February 21, 2012

Good business leaders know collaboration fuels their success

Posted in economic recovery, income inequality, role of government, U.S. Economy tagged , , , , , , at 9:21 am by realitytax

If the 1% saw the acquisition of wealth as a collaboration, if the rich, well-to-do, “successful” people recalled they aren’t doing ALL the work, the research suggests they’d be better at sharing.

Really.

Business owners guided by both concern for others and insight into the overall factors that lead to success, know this.

If the Democrats really want to get moral psychology working for them, I suggest that they focus less on distributive fairness — which is about whether everyone got what they deserved — and more on procedural fairness—which is about whether honest, open and impartial procedures were used to decide who got what. If there’s a problem with the ultra-rich, it’s not that they have too much wealth, it’s that they bought laws that made it easy for them to gain and keep so much more wealth in recent decades.

Johnathan Haidt
“How to Get the Rich to Share the Marbles”

20 February 2012

The role of government is always a subject of debate, but ensuring that scoundrels who are only motivated by putting money into their own pockets, and businesses that treat workers as disposable rather than seeing them as part of the collaborative effort that leads to success, are not allowed to enrich themselves without any oversight.

Jonathan Haidt is a professor of psychology at the University of Virginia and a visiting professor at the N.Y.U.-Stern School of Business. He is the author of “The Righteous Mind: Why Good People are Divided by Politics and Religion.”

April 7, 2011

7 Keys to Understanding Mass Transit Impact – and Value

Posted in role of government, taxes, U.S. Economy, Uncategorized tagged , , , , , , , , , , at 9:32 am by realitytax

DC Streetcar study1) It’s not just bus and light-rail

Streetcars play an increasing role, as the DC Streetcar Land-Use Study documents, and for good reason. The upfront costs are lower than light-rail, while businesses (and commercial real estate values) react much more vigorously than they do to bus rapid transit (BRT) proposals.

2) Return on Investment is Reliable, Investors React

In terms of taxpayers dollars, the Goody Clancy DC study found “streetcar offers a better ratio of benefits to costs compared to Bus Rapid Transit (BRT) or Light Transit. While BRT is less expensive to implement, it does not generate the real estate investments to the same degree that streetcars can.” In other words, with a lower implementation cost than light rail that stability and predictability is what businesses and property owners like. Long-term, they know the traffic patterns and support for use are reliable.

3) Urban Rail Transportation Stimulates Economic Development

With so many elected officials trying to create jobs and reverse shrinkage of tax revenues, studies on the light rail projects in Minneapolis, Portland, and Denver reveal more benefits than just the immediate job creation from the construction projects, there’s lots of other new real estate development, too, including especially housing when the lines are well-sited.

4) Transit Is Not an “either/or” Choice

Some state legislatures are leery of the investment as they look at funding for the repair and maintenance of existing roads, highways, and bridges. Yet a new (or better) Transit system reduces wear, freeing up more money and reducing infrastructure maintenance costs in transportation budgets.

5) If Highways Are the Answer We’d All Move to L.A.

I don’t want to decry development in Southern California, but the smog and traffic jams are legendary. Most developed areas don’t have the land to give up for more highways, toll-roads are far from a free solution even though they shift the maintenance costs, and most communities favor fewer big roads as the cost to our environment and impact on our quality of life becomes more evident.

3) It’s Efficient

Max busIt’s a simple fact, person-throughput is increased when a greater share of travelers in any given transportation corridor are riding rather than driving. Risks shrink, quality of life blossoms, and systems that mitigate commuter congestion coincidentally result in revitalized commercial and retail growth – again, because business investors recognize and gravitate to the predictable. While there are pitfalls to be avoided, there are numerous studies that show what’s working and what hasn’t; the data is real, so re-inventing the wheel isn’t the first step.

7) If You Build It, They Will Come

When you consider areas such as the Pearl district of Portland it’s obvious why that city is always high on lists of desirable places to live; urban development was phenomenal, and some estimates suggest streetcar ridership is 7 times higher than a bus alternative would be. Either way, it spurred billions of dollars in development projects, which translates into jobs and other tax revenues for the city – and isn’t that what every state or local government needs?

March 11, 2011

Budget, Deficits, Ideas, and Stuff

Posted in federal budget, role of government, taxes, U.S. Economy tagged , , , , , , at 12:48 pm by realitytax

The thing people are best at is exchanging stuff, including ideas; that’s what sets us apart from every animal on the face of the earth. Dogs don’t exchange bones with each other, chimpanzees and dolphins don’t ask for advice, and yet nobody reading this could build the simplest device we rely on every day in any reasonable amount of time without the active participation of many, many other people.

You doubt it? Name your example: Could you make a toothbrush? How will you get the petroleum to make the various plastics? OK, so you can whittle down a piece of wood to serve as the handle, sure, but are you going to use a knife you traded for or make your own? You can collect some stiff bristly stuff, but to trim it all to a nearly uniform length would you like a scissors? …and glue the bristles in place…how? Let’s not even consider transportation machines and mp3 players. So much more efficient to let somebody else mine and smelt the metals, while legions of people build and maintain the systems to distribute the stuff, and still others focus on food, wouldn’t you agree?

Another way to think of it is that while any of us can probably manage to be self-sufficient, it wouldn’t leave us much time for anything else at all. Complex trading makes it possible for specialists to efficiently do what they’re best at, and the whole society can enjoy the fruits of the labor of others.

Now what’s that got to do with the U.S. economy, government budget decisions, and the federal deficit?

Well, while we can all agree that while the government has a long-term fiscal management issue, (call it a problem if you like,) the key factor in the budget challenges is health care costs, and more to the point the rate at which those costs are growing. According to a recent article in the New York Times, “The Congressional Budget Office expects Social Security outlays as a percentage of G.D.P. to rise 30 percent over the next quarter-century, as the population ages, but it expects a near doubling of the share of G.D.P. spent on Medicare and Medicaid.

We don’t solve that by reducing what we spend on either education or job creation. Cutting the benefits for military veterans only shifts the costs of their health care, it doesn’t control it. Cutting taxes surely doesn’t provide any free-market incentive to rein in runaway health care costs, nor does reducing and/or eliminating the collective bargaining rights of public-sector employees (another way of shifting the costs without actually addressing the cause.)

There’s a time for catching the drips coming through the roof, but that’s a stop-gap until you can properly fix the roof. If you’re in charge of the building it’s not responsible to tell the people who live or work in it to just keep emptying their buckets – if you don’t know what to do yourself, you call somebody who can fix it, and if you have to raise the rent you do that, too. That’s the whole point of participating in society instead of being self-sufficient.

Bernie SandersIt’s time for Congress to do their job and stop asking the American people to keep emptying the buckets. They asked voters to trust them to solve problems – to keep the roof in good repair – not kick them down the road while we collect rainwater and listen to their complaints about how hard it is to fix. Lowering taxes to fight a budget deficit is like bringing gasoline to fight a fire.

Those elected officials that have no idea how to actually live up to that promise should get out of the business and let somebody with real solutions work on it before they ruin the building and bring down the value of the whole neighborhood even further. Stop talking about “partnering with business” and how regulations are a burden and go work on whatever stuff it is you’re actually good at doing (other than interviews with sound-bites and acting like absentee slumlords, that is,) and leave my government – for the people – alone.

February 28, 2011

Progressives have a problem

Posted in 2012 Elections, federal budget, Obama administration, role of government, U.S. Economy tagged , , , at 11:20 am by realitytax

We all get that advertising makes an impact, and it follows that our military recruiting benefits from marketing expenditures.  Should voters tell our representatives in Congress to micro-manage ad campaigns for the Defense Department?  In a word, no, but that’s what this hullabaloo is all about.

“There is no argument from Democrats or Republicans that we must reduce our massive debt. But there is fierce discussion and passionate debate concerning how to reduce our deficit.”

The Pragmatic Progressive Forum
28 Feb 2011

If Congress chooses to set limits on what part of the Defense Department budget goes to advertising, including “none,” that’s possibly within their role in tackling the budget deficit. At what level do we want to spend time controlling the specific choices?

According to Wikipedia (see citations below) for the 2010 fiscal year, “the president’s base budget of the Department of Defense rose to $533.8 billion. Adding spending on “overseas contingency operations” brings the sum to $663.8 billion.” Now I know the Pentagon pays more than seems reasonable for hardware, and consulting, and other services, and that a penny saved is a penny earned, but when it comes to advertising it’s also a question of return on investment — and while the roughly $16 million that we’re talking about is a lot of cash, relative to that $600+ billion, folks, it’s chump change: less than 1/100 of 1%

So tell me, how much time is it worth arguing over, relative to the other 99.9975% of the Defense Department budget? All progressives will accomplish, other than distracting from other spending decisions, of course, is alienating NASCAR fans: ultimately that mind-set drives them to think their values are more in line with the Republican party.

Image via Army.mil

With over 15 million viewers a week ago for NASCAR’s Daytona 500, the appeal is undeniable even to folks who can’t imagine why “just watching cars driving in a loop” is entertaining. The biggest companies in the U.S. wanted in; they know the value of having their logo seen by that many fan-eyeballs, associating their brands with the race and drivers tends to make influence purchasing. Would Target®, Burger King®, Sherwin-Williams®, and Budweiser® be there if advertising didn’t matter?

Progressive columnists and pundits need to learn two things, fast, if they want to take advantage of the attention that the struggle in Madison is finally generating in the media. First, diversity is good, even when it comes to what we do for entertainment. Second, avoid falling into traps that emphasize differences. It doesn’t help their causes to focus on stuff that makes middle-class Americans think liberal neighbors and/or Democrats in Congress are somehow less in touch with regular people than the elite GOP strategists and politicians.

Winning elections is about more than just getting people to vote. If the Democrats in Congress get drawn into this argument, and start arguing against an iconic pass-time, in a process where narrow margins determine who holds an office and makes budget choices they’ll be conceding electoral might to their opposition for years to come.

______________________________
Wikipedia citations: 

Updated Summary Tables, Budget of the United States Government Fiscal Year 2010 (Table S.12)
http://www.gpoaccess.gov/usbudget/fy09/pdf/budget/defense.pdf

February 18, 2011

$6 Trillion in play: derivatives markets

Posted in Finance Reform, GOP, immigration, role of government, U.S. Economy tagged , , , , , , , , at 10:32 am by realitytax

Reuters is reporting on a ploy to stall the re-regulation of derivatives markets as proposed by the Dodd-Franks financial reform bill. GOP strategists are now asserting that rushed rule-making can’t become a higher priority than economic analysis, so we ought to slow down and (finally) do the sort of analysis that might have prevented the market crash and the resulting recession (if only we hadn’t let Wall Street insiders write their own rules for so long.)

signing of Dodd-Franks billAs I discussed earlier this week elsewhere, the provocatively-titled Wall Street Journal article “Study: Strict Derivatives Regulation Could Cost 130,000 Jobs” echoing the “government regulations hurt business” talking-point has been yet again defused — this time by professors John E.  Parsons and Antonio S. Mello, who pointed out, “It’s always possible to ignore the system-wide purpose of a regulation and claim it is costly due to the burden it imposes…”

“We have regulations controlling immigration, restricting tobacco and alcohol sales, establishing speed limits, and prohibiting the use of dangerous materials such as lead paint. We embrace regulations about what can’t be in our drinking water, and insuring we have the freedom to practice religion unfettered by the preferences of government agencies…

…laws about everything from voter registration to verifying the safety & efficacy of drugs because we know we can’t simply trust everybody to do the right thing if there’s no referee…

…the GOP has been persuaded to slow down the process of reforming Wall Street’s greedy, self-serving behaviors.”

Thomas A. Hayes

We’ve seen what happens on Wall Street without adequate oversight and regulation(s): the markets crashed, foreclosures destroyed home values, the economy went into a tail-spin. As if that wasn’t bad enough, the trickle-down effect is that millions of our friends and neighbors are unemployed at precisely the time when their highest-value asset, their home, has collapsed.

Compare the amount of money we’re talking about to the debt-ceiling or the budget for the entire U.S. Government. On Wall Street, in the derivatives market alone, $600 trillion is in play. That’s why the players, and the Chamber of Commerce, are lobbying so hard to be left alone, and trying to scare us with more jobs lost.

“…there is ‘no upside’ to imposing margin requirements on end users, said David Hirschmann, who heads the U.S. Chamber’s Center for Capital Markets Competitiveness.”

Victoria McGrane, from her article
Wall Street Journal February 13, 2011

Recovering our standing as the world leader in agriculture and industry, and creating the millions of jobs our country needs, won’t be enough to keep Wall Street greed from ruining our economy. We abandoned a “free market” approach to firefighting, because the profit motive led to really bad outcomes for the people that fire companies were supposed to protect. There are countless examples of systems that operate better in terms of the “common good” when we don’t let snake-oil salesmen operate unfettered in pursuit of their individual profit.

I’ve been pondering whether or not our financial markets can “create prosperity” other than for Wall Street insiders. It’s certainly not what the evidence suggests they’ve done lately; it’s hard to see an “upside” (to borrow David Hirschmann’s term) to heeding those with the most to gain by slowing down reforms when they’ve shown such willingness to abuse the system.

It’s harder still to trust the tired old assertions about government regulations being nothing more than interference that “burdens small business” which can be, and have been, so quickly, thoroughly debunked by simple logic.

This is not Somalia. The citizens of the United States don’t want an end to government; we want a return to the ideal that good government works “for the people” not the fatcats who game the system for profit at the expense of the majority of fair-minded, hard-working people. We want solutions, not sound-bites.

February 10, 2011

United, we stand.

Posted in economic recovery, foreclosure crisis, health care, immigration, role of government, soft bigotry, taxes, U.S. Economy tagged , , , , , , , at 11:01 am by realitytax

Miami Herald LogoThe President of the AFL-CIO, Richard Trumka, joined with Gaby Pacheco on an Op-Ed piece in the Wednesday Miami Herald, “DREAM Act – keep trying” intended to reinvigorate the discussion of immigration.

“It is time for President Obama and Congress to take action on meaningful immigration reform, to turn these dreams to reality and to move our country and our economy forward.”

RICHARD TRUMKA AND GABY PACHECO
Wednesday, 02.09.11

Who is Gaby Pacheco? Gaby is an “undocumented, DREAM-Act eligible youth” from Miami, risking a fair bit by stepping into the limelight.

Richard Trumka of the AFL CIO

AFL CIO President Richard Trumka

Like it or not, immigration is the most powerful force in shaping our culture, and has been for centuries. Trumka and Pacheco have it right, asserting that our immigration “system” will not fix itself. So, what should the role of the department of Immigration & Customs Enforcement (ICE) and the rest of the state and federal agencies dealing with immigration be?

Well, if you believe some, government can’t get anything right, and should just throw in the towel and disband. I’m not one of those. We elect people to work for us in Washington (and in our state governments, too.) The reality is: without government there would be no immigration policy, let alone men and women paid to enforce it; we’d be practicing the model currently used in Somalia. Somalia, where piracy plays a central role in the economy – and thinking people find the means to leave if they possibly can.

It’s misleading for politicians and pundits to talk about reducing the size of government, cutting taxes, cutting the deficit, and lessening “government interference in our lives” while at the same time arguing for more immigration agents, more prisons, building democracies in other nations, and fixing the economy to help the middle class recover from the banking and mortgage crisis that came from deregulating Wall Street. Double talk won’t form a more perfect union, let alone ensure domestic tranquility, ok?

We’ve always believed that the way to make this country great is to ensure that future generations will enjoy a higher standard of living. That won’t happen if they can’t buy homes because they can’t even afford health insurance, while politicians cater to the whims of special interest money funneled to their incredibly expensive campaigns.

I’m not saying every tax dollar is spent wisely – we can’t even account for squandered billions simply “lost” during the abysmal Iraq reconstruction, for instance – but that’s precisely why it’s time to talk about running our government as a whole, and every agency within it, better and more carefully. Planning for the future, financial experts advise, is always about investing strategically and ensuring diversity.

“At a time when business is loudly advocating for importing skilled workers, politicians and corporate CEOs are ignoring the fact that some of our best and brightest are already here, but pushed into an underground economy where they can’t actively participate.”

RICHARD TRUMKA AND GABY PACHECO
Wednesday, 02.09.11

If you believe that government should work for us, that our elected officials should work for us, that partnering with business to ensure our economic viability as a nation is a key to a future where our children can thrive and prosper, then it’s time to stop focusing on the messages that divide us.

That’s why I applaud, and stand with, that third-generation Pennsylvania coal miner Richard Trumka, and Gaby Pacheco, a DREAM Act-eligible youth from Florida, as they talk about jobs, the economy, and immigration — which the Congress seems to lack the courage and vision to address. It’s time for our elected leaders to stop playing politics and do what we sent them to do – create real solutions.

short link for sharing: http://wp.me/pjYZO-5L

July 15, 2010

Deficit truth and voodoo economics

Posted in economic recovery, federal budget, GOP, taxes, U.S. Economy tagged , , at 10:56 am by realitytax

If the GOP is really serious about deficit reduction why does Sentator McConnell (R-KY) say it’s a “uniform view in his caucus that tax cuts needn’t be offset by other changes in spending” — do none of them think tax cuts affect the budget? There’s ample evidence that the tax cuts enacted under the previous administration were, in fact, the largest factor in rapidly turning the Treasury’s surplus in 2000 into the deficit under a Republican administration which mostly enjoyed a Republican Congressional majority.

What kind of voodoo budgeting lets you ignore a revenue decrease?  We lost 3 million manufacturing jobs while Bush was President, but the GOP line is that tax cuts will help?  Tax cuts don’t put groceries on the table of an unemployed person, but they do add to the deficit – it’s not complex math.

We’ve got to get more rational in discussing the budget and the deficit. The economy can work – productivity has nearly doubled in this country in the past 30 years, and corporate profits are obviously robust even as CEO salaries and bonuses have sky-rocketed.

Leaders who will safeguard the interests of ordinary citizens are becoming an endangered species in the Congress. In late summer 2008 Congressional leaders and the Bush administration told the country that big business needed behemoth bailouts our our entire economic system would collapse, but that Wall Street bailout did nothing to save blue collar jobs, reverse the outsourcing trends, or stimulate job creation. The bailout didn’t even stimulate lending, it just gave banks cash that went to year-end bonuses.

Bonuses – seriously. What other industry would award bonuses when they had to get billions to remain in business?

And now Senate Republicans want to balance the budget (and stir up fears about deficits) while they claim there’s no need to offset tax cuts with other revenue?  Think about that.  Tax cuts may or may not make be your cup of tea; they’re a tool in the economist’s arsenal. Yet to claim on the one hand deficits are bad and then turn around and advocate revenue reduction — in this case by providing tax cuts for the wealthiest citizens — without offsetting it in any way defies the reasoning powers we expect in our elected leaders.

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