Let’s change tax policy to favor only those capital gains going to productive ends.

A capital gain, according to Investopedia, is “an increase in the value of a capital asset (investment or real estate) that gives it a higher worth than the purchase price. The gain is not realized until the asset is sold.”  Investments in this context include stocks, bonds, mutual funds and exchange-traded funds (ETF).

Capital gains are taxed at a lower rate than other income like salary, taxable benefits and interest income.  Capital gains are also exempt from Social Security and Medicare taxes (also called FICA or payroll taxes). 

The federal government gives special tax treatment to capital gains to encourage people to take risks with their money by investing in ventures that could produce jobs and wealth for society.  The government distorts the marketplace by lowering the cost to invest.  It does so to help our society by encouraging the creation of jobs and wealth.

All well and good, but what does most of the buying of stocks and all of the trading in investment hedges like puts and calls have to do with creating jobs?

When you buy the stock of General Electric or a bond of Wells Fargo Bank you are not helping the company one bit, unless you buy it directly from the company.  But most stock is bought on secondary markets such as the New York Stock Exchange or NASDAQ.  In all trading of stocks and bonds and all hedging strategies, you buy from someone else or sell to someone else.  The company gets no additional money.

Now companies do from time to time issue stock or float bonds, and the people who buy them deserve a tax break for helping companies expand or develop new products, all of which create jobs and wealth and meet societal needs.  And even before a stock is public, people invest privately, usually buying shares or loaning money.  These people all deserve a tax break.  I have no problem with that.

For that reason, I propose that we change our tax law so that only when all the funds to buy the security go directly to the company (less fees to investment bankers, to be sure), will the investment qualify for the capital gains rate when the investment is sold. 

Many people are already paying taxes on capital gains at the rate of income taxes if they have traditional IRAs.  When you take money out of a traditional IRA (or exchange the IRA for a Roth IRA), you pay both the tax-deferred investment amounts and all capital gains as income, and not as capital gains.  I’m guessing that most people have all or almost all of their stocks, bonds, mutual funds and ETFs in IRAs and so don’t care much about the capital gains tax break.  But because there are strict limits on how much income you can shelter in an IRA, the wealthier you are, the more gains you will likely have that are currently getting the capital gains tax break. 

Some will say that this move will kill the stock market and therefore make it harder for companies to find financing.  My response: “Horse feathers!”  People have to do something with their money, and so will still buy bonds and stocks on the secondary markets.  They’ll just pay more of their profit in taxes, and why not?  That money did not really help to create any jobs.

If we want to tax rich folk less for creating jobs, let’s at least make sure that they’re actually creating jobs with the extra money they have; for example, the extra billions our government leaders recently gave the wealthy by extending temporary tax breaks for another two years.  You know, that $38.5 billion ripped from social service, educational, mass transit and other important job-creating programs in the latest federal budget.

The idea that tax breaks for wealthy create jobs is hooey; in fact it’s taxing the wealthy that creates jobs.

I’m a little late to mention it, but the usually estimable Charles M. Blow added to the massive evidence that lowering taxes on the wealthy does not create jobs, nor build additional wealth, but in fact destroys jobs and wealth.

In his “charticle” (chart plus short article) titled “The Pirates of Capitol Hill,” first published in the New York Times of Saturday, August 16, Blow presents a chart that tracks the marginal tax rates on the highest incomes and gross domestic product (GDP) since 1913, a good start date for the modern industrial state in The United States.

The marginal tax rate, BTW, is the amount of tax paid on an additional dollar of income. The marginal tax rate is the highest rate, but people will only pay it on the amounts earned above the highest cut-off point, not on all their income.

In these past 98 years, whenever the marginal tax rate for the wealthy went up, so did GDP. Whenever marginal tax rates on the wealthy went down, so did GDP.  The only time that GDP has ever declined in this country coincides with the times that we have had the lowest marginal tax rates on the highest incomes. In other words, when the wealthy pay less in taxes, our rate of GDP growth takes a swan dive and we sometimes even get GDP shrinkage.

The explanation for the relationship between low taxes on the wealthy and poor economic performance is easy: For every dollar that the government spends, it will put 100% of it back into circulation, either as salary to its own employees, benefits to citizens or payments to its suppliers.  All this circulation of money back into the economy creates jobs either directly or indirectly.

But when someone who already is rich gets the money, that money is likely to exit the productive economy, because it will likely go into:

  • Traditional investments: The only time that buying a stock or bond significantly helps create jobs is when the bond or stock is a new issue, that is, when the money goes to the company to create the jobs.  When you buy existing stocks, no additional money goes to the companies whose stock it is, and therefore no additional jobs are created. 
  • Financial machinations, such as options and other hedging, which create no additional companies or jobs beyond a relatively few highly-paid financial whizzes.
  • Art work and other high-end goods for which the price of the object primarily represents non-productive added value that sits in the product rather than being circulated around the economy.  To put simply, when you buy a Picasso for $45 million it creates fewer jobs than when 4.5 million people pay $100 each for a nicely framed print of the painting. 

To those who say that the wealthy do in fact use a goodly portion of the additional money they have under low tax regimes, I respond in three ways:

  1. That’s not what the statistics say.
  2. But not as much as the government does, since the government spends 100% of what it takes in.
  3. Do they now? (Read with sarcasm!)  My analysis of 35 years of analyzing business news media has been that the wealthier one is, the more likely one will finance job-creating ventures with OPM—other people’s money.

Blow ends his article with “But the spurious argument that cutting taxes for the wealthy will somehow stimulate economic growth is not borne out by the data. A look at the year-over-year change in G.D.P. and changes in the historical top marginal tax rates show no such correlation. This isn’t about balancing budgets or fiscal discipline or prosperity-for-posterity stewardship. This is open piracy for plutocrats. This is about reshaping the government and economy to benefit the wealthy and powerful at the expense of the poor and powerless.

Amen, brother!

 

More from the speech I gave connecting the attack on public unions to 30 years of taking from everyone to give to the wealthy

More from the speech I gave two nights ago at the monthly meeting of the Pittsburgh Area Jewish Committee (PAJC):

To belabor what is probably obvious, shrinking the percentage of the workforce covered by unions shifts money up the economic ladder because the non-unionized workers make less for the same or comparable jobs, leaving the difference for executives, owners and shareholders. It’s not a coincidence that the period in which the United States had the most equal distribution of wealth was the same age in which the economy was the strongest and that unions were also the strongest: after World War II through most of the 70s.  Unions turn low wage jobs into middle class jobs—they always have and they always will.

Here are some other trends that have helped to concentrate more of our income and wealth in relatively fewer hands:

  • Tax policy:  We can describe our tax policy since Ronald Reagan took office as “Reverse Robin Hood.”  In Reagan’s first year, Congress cut income taxes to historically low levels, that are nevertheless still higher than today.  A year later, Congress raised taxes, but the new increases fell heavy on the middle class and the poor. And for more than 30 years, that’s the way it’s gone:  tax cuts that primarily benefit the wealthy alternating with tax increases that primarily take more form the middle class. The Bush II cuts that have recently been extended have the highest incomes paying the lowest rates and the lowest percentage of total government revenues in the history of the modernized West.  But even as we have lowered taxes, we have borrowed more money, creating safe havens and investment opportunities in which the rich can stash the money they have saved in taxes.
  • The movement to privatize what have been traditional government services such as running prisons and educating our youth:  Whether for schools, prisons, or cooking and delivering meals to soldiers, when a private company does it, it intends to make profit for its key executives and shareholders.  As many studies have shown, low level government workers, many of whom are unionized, typically make more money than their peers in the private sector, most of whom aren’t unionized, whereas private sector presidents, officers and senior management make far more than department heads and other civil service executives.   Some government contracting makes sense, for example, to manufacture tents for soldiers or provide a special social service to an “at-risk” population; these functions have historically been outsourced.  But the new outsourcing of the recent past has usually not worked well for our citizens. Virtually all studies on charter school performance demonstrate that charter schools almost always fail to improve student performance and often worsen it. It is also well documented that the privatization of our prisons over the past 25 years has been a festering scandal of prisoner abuse and fraud. When the government loans money to students for college and career training, the terms have been significantly better than when the private sector was allowed to do so between the early 90’s and this year. And let me ask you this—did you prefer how our wars went when we used relatively few contractors as in World War I and II, or now that we’re making massive use of military contractors in Iraq and Afghanistan?   Again, keep in mind that when the government gives a contract out instead of doing it with its own workforce, it is taking money from lower paid employees, who tend to be middle class, and giving it to executives and investors, who tend to be wealthy.
  • Shrinking of social welfare programs: We don’t have to spend much time here.  It’s clear that a social welfare program, whether it’s food stamps, healthcare for poor children or support of state universities, represents a transfer payment down the economic ladder.  When we used to provide more money for these programs, we had a more equitable distribution of wealth than we do now.
  • The attack on social security: The first step in the 30-year attack on Social Security came when the administration of Ronald Reagan changed the government accounting system and rolled the Social Security Trust Fund into the general budget and then claimed that the Trust Fund was near bankruptcy when all it needed to remain strong was to get back the money that it had lent the federal government.  Since then, almost every “fix” that has been made to the system has taken benefits away, for example, by raising the age or retirement, or to collect more Social Security revenues by increasing the percentage of what people pay.  In the same time, the cap on wages to be assessed Social Security taxes has crept up very little when inflation is considered.  Because of the graying of the baby boom generation, we do face a minor shortfall in the Trust Fund in about 30 or so years, not a grave one, but our elected officials seem to avoid the obvious solution—to take the cap off the income which is assessed the Social Security tax.
  • For example, President Obama’s National Commission on Fiscal Responsibility & Reform proposes eventually raising the retirement age to 69 and raising the cap on income assessed by the Social Security tax only to $170,000.  The lawyers, accountants and writers in this room could work well into our 70’s or 80’s, but the age of 69 seems pretty old for retirement from most jobs: think of janitors, warehouse workers, retail clerks, factory workers, truck drivers, and most hospital staff.  Why couldn’t the National Commission have knocked a few years off that proposed retirement number and taken the cap off the income to be taxed for Social Security?
  • Its treatment of Social Security is one of just many ways that President Obama’s National Commission wants to accelerate the movement of income and wealth up the ladder.  Although not asked to mess with the tax system, the Commission gave a detailed recommendation for changing it.  Paul Krugman is just one of many economists who, upon analyzing the series of tax increases and decreases proposed by the commission, recognized that if the commission’s plan passed, the wealthy would be paying even fewer taxes.  Meanwhile, the National Commission proposed draconian cuts to social welfare and education programs, again taking money from the poor and middle class who benefit from these programs and giving it to the wealthy, who will get the benefit of the proposed tax breaks.
  • Right-wingers, primarily Republicans, are on the move in many states to take more away from the working and middle classes.  Republicans in Missouri, Michigan, Arkansas and Florida have all taken steps to cut the time that the unemployed can receive unemployment benefits. And nationally, the right-wing has begun a legislative assault on Medicare and Medicaid’s funding and fundamental structure.

Now that I have shown you how this massive net transfer of money—almost a heist, as it were—occurred, I want to close with two questions: why should we care and what can we do about it?

Why should we care?  I think most of us are fairly well off, and statistically speaking many of us would qualify as wealthy.  Many of us are among the ones who have done quite well over the past three decades.

But we should all care because one of the hard lessons of economic history is that nations in which equality of wealth increases over time always thrive economically whereas those in which the equality of wealth decreases tend to decline.  I first read of this idea from Fernand Braudel, usually considered the great historian of the 20th century after Toynbee, who brilliantly analyzes Spain’s decline during the 16th century because of the growing unequal distribution of wealth fueled by the growth of predatory tax policies that had the poor and middle classes paying more and the wealthy paying less. A positive historical example is Western Europe after the Black Plague, an age of rapid economic growth and the highest average wage compared to total wealth in western history. Closer to home, we can compare our nation’s condition from the end of World War II to the late 70’s to what it has become since, save for the Clinton boom, which also saw a temporary reversal of the trend towards greater wealth inequality. If we don’t reverse the trend, the economy and quality of life in the United States will decline quickly and permanently.

I want to pose and then give my answer to one other question: What to do to reverse the three decade trend of greater wealth inequality in the United States?  The following are some actions that I would submit we should demand from our elected officials and those who want our vote and support in primaries:

  • Raise taxes on the wealthiest five percent of incomes and use the funds to provide simple wealth-shifting programs such as lowering the cost of tuition at public universities or increasing food stamp payouts.
  • Remove the $106,800 cap on individual and employer payments to the Social Security Trust Fund (known sometimes as SSI or payroll taxes), so that everyone pays on all income but keep the cap on maximum benefits, which would secure the Social Security system well into the future.
  • Raise the minimum wage.
  • Foster unions by lowering barriers to unionization, ending “right to work” laws and requiring that charter school teachers join unions in areas in which the public school teachers are unionized.
  • End government outsourcing for ongoing non-manufacturing, non-research government functions such as operating prisons and public parking and providing military services.  Government pays lower paid workers more and higher paid workers less than the private sector does, so when the government does it, there is a more equitable distribution of wealth.

All of these actions will raise wages and redistribute wealth down the economic ladder.  The experience of Western Europe suggests that these moves would not threaten our competitiveness in global markets.

We won’t be able to fix in one election, or even in one decade the grave harm which three decades of taking from the middle class and poor and giving to the wealthy has inflicted on our society.  But if we don’t get started now we will continue along the same sorry path that in 50 short years turned Spain from the most powerful nation in the world into Europe’s backwater for four long and hard centuries.

 

The speech I gave last night connected the attack on public unions to 30 years of taking from everyone to give to wealthy

I gave the following remarks yesterday evening at the monthly meeting of the Pittsburgh Area Jewish Committee (PAJC). My topic was “putting the Attack on Public Unions in Perspective.”  I spoke after Sam Williamson, Associate Manager of the Pennsylvania Joint Board of Workers United, SEIU, spoke on the significance of the 1911 Triangle Shirtwaist Fire

In this speech I pull together a number of ideas that have populated by blog over the past 18 months, so I thought I would publish it on the blog for my readers. It’s pretty long, so I’ll split it up over two days:

Over the next 15 minutes, I’m going to put the current attempt in many states to reduce pensions and curtail the collective bargaining rights of unionized public employees into two broad contexts: one—the 30-year war against labor unions and, two—the role that war has played in the broader movement of income and wealth up the ladder from the middle class and the poor to the wealthy, also a phenomenon of the last 30 years.

My interest in these matters began when I was a television news reporter working for the national news program, “Business Today” and covered the air traffic controllers’ strike of 1981.  During that time I was the first mass media journalist to report about the impact of the graying of the baby boom generation on the economy and society, and also the first to report on our development into a nation of rich and poor.  Today, among other things, I write the blog, OpEdge, which has investigated and analyzed the right-wing war against unions as one of its continuing themes.

Let’s get started, because we’re talking about class warfare, which as Betty Davis might have said, is always a bumpy ride.

The attempt of Governor Scott Walker and the Republican legislators to end important collective bargaining rights in Wisconsin is the tip of the iceberg of what is an all-out assault on public workers occurring before our very eyes.  Here are some other examples that have not received as much ink nationally:

  • In Indiana, Democrats legislators also walked off the job to slow down Republican efforts to ram through laws that weaken Indiana’s prevailing wage and collective bargaining laws.
  • In Florida, there are three bills moving through the legislature that weaken the teacher’s union, restrict political activity by public unions and reduce benefits to state workers.
  • Republicans in Iowa, New Jersey, Maine and Ohio are all trying to restrict collective bargaining rights of state employees
  • Meanwhile, the governor of Ohio wants to exempt universities from a requirement that they pay union-level wages on construction projects.
  • Even Democrats are getting into the “attack the unions” game.  Connecticut’s new Democratic Governor is demanding $2 billion in public union concessions over two years.
  • Let’s cap this review of anti-union activity across the country with a little Alice in Wonderland thinking that many have been doing, including the New York Times this past January.  It seems as if certain policy makers are considering ways to enable states to enter bankruptcy in a new and as yet illegal way that would allow the states to keep paying municipal bond holders while breaking all union contracts.

If you think all this activity against public unions sprang up overnight as a collective expression of the anger or frustration of a country riddled with economic problems, then you haven’t been paying attention.  Right-wingers, primarily from the Republican Party, have been aggressively trying to curtail unionism and union political activity since the ascension to the presidency of the patron saint of union-busting, Ronald Reagan:

  • Symbolically, the 30-year war against unions began when President Ronald Reagan fired more than 11,000 air traffic controllers—85% of all air traffic controllers—because they did not return to work as ordered during a strike in August of 1981.  Reagan also banned the fired employees from all future federal work, a move that the Clinton Administration rescinded in 1993.
  • Reagan packed the National Labor Relations Board with management representatives. Prior NLRB boards settled only one third of all cases in favor of employers, even under Nixon.  Reagan’s NLRB settled three-quarters of all complaints in favor of employers.  The NLRB under Reagan also took more time to settle union complaints, which made it harder to organize and easier for management to pursue decertification campaigns.
  • Both Reagan and Bush II’s Labor Departments were anti-union.  Reagan’s Labor Department, for example, declined to ask union-busting consultants and the companies that hired them for the financial disclosure statements the law demands, but it did ask unions to provide this documentation. Though the Labor Department cut its overall budget by more than 10 percent, it increased the budget for investigating union finances by almost 40 percent.
  • Under Bush II, the budget was again eviscerated, with funding stripped from every enforcement operation: workplace health and safety, minimum wage, fair hours, and even child labor.  But no surprise, funding for investigations of labor unions increased.
  • Now we come to that odd confection called charter schools.  Although many well-intentioned people now support charter schools, make no bones about it—the inception of the charter school movement and the continued advocacy by the right-wing has from the start derived from anti-union motives. For the most part, charter schools replace unionized teachers with non-unionized ones, who, of course, make less money, a necessity if the charter school is going to make a profit for its organizers.  The list of long-time financial supporters of the charter school movement reads like a who’s who of union haters, including the Walton family and the Koch brothers.  And supporting charter schools is part of the anti-union panoply of policy recommendations by such anti-union think tanks as the Heritage Foundation, the Pacific Research Foundation and the Goldwater Institute. By the way, virtually all studies of the matter show that the charter school movement has yielded disappointing results in the area of student performance both in school and on standardized tests.

The war on unions is just part of a larger trend over the last 30 years to transfer both income and wealth up the economic ladder.  This period has seen incomes and overall wealth of the middle class and poor stagnate while those for the upper 5% and 1% grow steadily.

Before I lay out some of the key events in this transfer of income and wealth up the economic ladder, let me first convince you that it has occurred.  Most of my facts were supplied by Professor William Domhoff, author of Who Rules America Now and The Powers that Be:

  • The top 1% now owns 34% of all the wealth in the United States, compared to only 20.5% in 1979, for a gain of almost 70% in the past 30 years!
  • Income of the top 1% was only about 13% of total income in 1982 and today  it’s about 21.5%—a gain of two-thirds!
  • The chief executive officers and presidents of companies now make many more times the money than their average full-time worker does.  In 1980, CEOs made about 42 times what the average worked was paid; CEOs now make 475 times the income of the average worker in the United States.  By the way, in Europe and Japan, it’s anywhere from only eleven times as much to 22 times as much
  • The top 1% of U.S. households owns nearly twice as much of America’s corporate wealth as they did just 15 years ago.
  • And only the top 5 percent of U.S. households have earned additional income to match the rise in housing costs since 1975.

I think it’s reasonable to say that all ideology and philosophy aside, the past 30 years have seen the rich taking more of the pie and leaving less for everyone else.

 

New Republican majorities try to curtail a woman’s right to an abortion in many states.

While the war on public unions is getting most of the ink, new Republican majorities in state legislatures are quietly also moving to curtail the rights of women to have abortions in a large number of states.

Arizona just became the first state to outlaw abortions for reasons of race or sex, which, as many have observed, is an invasion of privacy.  Kansas Republicans want to license abortion clinics in that state, while Florida, Iowa and Ohio legislatures are all considering bills that would place more restrictions on women seeking abortions, make them jump through more hoops and make it harder to pay for abortions.

Indiana may take the cake for nutty legislative proposals:  One proposed new Indiana law bans taxpayer-paid abortions in cases of incest or rape.  Another requires physicians to tell women seeking abortions that having an abortion has been linked to a higher prevalence of breast cancer, a scurrilous lie parading as theory but disproved by scientific research long ago.  

Coming to a position on abortion is not easy, unlike the other key issues on the right-wing social agenda.  Unlike abortion, we can easily disprove every other right-wing stand on the major social and political issues of the day:

  • Scientists have proved that man-induced rapid global warming is occurring and beginning to leave negative marks on nature and mankind.
  • The overwhelming preponderance of evidence supports the theory of evolution.
  • Research has demonstrated time and again that capital punishment is not a deterrent to crime and that torture does not yield additional information from suspects.
  • Research also shows that when more people own guns, more people are killed and injured by guns, both legal and illegal ones.
  • Spending more does improve the performance of children in the classroom and on standardized tests, but only if the money is spent on smaller classes with more qualified teachers.
  • The claims that gay marriage harms “responsible procreation” and endangers other marriages and families have been disproved.
  • The United States has a substandard and expensive medical system when compared to other Western nations, all of which have nationalized systems.

Facts will disprove all the right-wing nonsense, except when it comes to abortion (and the related issue of stem cell research).

In truth, defining when life begins really is a matter of belief, since no one can really say.  Does life begins at inception, viability or someplace else?  And what does viability really mean, since a new-born thrown into the woods or even put in the street can not survive on its own, and so is not really all that viable.

So what’s the answer? Everyone’s stand on abortion is a matter of belief, no matter how reasoned the arguments made or the graphic photographs flashed.

So whereas we can demonstrate beyond the doubt of any truly rational and open-minded person that appropriate public policy and legislative change should favor gun control, greater emissions controls and more educational aid targeted on the classroom, it is impossible to make such a confident assertion regarding abortion.

But there must be public policy.  There must be laws.

What to do?

The way into the dilemma—belief—is also the way out.  From atheist to Hassid, belief is always a matter of faith, which of course belongs to the universe of religion.  And religion has no place in our political system and should have no power to influence our laws.  Our Deist forefathers wrote religious freedom—freedom of belief—into the Constitution.  They believed that something that is a matter of faith is rightfully a personal concern of our private lives.  And today I think most right-wingers, centrists and left-wingers agree that the government for the most part should stay out of our private lives.   Of course, they make define that term differently, to be sure.

As a matter of public policy, then, we should and must allow women the right to an abortion.  To do anything else would represent a tearing of the thick steel wall that is supposed to separate the state from any and all religions or religious belief in the United States.

We certainly have the right to set sensible medical ground rules, such as limiting late-term, and influencing people not to use abortion as a means of birth control by promoting other methods such as condoms and the morning after pill.  But we should in no way slow down the process, once the woman makes the decision to investigate the abortion option.  And we should recognize that any rule we lay down regarding late term abortions must have room for medical exceptions. 

Finally, we should not have legislation that promulgates the idea that abortions are inherently wrong or immoral.  Those are religious judgments, and government is not supposed to make those, except when it involves saving human lives. 

And that starts us full circle, as it begs the question, when does life begin? But again it’s a circle of belief.   And in our culture, government butts out of those discussions.

An “It can’t happen here” approach to nuclear-generated electricity will ensure that it does.

As we all know by now, the Fukushima plant’s inability to withstand natural forces has resulted in the poisoning of water and land in the surrounding area and the emission of radiation into the atmosphere that is now detected in parts of the United States.  And the reactors are still not under control, the potential damage to humans and other living things still not contained. 

While everyone around the world is asking, “Could it happen here?,”  our governments (outside of Germany) and the nuclear industry minimize the risks and boast about new technologies.

I’ve only read opponents of nuclear-generated electricity use the expression “It can’t happen here,” always to describe the attitude of proponents.  I know of no proponent of nuclear who has used this exact idiomatic expression, at least not since a massive Japanese earthquake began a chain of events that caused an as-yet uncontrollable meltdown of nuclear reactors at the Fukushima plant. 

I thought I would share some of the facts I have culled from my reading about the Fukushima incident, the reactions of both opponents and proponents of nuclear-generated electricity, and the comparisons between Fukushima and U.S. nuclear plants presented by both sides:

  • Of the 104 nuclear-powered electrical generating plants in the United States, 53 (more than half) have the same basic reactor design as the Fukushima reactors.
  • One of the biggest problems at Fukushima is that the fuel rods are not covered by enough water.  The uncovered rods spew radioactivity into the environment. And it turns out that on average, the rods are piled twice as high in U.S. nuclear plants than at Fukushima. As anyone with common sense will realize, the higher you pile the rods, the more water you will need to cover them, the more likely there will be insufficient water (all other things being equal)  and the greater the potential problem if the rods are uncovered.   
  • After power failed in the plant, which meant, among other things, that there was no way to pump water to the spent nuclear rods, Fukushima ran out of battery power in about eight hours.  Virtually all U.S. nuclear-generated electrical power plants—93 in all—have batteries that last a mere four hours.

These three facts are enough to convince me that the overall the safety and the standards of safe operation at U.S. nuclear-generated power plants are about what they are in Japan.   That conclusion in turn begs a few important questions:  Could a U.S. plant be hit with a natural disaster like the one that hit Japan—a major earthquake followed by a tsunami?  Would it take less than an earthquake-tsunami to do the damage? What other weaknesses in design or operations are there that we won’t know about until something bad happens

My current reading, Mao’s Great Famine by Frank Dikötter, makes me raise another very frightening question.  The massive amount of evidence that Dikötter presents builds a solid case for the idea that during the Chinese so-called “Great Leap Forward” in 1958-1960, the mores and practices supporting the social and economic system seemed to crumble away in a matter of months because of the crazy policies of the communist party.  Standards of safety and maintenance were loosened to the degree that equipment and factories quickly became inoperable and some unreal number of manufactured and finished goods—maybe a third—were so shoddy that they were unusable.  New dams and irrigation projects failed everywhere because of shoddy construction.  Corruption and falsification of reports was endemic.

What if such a total breakdown occurred in a country that generates electricity using nuclear power?  The thought of what could happen is almost too horrific to conjure.

Front page Times article on Wal-Mart exemplifies major propaganda technique: selection of facts to distort reality

The front page of Saturday’s New York Times displayed an egregious example of perhaps the most utilized propaganda technique other than the big lie: selection of details, facts or experts to distort reality.  It works best, as in the Times article, when the writer does not state the point of distortion, but lets the facts or experts selected do the talking.

Here, then, are the first three paragraphs of the Times story in question (or should I say, propaganda document), which reports Wal-Mart’s latest efforts to open a store in New York City 

“It persuaded the makers of All laundry detergent to shrink their bottles by more than half to generate less waste. It got thousands of farmers to stop using pesticides. And it encouraged millions of consumers to dump incandescent light bulbs in favor of energy-sipping compact fluorescents 

But for all of its arm-twisting powers of persuasion, Wal-Mart has been unable to achieve the simplest of ambitions: to set up shop in New York City, America’s biggest urban retail market.

It is a galling failure for a company that transcended its humble rural roots to become a global behemoth.”

When you get done with the first paragraph, don’t you just love this environmentally friendly company that persuades others to help clean up the environment?

If you love this Wal-Mart, you might admire the following historical figure: “He turned around his country’s lagging economy in less than five years.  He created an organization that helps young people learn about the joys of outdoor activities and the importance of high ethical standards.  In negotiations with the leaders of other countries, he obtained everything that his country needed while giving away few concessions.” 

Don’t you just love this guy?  Don’t you wish he was our leader?  Or did you guess that I’m describing Adolph Hitler? 

I think most readers understand that I’m not comparing Wal-Mart to Hitler.  What I’m doing is using the same distorting propaganda technique of fact selection to make Hitler look more admirable that the Times writer Elizabeth A. Harris uses to describe Wal-Mart.

In distorting reality by selection of facts, the subtext of Harris’ message is that Wal-Mart takes its corporate responsibilities seriously.  Besides suggesting explicitly that Wal-Mart is a jolly green giant, the use of specific words—“persuaded,” “encouraged”—undercuts the common image of Wal-Mart as a big bully.

Here is another way that Harris might have begun her story, using the same rhetorical device of listing facts to create a contrast between what the powerful company has been able to accomplish elsewhere and its long-term inability to take a bite out of the Big Apple: “It used its purchasing power to hardball entertainment companies to sanitize the lyrics of best-selling music CDs.  It has successfully kept unions out of its workforce with a combination of questionable activities and massive spending.  It has driven thousands of mom-and-pop stores and small chains out of business while destroying the downtowns of smaller cities all over the country.”

My paragraph is a more relevant picture of what Wal-Mart has wrought, focused on big-picture actions as opposed to some tactical decisions Wal-Mart made to save money that happened to also help clean the environment.  My version also suggests why the contrast to the New York situation is so poignant: because Wal-Mart is used to throwing its weight around and getting its way, and that has never happened in New York.   

The reporter is attempting to elicit admiration for Wal-Mart and sympathy for its plight in the Big Apple.  But to do so, she has to ignore both Wal-Mart’s long and negative past as an employer and a competitor. 

The article goes on to describe Wal-Mart’s NYC efforts, puts the new NYC campaign in the context of the company trying to sell “liberal America,” and quotes numerous experts. 

What the article doesn’t do is explain why New Yorkers and the existing New York political and governmental infrastructure are so hostile to Wal-Mart.  Let’s start with the low salaries and Ebenezer Scrooge-like benefits the company pays most of its employees.  And then there’s the fact that in Manhattan, and to a lesser degree in the other boroughs, you can see a lot of small and regional stores selling all kinds of interesting and different things in the streets along side the national chains with the standardized offerings.  These stores give dozens, if not hundreds of New York neighborhoods an individual character that is lacking in so many American residential areas nowadays.  Or maybe it’s that New Yorkers are less willing than other Americans to put up with censorship or to suffer companies accused of discrimination against any group, as Wal-Mart has been so accused numerous times.

Whatever it is, Wal-Mart and New York City are completely mismatched.  As a once-and-always New Yorker, I hope that Wal-Mart loses its latest battle to enter the city, and worry that it appears that this time out the Arkansas monster has The New York Times on its side.   

For the third time in a decade, American can think of nothing better to do than start a war.

I’m not going to mince words: It was a grave mistake for our country to lead a military action against the forces of Libya’s ruler since 1969, Muammar Gaddafi.  And after the debacles of Iraq and Afghanistan, it was also a sign of collective lunacy among our policy makers and politicians.

Here’s what’s wrong with the move, which of this writing consists of massive bombing with the promise of ground forces in which the American role is still undefined:

There is no goal. What does this French-British-American-led war hope to accomplish?  Free elections? Less repression and a more open economic system? Overthrow?  What’s the plan when Gaddafi falls? Who replaces him? Remember the thousands of American lives and trillions of dollars lost because we didn’t have a plan in Iraq.  Remember, too, the utter destruction of Iraq and the death of 151,000 Iraqis. (by the count of the Iraqi Family Health survey; other estimates, by the way, range as high as 600,000!) 

Why Libya and not other dictators? As we Jews would say at the Passover Seder, ma nish tanah?, which roughly translates into “Why is this any different?” Why haven’t we invaded North Korea or Iraq for mistreating their people?  Why haven’t we invaded Saudi Arabia for keeping its people in totalitarian darkness?  Why didn’t we invade Guatemala and Nicaragua in the 60s and 70s, and in fact lent support to the regimes that were suppressing the people?  What about our good old buddy and financier China?  To those who say their difference is the degree to which Gaddafi is hurting, even torturing, innocent people in his crackdown on protest, my response is: Before we get into another dirty and potentially endless war, perhaps we should first prosecute those in our own country who approved of and created our reprehensible torture gulag.

I think what’s happened is that the U.S. (Hillary?) made a deal with Europe, who really needs Libyan oil much more than we do, and China to be the world’s policeperson, in return for unnamed economic concessions.  But that surmise merely locates the source of the lunacy.  It doesn’t tell us what the leaders of the so-called free world were thinking when they decided to plunge headlong once again into the internal battles of sovereign nations on other continents.

There is a lot we could and should be doing to help the Libyan rebels short of invasion. But it seems as if our government prefers to shoot first and ask questions later.  

Nuclear power advocates make illogical comparison to hydroelectric and coal plant accidents

When a Guy Chapman responded to my blog entry on ending nuclear-generated electricity by citing a 1975 Chinese Dam accident in which 26,000 died and another 140,000 may have starved to death later, I thought I would ignore it. 

But yesterday in many newspapers across the globe, Gwynne Dyer, a legitimate international journalist, repeated the ridiculous argument central to Chapman’s response, that nuclear is unfairly treated and held to a higher standard than we hold other ways of generating electricity. 

Now I have to analyze what looks like one of the major rhetorical strategies that the nuclear industry and its supporters will employ to explain away the growing disaster at Fukushima.

The way this argument goes, hundreds of miners die every year and only 5,000 died at Chernobyl, which of course ignores the thousands of malformed children born or those who developed thyroid and other cancers afterwards and the hundreds of thousands of early deaths that have occurred and we know will occur over the coming decades.

There are five problems with the argument that other electrical-generating industries kill more people and get a free pass:

  1. It’s not true that the other industries get a free pass:  After the 1975 Chinese hydroelectric disaster, the heads of those in charge rolled and the dam was entirely rebuilt.  We see what’s happening to Massey and its CEO in the wake of the West Virginia coal accident: investigations and indictments.
  2. You are comparing apples to oranges:  In both the hydroelectric and the coal comparison, the authors compare the total fatalities of many accidents or of the very worst imaginable accident to the immediate fatalities of what may or may not have been a severe nuclear plant accident. 
  3. The failures leading to most of the coal and hydroelectric accidents resulted either from human error, poor maintenance or bad technology, all of which can be corrected with existing technologies and higher inspection standards, which virtually all nations are now dedicated to achieving.  But while human error and inferior design have led to most nuclear accidents, too, the unavoidable safety hazards of nuclear are inherent in that it produces harmful radiation, which is impossible to store safely and lingers for tens of thousands of years.
  4. A hydroelectric or coal accident affects only the immediate surroundings, whereas the nuclear accident can infect water and food hundreds and even thousands of miles away.
  5. It is possible to implement all the steps to ameliorate hydroelectric or coal damage to the natural and human environments within the course of a few decades at the most.  Ameliorating not only the damage from a nuclear accident, but the waste nuclear produces takes far longer than the recorded history of mankind to this date.   

One thing that all these technologies have in common is the need for governmental support to produces inexpensive electricity.  If governments made coal-powered generating plants use equipment that is now available to “scrub” most of the noxious wastes from burning coal to generate electricity, the price of electricity would rise significantly.  Virtually all hydroelectric projects have government support.  In the case of nuclear-generated electricity, the industry would not even exist without the Price-Anderson Act, which limits the financial liability of companies that generate electricity through nuclear fission to the equivalent of the cost of a fender-bender. If we were to repeal the Price-Anderson Act, I’m betting virtually every nuclear power plant in the United States would shut down in 10 years.

I’m not saying that we shouldn’t provide support to electricity-producing industries.  What I am saying is that we should immediately end all governmental support of nuclear-generated electricity and invest that money into cleaning up and making safer existing technologies and commercializing solar, wind and other renewable alternatives. 

Mass media barrages young people with messages that even if school is good, learning is not.

I like to collect examples of the ideological subtext hidden in mass media documents such as TV shows, advertisements, movies, cartoons and news stories.  Today I would like to share some recent examples of one ideological message embedded in the mass media for decades: anti-intellectualism and anti-learning.

The mythology of anti-intellectualism has been alive since at least the end of World War II.  In this mythology, only the socially maladroit and sexually unattractive do well in school or engage in intellectual pursuits.  The brand name for these socially inadequate creatures that end up alone with their books is the nerd.  Here is how Merriam-Webster’s defines nerd:  an unstylish, unattractive, or socially inept person; especially: one slavishly devoted to intellectual or academic pursuits

It’s easy to spot anti-intellectualism in films such as “Grease,” the “Revenge of the Nerds” series and even “The Social Network,” or in any number of television shows.  I want to give a few examples of more subtle digs at those who like to do well in school or pursue intellectual activities:

  • The latest New Yorker has an article by D.T. Max about chess phenom Magnus Carlsen that sets Magnus up as the anti-chess nerd.  Max tries to convince us the Magnus, who played thousands of games of chess over the Internet a year, is not a studious chess professional compared to unnamed others.  All the details about Carlsen are meant to oppose him to some imaginary chess archetype who is less normal and nerdier.  This imaginary archetype exists only in myth.  Most of the children and young adults whom I met when my son was a nationally ranked youth chess player were well-rounded, athletic kids with a lot of social poise and grace for their age, including the current American phenom Hikaru Nakamura.
  • A Match.com article circulating the Internet this week claims to tell us the “Top 10 cities to date a nerd.”  It’s a list of the 10 cities with the highest educated Match.com members in technical or educational occupations.  I can see the value of the article, because if I wanted to find a spouse, I would certainly be interested in going where there are a lot of highly educated people.  But note that the label doesn’t glamorize highly educated people, the articles uses the derogatory “nerd.”
  • A Garfield the Cat cartoon of March 3 finds Garfield and his owner, Jon, perusing the owner’s yearbook. Remember that years ago the strip’s creator Jim Davis established Jon as a socially inept doofus.  Here’s what Jon says as they flip the pages:  “There’s me in the chess club….There’s me in the Latin club…There’s me in the science club…There’s me in the calculus club.” Finally, in the last panel the punch line comes, “There’s me stag at the Junior prom,” to which Garfield think-says with a sarcastic smirk etched across his face, “Go figure!”  The inference and the essence of the joke, is that it’s a no-brainer that Jon went stag to the prom since no one with those intellectual activities could ever attract a date.

Now for two examples of one of the most popular sub-themes of the anti-intellectual ideology, the myth that math is impossibly hard.

  • In October of last year, Mackenzie Carpenter wrote a very good story in the Pittsburgh Post-Gazette about the fact that all over the county, more and more freshmen kids are freaking out when they get to colleges.  Unfortunately, she marred the story with her anti-math opening: “It’s late October. Have you gotten The Call or The Text yet from your college freshman?  As in: I hate it here. No one will sit with me in the dining hall. I’m going to flunk algebra because the teacher has a foreign accent and I can’t understand her.” 

In analyzing this hypothetical case history that Carpenter presents, let’s place the mildly racist comment to one side and look at what Carpenter imagined was the tough class the hypothetical freshman was failing: algebra.    The fact of the matter is that most kids bound for college have already taken algebra, many as early as the 6th grade.  On the college level, algebra is considered a remedial class. To propose algebra then as the “hard subject” in the hypothetical case history actually demeans the intellectual content that should be the central experience of college.  By selecting algebra instead of calculus or freshman English is inherently anti-intellectual, while also supporting the false view that math is extremely hard.

  • “The Motley Fool” column of financial advice and news also took a gratuitous swipe at math by assuming that his target market assumes math is hard in an article from last October: “The bad news: Studying companies well involves a little math. The good news: It’s not that hard.” There are so many other ways that the Fool (or should I write fool?) could have approached the story, which is about calculating growth rates, none of which would have proposed that math is hard.  It’s not that the Fool/fool has an agenda to help enslave people intellectually by convincing them they are not smart enough to master the intricacies of “10 = X + 3, what is X?”  It’s that “math is hard” and “intellectuals are socially maladroit” are part of the underlying ideological messages that permeate all our lives, including the Fool/fool’s. 

Some of you are going to remind me that I often write about another social trend: the mad push by helicopter parents to get their children into the very best colleges possible.  This mad dash can include a lot of actions that would appear on the surface to support and cherish learning, such as taking enrichment classes during the summer and getting private tutors.  But judging from the stories in the mass media and the vast anecdotal evidence I have collected from my own experience and those of many other parents, the quest of the helicopter parent, or maybe I should say the Tiger Mom, has nothing to do with learning or education.  It has to do with upgrading to a brand of education that the parents believe will represent a more powerful certification of their children’s status and therefore lead to a higher social position and a job that pays more money.  The helicopter parent has commoditized education, that is, turned it into a commodity that they believe they can buy to enhance their children’s lives (and their own).

Far from being a paradox, the coexistence of these two trends—anti-intellectualism and the helicopter parent—makes all the sense in the world.  What debases intellectual activity more than reducing its value to a certification that money and not intellectual achievement can buy?