Monthly Archives: March 2013

Income Inequity

Krugman_No Trickle Down

Worker Compensation Relative to Corporate Profit

After yesterdays blog, I happened on this chart depicting the varying rates of change in business profits and the income of workers. This is a great indication of the growing income diversity I mentioned. For the past years and as this recovery draws slowly on, we see an ever widening gap developing here. In this chart to the right is total workers’ compensation in blue and profits in red, both shown as indexes with the quarter before the recession at 100: Courtesy of Paul Krugman. In some circles this is argued as the way of free enterprise with in this case management/owners/investors deserving more than the workers.

So I took a quick peek at where this divide began and the degree of this wedge. I found some good work already done by Lawrence Mishel identifying some causes including the rising difference between income being earned from owning capital and income

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Wedge Between Productivity and Compensation Growth, Economic Policy Institute

being earned by workers. I’ve touched before on how our tax policies are today influencing this massive redistribution of wealth. Yesterday made the point of allowing the “temporary” tax reductions to expire. Clearly I need to spend time researching and making my point.

Today however is Easter, and after a wonderful brunch with friends (Award winning author Chris Jackson) aboard their boat, it is simply time to play and enjoy a little music and relaxing. I’ll leave you with this chart depicting the growing divide between productivity and hourly wages and my promise to get in depth in the near future.

 

Old Assault Weapons—New Taxes

Are they related? Yes; both the Federal Assault Weapons Ban of 1994 and the Economic Growth and Tax Reconciliation Act of 2001 were passed by the US House and Senate, and signed into temporary laws expiring in 10 years. That was the plan, ten years and both would end barring significant positive impacts and the resulting votes necessary to make them permanent. But that’s pretty much where the relationship dies if we listen to the political banter.

But as the 10 year temporary assault weapons ban came to a close it was quietly allowed to end. No fanfare, no public pronouncements about “new” assault weapons being loosed on the public, few pros—cons kicked about of the impact to the country or the future of Americans. The discussion was so limited it was virtually nonexistent. Today as our House and Senate considers another ban we hear much about “disarming” the public, “infringement of constitutional rights” and much more, some truth and some non-truth. Were there positive or negative outcomes as a result of the temporary ban? I’m not discussing the assault weapons ban except to say it was temporary, and then it expired just as it was intended and passed in 1994 to do.

However as temporary tax reductions came near to end we’ve heard a loud outcry about “new” taxes being livied on businesses and public, claims about the impacts to the country, and how horrible it will be for free enterprise impacting the future of Americans. On allowing the tax (temporary) reductions to expire the discussion points include one-liners like “no new revenue”, “budget cuts”, “shrinking government”, and “hurting the economy”. Really they are just the old taxes, nothing new at all about them.

If we think outcomes should count and we indeed want to look at potential impacts of the temporary law, here are a few talking points: The “old” tax rates (now temporarily reduced) were in effect for the period back when GDP growth was 5%, unemployment was running at 4%, and there were federal revenue excesses of $236.2 Billion, yes actually paying down the national debt verses running an annual deficit.

Since we’ve enacted these temporary tax reductions, we have GDP growth at 2%, 3Q 2012, unemployment at 8%, a $1.3 Trillion (2011) and $1.1 Trillion (2012) annual deficit, and a major migration of wealth from lower and middle class to the top few percent. All that in spite of the Heritage Foundation report predicting the temporary cuts would result in complete elimination of the U.S. national debt by fiscal year 2010.  But hey, the Heritage Foundation has been wrong about inflation for ~5 years now too.

Taxes and the Economy

Do Low Tax Rates Help the Economy?

If we need more let’s couple that experience with the study discussed a few weeks ago analyzing the impacts of tax rates on the GDP, savings rates, and productivity. Now we have our own decade of personal experience as to what happened and a study from 1945 on telling us these past years are indeed NOT an anomaly. 

As I mentioned in Low Taxes verses Economy:

  • Lowering marginal tax rates does not increase economic activity nor impact the GDP.
  • Lowering capital gains rates does not increase economic activity nor impact the GDP.
  • Lowering marginal tax rates and/or capital gains tax rates does not increase saving and investment.
  • Lowering marginal tax rates and/or capital gains tax rates does not increase U.S productivity.
  • Lastly, lowering capital gains and/or marginal tax rates does make the wealthy wealthier and add to the significant and growing U.S income inequality.

I’m starting to like the sound of those “old” tax rates. So let the temporary tax breaks expire just like the temporary assault weapons ban. Or to be credible, we should at least call them “old” taxes. Old as in when the economy was fine, the deficit and talk of austerity nonexistent.

The “Real” Truth About Women in Combat

Since I’ve been on the issue of military, let’s jump right to another point, women in combat roles. Interesting the argument is loudest from those who appear to know the least. A recent commentary by David Frum claims to be the “Truth About Women in Combat” While Frum makes some good points and has done a fair amount of homework verses espousing all the same age old lines. But he is still off target.

Mainly he cites a book done in 2007 by Kingsley Brown[e]: Co-ed Combat: The New Evidence That Women Shouldn’t Fight the Nation’s Wars

 “The case presented by Browne won’t come as news to any military decision-maker. But it will and should jolt those who have relied on too credulous media sources for their information about what soldiers do and how they do it.”

Well I’m not a media source but a retired US Air Force Combat Veteran who has served on the ground as well as having trained thousands of men and women over my career to do the same. While Frum claims this issue is one of “liberals being blinded by ideology” he seems pretty hung up on conservative ideology and myths himself. Here’s where he (and Browne) have it wrong:

Frum uses the EP-3 example as to how the pilot had to use “all his strength” to save the craft and crew. May be true but we must consider just because a method (sheer strength in this case) worked does not make it the only possible solution; besides women have been successfully piloting naval aircraft since 1974, the US Air force since 1976. So while he makes it in dramatic fashion and lives were saved due to that person’s strength he doesn’t delve into what that level of strength is nor how many male fliers have it or not, or female fliers have it or not. I know all troops are not able to do the same number of pushups now regardless of sex. His example reads well but lacks data to support his position. If a male was flying who did not have the same strength as Shane Osborn would they have survived? In essence his argument is about strength but he makes it about gender, i.e. a false argument.

He does move to the question of the military (not) supporting gender neutral standards. This is true and there are clearly jobs that by general consensus need to have gender neutral standards, primarily those few that have not yet been open to women. Equally true just as the E-3 example, what exactly is that level of strength required? What deserves to be watched is where the threshold is set as these options become open to women. Many of these career paths/cultures are pretty small and tribal in nature with the ritual being one of “I had to do it this way so everyone coming in has to too”. For over two years I ran the toughest school for combatants (Pararescue) in the US Air Force, and it is difficult to distill a standard down to exactly what is necessary. Sometimes it is simply based on keeping it as demanding as possible yet still able to maintain a pass rate which produces just enough in numbers to meet the services mission needs. My concern is will the standard move in directions and areas so the old boys can keep the females out, pushups over sit-ups for example? My experience tells me it does bear close watching.

To highlight the point that we are already not of the same strength nor need to be, let’s consider an airborne assault. There is a limit to how much strain the parachute and static line can take when unloading troops on an airdrop. Yet commanders need/want as much gear on the drop as physically possible. I don’t know what the limit is today but it was around 310 pounds when I was involved in the Air Mobility Battle-lab. So if Billy weighed in at 225 and Johnny at 140, Billy was going out the door with pretty much just his body armor, his M5, his pack, and part of his basic load of ammo in spite of the fact he can do a couple hundred pushups and sit-ups without breathing hard. Johnny on the other hand has all that plus; all of his own ammo, the rest of Billy’s ammo, a couple AT-4 rockets, mines and anything else that can be strapped to him until he was at the max 310 pounds. There were times when the troop couldn’t even waddle to the door so his squad (stick) members partially carry him to and out the door to keep the jump formation tight.

I get really concerned with the rest of Frum’s arguments. While not touching on each and every one, in general I read them as; in my words “cultural hurdles which are difficult to leap” He is correct in his identification of significant challenges. He talks of men accepting women as leaders in battle, the sex’s different reaction to threats and several others. Kind of reminds me of voting rights laws. Yes we know it hasn’t been this way before and people will have a tough time figuring it out, accepting it, and making it work. But that will never change just as accepting women and blacks voting did(n’t), until it becomes the rule backed with enforcement making the old boys walk the line…like it or not. Women are accepted equally by the men in leadership roles when the leadership above has created the expectation and the man or woman is competent; leaders are leaders and the rest are not. When the battle starts, no one cares. It’s pretty basic us against them.

What the author(s) forget, or perhaps don’t know as I haven’t seen any record of service, is that good small tactical teams are made of great diversity. The very best teams are not a lot of cookie cutter produced troops in replication. They are a group of individuals with different skills, thoughts, talents, capabilities, flexibilities and yes, strengths. To make all the individuals the same makes a team extremely weak and far less able to adapt to the rapidly evolving, never the same, not very easily understood situations on and today often well behind the battlefront. It is far more about the collective or aggregate pool of capability than of each individual. It is not like WWII with trenches and lines and standard set pieces, missions and tasks. Our most elite teams (those few where women have not yet tread) are built on many tenants well beyond strength. Knowledge, judgment, ability to adapt quickly, often without leadership, and to find your way in/out of places and situations where the textbook and those who taught you all they knew, did not go.

The critical point to me. Warfare has changed. Frum uses the “push button” example and discredits it to a degree. But he does not go to the next iteration. That being after just day one and often right from the beginning it is no longer a linear battlefield, but one where the enemy may be anywhere or anyone. Knowledge, trust and intuition become the most important attributes (detecting the enemy) next becomes understanding the situation before the opponent does and lastly is the action or combat. See first, understand first, act first is the decision model. It doesn’t all come to combat if this is done faster and more accurately than those around you. But my point is that without a linear front, this is already happening, and daily. There are already a lot of women in combat zones and just as much in combat as if they were in an official “combatant” unit. Contrary to Frum’s assertion, they are already proven capable.

During my time doing combat missions in Iraq, there were women on my teams. They were equally important as the men. Some of them were stronger than some of my men, some were not. Nobody cared because  teams were built on individual contributions making the team the most capable as a whole instead of 13 cookies all from the same mold. Had absolutely nothing to do with gender, everything to do with skills and leadership. In the end the leadership, follower-ship, Purple Hearts and Combat Action Badges, all engagement and consequence based fell in relative equal distribution, male or female, black, white, Hispanic, Japanese and several others of which if we go back far enough in history, were thought less capable.

Frum is dead wrong on this. He sees just ideology involved but it is simply about getting the right troops in the right places and offering opportunities equally for everyone who meets the requirements, gender aside. Of course we will have to break a few Paradigms which he points to with very real examples, but it needs to be done. It will take just as long to effect the change whether we start this year or wait a couple more before taking the first steps. Already way past time

More Iraq: About Silence, About Oil

Iraq – the decade of silent media. Yes it was over Oil. While the US media has remained silent others have not. Here is a tidbit worth reading from Glen Greenwald of the UK guardian, David Frum, the Iraq war and oil.

In this article Frum, a former Bush speechwriter, confirms the war was over oil. More importantly since Frum really had no authority despite being an “insider” is his take on how anyone who spoke about the war being over oil were attacked and discredited. In some points Frum plays a sort of revisionist history regarding his own role so Greenwald does several followups of his own with pretty revealing updates. What we see assembled via Greenwald are comments from senior leaders – Gen John Abaizade former US CENTCOM Commander with responsibility for Iraq:

 Of course it’s about oil, it’s very much about oil, and we can’t really deny that. From the standpoint of a solider who’s now fought in the middle east for six years – my son-in-law’s fought there for four years, my daughter’s been over there, my son has served the nation – my family has been fighting for a long time.”

And then there is Secretary of Defense Chuck Hagel from 2007:

People say we’re not fighting for oil. Of course we are. They talk about America’s national interest. What the hell do you think they’re talking about? We’re not there for figs.”

Former Federal Reserve Chairman Alan Greenspan added in his 2007 book:

“I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil.”

So in spite of our British friends speaking a form of English verses American, they do seem to be able to speak the truth. Truths we all know now, but our media is either ashamed or afraid to say out loud.

Iraq, A decade ago — Of Silence

Ten years have gone by since the U.S. Invasion of Iraq. I have looked all week and note a distinct void of anything substantive in the mass media. Why? First I will bare my own discord with the event.

I served in Iraq thus I am torn as I write this. I have seen both the devastation and the heroics. I have left friends on the battlefield, and the worst for me will forever be the death of Adam the son of our good friends. He was a young man who by his dad’s request I enlisted in the US Army just a few years earlier. Adam died honorably serving his country, his fellow team mates and the Iraqi people. The men and women who served in this war and the many who gave their lives are true patriots and heroes. The team I had the honor of leading will forever be my nearest brothers and sisters. Their accomplishments, dedication, and loyalty to our team and their country are not, and cannot be questioned. This piece by me is not meant to take anything away from all those loyal men and women who went forward without question to do their best in serving their country and leadership’s wishes for the Iraqi people.

I was among them, except for hero part but doing my best in service to my country, my leadership, and the Iraqi people. I retired as a USAF 0-5 after returning in 2007 and have lived aboard our sailing yacht since. I am no longer burdened with the weight of loyalty to leadership, party(s), or setting an example for the loyal troops. I can choose what I read and form and voice opinions out loud. My loyalty today is to my family, my friends, and my country. In a democracy it is patriotic to ask questions that should be asked and share conclusions with the people and the legislative elite.

So why the media silence? I have waited to see what would be published, and nothing, so this post is after the anniversary date.  A decade is considered a milestone in everything from sports to auto models and yes, wars. This week silence. Is the media embarrassed or feeling complicit as Paul Krugman suggested earlier in the week? Is this what guilty silence sounds like? Did media fail so miserably to ask the right questions that today’s response is to pretend it didn’t happen? Should they have challenged the “overpowering conventional wisdom”? Since the invasion, a lot of questions have been asked, and many answered. Everything from the lack of or misleading the public on intelligence, actions and priorities on the ground, to the costs both ours and Iraqis has been researched. I repeat the mantra, “Those who fail to learn from history are doomed to repeat it.”

My first look came from the battlefield; being in a unique position, also the Division Battle Staff (BS). By day I helped the “kids” working with the Iraqis, by night I watched the BS slides describing contacts, actions, and objectives. But the ones seeming most out of place to me were about oil production broken down by areas and pipelines. How to secure them, how to keep the oil flowing and increasing was indeed discussed among the most senior military leadership, with follow-on tasks assigned. So military manpower was used to aid and increase oil flowing out of the country. This hit most close to home when I read Kevin Phillips book American Theocracy this past summer with his conclusion the war was about/over oil.

“In Baghdad’s Iraqi National Museum, left wide open to looters in 2003 by careless military planners, dozens of wall maps explaining Iraq’s achievements as the cradle of world civilization: it’s invention of writing and the wheel, the birth of mathematics, and the establishment of the first code of laws (Hammurabi’s). By most archeologists’ accounts, the museum and the National Library were world-class institutions with unique collections.

 

Even so, the first major building to be surrounded and occupied by American soldiers was the one housing truly vital maps and artifacts: The Iraqi Oil Ministry. Here were thousands of seismic portrats of the nation’s oil fields, the subterranean keys to the Majnoon, northern Rumaila, West Qurna, and many more. World opinion had little difficulty in mistaking U.S. priorities.”

After wrestling my way through his book I posted my agreement. Going farther back before my deployment my favorite article appeared in the New Your Times – A War for US, Fought by Them, William Broyles. As someone who tried unsuccessfully to avoid Viet Nam, he is touching in his admiration of the military, and compelling when he begins a breakdown of who had family in wars and who from the legislative bodies had family in the current war(s). You should read the whole article but his conclusion provides a knockout punch so appropriate to Iraq:

“If this war is truly worth fighting, then the burdens of doing so should fall on all Americans. If you support this war, but assume that Pat Tillman and Other People’s Children should fight it, then you are worse than a hypocrite. If it’s not worth your family fighting it, then it’s not worth it, period. The draft is the truest test of public support for the administration’s handling of the war, which is perhaps why the administration is so dead set against bringing it back.”

I carried that article around for years. I quoted it, my Chief read it and passed it to every troop in the squadron saying something to the effect “If my commander thinks this is worth reading, you should all read it”. Then we all went…because it was our duty…not someone elses. Now I’m looking at the ten year milestone, listening and hearing nothing but eerie quiet so I’ll post some thoughts and a bit of the Iraqi cost from the Watson Institute – Ten Years after the Invasion of Iraq study and the Huffington post accumulated data:

  • $2.2 Trillion – U.S Federal price tag, not including veterans care into the future
  • $6 Trillion estimated including care for vets per the Huffington Post
  • 3,518 killed in action
  • 975 killed in non-hostile incidents
  • 32,221 wounded in action
  • 991 total amputations
    • 797 major limbs
    • 194 partial limbs
  • $60 Billion spent on reconstruction and development by the U.S Government
  •  $8 Billion was wasted per the final report of the Special Inspector General for Iraqi Reconstruction – Huffington Post

Few in these studies and articles comment on the opportunity cost as U.S credibility has taken a hit. While our media ignores this decade milestone, the foreign press has not. The U.K. Guardian blasts their government and the U.S. and Bush administration. The article is filled with quotes and examples from very senior military leaders with no punches pulled when it comes to misplaced priorities and responsibility. “”It was absolutely irresponsible to go in without thinking of the consequences”, said Lord Guthrie, former chief of defence staff and head of the army. He added: “War is dangerous, difficult, and dirty, but usually cheaper and shorter and easier than what can happen after the fighting stops.” They like I, are critical of the U.S (Bremmer) dismantling the entire military and subsequent creation of a massive police/authority vacume.

Financially we went from a nation with budget excesses to running a continuous deficit. Not all because of the war of course. But I can easily argue we could and should have been watching over the banks a bit better with just a tiny fraction of the manpower and capital spent in an unnecessary war. Knowledgeable authors are asking very tough questions, publishing meticulously documented findings, but gaining little traction from mass media. Former Los Angeles prosecutor Vincent Bugliosi’s book, “The Prosecution of George W. Bush for Murder,” which encountered a virtual boycott by the major news media when published in 2008, and “United States v. George W. Bush et al.,” by Elizabeth de la Vega, a former Assistant U.S Attorney who presents the case for criminal fraud. Both books rest their case on proof of deliberate deception by the President and members of his war cabinet. These authors are not “crazies” but experienced legal experts with well researched work.

My point however is not that legal action be taken but simply one of not ignoring the lessons. We have learned much in this decade. Mistakes, missteps, likely deception at the least and maybe more. But we need to dig, look, acknowledge, publish, study and learn. Self reflection it is called, or we stand to repeat the same mistakes with, as Broyles states “Other People’s Children”.

If there is doubt, take a look at those numbers from a couple paragraphs earlier. For us who were there and so many who were not, they are not just numbers but real people…gone. Our friends, family, communiity members, husbands, and wives who served and sacrificed their lives and limbs supporting this country. I am forever in honor of their loyality and sacrifice. That sacrifice alone makes it even more important to question why, and how we as a country can learn from what was right, and what was wrong. Why is the mass media ignoring this anniversary opportunity?

1937 all Over Again

Can’t help but note that even Jim Jubak is concerned about a repeat of 1937 when cutting the budget too quickly plunged the economy into the dreaded double dip.

 I’m pretty sure that we can’t yet declare victory in the Great Recession, since the specter of a repeat of 1937 still hangs over the global economy. As Federal Reserve chairman Ben Bernanke knows well, 1937 is the year that overconfidence in a US economic recovery led Congress and the President to aim for a balanced budget in the belief that the Great Depression was over. That mistake ushered in another economic downturn that wouldn’t itself be ended until the “economic stimulus program” known otherwise as World War II.

So far that makes Krugman, Bernanke, me, and now Jim Jubak. OK there are a few more, but apparently not enough in the House and Senate. Hello?

As the saying goes, “those who fail to learn from history are doomed to repeat it.” At who’s expense is the real concern…

Blinded by Belief

If someone had told me a few years ago that human beings could completely ignore facts simply because of their beliefs I would have called them wrong. Well, I am wrong. I held human kind in high esteem thinking education, reason, conscious thought could influence them to the truth, at least a large degree of the truth. We see by virtue of Tuesdays Business Insider survey and report, just how wrong I have been. Human opinion IS indeed influenced by what they want to believe, apparently politicians too.

The beauty of this survey is in the methodology, laying out solution options for the self imposed sequestration problem, but stripping away all indicators of political party, title, or who sponsored the plan, these pollsters put potential solutions to the public and the public has spoken. In such a big margin there really is no room for interpretation, they have chosen a strategy far different than their (alleged) representation.  Will Washington listen?

     “The poll asked participants to consider the core points of three sequester replacement proposals in Congress, without telling them the partisan affiliation of those plans. It found that in some cases, both Democrats and Republicans actually opposed their own party’s plans and/or backed their adversaries’ proposal.”

Democrats, Republicans, and Independents, read each proposed strategy and gave their preference, true democracy in action. The result in that most self identified Republicans disagree with strategy put forth by Republican leadership, instead choosing the option pushed by House Progressive Democrats. In a blind poll, verses one in which who put forth what, unencumbered by public arguments influencing the outcome, the strategy put forth by the House Progressive Caucus has the public support as the option considered mast palatable, workable, and good for the country.

     “The House Progressive Caucus plan replaces the entire sequester with a new plan with equivalent savings. It accomplishes this by ending subsidies to fossil fuel companies, closing several tax loopholes, cutting the corporate meal and entertainment tax deduction at 25 percent, and enacting a 28 percent limit on certain tax deductions and extensions”

In the end, while many humans may truelly not have the ability to set aside preconceived preferences, they chose good option in the blind. And in a democracy, they speak. I sure hope Washington pays attention. After all legislators are the ones who created this self imposed problem in the first place.