IndexNL-Next

Nederlog

February 4, 2019

Crisis: Schumer & Sanders, Nuclear Arms, Socialism, On 70% Tax, The Morally Necessary


“Nothing in all the world is more dangerous, than sincere ignorance and conscientious stupidity.”
  -- Dr. Martin Luther King Jr.







Sections

Introduction

1. Summary
2.
Crisis Files
     A. Selections from February 4, 2019
Introduction:

This is a Nederlog of Monday, February 4, 2019.

1. Summary

This is a crisis log but it is a bit different from how it was until 2013:

I have been writing about the crisis since September 1, 2008 (in Dutch, but since 2010 in English) and about the enormous dangers of surveillance (by secret services and by many rich commercial entities) since June 10, 2013, and I will continue with it.

On the moment and since more than three years (!!!!) I have problems with the company that is supposed to take care that my site is visible [1] and with my health, but I am still writing a Nederlog every day and I shall continue.

2. Crisis Files

These are five crisis files that are mostly well worth reading:

A. Selections from February 4, 2019:
1. Schumer and Sanders: Limit Corporate Stock Buybacks
2. Russia to Pull Plug on Nuclear Arms Pact After U.S. Does Same

3. Hunger for Socialism Is Giving Centrist Democrats Cold Feet

4. AOC’s 70 percent billionaire tax is not high enough

5. Substituting the So-Called "Possible" for What's Morally Necessary
The items 1 - 5 are today's selections from the 35 sites that I look at every morning. The indented text under each link is quoted from the link that starts the item. Unindented text is by me:

1. Schumer and Sanders: Limit Corporate Stock Buybacks

This article is by Chuck Schumer and Bernie Sanders on The New York Times. It starts as follows:

From the mid-20th century until the 1970s, American corporations shared a belief that they had a duty not only to their shareholders but to their workers, their communities and the country that created the economic conditions and legal protections for them to thrive. It created an extremely prosperous America for working people and the broad middle of the country.

But over the past several decades, corporate boardrooms have become obsessed with maximizing only shareholder earnings to the detriment of workers and the long-term strength of their companies, helping to create the worst level of income inequality in decades.

One way in which this pervasive corporate ethos manifests itself is the explosion of stock buybacks.

So focused on shareholder value, companies, rather than investing in ways to make their businesses more resilient or their workers more productive, have been dedicating ever larger shares of their profits to dividends and corporate share repurchases. When a company purchases its own stock back, it reduces the number of publicly traded shares, boosting the value of the stock to the benefit of shareholders and corporate leadership.

Between 2008 and 2017, 466 of the S&P 500 companies spent around $4 trillion on stock buybacks, equal to 53 percent of profits. Another 30 percent of corporate profits went to dividends. When more than 80 percent of corporate profits go to buybacks and dividends, there is reason to be concerned.

This practice of corporate self-indulgence is not new, but it’s grown enormously. Fueled by the Trump tax cut, in 2018, United States corporations repurchased more than $1 trillion of their own stock, a staggering figure and the highest amount ever authorized in a single year.

I say, for while I do know some about stock buybacks, the above explains it as quite serious, and indeed more so than I thought.

Here is some more:

This has become an enormous problem for workers and for the long-term strength of the economy for two main reasons.

First, stock buybacks don’t benefit the vast majority of Americans. That’s because large stockholders tend to be wealthier. Nearly 85 percent of all stocks owned by Americans belong to the wealthiest 10 percent of households. Of course, many corporate executives are compensated through stock-based pay. So when a company buys back its stock, boosting its value, the benefits go overwhelmingly to shareholders and executives, not workers.

Second, when corporations direct resources to buy back shares on this scale, they restrain their capacity to reinvest profits more meaningfully in the company in terms of R&D, equipment, higher wages, paid medical leave, retirement benefits and worker retraining.

Yes indeed - and incidentally: I hold for a long time - more than 5 years - that the division of adults in the USA by income is more or less fairly represented by 90 : 10, that is by 90% non-rich or poor and by 10% rich to very rich, and perhaps also by dividing the 10% into 9% millionaires and 1% billionaires.

I still do, and while I know this is not quite correct, I think it is by and large correct.

Back to the article:

That is why we are planning to introduce bold legislation to address this crisis. Our bill will prohibit a corporation from buying back its own stock unless it invests in workers and communities first, including things like paying all workers at least $15 an hour, providing seven days of paid sick leave, and offering decent pensions and more reliable health benefits.

In other words, our legislation would set minimum requirements for corporate investment in workers and the long-term strength of the company as a precondition for a corporation entering into a share buyback plan. The goal is to curtail the overreliance on buybacks while also incentivizing the productive investment of corporate capital.

This seems a quite decent idea to me. Here is part of the justification:

The past two years have been extremely disappointing for millions of workers. President Trump promised the typical American household a $4,000 pay raise as he pushed for his tax giveaway to the rich. The reality, however, is that from December 2017 to December 2018, real wages for average workers have gone up by just $9.11 a week. Sadly, average workers are making less today than they made in 1973 after adjusting for inflation, while stock buybacks have skyrocketed to record levels.

The time is long overdue for us to create an economy that works for all Americans, not just the people on top. Our legislation will be an important step in that direction.

I more or less agree and have two additional remarks: First, $4,000 : $9.11 = 0.00225, which also may be taken as an indication of Trump's promises and : Trump's actual creations, and second I do consider this evidence that the Democrats are pulling to the left. And this is a recommended article.

2. Russia to Pull Plug on Nuclear Arms Pact After U.S. Does Same

This article is by Vladimir Isachenkov on Truthdig and originally on The Associated Press. It starts as follows:

Following in the footsteps of the U.S., Russia will abandon a centerpiece nuclear arms treaty but will only deploy intermediate-range nuclear missiles if Washington does so, President Vladimir Putin said Saturday.

U.S. President Donald Trump accused Moscow on Friday of violating the 1987 Intermediate-Range Nuclear Forces treaty with “impunity” by deploying banned missiles. Trump said in a statement that the U.S. will “move forward” with developing its own military response options to Russia’s new land-based cruise missiles that could target Western Europe.

Moscow has strongly denied any breaches and accused Washington of making false accusations in order to justify its pullout.

The collapse of the INF Treaty has raised fears of a repeat of a Cold War showdown in the 1980s, when the U.S. and the Soviet Union both deployed intermediate-range missiles on the continent. Such weapons were seen as particularly destabilizing as they only take a few minutes to reach their targets, leaving no time for decision-makers and raising the likelihood of a global nuclear conflict over a false launch warning.

Yes indeed - and this substantially increases the risk of nuclear war. Also, while the reporting in this article is factual, I think it also may be taken as a fact (and not mere appearance or "being seen as") that nuclear arms that take a few minutes to reach their targets do substantially increase "the likelihood of a global nuclear conflict over a false launch warning".

Here is some more:

Speaking Saturday in a televised meeting with his foreign and defense ministers, Putin instructed the military to work on developing new land-based weapons that were previously forbidden by the INF treaty. Defense Minister Sergei Shoigu reported to Putin that they would include a land-based version of the Kalibr ship-based cruise missile and a new hypersonic intermediate-range ballistic missile.

Putin emphasized that such new weapons won’t be deployed unless the U.S. does so.

“Russia will not station intermediate-range weapons in Europe or other regions until similar U.S. weapons appear in those regions,” he said.

Well... this does not make me happy, especially with the - according to the psychologist who writes these reviews - insane president Donald Trump at the head of the USA. And this is a recommended article.

3. Hunger for Socialism Is Giving Centrist Democrats Cold Feet

This article is by Jon Queally on Truthdig and originally on Common Dreams. It starts as follows:

Amid warnings within progressive circles that the “moderate Democrat” remains a serious obstacle to the kind of transformative change many rank-and-file party members and voters in general say they want, new reporting by Axios on Saturday shows that it might be the centrists who are getting cold feet as they register just how hungry the electorate has become for policy solutions like Medicare for All, the Green New Deal, tuition-free higher education, and taxation that targets the nation’s wealthiest.

Well... I said above (in the first reviewed article) that there is "evidence that the Democrats are pulling to the left", and I shall keep it at that, in considerable part because I do not trust the vast majority of the elected Democrats in Congress or the Senate.

Here is some more:

In addition, internal polling taken by what Axios describes as one “prominent 2020 hopeful” discovered Democratic voters in Iowa, one of the key early caucus states in the presidential primaries, “has moved sharply left.”
    (..)
Offering a specific example, the polling reportedly “found that ‘socialism’ had a net positive rating, while ‘capitalism’ had a net negative rating.”

Iowa also has slightly over 3 million inhabitants, which is my reason not to consider this very significant (for this is less than 1% of the number of inhabitants of the USA).

Then again, I do agree that "the polling reportedly “found that ‘socialism’ had a net positive rating, while ‘capitalism’ had a net negative rating”" in the United States does seem a considerable change in the last 50 years.

Here is one more bit:

Documentary filmmaker and author Astra Taylor said: “Ten years ago — hell, two — I never would have believed I’d be reading this. Please let’s not squander this once in a lifetime opportunity.”

Others pointed out that the leftward lurch among U.S. voters is a phenomenon not isolated to Iowa:

Well... yes again, but also Iowa has no more than 3 million inhabitants. Anyway, this is a recommended article.


4. AOC’s 70 percent billionaire tax is not high enough

This article is by Bob Hennelly on Salon. I abbreviated the title. It starts as follows:

When Rep. Alexandria Ocasio-Cortez said on “60 Minutes” that she would favor raising the highest marginal tax rate on the nation’s wealthiest taxpayers to 70 percent, roughly doubling what it is now, the idea was cast as “radical.” It is not.

Looking at the actual post World War II trend lines, it is no where near radical enough. The sobering reality is that it will take a lot more to undue the massive damage done to the federal balance sheet and the average American household by a corrupt national government that is controlled by the rich.

For decades, the federal government has cut taxes on the wealthiest Americans and corporations while spending and borrowing so profligately, it should be chargeable as a criminal act.

Well... I more or less agree, but I also think this reaction is a bit too strong, in part because before Ocasio-Cortez stated her idea there was hardly a chance this idea would be quite popular, and in part because "the actual post World War II trend lines" to a large extent depended on World War II and on John Maynard Keynes, who died in 1946 (and who was according to Bertrand Russell the most intelligent man he ever met).

Here is more on the last 40 years of non-Keynesian policies:

Now, we are on the verge of spending more on servicing this debt than the current $700 billion we spend on our military each year. For decades we have been cutting taxes on the highest earners and replacing that revenue with debt for which the entire nation is on the hook. Put more simply, we have subsidized the the Bezos, Bloomberg and Schultz mega-fortunes by keeping their Federal taxes at historic lows, while shifting the cost of the government into the future by unprecedented borrowing that casts a dark cloud over the nation’s future.

I think this is quite correct. Here is some more:

But the 1963 to 1964 period was a key inflection point, with the top tax rate dropping from that “radical” Eisenhower 91 percent rate, to just 77 percent in just one year. My, how the uber-wealthy must have been relieved; and yet, it was set to become oh, so much better.


By the 1980s and the so-called Reagan revolution, that top tax rate dropped to 45 percent. By the 1990s, it dropped even further to 36 percent (..)

Again this is quite correct (and 1964 was during Johnson's presidency). Here is some more:

Things really got out of whack when, during President Obama’s tenure, we kept fighting the pricey global war on terror, the Federal government bailed out Wall Street banks and Detroit, leaving Main Street America to twist in the wind. Americans lost $20 trillion in household wealth lost that had taken generations to accumulate.

Several million American families lost their homes. This took the heaviest toll on African-American and Latino households.

Where did it go? Right to the top. In the 21st century gilded age the ethos is not ‘to those that much is given, much is expected’ but rather ‘to those with the most even more must be given'.

I think this is also quite correct (and the Dutch have a proverb that says "the Devil shits on the highest heap" which is a way of saying that to those with the most even more will be given).

Here is the last bit that I quote from this article:
According to Inequality.org “in 1982, the “poorest” American listed on the first annual Forbes magazine list of America’s richest 400 had a net worth of $80 million. The average member of that first list had a net worth of $230 million.”

Scroll forward to 2016 and rich Americans needed a “net worth of $1.7 billion to enter the Forbes 400, and the average member held a net $6.0 billion [fortune], over 10 times the 1982 average after adjusting for inflation.”


Meanwhile, down here on earth, from where we can’t see the top of the Bezos, Bloomberg Schultz wealth pyramid, close to 80 percent of Americans live paycheck to paycheck.

    (..)

No, I would say 70 percent for the highest marginal tax rate is too low, in light of our track record for the last 70 years. Call me an Eisenhower “radical”. I am holding out for 90 percent.
I said I more or less agree in principle and I do, but I also think that Ocasio-Cortez's proposal was quite reasonable in the circumstances in which she proposed it. And this is a recommended article.

5. Substituting the So-Called "Possible" for What's Morally Necessary

This article is by John Atcheson on Common Dreams. I shortened the title. This is from near its beginning:

This perspective [i.e. the entire notion that Democrats should only run on things that poll well - MM] is shared by the party's leadership, by most of the media, and virtually all of the political consultants and contributors.

It's not only wrong, it's morally bankrupt and a prescription for at least two existential crises.  It also explains why Republicans have been so successful despite being a minority party, and why the country has drifted to the right for more than three decades now, despite the fact that a firm majority of American voters remain progressive on an issue-by-issue basis.
I think there is something in the above, but it is far too strong, for the reasons "why the country has drifted to the right for more than three decades now" have a lot to do with Reagam's presidency (that started almost forty years ago) and the ever-increasing wealth and power of the richest Americans (rather than the fact "that Democrats should only run on things that poll well").

Here is some more:

But as presidential historian Jon Meacham said on HBO's "Real Time w/ Bill Maher," it is often easier to make big honking changes than to try to accomplish incremental ones.  Back in 2016, Democrats faced a choice between incrementalism—"a progressive who got things done"—and an advocate for a fundamental transition away from a rigged system. The party apparatchiks threw their weight and influence behind Hillary Clinton, a reluctant incrementalist who would have preferred to be a status quo candidate, and against Sanders, who advocated for more radical change.  Polls show that Sanders would have trounced Trump, and Clinton's ratings were always within the margin of error.

So, at a time when folks are desperate for change, incrementalism is bad politics.

I think this is more or less correct. Here is some more:

Today, we face two existential challenges and both demand that Democrats shape the polls rather than be shaped by them.

The first is income inequality, and it is driven by the fact that the rich and corporations have used their wealth to completely subvert the democratic process in America.  Elections are bought; politicians all but ignore the wishes of the people, while doing the bidding of the rich, corporations, and special interest;  income disparity has reached grotesque proportions globally and nationally, fueled by public policies favoring capital over labor; and with monopolies and monopsonies keeping wages low even in times of full employment, there's no solutions in the offing absent radical policy changes.

Historically, inequality of this magnitude has been a harbinger of revolutions—it presages crowds with pitchforks and torches storming the bastions of wealth.

I more or less agree - and if you wonder what "monopsony" means, this was a link explaining it.

Here is some more:

The second challenge is climate change.
    (...)
Four months ago, the IPCC’s Special Report Global Warming of 1.5 C essentially said we only had 12 years left to avoid catastrophic warming and irreversible feedbacks.  In other words, no matter how bad you think climate change might be, it’s likely to be worse, unless we act now, today. Literally.

And these two issues—income inequality and climate change—have a kind of negative synergy.

I more or less agree. Here is the ending of this article:

The choice is clear.  We can drift toward an economic and climate related Armageddon by following polls, or we can move toward a broadly shared sustainable and prosperous world by shaping them.

Sadly, it looks like we’re choosing the former.

Perhaps. This is a recommended article.

Note
[1] I have now been saying since the end of 2015 that xs4all.nl is systematically ruining my site by NOT updating it within a few seconds, as it did between 1996 and 2015, but by updating it between two to seven days later, that is, if I am lucky.

They have claimed that my site was wrongly named in html: A lie. They have claimed that my operating system was out of date: A lie.

And they just don't care for my site, my interests, my values or my ideas. They have behaved now for 2 years as if they are the eagerly willing instruments of the US's secret services, which I will from now on suppose they are (for truth is dead in Holland).

The only two reasons I remain with xs4all is that my site has been there since 1996, and I have no reasons whatsoever to suppose that any other Dutch provider is any better (!!).
       home - index - summaries - mail