I make a pretty good living as an airplane driver. I like what I do, usually things are pretty routine, and once in a while I am pretty surprised that they pay me what they do for me to do what I do. But then, suddenly, I'll find myself working pretty hard to salvage a good outcome when things just don't go according to plan. It could be a weather problem, killer storms along a route of flight or lingering at the destination airport. It could be an ill passenger or a failing airplane system; maybe a flock of birds insisting on the right of way. While even complex jobs don't required the ultimate in expertise at all times and in all places, when things go to shit in today's complex world everyone hopes there is an expert at the wheel. I am a firm believer in letting an expert do an expert's job.
I think it is fair to suggest that the economy has gone to shit. The problem is, there does not appear to be an expert in the house anywhere. As usual, the fight in the US is described as being between one of two choices. There is the right; conservative / cut taxes / cut spending / supply-side economic model that declares itself to be the real capitalism. Then there is the left: Keynesian / increase taxes / deficit spending model that sees capitalism as a good system so long as it is carefully regulated. (Out in the rest of the world somewhere is Socialism - the evil boggy man the frightens all the children of America.)
All of which is a puzzle. The administration of Bush II cut taxes. Jobs went away in masses. President Obama has kept the Bush era tax cuts in place; and has proved beyond a shadow of a doubt that tax cuts do not equal job growth. Clearly just cutting taxes has nothing to do with jobs; the right wing model simply doesn't seem to work. The same Bush II administration spent money like a drunken sailor...including starting two wars. President Obama has spent even more money. In spite of this river of money flowing in to the military / industrial complex and trillions of tax dollars spent to salvage Wall Street, the economy is still on its ass. The left wing model doesn't seem to work either. Once upon a time in the Bush administration (the right - thank you) it was claimed that deficits do not matter. Now there are people on the left claiming the same. (The right having changed its mind on the matter.) Spending money one doesn't have? I don't know of anyone who really thinks deficits don't matter when it comes time to pay the bills.
What seems clear to is that neither the left or the right as the slightest idea of how to run an economy. Which is actually what I kind of expect. The economy of any first world nation is at the leading edge of social evolution. New ideas, new discoveries, new products and services based on those discoveries, a tumult of continuous creation. Part of the tumult are new ways of measuring wealth and new ideas of how to build social structures. Parallel to that economy is the social discussion of what constitutes the moral use of wealth, new appreciations for the toll accumulating wealth takes on the planet and society, and a growing reluctance to have economics dictated from the top down. Which is why both models, left and right, must fail.
Currently the experts on the left and right are looking backward, trying to keep the future at bay by preserving top-down economic structures. The "top" for the left is political / government structures. The "top" for the right is the bankers, capitalists and corporate elite. (The right, in this case, is a lot more subtle than the left, buying the political /government structures, but still dictating from the top down.) On the left is the government, on the right business, both trying to dictate the terms on which everyone else can accumulate or disperse resources. And, though both sides are loath to admit it, there is quite a bit of cross-pollination between the two. There are no active political leaders in the US who do not have massive personal fortunes to protect. That need trumps any call to service they might feel and is reflected in the regulations they enforce (or remove), the subsidies they hand out and the in the tax codes they write.
No tax code will ever be perfect. But I can't help but think that one which determines a certain amount of tax on a certain amount of income, no deductions, no loop-holes, wouldn't be a damn sight better than the one we have now. Most important, it removes the ability of law makers to punish some individuals for making legal choices, (small families and renters) while rewarding others (large families and buyers). Why should those who chose to have small families or rent their home subsidise those who have large families and buy? The same kind of top-down pressure is applied in countless ways. Why should those who give money to a church (which uses most of that money for buildings and salaries) get a tax break while those who simply give money to hungry or homeless people don't get the write-off? People who buy a new car might get a tax break, used car buyers get no such help. People who buy a new corporate jet get a tax break, but not used jet buyers. (That's a weird one, isn't it?)
The same should hold for corporations. Oil companies, wind generator suppliers, cigarette manufacturers, distilleries, car builders...it doesn't matter. So long as what the company supplies is legal, the taxes on their income should be the same. As it is now maybe oil companies, using the influence they have in the political arena, get a tax code that hampers the wind generator manufacturer from getting a toe-hold in the market? (Has anyone ever seen any evidence that corporate entities actually like competition - regardless of the propaganda they employ?)
It may be true that tobacco companies are evil empires that sell the most addictive drug known to man to the young and the foolish. It may be true that oil companies are not often the good guys. Automobile manufacturers want to sell big cars that guzzle fuel because those units provide the largest margin of profit, and profit is what they do. It is what they should do. It is what society needs them to do. But the preferences of those who make up a society are best satisfied when the corporations are all treated the same.
[There is a whole different discussion needed on how to keep corporations doing what they do, providing goods and profits, while keeping them from trashing the environment and killing workers. No thinking person would call for abolishing environmental laws or allowing companies free reign in advertising under the guise of first amendments rights of free speech. On the contrary deliberate false advertising should carry a mandatory 1 year jail sentence for anyone involved in writing, production or distribution of such attempts at lying to the public - and that includes political adds. (Lies presented as truth is the tool of top-down power structures.) People might make stupid choices, but they should be informed stupid choices. But these musings are about taxes and subsidies and bottom-up vs. top-down economic and social structures.]
On the flip-side, all government subsidies should be halted as well. Why subsidise corn and sugar, not green beans or squash? My guess is that corn and sugar interests own more politicians than do green bean and squash growers. Why should be subsidise oil producers and not those who build wind generators? Once again we see a top-down enterprise able to project their views and/or desires. Removing all such subsidies is a bottom up move.
Will that "fix" the economy? Maybe. Maybe not. But at least we can get a clean look at what is going on. Everyone who makes money pays taxes, and at the same rate for the same income. Products go on the market for a price that bares some relationship to the cost of production and distribution. More of the people, more of the time, are then free to make their own decisions on how to spend what they have. Making those choices is very essence of a bottom-up society and reflects the continuous evolution of human society. All economic policy should be written while looking forward, knowing that it must reflect that reality.
As top-down structures falter under the weight of wide spread information sharing and demands for a fair shake from the bottom, some new economic experts have to emerge. More likely is that whole new economic structures will emerge and jinn up some economic experts in the process. I have no idea what those structures might be, but I suspect it they will be wildly different than anything we have yet imagined. The most valuable commodity in the world is knowledge, information, and the wisdom to use them well. And yet the price of knowledge and information is falling drastically as our ability to share them increases exponentially. Soon, as in a matter of years, the most valuable thing, the one thing human society needs to survive, will be a thing that requires no money to acquire. Already one can go on-line and study virtually any subject up to a collegiate level - math, writing, science, economics, weather, plate tectonics, history, physics - it is all there for the taking. One has to attend a bastion of "higher education" and spend thousands of dollars to get a piece of paper that certifies one has mastered the knowledge. But anyone can gain access to the knowledge with an Internet connection.
Our current economic models simply do not fit in the society that is evolving around us. Someday soon our economies will have to reflect rewarding a person for what they know, what they can do, how skilled they are in networking with others having knowledge needed to finish a project, and how well that project satisfies a need that society as a whole has uncovered. An economic system that simply rewards the powerful will fail for that power, based mostly on controlling and withholding information, will simply melt away. (The claim that knowledge is power isn't exactly true. Knowledge is power only when I know something you don't know.) The vanguard for the change can be seen in the actions of every tyrant in the world, every religion, every political party battling for supremacy. They all know the threat that knowledge poses for their top-down power structure. They all seek to restrict access to learning and understanding in order to preserve the world as they want it to be. And they all engage in relentless propaganda, which is just cover talk for lying to the public in order to keep knowledge out of their collective hands.
The chaos in today's economy is partly due to pure stupid. (Cutting taxes does not make jobs. Massive deficit spending can not "grow" an economy.) It is partly due to the pervasive corruption of a government bought and sold by economic interests. (Such corruption lives because it hides behind the ignorance of those being abused. Does anyone think this government and this Supreme Court is actually going to make campaign finance transparent without a fight?) And it is partly due to the many character flaws an evolving band of tribal apes carried down from the trees. To some lesser degree we are still a bit xenophobic, greedy, self-centered and prone to violence. (The knowledge that we are an evolving band of tribal apes is, itself, under constant assault by those who need religion in order to cling to power.)
Right now all of our economic experts are wedded to economic systems rooted in the past. We need some new experts at the wheel.
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