Archive for the ‘Economics’ Category
From Greedy Takers to Self-Denying Givers: a Sermon for Shepherd by the Sea, Gualala, California November 11, 2012
Shepherd by the Sea, Gualala, California
November 11, 2012
1 Kings 17:8-16 Psalm 146 Hebrews 9: 24-28 Mark 12:38-44
From Greedy Takers to Self-Denying Givers
The lessons for today are about stewardship. The secular principle of psychology goes: self-realization by self-acceptance. That can keep a person quite self-absorbed. The Christian principle goes: self-acceptance for the sake of self-giving. Our self-acceptance becomes possible, because as unlovable and unacceptable as we are, God in Christ has loved and accepted us and given us all things in heaven and earth as spiritual gifts and blessings. What we therefore receive from God, as givers, we share with others. With that a circulation of grace continues that brings life, the life of Christ to our church, our community, our society, our whole country and world.
Look at our first story! King Ahab had brought the fertility worship of Baal into Israel. With that an angry Elijah prophesied three years of drought and famine in the land. Probably to escape the hand of Ahab, he fled to Sarephath, a village just south of Sidon, where God had commanded a widow to nourish him.
I wrote a children’s song about the story. It’s called, “God Will Provide.”
Elijah met the widow
Picking up sticks
upon her path.
“Bring me some water,”
“and don’t forget
to bake some bread.”
“The little I’ve left
will make one bread;
Then my son and I
will soon be dead.”
“Have some faith
and put God first
and God will fill
your hunger and thirst.”
“Your flour and oil
will never run out,
that’s what sharing
is all about.”
never have enough,
and those who share
have more to spare.
Those with a lot,
will always want more.
Those with a little
will help the poor.
Seek ye first
the Kingdom Above
and God will provide you
with food of love.
The food of love
Will never run out
Because that’s what
Sharing’s all about!
The Widow of Zarephath was much like the widow who offered her two mites in the temple. A little flour and oil is all she had and the prophet wanted her to give it to him, requiring her to have faith, because he promised that God would see to it that her flour and oil would never run out. Death by starvation was staring her in the face and what was harder for her than her own death, was that of her son. Giving is the test of our faith. It is a tangible way to see if our faith is real or not.
The surprising outcome of her giving was not only being sustained throughout the drought and famine, but her son suddenly died and Elijah resuscitated him and turned the utter tragedy of her life into joyful motherhood once again.
Giving is healthy self-denial and dying to oneself makes the wonder of life and the fullness of God’s grace and glory become revealed to us in the law of love that includes the very least, the least of these.
How else can you explain the way Jesus sees the widow throwing in two mites and showing that she gave more than all the wealthy and bountiful offerings pouring into the treasury of the temple? God’s blessings are involved and because of them, a little becomes a lot and a lot can become a little. The background of power and prestige can make what appears to be giving into taking, so we should not be fooled by appearances. What the rich gave was no sacrifice at all, while the widow did not know where her next meal was coming from. In those days kings provided for widows because they had no property or income and were reduced to begging and gathering sticks like the widow of Sarephath. She really gave more than the widow Jesus pointed out, because she gave the prophet her last meal, which separated her and her son from starvation.
Jesus gave us even more, as Hebrews points out. He gave his life in his once and for all sacrifice. Like Luther says, he purchased us not with silver and gold or money, but with his own precious blood. God had to look at us, who are so angry and ungrateful and ask, “What do you want, blood?” And in our sinful and selfish way, we said, “Yes.” Then Jesus went to the cross and shed his blood for us, so that we might start coming alive to God and alive to our neighbors and those in need and continue God’s circulation of grace, which brings sustainability. The food of love never runs out. We share and the deeper our faith goes, the more our faith increases, the more we can give and share and in consequence, receive God’s blessings.
Our Psalm says, “Don’t put your trust in rulers; in mortals, in whom there is no help.” The systems and policies that administrations put into place are important, but the real flow of the circulation of grace in our lives depends upon our faith in God.
For example, one grain of corn placed and planted into the ground, dies. Notice that it is sacrificed because it is not eaten. Out of it a ten foot plant grows with six to eight ears of corn that can be husked with many hundreds of kernels of corn on each ear. Jesus would say, “Those who have ears to hear, let them hear!”
So whether we take the outcome of the Obama and Romney campaigns as good news or bad news, the really good news is the outcome of the campaign of our Lord Jesus Christ. But we also know that systems are important and bring with them a great deal of injustice, so greater approximations of justice are called for. The Gospel of Jesus Christ makes clear that widows, orphans, strangers, and the poor need to be protected from the voracious, who try to swallow up their houses. I wonder about reverse mortgages, sometimes. We should be wary, because the elderly are vulnerable.
What God requires of us is to become people who deny ourselves and die to ourselves in order to become givers and not takers.
Jesus was also comparing the joyful sacrifice of the widow with the voracious appetite of the greedy hypocritical scribes. I would like to point to other people and call them greedy, but then I do a double-take and look at myself. Why does my heart sink and why do I get perturbed when a beggar approaches me? I give him a dollar. Then I’ll turn around and pay fifty to sixty dollars on a meal for my wife and me at a restaurant.
When I give, it is so hard on me and I measure it so carefully. When I use money for myself, I often don’t even consider the limit. I’ll put thousands into the stock market, where I’ve lost them, thinking they would make me more money. If I had only given it away, I’d have some real treasure in heaven.
Selfish people never have enough. We always want more. When we can deny ourselves, we can share and even have more to spare.
I know a woman who was on welfare, back when I ministered in Coney Island. Without pay, she would clean the whole church and then decorate the altar so that everyone could see how much she loved the church. Her son worked for the telephone company, was in the union, and received a high salary. He would come to his mother for help when his money ran out. I kid you not!
So let’s hear Jesus out. For it we have to identify with the scribes. Although I want to, it would be hard for me to identify with that poor widow, in any case. The scribes were different because they could read and write, while the common people in those days couldn’t. They were professional and had more knowledge and power and they used it to their own advantage. Our self-interest is naturally stronger than our concern for other folks and helping them. So like with us, their greed went unchecked. Acting religiously, they were devouring widow’s houses.
The more things change, the more they stay the same. I remember in Coney Island in the Eighties, in the time under Ronald Reagan, Mario Cuomo, and Mayor Koch, how homelessness suddenly spread from the Bowery, where it had been notoriously contained for a long time, yes, now spread throughout the whole city and then throughout all the cities of America. That was when homelessness began. Here’s one reason: There were many S.R.O.’s in Manhattan and the other boroughs. Single room occupancies, where large numbers of the poor lived. The owners of these buildings wanted to convert them into condominiums. They dumped all the people into the street, renovated, and sold each apartment, which had been a rental, for hundreds of thousands of dollars, charging a monthly maintenance fee almost as high as the previous rent. Their real estate now brought in mega-bucks, but the homes of millions of people were devoured in that greed. Mayor Koch blamed the churches for being so hard hearted that we did not take in the homeless! Meanwhile their policies were sending countless people into the street.
Then we watched hurricane Katrina take out almost all the houses of the great City of New Orleans. Just a little later, the deluge of greed from Wall Street infected what used to be called, “real estate.” Everyone wanted equity income on their houses and were speculating by flipping them for profit and the banks were putting questionable mortgages into speculative derivatives and millions of houses went under water. Being “under water” was not a figure of speech for New Orleans, but being under water was just as real for the millions of people, who have been losing their homes by foreclosures each year since the Wall Street debacle.
It is our greed that has devoured all those houses across our country. We learned to live with the inhumane condition of homelessness. What goes around comes around. From homelessness going across the country, it has gone to the disaster in New Orleans, to the millions who have lost their homes in this great recession, to the new disasters now striking us in lower Manhattan, Statin Island, and the New Jersey shore. When we’re under one blanket, it’s not right to pull it over ourselves and expose other to the cold.
Perhaps unchecked human greed and selfishness can be compared with the fertility religion of Baal that Elijah fought, where parents would commit human sacrifice of their children to assure them of prosperity. Because of his protest, Elijah had to leave Israel quickly to escape the wrath of Ahab.
Jesus is the way, the truth, and the life. The voracious appetite of our greed needs to be checked by self-denial and dying to ourselves so that we come alive to God and alive to the love and sharing and giving of the new life in Christ. Our conversion, because of God’s acceptance of us, changes us from takers into givers.
Giving is really a test of our faith. In baptism, not our house, but we ourselves go under water, in self-denial, in dying to ourselves, dying to greed and all the other vices and sins, so that God lifts us up out of the water into our new selves, into a wonderful world filled with love and compassion, sharing and self-giving. Then grace will abound even on a deeper level than just giving money.
Money, of course, can really be our secret god that we believe in and cling to for dear life. What we discover is that it robs us of our life and of the human value of our lives. When we cling to and trust in the one true God, then we check our greed, we deny ourselves, we die to ourselves, and to sin, our separation from God, who even gave his only Son, so that we would not perish but have everlasting and abundant life.
After baptism we find ourselves in our new selves and we enter the wonderful new world that Jesus proclaimed, where sharing and self-giving become the new order of the day, where the first come last and the last come first. This new world becomes filled by grace and truth. The grace of God begins circulating amongst us, and we come alive receiving a world full of God’s gifts and blessings. And new houses will be built first for the poor and needy and then the millions in the middle class, who have lost them. Homelessness will recede until it becomes contained in the Bowery once more and everyone will figure out how addictions and insanity can be healed to bring shelters to them as well. The greed for the almighty dollar will decrease and faith in God will increase, because everyone will experience the self-giving and sharing that real faith brings. Then widows and orphans, the poor and the strangers in our land will lead us further into the life of giving and sharing that mark the children of God. Amen.
Blogging my thoughts:
“Under Chinese, a Greek Port Thrives: An Overhaul in Piraeus May Be a Model of What Greece Must Aspire To.” (New York Times, Business Day, Thursday, Oct, 11, 2012, pages B1 and B7.)
Reading this article today made me realize that the Third World-ization of the Greek workers (and of course our own) was going on. The Greeks leased half of the Port of Piraeus to the Chinese and kept the other half for themselves. They sold the container freight business to the Chinese and they kept the other half, a third of which is more lucrative passenger traffic with the rest for containers. The state-run port which had been languishing has now seen its Chinese portion of the port flourish. They have hired 1,000 employees, while the Greek side has hired only 800. The Chinese company Cosco paid Greece $500 million for their half of the port and made a profit of $6.47 million on sales of $94.2 million, while plowing a great deal of their profit into the expansion of their side of the port, which will make it into one of the 20 largest container ports in the world. The Greek side is also trying to modernize in its own way, but previously they have had three debilitating labor union strikes.
Some of the Greek long-shore men and dock workers made $181,000 a year with overtime, while the workers on the Chinese side, as if they are in another country, make less than $23,000 per year. The union demands that nine people work a gantry crane, while the Chinese company uses only four. Way up in the cab of the crane, 49 feet in the air , should the heater break down, even if the operator’s hands become stiff from the cold, the worker is expected to continue working, even if a life threatening accident could result. One Greek worker came down to warm his hands and was fired.
No use repeating every detail in this article. If some union workers with overtime were receiving $181,000 a year, the management was certainly getting many times that sum in salaries. It would be interesting to know what the Chinese management and CEO was receiving in salary compared to the workers who “received typically less than $23,000.” The Cosco CEO noted that thousands of workers were applying to Cosco for jobs, even though “they work 24-7, 365 days a year.”
“Casting a glance at the Greek side, [the CEO] added, ‘Maybe in other terminals people work less. In any case, if it’s so bad, thousands of people would not be applying to work for Cosco.’”
What he fails to mention is that 24% of Greek workers are unemployed and workers are desperate and powerless. On the Greek side, the union agreed to a 20% pay cut.
The point of my rehearsing these economic facts is that the whole society ought to share in the lowering of a standard of living and not only the workers. There is a painful conversion of the worker taking place, in which hard work will not bring in a living wage, while the management and owners multiply their profits many-fold because of their saving on labor. Now the Greek European workers are not merely competing with Third World workers of other countries, but those workers right in their own country working for Chinese wages. I’m sure that the Chinese workers in China make even less. But remember that those that own the corporations and their management are pocketing huge profits that come out of the pockets of workers, who cannot compete with Third world workers. Huge profits accrue when corporations can pay them 23 cents an hour, when they had to pay the European worker $23 an hour.
Unions were always a stop gap fighting against that kind of exploitation and sometimes what they fought for represented all workers: week-ends off, time and a half for over-time, child labor laws, paid holidays, sick leave, etc. Now unions cannot even help the unionized, because in their dis-empowerment, they split the labor force here and cannot compete with global capital’s exploitation of divided and immobile local and national labor forces. Capital has no trouble crossing borders, while workers are arrested for illegal entry.
Third World workers ought to have jobs with living wages and benefits just like our workers. That huge profit from the wage differential between 23 cents and $23 an hour that goes into the pockets of the super-wealthy should be taxed for the sake of ameliorating the decrease in the western workers’ standard of living and another portion should be added to the Third World workers’ income in order to improve their wages and the conditions in which they work. They should not have to live in barracks away from their wives and children. Then they would also not be locked up in factories as if in prisons, being burned to death when fires break out. Fortunes should not be made by visiting misfortune on so many people. In a time of recession, in a time of war, all should have to sacrifice and not just the poor workers. During a war, of course, soldiers sacrifice their lives, while munitions and armament producers make a killing!
Announcement of Scholardarity’s First Essay Contest
Peter Krey and Jason Zarri, co-founders of Scholardarity, are pleased to announce that Scholardarity is now accepting submissions for its first essay contest. The cost of entering the contest is $10.00. There will be prizes for the first, second, and third place winners. The contestant who wins first place will receive at least $200.00, the contestant who wins second place will receive at least $100.00, and the contestant who wins third place will receive at least $50.00; we say “at least” because the money received from the entrance fees will form a “pot”, which will be divided amongst the three winners: 50% of the pot for first place, 25% of the pot for second place, and 10% of the pot for third place.
There are two topics to choose from:
(1) What role should the government play in a society and what is the proper relation of the government and economy in order to best serve the common good? Would new approaches to the discipline of economics—for example, the evolutionary or complexity economics of Eric Beinhocker or other approaches, e.g., the social economics of Anghel Rugina, contribute to the well-being of society?
(2) What is the proper relationship between government and religion in a democracy? What are the effects, positive and/or negative, of government on religion, of religion on government, or of both on society as a whole? Essays may include the pros and cons of the separation of church and state, governmental restrictions on certain religious practices, as well as restrictions placed on a religion, such as wanting to impose its will on the whole society.
There will be two rounds: In Round 1, contestants will submit a proposal of about 500 words in which they give an outline for a paper on their selected topic. From these proposals, twenty will be selected as finalists to enter Round 2. The finalists will write a paper based on their proposal, of about 2,000 words in length. All twenty of the finalists’ essays will be published on Scholardarity.
The deadline for submissions for Round 1 is November 15th, and the deadline for submissions for Round 2 is January 15th
To enter the contest, go to Scholardarity’s Contest Page to enter, then send your proposal to
email@example.com, along with your name, address, and any other relevant contact information.
We look forward to hearing from you!
Blogging my thoughts about the Government’s Role in the Economy:
My economics professor, D’Anghel N. Rugina (1913-2008), taught us students about economic models. He called a free economy that affirmed private property and had a government of limited powers, Model alpha (Mα) and a completely controlled and planned economy that prohibited private property, whose government had unlimited powers, Model omega (Mω). He sometimes applied his models to the government, society, and the economy, which, according to him, are in an organic relationship. He noted that in France the society could be described as Mα 95% and ω 5%, the economy as Mα 45% and ω 55%, and the government as Mα 30% and ω 70%. (Because their models did not match there was friction. In the long run, the models of the government, economy, and society have to come close.) Narrowing the focus to the economy, however, a purely free one was theoretically 100% Mα and 0% Mω and Rugina described our mixed economy as more or less 50% Mα and 50% Mω. (To fix the historical time period, I took his course in economics in Northeastern University fifty years ago in the early sixties.)
Coming from a horrible experience with communism in Romania, Rugina identified that system or model with slavery and the Mα economy with freedom. In any case, he argued that the Mα economy sat on the base of a stable triangle, while that economy, which was completely centralized, planned, and controlled, i.e. Mω, sat on the point of the triangle making it completely unstable.
In Mα the people had the freedom of choice, could take initiative to start a business, and participate in the competition of the market place. In Mω the government had centralized and unlimited control over a planned economy.
Meanwhile it is important that the percentage of the Mα increase and that of the Mω decrease. Rugina noted that before World War I, no classical economist used the term capitalist for a free society that championed the free markets with limited government. When the term “capitalism” was first used it was pejorative connoting depression and over-production.
Today with as mixed an economy as ever, it is still necessary to champion the gradual increase of the Mα percentage and the decrease of the ω percentage. In the words of Rugina, to have full and natural stability, we must bring the system closer to Mα. But that can only proceed by greater approximations and not by giant disruptive steps, e.g., going back to the gold standard for money as Ron Paul would have us do. It is important that the government not interfere in our economy, but then we must also realize that if we devise policies as if we have Mα 100% and ω 0%, then we are being completely ideological. Rugina did not consider the anti-trust laws government interference, because as he says in an important essay in the Economist, capitalism has to be regulated with all the instruments, dials, and gauges like in the cock-pit of an airplane for it to fly.
Because Rugina was a classical economist, he considered John Maynard Keynes (1883-1946) a Marxist masquerading as a liberal economist, but he felt that Keynes’ theories applied to economies that were in a slump, which could describe ours right now. He noted, however, that despite Keynsian economic policies, there were still nine to ten million workers unemployed when World War II broke out, and it was the war and not the administration of F.D.R. that finally solved the unemployment problem.
Importantly, Rugina noted that the government had a legitimate role in defense and justice, as well as doing what the private sector could not provide for the people.
Thus it is necessary to see that ideological policies, whether from the right or the left, are not helpful in the reality of our mixed economy. It follows that when the government determines that it is unjust to have 45 million of its citizens uncovered by health insurance, while an insurer strikes 5 million from its rolls to become more profitable, then it is legitimate for the government to provide that service. We might call that socialism, but it takes place where the free markets could not find a profitable way to cover a basic need of the citizens of our society.
While clear and right answers for a pure model of an economy are possible, such clear policies are not possible in our 50% Mα and 50% Mω economy. I believe that in our society, which has a government of limited powers, there are places where a limited socialism is appropriate and should not be avoided, because there are places where capitalism is inappropriate. If body organs for transplants were for sale under the law of supply and demand, the rich would live and the poor would die. The important thing is to distinguish where capitalism is appropriate and where it is not.
Rugina notes that “the power of a private monopoly in a capitalistic society is limited.” He further said, “Pure monopoly in a mixed economy cannot be equated with Mω. It does not have that same absolute power. Mω qualified is a centrally controlled and planned economy.” This insight should make those who oppose the Affordable Health Care Act less anxious. Even though it represents the government entering a sector of our economy, it is not one that the private sector has dealt with adequately and justly. First of all, attaching health care insurance to employment with good benefits fails to cover people in times of high unemployment. Secondly, there is the progressive unwillingness of employers to provide such an expensive “fringe” benefit. When the supply of labor is so much greater than the demand, employers can hire cheap labor. What ground does a worker have to stand on when three others are standing in line for his or her job?
Let’s look at the electric utility, which is a government regulated monopoly, and socialist in the restricted sense that it is in a capitalist society and not an Mω centrally controlled and planned economy, which robs people of their freedom. As a government monopoly it distributed electricity to everyone with monthly bills that except for the very poor were at least affordable by everyone. When the hype about deregulation of this utility took place recently, it was a veritable disaster. Big corporations placed first bids on large batches of energy, which they could purchase cheaply. For the remaining expensive electricity, ordinary individuals and households suddenly gasped as their electric bills became thousands of dollars a month. Then Texas corporations like Enron used criminal measures to bilk the citizens of California out of billions of dollars. Tactics called Death Star shut down energy plants to initiate artificial shortages and black outs designed to bring an excessive increase in the price of electricity. Enron also used the manipulation called Ricochet to export and import energy out of state and back to multiply the price again many fold. The induced energy shortages were designed to bring Enron exorbitant profits at the expense of Californians.
Those are facts. Now I will indulge in some conjecture, for which I’ve seen some evidence, but which I cannot prove. Dick Cheney’s secret energy conferences, where Ken Ley was probably present, most certainly did not only deal with oil fields in Iraq and various pipelines, but probably also with Enron’s distribution of electricity to California. Thus suddenly the democratic governor, Gray Davis was looking at a $9 billion deficit brought on by the criminal activity of Enron. As in foreign countries, where the Bush administration wanted regime change, the opposing democratic governor could also be replaced. Arnold Schwarzenegger, the republican, may have been given the green light to start his recall campaign. After Gray Davis was recalled, California was not reimbursed for the $9 billion it had been bilked, and then Schwarzenegger left California with a $26 billion deficit from which our state has not recovered. My hypothesis is that this was a conscious republican energy strategy against the democratic power-house of California. I admit that this is conjecture, but very plausible conjecture from my point of view.
Back to the deregulation of electricity: Regulation had to be quickly reintroduced with one government regulated monopoly that provided electricity in an equitable way to everyone, that is, to corporations as well as individual households at affordable prices. Thus for electricity a limited form of socialism works while capitalism does not. It is granted that this government regulated monopoly is in a capitalist society with a government that is very limited in power.
Once when Helmut Gollwitzer, a theologian in Berlin, spoke out for socialism, I asked him how he could take that position when the Sowjet Union was such a failure. He answered that what was called socialism there was really state capitalism. The premier was like the CEO of a corporation which entailed the whole economy. His Politburo was like his board of directors, who drew up the five year plans for their centrally controlled and planned economy. From this pretentious center they could not at all anticipate and meet the needs of the people. So in East Germany, one always had to stand in a long line, even for ice cream, and when you got to the window they had just run out. The whole economy, which was run as one giant and total corporation, did not work.
When the Sowjet Union began to split up and introduce capitalism in the oil sector and others, those that became their CEO’s quickly became billionaires and Putin clapped one, who dared to run for his office, in prison. The decentralization and multiplication of corporations is proceeding in the way of a crony capitalism that is likely to privatize more and more.
I’m not sure what is happening in China. They are decentralizing corporations over various energy and industrial sectors, but still having them be government owned and regulated like our electric utility, e.g., Con Edison in New York, PG&E here in our part of California. Granted that their governmentally owned corporations are doing business in a Mω economy where the government has unlimited powers and does not exist by the consent of the people.
Back to our limited form of socialism: In the communications sector, deregulating ATT worked. Now many telephone companies rival and compete with one another and through the Internet communications have even taken another giant step forward, although Comcast, Verizon, and Apple smart phones have drastically increased the previous price of the regular telephone bill. All told deregulation brought an advantage to the communications sector. Deregulation of the airlines may have brought cheaper airfares, but the decrease in services is remarkable.
In the words of Reinhold Niebuhr, there are some things that we need the courage to change and we have to have the serenity to accept the things we cannot change with the wisdom to know the difference. Similarly there are some sectors that we can deregulate and allow the market forces of capitalism free reign and some that we cannot and we need the wisdom to know the difference. Furthermore, some institutions can be privatized and some cannot and for that we also need the wisdom to know the difference. For example, privatizing the military by the use of “contractors” – working for special corporations that keep changing their names, is a case in point. The name “contractors” is designed to hide the fact that they are mercenaries operating and hired by mercenary corporations.
Let’s turn to health care. I wish this was merely a thought experiment about an extreme case, but it really happened. Several years ago, three doctors in a hospital in Redding, CA did a great number of intrusive heart tests and open heart surgeries and realized that the more tests and operations they performed the more money they made. Imagine opening a person’s chest and operating on his or her healthy heart merely for the sake of profit! This notorious little hospital made about $50 million a year while a large general hospital across the street made only about $5 million. This continued until a priest was told that he needed heart surgery and he went to another doctor for a second opinion and discovered that he did not need surgery at all!
In our healthcare system operations bring in a great deal of money and the operating room has become the engine room of the “factory” hospital. That model of payment for each surgery may be as inappropriate as the “operation” run by those Redding doctors. Meanwhile in socialist Cuba doctors get paid very little, but they still go from house to house caring for the sick and doing preventive medicine, perhaps making last resort operations much less central to their health industry.
Now if the bottom line of the health care industry is to make money, rationalizing its sector like any business, then the capitalist models for it is by-and-large inappropriate. Health care is a necessity and the first thing a clinic asks for, even in the telephone call before a doctor visit, “Do you have health coverage; if so, what kind?” Then in comparison with Cuba, I believe it was fifty years ago when I remember a doctor making a house call. As sick as we can be, we have to go to the doctor’s office and the doctor is allotted only a few minutes to attend to us. What’s wrong with this picture? Is it capitalist medicine?
There is a very collective aspect to illness in our society as well. What fault is it of a person who catches a virus or catches a deadly infection in the hospital that was supposed to make him or her well? What about a person who gets cancer? These sicknesses have a collective aspect and are often environmentally and socially determined. If I go skiing and break my leg, it is accidental, but certainly related to my life-style. If I drink and smoke and ruin my liver and get lung cancer, there is certainly a measure of individual fault. But say that I get lung cancer from second hand smoke as a non-smoker! To become bankrupt by paying doctor bills seems to add insult to injury, which itself has been inflicted by society.
Let me return to the theme of unnecessary operations with a personal anecdote. When I went to an old doctor with knee trouble, he said that he could operate to take out my torn meniscus, but I still had arthritis, so he advised against the operation. He was honest enough to advise me against an operation that could have brought him $20,000 to $30,000 in income – but how many doctors can muster that kind of integrity?
To conclude with the economy in general, even with the total rationalization for profit as the bottom line, a business can have the integrity of paying its workers a living wage, providing dental and health insurance as well providing an excellent product for purchase enhancing the common welfare of the people. Such companies and such corporations represent capitalism with a human face, to coin a phrase opposite Dubček’s short-lived (1968-69), Czechoslovakian socialism with a human face.
Real ethics have to permeate every sector of our economic lives, whether they are appropriately capitalist and freedom based or based on sheer necessity. Parents are not free to feed or not to feed their children. Their freedom consists in fulfilling their responsibility to feed and nurture their children. Often one cannot presuppose that what is true for the individual is true for the whole society, but although they are different, individuals have to take responsibility just like the governments has to take responsibility for its people. People also have the right not be made sick by the environment.
 “A model,” according to D’Angel Rugina, “is a set of assumptions to define a framework, where we are [re]searching a problem.” In other places from my notes: “A model is a small picture.” and “A model is a world in itself.” Such a model resembles Max Weber’s archetypes, which should not become confused with reality. Models can help to investigate economic realities and perhaps realities can be shaped to resemble a certain model more. Rugina argued that the Sowyet Union proved that the 0% Mα and 100% Mω was possible, so therefore the 100% Mα and 0% Mω should also be.
 “Is there anything new to be said after Adam Smith, Marx, Walrus, and Keynes? Toward a third revolution in economic thinking” by my old inspiring college professor from Northeastern University in Boston, Anghel N. Rugina: International Journal of Social Economics, Vol 26 No. 10/11, 1999, pages 1227-1248. See my essay, “On Anghel Rugina and our Financial Crisis” for the exact citation.
 D’Angel Rugina taught before the issue of universal health coverage was debated, so I do not know if he would have supported it. But he held that the government should do what the private sector could not do for the people.
 When Rugina charts the society, economy, and government it is somewhat like Habermas theorizing the life-world and the two systems: the economic and the political ones. The relationship is somewhat clearer in Habermas, because the systems exist for the sake of the life world and the money of the economic system and the power of the political system should not uncouple the language, the words, the communication, which is the currency of the life-world. When this occurs then the life-world becomes colonized by the systems. Rugina sees the basic principles of his models bringing freedom or slavery to all three sectors.
How can tax cuts bring prosperity and jobs, when the Bush tax cuts brought us the great recession? Answer me!
Then when a flat-tax is proposed, it is incredibly unfair. If a CEO makes $100 million and s/he had to pay 10% s/he would still have $90 million. If s/he had to pay 90% s/he would still have $10 million. If someone made $22,000 and was taxed 10%, that person would have only $19,800 to live on. That income is just too much to die from and not enough to live on. We have had a regressive tax system designed to make the rich richer and the poor poorer.
When the rich do not pay taxes then the government has to borrow the money from them in the debt and then the government starts paying the rich by having to pay the interest on the debt that it owes them. If this is the case then the government pays interest to the rich, while the poor and middle class pay taxes. Now it is necessary to analyze whom the government is indebted to in order to determine the veracity of this claim. Of course, our government could be beholden to China and it could be that our government is paying China for its debt service.
Back to the Bush tax cuts: were they really used in the stock market speculation, which created a bubble after which trillions of dollars was lost in our common-wealth?
It may well be provable that tax increases improve businesses and the economy, just like pruning trees takes away wild growth and makes the trees bear more fruit.
Blogging my thoughts:
The Op-Ed page in the New York Times today was pretty inspiring. Milos Forman, the film director of “One Flew over the Cuckoo’s Nest” showed how those who claimed President Obama was a socialist didn’t know what they are talking about. He described socialism as he had experienced it and there is no comparison.
He argued that we had to keep in mind the melody of our country and how some harmony is required for us to make it. “But if just one section, or even one player, is out of tune, the music will disintegrate into cacophony.”
I don’t want to blame one party for the gridlock in Washington, because the real reason for the chasm between different political ideologies is the chasm that has grown between the rich and the everyday people of our country. In the words of Chief Justice Brandeis, “We can have democracy or the great wealth concentrated in the hands of the few, but we can’t have both.” Our representatives in Washington are caught in the social forces, the money, that is, issuing from our social and economic inequality.
In their piece Eric Liu and Nick Hanauer compare the economy to a garden and argue that it is not a rational machine. Harmful economic activity needs to be weeded out and healthy economic activity needs to be supported. Taxes and government spending is like watering the garden, when it spent for education and health, and is better compared to the circulation system than money that just goes down the drain.
In my blogging I have compared taxation to pruning of trees and bushes in order to make them bear fruit for the common good rather than wild, destructive, and contradictory growth.
Liu and Hanauer argue that
“Under the efficient market hypothesis, taxes are an extraction of resources from the jobs machine, or more literally taking the money out of the economy. It is not just separate from economic activity, but hostile to it. This is why most Americans believe that lower taxes will automatically lead to more prosperity. Yet if there were a shred of truth to this, then given our historically low tax rates we would today be drowning in jobs and general prosperity.”
The authors argue that jobs come from the organic feed-back loop between consumers and business, which requires a thriving middle class. The severe concentration of wealth kills middle class demand and jobs do not trickle down but emerge from the middle out. “To spend tax dollars on education and health is to circulate nutrients through the garden.”
“True, not all spending is equally useful, and not every worthy idea for spending is affordable. But this perspective helps us understand why the most prosperous economies are those that tax and spend the most, while those that tax and spend the least are failures. More important, it clarifies why more austerity cannot revive an already weak private economy and why more spending can.“
After the misguided Bush tax cuts (and the two wars) we lost 8 million jobs beginning our Great Recession. Money that could have renewed our infrastructure was in part lost in the Wall Street bubble with irrational derivatives and credit default swaps, where more weeds like Bernie Madoff and other Ponzi schemes were hiding among the wild growth in our financial sector, which made up 47% of our economy. The other part of the tax cuts, I believe, made our government have to buy bonds and increase the debt by loaning money from those who would have had to pay it in taxes. Thus our government has been taken hostage by those who should have paid taxes.
To pay taxes is a patriotic duty and serves to socialize our inherent selfishness. The tithe, which means giving the first ten percent of income to the church or charities, demonstrates one’s faith in God. Paying our taxes demonstrates our good faith as citizens of our commonwealth. It brings harmony into the garden of our economy. Liu and Hanauer argue well that their garden approach to the economy is pro-business and not at all anti-capitalist.
To me it seemed that politicians first promised tax-cuts in order to bribe voters into voting for them against their own interests. Now with Grover Norquist’s no tax pledge, which so many have signed, what seemed irrational has attained the level of insanity, unless one believes in anarchy. (Norquist merely wants to shrink government down enough to drown it in the bathtub.) Governor Pat Brown running against Ronald Reagan wondered, if he hated government so much, why he would want to be the president. It was like an anti-Catholic wanting to become the pope.
The huge deficits that Reagan and George W. Bush left because of their tax cuts show that they were using both to dismantle big government. When Reagan talked of the corner drugstore he was avoiding mention of the huge pharmaceuticals. Privatization does not give more power to the common person and get the government off an individual’s back, but places us into the power of the corporations. As the state governments get into trouble and city governments here in California go bankrupt, more and more public facilities have to name themselves directly after corporations. A change of pitchers now requires one to hear about oil change or what not. You pay to see a movie and you have to watch commercials and the movie contains commercials in the feature. The market is colonizing our life world in places it has no right to be.
Why did FDR create big government? In order to bully the huge corporations into taking our national interests into consideration. Where is the allegiance of global transnational corporations, except for their own private wealth?
Public citizens standing up for public interests and the commonwealth have to take a stand against all this privatization. Private armies, private jails, private schools! If we could sell California’s state government to Google, it could take care of our deficit in a jiffy. Why not let Google become one of the fifty states? What’s in the name “California”? Why not privatize it? The CEO of Oracle just bought an island in Hawaii.
We have just been into downsizing, where hatchet men fired whole departments to replace them with temporary workers. There is an army of unemployed, making workers have to do the work of three or more laid off workers. Should you complain, there are ten other workers standing in line for your job. Then there is the out-sourcing of labor and the remark from a CEO in the down-sizing time: “We don’t owe you a living?” For the sake of mega profits, productive workers were laid off in droves. Are the people there for the sake of the corporations or the corporations there for the sake of the people? Pray tell.