SailBlogs
Bookmark and Share

Profile
Who: Kimball Corson. Text and Photos not disclaimed or that are obviously not mine are copyright (c) Kimball Corson 2004-2013
Port: Lake Pleasant, AZ
View Complete Profile »
 
 
 
 
SailBlogs Friends
Trim Up Doune 
 
Catholics and the Court
Kimball Corson
03/06/2015, Pago Pago, American Samoa

Catholics comprise 25 percent of the US population yet are 67 percent of our Supreme Court justices. The conservative majority of five is all Catholic. Yet not a single law school of any catholic university ranks in the top 25 American law schools. That said, most of the Catholic justices are of better law schools, however.

I have often said, I could go into America's top ten most populous cities and after six months in each choose 18 lawyers (enough to create two supreme courts) each of whom is legally more knowledgeable and astute than all but the Jewish Justices on our own Court.

Our justices are by and large as bad as they are primarily because they are too often chosen 1) for their politics and 2) their predictability. Conservative Catholics fill that bill well for conservative presidents, unfortunately. Liberal justices are less predictable, but liberal still. Top scholars argue Supreme Court justices too rarely decide cases according to the applicable law, but often decide cases according to their political predispositions and then rationalize their decisions with such law as their clerks can paste together.

We certainly do not have the best and the brightest on our Court.

Confusion About Money
Kimball Corson
03/06/2015, Pago Pago, American Samoa

Money is not a government IOU or an IOU at all.

With an IOU, the I is whom? The U is whom? A Federal Reserve note is fiat, issued by the sovereign federal government that is usable to pay federal taxes and is used by legal mandate as legal tender to pay all debts because the full faith and credit of the US says it can be, period. It is not redeemable from the government for anything and it need not be to work as a currency.

I argue, as such, it is not a meaningful IOU, but that money when loaned or created by a bank for a "loan" has to be paid back and so it is the money that is owed, but the money is not the IOU. Actually, the loan agreement is the true IOU, but not the money itself.

Credit is best thought of I believe, as in "a line of credit;" as money that has been arranged to be borrowed but hasn't been yet. Once borrowed it becomes a loan and has to be paid back. Credit doesn't have to be paid back. A loan is the vehicle by which credit is used.

There is immense confusion and misunderstanding out there on these issues..

More On Debt and a Stable Economic Environment
Kimball Corson
03/06/2015, Pago Pago, American Samoa

Borrowing makes sense in a realistic and uncompromised interest rate environment when the present value of profits from a real investment sufficiently exceed the on-going costs of borrowing at such rates to make that investment contemplated worthwhile, given the macro economic uncertainties involved. This is true both for private debt and public debt that is incurred for real investment purposes. The system fails and excessive private debt is incurred, however, when the natural interest rate environment is compromised by federal intervention in pursuit of a zero interest rate environment. Investment cues and signals become masked and skewed in the direction of incurring excessively debt, now for whatever purpose.

In short, the Fed has destroyed the natural interest rate cues, has provided false real investment signals and, as a result, has induced massive private debt formation, not only in regard to real investment efforts, but also in regard to borrowing for all other purposes as well. Debt servicing too largely looks only to repayment of principal.

The Fed thinks it is helping, and it did immediately after the crash, but the simple truth is the Fed's continuing policy of attempting to regulate the economy by interest rate control and manipulation has destroyed the true calculus and market for real investment and it has undermined the economic stability and certainty needed for real long term investment by escalating private debt to too precarious levels. Also, by excessive QE, the Fed has also pushed stock and bond prices in secondary financial markets to excessive and precarious levels as well. By these means, the Fed has unwittingly destroyed the stable and more certain economic environment needed for long run real investment.

The Fed's role, and its tools and how it uses them, need to be reevaluated. It has badly erred here.

On the Human Condition
Kimball Corson
03/06/2015, Pago Pago, American Samoa

Our condition is layered. Foremost and underlying it all, we must care for our bodies daily. We must sleep, bathe, eat, cloth, eliminate, procreate, transport and otherwise care for, move and attend to our physical selves every day. The time this takes is inordinate. I guess a good 40 percent of our lives are consumed by such bodily endeavors, as I will call them.

Then there are the functions of learning and doing. On learning, whatever the forms it takes, and it takes various forms for each of us during our lifetimes, it does not come quickly or for some easily. Our reach, with both formal and informal education, corresponds to our basic intelligence and the opportunities we have or make for ourselves. But the essential condition is that we all have to start from learning scratch here. The fine educations and wisdom of earlier generations, and their nuisances, are too largely taken with them to their graves. We must learn from and sort our sources as best we can.

I venture a further guess that another 50 percent of our lives are largely divided into two phases -- formal and informal learning into our twenties, and then our vocational endeavor(s) after that, with a continuing degree of overlap between the two. The doing of something to earn our livelihood, after our formal education, like our formal education itself, is very time consuming. This is the stage of getting ready to do and then actually doing.

I would guesstimate the residual 10 percent of our lives is spend interspersed and divided between leisure, recreation and the pursuit of enjoyment, on one hand, and our individual efforts to give to or deduce some sort of meaning from our lives. We all wonder if and what any purpose to our life might be, and that set of queries reflects on how we should live our lives. We worry about our answers, tentative though they might be, and whether we will have any serious regrets at the end of life.

The bodily endeavors at 40 percent, the learning and doing endeavors at 50 percent and the recreational and wonderment endeavors at 10 percent is basically our lives. The learning and doing endeavors can be as pedestrian as learning little and laying carpet, as tragic as engaging in war and then rebuilding, or as exalted as becoming a legitimate and honest billionaire or a Nobel laureate. No matter how we land out, we are all restrained by these time allocations, notwithstanding some minor reallocability at the boundaries. Then we each die.

This is the basic human condition we rarely think about or mention.

The Great Ripoff
Kimball Corson
03/04/2015, Pago Pago, American Samoa

Cutting government research spending and short term profit maximization that disinvests in the development of longer term human research capital is killing US technological innovation. Other countries are moving ahead of us now, particularly those with public investment.

Most major technological breakthroughs have come from combinations of longer term private human capital development and well funded government research. Smart phones, beginning with the iPhone, are a perfect example. Let me go further and argue no great wealth, such as Apple's, is to be had without private and public interaction on both the development of human and physical capital for innovation. Without both, serious wealth formation becomes nearly impossible.

But there are two main villains now destroying this successful mix. One is the incredibly ignorant drive of conservatives to cut the funding for government research as being wasteful and the best way to curb deficits because they won't raise taxes, and the second is the neoclassical maxim that corporations should be run so as to maximize the present value of future profits. This latter rule presses too hard for a view that is much too short term, as I will explain.

Short term profits get maximized because they weight much more heavily in the present valuing of future profits and hence higher current share prices. As bad, corporate officers' compensation too much takes the form of stock options which cue on these results. A worse case scenario is the neoclassical position coupled with stock buy backs to raise share prices. The term structure of profits is skewed toward the present. Short term profit maximization and CEO compensation both badly squeeze the development of private human capital within corporations needed for innovation. Quick easy projects and higher employee turnover replace projects that are much more profitable in the longer term and better developed internal human capital The neoclassical view is too narrow and short-sighted and it gets the incentives wrong in too many regards here.

The keys to great long term growth are a) well funded longer term government research, b) the longer term development of human capital for innovation with in the private sector, and c) a stable and reasonably certain economic environment to allow for investment in the interactive results of a) and b). Our problem is we simply don't get it. Conservatives kill a), Short term profit maximization kills b) and the resulting economic consequences of both destroy c).

The ripoff is because what I describe currently was not always so. Once, government invested heavily in longer term, less restricted research. The private sector recruited and developed longer term human capital for innovation. And government provided a stable and predictable economic environment and infrastructure for longer term investment. The result was the formation of the great wealth and fortunes that we see today -- but whose owners now claim they did all by themselves and that to tax them at rates reflecting what actually happened, so as as to obtain the public's return, amounts to stealing from them personally.

And conservatives actually buy it!

On Being of Like Kind
Kimball Corson
03/01/2015, Pago Pago, American Samoa

After selling my large home on 20 acres, I deliberately and as an experiment moved into a gated, country club, community and joined the club. To say the community was Republican would be redundant. The community revolved around the club. Prospective club members were carefully screened and scrutinized, complete with interviews. It helped that I was well-educated, had a good income and ran around in a collectible Mercedes convertible. I also wore an expensive watch and dressed casually, but very well. I worked to make myself fit right in. I adopted the trappings well and kept my views to myself.

I was the only progressive there, but carefully kept my mouth shut and instead listened and observed carefully, occasionally even with a patronizing manner. I encountered more than a few Dick Cheney types at social and club meetings, parties and get togethers. What I learned in a nutshell was this --

Any social policy or change by government that threatened higher incomes was absolutely verboten and much discussed. Welfare and tax cuts were de regueur. Only people of like kind were really approved of -- ergo, the gates, the club and the tight, well networked community. These people strongly discriminate against -- to the point of overt social rejection -- any and all people who are not very much like themselves and who differ in any material regard. They vocally professed to despise people of color, different mindsets, lower incomes, unmarried working women, welfare recipients, democrats and anyone who thinks differently than they do. Parties and significant alcohol consumption were required to have them really loosen their tongues and open up on these matters. But they did and frequently. Otherwise, they put on a nominal and cordial face in all directions. But again, basically anyone who was not like they were was to be looked at askance if not rejected out of hand.

After this experiment of living among such staunch Republicans, many of the lizard brained variety, I sold out totally and moved aboard my boat over in San Diego. It was definitely an experience. I flew so far below the radar that before leaving, at a party I was toasted and made the country club's honorary world roving reporter. I have twice been invited back to speak, but both times have made excuses.

New Directions on Where We Are Headed
Kimball Corson
03/01/2015, Pago Pago, American Samoa

Assuming good health, people perform, both academically and otherwise, according to their effective IQs, that is, their IQs as enhanced or not by their executive function capabilities (basically, the effective ability to get things done quickly and well). Academically, IQs are highly predictive. This creates advantages and disadvantages for various groups. Jews have a mean IQ of 116; Hispanics, 89; Blacks, 83; Whites, 100; and north Asian Americans, 106. Of course, within each group, there are those who have IQs well above and well below their group means. This is important to keep in mind. One implication is many blacks have higher IQs than many whites. These are simply means on normally distributed populations. Not surprisingly therefore, Jews, Asians and smart whites drawn from a large enough pool generally do well. The rest too largely don't, except for those well out on the right tails of their group distributions. Unfortunately, the jobs available do not well line up with those finished with their formal education at whatever level.

Robotics has started to and will progressively create jobs at the top end, retain jobs at the very bottom and too much gut most everything in the middle. Already, robots can do surgery, legal research and analysis, cut hair, perform investment analysis and drive cars in heavy traffic.And we are just getting started. Robots work 24/7 with maintenance needs of about 15 minutes every two weeks. Their capabilities are increasing exponentially and their costs are declining rapidly. Managers love them -- no worker hassles, unions, sick leave, vacation management or anything of the sort. Norelco took the manufacture of its shavers to China for cheap labor but then brought manufacturing back to an all robotics factory. Electronics manufacturers on the Rim have hundreds of thousands of robots on order. Worker displacement is not just limited to the US.

Already about 43 percent of the US working age population (ages 15-64) is unemployed. This figure is up from 37 percent about 8 years ago. Currently, only about 45 percent of the population 18 and older have full time jobs. These are not good numbers. The push is on, not only in the US, but worldwide as well. I am aware of no governmental or other efforts to stall these trends or to impede the incursion of robotics. The US government does not even have a position or policy in these regards. The quantum of useful discussion here is too largely limited to academia with an occasional popular commentary.

Even these high unemployment figures do not fully reflect the glut of goods and deficient demand for them in world markets at existing prices. The prospects for deflation loom, both domestically and as imported. Productive capability out runs our consumption ability. Commodity prices -- often the factor input prices to production processes -- are in decline. Passed on, they lower prices further just as cheaper imports do. Both cause prices of competitive domestic goods to fall as well. Interactive, depressive factors abound. However, at any and every level of unemployment, robots continue to threaten. Robotics is not the automation of old, which like computers, helped us do our work and be more productive. Robots are out to replace us.

Many job vacancies exist in the US for those with high effective IQs and good educations at the top end of the employment spectrum, especially in STEM areas. The very bottom has many openings too, because their jobs are manual and many are too complex to be well programmed and algorithms cost effectively developed. The work needs doing, but the robotics ROI is too low. However, no one likes the wage rates at that end of the employment spectrum, and many would prefer to mooch off family and government rather than do that work. It is understandable, but it drives conservatives who prize a good work ethic absolutely nuts. How to handle the matter is a social policy issue. However, in time it may become moot as I will indicate.

The upper middle and lower middle level workers -- usually with good work habits and ethic -- is where the real help is going to be needed. At some future date, only the bottom and top end jobs will be available. The service sector can only absorb so many mid-level displaced workers. It is already bulging at the seems. Much of the middle level jobs will simply be gutted. We are already beginning to see that. Then we are eventually going to need to tax capital (the wealthy) heavily and have government provide a guaranteed income to all by means of, for example, a negative income tax. There is no real alternative, except huge social unrest, rebellion and perhaps even revolution. People cannot make do with nothing. Then we can fight over minimum income levels and what people should be doing. It is going to be messy, unless the robotics revolution is stopped and I don't see that happening. A second Renaissance is also a possibility because leisure is the basis of culture and there should be much leisure.

We are getting these points more quickly than most imagine. The public discussion is far behind the developing reality. The need to work is now seriously and rapidly starting to decline and disappear. Growth is stalling and deflation looms from the glut of unsold goods worldwide at falling prices, but we are psychologically not at all ready for these developments. We are too caught up in Horatio Alger stories and the last two centuries,

Discriminating Against Blacks and Women
Kimball Corson
02/27/2015, Pago Pago, American Samoa

A Harvard Business Review study from 2008 found that as many as 50% of women working in science, engineering and technology will, over time, leave because of hostile work environments.

The reasons are varied. According to the Harvard study, they include a "hostile" male culture, an imposed sense of isolation and lack of a clear career path from negect. An updated study in 2014 found the reasons hadn't significantly changed.

Most women in the Harvard study said the attitudes holding them back are subtle, and hence more difficult to challenge.

This raises the question of whether, if elected, Hillary Clinton will be treated any better than Obama, especially by Republicans of the lizard-brained variety.

On Jews
Kimball Corson
02/27/2015, Pago Pago, American Samoa

A friend resurrects our earlier discussions on Jews and why there is antisemitism. She thinks I am antisemitic. However, by the ADL test for antisemitism, I am clearly not. I do reject the idea, however, than any criticism of a Jewish group makes one antisemitic. There is no good reason Jews should get a free pass on all they do. Their behavior, like everyone's, is open to challenge. The charge of being antisemitic is too often just to shut non-Jews up. Even the word is preemptive because many Arabs are a Semitic people as well. I don't buy it the whole approach. Here succinctly are my views on Jews. Recall I spent most of my academic career and and professional working life among Jews,

To clarify: historically Jews have had a problem with greed and over reach. World attitudes toward Jews do not come from nowhere and nothing. No other ethnic group has this problem that the Jews do. However, time has altered matters, although attitudes lag behind. Most Jews have corrected the problem, largely by becoming more secular and integrating themselves with the rest of us, wholly or partially, and by abandoning much of their religion and culture. Out marriage is now hugely on the rise. Some teachings of the Torah and Judaism remain problematic however, but most now ignore them. But a few don't.

I personally think 1) Jews running the Israeli government are greedy and over-reaching in regard to their Palestinian land grabs and settlement policies in Israel -- all as justified by several sections in the Torah and therefore are supported by conservative Jewish religious leaders as well, who, in turn, support the Likud government, and

2) that Jewish bankers and regulators largely controlling the major banks on Wall Street are greedy and overreaching in how they run those banks -- which is and has been to the great detriment of the American people and to the middle class whom they gouge and defraud extensively much too often.

Aside from those two groups of Jews and 3) those who knowingly and willingly support and endorse such practices and policies of either or both groups -- I have no problem with most all of the rest of the Jewish community. They are generally smart, hard working and often successful. Many contribute a great deal; note especially their high percentage among Nobel laureates. More power to them.

The Torah, Judaism and Jewish culture still have aspects of the greed over reach problem implicit in them, but most Jews now understand that and side step the worst of it in one manner or another. Secularization is one way. The Ultra Orthodox however honor those sections and remain a problem.

Religion more generally is anathema. Witness the Koran and its interpretation by fundamentalist Muslims, as another example.

On Doing Laundry
Kimball Corson
02/25/2015, Pago Pago, American Samoa

Laundry . . .

. . . is an abomination or, more accurately, me having to do it is . . . at least to my way of thinking. I hate doing laundry. I even stall and freeze up thinking about it. I procrastinate. I even buy new shirts to avoid it.

Unlike most countries of the world, American Samoa, a US protectorate, is too largely a service-free zone or country. The reasons for this are because ---

CENSORED by suggested discretion.

For example, there are no laundry services in the country None. It is all do it yourself at a local laundromat. And forget dry cleaning. It is not to be had. By contrast, in many Mexican ports, a woman will paddle out to your boat in a panga, collect and do your laundry and return it to you folded, all for a reasonable price. Even in middle Tonga, which is much smaller, many shops take in your laundry, do and fold it, and charge you reasonably and by weight. Here laundry help is zip. You have to sort, wash, dry and fold your own laundry and do it in a room full of hot running driers in the ambient tropical heat. It is the pits.

My current laundry bags require a fork lift just to move them. The weight is made worse by the fact I use towels the size of bed sheets for sheets and they are heavy. Two is a machine load right there. Also, the problem becomes worse the more I procrastinate. That is not true for all tasks procrastinated on. Some even evaporate, although not many. I even have friends e-mailing me from afar to ask if I have done my laundry yet and trying to inspire me to do it.

At some point here soon, I am going to have to bite the bullet . . . and throw all those dirty clothes away and get a new wardrobe.
______

Thanks to my public whining and throwing of retrieved rocks, I have received a bailout of sorts. Although it is to hell and gone, a bus does run to a small shop which, as a secondary business, does take in and do laundry at a reasonable price I am told. Tomorrow -- upward and onward -- although in the back of my closet I have discovered two more clean shirts, so perhaps, the day or so after.

Why the Fed Is So Twitchy
Kimball Corson
02/25/2015, Pago Pago, American Samoa

The specter of 1937 is weighing on the Fed as it considers how it is going to unwinding the unprecedented monetary stimulus it has imposed.
Recall, in 1937, the Fed faced a recovery with a touch of inflation from the first leg of the Great Depression, but it prematurely tightened monetary policy and was forced to backtrack as the economy fell into into the second leg of the Great Depression.

"I believe that the biggest risk we face today is prematurely engineering restrictive monetary conditions," one top official said recently. "The U.S. experience during the Great Depression -- in particular, in 1937 -- is a classic example for monetary historians." A return to growth led the Fed to raise bank reserve requirements, and the government to reduce deficit spending, "the economy dropped back into recession and deflation." Also, the outlook for growth worldwide is poor. Here, too, there are parallels with 1937. Then, like now, you had a world with an excess supply of goods. The world's growth model, especially for emerging nations, is too much based on exports, but with the goods glut, the problem is, who are you going to export to. In short, the Fed is spooked by the 1937 parallels.

It also has the willies about investors in the secondary markets all running for the exits at the same time. More specifically, it worries about how much money-market mutual funds and exchange- traded funds would be vulnerable to investor runs. The reason is prime money-market funds -- viewed as safe by the public -- have a fixed net-asset value but are vulnerable to investor runs if there is a fall in the market value of their assets. During the 2008 crash, special bailout funds were set aside for the problem. That problem could well occur again if financial markets slip. Similarly, the rapid growth of bond mutual funds and ETFs (exchange traded funds) in recent years means these institutions now hold a much higher fraction of the available stock of less-liquid assets, including high-yield corporate bonds, bank loans and international debt. Bond funds and ETF runs could be a real mess. The Fed worries here too and is twitching.

The Fed is also very much worried about importing disinflation The reason is our monetary policy is about to diverge from other major central banks. With the BoJ suddenly accelerating its QE program, the PBoC cutting rates, and Mario Draghi more than hinting at a potential QE program in the Eurozone, the Fed is becoming increasingly isolated in its plans to begin rate normalization. Even India's RBI, who has kept rates elevated for some time, may begin to ease soon. As a result of this divergence, the US dollar has been on the rise this year. Given the disinflationary pressures around the world, the rising US dollar effectively "imports" disinflation into the US. This is so because because the rising dollar slows exports and increases the imports of cheap foreign goods.This pushes in the same direction as dropping oil and other commodity prices.

The "audit the Fed" movement is another Fed concern. This struggle is not at all about transparency, as some might guess. It is about power and control of the Fed's actions and discretion. The rule boys lurk in the background like Taylor who want to limit the Fed's discretion to act and require they obey mechanical rules. There is a behind the scenes struggle going on here. It worries the Fed.

Now that the economy is beginning to move, as in 1937, the Fed needs to worry about when and if the specter of inflation might arise, especially if growth continues and dishoarding gets going. It could happen quickly. Unwinding will become much harder. The probabilities of either inflation or deflation seem to go up simultaneously.The balancing act becomes finer and the tilt in either direction could be more tricky. The Fed worries here. too.

The Fed has a lot to be twitchy about. Its tools to handle these problems seem to be quite inadequate, looking at the problems. The best it can do, as Yellen suggests, is keep a constant finger on the pulse and have action plans in several directions. Raising or holding rates just doesn't seem to be enough.

Brain Activity and Development Closely Linked to Intestinal Bacteria
Kimball Corson
02/20/2015, Pago Pago, American Samoa

We have known for some time that there is a neural network between bacteria in the intestines and body, but now we learn more.

The big development presently is much research showing that gut bacteria have a significant impact on brain functioning.

The National Institute of Mental Health has invested more than $1 million on a new research program investigating the link between the gut microbiome and the brain, and a neuroscience conference last month called the investigation of gut microbes a "paradigm shift" in brain science. "It opens up a completely new way of looking at brain function and health and disease," UCLA medicine and psychiatry professor Dr. Emeran Mayer has said..

Research has investigated a link between disorders like autism, depression and anxiety to variations in the microbes within the intestines -- and recently, neuroscientists began to develop a deeper understanding of just how the microbiome, as it is called, exerts an influence on the brain's development and activity. While the link is still being investigated, the immune system and the vagus nerve, which connects the brain to the digestive tract, both likely play a substantial role.

Are we next to learn we think how we eat? Or IQ is bacteria moderated?

Increasing Liquidity Is Not a Viable Solution
Kimball Corson
02/20/2015, Pago Pago, American Samoa

In response to a lagging economy, the Fed has pursued a zero interest rate policy and, by QE programs and open market operations, has pumped much liquidity into the economy. Japan has done much the same. The EU has not yet followed suit, but now facing a real threat from deflation, plans to move in the same direction or so we are told. What is becoming clear is that throwing increased liquidity at the economy is no real solution, except perhaps at the margin.

Dumping liquidity into stagnant economies, with low interest rate policies, has two main effects. It increases hoarding by the wealthy because in this economic environment, cash is preferred. And, secondly, to the extent, diversity away from cash is sought, it drives up stock and bond prices in secondary financial markets creating bubbles, enriching the wealthy and causing new imbalances in the economy. Real investment and consumption by all is little changed due to such efforts. That is the lesson from Japan and only slightly less so from the US.

The core reason for hoarding by the wealthy is that it is the most rational response in the face of great macro economic instability and uncertainty about the economy and busniess environment, including especially the possibility of deflation. The Fed does not address these problems per se. Real growth and investment is needed but that requires economic stability, reduced uncertainty and good long haul prospects in those regards. Increasing liquidity does not really address or solve those problems. The Fed does not understand these points.

Significant investments are longer term and they most contribute to growth, but if the ecconomic and business environments for such investments are beset by too much instability and future uncertainty, such investments are jeopardized and investors become unwilling to make them. They hoard cash and buy liquid secondary financial assets instead.

Obviously, the situation is not black and white or all or none. But there are central tendencies here. Such gains as there are now in the US economy, I submit, are due to more stability and less uncertainly in the US economy, certainly compared to abroad and in the last decade. While the stock and bond markets are bubbled up, they can both have major corrections without crashing in order to satisfy investor concerns about prices being too high. Employment is picking up as a leading indicator for prospective investment. Stabilized product markets and aggregate demand help a great deal. This is what a recovery looks like after a crash and recession like that of 2008.

But the Fed remains seriously out of the loop here. Only now is it given pause on continuing to do what it has done for so long without success. It worries about bubbled financial markets and the skewing of income and wealth distributions. Yellen created an uproar by even mentioning the skewings. So Fed concerns are somewhat driven under ground just now. It lacks needed new direction because it does not well understand the need for more economic stability and reduced investment uncertainty. For now, it is stuck at a crossroads.

Why Is the Public Debt So High?
Kimball Corson
02/20/2015, Pago Pago, American Samoa

The economist Richard Wolff interestingly argues it is because both the top 5 percent and the middle class want ever more services for their groups but do not want taxes raised on their respective groups to pay for them, so the government runs deficits to satisfy both groups. I do not believe this description is correct. Here is why.

There is little government can do for the rich besides reduce regulation, keep taxes on them low and hand them legislative favors. Government does that. It cannot provide them with any governmental services they want. They basically want government gone or substantially shrunk.

As a recent Princeton study shows, government does not listen to the concerns of the middle and lower classes because they provide insignificant campaign contributions. Representatives only listen to the rich who do not want services, but income saving or generating favors.

Moreover, the top 10 percent pay 68 percent of all income taxes. Meanwhile, the bottom 50 percent--those below the median income level--now earn 13 percent of the income but pay just 3 percent of the taxes. Tax revenues from the middle and lower classes don't amount to a hill of beans because their incomes are low and falling (by 8 percent for middle 40 percent since about 2010). Taxes are not raised on the middle and lower classes -- not because they lobby for lower taxes -- but because the tax base simply isn't there and because of concerns about the skewing of the distribution of income.

Aside from the social safety net, which the rich want to eliminate so their taxes can be reduced, nothing is done for the middle and lower classes. Many changes in the law are made, however, for the benefit of the rich, by way of reduced regulation, expanded subsidizes on oil, agriculture and the like and for specialized tax breaks. Services per se are not what the rich want. They seek licenses to pillage, steal and avoid taxes.

Unable to raise taxes for these reasons, the government deficit spends and increases the public debt.

How Environment Might Have a Continuing Impact on IQ
Kimball Corson
02/20/2015, Pago Pago, American Samoa


A new Stanford University study concludes that a study of twins shows that our environment, more than our heredity, plays the starring role in determining the state of our immune system, the body's primary defense against disease. This is especially true as we age, the study indicates.

This squares naturally with three additional and important established notions --
1) that the human gastrointestinal tract bacterial mix, health and composition constitutes about seventy percent of the body's immune system,
2) that bacteria in our bodies are neurally networked and relay information, and
3) that that brain activity and changes are closely linked to intestinal bacteria

I suggest, as a hypothesis I am unable to test, that IQ variations in adults might well depend upon changes in the bacterial mix, health and composition in a person's digestive tract which in turn is geographic specific and somewhat determined. The mixes in Cambridge, Mass. are likely very good.

 

Powered by SailBlogs