Tax the Rich!

The 1960 federal tax system was progressive even within the top percentile, progressing from an average tax rate of around 35 percent in the bottom half of the top percentile to over 70 percent in the top 0.01 percent. The super rich were heavily taxed, yet post-war the economy was booming. How was that possible when taxation of the rich, we are told, stops them investing in job creating ventures?

Well, the greater progressivity of federal taxes in 1960 compared with 2004 comes from reducing corporate income tax and estate tax. Corporate tax (taxation of capital income) collected about 6.5 percent of total personal income in 1960 but only around 2.5 percent today. Taxation of capital hit the top income groups because capital is concentrated in that tiny fraction of the population. Estate tax also decreased, from 0.8 percent of total personal income in 1960 to about 0.35 percent today. The decline in these two taxes has given the wealthy percentiles of the population a big boost over the forty years being considered.

Knowing that their capital income was being taxed meant it paid the wealthy in the long run to reinvest in the firm rather than taking income, but building for the future. Taxing the rich is better even for the capitalist. It makes them do what they are supposed to do—invest! Investment creates jobs!

Tax the Rich Every Last Penny Until the Money Banks Stole is Replaced

Too many people believe the political and media propaganda that we have overspent and we must cut back.

Keep reminding them that the banks overspent, thinking mortgage collateral—houses—would rise in value to cover it—in fact, on the assumption that housing prices would rise indefinitely. They spent money they didn’t have, giving themselves massive bonuses for doing it, then, when the housing market collapsed, they told governments, governments!, they were too big to fail, and told governments, supposedly our governments, they had to give them £$trillions from national treasuries—our money collected as taxes—to replace the money the inept bankers had lost on junk mortgages and junk bonds. What did we have to do with it?

We have already paid the banks—the money they were given was not the government’s money, it was our money, entrusted by us to governments for nation wide social use—yet these governments, supposedly our governments are making us pay again, through enforced austerity measures that have nothing to do with us overspending. Tell them to stuff their austerity measures that hit everyone except the super rich, and to get every penny back from the rich leeches who do nothing and deserve nothing of ours.

Impose a Supertax to Recoup the Money Robbed from our National Treasuries

After the UK bank bailouts in 2007-8, which the National Audit Office said emptied the British exchequer by almost a trillion pounds, UK Labour Chancellor, Alistair Darling, said the banks were henceforth to show restraint, and boasted of the 50 percent supertax he had imposed on bankers’ bonuses. Actually, it was a one-off payroll tax that would only raise £550 million—about 0.06 percent of the money the robbers had received. The bleating professional defenders of the City called it a fresh attack on that sacred institution, but nothing is being said about it now that banks are rewarding their executives, like Stephen Hester of RBS, for that staggering robbery of the treasuries of all the leading capitalist countries, leaving everyone except the ruling junker class tantamount to being bankrupt.

The measure, feeble and ineffective as it was, would prompt defections from the City, the publicity lobbyists claimed. All of these bankers can, apparently, get immensely rewarding jobs anywhere else in the world, and now they shall! It is their own propaganda, though doubtless, like all greedy opportunists, they believe it. And Darling said the banks would actually pay the bonuses tax, so the burden again falls on us, guileless slaves of the rich, whether it is through the exchequer or through the banks that we are robbed. John Whiting, tax policy director of the Chartered Institute of Taxation, immediately warned that the banks would find ways around the tax!

Bonuses are only part of the problem. Income tax is not merely unfair, it is regressive—the richer you are, the less you pay. One of the very richest men in the USA, Warren Buffett, has openly admitted that his tax rate (18 percent) is lower than that of his lower class secretary (30 percent). Can anyone deny that it is grossly unfair that the rich should pay less national tax than those who are much poorer? How is it possible? When income tax was introduced temporarily in 1842, even Queen Victoria paid it. The monarchy later, when it became a normal feature of government funding, was excused it. But in 1992, the British Queen volunteered to pay it again—no doubt with some persuasion—but hoping to gain popularity at a time when monarchy was under criticism.

In 1909, British Chancellor of the Exchequer, Lloyd George, set income tax at 9d (9 pence) in the pound (3.75 cents in the dollar), for incomes less than £2,000, which amounts to about £160,000 at 2012 values. He set a higher rate of 12d (one shilling, or 5 percent) for incomes above £2,000, and an additional “surtax” or “supertax” of 6d (another 2.5 percent) on the amount by which incomes of £5,000 (£400,000 today) or more exceeded £3,000 (£240,000 today). This scheme, applied today, would mean rich people simply pay tax, not supertax, on earnings up to £240,000, but would owe the exchequer £4,000 as soon as they earned £400,000. Effectively, the rich would experience a hike in tax of just 1 percent of their income when they went through the £400,000 barrier, hardly a backbreaking jump. As things stand, the megarich would simply hire top accountants, lawyers and lobbyists to ensure the nation never gets the money they owe it, if everyone else does! But, if this sudden hike were sufficiently large, and avoidance and evasion of it were treated strictly as criminal, banks and corporations would not be inclined to overpay directors, and they would not want to recieve more than the limit and suffer the penalty of the tax barrier.

Republicans brag that, when they took Congress in 1994, they lowered taxes creating an improvement in the economy, and higher tax revenues. Since then they have perpetually called for the same strategem, even though the improvement they boasted of was short lived. What they want is lower taxes for the rich, but it is cutting taxation of the poor and middle classes that improves spending, business transactions, and ultimately the economy as a whole. Money rises like a gas through the classes of any capitalist society like ours, it does not trickle down like water, at least, if it does, it does not trickle down at home where it is needed!

Time series suggest that governments resist raising tax from the rich except in crises. Then they have sometimes lifted taxation into the supertax category of over 90 percent. When this is done, the revenue is fed in at the base of the economy in public projects and better benefits, lifting spending power at the base and thereby stimulating the economy throughout by the multiplier effect—the way each dollar or pound is spent over and over again, once someone poor gets it to spend in the first place, and the way an initial expenditure triggers further ones, like a tin of paint for the front door stimulating the decoration of the rest of the house, which now looks shabby, then new furniture, and with fresh aspirations, a new car, a new home, and so on. It is Keynesianism. It works! So, taxing the richest boosts the economy. Reducing taxes on the rich induces them to accumulate more capital which they regretably are too often ready to invest overseas for even better profits. Meanwhile, our own economy is deprived of liquidity and unemployment and poverty rise. Tax rates for the richest were being cut until 1928, but they failed to stop, and arguably exacerbated the Great Crash of 1929 and the following long depression, ended only by WWII. Our situation today is frighteningly similar.

Curiously, considering that the upper classes in the USA—not to mention many of the middle classes too, albeit perhaps influenced too much by patriotic propaganda—constantly demand foreign wars, the top rates of income tax go up while wars are being fought and afterwards when their costs have to be met. In WWI, the top US rate of income tax reached 77 percent, but in the aftermath of WWII it went as high as 94 percent. The US Right Wing, who bleat their propaganda line that Obama is a “commie” when he is not being a Moslem or a Satanist, would be certain that supertax equates to communism. Yet it has inevitably preceded the US economy picking up, so that the supertax was soon lifted. Perhaps too soon. UK supertax was lifted in 1973, but replaced by rates of income tax progressiing from zero for the very poorest to much higher levels for the rich, albeit falling short of a supertax. Maybe now, it should be a permanent feature of the modern capitalist state.

HM Revenue and Customs (UK) claims that twice in the post-war years, special tax rates have pushed income tax above 100 percent. Sad parasites of other people’s work received unearned income from stocks and shares, and apparently paid the taxman more than they earned. They must have been Warren Buffets living in cardboard boxes under railway arches. It is a highly dubious calculation which must assume that the different rates are applied additively. They were not. Some rates were either/or, not both in succession. No wonder the tax men leave the calculations to each of us ourselves to submit via self assessment. The people who do pay rates of over 100 percent are the poorest—those on benefits who lose all of certain benefits when they earn above certain levels of income. Unless the increase in income exceeds that lost by loss of benefits, income declines, so the effective tax rate of such poor people is over 100 percent. This is very common indeed, and explains why many people give up looking for work.

When a nation is divided into two contending classes, both cannot have their own way. Democracy is meant to ensure the majority rules, subject to its laws not oppressing the minority, but, for that, it has to be fair. It is not fair when one section owns all the media, and the rich can do that through their wealth. The American paranoia about socialism leads ordinary Americans to accept the rich man’s propaganda, and support the rich man’s interests contrary to their own. So that when sensible policies are proposed the people are confused by those who want a less practicable and more greedy policy, so that what emerges is precisely the wrong kind—acquiescence in wasteful policies, such as militarism and imperialism, rather than taking steps in the right direction.

The British Labour Party has exactly the same problem. Beguiled by Blairism and topped up in the Blair years with careerists and opportunists, it is quite incapabale of taking the right decisions. Even though the Con Dem coalition is on shaky ground, and the people are sick of the succession of Thatcherite policies over the last thirty years by successive governments, the Labour leadership is tied to its outdated mode of thinking—deregulated neo-liberalism—when something new, and actually left wing is needed in the face of the bankers and the junkers.

Americans Get More Antisocial as the Meanness of Capitalism Registers

Sociality is essential to humanity. It is the feeling of care and concern that people have towards each other, and is a deep instinct within us from the time when we lived for several hundred thousand years in small groups which gave us the advantage over fiercer animals that eventually made us king of the jungle and of the world. The instinct to work in small groups is still with us, but is getting weaker:

There is a lot of evidence that our democracy is based on having citizens connected with one another. When we connect with one another in associations we learn that our self interest is actually connected to the interests of others. That gives us a conception of the public good, common identity, and sense of common responsibility as a nation and as citizens. Any decline in that scholars see as potentially detrimental to democracy.

Pamela Paxton

Pamela Paxton is a sociology professor and Population Research Center affiliate from The University of Texas at Austin. She and Matthew A Painter II, an assistant professor of sociology at the University of Wyoming, used the Iowa Community Survey and the General Social Survey to explore the changing nature of voluntary association membership between 1994 and 2004, using responses from approximately 10,000 citizens in 99 small towns in Iowa, as well as a national sample of the United States population. They compared active members, who regularly attend local meetings, to checkbook members who do not attend any meetings and whose only requirement for membership was likely just to write a check.

Small town Iowans on average actively participated in about a quarter fewer associations in 2004 than they did in 1994. Active participation in recreational groups declined the most at 6 percent. The smallest declines in participation occurred for church and political/civic associations. Church participation declined by 3.5 percent, and active memberships in political and job related groups declined by 2 percent, the latter decline being less because 2004 was a presidential election year.

Overall, the evidence from Iowa suggests not only declining membership in general, but also a shift in how members participate in voluntary organizations. All categories show small but significant checkbook membership of all categories, except one which remained level, increased 1 to 1.6 percent. Paxton said:

Even if we thought these checkbook memberships were equivalent to being actively involved in an organization, the decline in the active associations is greater than any increase we are getting in checkbook memberships.

Paxton said scholars are still trying to understand the decline, but if it is happening in small towns in Iowa, the heartland of America, she expects the declines may be even more drastic elsewhere in country. Potential explanations for the shift from active to passive participation include:

• communities have less neighborhood interaction
• commutes are longer
• television and computer gaming inhibit interaction
• generational differences.

Academics have to think of the sources of their funding and therefore are often timid in expressing conclusions that funding bodies do not like. The fact is that capitalism is based on the ruthless exploitation of your neighbor, everyone wants to join the rich man’s club, and capitalism is supposed to be the way to the American dream, trust disappears, neighborliness and sociality seem old fashioned in the increasingly harsh America. People withdraw to their tellies and computers. Turn to any political forum and you find the defenders of the system, people who are doing all right out of it, and many, like these, who are plainly exasperated by unemployment, hardship, uncertainty, unfriendliness:

1. interactions between people now always have the motive of profit
2. the reality of commercial competition is that anything goes, to win
3. a monetarist system always breeds distrust
4. employers always have some angle or con going even against their own employees—I’m sick of it
5. the system of government and economics is designed for people to screw one another
6. I don’t trush anybody any more—I haven’t found one person worth trusting
7. poor people are disposable, there are so many of them they don’t individually matter
8. societies with large impoverished classes soon acquire repressive means of state control of those populations—the USofA used terrorist threats to set up more repressive mechanisms
9. I don’t think I’ve ever met anyone who isn’t some sort of con artist or predator or something—to hell with them
10. our country became great is because we wanted it to help the poor and the elderly
11. it is unfairness that is ruining the country—how does a corporation making billions in profits not pay taxes and get government disbursements every year?
12. tax dollars should help our communities not fund foreign wars and corporation bribes—decent government gives us back the tax we pay in better community services, benefits for our people out of work, community projects that create jobs, and community education, then interaction will grow
13. it is a sick society that keeps a huge prison population and pays most people peanuts for doing menial jobs like flipping burgers, but an immensely rich minority who takes everything to spend abroad—what’s fair?
14. society needs a social contract—without it, a society has no stake in its people, and is ripe for revolution.

Americans have been conditioned for decades to hate socialism, yet it simply means building a society that everyone wants to live in. It does not mean collecting tax dollars from the poor and middle classes to give to the megarich.

The six broad categories of organizations in the study were service and fraternal organizations, recreational groups, political and civic groups, job-related organizations, church-related groups, and all other groups and organizations.

America Stops Laughing to Correct Apoplectic Republican Comic, Rush Limbaugh

Alternet has a plethora of interesting articles and often more interesting and informative comments. This link is to a comment thread to a short article about the right wing propagandist Rush Limbaugh, who is no repecter of the truth or even of facts. A comment by passnthru2 noted:

1. The richest 1 percent has 43 percent of the nation’s wealth—6 times that of the bottom 80 percent, which has just 7 percent
2. the richest 5 percent has 72 percent of the nation’s wealth—10 times that of the bottom 80 percent
3. the top 20 percent has 93 percent of the nation’s wealth—23 times that of the bottom 80 percent
4. the top 50 percent has 97.5 percent of the nation’s wealth—39 times that of the bottom 50 percent which has 2.5 percent

44 percent of Americans couldn’t get $2000 together if their lives depended on it, while the richest 400 families:

1. have $1.4 trillion, and yet,
2. pay under 14% income tax

These rich people and the big corporations they own are sitting on piles of cash, yet they refuse to pay decent wages, and do everything in their power to lower the workers wages, for example using professional bigots like Rush Limbaugh whose splenetic rants impress a substantial section of the redneck population. It explains why there is a recession, and illustrates the huge fault in capitalism.

The rich always want more, and have to drive up profits to get more. They can do it by charging more and by paying their workers proportionally or absolutely less. They can even move their businesses abroad and pay the domestic worker nothing at all! But when people have less to spend whether it is absolutely less through wage cuts or relatively less by price inflation, they cannot afford to buy as much as they could previously. The retail trade goes into recession, and manufacturing businesses follow.

RustyCannon observed that if they were to pay people better, retail and therefore industry would be stimulated. Poor workers necessarily spend what they receive in earnings. They do not earn enough to save it. So the economy would be stimulated if the rich would just realize that they are starving the economy of liquidity by their greed. If the rich will not do it then the government must. President Carter created jobs, then Reagan came in, cut taxes for the rich, and drove unemployment through the roof.

The theory was “trickle down”. Give the rich more tax breaks and less regulations and they will spend more readily, employing people to expand their businesses. It doesn’t work. Republican President, George W Bush did not create as many jobs in the two terms of his presidency as did Carter in the single term he had. The rich just begin to expect more tax breaks to accumulate more risk free wealth—it is easier than taking the risks of trading. 30 years of this has just lead to manufacturers closing factories and destroying lives at home to move maufacture abroad to low labor cost countries. 50,000 manufacturing companies went in the Bush administration alone.

The large and enterprising middle class that was the economic engine of the USA is being impoverished by the stranglehold the rich have on the nation’s ready money—the top 400 wealthiest own more than the bottom 150 million. The economy is starved of demand. Middle class wages have been flat for 3 decades, yet the cost of living has continued to climb. Two income homes are now needed just to get by. The middle class no longer has as much disposable income, and what it has is falling, leaving its demand for products and services lower, with knock-ons to other small businesses dependent on them.

When people, encouraged by the sleepwalking bankers, began using the equity in their homes, they created a false demand bubble, and a false sense of prosperity. Disastrous greed among bankers who thought our money was theirs, led them to gamble with those unsound derivatives. Trading them backwards and forwards each day yielded immense bionuses for doing nothing in the least bit useful. That bubble burst, leaving us in the mess we are in, yet with no will to regulate the banksters and the rentiers, and sustained “head in the sand” insanity among Republicans determined to tie down Obama, and bring him down, if at all possible.

Further cuts as demanded by the Republicans can only make the situation worse, and that is the fault of the Republicans themselves who ought to have accummulated in the good years to spend in the bleak ones. They spent through the good years and now, when spending is the only way out of depression, they want to cut. Strong financial regulation and a New Deal like FDR’s will be necessary to reinvigorate the economy—measures that Republican bigots like Limbaugh call socialism for the sake of their indoctrinated disciples.

GBS—Just What is the Point of the Rich?

Taxation of the poor and cuts in public spending by cutting government expenditure causes personal suffering among those who have to live off smaller take home pay, or who lose their jobs. The unearned income from returns on stocks, profits, bonuses and commissions—the ways the rich maintain their wealth—is treated “as so sacred that we must all tighten our belts sooner than touch it” (GBS). The media pundits and tame academics employed by the wealthy class explain to us that we need the investments of these rich people to replace and accumulate capital, without which we would have no industry at all. So we have to let this narrow class of super rich have so much money that it is quite impossible to consume, leaving them with no alternative but to invest it:

After stuffing themselves with every luxury that can be imagined on the face of the earth, they still have millions which save themselves because they cannot be spent. That is the argument for having an enormously rich class amongst you. What have we to say to that?

In the first place, it is an enormous waste to overfeed a handful of idle people and their millions of hangers on before you can save money when no money need pass through their hands at all. No sane nation, which could accumulate its capital in any other way, would chose that way. Well, what on earth is to prevent us from accumulating our capital in another way? Why not take its sources out of the hands of these gentlemen and accumulate it ourselves? They would then have to work for a living, but we would all be the richer and they all the happier.

G B Shaw, In Praise of Guy Fawkes, 1932

After all, they are always telling us that work is good for us, so they must be all the happier to be able to join with us in doing it, those of us, that is, who have jobs in the first place. But we will be able to sensibly organize employment by looking to rebuilding our decayed cities and providing better public amenities, thereby employing many who at present have no jobs and live in derelict inner cities despairing for the future of their kids who know nothing but the local drug baron.

Then again, what guarantee have we that these people will invest their surplus cash for the good of the nation? As a rule they send it wherever labor is cheapest, anywhere in the world except the USA.

Here we are with our cities rotted out with slums, and with the most urgent need for capital to do away with those slums and to improve the condition of our people, to give them better food, better clothing, better housing, and better education, for bringing our obsolete machinery up to date, organizing agriculture collectively, and introducing all the new scientific methods. We need capital for those things, but if there is a penny more in the way of dividend to be got by our capitalist class by sending money to the Argentine or anywhere else, they send it there.

G B Shaw, In Praise of Guy Fawkes, 1932

In the present day, China has vast amounts of US dollars. By controlling the release of these dollars on to the market, the Chinese can control the US economy, making exports expensive and imports cheap, perhaps, with disastrous consequences for home industries. What do the super rich class care? They bother only about their investments which make their money abroad anyway, so the US economy scarcely matters to them.

So you see the one defense you can set up for the conspiracy of silence about unearned income is nothing but a silly excuse for shirking the great enterprise of Socialism. It is not true that wages must be cut, public enterprises much be starved and stopped in order that more hundreds of millions can be added to those that are being wasted at present on idleness, extravagance and corruption of labor which are ruining us.

G B Shaw, In Praise of Guy Fawkes, 1932

As to innovation, it is true that private corporations have developed wonderful technological advances, but very much of the original scientific priming behind it is financed by the state not by the idle rich who too often consider it far too chancey to finance research, and then government contracts often under the auspices of the military are often necessary to encourage the private corporations to do anything towards technological development. In short, risk avoidance actually holds back progress when investment is in private hands. The rich look for security nowadays not enterprise. It is the small independent businessman, rising from the working and middle classes, who is often the entrepreneur, and they frequently have problems raising funds for start ups and growth.

Warren Buffet Says Squeeze the Mega Rich

We have noted elsewhere in this Blog that professor Greg Philo found some rich people—the intelligent ones—were willing, even glad, to pay additional tax if it meant greater economic and social stability in the nation and the world. Now, Warren Buffet, whose net wealth is valued at around $50 billion, in The New York Times has lashed out at Congress, saying that they were not handling tax breaks in a way that is best for the country. He called for higher taxes for the super rich of America, himself included.

While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we megarich continue to get our extraordinary tax breaks. These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species.

While he paid nearly $7 million in taxes last year, he should have forked over much more to the federal government but tax breaks kept him from doing so, he wrote. “It's nice to have friends in high places”, but Congress need not “coddle” the super rich any longer.

GBS—What Obama Should Have Done in the Face of Congressional Budget Opposition

…the existing system is in essense nothing but a gigantic robbery of the poor. what is the matter with society is that the legal owners of the country and its capital are getting for nothing whatsoever an enormous share of the wealth produced from day to day in this country… balancing the Budget or forming a Budget was simply this: how much money can we get out of the people?

G B Shaw, In Praise of Guy Fawkes, 1932

Of course, when all the measures directed at the poor are insufficient, a capitalist President and Congress have to consider taxation of the rich, who will never consent until the politicians have convinced them that every last dime has been screwed from the people. Today, they are even greedier and more unreasonable than they were in the 1930s, and we know how they ended!

If Obama were a socialist, having no socialist majority in Congress, according to Shaw, he ought to have resigned in the face of the idiotic Congressional Republican opposition. He should have said:

Very well, I resign, so you Republicans take this budget in hand yourselves. I know perfectly well that you will do everything you can to get the money without coming down on the rich. You will cut services and amenities, and tax every dime of earned wages and nothing or as little as possible on unearned incomes. You will pretend that the US of America will be communistic if a dime of the vast wealth of the rich is conscripted on behalf of the country, and will continue in the face of the dire situation to leave the rich all their tax breaks and bacon lard.

You will not mention what sum of money those tax breaks mean to the treasury, and therefore to the people, nor what the treasury could raise if the rich were obliged to pay tax even at the same rate as the poor, let alone the higher rates that are justified. The poor will spend their money here in the US, creating jobs for others, and demanding goods and services boosting our economy. The rich spend and invest much of their money abroad, depriving the US of jobs, goods and services, and breaking communities in the process.

Very well, serve the rich according to your traditions, and take the plaudits of success or the consequences of failure. I am not in on this deal. My conscience is clear.

China’s Competitive Advantages Grow While the US Borrows War Bucks!

Writing in the current issue of the International Journal of Sustainable Strategic Management, Jack McCann of Lincoln Memorial University, in Tennessee, says that China has witnessed an average annual growth of about 10% for nearly two decades and has been uniquely stable in the present world economic crises. Indeed, China’s merchandise trade has been growing three times faster than world trade at about 14%. China currently produces nearly two thirds of the world’s bicycles, a third of its television sets and air conditioners, and half of the world’s microwave ovens. China has become the world’s second largest oil consumer after the US. McCann says:

On paper, globalization poses the long term potential to raise living standards and reduce the costs of goods and services for people everywhere. … China’s pool of cheap labor may dominate world labor markets for decades, giving it a monopoly on cheaply manufactured goods

Globalization has wrought new opportunities for many nations. China is no different from how the US was, and how any other nation is in attempting to make the most of its advantages, cultivating friendships with third party countries. Meanwhile shamelessly greedy US politicians try to support enormous war spending without frightening the rich with taxation! Instead the US trade deficit with China increases year after year into the hundreds of billions of dollars. What will happen if the Chinese decide to release the dollars they hold on to the market? The dollar will be devalued and the US bankrupted.

So tax the rich to pay US workers for what they do best—make excellent products that the world wants to buy. Rebuild our decaying cities and infrastructure. Use our technical knowledge to improve labor productivity at home, instead of outsourcing abroad! Compete!

US Credit Worthiness, Tax Hikes and the Balancing of the Federal Budget

Krishna Tummala, director of Kansas State’s public administration program and professor of political science simply explains the reason for the nation’s burgeoning debt:

People demand more services but are not always willing to pay taxes. The politicians promise more services without telling them the cost and that they must be paid for. Instead, they use the so-called painless way to go about this by allowing deficit budgets. This means not only the politicians must educate themselves on the issues, but their constituents as well.

He adds that the argument that the federal government should live like we do, within our means, is hypocritical. The personal debt of Americans is close to $2 trillion, so effectively we all live in debt. The federal government just is behaving like we do. Moreover, it has the responsibility for the common welfare and general defense, as the Constitution requires. Yet state governments, 48 of which require a balanced budget by law, are favorably compared to the federal government. But state governments differ in their budgeting compared to the fed. The federal government has only one budget, but each state has two, a current account and a capital account. Only the state’s current account—effectively its day to day running costs—must be balanced. The capital account is the place for major project expenditures, and they have to be carried forward annually.

The federal government borrows money through Article I of the US Constitution, and had it not been able to, it could not have borrowed $15 million from Britain in 1803 to complete the Louisiana Purchase. It doubled the size of the country, made it possible for it to be united coast to coast, and without it, it perhaps would never have become the world power it is. Now the national debt is $14 trillion, but it is not owed to the British. The Chinese have around $3 trillion of it.

People who want a balanced budget, many of them Republicans, have to realize that it will need taxes to be raised. Cutting expenditures will not be enough, and will shut down the country first. But Republicans will not condone tax hikes because the people with the money are leading Republican donors. So, cooperation between the parties has been lacking, only quarreling, a lot of posturing and little dialogue. The deadline for increasing the debt ceiling is 2 August, with the country’s credit worthiness at stake. If the debt ceiling is not extended, the country will default, hitting the economy of the whole world, everything now being so interconnected.

The country’s credit worthiness underpins the financing of debts. Foreign countries must have confidence in the US economy or they will not be willing to lend. Of course, credit ratings agencies such as Moody’s and Standard & Poor’s can evaluate the soundness of the US economy but the ratings agencies were giving excellent ratings to the financial sector “before it went belly-up”, Tummala wryly concluded!

Are Americans Sick Of War?

A poll by “Pulse Opinion Research” shows that 72 percent of likely voters in the US think that the country is fighting too many wars abroad. Operations continue incessantly overseas and new ones always arrive when old ones seem to be getting settled, like Libya after Iraq. The US people increasingly want to know when the military will finally listen to the people and step back.

Americans see the country deep in hock, and millions unemployed and underemployed, while millions more, even middle class people, worry about the possibility of getting the bullet—fired! Or their compensation slashed in some economy drive. Yet administrations always have plenty of money to fight foreign wars. Something Americans can do without in these allegedly hard times is their tax dollars wasted on useless wars.

With Americans wanting out, this administration is doing little. Yet Obama campaigned under the banner of “Change”, of which ending war was one prominent constituent part, but like Clinton he has broken every promise and spinelessly has bent over to the militarists and the armamaments manufacturers, introducing the US into more wars on his watch. Even a Republican presidential candidate, Ron Paul, thinks these wars “endless” and “unwinnable”.

Is Paul doing the same as Obama? Codding the voter? Elections in the USA are an utter fraud. It does not matter who wins, the same policies—aimed at keeping the military and industrial barons and their financiers in banking and insurance swimming in profits—are retained, and the professional lobbyists in Washington with their bucketloads of bribery dollars can always get their own way with grasping representatives. They all have their price, and it isn’t high for the filthy rich minority with enough megabucks to control the USA.

Yankees threw off the yoke of the English, but now they'll have to throw off the yoke of their home grown oppressors. The Brits had to do the same. They threw out the king in the seventeenth century, but kings returned. In the nineteenth century, they had to strike and riot to get the two reform acts passed that pulled the greedy rich into some order for a couple of centuries. Now the British will have to do it again, too!

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.

Who are the “Mindless” Ones?

UK Students Protest Vigorously Over Political Liars

Yesterday the Liberal Democrats in the UK’s Con-Dem coalition government voted to increase university tuition fees by 100 to 200 percent. Some did vote against and a few abstained, and even a few Tories voted against the outrageous measure, but sufficient members voted for it to ensure a government majority of 21 in the House of Commons. The Tory House of Lords, newly packed by Tory leader, David Cameron, with a load of Tory time servers, will back the motion.

Students are so outraged at this that they have started a campaign to register their utter disapproval by confronting the state, and particularly, that section of the coalition, the Liberals who solemnly pledged before the election that they would not support the Tory proposals for higher university fees under any circumstances. Liberal leader, Nick Clegg, says the pledge was a mistake because the Treasury is worse off than he and his party had reckoned. It therefore cannot be honored.

Indeed, there can be no honor among thieves and Clegg had his own excellent education because he is from a long line of them. His family are among the country’s rich, he had a private education at Westminster school, and went to one of the UK’s best universities, Cambridge, because his father was a banker, and his varied family background includes Ukrainian nobility. He is, in short, not without a few quid to his name.

Now, having joined the coalition government led by another rich Tory, David Cameron, he has decided that the country can no longer afford free, or even cheap, university education because the Treasury is deep in debt, and the country has to fill it and meanwhile service its borrowing requirements—we have to borrow from the banks to pay the interest on our debts, and so we cannot afford public services like free education any more!

The Banks—Robbers!

The students, however, unlike many trades unionists and Labour Party supporters are intelligent enough to realize the public purse is empty because we have given all our money and more to the banks to bail them out of insolvency when they were on the verge of collapse two years ago through speculative investments meant to further enrich already super rich financiers, and line the pockets of their agents the bankers simultaneously, through the enormous bonuses they paid themselves for robbing the rest of us.

All of this done under the innocent and admiring gaze of the pathetic supporters of the criminal New Labour Party of one T Blair, otherwise known as T Bliar, who is now coining it for his neoconservative takeover of the British traditional trades union and socialist party on behalf of the big criminals who bribed him to support the US Bush administration in its greedy adventures, and are now faithfully rewarding him with their spare change.

Students know it, and are young enough and angry enough to want to do something about it, unlike most of the British working class who are gulled into a zombic stupor by a media controlled by the same class of megarich criminals feeding them mindless reality TV, soap operas and a “get rich quick” celebrity culture that blurs the distinction between fantasy and reality for many. The students, after sleeping for almost fifty years, are now waking up to the state of the nation. We are not broke, but we have been robbed in a blatant scam, and the students of the future are among the ones who will have to pay for the heist.

Note thet these mindless students are not protesting for themselves. Most of them will have graduated before the measures are brought in, but the university under-graduates have been supported by many school pupils and students of pre-university sixth form colleges, who know they will be affected by the government class-laden legislation. Class-laden? Young people from poor families will hesitate getting into massive debt before they even start on their adult careers, and the assurances of grants and special measures for the poorest does not impress them. They are sops to get the measures passed, and need be worth nothing more than the Liberal “pledge” to oppose such acts. That was plainly worthless!

Mindless MPs

Yesterday’s demonstrations ended up chaotic, and the culprits are being called names by the media—“mindless” and “thugs”. It is the media pundits who are mindless, and the idiotic MPs who think they can gull the people forever. The students are showing that is not the case. Unjust societies fall apart because people will not put up with it, and the British are beginning to realize how they have been tricked. It is simply that they have lost the will or the courage to publicly demonstrate their diaproval, but students are leading the way.

The students are not “mindless”, it is liberal MPs like the local empty-headed idiot, Don Foster, who represents the rather posh city of Bath. Someone threw a rock through his window, and Mr Foster responded that he did not enter politics to win a popularity contest but to change things. He seemed quite oblivious to the fact that he actually stood as an MP in a popularity contest—it is called democracy! MPs are elected when they gain the popularity of the electorate, and that popularity is based on what they promise to do.

The half witted Foster, reneged on his promise and merely had a brick through his window. Next time, if the electorate are learning anything, he will be evicted. The local MP for this constituency of Somerton and Frome, David heath, a Liberal Democrat, who has had a narrow majority for several elections can hardly expect to remain in his seat in parliament now that he too has voted against the students’ and the country’s best interests. These two and their fellow opportunists will doubtless by then have abandoned all pretence of being Liberals and will have joined the Tories.

Mindless Media

Media pundist are never “mindless”. They write their columns and usually have sufficient ego not to want to humble themselves even when proved to be wrong. One of them, on Murdoch’s TV tried to bombast an NUS spokesman into condemning the NUS organized demonstrations, but the young man admirably stood his ground despite the anchor man speaking over him, and attempting to harass him into slipping up. The demonstrations had been taken over by “anarchists”! It is a general assertion made by media pundits trying to make out that demonstrations are fundamentally vehicles for what they also like to call “rent a crowd”, professional rioters. Quite where these professionals hide or make aliving when there are no riots to lead, is hard to figure, but they always emerge mysteriously when a demonstration gets out of hand. No one ever seems to figure that it is frustration and anger at being duped by professional careerists called policemen and politicians.

No one ever considers either that, it being in the interest of the state apparatus to discredit demonstrations by introducing petty but violent acts, they have undercover agents provocateurs actually causing and inciting trouble. Any self respecting professional rioter, having broken into Millbank or the Treasury building would have set them both on fire, but these professional anarchists only set fire to a few placards and wooden staves in the streets. These professionals could hardly expect to get employed again, could they?

Mindless Police

Certainly the police professionally anger crowds by their so-called “crowd control” techniques. They “kettle” crowds or sections of a large crowd—confine them by force—into a narrow space and refuse to allow them to pass. This naturally causes immense frustration when people want to relieve themselves or to go for food or drink. Yesterday, a section of the crowd were induced to cross Westminster Bridge to escape the kettle, but then were stopped half way across and confined for hours in the narrow space of the bridge. The police are meant to be the guardians of the right of lawful citizens to move along the Queen’s highways, but they wilfully break the law themselves, with the result that violence is the only way to escape. Innocent people have died in these kettles, and a young man needed a three hour brain operation yesterday after a baton attack. It goes without saying that any rogue policeman will be innocent.

The police too are “mindless” because the media are forever highlighting violent protests but ignore peaceful ones. A peaceful “candle lit” vigil across the bridge in the South Bank was hardly mentioned by press or TV. So the provocation of the police and their plain clothes agents might actually be giving the publicity that will arouse the sleeping giant of the British public and their generally compliant trades unions from their slumbers.

The Effective Tactic—Destabilization

If Parliament relies on demonstrations being forever peaceful, and therefore of no consequence so it can simply ignore them, it is making a big error, one it has often made before. The present situation is plain to anyone who thinks just a little. The rich get richer even when the country is, they tell us, broke. Only last week, Ireland had to go cap in hand for a large multibillion Euro loan to bail out its own banks. This week the Irish banks are handing out tens of millions in bonuses, just as British and US banks have done. The banks and their employers, the super rich financiers, gleefully put up two fingers to the world, while the people have to scratch about to pay their mortgages and rents, aye and taxes, if they can. That is why the students are angry, and why we all should be angry too. It is why we should support them and ignore the whingeing special pleading of the press and the broadcast media.

Listen! The richest 1 percent of the world’s population owns over $200 trillion. No need to guess where most of the 1 percent live. Maybe as little as 5 percent of this largess would solve the world’s economic problems, but Obama has just caved in to the rich man’s lobby in the US called the Republican Party, and most of the world’s leading developed countries have bailed out their banks while putting the burden of their empty treasuries on the people, not where it should be, on the minority who own as much as the rest put together. Governments ought to be joining together to ensure the rich are taxed and pay it.

Curiously many, the most intelligent among the rich, do not mind it as a temporary burden! Those rich people not among the “mindless” realize that their riches are most secure in a stable world, and corporate and financial greed is now destabilizing the world. That they do not like. It follows in all logic that the best way to get the rich to pay their fair share towards economic stability is to threaten instability. That is what “mindless” students are doing.

How Does Mixing Business with Politics Differ from Corruption and Bribery?

Most people would disapprove of corruption. It is one of those things people think are bad. Yet few of these same people realize that politically connected firms get massive benefits from their sponsoring of favored candidates in elections, once their favorites get into government. The bailouts of the banks deemed “too big to fail” are the latest and most obvious example.

A study by Russell Crook and David Woehr of the University of Tennessee, Knoxville, found that when firms engage in corporate political activities, such as lobbying and making campaign contributions, they get roughly 20 percent higher profits. So, to fatten your company’s profits, donate to a political campaign!

The analysis of 7,000 firms over various time periods, showed what led them into corporate political activity. The larger the firm, the more likely it was to be politically active, and politicians closer to power, more able to influence policy and legislation, were more likely to receive corporate donations. Incumbents more often got money than new candidates.

Yet in January 2010, the US Supreme Court in Citizens United v Federal Election Commission overturned an old ruling limiting corporate donations to politicians. It gave the nod to higher levels of corporate political influence. Consequently, corporate political donations will be subject to less scrutiny and transparency, and it will be all the harder to know who is sponsoring whom, and to what amount. Crook said:

Given this, we think that the Supreme Court ruling means that corporations and politicians will develop closer relationships than ever before.

In fact, corporations have already donated more money to politicians in the recent elections than ever before, despite the parlous state of the US economy. It reflects the money that big political donors seem to find quite readily to support supposedly grass roots Tea Parties, despite the country allegedly being on its uppers. Plainly the rich donors are not on their uppers.

Why then do corporate political donations lead to fatter profit margins? The corporate bosses do not like throwing money away to no purpose, so political corporate spending has a purpose, obviously. It is to get favorable legislation enacted. The donations are actually bribes! Besides the bank bailouts, another example was the “Copyright Term Extension Act”, sarcastically called, the “Mickey Mouse Protection Act”, in which Disney successfully lobbied to extend US copyrights by 20 years.

Though Crook and Woehr are careful not to say these practices are corrupt, they plainly think they are a cause for concern to citizens. Sticking with the market model, Crook said:

We do not believe that this activity is illegal, but this activity constrains natural market forces and is thus undesirable. And with the new Supreme Court ruling, it is only going to get worse.

The journal, Financial Management, has also revealed that corruption is widespread in the corporate world, and has confirmed successful corporations are often the ones with the most extensive political connections.

Mara Faccio studied several thousand firms and found:

Politically connected firms have higher leverage in the form of preferential loans, pay lower taxes, have regulatory protection, are made eligible for government aid, and have stronger market power. They differ more dramatically from their peers when their political links are stronger, and in more corrupt countries, although these characteristics can be observed worldwide.

She alleges that connected firms appear to enjoy substantial favors from governments, distorting the allocation of public resources. “Firms with no political ties appear to be at a disadvantage”, so, it seems, the pressure is on for all firms to corrupt government! Her study was not restricted to the USA. She looked at 47 countries all together, but political influence by companies was common in both emerging and developed countries, although the methods of political influence varied somewhat.

These studies show that the ordinary voter is oblivious to the way that democracy is commonly swindled by political bribery and corruption, in the USA and in most other capitalist countries, whether advanced or developing. People consider corruption as wrong, but show no curiosity that it is happening daily, and the one who suffers in the end is Joe and Jane Doe, the common man and woman, you and me.

It is time this corrupt system was ended, and it is certain that right wingers dressing up as Captain America and in tricorn hats—led by the nose by private sponsors from among the rich—will not do it. A genuine grass roots movement is needed, and it will probably be led, as it is in France and latterly in Britain, by serious students and angry unemployed young people.

Darwinian Leadership and Human Society

Professor of business, Paul Lawrence, says he has discovered a new idea he calls “Renewed Darwinian” theory. He tells us it addresses questions that have “been amazingly ignored by the academics”, but have “been on the minds of humans since we have had history”. It is a renewed version of Darwin! The common idea is that Darwin is all about the survival of the meanest and the fittest. The most ruthless survive. But Lawrence thinks there is more to it than just being mean fit and ruthless.

It is curious that anyone nowadays should think, like a Christian fundamentalist, that Darwin’s notion expressed as survival of the fittest means that the physically fittest, or the meanest, are the ones who survive the struggle for existence. Evolutionary theory says there are more ways to be fit besides having big muscles, big teeth or claws, and a disregard for anything other than self. And nor have these other methods been ignored by the academics, unless Lawrence is talking about academics like himself, academics in fields other than biology. The academic experts in biology and evolution never doubted that there are many ways of being fit to survive, from being very small to being very big, from being very fast to being very slow, from having unusual senses like echo location to having other peculiar qualities like intelligence, and so on.

Professor Lawrence seems amazed by some of Darwin’s views expressed in his book The Descent of Man:

Any creature, whatsoever, that has the social instincts comparable to those of humans and the intellectual capacities close to those of humans would inevitably develop a moral sense of conscience.

Lawrence explains:

Now, what he’s saying here is that if humans—any creature—had the drive to bond, a social instinct, and a drive to intellectual drives like to comprehend, would have the conscience to help them fulfil those two drives because without conscience you could not fulfil those two drives.

In attempting to explain it further, he tells us a great deal about the mentality of many modern Americans, the people of the “Christian Nation”. He says:

We’ve all heard of the Golden Rule: “Do unto other as you would have them do unto you”, But, we’re not quite sure what it means!

Despite all that Christianity, Americans and, it seems, especially American corporate and political bosses, do not know what the Golden Rule means. That is quite staggering but explains a great deal that has utterly baffled us foreigners, who have admired aspects of American life, but been bemused by American mass selfishness, lack of empathy for others, and readiness to kill everyone they meet in the world to get their own way.

It also confirms a Pew Poll that showed us that, though maybe 90 percent of Americans might claim to be Christians, three quarters of them do not know enough about Christianity or relevant aspects of their own constitution to be able to honestly claim they actually are Christians. Let is not assume that all of them are sociopaths, but simply that the US is not the freedom loving place they like to propagate for the good of the rest of us. Most Americans bend to the pressure of their peers because they are afraid of becoming the butt of their peers’ humor, or worse in a country with more guns than people, put up with their disdain and anger.

People have a natural social need or drive to bond with others, and a desire to be liked and respected. They are indeed aspects of evolution because humanity is a social species. We have evolved to live together, and for that to have happened, we have to have certain instincts or traits like the ones that Lawrence has just discovered, albeit late by over a century. For all that, it is to be hoped that Lawrence will continue to carry forward his ideas into the territories where they are anathema, into the US in general, and management there and in many other countries too.

Four Drives

So has Professor of business studies Lawrence actually understood Darwinism to come up with something novel? Well, he says that humans beings have other drives besides the drive to gain resources. He says we are born with four drives, essential for our basic survival. They are necessary for our species to thrive as a whole species and they are encoded in our DNA and we sense them and feel them mostly by the emotional messages we get from our subconscious as we witness the world around us.

These four drives are:

1. to acquire, to possess, to own things that are necessary for our survival and to enhance our status as individuals
2. to defend our resources from hazards, not only ourselves, our loved ones and our possessions, but our beliefs
3. to bond in long term, mutually caring relationships with other humans
4. to make sense out of the world, to build knowledge that lets us get on with with our everyday lives.

Well, there is not much there that the academics did not know, though it might indeed be new to financiers and business men who always behave as if the whole purpose of life is to grab as much as you can, even though you have no idea how to use it all when you have it.

Lawrence seems to believe that these principles he thinks he has newly discovered go beyond the preservation of particular genes, but he has not so far shown that these traits he describes are not conditioned by genes. But, now perhaps he gets to do his job when he tells us that good leaders take into account all four drives, not just the desire to acquire. He asks us to note that we all have these drives as human beings, and the good leader recognizes it, and ought not put all the emphasis on greed. In practical terms, it means, Lawrence says:

• the drive to bond—treat people honestly, do not lie to them, and keep your promises to them
• the drive to comprehend—tell people the truth not lies, and not spread misinformation
• the drive to defend—be there when the going gets tough, to back up your staff, friends and anyone you have relied on to do work you asked them to do.

These are the ways to have strong long term relationships, and they are natural ways for humans to behave. It is natural too for huimans to look to a leader, but you have to have and keep their respect by helping them understand, acquire and develop basic human drives for themselves. It is having a good conscience, because the Golden Rule in application makes the helper and the receiver feel good, and ready to reciprocate the assistance in future.

Lawrence rightly equates good leadership with good moral leadership. Leaders without any conscience, or one only poorly developed, simply cannot have any fellow feeling:

They do not know what compassion is, they do not know what empathy is, they do not know even what love is. That is something they are never going to experience in their life because they don’t have that feature in their brain when they are born.

If we try to figure out how do we respond to fulfil those drives for ourselves, and are successful in doing so, people will begin to pay attention to us, and maybe think they’ll trust us to leadership. Leadership grows out of one’s own success in leading one’s own life. But, though we mostly have the necessary abilities, we have to refine them, practice them, train our minds to be more effective in ourselves and leading others. So, experience is also needed.

An example is that the world has a lot of organizations loaded with distrust. People do not trust enough in each other to cooperate properly. They think they are going to be undercut some way. The good leader can use the skills inherent in humanity to encourage cooperation, but people have to feel secure enough.

Our Sociopathic Leaders

It is refreshing to hear him say that a disproportionate number of leaders are sociopaths, who lack the drive to bond with others. It is a problem for less than 4 percent of the population, but Lawrence guesses that 10% of people in positions of power may be sociopaths. Like Tony Blair, the former PM of the UK, and in many people’s opinion an archetypal sociopath, they are often charming, and use their charm and lack of scruples about others to climb to positions of power.

A lot of history records the fact that such people have gotten into important positions. The Renaissance was an effort to move away from a sociopathic kind of leadership. The Constitution of the United States was a effort to create a government able to keep free of such leadership. Balancing the power, and not getting power concentrated in any one office are ways of avoiding that kind of leadership.

Some prominent leaders in business are highly suspect of being sociopathic. Lawrence suggests the recent Wall Street crisis, with the crash in the market and the resulting worldwide depression, illustrates sociopaths at work. Some in the big banks saw that by buying subprime mortgages—granted with little regard whether they could be repaid and so subject to foreclosure—they could sell them to Wall Street banks which could dice them up into derivatives and sell them as Triple-A bonds to people who were trustees of pension funds and endowments, and collect 100 percent on the dollar for them. The bonds were phony, worth maybe half of their face value when they bought them.

And that was the con, the absolute fraud that was pulled off. And we still don’t have a clear understanding by the public or even by the Department of Justice that that is what happened, and we should be prosecuting those people and getting the evidence out that will prove that those are criminal actions.

Conclusion: Is “Renewed Darwinian” New?

Profesor Lawrence does not have anything new in scientific terms but he does something new in speaking out about the perilous state we are in through neglecting the traits of our evolved nature. The western economic system, called capitalism, requires us to act as if we were solitary creatures fending only for ourselves, and perhaps our immediate families, in a state of nature—meaning acting like savages. Humans though are not savages, not solitary, and the reason is that we have evolved to be social animals who live amicably together in groups by sacrificing a little personal freedom—the freedom to be savage towards others—so that others will work with us in a community for our mutual advantage.

As soon as someone took more than a fair share of the communal produce, human society traditionally shamed them, and if that did not work, it expelled them from the group, exiled them. They were left to fend for themselves by themselves, unless another group was willing to accept them. As most groups will have realized why some human was wandering alone, they would have been chary at admitting them into their own group.

Now we cannot expel people from society, but bad crimes are seriously punished. The bad crimes that, so far, have not been seriously punished are the banking and financial crimes, like the scam described by Professor Lawrence. It is time these criminals against humanity were properly punished, and it is time that immoral profits by the few at the expense of the many were progressively taxed and redistributed so that there is no underclass of people abandoned on the grounds that they are work shy, when there is not enough work to go round.

A society of chimpanzees will look after the ones among them that are not fully capable, and even the alpha male will show care and compassion to a defective or disabled chimpanzee. Why cannot human leaders be the same? Obviously, they can, and professor Lawrence suggests how, but society has the right and the duty to protect itself against the massively greedy, who move their money to wherever in the world it will continue to accumulate profit, irrespective of what happens to the poor and unemployed in their own country. These are the people without consciences that Lawrence describes. They are indeed criminals. Punish them!

Where is All the Money? Ask Credit Suisse Bank!

Sam Pizzigati, editor of Too Much, an online newsletter on excess and inequality, reports that the Swiss banking giant Credit Suisse has issued for the first time a Global Wealth Report based on financial data from over 200 countries. It shows that total global net worth, despite the 2008 global economic meltdown, has rocketed up 72 percent since 2000. Credit Suisse sums up:

The past decade has been especially conducive to the establishment and preservation of large fortunes.

The world has more than enough wealth to ensure no one on the planet need be potless. The study shows the world has 4.4 billion adults and the total wealth they own is $194.5 trillion. Shared out, every adult in the world could have $43,800. The fact is, though, that three billion people, almost 70 percent, have less than $10,000, and 1.1 billion, a quarter of all adults, have less than $1,000. These figures are net worth, meaning their assets less their liabilities. Half the people on earth who are 20 and older have less than 2 percent of global wealth—each less than $4,000.

The world’s richest 1 percent—adults who have at least $588,000—hold 43 percent of the world’s wealth. They constitute the ruling class, the wealthiest class, and they break down as:

• just over 1,000 billionaires, with over $1000 million each
• 80,000 more super rich people worth between $50 million and $1 billion each
• 24 million more people who are millionaires worth between $1 million and $50 million.

Those wealth differences are exacerbated by the local conditions. In uncivilized societies with poor public health care, poor quality public education, and no state pensions, then the poor are hit by ill health, a miserable old age, and ignorance because they cannot afford to pay for the absent public services. Moreover, epidemics like swine flu, natural disasters, like Katrina, and unemploment are additional shocks for which the poor do not have the reserves to survive easily. In a society with the opposite conditions, a history of civilized caring governments which have provided public services and benefits then poverty does not have the stigma and practical horrors it has in poor societies.

No other nation has as much total wealth as the United States, with only 5.2 percent of the world’s population. It has 23 percent of the world’s adults worth at least $100,000 and an even greater proportion, 41 percent, of the world’s millionaires. Yet, it is a society with inadequate social services, so its people need more personal wealth to survive than people in countries like France, Sweden and Germany which have good social services.

Canada has a national public health insurance. Credit Suisse calculates the wealth of the typical Canadian family is $94,700, double the $47,771 US average. It shows that good public services add to a nation’s wealth. Public services provide jobs, and need private business suppliers, and health and pension security means people are less risk averse, and will be more inclined to start up new businesses.

Why then have we given trillions of dollars to the banks, depleting our treasuries so much that we are told we have been living too extravagantly? It is a big lie, and we ought to be taking direct action to change it. But we can do without Tea Party economics. We do not need tax cuts for the rich, we need services for the poor, paid for by taxing the rich. They can afford it, we cannot!

God or Liberty? A Fair Society, Please!

Not Freedom from Taxation, Nor Mystical Faith, but a Fair Distribution of Wealth and a Functioning Society

US religious and social history has been characterized by a periodical pulsation of religious fervor. Since the 1980s, the pulsation has been upbeat, evangelical movements and their leaders grabbing a lot of publicity and political power. These periods of religious fervency rarely last over half a century, so the latest one is probably on the wane, and the religious enthusiasts are riding the Tea Parties as if it were a religious revival. But Pulitzer Prize winner, Jon Meacham, a journalist and a historian, sees the Tea Party as “nationalistic, not moralistic”.

Tea Partyers are less concerned about the moral issues and more concerned about economic ones. It is conservative Christians who still say, “We need government to protect our morality, to protect us from ourselves”.

The myth stems from the original event in 1773, the Boston Tea Party, which was an act of rebellion against taxation without representation. The colonies were ruled by the King Georges of England and had no say in their own affairs. Three years later, the American colonies rebelled, and won independence. For Meacham:

It is liberty, less than religion, that holds us together.

S Augustine, in City of God, defined a people as “the association of a multitude of rational beings united by a common agreement on the objects of their love.” The “City of God” he meant was the Christian Church, in those days, the Catholic Church, and the objects of their love were their fellow human beings, and, of course, God, in the form of Jesus Christ, who had identified himself with the meek and the downtrodden in the world. When the new Christian religion began to spread from the original Jews to gentiles in the Roman empire, it was indeed the poor and the downtrodden who responded, and a much smaller number of mainly rich women, glad to give up their legacies for salvation.

For modern American Christians none of that applies. According to Meacham, “the attack culture has subsumed everything else”. American conservative Christians, like those who supported Bush, and who are now supporting “Tea Parties” to get rid of Obama think, and like to say, that the United States is a “Christian nation”. Even many liberal Americans agree. They think the country’s founding principles are based on Christianity, through the settlement of New England by the Pilgrim fathers in 1620.

It was not the Christian ideas of the Pilgrim Fathers who initially settled in America, but the Enlightenment values of the Founding Fathers of the new republic who set out the documents that proclaimed the nature of the new political entity, and set out its founding principles, principles that still apply. Since the country’s founding, Americans have confused its defining features.

Mark McGarvie, a history professor at the University of Richmond, points out that the stress on man’s duties and responsibilities towards his fellow man, according to the teaching of Christ, was an element in the motivation of the founding of some of the early US colonies, but Christianity had nothing to say about anyone’s individual freedom. Christ had nothing to say specifically about slavery. Plainly, though, slaves fell into the category of the poor, the meek and the downtrodden, people whom Christ said were blessed, would enter the kingdom of heaven and ought to be treated like God. The man Christians treat as their God, Paul, the one they prefer to cite rather than God—Christ whom they largely ignore—told slaves to settle for their lot. Paul marginalized Christ’s emphasis on being loving and kind to each other—on works, as the New Testament calls it—by substituting for Christ’s practical teaching his own mystification, faith in God and the body of Christ!

The Declaration of Independence was based on the ideas of the Enlightenment, the teachings of Locke and Rousseau, as expressed by Jefferson and Madison. These men were also concerned with the poor and downtrodden, with the centuries of oppression people had suffered while Europe was ruled by the Church, and its hereditary nobility, who wanted the people to believe that kings were divinely appointed and had to be obeyed, even when they were wicked. It is what S—Paul taught, but not Christ.

With the rise of the merchant class of capitalists, the Feudal System of government by the nobility and royalty was doomed, but struggles were needed to put it firmly in its grave, and the American Declaration of Independence was one of the acts that established that kings were not divinely right! Instead of the divine right of kings, the Enlightenment idea was that God had nothing to do with individual rights, except that free will meant everyone was personally free in God’s own view! The Enlightenment was about protecting individual rights, in contradiction of divine rights.

Now the point of individual rights is not that everyone should do as they like, for that would be intolerable, and indeed would be quite alien to anything that Christ taught or any Christian should believe. The Founding Fathers thought that humans were primarily good to each other, and that society should allow them to prosper according to their good nature. They inscribed on the country’s Great Seal the motto “Out of many, one”. Americans were to pursue their own interests and desires with the ultimate aim of doing good not just for themselves but for a whole united society.

The other side of the US Great Seal has two mottoes, one of which announces that the birth of the USA begins a “New Order of the Centuries”, while the other is simply “It Has Favored Our Efforts”, “It” meaning Fortune or Providence, according to your religious inclination. So, although Christians will read this as being God’s Providence, and therefore God, the deists who drew up the documents could be more neutral and read it as Fortune. Even here, then, a Christian interpretation is not the only one. Deists believed in a God, but not one that twiddled with the world he made.

The conflict between the mystified Christianity of Paul and Luther, and the practical Christianity of Christ himself, filtered through the Enlightenment, existed from the outset of the USA, and there seems little to be gained in denying it. Christians nevertheless do, or they do not recognize it at all.

In modern practical terms, freedom is the freedom of the hyper rich one or two percent of the people to take the enormity of the country’s wealth that leaves the poor and even the middle classes struggling, either to stay alive or to maintain their standards. It is not social schemes like health and education, schemes that no civilized country can do without but which are being starved of sufficient cash to offer a proper service, both in the US and abroad. Christ went about curing people gratis and blessing the poor like Lazarus, the beggar, while approving the damnation of the rich, like Dives, the rich man. The greed of the minority is the real moral problem of all societies. That is what Christ taught.

It is all very simply set out in the Christian gospels but none of the evangelical crowd, who think Tea Parties are sent by God, have read or comprehend the teachings of Christ. They believe what their Republican pastors and politicians tell them, and, as Limbaugh and Beck prove, being idiotic is what the conservative Christian loves—“That’s just how I feel. Boy aren’t these guys just great!” They are too easily conned to see they are being conned! These guys are not idiots. They are! They are being taken for a ride, and the only benefactors are the Republican grandees, the mega rich, whom they think will help them by reducing taxation when all it does is leave those with the income worth taxing, better off.

It is Time We Removed Inequality

Robert H Frank, an economics professor at the Johnson Graduate School of Management at Cornell University, wrote in the New York Times about the present financial crisis, comparing it with past times and using a new survey.

Incomes in the US rose at about the same rate, almost 3 percent a year, for all income levels in the three decades immediately after World War II. Prosperity extended across the whole population, irrespective of class. The country's infrastructure of highways, railroads, dams and bridges were well maintained, and new industries in communications, electronics and airlines were growing.

In the last three decades the economy has grown only slowly, infrastructure is decaying, and many people have trouble finding adequate work because industry is floundering.

Moreover the change in circumstances has not been evenly distributed. The share of total income going to the top 1 percent of earners, which stood at 8.9 percent in 1976, rose to 23.5 percent by 2007, but during the same period, the average inflation-adjusted hourly wage declined by more than 7 percent. The rich have been getting richer ever more quickly while the poor and the squeezed middle classes have remained static or lost out. The situation is plainly unfair and antisocial by any standard.

Societies must be founded on a sense of fairness and justice even if they are not unquestionably fair. The people of the US have been ready to tolerate a degree of unfairness in income and wealth distribution providing that they felt they had a chance of joining the wealthy by dint of personal effort, and proving that living standards generally improved because a large number of people were working in concert to build a better country. In short, providing that income was not distributed unfairly to a minority of the already rich while everyone else struggled.

Frank notes that the founder of modern capitalist theory, the Scot, Adam Smith, who wrote Wealth of Nations, the capitalist's bible, peppered it with trenchant moral analysis. He was, after all, a professor of moral philosophy at the University of Glasgow.

Yet rising inequality has created enormous losses and few gains, even for its ostensible beneficiaries, the mega rich class, who now have reason to worry that social instability will ruin them, if it is allowed to develop further. In any case, increasing riches alone never improves overall happiness once people have sufficient not to feel insecure. All that happens is that they notice that others are just as well off, and they then want another increase. Everyone wants to keep up with the Joneses, but these people are already loaded!

Frank reveals that he and two co-workers have found that the US state counties where income inequality grew fastest also showed the biggest increases in symptoms of financial distress. Even after controlling for other factors, counties with the biggest increases in inequality had the largest increases in bankruptcy filings, and also reported the largest increases in divorce rates, divorce rates being reliable indicator of financial distress.

Families short on cash will try to make ends meet by moving to where housing is cheaper, usually farther from work. So, long commute times are another footprint of financial distress, and the counties where commute times had grown the most were those with the largest increases in inequality.

Even basic public services are no longer being properly maintained because of the persistent objection the rich have to paying their proportionate share of taxation. Rich and poor alike endure crumbling roads, weak bridges, an unreliable rail system, and insecure cargo containers, and many Americans live in the shadow of poorly maintained dams that could collapse at any moment. The right wing lobbyists and their academic parrots say nothing can be done, and most advocate policies like tax cuts for the wealthy that put the burden on the poorest in society.

There is no compelling evidence that greater inequality bolsters economic growth or enhances anyone’s well being. The rich remain a minority, though they hold a majority of the country's dollars. They can buy bigger mansions and host expensive parties, but it will not keep the majority employed and adequately compensated, and in any case the wealth of the rich is mainly invested abroad in places like China and India where the best rates of return can be had, and the exchange rate offer a hedge against losses. Then again the obscene bonuses wall street bankers and brokers pay themselves attract the most intelligent graduates, leaving vital sectors like industry, science, technology and engineering devoid of creative talent—and bang goes any competitive advantage we might expect to have in the future. Yet, any grifter can learn how to gamble in junk bonds but not how to succeed in science or engineering, or even in proper good stock picking.

No one dares to argue that rising inequality is required in the name of fairness. John Rawls in his theory of justice as fairness (A Theory of Justice) though inequality was only justifiable when the poor were nevertheless getting wealthier, albeit maybe not as quickly as the wealthy. So we should agree inequality is a bad thing, and do something about it.

In the UK, Professor Greg Philo suggested that the top 10% should pay a one off tax of 20% of their wealth. It caused some outcry, but surprisingly, a lot of wealthy people were willing to do it. They were the ones who realized it would be far worse if social unrest got so bad, especially if it were worldwide, as is the financial crisis, that all of their wealth might be threatened by social instability. They knew that the one off payment, though substantial, would repay itself if we got into a new ers of financial stability as a consequence. Their remaining investments would soon grow to pay back the lost 20%. Though the short sighted greedy rich would moan like hell until the benefits came through, everyone would end up happy.

Americans Favor Federal Research Funding on Science and Medicine

Research!America commissioned a national poll which found most Americans (58%) would vote for a candidate who wanted higher federal spending on job creation and federal health research funding. 91% of Americans think research and development (R&D) is important to their state's economy, and 71% said investing in health research is important for job creation and economic recovery.

Despite strong public support for research funding, the poll found that 53% are not well informed about the views of their senators and representatives on medical, health and scientific research. Mary Woolley, president and CEO of Research!America said:

Our poll findings show that Americans understand very clearly the connection between greater investment in research and economic growth and job creation, yet too few know their candidates' views on research. I urge all Americans to find out where their candidates stand on these important issues.

88% of Americans said it is important for Congress to work on a bipartisan basis to research to make health a top national priority. Research!America's chair, former Illinois Congressman John Edward Porter said:

Research investment is absolutely essential to America's future—for our health and our economy—and it's essential that candidates for Congress understand this. Each dollar invested in research produces more than double that amount in economic output. Americans deserve leaders in Congress who will work together to achieve sorely needed results for our nation's health and economic challenges today and in the future. Medical research, science and innovation are investments we simply cannot afford to postpone.

The poll also found:

• 87% think a good use of tax dollars is military investment improving health for service members and veterans
• 84% say the US should work to improve health globally through research and development
• 88% think basic scientific research should be supported by the federal government
• 87% say he US should adopt the aim of other countries to spend 3% of GDP on research and development
• 74% say US competitiveness and future economic prosperity depends on education and training in science, technology, engineering and math
• 84% say prevention and wellness reduce health care costs, and 77% say research helps solve these rising costs
• 70% favor federal funding for research using embryonic stem cells
• On balance, Americans favor speeding up the time it takes the US Food and Drug Administration to approve drugs: 42% say is too long, 12% say not long enough and 28% say it is about right.