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Privatization: The Road To Hell

Billionaires are different from you and me, for obvious reasons, including the fact that they buy much pricier baubles than we do.

A sleek car costing $100,000? Why, for them, that’s just an easy impulse purchase. A few million bucks for a Matisse original? Go ahead — it’ll liven up the hallway. How about throwing a fat wad of cash at a university to get an academic chair named for you? Sure, it’s all part of the fun of living in BillionaireLand.

Then there is the top crust of the upper-crust — such megalomaniacal megabillionaires as the Koch brothers. Using money from their industrial conglomerate, their foundation and their personal fortunes, these two far-out, laissez-faire extremists are literally buying public policy. Their purchases of everything from politicians to the tea party help them push the privatization of all things public and the elimination of pesky regulations and taxes that crimp their style.

To advance their plutocratic privatization cause, brother Charles has even gone on a shopping spree for an invaluable bauble that most of us didn’t even know was for sale: academic freedom. And it’s surprisingly cheap!

For only $1.5 million, Koch bought a big chunk of the economics department of Florida State University a couple of years ago. His donation gives him control of a new “academic” program at this public institution to indoctrinate students in his self-serving political theories.

The billionaire gets to screen all applicants, veto any he deems insufficiently ideological, and sign off on all new hires. Also, the department head must submit yearly reports to Koch about the faculty’s speeches, publications and classes, and he evaluates the faculty based on “objectives” that he sets.

Charles has made similar purchases of academic freedom at two other state universities, Clemson and West Virginia. Also, in a May 20 piece at Alternet.org, investigative researcher Lee Fang reveals that Koch has paid $419,000 to buy into Brown University’s “political theory project,” $3.6 million to establish Troy University’s “center for political economy” and $700,000 for a piece of Utah State’s Huntsman School of Business, which now has the “Charles G.
Koch Professor of Political Economy.”

Imagine the screams of outrage we’d hear from the Kochs if a labor union were doing this.

A recent article in The Onion, the satirical newsweekly, printed a downsize-big-government spoof that Charles and David would love to turn into reality. The parody disclosed that President Obama had come up with a surefire plan to balance the federal budget: Rob Fort Knox! “I’ve got the blueprints,” Obama is quoted as saying, “and I think I found a way out through a drainage pipe.”

Unfortunately, with today’s political climate dominated by howling winds from the far-right fringe, there’s no longer any room in American culture for satire. Sure enough, some laissez-faire extremists at such Koch-funded corporate fronts as Cato Institute and Heritage Foundation are presently howling for the government to sell all of America’s gold stored in Fort Knox. Noting that we have billions worth of bullion in the vaults, a fellow from Heritage made this keen observation: “It’s just sort of sitting there.”

Uh, yeah, professor. Like Mount Rushmore, the Grand Canyon, the Lincoln Memorial and other national assets — being there is the point.

Yet these ivory tower ideologues are using the current brouhaha over the budget deficit as an opening to push their loopiest fantasies of selling off all of America’s public properties, facilities, systems and treasures to create a no-government, plutocratic paradise. Just spread our public goods out on tables, like a flea market from hell, and invite the global rich to buy it all.

For example, a fellow from another Koch-funded front, the American Enterprise Institute, observes that the government could raise billions of dollars to retire that pesky deficit simply by selling our interstate highway system. Americans would then have to pay tolls forever to the corporate owners, but hey, he exclaims, remember that tolls “work for the River Styx, why not the Beltway?”

What a perfect metaphor for privatization! In ancient mythology, dead souls must pay a toll to be ferried across the River Styx and enter the depths of hell.

By: Jim Hightower, CommonDreams.org/Creators.com, May 25, 2011

May 25, 2011 Posted by | Democracy, Government, Ideologues, Ideology, Koch Brothers, Politics, Regulations, Republicans, Right Wing, Taxes, Tea Party, Unions, Wealthy | , , , , , , , , , , , , , , | Leave a comment

The Grand Delusion: Higher Taxes “Soak” The Rich

Squeezing, gouging, soaking, it’s all the same, and it’s all wrong. The richest Americans, we hear it said, pay most of the federal income taxes. That’s true. But since 1980 their AFTER-TAX SHARE of America’s income has TRIPLED. That’s a trillion dollars a year in extra income for the wealthiest 1%.

A trillion dollars is seven times more than the budget deficits of all 50 states combined.

A trillion dollars, if it hadn’t been redistributed to the rich, would provide an extra $10,000 a year for every family that has contributed to American productivity since 1980.

The defenders of unlimited wealth insist that the very rich have earned their money. But what does EARN mean? Does it mean that the million richest families worked harder than the other 99 million families for thirty years? Does it mean that one man can bet against the mortgage industry and make enough money to pay the salaries of 100,000 health care workers? Does it mean using American research and infrastructure and national security to build a corporation that pays zero federal income taxes?

Most of the fortunate 1% benefited from tax cuts, financial system de-regulation, ownership of 50% of the stock market, and a 15% capital gains tax. According to a study by the University of California, in 2008 only 19% of the income reported by the 13,480 individuals or families making over $10 million came from wages and salaries.

The very rich claim that their income growth stimulates the economy. But it hasn’t happened. Low-income earners spend a greater percentage of their overall income on consumption, but they have less purchasing power than they had thirty years ago.

What the very rich won’t admit is that they benefit the most from government-funded research, national security, infrastructure, property rights, and a financial industry tailored to their pleasure and profit.

Instead, they claim that anyone can be rich if only they work hard. Much of America wouldn’t know if this is true. They haven’t had a chance to work lately.

By: Paul Buchheit, CommonDreams.org, May 10, 2011

May 11, 2011 Posted by | Banks, Budget, Businesses, Conservatives, Consumers, Debt Ceiling, Deficits, Economic Recovery, Economy, Financial Institutions, Government, Government Shut Down, Income Gap, Middle Class, Minimum Wage, Politics, Regulations, Republicans, Tax Increases, Taxes, Wall Street | , , , , , , , , , , , , , , , | 1 Comment

The Rich Are Different: They’re Luckier

This long attack on the unfairness of progressive taxation from the Hoover Institution by Kip Hagopian usefully embodies a lot of right-wing delusions about income inequality. It argues that a person’s income is determined by three things:

America’s free enterprise system provides an environment in which the substantial majority of its citizens can realize their fullest earnings potential. Within that environment, individual economic outcomes are the product of a combination of three elements: aptitude, work effort, and choice of occupation.

Aptitude. For the purposes of this essay, aptitude is broadly defined as the capacity to produce, or to earn income. For the most part, it comes from circumstances of birth and is distributed unequally. Aptitude may be derived from innate talents (cognitive, musical, artistic, athletic, etc.) or physical attributes (appearance, dexterity, possession of senses, etc.). Or it may be acquired from lessons learned from parents and other life experiences. Aptitude emanating from circumstances of birth (either innate or acquired) can be significantly enhanced by individual effort applied to strengthening one’s skills (see “Work Effort” below). Aptitude is measured from low to high in accordance with the monetary value placed on it in the marketplace. This is a measure of earning power and is not in any way an indication of an individual’s intrinsic worth as a human being. For most people aptitude is the most significant determinant of income. But it has to be understood as capacity; aptitude does not produce income until it is combined with individual effort.

Work effort. For any given level of aptitude and occupation, work effort plays the decisive role in determining income, and in many cases may result in persons with lower aptitudes earning more than their higher-aptitude peers. For the purposes of this essay, the term “work effort” includes not only the number of hours worked, but also the intensity of the effort applied during those hours. As noted above, it also includes work effort applied to strengthening one’s skills.

At every level of aptitude and in every profession, whether the pay is in salary or hourly wages, there are workers who outperform their peers in each hour worked. They do this by performing tasks more quickly; focusing on the tasks more intently; finding and completing additional tasks that need to be done; and using some of their leisure time practicing or training to become more skilled. These people get more raises, larger bonuses, and more promotions than their peers. Thus, greater work effort can produce higher income whether the person is paid by the hour or earns a salary.

In addition to producing higher income in its own right, work effort applied to strengthening one’s skill — resulting in “learned” or “enhanced” aptitude — can make a substantial contribution toward increasing income. The “rough” carpenter who spends nights and weekends developing the skills necessary to qualify as a more highly valued “finish” carpenter will move up the wage scale by doing so. Professional athletes, musicians, singers, and other performers can enhance their innate aptitudes substantially through extensive practice, and a great many are renowned for having done so. A classic example is Hall-of-Famer Jerry Rice, who is generally recognized as the best wide receiver in NFL history. He was one of the highest paid players in pro football for twenty years, an achievement largely credited to his intense practice and workout regimen. Perhaps the most effective way of enhancing aptitude is through increased study in school. Whether it is grade school, high school, vocational school or college, for any particular tier of aptitude, those who study the most almost always get the best grades, matriculate to the best colleges, and secure the best jobs.

Choice of occupation. Choice of occupation is also important in determining income. Had Bill Gates decided to finish Harvard and become a high school math teacher, he almost certainly would have been successful, but he would not have become a multi-billionaire.

Earned income is determined by a mix of the three factors described above, and the relative contribution of each varies by individual.

This is obviously written to minimize the role of luck. It acknowledges that Bill Gates made more money by choosing to become a software mogul than by choosing t be a high school math teacher. But, of course, Gates (as he has acknowledged) benefited enormously not just from his family situation but from the timing of his birth, which put him in the work force at a moment when computing technology was set to explode. If he had been born a decade or two earlier, he probably would have been an anonymous lab geek if he had followed his mathematical inclinations, or perhaps the owner of a successful grocery store chain if he had pursued his entrepreneurial instincts.

What’s more, it is demonstrably not the case that income levels simply reflect aptitude and effort. Now, obviously being from a richer family affords all sorts of advantages, including physical, emotional, and cultural development. But factor all that out of the equation and assume that it’s just fair for all those things to translate into higher academic performance and higher earnings.

Even assuming that, there are massive advantages inherent simply in being born rich (and disadvantages in being poor.) My favorite example, simply because it’s so dramatic, is that a child born into the lowest-earning quintile who manages to attain a college degree is less likely to be in the highest-earning quintile than a child born into the top quintile who does not attain a college degree. This is all the more remarkable when you consider that making it to, and through, college is far harder for poor kids than rich kids even at a given level of aptitude. (Two thirds of the kids with average math scores and low-income parents do not attend college, while almost two-thirds of high-income kids with average math scores do.)

 How would Hagopian explain this? The lower-income kids managed to beat the odds by graduating from college, yet they make less money than the rich kids who beat the odds in the other direction by not going to college. By any measure, the former group has more aptitude and greater work ethic. Now, clearly right-wingers in general, and wealthy right-wingers in particular, like to think aptitude and effort and choices determine how much money you make. (Hagopian is the co-founder of a venture capital and private equity firm.) You see this from Greg Mankiw, Arthur Brooks, and on and on. The right-wing worldview is based on a moral premise about the relationship between merit and wealth that is demonstrably false.

By: Jonathan Chait, The New Republic, April 1, 2011

April 2, 2011 Posted by | Class Warfare, Conservatives, Equal Rights, Ideologues, Income Gap, Jobs, Minimum Wage, Politics, Right Wing | , , , , , , , , , , , | Leave a comment

   

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