Tag: Economy

Inflation

Economists tout the strength of the numbers:
low unemployment, low inflation, and significant growth—
and, even better, a reduction in economic inequality.
For them, low and controlled inflation is a
sign of a healthy and stable economy.
But the public says inflation won’t be solved until
prices drop to where they were a few years ago.
They see the data contradicting lived experience.
Since the MSM has failed, as usual,
it’s up to the Democrats to explain that the
those who feel inflation keenest are  
last ones that benefit from a strong economy.
The pandemic was a major cause as well as
corporate price gouging and the housing crunch.
They should also link the income inequity with
Republican “trickle-down” economic policies and  
tax cuts for the rich and corporate favoritism.
They need to inform much more on economics,
especially about finance, in addition to
critical thinking to fight disinformation.
It is unlikely prices will return to pre-COVID levels.
It is only through progressive policies that the
income and confidence gaps can be reduced.
It won’t be easy, but it is doable.

“Economics is not a gay science.
It is a dreary, desolate, and indeed quite abject and distressing one;
what we might call, by way of eminence, the dismal science.”
(Thomas Carlyle, 1849)

© 2024, Kenneth Koziol. All rights reserved.

Government: Not a Business

Every now and then, the country gets the notion of putting a businessman in the White House on the theory that “America should be run like a business.” This is totally wrong.

Response:

Businesses exist to make a profit for their shareholders. The preamble to the Constitution spells out the purpose of our government: to “establish Justice, insure domestic Tranquility, provide for the common defence [sic], promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity.”  There is not a word about profit. In fact, the federal government is the only US government legally capable of operating at a deficit.

Few would argue that the Army, Navy, Air Force, Marine Corps, Coast Guard, police department, fire department, libraries, parks, and public schools are of no social value, and yet they could not exist and also cover and protect the majority of the population if they were required to be profitable.

Why Government Should Not Be Run Like A Business

An Example of Why Gov’t Can’t Be Run Like a Business: The Postal Service

Immigration: Benefits

Immigrants, regardless of their status, place of origin, skill level, language proficiency, or time in country, contribute significantly to the country ever since its foundation and into the present day. Immigration is an important part of the American identity. 14 percent of the United States population is foreign-born. That’s approximately 45 million immigrants, more than any other nation.

Without immigrants and their children, the United States would soon begin to experience demographic decline. The number of US-born workers with US-born parents is declining. Immigrants extend the sustainability of federal retirement programs by slowing the rise in the ratio of retirees to workers. Without a growing workforce, the US economy would begin to lose its dynamism and leadership role in the global economy.

Immigrants are net contributors to job creation and wage growth. Unskilled labor fills a gap in farms and factories that America’s aging population doesn’t satisfy. Immigrant business owners have created millions of American jobs through major corporations and countless small businesses. In the most recent analysis, nearly 45 percent of firms on the Fortune 500 list were founded by immigrants or their children. Foreign-born entrepreneurs drive business creation through the thousands of small mom-and-pop stores that line our communities. Immigrants start businesses at a higher rate than the U.S.-born Americans.

In areas requiring lower-skilled workers, automation and outsourcing have inflicted more damage in wages than immigrants themselves, as it simply requires less manpower to perform certain tasks. These lower wages, however, deter American born workers from taking jobs in these low-skilled fields, hence requiring migrant workers to fill the vacant positions. Overall, however, incorporating migrants into the workforce, regardless of their skill level, increases consumption, spending, and investing, which leads to an increase in GDP and the economic growth.

Furthermore, with the contributions immigrants make to Social Security, they secure the health of the fund for ageing Americans, ensuring that the contributions they made from their own wages make their way back to them in retirement. Even undocumented immigrants pump about $13 billion into Social Security each year, contributions they likely won’t be able to use.

Immigrants are often exceptional inventors and creators that drive innovation. They’ve experienced challenges and adversity that forced them to come up with new solutions and often take a more difficult path than others. It may also make them more empathetic, finding a better solution from the customer’s perspective.

Immigrants are disproportionately likely to hold STEM degrees as compared to the native-born workforce. What’s more, immigrant entrepreneurs are responsible for more patents per capita than the native-born population.

American culture is a blend of the world’s customs, rituals, and traditions introduced through each wave of migration. Immigrants have played an out-sized role in the development of the American performing arts. Our food scene has become a cornucopia of world flavors because it integrates just about everything introduced by these newcomers.

There are an estimated 2.8 million immigrant healthcare professionals, playing a vital role on the front lines of disease-born crises. In fact, approximately 28 percent of physicians and surgeons are immigrants. Health aids (25 percent) and nurses (15 percent) are other medical occupations with a large percentage of foreign-born individuals.

Since the Revolutionary War, immigrants have been a vital part of the United States military and the nation’s defense. Military service has been a way for many foreign-born individuals to give back and earn a path to citizenship. Since 2002, over 139,000 members of the military have been naturalized. Unfortunately, naturalizations have fallen in recent years. In part, this is due to the suspension of recruitment programs like MANVI, which allowed certain immigrants to enlist if they had skills considered vital to the national interest.

Suggestions:

1. Re-enact the DREAM Act.

2. Provide a path to citizenship for undocumented immigrants currently residing in the country who do not have felony offenses.

3. Institute guest worker programs by industry that can provide a path to citizenship for participants via a lottery and yearly quota system.

4. Require businesses to prioritize the hire of American citizens and permanent residents and comply with stringent regulation of treatment for the immigrant workers they do hire.

Benefits of Immigration Outweigh the Costs

America’s slowest population growth since Great Depression

Reparations: The “New World”

Two major demographics deserve significant redress for centuries of atrocities: the descendants of the First Peoples to the hemisphere and the descendants of slaves brought here without consent. Subsequent immigrants should have acknowledged this. Instead, many have over the years disregarded the rights of these people and unjustly and even cruelly treated them.

For those who ask “Why should I pay. I didn’t do anything to harm these people,” I say we are all continuing to benefit from the suffering and burdens imposed on these innocent people.

Suggestion:

To partially make up for these egregious transgressions, I suggest the equivalent of a one-time levy of 5% of the net worth for each household in the country. There are over 128,000,000 households less the approximately 18 million households that are descendants of the First Peoples and of slaves. The total national net household worth is over $100 trillion. Accordingly, example one-time levies would be $37,000 for a household of $750,000 net worth, $500 for a household of $10,000 net worth, and $5 billion for a household of $100 Billion net worth (no shirking for the rich). This would come to about $100,000 per descendant.

Of course, $100,000 does not make up for all the suffering imposed on the descendants of the First Peoples and of slaves. Rather, it should approach the scale some have proposed–a minimum of $1.5 million per descendant for these genocides. I believe, however, the amount I am suggesting is more politically and practically realizable.

The payment could be divvied up in different ways and/or staggered a bit but not too long. Some portion of payment could be translated into improved education, job training, and healthcare. This would help redistribute wealth in the country and also stimulate the economy. (see also Taxes: Wealth Redistribution)

Additional legislative measures should also be applied to guarantee equitable treatment in other economic and social issues.

U.S. Net Worth Statistics: The State of Wealth in 2022

The Black-white wealth gap left Black households more vulnerable

Calculating Reparations: $1.5 Million for Each Slave Descendant in the U.S

Taxes: Wealth Redistribution

There is a sort of a myth in America that shows respect for those who can pull themselves up by there boot-straps. It is particularly present in right-wing rhetoric. The rich and their right-wing followers often use such phrases to say that the poor and middle class should lead their lives accordingly. If that is so, I believe the rich rich should lead by example. It should not be allowed that the children of the rich inherit the full wealth of their parents. After all, these children should also be allowed to prove that they, too, can pull themselves up by their bootstraps.

Suggestion:

No one in this should be allowed to inherit more than twice the lifetime median income of the ordinary American adjusted to inflation. That currently would be around $6 million. Depending on how the taxes collected are used, this proposal could serve to fund needed economic and/or social projects and stimulate the economy.

While my suggestion runs into some practical issues of implementation, here is an interesting collection of approaches to wealth redistribution that go a long way to attain my goal. These approaches can be found at the following website showing recent New York state legislative proposals:

14 Tax-the-Rich Revenue Proposals 2020

Tackling Homelessness: New Approaches

I. Regional Governance Approach

In the San Francisco Bay Area, the burden of dealing with the issue of homelessness has fallen mainly to a few so-called “liberal” municipalities: San Francisco, San Jose, Oakland, and Richmond, while neighboring communities contribute less to the solution and/or actively try to deter the homeless in various ways. A single municipality or county cannot be expected to be able to solve this problem. Once a homeless population is “chased” from one location. They often move on to another location, often in another city. There have been many attempts at the municipal, county, and state level to address homelessness, most have proven inefficient. And while there may be better solutions for single aspects of homelessness, I suggest that these may not in the end be effective until we reexamine and reform our system of federalism.

In the US there have been a few attempts to address regional problems to deal with some levels of community safety, health, development, and infrastructure such as ABAG in the Bay Area, the governance structure is weak and often suggestive rather than authoritative.

I believe we need to consider implementing, widening, and strengthening the power and scope of regional governance. This system could be applied to the major population regions in the state–San Diego, Los Angeles, Bay Area, and Sacramento.

In the case of homelessness, in a regional governance scenario,

  • All of the neighboring municipalities would be obliged to contribute materially and monetarily to the issue.
  • This would entail coordinated construction of housing infrastructure distributed evenly throughout the Bay Area and not only in the usually overburdened municipalities.
  • Proportional taxation to even out resource imbalance would also be implemented.
  • No bending of regulation via exceptions would be allowed (such as the community of Woodside’s attempt to declare itself a mountain lion sanctuary to avoid building affordable housing).

Mayor weighs charging other towns if their homeless people move to Oakland

II. Nuts and Bolts

  • Increase access to housing affordable (construction and subsidies) to households making less than 30% of the Area Median Income.
  • Expand homelessness prevention (financial support, legal assistance, and support for behavioral health needs).
  • Increase household incomes through evidence-based employment support (training, support for job search, and transportation).
  • Increase outreach and service delivery to people experiencing homelessness.
  • Embed a racial equity approach in homeless system service delivery.

California Statewide Study Investigates Causes and Impacts of Homelessness