How We Can Leverage AI to Create a “Jobless” society: Part 2

09 Nov 2025 9 Comments

by Dr. John Persico Jr. in Uncategorized Tags: , , , , , , , , , ,

In Part 1 of this Blog, I described some of the possibilities that AI might provide us in terms of developing what could become a utopian Society.  I named the economic system that such a society would need as an Equalitarian Economy as opposed to a Capitalistic, Socialistic, Communistic or any other type of economy that ever existed.  This new economy would be extremely Democratic in that everyone would be able to benefit from it.  I described several critical parameters of such an economy which included: 

Core Principles of Equalitarianism:

Shared Prosperity: Wealth produced by automated systems and AI is treated as a collective inheritance, not private privilege.

Universal Security: Every person is guaranteed access to health, education, housing, food, and connectivity as rights of citizenship.

Democratic Ownership: Data, infrastructure, and automation are managed for the public good through civic and cooperative institutions.

Ecological Balance: Progress is measured not by growth alone but by sustainability and planetary stewardship.

Purpose Beyond Profit: Humans pursue creativity, service, and learning as the highest expressions of freedom in a post-labor world.

Transparency and Trust: Economic algorithms and institutions operate openly, accountable to citizens, not corporations.

Responsibility and Contribution: Freedom is balanced with duty—to community, environment, and future generations.

Cultural Flourishing: Arts, education, and civic engagement become the new engines of meaning.

Global Solidarity: Equalitarianism recognizes that abundance must be shared across borders to preserve peace and human dignity.

The Equilibrium Principle: Every policy seeks harmony between technological power and human values.

Some people would call me overly idealistic or say that I had my head in the clouds.  They would argue that humans being can never create a society that evidences the characteristics noted above.  Karen says I am the ultimate pessimist.  That I don’t trust anyone or anything.  How do I resolve these apparent contradictions in my personality?  Who is right?  Am I a fuzzy headed idealist or a skeptical pessimist who thinks the worse in every situation? 

When someone calls me an unrealistic idealist who doesn’t understand human nature, I take it as a backhanded compliment.  I do understand human nature—both its flaws and its possibilities.  I’ve spent a lifetime studying how fear, greed, and ego shape behavior, but I refuse to believe they are destiny.  To me, realism without conscience is cynicism, and idealism without realism is sentimentality. The space I try to inhabit is between the two: the realm of the pragmatic humanist. 

I believe that understanding human nature means believing that it can grow—through education, empathy, and systems that bring out our better selves.  I’m not an unrealistic idealist; I’m a realist of potential.  The human race has yet to tap the potential that lies in all of us.  From the newborn baby to the fading senior citizen.  From America to Europe to Africa to Asia.  From the poorest people in the world, to the richest.  We have so much untapped potential.  If we could only learn to love others instead of hating others. 

Baha’u’llah taught that love is the fundamental principle of existence, the “spirit of life” for humanity, and the most powerful force for progress.  Jesus said that the two greatest commandments are to love God with all your heart, soul, and mind, and to love your neighbor as yourself.  Buddha described love as a boundless, benevolent wish for the happiness of all beings, a quality he called loving-kindness.  Muhammad’s teachings on love emphasized love for the sake of Allah, which includes compassion for all of humanity and other creations.  Krishna teaches that “he who does my work, who loves me, who sees me as the highest, free from attachment to all things, and with love for all creation, he in truth comes to me.”

Dr. Deming once told me that transformation starts in the heart but ends in the brain.  Transformation requires a new way of thinking and not following the dead ends that come from thinking in a box.  Einstein said that we cannot solve the problems of today with the same level of thinking that created these problems.  We can make a better world, and we can be better people, but it requires love, empathy, compassion and kindness.  Once we understand this, we can think our way to the world that we can only dream of now.   How can we get there from today? 

Transitioning from Today to Tomorrow:

The road to 2075 could unfold in three arcs:

2025–2035: Universal healthcare, education, pilot dividends, civic wealth funds.

2035–2055: Scaling UBB modules, digital public wallets, land value taxes.

2055–2075: Constitutional right to the Bundle, full Automated Productivity Dividend (APD) , AI-audited transparency.

The system’s heart is trust.  Algorithms determining the APD or resource prices must be openly audited.  Fiscal boards set rules, not politicians seeking applause.  Citizen assemblies test and refine programs through feedback loops, ensuring continual improvement—Plan, Do, Study, Act (The Deming Cycle) on a planetary scale.

Here are the key elements of my Equalitarian Economy and how they would work.

1) What’s guaranteed (the “Universal Basic Bundle”)

Instead of only cash, society guarantees a bundle of essential services, delivered like utilities:

  • Healthcare: universal coverage with public providers + private options layered on top.
  • Food: a baseline food allowance redeemable at grocers/meal services; nutrition standards, not one-size-fits-all rations.
  • Housing: right to housing via public development + vouchers + mutuals; minimum quality standards.
  • Education: free lifetime learning, credentials, and creative/technical studios.
  • Connectivity & Mobility: free broadband and a mobility pass (local transit + basic distance allotment).

The bundle is portable, unconditional, and choice-preserving (people pick among accredited providers).  Think “public option platforms” rather than one provider per need.

2) How people get spending power (beyond the basics)

Everyone receives an Automated Productivity Dividend (APD)—a cash-like stipend reflecting the value created by AI/robotic capital. It’s funded by:

  • Sovereign & civic wealth funds that own broad stakes in AI/robotic enterprises.
  • Resource rents (land value, spectrum, minerals), carbon fees, and environmental charges—returned equally as dividends.
  • A luxury VAT and/or robot/compute levy on supernormal AI rents (carefully designed to avoid stifling innovation).

Result: basics in-kind + optional cash for variety and luxuries.

3) Who owns the machines (so the dividend is real)

Without purposeful ownership design, a few owners capture everything.  Options that spread the gains:

  • National/municipal wealth funds (Alaska-style, but scaled and diversified into AI).
  • Pension & community funds mandated to hold a share of AI/automation indexes.
  • Data & model trusts that license public data/commons to AI firms in exchange for recurring royalties paid to residents.
  • Cooperative platforms where users/workers/cities co-own service robots and local models.

Mixing these creates a plural, resilient ownership base that throws off steady APD cashflows.

4) How to allocate real scarcities

Even with abundant automation, some things will remain scarce: prime urban land, top-tier medical slots, rare materials, energy peaks.

Use clear, fairness-preserving allocation rules:

  • Congestion pricing for peak resources (electricity at 6–9pm, popular transit slots)—revenues go back to people.
  • Auctions with dividend money for luxuries/rare items (keeps fairness and price signals).
  • Lotteries with rotation for non-monetizable scarcities (e.g., coveted campsites).
  • Personal environmental/material budgets (cap-and-dividend) to keep within planetary limits while preserving individual choice.

5) Governance that people can trust

  • A Constitutional floor of social rights (bundle + APD) guarded by independent fiscal/actuarial boards.
  • Transparent algorithmic policy: models that set APD levels, bundle rates, and scarcity prices are open-audited; citizens’ assemblies review changes.
  • Local experimentation / national reinsurance: cities iterate; the center backstops risks.
  • A Deming-style continuous improvement loop: publish indicators, test alternatives, keep what works.

6) Work, purpose, and status in a post-work world

“Jobs” give income, yes—but also identity, mastery, and community. Replace the income function with APD + bundle; replace the meaning function with:

  • Civic & creative missions (caregiving, arts, restoration ecology, mentoring, open-source, local news).
  • Reputation and recognition systems (think honors, badges, grants, residencies) that are non-financial but unlock opportunities (studio access, travel fellowships, lab time).
  • Voluntary problem prizes for hard societal challenges—open to anyone.

Let us look at how the above ideas would work on a day-to-day basis.  We will watch how Maya, one citizen in the new economy would receive economic benefits:

  • Maya receives the bundle automatically (healthcare, housing lease, mobility, broadband, education access) plus a monthly APD deposited into her public wallet.
  • She books a surgical consult on the health platform, enrolls in a ceramics + music course, and applies for a community garden micro-grant.
  • Peak-hour e-bike lanes use congestion pricing; her wallet is refunded weekly with the proceeds.
  • She enters a materials-light design contest; the prize is a year in a shared studio with high-end tools—no salary needed, but high status and joy.

How long would it take to transition to this new economy.  We can look at a path that such a transition might take.  (so this isn’t sci-fi hand-waving or pie in the sky thinking)

Years 0–10

  • Make healthcare and education genuinely universal; scale housing-first programs.
  • Launch/expand sovereign & civic wealth funds; start data trusts for public sector datasets.
  • Pilot UBB modules (mobility, broadband, food) in cities; pilot APD at modest levels via carbon/resource dividends + luxury VAT.
  • Enact land value tax shifts and congestion pricing with rebates/dividends.

Years 10–25

  • Ratchet APD as automation rents grow; fold in compute/robot levies if warranted.
  • Convert portions of tax expenditures into automatic bundle entitlements.
  • Standardize digital ID + public wallet (privacy-preserving) for payments and allocations.
  • Scale community/co-op ownership of local service robotics.

Years 25–50

  • Codify the social rights floor; stabilize APD against business cycles with rules-based mechanisms.
  • Shift most routine administration to auditable public AI; keep humans on goals, ethics, and appeals.
  • Tighten ecological caps with cap-and-dividend so abundance doesn’t overshoot the planet.

Now let us look at the Feasibility or Likelihood that such a transition could ever take place. 

  • Feasibility (could we?)

High, in terms of some  pieces.  Every element has real-world precedents: public services, dividends from shared assets, congestion pricing, social wealth funds, lotteries, co-ops.  Stitching them together is an engineering-and-governance project, not magic.

  • Likelihood (will we?)

Medium-low.  Left to markets alone, AI rents concentrate; political resistance to broad ownership and unconditional floors is strong.  Likelihood rises if we start now with: building civic wealth funds, enshrining social rights floors, deploying public wallets, and sharing automation rents early so people feel gains, not only disruption. 

Every component already exists somewhere—Alaska’s oil dividend, Norway’s wealth fund, Singapore’s housing model, open-source governance.  Integration is engineering, not fantasy.  We must act deliberately and share compassion for all of humanity.  Otherwise, AI and automation will only amplify inequality.  But if we start early—own public AI equity, legislate social rights floors—than the likelihood rises sharply. 

Bottom line

A post-work economy is possible if we socialize a slice of the returns to automation (not all of the economy), guarantee a Universal Basic Bundle, and use transparent, fair allocation for what remains scarce.  People keep freedom, society keeps stability, and progress keeps its edge.

How We Can Leverage AI to Create a “Jobless” society: Part 1

04 Nov 2025 14 Comments

by Dr. John Persico Jr. in Uncategorized Tags: , , , , , , , , , ,

Introduction:

Political pundits and other so-called experts are all taking sides on the advantages and disadvantages that AI poses for humanity.  Many are fixated on the large number of jobs that will be rendered obsolete by AI.  They seem to forget that throughout history, new jobs replaced old jobs when technology changed.  From sails to steamships, horse and buggies to cars, history is one vast unfolding of technology changing the way societies do work and are structured.

For the sake of compromise, I will assume the worse.  Let me speculate that in fifty years, AI will eliminate 95 percent of all jobs on the earth.  There are two ways that such a situation could be viewed.  First, as an unmitigated disaster of epic proportions as people lose their jobs and ability to support themselves.  Or as an opportunity of epic proportions based on an abundance of leisure time.  An opportunity that enables people to use this leisure time to pursue more rewarding and creative activities.  AI could eliminate the drudge of 9-to-5 work.  However, we are still going to need an economic system.  I believe such a system would be vastly different that any system that we have ever had either today or in the past.  The world stands at the threshold of a post-labor era.  Machines now do the work that once defined our lives, yet the rewards of that labor remain unevenly shared.  We need a new economic philosophy — one that aligns technological abundance with human fairness.

How could we structure an economic system in which people did not work but could still have access to health care, education, food, shelter and clothes?  Would this be possible?  We see Sci-Fi movies with civilizations on other worlds or in the future who live in a Utopia where robots and AI take of all the basic needs.  But how would a new economic system distribute the goods and services that are basic to humanity?  This is a lightning rod activity since many people are quick to oppose any efforts wherein someone seems to get something for nothing.  Witness, the ongoing criticism of social services such as welfare, unemployment and even social security.  A new economic system is going to call for new thinking.  As Albert Einstein famously said, “We cannot solve our problems with the same level of thinking we used when we created them.”

To think about what such a system might look like, I want to bring up an analogy that portrays a very different way of looking at life.  The people that we call Indians who were indigenous to this country before Europeans arrived had a way of distributing food and shelter that was quite admirable.  They believed that the land, water, resources belonged to everyone.  No one could own the land, lakes or seas.  If a buffalo hunt took place, the resultant meat was shared among all the tribal members.  No one said “I killed that buffalo, so the meat belongs to me.  But I will sell you some if you want any.”

Equalitarianism:

I want to propose that we cannot have a new economy based on selfish individualistic thinking that ignores any kind of social obligations.  If AI and automation do 95% of the work, we’ll need an economic system that (1) guarantees the basics, (2) steers scarce resources wisely, and (3) keeps meaning, dignity, and innovation alive.  I will call this new economy “Equalitarianism” as opposed to capitalism, socialism, communism or any other economic system that you have heard of. “Equalitarianism” is a democratic economic philosophy grounded in fairness, shared ownership, and universal well-being.  It envisions a society in which the fruits of automation and intelligence—both human and artificial—are distributed to ensure dignity, opportunity, and balance for all.

Core Principles of Equalitarianism:

  • Shared Prosperity: Wealth produced by automated systems and AI is treated as a collective inheritance, not private privilege.
  • Universal Security: Every person is guaranteed access to health, education, housing, food, and connectivity as rights of citizenship.
  • Democratic Ownership: Data, infrastructure, and automation are managed for the public good through civic and cooperative institutions.
  • Ecological Balance: Progress is measured not by growth alone but by sustainability and planetary stewardship.
  • Purpose Beyond Profit: Humans pursue creativity, service, and learning as the highest expressions of freedom in a post-labor world.
  • Transparency and Trust: Economic algorithms and institutions operate openly, accountable to citizens, not corporations.
  • Responsibility and Contribution: Freedom is balanced with duty—to community, environment, and future generations.
  • Cultural Flourishing: Arts, education, and civic engagement become the new engines of meaning.
  • Global Solidarity: Equalitarianism recognizes that abundance must be shared across borders to preserve peace and human dignity.
  • The Equilibrium Principle: Every policy seeks harmony between technological power and human values.

Building an Economy When Work Disappears:

Imagine it’s the year 2075.  Ninety-five percent of all jobs once done by humans are now performed by artificial intelligences and robots.   Factories hum without workers, crops harvest themselves, and algorithms handle every clerical task once requiring a cubicle.  Humanity’s most ancient concern—how to earn a living—has been replaced by a new question: “How to live meaningfully when earning is no longer required?”

For centuries, economies balanced two core elements: labor and capital.  Labor created value; wages distributed it.  The Twentieth Century saw “information” added to the two core elements. Productivity once dependent on land and labor has become increasingly dependent on information and data.  Humans cannot compete with AI when it comes to producing and managing such data.   When increased automation and AI can provide nearly all productive labor, the former equilibrium collapses.  Yet people will still need food, housing, healthcare, education, and belonging.  We will also need purpose.  The challenge is no longer how to produce, but how to share.  Here are some ideas on how resources could be managed in an Equalitarian economy:

A Universal Basic Bundle:

Instead of handing out only cash, the new economy could guarantee a Universal Basic Bundle (UBB)—a set of public services as reliable as electricity.  Healthcare would be universal, food credits digital, housing guaranteed, education lifelong, and connectivity and mobility free.  This bundle would ensure dignity without removing freedom; citizens choose providers and can upgrade privately.

An Automated Productivity Dividend:

While the UBB guarantees basics, citizens also receive an Automated Productivity Dividend (APD)—a monthly stipend reflecting humanity’s collective ownership of the machines that now do the work.  The APD would draw from public wealth funds, resource rents, and automation taxes.  It grows as automation grows—return on shared capital, not charity.

Ownership in an Age of Algorithms:

Without shared ownership, AI profits concentrate into a few hands.  Society must broaden who owns the means of computation through sovereign and municipal wealth funds, data trusts, and cooperative platforms.  This mosaic of ownership spreads wealth and gives every citizen a stake in the future.

Managing Scarcity in an Age of Plenty:

Even a post-labor world will face scarcities—prime land, rare minerals, medical specialists, and peak energy hours.  Instead of rationing by privilege, we can ration by fairness: dynamic pricing for peak resources, lotteries for non-market goods, and caps and dividends for carbon and material use.  Money remains, but it serves coordination rather than domination.

Purpose Beyond the Paycheck:

While work may vanish, meaning and purpose must not.  Society can elevate civic, creative, and ecological missions as the new currency of status—with prizes, recognition systems, open laboratories, and local media supported by public dividends.  In place of employment, people pursue engagement; work shifts from income to contribution.  In the early 1950’s, the Japanese created a prize for quality based on the ideas of Dr. Deming and named it the Deming Prize.  This effort greatly helped to catapult Japan to a world leadership in product quality and reliability.  The old saying that “Two heads are better than one” can now be changed to “Two heads with AI are better than only two heads.”  Together we can think our way to a better world.

Bottom Line for Humanity:

A society freed from compulsory labor can become either a gilded palace for the few or a renaissance of the many.  It can become a world of haves and have nots.  A world with a few super rich and billions of poor people with no jobs and no skills.  If we share the fruits of intelligence—both human and artificial—we can fulfill the dream that every prophet and philosopher has always embraced: a world where work is a choice, not a chain.  Where labor from 9 to 5 is replaced by time for family, friends and creativity.

How We Can Leverage AI to Create a “Jobless” society:  Part 2

In my next blog, I will dive deeper into some of the concepts and ideas that I presented in this blog.  I want to describe how many of the economic elements that I noted could actually work and discuss the pro’s and con’s of some of them.  We will discuss the feasibility of the scenario that I am advocating.

Follow the Money: The Hidden Economic Roots of War

28 Aug 2025 2 Comments

by Dr. John Persico Jr. in Uncategorized Tags: , , , , , , ,

 

Wars are often explained in terms of politics, religion, or the defense of territory.  Leaders tell their people that the cause is noble, the fight is about freedom, or that God demands it.  Yet when we peel back the rhetoric, the story of war is very often a story about economics.

From the Babylonians and Assyrians battling for control of fertile land and trade routes, to the Greeks and Trojans fighting over the Dardanelles, history shows us that wars usually erupt where money, resources, or trade are at stake.  Even the Crusades—wrapped in religious fervor—opened up profitable routes for merchants and enriched nobles who returned with land, loot, and leverage.


The modern world is no different.  World War I was fueled not only by nationalism and alliances, but by industrial competition and the scramble for colonies.  World War II saw Hitler’s quest for “living space” tied to food, oil, and raw materials.  The Cold War between the U.S. and the Soviet Union pitted two economic systems against one another just as much as two political ideologies.  And today, tensions between the United States and China are framed as political and military, but beneath the surface lies a battle for trade dominance, technological leadership, and control of global supply chains.

Of course, not every war is about economics.  Some are sparked by religion, fear, or pride.  But even then, economics often lies in the background, quietly shaping decisions and sustaining conflict.  Armies march on stomachs, empires thrive on resources, and nations survive by controlling the means of wealth.

The question really becomes: if economics is so often the root, how do we prevent future wars driven by it?  History suggests a few answers:

  • Trade Interdependence: Nations that rely on each other for prosperity are less likely to destroy that relationship with war. Europe after 1945 is a powerful example.
  • Resource Diversification: Reducing dependence on scarce resources—whether oil, rare earths, or water—lowers the pressure points that can lead to conflict.
  • Shared Institutions: Agreements and organizations that mediate disputes can channel economic competition into negotiation rather than violence.
  • Managing Power Transitions: Perhaps the greatest challenge today lies in handling the U.S.–China rivalry. Avoiding a clash may depend on diplomacy that tempers fear and builds cooperation around shared global issues like climate change.

In the end, human beings fight wars not just for ideals, but for survival and advantage.  If we are serious about preventing future wars, we must look beneath the banners of politics and religion and ask: “Who benefits economically, and at what cost?”

Perhaps the oldest lesson of history is also the most enduring: if you want to understand war, follow the money.  Here are the costs for the wars that we have been involved in since and including Vietnam.  Where do you think this money comes from?  Who do you think really benefits from the money spent?

Vietnam (1965–1975)

Iraq (2003–present, incl. ISIS war in Iraq & Syria)

  • Spent to date (through 2023) on operations, reconstruction, etc.: ~$1.79T.
  • Plus veterans’ care obligations through 2050: ~$1.1T.
  • Total (spent + obligated for vets): ~$2.89T. Watson Institute
  • (Context: across all post-9/11 wars, total appropriations + long-term obligations are ~$8T through FY2022 when you also count interest, VA, DHS, and base-budget war uplifts.) Watson Institute

Afghanistan (2001–2021)

  • Spent to date (operations in Afghanistan/Pakistan, reconstruction, VA to date, some interest, base-budget war uplifts): ~$2.313T. (Excludes future veteran care and future interest.) Watson Institute
  • (Same post-9/11 context as above applies.) Watson Institute

Ukraine (2022–present)

  • U.S. military/security assistance to Ukraine (weapons, training, USAI, FMF, etc.): ~$66.9B committed as of Jan 2025 (State Dept.). State Department
  • Broader U.S. Ukraine response (appropriations for military aid, replenishing U.S. stocks, U.S. force posture in Europe, economic & humanitarian aid, oversight, etc.): ~$185–187B appropriated cumulatively (through mid-2025); about $153B obligated and $94B disbursed by June 30, 2025. U.S. Department of Defense+1Ukraine Oversight+1

Gaza/Israel war (Oct 2023–present)

  • Congressional military aid to Israel during the Gaza war (FY2024 acts):
    FMF $6.8B + missile defense $4.5B + Iron Beam $1.2B + other DoD items $0.11B = ~$12.61B. Congress.gov
  • Wider tally including related U.S. operations in the region (e.g., Red Sea/Houthi strikes) through Sept 30, 2024: at least $22.76B total ($17.9B in U.S. support to Israel’s military ops + $4.86B in related U.S. regional operations). (Conservative estimate; excludes non-military/humanitarian spending.) Watson Institute

Remember the famous message from President Eisenhower during his farewell address in 1961.  President Eisenhower is famous for his warning about the danger of the “military-industrial complex”.  He stated,

“We must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex.  The potential for the disastrous rise of misplaced power exists and will persist.”

Conclusions:

  • Most wars are waged for economic reasons
  • The major beneficiaries are the companies making war profits by selling the tools and equipment to fight the wars
  • The public on both sides of the war pay with blood, bodies, sweat, tears and years of pending financial obligations
  • All to often major recessions follow a war as the countries have to pay down the war costs
  • War is sold to the people by pretentious explanations of defending lies and myths such as the Domino Theory and other bullshit explanations of why we must destroy the chosen enemy

 

Why Americans Hate the Government!

25 Feb 2025 12 Comments

by Dr. John Persico Jr. in Uncategorized Tags: , , , , , , ,

I sit here in my car driving the speed limit of 75 mph on the interstate and being passed by multitudes of cars doing at least 85 mph or maybe 90 mph.  It feels like I am standing still.  I watch as cars pass on the right, left and in-between in their hurry to get somewhere really important.  Speed limits and stop signs seem to be only ideologies obeyed at the discretion or whim of the drivers on the roads today.

Americans have always said that they want less government.  Today, it seems that they want NO government.  People clamor for their rights at every mention of some law or other injunction that they do not feel applies to them.  Hardly any American cannot find some law that they find unfair and unjust.

Edmund Burke said that the “Government that governs best is the government that governs least.”  Abraham Lincoln said that “If all men were just, there still would be some, though not so much, need of government.”  Many Anarchists would agree with these sentiments.  In the past, Americans have treated Anarchists as terrorists and revolutionaries.  Anarchists are despised by most Americans.  Yet, few Americans understand that many Anarchists share their same belief in “eliminating the government.” The January 6th attacks on the Congress of the USA could have been a picture-perfect representation of an Anarchist attack.  Unfortunately, for such simple depictions of Anarchists many are not violent revolutionaries.  One definition of an Anarchist given by the FBI is as follows:

“Anarchism is a belief that society should have no government, laws, police, or any other authority.  Having that belief is perfectly legal, and the majority of anarchists in the U.S. advocate change through non-violent, non-criminal means.” — FBI. Gov

The implications of this definition are profound.  Consider that “The majority of anarchists are non-violent” whereas the majority of those storming the US Capital on January 6th were engaged in violent criminal attacks.  How many of the people attacking the Capital would agree that they were engaged in the same type of criminal activities that they ascribe to Anarchists?  Nevertheless, both groups share a dislike for government.

A closer reading of Lincoln and Burke though does not show an advocacy for NO government, only less government.  What are the primary purposes of a government than and how can it reconcile achieving these purposes while at the same time not becoming a burden on the everyday lives of its citizens?   Here are the five most important functions of a government:

The five most important functions of a government typically include: (From ChatGPT)

  1. Maintaining Order and Security:

Enforcing laws, protecting citizens from crime, and ensuring national defense against external threats.

  1. Providing Public Services:

Offering essential services like education, healthcare, infrastructure (roads, bridges), and utilities that individuals or private businesses might not adequately provide.

  1. Protecting Individual Rights and Freedoms:

Upholding constitutional rights, such as freedom of speech, religion, and equal protection under the law.

  1. Economic Management:

Regulating trade, managing taxes and public spending, and addressing unemployment and inflation to foster a stable economy.

  1. Formulating and Enforcing Laws:

Creating legislation that reflects societal values and ensures justice, while maintaining systems to fairly enforce these laws.  (End of ChatGPT) 

Few people would disagree with any of these functions.  But if God lies in the details (or the Devil some might say), than our disputes are more around “what exactly will be done and how will it be done.”

Any one of these five functions can illustrate the problem that people have with the government.  For instance, what Public Services will be provided?  We accepted education many years ago as a public service, but now some want to privatize education.  Other people want childcare as a public service while there are people who disagree with the idea.

But the question of what services and what laws to provide are not the only problem people have with the government.  A bigger problem lies in the “how” of government.  By how, I refer to the efficiency of government.  The government has long been lambasted for its lack of efficiency.  Several years ago, Senator William Proxmire of Wisconsin created his “Golden Fleece Award.”  Periodically a government agency would receive this award for an egregious offense of efficiency.  Some of these became famous even if they might have been a gross exaggeration.  One that comes readily to my mind was the “Golden Toilet” bowls case.  Allegedly, a government office ordered gold-plated toilet bowls.  Whether this is an urban myth or not, there are indeed countless stories of government bureaucracy creating inefficiency.

When I worked as a principal strategic planner for the Metropolitan Council in Minnesota, I saw so many examples of government waste and stupidity that I often came home complaining to my spouse that, “If only the citizens of this state could see the waste and inefficiency that I am trying to deal with, they would grab guns, knives and even pitch forks and march on city hall.”

That was over twenty-five years ago, and people have finally marched (if not on city hall) on the Capital of the USA.  Unfortunately, as is the case with much anger, it is often misplaced and misguided.  It is not only the Federal Government that is inefficient, but also most state governments, county governments and city governments that are inefficient as well.  When I was teaching the concepts of quality and process improvement to companies, I would use a conceptual framework based on two key economic concepts to explain how a company could improve its operations.

There are two key economic concepts that every organization must be concerned with.  The first key concept is Effectiveness.  Effectiveness can be defined as “Doing the right things.”  The second key concept is Efficiency.  Efficiency can be defined as “Doing things right.”  In order for any organization to maximize productivity it must be both efficient and effective.  It does not matter if you do the right things, but you don’t do them right.  Vice versa, if you do the wrong things but you do them right, that is nonproductive as well.  We can summarize these maxims simply by the following idea:  Your clients and customers expect that you will give them “What they want or need at a price that they can afford.”  Price reflects the efficiency of an operation, while giving customers what they want or need reflects the effectiveness of the operation.

In my experience, both as a business teacher and a management consultant, business organizations focus more on efficiency than effectiveness.  There are countless examples of products and services that are neither needed nor wanted by people, but advertising can always be effective in convincing consumers otherwise.  I am thinking of cigarettes and carbon-based products as two such examples.

On the other hand, the government typically focuses more on effectiveness (that is giving people needed services) and much less on efficiency.  The government tries to reduce the waste and garbage that comes from industry as a direct offshoot of their so-called efficiency. The most noted example is the environmental degradation caused by many business products.  Today we face a world where climate change is destroying our lives and our environment.  If the trends noted today keep growing, we will eventually inhabit a planet where human life can no longer exist.  Much of this climate change could have been prevented.  However, companies and politicians in the pocket of big oil have spent billions of dollars in efforts to deny that climate change is taking place due to carbon-based fuels.

The secret of sustainability (a dirty word to some people) on a global scale is to have businesses and governments that are both effective and efficient.  Unfortunately for most governments, they get the worst of the publicity.  There is much less criticism of the ineffectiveness of big business to provide products that are compatible with a clean environment than there are criticisms of the government for inefficiently trying to regulate this business waste.  It is easy to see why that is the case.  As my friend Dick always said, “Follow the money.”

The government spends very little money trying to convince you that the climate is changing, or that too much production of carbon fuels is destroying our environment.  Big business has dozens of lobbyists padding the campaign budgets of politicians to convince them to ignore the effects of global warming and to deny that it exists.

Big business also spends billions of dollars trying to convince you that they can provide government services more efficiently than the government.  The last few years have seen ongoing attempts to privatize education, prisons, waste treatment plants and many other public services where big business think they can make a profit.  In addition, big business has been at the forefront of efforts to deregulate organizations such as banks, public utilities and airlines in order for them to manage these organizations without restrictions.  Having no restrictions, gives them free rein to make as much profit as they like. Yes, you may get these services cheaper and thus more efficiently than the government would provide them, but you will pay a hidden cost.  There are no free lunches in the world.  The Great Recession of 2007 followed the issuing of loans and mortgages that had too little collateral and too high interest rates leading to a catastrophic failure of banks and homeowners.

IF you want further corroboration regarding my above analysis of the 2007 recession, you can read the following from ChatGPT:

“The 2006 recession was actually part of a broader economic crisis that led into the Great Recession (which officially spanned from late 2007 to 2009), but the roots of the downturn started around 2006.

The major cause was the housing market crash. Here’s a quick breakdown of what happened:

Subprime Mortgage Lending: Banks and lenders gave out risky loans (subprime mortgages) to people with poor credit histories. These loans often had adjustable interest rates that started low but later spiked, making it hard for borrowers to keep up with payments.

Housing Bubble Burst: Housing prices had been soaring due to speculation and easy credit, but by 2006, home prices peaked and started to fall. As prices dropped, homeowners who couldn’t sell their homes or refinance their loans began defaulting.

Mortgage-Backed Securities (MBS): Banks bundled these risky mortgages into financial products called MBS and sold them to investors. When homeowners started defaulting, the value of these securities collapsed, causing massive losses for banks and financial institutions.

Foreclosures and Bank Failures: Foreclosures skyrocketed, and big financial players like Lehman Brothers collapsed or needed bailouts, which deepened the economic panic.

The domino effect triggered a credit crunch — banks stopped lending, businesses cut jobs, and consumer spending shrank, all of which pushed the economy into a full-blown recession by late 2007.”

Consumers and the American public paid a big price for the greed and stupidity of the banking industry.  A greed which was supported by Government deregulation which in turn was pushed by greedy politicians ignoring the need for regulation.  Behind all the politicians are legions of lobbyists for the banking industry.

Major insights I want to leave you with:

  1. People want a free lunch when it does not exist.
  2.  Politicians (first and MOST) represent those from whom they get the most gold. He who has the gold makes the rules.
  3.  Businesses and citizens will never regulate themselves without some help from a government to set norms that everyone must abide by.  Witness, the amount of gun violence, air pollution, water pollution, road rage and senseless speeding that exists today.  There are too many people and too many organizations which will not police themselves.
  4.  Efficiency and Effectiveness are the fundamental building blocks for any sustainable economic system that is going to deliver ongoing value to society.
  5.  We need a government that is fair, nonpartisan, educated and responsible to the citizens and not the lobbyists. We do not have that now. 

 Some Solutions I Would Like to Suggest:

  1.  Make lobbying illegal.  Lobbying is bribery.  Ban all lobbyists from congress.
  2.  Overturn Citizens United Ruling:  Corporations are not people and should not be allowed a vote.  Just as we separated Church and State, we must have a constitutional amendment to separate Corporations and State.
  3.  Term limits for all politicians. I recommend one six-year term for all elected positions.  Furthermore, once an elected politician leaves an office, they cannot hold another government position in any office for ten years. 
  4. Have Vouchers for Campaign Contributions: Every year, each eligible voting citizen of the USA would get a monetary voucher for 500 dollars to fund as many campaigns as they want to contribute to.  The voucher money could only be used to fund political campaigns.   The maximum that any citizen could contribute to political campaigns in a year would be 1000 dollars.   No PAC money, no corporate funds, no other funds except funds from individual registered voters would be allowed.
  5. Supreme Court Justices: Supreme Court Justices should serve a maximum of 15 years.  New justices should be selected by the following practice:  A bipartisan committee of judges nominates a total of 6 candidates.  The final candidate is selected at random from the pool of six.

These changes would be only a first step in bringing true democracy back to America.  There are many changes needed to make the Government bureaucracies throughout America more efficient and effective.  The ideas I have given above are only a start.  We need to bring efficiency and effectiveness to our Education, Health Care, Justice, Military, Social Services, Immigration and Diplomatic systems.  In several other blogs, I have suggested ideas on how to go about dealing with some of these systems.  However, nothing is more important than getting the corruption out of Government fostered by our present system of electing candidates to office.

What is a lobbyist?

Lobbyists are professionals hired by a special interest group to represent their interests to Congress.

The term “lobbyist” harkens back to the days when people hung around in lobbies waiting to get a word in with legislators heading to vote.

All kinds of groups hire lobbyists — from corporations and private companies to nonprofits and unions — to try to persuade the government to pass legislation that’s favorable to them.

Why Are Americans so Misinformed About Economics?  — Part 1

26 Nov 2024 1 Comment

by Dr. John Persico Jr. in Uncategorized Tags: , , , , , , , , , ,

Most people in the USA are woefully inept when it comes to understanding the basics of economic theory.  The resulting problem is that the public believes everything they hear from politicians and the media.  If the public is uninformed about economics, the media and politicians are even worse.  The difference is that politicians use their lack of knowledge to further their own political ambitions.  The media use the same lack of knowledge to drive advertising and to make money for their outlets.

By far, the greatest malignancy comes from the fact that the public lack of economic understanding leads to support for war efforts throughout the world.  American foreign economic policy is often based on greed and fear.  We use our military might to support regimes, despots and wars that will keep our economic system dominant.  We assume that the global marketplace is one of win-lose or zero-sum economics.  We do not believe that a win-win is possible with all nations.  Instead, we play zero-sum games with any countries that we think might threaten our economic dominance.

Former German Chancellor Angela Merkel argued President-elect Trump does not believe in “any win-win situation,” and it makes international collaboration difficult. — The Hill, 11/26/24

Economics can be divided into two branches.  One is called macroeconomics.  Macroeconomics is concerned with large-scale or general economic factors, such as interest rates and national productivity.  Placing tariffs or trade restrictions on other countries could be considered a macroeconomic decision.  The other branch is called microeconomics.  Microeconomics considers the behavior of decision takers within the economy, such as individuals, households and firms.  How much a given industry or company pays its workers versus how much it pays its senior executives could be considered a microeconomic policy.

I want to first talk about microeconomics and one of its major fallacies or myths.  In Part 2, I will discuss the problems of a macroeconomics policy myth based on a greedy Military Industrial Complex.  This microeconomics fallacy is the so-called Trickle-Down Theory.  This is the myth fostered by those with money or power that if you trust them to make as much money as possible, some of it will “trickle” down to you.  You might as well wait for the Tooth Fairy, the Easter Bunny or Santa Claus.

A more accurate and predictable economic theory is that the “rich get richer, and the poor get poorer.”  Philanthropic efforts in the USA have done little or nothing to alleviate poverty.  Rich people would rather donate to the Metropolitan Opera than they would to a neighborhood poverty reduction program.  The prestige is greater by donating to the opera and the tax deductions are just as good.

“While philanthropy has contributed to alleviating poverty by providing direct assistance like food, shelter, and healthcare, its impact is often considered to be limited when compared to broader systemic changes like government policies, as philanthropy primarily acts as a supplementary tool in tackling the root causes of poverty; therefore, it can provide relief but may not achieve large-scale poverty eradication on its own.”  — Google AI

We can easily prove that Trickle Down theory does not work.  A little logic if you will.  Let us suppose that money trickled down in a company from wealthy entrepreneurs like Elon Musk to the worker bees.  If this were true, than over time, the wages between workers and senior executives should (while still being large) not be huge.  However, consider the following:

“According to recent data, the average CEO earns significantly more than a typical worker, with the pay ratio often exceeding 300 to 1, meaning a CEO makes roughly 300 times more than the average employee; for example, in 2023, the average CEO pay was estimated to be around 290 times that of a typical worker, compared to a ratio of 21 to 1 in 1965.”  — Google Generative AI

Some economists have claimed to find evidence to support assertions that the Trickle-Down theory actually does work.  But my friend, ask yourself these questions:

  • Would you trust that all economists are unbiased and willing to tell the truth about their employers?
  • If Trickle Down economics worked, than how come the gap in pay between the higher and lower workers has continued to grow over the past 50 years rather than shrink?
  • Finally, economists be damned. Do you really think rich people give one rat’s ass about your pay and whether or not there is “income inequality?”  How many millionaires do you know who donated their estates to poor people?

I do not believe in communism, but neither am I so callused as to believe that “poor people don’t deserve the money because they will just waste it.”  What I have observed in my 78 years on this earth is that some people get a head start in life and end up much higher on the ladder than those who start off without a ladder.  It has never been and never will be an equal playing field.  Talent and brains are not equally distributed.  Neither is health and longevity.  Money will never be equally distributed.  But these premises aside do not mean that a society should be structured simply to help the rich get richer at the expense of the poor people who provide the labor for them.

Today, we have a Roman Circus of means to help keep poor people poor and make the rich even richer.  One of the most notorious of these means is the availability of legalized gambling.  Gambling is one of the most egregious means of insuring that people who are poor will stay poor.  The odds on winning at some popular gambling activities are as follows:

  • Top prize on a poker machine (playing maximum lines): up to 1 in 7,000,000
  • The trifecta in a 13-horse race: 1 in 1,716
  • 1st division in Gold Lotto (one game): 1 in 8,145,060
  • 1st division in Powerball (one game): 1 in 134,490,400
  • The top prize on a $5 Crossword Instant Scratch-Its game: 1 in 1,700,000.

And now we have added sports betting to the number of ways that people can lose their hard owned cash.  The people making money want to keep you betting more and more.  The payoffs are random, which encourages people to think that they will win.  In psychology, it is called the “Gambler’s Fallacy.”  This is an incorrect belief that a random event is more or less likely to occur based on previous outcomes.  For instance, if heads comes up three times in a row on a coin toss, most people will bet that tails will come up on a fourth throw.  The odds are still fifty-fifty on any throw if it is a fair coin.  Consider the following facts:

“About 13.5% of gamblers go home from a casino having made any money.  This statistic comes from a study of 4,222 gamblers, and only 7 of them won more than $150.  Conversely, 217 of them lost over $5000 at casino games.  Also, note that those who play more often have lower chances of winning.” 

My wife and I occasionally go to a casino.  We may invest twenty dollars between us and then have a buffet dinner.  It is fun but we never bet more than twenty dollars total.  We know that we will walk out losers 98 percent of the time.  However, I have seen high school kids in some of my classes huddled together placing sports bets.  Would society not be better off showing them how to start a business and providing incentives for doing so rather than slick advertising designed to make them think that they can get rich betting on sports teams?

“The world’s 50 highest-paid athletes hauled in an estimated $3.88 billion over the last 12 months before taxes and agents’ fees, up 13% from last year’s record mark of $3.44 billion.  Roughly 76%, or $2.94 billion, came from on-field earnings (salaries, bonuses and prize money) partly because of the Middle Eastern money continuing to flow into sports.”  — Forbes ,MAY 16, 2024

Marx once said that religion was the opiate of the masses.  By this he meant that people were drugged into thinking that religion would bring them to a paradise where all their dreams could come true.  It would take death and being a true believer to get them to this paradise, but it was a sure thing.  Today, gambling and sports have become the opiate of the masses.  People dream of winning the lottery and getting rich.  Others dream of making it big in sports and becoming the next Michael Jordan.  People think their kids have a high probability of going on to a lucrative career in sports if they can only get a paid tuition to a major NCAA college.

The facts my friends do not support that your kids will be anywhere near getting into a major league sports team.

  • 59% of high school football and basketball players believe they will get a college scholarship    
  • 98 out of 100 high school athletes never play collegiate sports of any kind at any level.
  • Less than one out of every 100 high school athletes receive a scholarship of any kind to a Division I school.
  • Only 1 in 16,000 high school athletes attains a professional career in sports.

But why bust anyone’s bubble?  Aren’t we all entitled to our dreams?  What would life be without goals and hopes that exceed our grasp?  Who wants to tell their children that they cannot go for it?

I have been a parent like many of you.  I wanted the best for my daughter.  But I was under no illusions about the reality of the workplace world.  Too many poor people are unrealistic when it comes to understanding the economics of the workplace.  This leads to poor decision making and the ability of huckster politicians and greedy organizations to take advantage  of them.  The rich in America see the poor as a resource of suckers born every day.  “Caveat Emptor” means let the buyer beware.  Many of my MBA students subscribed to this belief when I was teaching at Metro State University.  I could argue against it all day, but the majority of what MBA students learn in college is that money is good, greed is good and that we deserve all we can beg, borrow or steal.

“No less a business expert than Dr. W. E. Deming was critical of traditional MBA programs, arguing that they often focused too heavily on short-term profit goals and not enough on long-term quality improvement, neglecting essential statistical tools and systemic understanding needed for true organizational change; he believed they often taught practices that were detrimental to continuous improvement within companies.” — Google AI

Rana Foroohar writing in Evonomics states that “MBAs are everywhere, yet the industries where you find fewer of them tend to be the most successful.  America’s shining technology and innovation hub—Silicon Valley—is relatively light on MBAs and heavy on engineers.  MBAs had almost nothing to do with the two major developments in the American business landscape over the last forty years: the Japanese-style quality revolution in manufacturing and the digital revolution.” —   Want to Kill Your Economy?  Have MBA Programs Churn out Takers Not Makers

Keep your dreams for tomorrow but base them on reality.  Do not trust what people asking you for your money or your vote try to sell you.  The only way to keep your money in your pocket is to keep informed and to pay little attention to the lies, disinformation and misinformation spread by politicians and the media.

In Part 2, I want to address the truth regarding our contempt towards Russia and China and the real reasons underlying our mistrust and hostility towards them.  These reasons are based on simple economic realities that our leaders do not want you to understand.  They want you to subscribe to doctrines of fear and hatred that will support the many unjust policies that we propose for our economic “enemies.”

War has been called a continuation of politics by other means.  Economic dominance is one side of the coin.  Political dominance is the other side.  War becomes the means to insure that we are both politically and economically dominant on the world stage.  These truths will explain why we continually assail both Russia and China as threats to America.  Some of these truths will also explain why we are supporting Israel’s genocide in the Mideast.

What Has Happened to Morality in the USA?

08 Nov 2022 7 Comments

by Dr. John Persico Jr. in Uncategorized Tags: , , , , , , , ,

moralityYears ago, religions enforced what I would call a pseudo moral code through the power of the state to enact laws desired by the most powerful religions.  This of course reflected the power that religions had in society back when you could go to hell for missing mass on Sunday.  Gambling was verboten.  There was legalized horse race betting in only a few states, and a few states had some other sports such as greyhound racing or Jai Alai which you could bet on.  Legally, you could only place bets at the venue.  Of course, organized crime found it very lucrative to offer “off track” betting.  Every street corner where I grew up had a bookie some place or other.  And of course, the numbers game was a very popular way for fools to lose their money.  Sports betting was done privately, and casino gambling did not start in Las Vegas until 1931.  It had been legal earlier but was outlawed in 1910 and not legalized until 1931.  The only lottery I ever heard of when I was growing up had to do with the Irish Sweepstakes.  There must have been some way to buy these tickets, but I never investigated it.

Today, you can buy pull tabs and lottery tickets in almost every gas station.  Casinos are just around the corner in twenty states and sports betting became legal on April 15, 2021, in the USA.  Organized religion believed that gambling would be addictive, and husband and wives would neglect their parental responsibilities as they gambled away their hard-earned wages.  People who regularly buy lottery tickets are the norm today even though economists refer to the lottery as a tax on the poor and the stupid.

ReeferMadness800-520x348

Marijuana was once considered a drug from Satan and every state in the Union banned its sale.  The movie “Reefer Madness” came out in 1936 and portrayed wild eyed youth going crazy after smoking a joint.  Smoking weed was a sure path to hell and damnation.  As of May 27, 2022, 19 states, two territories and the District of Columbia have now enacted measures to regulate cannabis for adult non-medical use with several other states limiting its use to medical purposes.  You can now smoke that joint where it once would have put you in jail.

drink-whiskey-hail-satan-satanic-baphomet-gift-manuel-pichlerWhiskey can now be purchased almost 24/7 in many states.  You can buy it in grocery stores, gas stations, bars, and convenience stores.  Perhaps no substance has been more abhorred by religions than whiskey.  Benjamin Franklin said that “Beer is proof that God loved man and wanted him to be happy.”  However, this was not the attitude of most religious organizations.  Temperance movements motivated by so called moral considerations did their best to ban alcohol in the US.  It is illegal in thirteen countries in the world.  Several of the world’s major religions ban the use of alcohol.  There are seventy-five scripture (Bible) warnings against the drinking of alcohol.  Is it any wonder that so many religions have prohibited the drinking of alcohol.

  • Hosea 4:11 – Intoxicating wine takes away intelligence.
  • Micah 2:11 – Israelites are eager to follow false teachers who prophesy plenty of intoxicating drinks.
  • Habakkuk 2:16 – Drinking leads to shame.

I have been trying to show some of the influences that religion and state have had in terms of legislating and enforcing moral codes and policy.  I could say more about prostitution and pornography but the nuances I hold regarding these subjects would entail a blog of their own.  Suffice it to say that restrictions in these areas have declined considerably in the last fifty years.

The_Fire__Brimstone_PreachingNow there may be some of you reading my blog and expecting a fire and brimstone sermon regarding the sins of humanity and the temptations of the devil.  Nothing could be further from my mind.  I am not advocating going back to the religious sanctions or beliefs that fueled so much of our political system.  In the first place, they were misguided and in the second place they penalized those who could practice moral virtues along with those most reluctant.  I could never understand why I could not buy liquor on Sunday or after 10 PM on weekdays or in a grocery store.  I have never received a DUI or even a warning for driving drunk.

The biggest problem with efforts to legislate morality is that they assume that the legal sanctions will result in a more moral society.  The evidence of racism, sexism, homophobia, and xenophobia in America should put a stake through the heart of that false belief.  The government has never been a vendor of morality.  People confuse legality with morality.

1787-Money-Mania-fullThe government has always been in the marketing business.  They would market “SIN” if they could find a way to sell it or allow it to be sold.  In some respects, they are already doing that with the legalization of gambling and their promotion of bigger and bigger lotteries.  The poor buy more and more tickets when the odds go ever higher against anyone winning.  Powerball’s odds are 1 in 292 million, and the combined populations in the states where tickets are sold equal nearly 320 million.  What would anyone do with 2 billion dollars?  (As I write this, the lottery of 2.0 billion has been won by a single person in California)

This is the stuff of more is better which I talked about in my last blog.  How large of a jackpot would be enough to support you for the rest of your life?  Assuming the average age of a lottery ticket holder, it would take nearly $5 million, according to Robert Pagliarini, president of Pacifica Wealth Advisors.  With a net take home of 1 billion dollars, one billion dollars could easily support 200 people for the rest of their lives.

There is nothing moral about ever bigger lottery purses.  Not to mention the fact that the odds are better that the lottery winner will go bankrupt rather than that they will see a happy old age with lots of money.  “Life after winning the lottery may not stay glamorous forever. Whether they win $500 million or $1 million, about 70 percent of lotto winners lose or spend all that money in five years or less.” — Easy Come, Easy Go.

What does this have to do with morality? 

First, we must define morality.  It is not about making money, winning the lottery, drinking booze, smoking weed or visiting a casino.  The Prosperity Gospel is a distortion of the idea of moral behavior.  Morality is the process of asking yourself what impact an action, a course of action, a decision, a purchase, or a behavior will have on other people.  It does not mean that you cannot drink and gamble.  It does not mean that you cannot have wild sex at a swinger’s party.  It does mean that you need to be able to ask yourself if your gambling and drinking is having a negative impact on others.  It does mean that you need to ask yourself if your sexual habits are having a negative impact on other people.  By others. I mean more than your family, more than your friends, more than your neighbors.  I mean other states.  I mean other countries.  I mean the entire world.  This does not mean that you have no rights.  You have the right to swing your arm but your right proverbially stops at the nose of another person.

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As I said in my last blog, we must look outside of ourselves to find morality.  This is not easy to do.  Some of us, (fewer every year) go to a church on Sunday where we may get a sermon that asks us to look at our behaviors and what we can do for other people.  (“According to a 2021 survey, 31 percent of Americans never attend church or synagogue, compared to 22 percent of Americans who attend every week.”— Church Attendance of Americans)  Those of us who attend church hear maybe a twenty or thirty minute sermon each week on morality.

Compared to this 30-minute sermon once per week for maybe fifty percent of Americans:

“The average American watches four hours of TV each day (that’s down from about six hours in the 1960s through 1990s by the way). There are about twenty minutes of “non-program material” per hour, which includes ads, promos, news updates, etc. For our purposes, let’s consider all of this commercial matter.  So in four hours, we see eighty minutes of commercials.” — Fred Pagano, Radio, television and Internet advertising producer and director.

This means that the average American hears about 560 minutes of paid advertisements each week or the equivalent of 19 sermons.  These ads exhort you to think of yourself.  You are special but you need more to be more special.  If you don’t buy more, you neighbors will look down on you.  Your friends will surpass you in status.  Your family will stop loving you.  You can be a better smarter person, but you must buy the new Persico Bacon Maker.  You need a new car or maybe even a bigger house.  You should go out to eat more or get a new insurance policy.

smoking

Advertisements are NEVER what you can do for other people or society.  They are ALWAYS inherently selfish.  Is it any wonder that Americans shop till they drop or keep on buying more stuff that is bigger and bigger than they will ever need?   Americans have been and are continually bombarded by Madison Avenue messages that are a form of de facto brainwashing.  Too many Americans today are selfish, self-centered, narcissistic, and exhibit an entitlement mentality.  Economic policy extols benefits that will accrue to society with more buying and more spending.  It is somewhat ironic that the rampant inflation today and the wild economic swings have not been helped one iota by a greedy narcissistic economic policy that ignores any effort to provide a balance Moral Policy.  In addition, Americans are no happier today than they were seventy years ago.

“The vast majority of Americans report being “very” (42%) or “fairly happy” (44%), but the combined 86% is down from 91% the last time Gallup asked about this, in December 2008. It is also the lowest overall percentage happy Gallup has recorded in periodic readings over 71 years and is only the fifth time happiness has dipped below the 90% mark in 23 readings since 1948.” — Happiness Not Quite as Widespread as Usual in the U.S

How do we get a balance between Moral Policy and Economic Policy?

My apologies.  This blog was longer than I thought it would be.  I will address the above question in my next blog.  In the meantime, I would love to hear any comments, questions or ideas that you might have concerning the issues I have raised in this and my previous blog.

All About that Money

13 Mar 2022 2 Comments

by Dr. John Persico Jr. in Uncategorized Tags: , , , , , , , , , , , ,

its all about the money

Because you know it’s all about that money

‘Bout that money, no people

It’s all ’bout that money, ’bout that money, no people

It’s all ’bout that money, ’bout that money, no people

It’s all ’bout that money, ’bout that money (money, money, money, money)

I want to thank Meghan Trainor for the inspiration for my blog this week.  Her song “All About That Bass” is one I have listened to many times.  If you have not heard it, it is a great tune.  But be sure to read the lyrics.  The lyrics tell you something about our current attitudes towards health and beauty.

My second inspiration for this blog came from a recent James Hightower article in his newsletter “The Lowdown, Volume 24, Number 2, February 22, 2022.”  The title of the article was “Gouge Consumers -> and Blame Joe Biden.”  A good friend of mine who I often discuss politics with sent me this article and wanted to know my opinion.  At first glance, I thought it resonated quite well with my series on corporate greed.  “It’s all ‘bout that money.”

Hightower argues that the Republicans want to do anything they can to pin the problems with the inflationary economy on poor Joe Biden.  Joe and the Democrats are (as usual) caught between the proverbial rock and a hard place.  According to Hightower, Joe is being unfairly blamed for an inflationary spiral that is actually caused by corporate greed.  This greed is aided and abetted by Republicans who wine and dine the fat cats so that they can get their coffers filled with campaign contributions come election time.  So far so good right?  “It’s all ‘bout that money.”

However, this scenario has several major flaws in it.  Let me list three erroneous assumptions that I will dissect in this blog.

  1. By rallying the American people, the Democrats can curtail the power of the corporations to control prices and win the votes of the adoring populace.
  2.  Inflation is the major enemy of America, and it must be returned to the Pandora’s box that it somehow escaped from.
  3.  The Democrats (If they control Congress) will be motivated to make systemic changes to the power structure that gird elections in America today. This means making major changes in corporate charters, anti-trust laws and the military industrial complex.

 Let us look at each of these assumptions to see how I think they really will or can play out.

  •  By rallying the American people, the Democrats can curtail the power of the corporations to control prices and win the votes of the adoring populace.

Americans have benefited for many years from an economic structure which traded off low prices for corporate power.  Corporations have since the 1950’s shucked off most of the power restraints that had been imposed during the era of the “Robber Barons.”  Little by little, inch by inch and year by year, corporations gained back more and more power.  At some point, they gained enough power to dictate the laws that they would play the capitalism game by.  Congress stood by as these powerful companies gained this power.  The Citizens United Decision is one manifestation of this situation.  “It’s all ‘bout that money.”

What did the American people get in return?  Simply the ability to shop nonstop.  To celebrate profligacy with the axiom that everything in America must be bigger and bigger.  From car engines to houses to burgers, the impelling religion in America is that more is better, bigger is better.  He or she who has the most toys wins.  It has become a cornerstone of American life to buy, buy and then buy some more.  The damage to the environment has been ignored.  Just as long as there is cheap gas, cheap energy and cheap food, the hell with the climate and the hell with any economic restraint.  “It’s all ‘bout that money.”

Biden will do everything he can to stop gas prices from rising.  But he is powerless to stop them from doing so.  The Republicans are like pigs wallowing in mud.  They can fling accusations everywhere and they will hit their target.  The Democrats are trying to tell people that the higher gas prices are the sacrifice we must make for Ukrainian Freedom.  This is laughable.  Since when have Americans been willing to sacrifice for anything these past fifty or so years?  For the environment?  For the poor?  For minorities?  For Immigrants.”  I should mention the unwillingness of millions of Americans to follow a mask mandate or vaccination requirements to help stem the Corona virus pandemic.  Our country has become so self-centered and narcissistic that the only thing that motivates us is our wallet and how much money we can spend on gas guzzling pick-up trucks.  “It’s all ‘bout that money.”

To be honest, I also own a 2011 Ford F150 pick-up truck.  If gas goes up to twenty dollars a gallon, I will gladly junk the truck and either walk more or travel less.  I realize that for many people this may not be an option.  However, it is also a fact that many pick-up truck owners seldom use the “pick-up” capacity of their trucks or tow anything.  The main purpose for many owners of a pick-up truck is a status symbol.

“The high-spec, luxuriously equipped pickup truck has become a status symbol again, argues Chris Woodyard for USA Today. ‘Driven by cheap fuel, a surging economy and a rising stock market, more buyers are willing to pay as much for a richly appointed truck as they would a fancy Mercedes-Benz or Lexus sedan,’ he writes.”

  • Inflation is the major enemy of America and that it must be returned to the Pandora’s box that it somehow escaped from.

Maintaining a stable and consistent economy is not a one-time deal.  It is a process that involves a continuous juggling act with many different balls.  Some of the balls include, unemployment, interest rates, deficit spending, environmental regulations, wage, and price controls.  There are many other balls, but my point is that no single ball will keep the economy on an even keel.  “It’s all ‘bout that money.”

Economic spirals and economic adjustments are inevitable.  They have been since the beginning of the world.  Complicating the juggling act is that now more than ever we are in a global economy where the actions of many other actors can distort or influence the juggling act.  No one nation has the power to control the global influences that impact all of the world’s economies.  A misguided reliance on military power can to some extent be blamed for the many conflicts that disrupt the lives of average people who simply want to live a good life and have the freedom to choose how they live.  “It’s all ‘bout that money.” 

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Biden will be blamed for the economy since the “blame game” seems to be the major policy element used by both parties.  Their reliance on this blame game shows their contempt for the American people since they assume that most of us are either too stupid or too myopic to understand that the President has very little control over the economy in the short run and to some extent even in the long run.  More important are the influences of the various economic policies and economic philosophies guiding how the juggling will be done.  I can safely say that economists are continually wrong but also continually readjusting their models to better stabilize and adjust the economy.  Just as new variants of the Corona virus seem to be continually emerging, new economic theories are continually being developed to better explain economic realities.  “It’s all ‘bout that money.”

  • The Democrats (If they control congress) will be motivated to make systemic changes to the power structure that gird elections in America today. This means making major changes in corporate charters, anti-trust laws and the military industrial complex.

If past is prologue, I will bet that the Democrats will not do anything major to upset the corporate apple cart that they as much as the Republicans depend on to get elected.  I have not seen Democrats, progressive or not, supporting term limits, redoing corporate laws, corporate charters, monopolies, monopsonies or global trading powers.  For the past fifty years, the Democrats, well intentioned sometimes, have let themselves be out-thought, out-planned and out maneuvered by their slick cousins the Republicans.  The Republicans scream, threaten and berate the Democrats for the exact same behaviors that they exhibit when they are in power.  What do the Democrats do?  They maintain that they are “taking the high road” when their cousins are taking the low road.  “It’s all ‘bout that money.”

The new ten-year budget for the US military was passed after an increase from 2.8 trillion dollars to 3.2 trillion dollars by a bipartisan vote.

“The bill, which angered antiwar progressives who had hoped Democrats’ unified control of Washington would lead to significant cuts in military spending, passed overwhelmingly on an 89-to-10 vote.  The lopsided votes, both in the Senate and the House, which passed the legislation last week, underscored the bipartisan commitment in Congress to spend huge amounts of federal money on defense initiatives at a time when Republicans have balked at spending even a fraction as much on social programs.”

Over the past twenty or so years, every time we have gone to war whether in Iraq, Libya, Yemen or Syria, the Democrats have linked arms with the Republicans as we embark on yet another unsanctioned war to protect American interests.  The only interests I ever see us protecting are our oil interests.  American soldiers are fodder for American industry in the sense that it is their lives and bodies that are sacrificed so that Global corporations can make ever greater profits.  “It’s all ‘bout that money.”

US-PCE-2021-08-27-YOY-

So pardon me please, if I am skeptical of the Democrats or if I see the Democans and Republicats as more or less Tweddle Dee and Tweddle Dum.  Many people have said that we need a third party.  In some ways, we did get a third party.  The Tea Party became the Republican Party and kicked out the old-time Republicans.  We still have two parties.  I think it is high time we start a Progressive Party and leave the lame Democrats to party with their Republican Cousins.  Perhaps there are enough people who want to see major changes in Government and will allow us to get rid of the ever running, ever campaigning, ever raising money, lifetime professional politicians.  “It’s all ‘bout that money.”

“Net worth data compiled by the nonpartisan Center for Responsive Politics for 2018, the most recent year available, shows that almost two-thirds of U.S. senators have a net worth exceeding $1 million. A few of them are exceptionally wealthy.”

Years ago, I voted for the best person regardless of party.  The past eight or so years facing Trump and an increasingly right-wing Republican party, I succumbed to the “Lesser Evil” concept.  I voted for the Democratic candidate regardless of whether or not I thought they would make much of a difference.  In the past, I seldom voted for a Democratic candidate.  I voted for people like Ross Perot and Ralph Nader and many others who were given little or no chance of getting elected.  I was told that “I threw my vote away.”  Sad to say, I used the same argument on many friends as I encouraged them to vote for Hillary or Biden.  I am back to the “old” John. 

It’s all ’bout that money, ’bout that money, no people

It’s all ’bout that money, ’bout that money, no people

It’s all ’bout that money, ’bout that money (money, money, money, money)

PS:

Why is it that Politicians keep screaming about tax cuts and the need to cut taxes but Tax Revenues by State (some exceptions) keep growing?

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Taking It to Extremes – Part 3 of 5 – Society versus the Economy

27 Nov 2020 5 Comments

by Dr. John Persico Jr. in Uncategorized Tags: , , , , , , , , , ,

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Introduction: (Skip if you have read Part 1)

A number of years ago, I wrote an article about the famous “Golden Mean” of Greek philosophy.  The mean was basically a rule that said the best way of living is to balance extremes.  Another way of looking at what this rule implies is that evil or bad things happen when we over do something.  We need to take all things in moderation.  Thus, drugs, smoking, guns, watching TV etc., are not evil or bad in themselves but when we take them to extremes, they became dangerous and counterproductive.

Life is an ongoing struggle to find our proper balance.  However, it may never be a question of equal balance because the proper balance can never be static.  There are many dimensions or polarities in life where it is not really a matter of moderation or balance but more a matter of dynamically imposing a temporary order between two extremes.  The concept of Hegelian Dialectics comes to my mind as an aide in thinking about this process.

Dialectical thinking can be described as: “The ability to view issues from multiple perspectives and to arrive at the most economical and reasonable reconciliation of seemingly contradictory information and postures.”  This is a much more complex process than simply balancing extremes.  The more I thought about it the more I decided to add a corollary to the Greek Rule.  Since I think time has easily proved the value of the Golden Mean, a corollary by definition is a proposition that follows from and is appended to one already proved.  My corollary is as follows:

John’s Corollary:

Anytime, one concept in a set of opposing concepts is allowed to dominate the other concept, extreme dysfunction will result.

I want to discuss this more by using five pairs of concepts that I think are critical to our world today.  I want to show you how the distortion created by proponents of each concept is dangerous to life as we know it.  I do not use the word dangerous loosely or frivolously or for effect.  The battle between these ideas is destroying life as we know it on this planet.   The proponents of each side of these polarities seek to destroy the proponents on the other side.

Rather than looking at things from a systems perspective and trying to dynamically adjust the system, opponents are driven to allow one idea to dominate to the exclusion of the other idea.  Witness the name calling between conservatives and liberals today.  Each side demonizes the other side and assumes God is on their side and Satan is on the other side. Liberals are evil to conservatives and conservatives are evil to liberals.

Here are the five pairs of concepts we will look at in the next few weeks.  This week we will look at number three on my list.  We have already discussed the “efficiency versus effectiveness” dimension in part one of this blog series and the “growth versus development” dimension in part two.

  1. Efficiency versus Effectiveness
  2. Growth versus Development
  3. Society versus the Economy
  4. Conservative versus Liberal
  5. Rights of the Individual versus Rights of the Group
  1. Society versus the Economy:

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Today we are faced with an epic pandemic.  This threat has led to a battle between those who want to protect the economy and those for whom society is more important.  This is not the first time such a battle has been waged.  Four thousand years ago Moses battled Ramses over the same issue.  Pharaoh Ramses had cheap labor with the Israelites.  The Egyptian economy was purring along.  Pharaoh did not want to change anything.  The Israelites were not so happy.  Their society was in chaos as it was being slowly but inevitably destroyed by Egyptian culture.  A few hundred more years and there would be no Israelites.  A leader named Moses decided his people must leave Egypt.  He first tried to convince Ramses to simply “let my people go.”  Ramses would have none of this idea.  He had a good thing going with cheap labor and he was not about to rock the boat.

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Moses decided to play hard ball.  He brought a plague to hurt the Egyptians.  Ramses was aggrieved and decided to allow the Israelites to leave.  However, at the last-minute Ramses changed his mind.  It was a question of what would be good for the economy or what would be good for the Israelites.  The economy won out.  Moses brought another plague and then another.  Each time, Ramses would acquiesce and then at the last minute he would change his mind.  He finally let the Israelites leave but once they were “on the road” he had his last-minute regrets again and sent his army to bring them back.  The rest is (as they say) “history.”

Fast forward to the world in 2020.  A pandemic more widespread and as lethal as any in history has struck the world.  The battle is again engaged between leaders like Donald Trump who care more about the economy and leaders who care more about society.  A false dichotomy if ever there was one.  Under John’s corollary, taking either position and ignoring the other position can and will only result in a destruction of both.  You cannot have a society without an economy, and you can not have an economy without a society.  But what is the purpose of each?  What is a society and what is an economy?

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A society is a group of people, perhaps a tribe, a nation, or a family that choose to live together to share mutual resources.  People that live together beget relationships that involve feelings of community that grow out of common concerns.  These feelings range from love to sometimes hate.  There is a mutual interdependence in a society that implies the good of the society is based on the good of the individual and vice versa.  Societies develop a strong bond based on this mutual interdependence.

An economy is a means of providing resources for a society.  It is the means towards an end.  The end being the perpetuity of the society.  No society can exist without an economy.  Social economies have existed since the cave people and at one point simply involved people hunting and gathering together.  In modern times, we see economies based on a much more complex web of “hunting and gathering.”  The hunting and gathering in a modern society may involve Internet hunting or gathering crops at the local supermarket.

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A supply chain exists in modern societies based on what economists’ call “comparative advantage.”  This involves multiple components of a supply chain each doing what they do best.  Farmers raise dairy cattle.  Dairies make milk.  Trucking companies transfer the milk.  Retail stores sell the milk and other dairy products.  Consumers work at some part of a supply chain (there are thousands of supply chains that exist in the world today) to earn money to purchase goods and services sold at one or more other supply chains.  This is a simple version of an economy.  The bottom line is that in the 21st Century, no jobs mean no money.  No money means no ability to purchase goods and services.  Ergo, you starve to death or rely on the charity of your neighbors in your society.

Since the Covid-19 Pandemic began, leaders seem to have chosen sides in a fruitless and ignorant battle between “society” and the “economy.”  Over and over again we have seen leaders propose one extreme position or the other.  “We must shut everything down or we must open everything up!”  In the USA, there has been endless wrangling over a second stimulus bill.  Instead of intelligently looking at the balance between society and the economy, both Democrats and Republicans have used the crisis to further their own goals and agendas.

coronavirus

This lack of leadership of both parties directly dovetails with the lack of leadership set by the former President of the United States.  A man whose own agenda was based on keeping an economy going to further his chances for reelection.  For a man who scorned Marxism and socialism, he realized that the economy always plays a major role in the life of the common person.  He thought that if the economy was going strong, people would overlook the thousands of deaths of their friends and neighbors.  He created a narrative that the entire pandemic was “false.”  The deaths were false.  He claimed falsely that the hospitals were reporting everything as Covid-19 deaths when they were actually due to something else.  I personally talked to many Trump supporters who told me that doctors and hospitals did this because the reimbursement rates were higher for deaths due to Covid-19 than for other causes.

trump on virus magic

I served four years in the United States Air Force.  I learned while in the military that a commander, whether of a battalion, a squadron or a platoon has a major responsibility to keep his soldiers as safe as possible.  Any military leader who recklessly and needlessly puts his or her soldiers in harm’s way will be tried and court martialed for “dereliction” of duty. Following are two examples from a Marine publication titled: “Leadership, Ethics and Law of War Discussion Guide for Marines” by Marine Corps University, Lejeune Leadership (2008)

“The platoon commander was charged with violations of Article 92 (Dereliction of Duty), Article 109 (Willful and wrongful damage to an automobile), Article 118 (Premeditated murder) and Article 133 (Willful and wrongful failure to safeguard the detainees) of the Uniform Code of Military Justice on 1 Feb 2005.”

“1st Lt Lawson was charged with dereliction of duty for failing to account for LCpl Rother’s welfare by posting him alone as a road guide. He was also charged with disobeying an order for two violations: failing to post guides in pairs as Judgment Case Study 5 Dependability Proficiency as directed and failing to provide a roster of the guides to the logistics officer before they were posted.”

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We have a former President who claims to be the Commander in Chief, yet he violated every canon of military law by recklessly and needlessly putting the entire US population in harm’s way by his disregard for the lives of these people.  His actions resulted in the deaths of thousands and yet I hear no outcry for justice.  I hear no strong voices noting his responsibility for these thousands of deaths.  As the primary person responsible for politicizing this Pandemic, he must be held accountable for these deaths.  The liars and sycophants who supported him must also be held accountable.

I blame the Democrats for their continuing stupidity to face reality.  I blame the Republicans for their lack of integrity and for their greed.  Both parties have made the pandemic in the USA much worse than it needed to be.  The lack of courage on one side and the greed on the other side created a perfect storm for the Covid-19 Virus to spread.  As I speak, we are witnessing a spike and increase in cases that seems beyond belief.

online-school-socialization

Part of the reason for the increase in Corvid-10 cases has been the rush by both parties to open the schools.  So-called well-meaning educators and health experts even supported this rush.  On one side it was the belief that “day care” was needed to get the economy going again and on the other side, it was the need for teachers and schools to regain income.  Both sides used such flimsy excuses as “students need socializing” and would not get it at home or “students would fall behind” if they did not have direct contact with teachers.  No one ever defined what “socializing” children means or how schools accomplish this.  As for students falling behind, were they talking about their ability to take these ridiculous standardized state tests which add little or nothing to a student’s ability to think and reason for themselves?   No one ever defined what these children would be “falling behind.”

I realize that I have digressed from my original thesis.  To sum it up, a failure to balance the needs of both the society and the economy has led to disastrous results.  Add to this, the overall lack of leadership by the US President and both parties and we have a crisis that has never before been witnessed in the USA.  Some of these same problems beset the rest of the world.  The stupidity we have seen is not simply a manifestation of American ignorance, greed, and short-sightedness.  The world abounds in bad leadership.  Will we learn anything from our mistakes?  Will we admit that we were so polarized that neither side would listen to the other side?  Will we make progress under a new President?  Only time will tell.

It’s the Economy Stupid! The Five Myths of Capitalism – Part 2 of 5

25 Apr 2020 8 Comments

by Dr. John Persico Jr. in Uncategorized Tags: , , , , , , , , , , ,

quote-the-liberty-of-a-democracy-is-not-safe-if-the-people-tolerated-the-growth-of-private-franklin-d-roosevelt-36-65-91

In my last blog, I asserted that unless we change our attitudes and policies regarding Corporate Capitalism, it will destroy our country, our way of life, our freedoms, and our environment.  Furthermore, we will undoubtedly take some of the rest of the world along with us.  This is a serious accusation and one I do not take lightly.  I have been a business educator in higher education and a management consultant to some of the top corporations in the world.  My opinion is not based on theory or just observations.  It is based on the in-depth work I did with over 32 companies during the time I was actively consulting.  There are many good people working in corporate America but as Dr. Deming once said “You put a good person in a bad system and the system will win every time.  Myth #2 is:

  1. Corporations are self-regulating entities for the common good

Laissez-Faire-Economics

Let me explain what I mean by this.  There is a doctrine or concept in economics called “laissez faire.”  Laissez faire is a belief that business and the marketplace works best without the interference of any government agencies.  It implies that there is an invisible hand which controls the dynamics of markets.  This invisible hand ensures that markets reach some kind of an equilibrium.   One example of this is the “law of supply and demand.”  When demand is high, prices will be high, and supplies will be low.  Not everyone who wants the product will be able to find them or afford them.  Producers will then create more of the product to meet demand.  As product quantity rises, prices fall until an equilibrium price is reached that allows everyone who wants the product to purchase the product at a price that is fair to them and allows the manufacturers to make a profit.  Governments can intervene (as they have done) by price controls or subsidies.  Such efforts by the government are generally felt to destroy the inherent equilibrium of the market.

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government-warning-poster-mock1_1024x1024People who believe in the idea of “laissez faire” want us to think that corporations can regulate themselves and do a better job of it then when government interferes with rules, policies, laws and regulations.  Business leaders do their best to hype this belief and to create the idea that government run organizations are always less efficient than those run by private entities. Conservatives and Republicans subscribe to this belief and spend a great deal of time and effort trying to thwart those who disagree.

The conservative mantra is that “no government is good government.”  In the past forty or so years, there has been a concerted effort by conservative politicians to eliminate government regulations and to allow private for-profit business to take over such services as public education, wastewater treatment plants, social security, Medicare, and prisons.  The argument is always the same “private business can do it more cost effectively than government.”

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Here is the catch or hypocrisy in the above argument.  It is only heard when businesses can easily make a profit.  When there is an easy market with lots of potential and lots of potential customers, business leaders want the government to stay out of the way.  However, when things turn sour and profits turn to losses or when the loss potential is high, business then want the government to step in.   The mantra that “No government is good government” soon turns to “We need help, or we will have to declare bankruptcy.”  Suddenly, the government that has been spurned and criticized for being too intrusive and for screwing up the equilibrium of the market is now called upon to help save private companies.  Here are some recent headlines that highlight this hypocrisy:

  • Airlines will receive billions of dollars in grants and loans to pay flight attendants, pilots, and other employees
  • Boeing still expects to get some help from the federal government
  • Trump administration eyes paying oil companies to keep crude in the ground
  • Coronavirus Stimulus Shows Big Government is Back
  • Washington is gripped in a bailout frenzy. Nearly every industry is sending its lobbyists to ask Congress for handouts
  • The coal industry wants permission to stop making payments to miners with black lung disease.
  • The hotel industry alone has requested a $150 billion bailout

For a complete list of companies or industries that have received government bailouts going back a number of years see ProPublica Bailout Tracker.  There are almost a thousand major corporations on this list.

During the recession of 2007 and 2008 government bailouts in the form of loans and outright grants were given to a wide range of American companies.  Many times the argument was heard that “They are too big to fail.”  Some Conservatives actually opposed these bailouts and some Democrats were in favor of them.

Now understand this please.  I am not necessarily in favor of letting all businesses fail.  The Austrian school of Economics would argue in favor of letting them fail.  They call this  “Creative Destruction.”

“According to Schumpeter (A leader in the school of Austrian Economics), the “gale of creative destruction” describes the “process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one”.  — Wikipedia

“Creative destruction is a process through which something new brings about the demise of whatever existed before it.  Old industries and firms, which are no longer profitable, close down enabling the resources (capital and labour) to move into more productive processes.” — Economics Help

BusinessCycle-Waves-of-Creative-Destruction

In other words, if Boeing and United Air and General Motors and all the other companies that want a bailout can’t hack it, them let them fail.  Let them declare bankruptcy and get out of the way so new more productive and more efficient firms can enter the marketplace.  This is a little like the Theory of Evolution in which the weaker species die out and the stronger species survive.   Thus, company bankruptcies and jobs lost will in the long run result in a more efficient industry.

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I am not against bailing some companies out.  The one thing I have learned in my years on this earth is that there are always exceptions to every rule.  There may be times when we should let businesses fail and there may be times to help them survive a rough patch.  I have no problems with the foregoing thoughts.  What I do have a problem with is the laissez faire argument that ends with “Leave us alone when we are making heaps of money but help us out when things turn bad.”  This is a deceitful and duplicitous argument which has led to an extreme gullibility on the part of many Americans.  Too many Americans now believe that “Government is the Problem” to quote Ronald Reagan.

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Here is a short list of how private business benefits from Government:

  • Copyright protection
  • Trademark protection
  • Patent Rights
  • Tax breaks for siting a new business
  • Police protection
  • Fire protection
  • Military protection for overseas business
  • Research and development studies
  • Mineral rights
  • Right of ways
  • Land ownership at sometimes exceptionally low prices
  • Tax concessions, such as exemptions, credits, or deferrals
  • Assumption of risk, such as loan guarantees.
  • Government procurement policies that pay more than the free-market price
  • Stock purchases that keep a company’s stock price higher than market levels
  • Subsidies for externalities that could not be recovered at competitive costs
  • Tariff protections
  • Subsidies for farmers, oil companies and many others
  • Job training programs for workers
  • Education programs for workers 

https___blogs-images.forbes.com_adamandrzejewski_files_2018_08_Forbes_USFarmRecipients-2Corporations are liars.  They say they want to live in a laissez faire environment.  They say they want fewer government regulations.  They say the government only interferes and adds no value to their products.  They say they don’t want the government telling them what to do.  The lie is that they do want Government involvement.  They want the government to bail them out of a situation when they will suffer losses or see lower profit margins.  They want the government to give them preferred bankruptcy conditions.  They want the government to side with them in labor-management disputes.  They want the government to help them out with all of the items on my list above.  Do some research.  Find out how many companies and industries get government handouts.  Check out Government Subsidies.

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Thus, the myth that organizations are self-regulating is the myth of the impossible.  You might as well believe in a perpetual motion machine.  It does not exist because it is impossible.  The Second Law of Thermodynamics states: “That there is a natural tendency of any isolated system to degenerate into a more disordered state.”  Thus any entity or organism or system needs energy from outside in order to maintain a state of equilibrium.  If the energy is less than needed, the entity will eventually degrade into a state of maximum entropy or disorder.”  For instance, when we die, we will degrade into dust.  If you do not periodically clean and organize your home, it will degrade into a garbage bin.  You cannot expect any system to maintain a steady state without input from outside.

The bottom line is that no corporation including illegal ones like drug cartels and the mafia can exist without independent inputs from outside their system.  Corporations are dependent on governments for their very survival.  Anyone who thinks that Corporate Capitalism could survive (much less thrive) without the input of Government is either stupid, naïve, or trying to sell you the Brooklyn Bridge.  It is about time for politicians and Americans to realize that business needs government and government needs business.

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Enough with these moronic arguments made by right wing protestors to do away with government.  A capitalistic economy without a government to monitor its excesses and to protect it from the vagaries of the marketplace would soon evolve into a system of chaos, lawlessness and monopolies that would be totally dysfunctional and destructive. The present emphasis on deregulation, privatization and less government has been taken too far and with too little appreciation of the need for government balance and oversight.  If we continue down this road, we will destroy our country and any vestige of the ideals of a free marketplace.  There is no such thing as free.  A free market requires policies, regulations, and rules.  There is no such thing as an economic system without some form of government to oversee, watch out for and protect its lawful interests.  Even illegal systems court the interests of governments albeit with bribes and threats rather than lobbyists and special interest groups.

Some of you might find the following article interesting.  It was published several years ago in the Harvard Business Review.

Does Privatization Serve the Public Interest? by John B. Goodman and Gary W. Loveman from the November-December 1991 Issue of Harvard Business Review.