was standing on second base, for the usual toss the ball around the infield tradition that ends with the ball back in the pitcher's hands. He turned and fired the ball to the first baseman who was stretched toward second with his foot on the base. I could hear some cheering, and figured our fans and families were happy, and somewhat surprised, that the chubby right fielder with glasses had caught a fly ball for an out. I was wrong.

Remember, I had no idea how many outs we'd already notched. Well, it seems that the correct number was... none. The opposing base runners had seen the ball heading my way and did what any ball player would do when said fly ball had pretty much a zero chance of being caught: They took off at a dead run for the next base. I'm sure that they figured on scoring at least one runner and, given my credentials, maybe two. What the didn't figure on was little old me catching the ball. See, the rules of baseball say that before a runner can advance after the catch of a ball on the fly they had to touch the base they were leaving from after the catch. These guys knew who was in right field, so they just took off running.

When my casual toss to second base reached the second baseman the runner who had headed to third was out. When he fired the ball to first, that runner was out. Now, I was still glowing from catching a fly ball and still had no idea of the number of outs. As my team all started to run toward the dugout, somebody looked out my way a waved me in. I shrugged my shoulders and trotted toward the infield. It was only then that it hit me: My catch was one out, the second baseman made the second and the ball fired to first was three. I had started a triple play!


No, I didn't get a case of Pepsi for my trouble. In fact, the team was sort of unimpressed with the whole thing. I think maybe two of my teammates patted me on the back and said, “good job.” And that was it. My turn at bat came up and my usual strikeout was the result. The world was back to normal. That was my last season playing Little League baseball. My interest moved on to Amateur (Ham) Radio. I'm sure the Braves did just fine without me, but I bet no other player started a triple play. At least I don't think they did.

Wednesday, July 16, 2014

MORE MYTHS

As I noted in the last post, our friends on the conservative side of things seem to believe a lot of stuff that can't pass the smell test of logic. That is to say, if it doesn't walk, quack or fly like a duck... it's not a duck, no matter how much you believe it is one.

Our second myth, then, is simply the entire right wing economic plan and answer to the endlessly repeated question, "Where are the jobs?" But don't worry about it being a long, dry list of policies. Here's the whole thing from a USAToday piece by Cal Thomas.

"Cutting taxes, lowering government spending and reducing the size of the federal bureaucracy would improve the economy... "
Ya, that's all of it. The conservative answer to all that is wrong with the Greatest Nation to Ever Grace the Face of the Earth. That, by the way, is yet more right wing clap trap. Here's the logic problem. If the statement is true then how could there be so much wrong with the country? Just sayin'

So let's dig a little deeper into the Great Plan (GP) and see how it would work to solve all of our economic problems. Cutting taxes. I assume that the idea is that leaving more money in the hands of them that earned it will translate into more investment in private sector businesses which will then produce more hiring and greater economic activity. That's the theory, anyway. Let's look at those ever so bothersome facts.

American businesses are, and have been, sitting on over 2 Trillion Dollars of cash. Not capital, not infrastructure, not warehouses full of product. Cash! There is a glut of mergers going on at the highest levels. And notice how often the deal is presented in terms of cash not just stock and other equity. We also have many large companies doing stock buybacks as a way to offer stockholders short term gain and get rid of even more of that pesky cash. What we don't have is hiring of new employees or raises for existing staff. So please, if you can, explain how giving a business even more cash money in the form of a tax cut will induce, encourage or maybe trick those companies into spending that money by creating jobs?

Businesses do not hire people because they have excess cash laying around the boardroom. They hire to satisfy a need brought on by increased demand for whatever it is that they are selling. Look at the last 6 years. Businesses have lots of money but are not hiring. Or look even farther back to 2001 and 2003. The massive Bush tax cuts, directed mostly toward the top 10% of earners did not result in increased hiring as had been predicted... by conservatives. Here's a chart of the unemployment rate since 2000.


Notice how after the 2001 tax cuts the unemployment rate went up, not down. Also notice that after the 2003 tax cuts the rate did start down, but very slowly and barely reached the level of unemployment recorded on the day George W. Bush took office. Oh, and you might want to notice that the huge upward spike starting in 2007 and ending in the first quarter of 2009 was all on Bush's watch.

So, two huge tax cuts... no effect on hiring. Tell me how this works!

Well, surely lowering government spending will do something positive for the economy. Maybe not. As I alluded to in the first myth post, government spending puts money into the economy. The logical extension of that statement is that reducing government spending removes money from the economy. But the conservative theory says that that money will still me spent and invested by the private sector which knows much better than bad old government where to pour that cash. Okay, but there may be a few problems. For example, it may be unstated but the conservative assumption is that money not spent by government will be returned to the taxpayers in the form of tax cuts (see above). This, of course, ignores the other unmentioned part of the right wing GP, the debt and deficit. I would think that any savings of tax dollars brought on by spending cuts should first go to reduce the deficit (the amount of money we borrow and then spend) and then to reduce the debt (the amount of money that we owe to those entities which lent us the money to excessively spend). They, conservatives, wale and moan about the D and D almost as often as they mention Obama's War on Coal. Which is to say, all the time. So I only think it would be fair to use spending reductions for those purposes. Want to bet on that one?

More importantly for our busting of myths (see how I avoided problems with the copyright laws), how would cutting spending, regardless of were any savings is redirected, "... Improve the economy?" I don't think it would. And I'm in agreement with the majority of economists. I'll say it again, government spending puts money into the economy. And, by the way, it also increases the moneys coming in from taxes. No, this is not some perpetual motion machine that runs forever on its own output energy. It is the simple fact that the federal government taxes transactions.

We pretty much only think of the government taxing income, but income, and in the case of businesses, profit, can also be viewed as transactions. Your part of transaction is to put in your 40 hours of working for your employer and your employers part is to give you money for your work. The same, of course, holds true for businesses. Buy 100 widgets from Widget World and they send you widgets and you pay them money. So really, all of what we call economic activity is just one transaction after another. And they're all taxable.

Those who haven't been there might be surprised to learn that unemployment payments are... taxable. Yep, all of those lazy takers receiving unemployment benefits so that they can lay around and play video games all day on the taxpayers dime are, in fact, required to pay taxes on the money they receive. One member of the household working while the other is disabled or retired? Social Security payments are also taxable under certain circumstances.

Grants from the government are generally not taxable, every transaction from that point on, is. So a science grant of say $500,000 to study hens teeth may seem like a half million dollar waste, but just remember that the half million dollars is now buying lab equipment (taxable) lab coats (taxable) paper, pens, computers, cell phones, lab assistants, etc. (all taxable). And the people who are paid for their work or their products take that money and buy bread and milk and shoes and diapers and more lab coats and stuff to sell AND IT'S ALL TAXABLE.

This basic fact is why Europe, which chose spending cutting as their way to recover from the Great Recession, is suffering under double digit unemployment and why the USA, which, by way of the FED, chose stimulus rather than austerity, has an unemployment rate of 6.1%. Facts are facts.

Okay, that's enough for now. The part about reducing the size of the federal bureaucracy is really just reduce spending said in a different way and is, as we've seen, just as meaningless. This stuff sounds good, in a kitchen table, checkbook balancing, kind of way, but the federal budget is not your checking account. The general economy doesn't work like that and believing that it does is a very big part of the problem.

Monday, July 7, 2014

MYTHS

Every so often I read or hear something said by a politician or political pundits that just sets my teeth on edge. Why? because I know that what is being said is not true. And I'm not talking about Presidential birth certificates or other such bull crap that is passed off as true in certain circles. No, I'm talking about things that are false on their face by real evidence or logical deduction. For example:

In an op/ed piece from our local, very right wing, newspaper a Republican Congressman and committee chairman expressed the thought that he didn't think that the American people wanted any higher taxes since that just took more money out of the economy. And there it is. The myth of the black hole of government taxation.

First, the obvious question should be, "Where does the money go?" I can't for the life of me figure that one out. Is there a super computer out in the desert somewhere that adds up all of the tax dollars that, because they've been collected, now must disappear from view. Of course given the government's fine record of efficiency I figure that super computer is a couple of Apple II's and a dial up modem.

This little myth, which has and is repeated regularly on the right, flies directly in the face of the other side of the conservative mantra; out of control government spending! What do these folks think is being spent? Let's see, the government taxes people and corporations, who are really just people too, haven't you heard, takes that money and hides it somewhere so that it is no longer in and usable in the regular economy and then, I guess, borrows money from China to spend on all of the worthless programs that the government over spends on. Or something like that. See what I mean. This whole concept fails a simple test of logic.

No, the government does not remove money from the economy when it collects taxes. It might remove money from your economy or from your businesses economy and that could certainly piss you off, but if you step back and look at the bigger picture it's clear that redistribution of money by the government may stick in your craw, it's what governments at all levels do.

We can clearly see that the Congressman's statement is false. Is this a deliberate lie on his part? I have no way of knowing. More troubling is the thought that he actually believes this nonsense. That would be the result of decades of ideology being endlessly repeated and never challenged by our dog whipped main stream media. They, the media, are so afraid of charges of bias from the right that they'ed find someone to express an opposing position after a guest states that the earth is round. What scares me is that this guy writes laws that I have to then follow. He doesn't know how the economy works. That's not a good mix.

Okay, that's all for now. Think about this a little, please. Myth number two coming up.

Friday, April 4, 2014

HOW DARE THEY - INSURANCE MANDATE

How dare the Government mandate that we must have insurance. And mandate what the minimum coverage must be. And penalize us if we don't buy the insurance from a private company approved to sell that insurance. How dare they!

Of course, I'm not talking about the ACA or as it has come to be called, Obamacare. I'm talking about Auto Insurance. That's right, good old auto insurance. I can't for the life of me understand why the folks on the political right can get blue in the face over the ACA's individual mandate. You know, the government forcing us to buy a product and penalizing us if we don't, since that is exactly what happens with your auto insurance.

Let's compare, shall we. Government sets the minimum coverage required under both. Check. Government must approve which companies can sell both. Check. Government mandates that you buy both types of insurance. Check. Government penalizes those who don't buy both types of insurance in the form of a monetary fine under the ACA and by taking away ones vehicle registration under the auto insurance statutes. Check. The only difference that I can see is that the ACA is federal and auto insurance is regulated by the states. Oh ya, and that the ACA is a program passed by the Democrats under a Democrat President. (Using ideas first proposed by the very conservative Heritage Foundation, by the way.)

They're the SAME, people! No difference at all. The auto insurance mandates were put into place so as to product the public from uninsured, and unable to pay, drivers who cause accidents and damage to those who do take personal responsibility and buy insurance. It's a way to mandate that personal responsibility and the states feel that it's in the best interest of the public that all vehicles are covered by insurance. The ACA is a way to make the uninsured health care consuming public also take the same personal responsibility that those who have purchased health insurance have taken. That way the responsible people don't have to pay to make up for health care services used by the uninsured and then not paid for. Each form of insurance satisfies a compelling public interest. There is no difference.

So, please, someone tell me why one is okay the the other is not? Please. Anyone?


Friday, March 14, 2014

TAXES

I've been working on our taxes this week and if anything can send me into a rant, that's it. Now, I figure that everybody hates paying taxes, but if you listen to conservatives you'd think that the tax man ranks right up there with Hitler, Stalin and Jack the Ripper.

You've heard them, I'm sure. "The government wants to confiscate your hard earned money," or "That government just wants to steal my money." Of course this is usually followed by the words, "And give it to some poor folks," or words to that effect. This echos back to the 2012 Presidential race and the talk of Makers and Takers. But maybe we need to get a bit real.

When you try to define who falls into which camp, either the Makers or the Takers, you run into several, shall we say, problem areas. For example, the fact that the Federal Government pays out huge amounts to subsidize the oil industry. And Agribusiness gets in on their share, as does the renewable fuels industry, including solar, wind, hydro and geothermal. And let's not forget the auto industry, the airline industry and pretty much any other transportation industry you can think of other than the Amish buggy industry. And these and many more are so called Makers!

On the Taker side of the coin one is faced with the uncomfortable truth that both Social Security payments and unemployment benefits are taxable. That's right, every year I have to pay taxes on the Social Security Disability payments which I received during the year. So, does that make me a Taker... or a Maker? Let's see, I earned enough money as a business owner who created and helped to create a couple hundred jobs, and paid into the Social Security and Medicare systems the required taxes so that now, when I need it, I can get a check from Social Security for my disability and receive health insurance by way of Medicare. I guess I went from being a Maker to a Taker. But since I still pay taxes on what I receive I should still be a Maker, right?

And that right there is the part that makes my head explode. People are always changing their status in our mobile and ageing society. It's one of the things that makes this a great country. We just shouldn't label folks with names like Makers and Takers and then try to make those labels a justification for certain policies. It's not fair and it can come back and bite you later in life. Even conservatives get old you know.

Thursday, March 6, 2014

LET'S TALK ABOUT BULLETS

The recent trial of Micheal Dunn in Florida got me to thinking. Dunn is the guy who fired 10 times into an SUV because the music was too loud. Three shots hit and killed 17 year old Jordan Davis and the other 7 missed his three friends who were also in the car. Dunn ended up with a mistrial on the charge of murder, but was convicted on three counts of attempted murder. This somewhat goofy outcome I'll save for another time. What I find interesting are the charges he was convicted on.

It would seem that the prosecution choose to file only three attempted murder charges because there were three potential victims, not counting Mr. Davis who he actually hit. The Florida statute doesn't make that distinction, so I can only assume that this was a decision made by the prosecutor.

So, here's my idea and I would think that both the liberal gun control types and the NRA would be all for this. If you fire a gun intentionally in the direction of another human being each and every bullet fired counts as an attempted murder. Now, there could be mitigating circumstances that the defense could argue, such as, "I shot at the ground to scare them off," or some such, but in general if the bullet flies toward people that's attempted murder. In the Dunn case that would mean 7 counts carrying up to 20 years each.

But even better, this would be a way to discourage the use of giant magazines by criminals. Conservatives are always telling us that criminal punishment acts as a deterrent to future crime. The entire death penalty system is built upon that foundation. Mandatory minimum sentences are supposed to act as a deterrent to others contemplating selling drugs, etc. So there you go. If Mr. Criminal loads up his AK-47 with a banana clip of 30 rounds and fires away at some other gang bangers, he should face 30 charges of attempted murder. Put in that new barrel clip that holds 100. Oh ya, he's going to prison for a long time!

Gun control advocates have been wanting to ban high capacity magazines, but this could, over time, produce the same result. NRA types want the laws enforced and would never be in favor of shooting at people who didn't already threaten them. You want to load up your MAC-10 with 30 rounds at the gun range, have at it. One could also use monster clips for hunting, but I suspect that a little peer pressure from other hunters might put a stop to that.

So, there you go. If you like the idea spread it around. If not, tell me why in the comments. I promise to check them.