Friday, March 16, 2018

My thoughts after listening to interesting interview with Robert Reich on KQED Forum

Interesting interview on KQED Forum with a former U.S. secretary of labor under the Obama Administration. He talks about the decline in the feeling of common good. Rise in cynicism I guess. He basically blames greed, corporations and mostly right wing politics, but while I was listening, I thought about some problems on the left as well.

Here's the blurb from KQED web site.

As economic inequality has surged over the past half century, trust in government, corporations and democracy in general has dwindled among Americans. In "The Common Good" Robert Reich argues that to save democratic institutions, America must restore its morality and rise above spreading individualism. He joins us to discuss how this transformation can happen amid such political divisiveness.

Some of my thoughts about labor unions and so forth below.

Rising cynicism from things that are often thought of as from the left as well. Maybe the right is worse, in my opinion, but the left has its share also.

Here's an example. Idealism of the Great Society led to construction of large housing projects for low income people. Urban renewal. Much of this became crime infested places that, in some cases, had to be torn down. Today's planners realize that those big housing projects, which concentrated lots of poor people into big buildings in one part of town, were a bad idea. It's better to mix variety of income levels into smaller, more human scale structures.

Reigh talked about the value of unions. They have their good points, but problems as well. Seems like back in the 1970s some union workers made very good salaries but the unions didn't care that much about the people who were outside their union. It was hard to get into those good paying jobs. Apprenticeships were hard to get and so forth. The unions shot themselves in the foot politically as outsiders outnumbered union members. Now practically no one is in a union, but the few who are left do seem to care more about the general welfare of workers. Modern unions do care about minimum wage, universal healthcare and so forth beyond just looking out for their own members.

Another problem with unions was the rigid contracts and work schedules. Today's workers and economics call for more flexibility of work hours.

Gentrification is pretty rampant in left leaning cities such as San Francisco, Seattle and even Bellingham where the rising cost of housing is a problem. Also there's the problem of nimby-ism as well as the issue of hippies turned to yuppies.

I can go on, but those are just some thoughts that entered my mind listening to the podcast during my custodial shift.

Wednesday, March 14, 2018

My take on the gold standard, debt jubilee and so forth

For discussion, a friend of mine posted a link on my Facebook wall wondering what my take would be on these topics. His comment and then my response below.

Robert, I'd be curious to know what you'd say about this. I think it is quite a lucid piece. It's interesting to see a right wing critique of wealth inequality. There are two things I wonder about: would staying on the gold standard really have helped ordinary people enjoy the fruits of their productivity? And is there a way we could do a jubilee that wouldn't wipe out the savings of people who really need them?

It strikes me that maybe he's creating a myth of a perfect America under the gold standard. But maybe the gold standard could have helped ordinary people enjoy the fruits of their labor. Can you see any way it would?

Here's my response.

Pretty interesting, but I think he is exaggerating the negative. It sells his book. I read most of the article (till into the book sales pitch) on my sleek tablet computer using WIFI at a laundromat. He was talking about how American workers have not benefited from America's wealth. I don't buy that idea in total as we are benefiting from so much new technology. The products we use today, such as tablet computers is one example. The internet brings great wealth. Even our public spaces, the parks, bike paths, schools, museums, public broadcasting is rich, in a way, than my childhood. I hear the average supermarket had around 4,000 items during my childhood. Now it's around 40,000 items (specific numbers may not be exact, but the idea holds). In many ways the world today, here in USA, is abundant and makes the world of my childhood look spartan.

The problem is that it seems like most of this wealth is not really accounted for very well. Much of the wealth we get from the internet is free. It's a benefit to the consumer, but how does one pay the worker when the product is free or at very low cost? More mundane things that have been thought of as necessities for years have gotten much more expensive. Important things like housing, healthcare and a college education. Part of that problem does relate to the practice of printing money. As the author of this article does point out the sloshing around of new money inflates the price of assets and hasn't done as much for wages.

Printed money is part of the reason why houses that went for $25,000 during my childhood now go for over 1 million dollars in Seattle at least. While assets like houses have inflated like crazy, the cost of a Xerox copy remains around the same as it was during my college years. This makes it hard to keep up with asset costs if one is working making things like Xerox copies or other products and services.

I'll have to admit I am not an economics expert, or like a friend of mine has says about himself, "I know enough about economics to make me dangerous." That being said, I think remaining on the gold standard would prevent the printing of money, but it would cause many other problems. It's kind of a pick your poison trade off. I think the gold standard is too confining for a growing economy and what we have now allows for more flexibility.

I may be suffering from biases created by NPR Radio. There is a lot of educational talk about the gold standard in the show called Planet Money. I heard one of the shows with my radio while biking around Lake Samish a few months back. Doing a Google search, I found several of those podcasts. Planet Money has done a whole series on the virtues (maybe) and drawback of the gold standard.

Going back to the gold standard would probably create as many problems as it solves, or maybe even more problems, I would guess. Instead, I think we just need to manage things better. Figure out how to better channel money to workers and less to assets. Taxes on the wealthy and more generous domestic spending can help; in the opinion of us liberals at least.

Part of the problem is when the Federal Reserve prints money, they try to aim at a balance of stimulating the economy without causing run away inflation. Problem is that they are looking at inflation across the whole economy and don't seem to be seeing that there are pockets of high inflation; like house values in many cities, while overall inflation remains low. People are hurting because certain things, like house values, go up while wages stagnate. When the things that are inflationary are necessities, it's a problem.

Better safety nets would help, but also the Fed may be pushing the gas peddle of creating money too much because they aren't looking at the things that are inflating. Maybe they should back off the accelerator to try and tame house value and other asset bubbles. The problem is that backing off the accelerator means lower economic activity and lower employment. That is why unfair distribution of wealth is a big part of the problem. We should have a better way to survive a slow economy. Better than tossing people out into the street.

In an ideal world, maybe they would back off the accelerator and let economy slow down. I am a fan of lower workweeks and striving for quality of life; rather than just material wealth. This could also help the environment. We, as a society, need to learn how to thrive with less consumption. Still have improving quality of life, however. It's how we organize society, wealth distribution and so forth that matters the most.

Today we have many things, like tablet computers, which have vastly improved quality of life, but they are not counted as wealth in the same way that a place to live is. Lots of quality of life things aren't even counted at all by economists. The time parents spend with kids, for instance. Too much of society takes money too seriously.

Debt Jubilee.

Speaking of taking money seriously, the concept of a debt jubilee is interesting. Things like this may have to happen and it would be hard to have a large jubilee without ruining people's savings on the other side of the equation.

In a way, there are small jubilees happening whenever there is a bankruptcy. By coincidence, last night during my custodial shift, I listened to a podcast about the post bankruptcy era for the city of Vallejo, California. 10 years ago, that city government declared bankruptcy which is kind of like pushing the reset button. It may have to happen in a lot of cases. Now Vallejo is getting back on its feet and thriving in many ways. Little bankruptcies can be absorbed in the financial system without too much disruption for most people's savings, but something big, like the US government going bankrupt, would cause the loss of a lot of savings. It can happen, I would guess.

I have some retirement savings in the YMCA plan. It would be sad to loose lots of that, but if everyone else was also loosing, we would all be in the same boat. Could mean cost of living drops also.

I don't know what the author recommends as I haven't bought the book, but my own idea is to cherish the life I live now and the life I have lived in the past. My bike trips across USA, for instance. I'm banking some on the future, but realize that the future is unpredictable. I've had a pretty good life anyway. I hope I have a good retirement, but part of my strategy is to enjoy the life I have today. Much of my good life has already been lived. Already in the bank of life experience, so to speak.

My friend comments again.

Thanks, Robert. Good reflections!

That helps me to understand how monetary policy can distort the economy in some ways.

I read an economist some years ago who said we should discourage home ownership. He said speculation in real estate is always behind all economic crashes, in some way at least. Real estate should be highly taxed.

But when I mentioned his theory to a lady at church, she said "somebody has to own the houses." Why not ordinary people?

My response.

I hear that in Germany there is much tighter controls on windfall profits from selling real estate at least. More controls if real estate has inflated significantly. Condominiums near central Berlin are a lot more affordable than in London, UK where those controls are not in effect.

Monday, March 12, 2018

Can life in British Columbia still thrive if Alberta cuts back on the oil tap?

Under the radar, here in USA, but I often listen to Canadian radio. This is big north of the border. Will oil rich Alberta turn off the supply to consumers in British Columbia? The threat is pushing up gas prices around Vancouver. It's about the expansion of Trans Mountain Pipeline. The pipeline brings oil from Alberta to Vancouver area. There are plans to expand it, but those plans have run into fierce opposition in BC. Alberta's Lieutenant Governor is miffed. There's talk of cutting back the existing flow of oil if expansion is not allowed. This brings up my basic philosophy about dealing with oil consumption as a consumer. It's one thing to try and stop a pipeline, but if the threat of cutting back on oil supply causes one to quake in their boots, it's time to think about the role the consumer plays in this whole question.

I know, it's kind of easy for me to talk cause I ride a bicycle. Yes, I consume products from oil as well. Still, I think we need to figure out how to make society less oil dependent. Stopping a new pipeline may have consequences to the way our current economy is structured, on both sides of the border. It's up to consumers and voters to really make the changes we need in society.

Speaking of both sides of the border, there is a branch of Trans Mountain that comes to Whatcom County. It's part of the supply chain for some of our largest local employers; the two oil refineries just north of Bellingham.

Good discussion on my Facebook wall after this post.

John: All this macho posturing in support of massive corporate profits. Never mind that the oil sands are creating a landscape that may never recover, that thousands of folks are poisoned by the runoff from those open sores on the land, or that this is the dirtiest oil on the planet. We see clearly the power of corporations to manipulate governments to do their bidding, and the people be damned.

Nathan: It's a bit worse than that. A lot of the oil the new pipeline would move is already being moved by train. As scary as pipelines can be, oil by train is terrifying. No municipality in North America has a plan in place for dealing with an oil train getting wrecked beyond "run like hell and let it finish burning." Canada already had an entire small town obliterated by one wrecking. So as long as consumers demand the product, it will keep being moved, just in a far more dangerous manner. Stopping the pipeline is not stopping the oil, it's stopping a major safety upgrade. Consumption needs to be targeted, not pipelines.

John: True, but there is the transgression of First Nations lands...and that needs to stop.

Nathan: I agree we need to treat them, their heritage, and their lands better. But that oil is already going through or near their land. Shutting down the pipelines is increasing the danger to their lands unless consumption is reduced to stop the need for oil trains. Robert riding his bike does far more to protect native lands than all the protestors burning oil to drive out and protest what are essentially safety upgrades.

John: While I might agree, it doesn't change the fact that those oil sands should never have been exploited for environmental reasons and anything that can possibly reduce their acceptability may not be a wasted effort. Reducing consumption is definitely a possibility, but not until alternative energy sources are found. Not everyone can ride a bike everywhere and while Robert is truly an admirable individual with a gentle wisdom about him, his solution is unique to him and cannot be pushed as a universal one. The war against environmental destruction must proceed on many levels.

Nathan: Then there needs to be efforts to stop what allows those tar sands to be developed, and the pipeline is not one of them. The trains, or the oil fields themselves need to be targeted. Shut down the pipeline and you still have made no impact to production, and the only impact you have made to distribution is to force a far more dangerous method of transport. The current tactic is like protesting car culture by trying to ban seatbelts.

Below, my response to the thread.

Robert: With oil trains and trucks rumbling through native lands in many cases and the exploitation of tar sands, it is important to reduce oil consumption. Approach this from many angles such as voting in favor of things like carbon taxes. City planning plays a big role as we should strive to reduce the commute time to work and errands. Making density more affordable is a key as, these days, I think there are a lot of people who would love to benefit from urban living in neighborhoods like Vancouver's West End, but can't afford it. If places farther out could be built like the inner city; transit, walking and biking would be more viable. Short of drastic changes in our culture, the biggest driver of change may have to be technology. Something like solar power creating hydrogen fuel.

Sunday, March 11, 2018

Hardened schools like missile silos or prisons. A bad idea for education.

Someone at NRA says schools should become the most hardened target in America to prevent school shootings. There are a lot of real hard targets in USA; like nuclear missile silos and prisons. Do we really want our schools to be that? On the other hand, vocational counselors often call for our schools and universities to be more open to people and input from various fields of work. Schools should become less like ivory towers so they can be permeated by the expertise from the larger community. Bring in experts from industry and other walks of life to help build that bridge to the world beyond school. That's not being hardened. We need to find better roads to school safety. Less compartmental thinking.

Wednesday, March 07, 2018

Why it's hard to cut federal spending. It's the lifeline for a lot of people.

Congressman Paul Ryan being grilled by a Fox News commentator about the huge deficit. Spending is still high. Of course the military got a big increase. He considers the recent disaster relief bill to be "temporary spending." I would say there's always disasters every year, however. He would like to reduce spending by cutting things like Medicaid. I would say that people are dependent on those things, like the 49% of pregnancies that are on Medicaid, so I read. Maybe they should just distribute the morning after pill since it's cheaper than bringing a child into this world.

I don't think they can cut the spending. Things like Medicaid and Medicare are the life blood to a lot of people. Life blood to a lot of constituents. There's always some disaster that they can't just turn their backs on; possibly more disasters, going forward, due to climate change.

Domestic spending is the price we pay for public safety and a civil society. They will need to stop kidding themselves and plan for it. Less tax cuts for the rich.

Maybe society can live cheaper, but Republicans don't talk about what really needs to be discussed, like the morning after pill. If medicine is too expensive, get more people to ride bicycles and eat better diets. Go to the doctor less. The private sector doesn't provide health insurance for a large percentage of our population which means its up to the government to provide for the needs of a lot of people.

Tax cuts for the rich? For the most part I would guess that is not helping the economy. It mostly goes to the idle rich. A few entrepreneurs, like Elon Musk, do invest in things that can help; like Elon's idea to help Puerto Rico turn the lights back on after the disaster by going around traditional power distribution and using more decentralized solar power. Hey, Republicans, I guess we have to do things differently. The old American way of doing business is at a dead end.