Tuesday, March 22, 2011

A Tale of Two Countries

Libya—a Rogue State

We found out last night that the British parliament is not a coalition of the Conservative party and the Liberal Democrats, it includes the Labour Party. When it comes to warfare, the UK has only one party—the Gang of Three. The House of Commons voted by 557 to 13 to support the UN resolution 1973 on Libya. The thirteen MPs with the principle to vote against were:

John Baron (C: Basildon & Billericay), Graham Allen (L: Nottingham North), Ronnie Campbell (L: NBlyth Valley), Jeremy Corbyn (L: NIslington North), Barry Gardiner (L: NBrent North), Roger Godsiff (L: NBirmingham Hall Green), John McDonnell (L: NHayes and Harlington), Linda Riordan (L: NHalifax), Dennis Skinner (L: NBolsover), Mike Wood (L: NBatley and Spen), Katy Clark (L: NNorth Ayrshire and Arran), Yasmin Qureshi (L: NBolton South-East), Caroline Lucas (Green: Brighton Pavilion), Mark Durkan (SDLP: Foyle), Margaret Ritchie (SDLP: Down South).

The rest either abstained, showing they are good for nothing, or voted for yet another middle eastern war. These people have no excuse. They have seen what Blair and Bush did in Iraq and what is happening in Afghanistan, but they are so lacking in principle and dripping in opportunistic self satisfaction that they ignored what they know… for self advancement. They are not fit to be MPs. They are not fit to be in Parliament. Parliament requires an opposition or it is as much a dictatorship as Libya. What is the point of choosing a representative when all of them vote according to the script that suits the MP and not what the citizens they represent want.

These people have killed democracy as we know it. As we know it it is pointless, and it needs now to be re-thought. The present system is a careerist gravy train for crooks, who, on this vote, outnumber principled MPs 43 to 1. We cannot expect Parliament to reform itself, so we, the people, will have to reform it as we have had to do in the seventeenth century, and twice in the nineteenth century by revolution and the threat of revolution. Britons died on these occasions, and doubtless the same will again be true. To achieve fairness and justice ordinary people always die.

Will the French, Americans and Arabs be organizing a humanitarian “No Fly Zone” over the UK when our government turns the troops against its people? No chance! If anything, they will do the same as in Libya. The “No Fly Zone” over Libya is obviously… obviously… not a humanitarian venture.

Just how do you save people from being killed by bombing them? It is exactly the same in Afghanistan where even Karzai, the US stooge, now wants the US and its lapdogs out, after a series of mass murders of civilians, often by US drones. It shows the poltroonery of the US and its allies. They are doing their best to engage the enemy by robots in case they might get killed themselves, so they sent pilotless aircraft to target schools and weddings, anywhere where there seems to be a gathering of people on the assumption that it is a troop of rebels.

And to what purpose? How does an ordinary Briton or American benefit from this wanton brutality? We do not. A few people employed servicing the military will briefly enjoy secure employment, but the rest of us will have to pay for this adventure, as we paid for the previous ones, by job losses and tax hikes. The beneficiaries are the rich, not us. And, when we choose to rebel against our rich dictators, the rich will use the technology they are perfecting abroad against us.

Israel—a Rogue State

Perhaps something will come out of it. It is wishful thinking, but goes like this.

Since all these MPs think it proper to support the bombing of nations that they claim a humanitarian reason for doing, they ought now to be willing to support the bombing of Israel, a rogue state which has different laws for Jews and Arabs among its own citizenry, and frequently raids Gaza, a small patch of land packed with millions of Arabs who are not Israeli citizens. Israel’s “democratic” authorities have even revoked the residency permit of the Anglican Bishop of Jerusalem. Despite efforts by the Archbishop of Canterbury, the British Foreign Secretary and the British ambassador, the Israelis have not relented.

After maintaining a deafening silence about Israel’s atrocities against civilians, Britain suddenly wants a “day of reckoning” for war criminals—as long as they are Libyan.
Stuart Littlewood

The UK Foreign Secretary William Hague, promised retribution for Gaddafi’s crimes, and to refer Libya to the Prosecutor of the International Criminal Court:

That sends a clear message to all involved, in the regime and any other groups that if they commit crimes and atrocities there will be a day of reckoning for them.
Crimes will not go unpunished and will not be forgotten. There will be a day of reckoning and the reach of international justice is long.

British diplomats expressed the ConDem coalition’s policy as taking whatever steps were necessary…

…to ensure that those responsible for the awful human rights violations that are currently occurring in Libya are held to account… [because] we are appalled by the levels of violence… [so] The United Kingdom will do everything we can to make sure those responsible in the Libyan regime are held accountable for their actions…

Why then did we not hear this highly principled, humanitarian Foreign Secretary call for a reckoning with the Israeli regime? It murdered 1400 of Gaza’s civilians, including hundreds of children, two years ago, at Christmas! Besides the murder, the attacks left thousands maimed and myriads homeless, having to live in rubble. One UN resolution was sufficient for the bombing of Libya, but very many UN resolutions have been passed regarding Israeli oppression of Palestinians with absolutely no response at all from these humanitarian leaders of ours.

HMS York instantly appeared unloading medical supplies for the Benghazi Medical Centre, donated by the Swedish government, but nothing was available to assist when Gaza was under attack from Israeli bombers, or when Israeli soldiers acted as pirates on the high seas hijacking a Turkish ship carrying similar humanitarian aid to Gazans who are oppressed, humiliated, and impoverished every day by Israeli attacks.

Instead of seeking justice for Israeli crimes the Foreign Office is trying to change international law to let the Israeli criminals who authorized and justified them, like Tzipi Livni, Avigdor Lieberman, Ehud Barak and Binyamin Netanyahu, to move freely in the west.

Prominent Zionist Jews, who are knee jerk supporters of Israel, whatever atrocities they commit, are among the supporters of western political parties, and western leaders pander to these Zionists because they will finance them. David Cameron told a Jewish dinner, according to the Jerusalem Post:

With me you have a prime minister whose belief in Israel is indestructible… I will always be a strong defender of the Jewish people. I will always be an advocate for the State of Israel.

Cameron promises to support the Zionist state of Israel “always”—whatever crimes it commits! And then he cynically equates “the Jewish people” with Israel, so is it any wonder that some people do the same and attack Jews wherever they are for the crimes of Zionist Israel? Anti-Semitic attacks are on the increase, the Chief Rabbi of the UK tells us, as if it should be surprising when so many of them are Zionists—Jewish fascists! But all Jews are not Zionists, and all Jews do not support the racialist attitude of Israel, including some Israeli Jews.

Western uncritical support of Zionism is why Israel gets away with what Gaddafi cannot, why anti-Semitism is increasing, and why also the megarich oil sheiks of the Arabian peninsula can oppress their own people without a word of criticism from western leaders like Hague, Cameron, Obama and Clinton, all of whom get more two faced and slimy by the second. If you are an Arab rebel make sure you choose who you are rebelling against. If it is Gaddafi—OK, you are a democrat. If the king of Saudi Arabia—bad news, you are a terrorist.

War is a massacre of people who don’t know each other for the profit of people who know each other but don’t massacre each other.
Paul Valery

Invading foreign countries is for the benefit of a narrow class of megarich people, who like to steal other people’s assets and benefit from war bucks whatever else happens.

Monday, March 21, 2011

Our Heroic Leaders Lead us into a Fruitless War Again! Why?

Well, here we go again. We are three days into another crusade against the Moslems. Western leaders inevitably deny it, but it has become essential for us to effect regime change over certain Moslem leaders, some of whom, like Gaddafi and the late Saddam Hussein, who used to be so much in favour that western arms dealers sold them billions worth of modern weapons. Only a few weeks ago, the latest grubby British leader to emulate the avaricious and unprincipled T Blair, “Dave” Cameron, was selling arms personally to Arab sheiks and kings. Now he is sending “our boys” to risk death flying over Libya to bomb the poor souls beneath, to save them from being bombed by Gaddafi! Could anything be more hypocritical?

The spokesman for the Arab League did not think so. He complained that the Arabs understood a “no fly zone” was to stop Gaddafi’s aeroplanes from flying, not to stop Libyans from living, whether supporters of Gaddafi or rebels. Plainly Cameron and his vile coalition, including Obama, intend to weight the civil war, which until last week looked favorable to Gaddafi, heavily towards the rebels. No one seems to know what proportion of the Libyans oppose Gaddafi. They quickly seemed to capture the north eastern corner of the country around Benghazi, then could make no more progress. The bulk of Libya seems to prefer their present leader to some western puppet.

“Dave” admits he wants to see regime change, admitting that his objectives are the same as Blair’s and Bush’s in Iraq, but pretends the terms of the UN resolution 1973 forbid it. Even so, almost the first blow struck was a cruise missile strike against an important administrative building in Tripoli where there was a chance that Gaddafi might be himself killed. While the direct objective cannot be Gaddafi, “Dave” explains, he can be legitimately targeted because the UN resolution said all means can be used to stop Libyan civilians from being killed, so killing one Libyan civilian can be legitimate on those grounds, and, naturally, many others might be killed colaterally—sad that!


Meanwhile the hypocrisy of taking precipitate action against some oil rich dictators while favoring other equally unpleasant or worse oil rich dictators passes by the half of our knowing electorate that happily soak up every lie the BBC, Murdoch and company sling at them. Simultaneously with the rebellion against Gaddafi the people of Bahrein rebelled against their king, who after being forced to say he was willing to concede some reforms, was obliged by an unyielding public, to bring in the Saudi Arabian army, an army that is the personal arm-twister of the Saud family who rule Arabia.

Arabia is the best friend of all opportunistic western leaders because of their oil, and their oil wealth, which again makes them prime customers for arms dealers. The arms they sold were used against a tiny island, just a causeway off Saudi Arabia, but where is the call for the king of Bahrein and the wicked Saud family to yield to the legitimate rebels? Why is there a no fly Zone over Arabia? For the same reason that Bush chose to bomb Iraq as punishment of the Moslems for the 9/11 attacks, even though the 9/11 bombers were almost entirely Saudi terrorists, not Iraqi terrorists—Osama bin Laden is a Saudi. But the Saudi’s are chums of the west, specifically of the Bush family, it was said at the time. There can be no one with a brain cell today who does not know this, but sadly our cynical rulers know full well that there is nothing easier than for the minority to rule the majority. Just use media manipulation.

In the UK, before the war in Iraq, a million people turned out against the war. It woke up the British ruling class and their media pals to the need for continuous propaganda, so a campaign began that is continuing still. Almost the only history taught in British schools these days is Hitler and WWII, the way our “brave boys” beat the Nazis. They were indeed brave boys… then… fighting against a right wing racist dictatorship that wanted to control the world from Europe to India, and most of them conscripted, not professional soldiers, but it gets our youth admiring warfare, and imagining that we only fight just wars—now a big lie.

Our “brave boys” today are more like the Nazis, fighting against poor foreigners thousands of miles away who just want to live their own lives. But the propaganda in the last decade has worked, and these—our own soldiers—though they are killing farmers and their families trying to wrest back the control of their own land from foreigners, are hailed as heroes! Well, they are called that when they return in a box, or with bits of themselves missing. In the UK a charity was set up for these heroes called, would you believe, “Help the Heroes”, when the people helping could have been more help marching in an angry mass to stop these boys, and girls, from wasting their lives for no good reason. Helping rich men grab someone else’s resources, mainly oil not carrots, is not heroic. They do not differ from heavies working for gangsters, except that the heavies know what they are doing, and do it for profit, while our soldiers are paid little more than KPs.

We can always afford a good war!

Now the Queen has given the little Wiltshire town of Wootton Basset the accolade of “Royal” because it hosted a regular mass line up of people grieving for the victims as each one, returned to Lineham air base, proceeded in a funeral procession through the town. Some will have grieved genuinely. But how much more valuable it would have been if they had instead been protesting against the war. Instead it became a neo Nazi showcase of tattooed bikers, war veterans who ought to have known better, various other rentacrowd types, and, of course, BBC and Murdoch’s TV camera men duly filming it several times a week, for its propaganda value. The town naturally loved it—business had never been better.

Now we learn that with the launch of the war against Libya, another propaganda charity has started, “Horses for Heroes”, in which disabled soldiers are riding from John o’Groats at the tip of Scotland to Land’s End at the tip of Cornwall, around 1000 miles, nominally to raise money, but, in fact, like “Help the Heroes”, to continue the war sympathy campaign on the British people. The UK is now like the US. It is on a permanent war economy, and even the media have to show some people, even veterans, saying so, and criticizing the hysteria for war sentiment. These wise people ask:

How can we afford these wars when we are bankrupt, and ordinary people are feeling the weight of government cuts through pay freezes and tax hikes. How can money be found, in these allegedly dire circumstances, for stupid overseas adventures which are of no concern for us.

The megarich financier class gets richer while ordinary people get poorer. The megarich, investment capitalists and bankers, get bailed out by poor people’s sacrifices, and arms dealers get rich by killing the poor, here allegedly being heroes, and abroad by being evil cowards blowing up our heroes to defend their land and homes. All is fair in war, as far as the rich are concerned, providing that the profits roll in. I wonder what they would do if we rebelled. Would they shoot rebels? It is what they have usually done. Does anyone seriously think they are different now?

Education not Poverty—Reclaiming What is Ours!

In the 2007, Trends in International Mathematics and Science Study test, students from Singapore took first or second place in all science categories. The United States ranked 11th.

The quality of our math and science education lags behind many other nations.
Barack Obama

Mark Roth, a former science editor of the Pittsburgh Post-Gazette asks why do pupils, in a nation that is world leader in scientific research lag, behind other countries in science. Excuses range from poverty, poor training of teachers, disdainful attitudes to education and knowledge, the shockingly poor scientific illiteracy of American adults to the convenience of paying to import scientists and mathematicians from abroad where standards are higher. It is is actually cheaper for corporations to hire foreign scientists that for have to pay taxes to improve the US education service.

Meanwhile, the huge gap between students in affluent and poor school districts is reflected in racial disparities in scores. Affluent white kids in the US do as well as white kids in Europe. In the European Program for International Student Assessment, or PISA, American students as a whole scored 502 in 2009, slightly above the industrialized nation average of 500. Arthur Eisenkraft, a science education expert at the University of Massachusetts at Boston, said economic differences play a part in the discrepancy:

We’ve always known there are high correlations between poverty and how kids do in school.

The downside is particularly noticeable in large urban school districts like Pittsburgh. Only two of the 17 big city school districts that participated in the National Assessment of Educational Progress science tests, in 2009, had more than a third of their students scoring in the proficient range. Eight of the districts had more than half of their students below the basic level. Alan J Friedman, a science education consultant, emphasized that those who are below basic in science at the eighth grade level most probably will be freezing themselves out of a whole lifetime of advancement opportunities.

Part of the reason for the fall in test scores from the elementary school to middle school is attitude—and is shared by parents as well as kids. In Asian countries, doing well in science is considered to be by application, hard work, but Americans think it is whether you have a natural gift for a subject, aptitude, natural ability—you just don’t want to do it! Students say, “I’m no good at science, and that’s just how it is”. Being a “celebrity” seems a lot more fun!

Besides the need for effort, school pupils need to know how to analyze problems and work out the answers to them. But many teachers who teach science are poorly trained in it themselves. Many have not done science in college. It becomes particularly critical if the content is controversial, as in teaching evolution in biology classes. Lack of the proper training in science and evolution leaves teachers without the confidence to face up to aggressive Christian kids challenging them, especially when they have equally aggressive and sometimes influential parents coming into the school to complain. Many parents love Jesus so much that they love guns, and high school shootings have become popular recently.

The lack of scientific literacy in America is compounded by the determination of many US Christians no keep on sabotaging science on the grounds that all the answers necessary are in Genesis. All Genesis answers is what is in it, and whatever regard people have for it, it is not science.

Ultimately America, and much of the west—the UK is going the same way—needs proper regulation of corporate greed. If people are to work hard, they need rewards that seem proportionate—decent wages, apprenticeships and training schemes, and sposorship of education—but corporate America could not care less than it does about American society. If they could get people to work for nothing they would, and when industry is fully robotized, that will be the real situation.

But who then would be able to buy anything? Without money at the base of society, at consumer level, society collapses, and discontent rises. Intelligent young people already see it, experience it, and feel that education is pointless when the prospect of any work for most is negligible. Already there are places where hundreds of people compete for each job that becomes available. They wonder whether it is lucky or clever to take any such job, if offered, because they will have to work for peanuts under a perpetual threat of being fired. Why bother? It is easier and more lucrative to be a thief. Already vast swathes of the inner cities are dying or dead, because industries have moved to cheap labor countries, or to another state in the Union that will offer the biggest incentives—bribes.

Social responsibility has to be made an important factor in corporate decisions. It can be done by strictly enforced legislation. And should the corporate bosses decide to move abroad, then they should do it with the knowledge that their products will be heavily taxed if they are imported to the USA, and Americans domiciled abroad whose businesses have been moved from the USA, should be taxed as if they still lived in the USA. It is time the country was taking back what it has allowed a small body of people to take away—the nation’s jobs and wages.

Friday, March 18, 2011

Why Are Wealthy Countries Smart Countries?

A press release of the Association of Psychological Science tells us that Heiner Rindermann of the Chemnitz University of Technology and James Thompson of University College London have analyzed test scores from 90 countries, from the US to New Zealand, and Colombia to Kazakhstan, and found that the intelligence of the people, particularly the smartest 5 percent, is a factor in the strength of their economies.

They also collected data on the country’s excellence in science and technology the number of patents granted per person and how many Nobel Prizes the country’s people had won in science.

They found that intelligence made a difference in gross domestic product. For each one point increase in a country’s average IQ, the GDP per capita was $229 higher. For every additional IQ point in the smartest 5 percent of the population, a country’s per capita GDP was $468 higher. Rindermann says:

Within a society, the level of the most intelligent people is important for economic productivity. I think in the modern economy, human capital and cognitive ability are more important than economic freedom.

The press release is inadequate, admittedly, but the obvious criticism in the way these data are presented is that it is a typical chicken and egg question. IQ is not solely intrinsic, it can be trained, and nothing suggests that intelligence is the independent variable, and economic success the dependent one. It could be the exact opposite. Economic success provides some people with a surplus that they can use to recruit able people into their businesses, and educate their own children to a higher standard than ordinary workers. They can also marry their daughters to the most successful of their employees. Through successive generations, then, the ruling elite get cleverer and better educated.

Meanwhile successful managers who did not marry the boss’s daughter can launch businesses of their own, and when successful, can join the ruling elite. This latter is, of course, the American Dream, but it gets harder and harder for anyone actually to go from rags to riches via enterprise. Startup costs are prohibitive in a technological age unless someone is willing to sell their idea to a rich man called a “venture capitalist”. The entrepreneur from then on is no longer his own boss. The megarich insulate themselves from failure by buying the best ideas from potential rivals, employing clever managers and lawyers to preserve their wealth for them, and bribing politicians to wangle the political and economic system to suit them.

So what is the chicken and what is the egg? As ever the rich have grabbed all the best seats, and they are not going to give them up. They think they’ve paid for them. They will!

Bonuses and Distribution of Wealth in the UK

UK society, like the US, is skewed horribly in favour of the rich and against the poor. Some 53 of the UK’s richest 1,000 are billionaires. The wealth of these 1000 people has increased from £98.99 billion in 1997 to £335.5 billion today. Over the past 12 months, they got richer by an incredible 29 per cent. Despite the worsening economic situation, this is the largest annual increase in the wealth of this rich minority. What these figures show is an increasingly unequal society that has enriched the already megarich at our expense. The amount of gross domestic product (GDP, annual national production) dedicated to wages and salaries has declined over the past three decades. There is no way that such a distribution of wealth can be said to favour the common good.

The injustice of wealth distribution is in need of urgent debate. Why is the argument for higher taxation on the highest earners continually rejected out of hand? If the country wants better services then they have to be paid for. It is not possible to have something for nothing. And those who earn the most—and usually have got most out of the system—should pay more tax. Justice should be applied to the economic system by restoring higher levels of tax on those most able to pay. If they want to leave the country, then the country can put an even higher tax on any wealth they propose to take with them? Then we can say good riddance to bad rubbish, and let our youth have the chances they are now being denied.

In 1976, wages and salaries accounted for 65.1 per cent of GDP, this had reduced to 52.6 per cent by 1996, a time when the wealth of the richest 1,000 increased threefold. But society took a fairer proportion of that wealth increase. Levels of taxation were far higher on the rich. Tax rates above 80 per cent on those earning the most were not uncommon. Society was more equal and cohesive as a result. Reagan’s pandering to the megarich demands for tax cutting spread to his lapbitch, Margaret Thatcher, then to Bush’s lapbitch, Tony Blair, leading to today’s gross inequality and unfairness, in imitation of the USA.

Top FTSE 100 chief executives earned 47 times median earnings in 2000 and 88 times in 2010. In the public sector the ratio is far lower, more like 12 to one. Even so, the top 1% of public officials earned an average of £120,000. Why does a senior executive need a financial incentive, when every other worker does not get them and makes do with an agree wage? Would executives refuse to work? Would a hospital director let people die if not awarded a bonus?

The Big Society is an austerity program. The coalition government cynically chants its slogan “we’re all in it together” in reducing the deficit. Yet the policy implemented cuts public services, freezes public sector workers pay, cuts jobs and reduces pension rights, while inviting billionaires from everywhere to live here untaxed! When we discover that 1,000 people in Britain now have over £300 million each, we should be seriously complaining that the entire cost of deficit reduction is falling on the poor 65 million of us. At present it is the poorest who continue to pay for the deficit while the megarich grow ever wealthier. This cannot be right.

It has been suggested that there would be no deficit at all, if the treasury recooped some of the wealth the rich have robbed us of in the last thirty of forty years. MP Austin Mitchell thinks this 1,000 people with the most wealth could yield 25 per cent of it for the sake of the economy upon which the rich depend for future wealth. It would clear £84 billion from the deficit. Another suggestion was that the top 1 percent of the richest people, about 650,000 in the UK, could give up 20 percent of their accumulated wealth, clearing the deficit all together. Note that these megarich people would still be megarich under either scheme. They would still have 75 to 80 percent of their amassed riches.

The proposals are all the more attractive because of the neglible tax that most of these people pay and have ever paid, through their use of corporate lawyers to exploit taxation loopholes, and simply defraud the exchequer. Strict taxation on the rich is a basic justice that should be implemented now. The complaint of ordinary middle class people in the late Roman empire was that their megarich paid no taxes, or simply increased rents to cover any they had to pay. Soon after, the western empire collapsed. The people preferred barbarians to their own rulers.

A recent government inquiry considered that there should be a maximum pay ratio of 20:1 between top and bottom. It was meant to be only in the public sector, but, if it was considered just, why not overall? It was a hostage to fortune even to suggest it, so it disappeared in the final report. Instead, it recommended bonuses as being fair! CEOs should have a marginal element of their pay “at risk”, subject to meeting agreed objectives. Then public services would not be offering rewards for failure.

No research has shown that bonuses improve performance, nor do firms paying them do better. Paying students to get better passes did not work. The ones who did well, did it because they enjoyed what they were doing. The same should be applied to bankers and CEOs. If they don’t like it, then let them quit and join the oridnary Joes who have to like it or survive in frugality on benefits. In any case, who would judge the CEO’s performance? A team of bureaucrats?

Schemes like this are bogus, even where performance can be measured. Sir Fred Goodwin of RBS was awarded a discretionary £16m pension pot, while he wrecked the biggest bank in the world. The package was approved by the bank’s remunerators and non-executives, his friends and associates. Directors rip off shareholders with the collusion of institutions, so they get bonuses whether good or useless. Bankers’ bonuses are the biggest because the City is a massive gang of monkeys scratching each others’ backs furiously.

Bonuses are not incentives. They are measures of greed and selfishness, and are possible because corporate leadership is no longer properly accountable. Such schemes were thought up in the 1980s to let top earners take ever larger sums of money from their companies. It was unfair, dishonest, and, for the banks, disastrous. Top executives are paid above the average to work harder and more successfully than the rest of us. If they fail, they should be fired, with no golden handshakes.

Pay should be fixed and pay scales fairly flat. The bonus anyone should get is acclaim by peers and the public for doing a good job.

Reporting from the UK Morning Star and the UK Guardian.

Tuesday, March 15, 2011

How Incentives Destroy Co-operation and Will Destroy Society

Human societies depend upon each of us helping our neighbors, and not exploiting them, and about 80 percent of us are willing to participate fairly in joint projects of mutual benefit. The other 20 percent are skivers, people who will try to get the benefits with as little effort as they can get away with. The skiving free loaders are not popular with the others who pull their weight, and usually sanctions or punishments are applied to those who try to exploit other people’s mutual effort for their own gain. It is called norm enforcement, the norm being that everyone should pull their weight, and those who do not are deviants from the norm.

Data like these are not difficult to get by testing in controlled situations. If my neighbor and I could each build a house on our acre plot in six months, but by co-operating we could do a better job making use of our complementary skills and finish the two houses in eight months, then we have a clear benefit from co-operating. If the houses still took six months each and were no better, we might as well build our own, and we only have ourselves to blame for anything that goes wrong. The act of co-operating must itself have a benefit or there is no point in it. So setting up a test in which people can share a sum of money they have been given with other participants to get a benefit from the pooled resource mimics my neighbor and I helping each other build a house, as long as it is likely that by sharing we can all be better off.

In such tests, Professor Stephan Meier, Assistant Professor in Management at Columbia Business School, and co-worker, Andreas Fuster, PhD candidate, Harvard University Department of Economics, discovered that when people were given private incentives, norm enforcement became less effective. The incentives seemed to take the edge off the hard feeling towards the skivers.

  1. Participants were asked to contribute to a common pool of cash to be divided equally among them all at the end of each of six rounds, whether or not all participants contributed. No kind of norm enforcement was used. People gave only small amounts to begin with, and gave less in each round.
  2. By adding an incentive to contribute (a lottery ticket), with no opportunity to enforce norms, people contributed more gladly, including free riders.
  3. Norm enforcement was introduced to the first test, in the shape of a fine on free riders at the end of each round. Those who were fined, most of them, increased their contributions in subsequent rounds.
  4. Adding the lottery ticket incentive made contributors scale back their punishment of free riders by almost half, and free riders were less likely to make larger contributions in subsequent rounds whether or not they were punished. The result tended towards the previous test without incentives.

Fuster says:

Individual incentives can really change the structure of how we deal with one another, what the norms are, and how we enforce norms. If social forces in an organization are important, managers need to be attuned to norm enforcement and peer effects. They should understand that adding monetary incentives can dramatically change this dynamic and lead to a net negative effect.

The point is that the lottery ticket became the aim of participating, there being nothing to be gained by sharing through the common pool. Free riding therefore became irrelevant. Everyone would give just enough to get a lottery ticket, whether a free rider or not.

On the face of it the experiments are flawed. There is no co-operative gain to be made by contributing to the common fund. The pool needs to be enhanced in some way to make it more like human co-operation. Even so, it is easy to see that a separate incentive can draw attention from the whole point of a co-operative venture—the advantages of co-operating—by distracting attention from the primary objective.

It is the reason, for example, why sports can be so easily disrupted by gambling. Whatever is to be gained from illegal betting can make sportsmen actually want to sabotage the supposedly co-operative team objective, and lose for their personal gain.

The same is true of senior managers and board members who begin to give themselves bonuses from the company’s earnings. The drive to maximize bonuses distract from the corporate aims, and when shareholders will not sack managers and board members who are lining their own pockets at the expense of the shareholder, then the managers can run amuck.

That is what happened in our banks. Barclays’ shares for example sank by a half over several years when top managers in most banks lifted their own compensation, including bonuses, by obscene amounts, and shareholders let them get away with it. Needless to say, the holders of large blocks of shares, able to sway any shareholders’ meeting, are often themselves large banks and city institutions, so effectively they are in a scam to rob the ordinary small shareholder and the customers.

Politicians are the same. Their objective is supposed to be to represent the interests of the people who vote for them, but they are all too easily distracted by the wads of maney waved at them from corporate bosses. Tony Blair is getting his compensastion now for his sacrifice of pretending to be a Labour Party Prime Minister, when he was a Republican Quisling. The incentives of the rich soon make most career politics forget what they are there for.

Our societies used to take an extremely dim view of bribery, but no longer. Bribes are today incentives, and the law enforcers themselves are too ready to accept them. A cabal of superrich people have corrupted the western world beyond redemption. Western society is decadent and immoral. Democracy is superficial. We are run by this megarich class, which controls every party with its incentives, incentives to do as they want, and not what is good for society.

The often despised Arabs are showing more courage and awareness now than the once militant workers of the UK and France. Workers in the US have always been too easily fooled by their betters. Even after thirty years of declining real wages, longer hours and poorer conditions for those in work, and a labor pool of twenty or thirty million unemployed or part time workers, while the top thousand or so people have trebled their wealth, the average American is still beguiled by the moribund American dream, Republican crooks and pastors, and their own inability to comprehend what is going on. They are the ones without the incentives, but rather are offered carrots.

Carrots might be incentives for donkeys, but Americans ought to be more sophisticated than those famously uncomplaining beasts of burden. Its time they started to do what the Arabs have already begun. Get out in mass on to the streets, trash a few corporate HQs and banks, and threaten revolution. Social instability is one thing the rich do not like, and can do little about, except getting national guards to shoot citizens.

Then everyone will realize that the state is not theirs, and democracy is an illusion.

Thursday, March 10, 2011

Downturn in Housing—Nothing has Changed

Nothing has changed in the last two years. Bankers still get obscene bonuses, and the ordinary Joe is still being robbed by a system arranged to suit the rich. A report from the W P Carey School of Business at Arizona State University suggests a new downturn in the housing market.

Foreclosures had been held steady by foreclosure moratoria, but as these played out, it seems the rate of foreclosure is going up to where it would have been otherwise. In the last few months of 2010, foreclosures had fallen to 30 percent, but, in January and February 2011, it had risen again to 43 percent of recorded sales. Associate professor of Real Estate Jay Butler, who wrote the report, said:

January 2011 showed a re-emergence of troubled times, which continued through February.

Housing prices were also being influenced by foreclosure related activity. 40 percent of normal market sales were resales of previously foreclosed on houses. Adding these to the 43 percent of sold foreclosed houses means 66 percent of the market in January and February related to foreclosed buildings. That and the absence of a strong move up market, which is fundamental to a housing recovery, is restricting growth in home prices, leaving many home owners in negative equity.

The median price for the traditional market in February was $127,500, which is an improvement over the $125,000 in January, but down from $140,000 last year. The foreclosed properties in February had a median price of $141,385 in contrast to $143,580 for January and $153,695 for a year ago. Even expensive homes continued to be foreclosed, with 19 being over $1 million in February, so people who consider themselves middle class are being hit too.

The ones who are not being hit are the 0.1 percent of the population who rule the country, the mega rich, whose wealth equals that of the poorest half of Americans. Half of Americans is around 150 million! The mega rich, have as much money as 50 percent of all Americans and the proportion is rising each year. These people are never satisfied by however much they have.

The sad thing is that so many Americans are intoxicated by the American dream, that they can, somehow, be one of the mega rich. A dream is all it is for 99.9 percent of Americans.

Wise up, Yankees!

Thursday, March 3, 2011

Who Would Want to be a Teacher in Walker’s Wisconsin?

Craig A Olson, a University of Illinois professor of labor and employment relations, and an expert in employment relations and labor economics, shows the salaries of Wisconsin teachers have fallen behind changes in the cost of living as well as wage growth in the private sector over the last 16 years.

By comparing public data from 1995 to 2009 of the earnings of an average college graduate employed in the private sector in the US versus the earnings of an average college educated teacher in Wisconsin, after accounting for inflation, and not counting fringe benefits, Olsen found:

  1. in Wisconsin, the average teacher’s salary declined by 10 percent,
  2. the average private sector college graduate’s weekly earnings increased by 10 percent.

In 1995, the average college educated private sector worker in the US earned 17 percent more than a Wisconsin teacher, in 2009, this gap had increased to 36 percent. Olson commented:

Not only did Wisconsin teachers not keep up with inflation, their earning power also fell behind their private sector counterparts.

Many teachers accept that they have some security of employment compared with many in private industry, and have school holidays—though they seem a much better perk than they are because the have to spend more time preparing for the academic semester than many onlookers think. So they are content not to be paid the same salary as their fellow graduates in the sometimes riskier private sector, but this work shows that their wages are getting progressively worse, with no added benefits to compensate for the decline.

Governor Walker argued that Wisconsin public employees should be required to pay higher premium co-payments to match the higher co-payments paid by employees in the private sector. In Illinois, the average inflation adjusted premium for a family health insurance policy for Illinois teachers increased from $5,758 to $10,905 from 1993 to 2008. Health insurance premium costs for the private sector also have risen sharply during that time, increasing from $5,742 in 1999 to $13,770 in 2010, adjusted to 2009 prices.

But typically, when premiums have gone up the most, teachers, through their local unions, accepted lower salary increases or agreed to higher teacher health insurance premiums when compared to districts that faced smaller increases in premiums. And Wisconsin teachers did protect their health benefits when premiums were rising rapidly… by accepting lower wage increases.

Olson thinks that Walker’s budget bill will have ill considered consequences. While these changes will save Wisconsin school districts some money in the short term, he thinks it will have an adverse impact on the quality of the state’s teacher workforce:

My rough calculations of the changes in employee pension and health benefit contributions required under the proposal suggest the changes will cost the average Wisconsin teacher about $5,000 in total compensation. This reduction in total compensation is equal to about 10 percent of the salary for an average Wisconsin teacher. Since salary increases under the bill are limited without a voter referendum to changes in the cost of living, teachers will have great difficulty negotiating higher pay to offset these higher contributions. Obviously, it will make it more difficult for Wisconsin to attract high quality young adults into teaching. What parent in Wisconsin would encourage their child to become a teacher given the trends of the last 16 years and Governor Walker’s proposal?

The cause of the Walker attack is supposedly the deficit. And whose deficit is it? Clinton had a virtually balanced budget, but the aim of Republicans is to stiff the poor to give the rich more wealth. Theft from the poor is the source of the deficit, most obviously the manufacture and sale of junk bonds and the accompanying accumulation of banking bonuses in the so-called banking crisis. Banks now are back to their old tricks, and so Joe and Jane Public are forever coughing up their hard earned moolah for the benefit of the already sickeningly rich. Hillary Clinton tells us the US is losing the information war. Without proper education, the country will nosedive into the trough. The pigs at the top already have already had their nose in it for the last thirty years. If many Arabs, every American’s favorite bogeymen of the hour, can evict their corrupt leaders, maybe it is time smart Americans did.

Tuesday, March 1, 2011

How the Bankers’ Greed is Ruining the US Internationally

The United States has slipped from second place to 13th out of 34 countries in the number of students enrolled in university, and it is stagnating in science teaching—in 17th place—and doing poorly in math, in 25th place. In contrast, more Chinese are enrolling in universities, which means there will be more scientists in China than there are in the US, driving up Chinese scientific output, said Penn State professor Caroline Wagner at the annual meeting of the American Association for the Advancement of Science (AAAS).

At a time when the greed of bankers has forced United States and Europe to make severe cuts in government spending on social services, but also on support for industry and science, China has significantly increased spending on science and technology, said Denis Simon—a professor at Penn State University who is also the science and technology adviser to the mayor of the Chinese city of Dalian—at the AAAS meeting. Simon said that the Chinese hope to spend around 2.5 percent of gross domestic product (GDP), the sum of a nation’s annual output, on research and development by 2020.

In the United States, Republican lawmakers are talking about trimming a billion dollars from the National Institutes of Health (NIH), the world’s largest public research institute, and slashing funds for other science and research agencies, negating the billion dollar boost President Barack Obama proposed for science and health research in his 2012 budget. Republicans want to make Joe and Jane pay in poorer wages and conditions for the trillion dollar US deficit, much of which was incurred by the treasury in bailing out moribund banks “too big to fail”. Knowing that, the mainly Republican banksters milked their bonus scam—collecting huge bonuses for selling and reselling junk bonds in a type of Ponzi scheme which inevitably would collapse, but not before bankers and financiers had lined their pockets at the expense of the taxpayer.

The Republicans also want to slash funds for education by some $5 billion, even though Education Secretary, Arne Duncan, has warned that the United States must better educate its kids, especially in science and math, or risk becoming uncompetitive in the global economy.

Another sign that China is moving to the top of the science league, the number of quality scientific papers coming out of the country—measured by how often they are cited in other studies—is growing exponentially. How often a peer reviewed scientific paper is cited by another scientist is a key measure of quality. The proportion of Chinese papers being cited is up, while the proportion of citations of US and European papers is down. China already produces more research papers in the fields of natural science and engineering than the United States, which as yet remains in total the biggest producer of scientific papers in the world. But Wagner warned:

On current trends, China will publish more papers in all fields by 2015.