Archive for the ‘Economics’ Category

Socialism and Sin

June 24, 2019

I’m not a socialist.  Not because I don’t think that this model isn’t attractive, but because of my understanding of human nature and the issue of sin.  Contrary to the popular optimism of socialism in general and particularly current advocates for socialism in America, history is one long description of humans wracked with sin.  Some of them wealthy, some of them not.  Some with good intentions and some not.  Utopian ideas rest on the idea that we will eliminate or overcome these traits so that socialism can function properly, otherwise it is doomed to failure.

This is a fascinating and brief article on how people who do like the idea of socialism see things.  Or at least how some of them see things.  I’ll just comment briefly on some of the assumptions I see inherent in this mindset.

The article is spawned by the split between the world’s richest man, Jeff Bezos, and his ex-wife, Mackenzie Bezos.  Since there was no pre-nup agreement, she is now in her own right a multi-billionaire, and has pledged to give a great deal – perhaps all – of that wealth away.

The author of the article thinks that this ought to be standard operating procedure for billionaires, and that this should be achieved both through taxation as well as changed social expectations for  billionaires.

It’s interesting to me that ultimately the goal of this author isn’t simply to increase philanthropic giving by the richest people in the world, but to actually reduce their overall net worth and prevent them from maintaining or increasing their net worth.  In other words, it isn’t enough to give some of your money away – you should give it away until you’re no longer a billionaire.  Since there are only 2000 or so billionaires in the world, this seems like a manageable process, I suppose.  But it also strikes me as arbitrary.

As the author states in the fifth paragraph of  the article, the goal is not philanthropy but the elimination of wealth inequality.  Philanthropy is merely one mechanism – along with higher taxes and altered societal demands/expectations – by which to accomplish this.  But why just billionaires?  Presumably, when we have eliminated billionaires through these mechanisms, the attention will then shift to multi-millionaires.  Anyone with a net value of over $500 million perhaps.  But then when that is accomplished, the focus will shift lower, to $100 million or more.  And where after that?  What will wealth equality look like?  When everyone has a million dollars in the bank?

It may sound easy and reasonable to demand that billionaires divest themselves of their money, but how low can you go before people begin balking at the demands made of them?  Frankly, the average middle-class family in America is vastly more wealthy than a stunning percentage of the rest of the world.  When do we start forcing them to divest themselves of their wealth?

I think a better articulation of the author’s real goals would be helpful here.  What is the expectation in terms of wealth equality, and how is it sustainable over time?  What are the mathematical models that demonstrate it is both possible and sustainable?  Alas, mathematical models are not so good at accounting for human nature and sin.

Also, let’s define what the author means by giving away nearly all of their wealth.  Is $900 million acceptable?  $100 million?  $1million?

It’s interesting that this process is to be vigorously monitored.  Watchdogs are to be responsible for insisting that such a divestment of wealth is not simply undertaken, but that it is undertaken well.  And here I’m confused.  If wealth equality is the real goal, then why is the concern over ensuring that well-vetted humanitarian programs are the recipients of the monies?  What if J.K. Rowling decided to just write out checks to individual people for one million dollars (or whatever the assumed amount of wealth equality will be)?

I assume that’s unacceptable because many people wouldn’t know how to handle that sudden windfall.  There would need to be support services and mechanisms to help them.  To prevent them from falling back into an inequal wealth situation.  More watchdogging and regulation etc, etc, etc.

I also find it interesting that the author feels that there is no need to invent new philanthropic organizations or  mechanisms, and those that choose to do so are castigated for this.  Wouldn’t you think that someone capable of inventing Amazon or Facebook might be equally skilled at coming up with new ways of doing philanthropy and addressing humanitarian issues?  Again, a curious insistence on regulation rather than recognizing that someone who amasses billions of dollars might be rather good at other things as well.

None of this addresses the issue that millions of dollars are donated annually to very good causes.  Yet despite high-profiling and large amounts of money, malaria is still a very real threat to much of the world and poverty does not seem to be appreciably abated in most of the neediest places.  How is throwing additional money at these problems going to fix them to a point where wealth equality then becomes feasible?

Good intentions can be derailed by sin.  Dishonesty, greed, envy – these are deeply woven into our human natures.  Hence the need for constant vigilance in the socialist future envisioned by this author.  But such vigilance seems ultimately to be inadequate.  I’m not saying that we shouldn’t try to improve the human condition, but simply forcing people to give up their money to other people hasn’t – historically – been very effective for very long.  Politics and economics alone are inadequate to dealing with our human situation.  Until we take seriously the theological aspects, we are doomed to continued failure.

Slow Moving Train Wreck

May 1, 2019

The Los Angeles Times reported today that for the first time since records have been kept, the county of Los Angeles experienced a growth rate of 0% last year, and California as a whole grew by the smallest amount since we’ve tracked these sorts of things.

The article duly noted a variety of potential causes for this slow in growth rate.

  • Fewer immigrants from Mexico and more from Asia.  Asian immigrants apparently on the whole are better educated than Mexican immigrants, and better-educated people tend to have fewer children.  Tuck this particular detail away in your memory for just a moment – we’ll come back to it.
  • Native-born Americans have been experiencing a decline in birth rates for years.
  • A lack of housing (affordable, of course) is another possible contribution to slower growth rates as people can’t afford to move here.  Or stay here.
  • Economic uncertainties over the past 20 years are also likely to blame as people are less able or inclined to have kids in rugged economic times.
  • Natural disasters such as the devastating wildfires of 2017 and 2018 contributed to a rearrangement of population in certain affected areas.
  • California lost roughly a million people between 2007-2016.  Six million people moved out of the state and only five million moved in.

What the article didn’t see fit to note is the popular idea – pushed for the last 50 years – that we are overpopulating the planet.  This idea – pushed in schools particularly – is likely to take psychological root in many people who then decide to have smaller families.  The longer you’re in school (the better educated you are, as per above), the more often you’re going to hear this over-population mantra and will likely feel greater pressure to respond to it by not having lots of (or any) kids.

However the article mentions in passing the completely devastating this false idea is and will continue to have on our society as fewer young people struggle to support a larger population of older people.  Is it any wonder that socialism and a restructuring of our economy is gaining popularity among younger generations?

Also not discussed in the article is the trend for people to wait longer before marrying.  I’d presume that there is a corresponding delay in having children, at least among people inclined to think that those two things are related.  And if you aren’t marrying until your very late 20’s or early 30’s, and need to get your economic ducks in a row before contemplating children, then it’s going to be getting more and more difficult (biologically) to get pregnant and carry to term.

And I wonder about possible links about delaying having children and whether people who have built enjoyable lives without children are having a harder time considering adding children to the equation and spoiling some of the fun.

No conjecture was offered as to why more people are leaving than coming to California, but many Californians will quickly offer some explanations – over-regulation, over-taxation, and a disconnect between the major population centers and the rest of the state.

Lots of factors to consider, both ones that the Times chose to talk about and a few it didn’t think to mention, but which likely have a real impact as well.

 

 

 

Poverty Colored Glasses

April 30, 2019

An essay which recognizes the narrative being pushed in certain segments of our culture and society isn’t just divergent, it completely ignores reality.  It has to, otherwise certain economic and political aspirations can’t possibly succeed.

There’s a good reason for that, but we’re in danger of being lulled into a false depiction of reality.

Your Money at Work

October 19, 2018

How do you help cope  with the devastation of Hurricane Michael in the Southeastern United States?  Lots of ways come to mind.  You could volunteer your time.  You could send money.  You could rally others to do these things as a group.

Or you could fly 15 dogs to Santa Barbara from Florida.

Something you might want to consider the next time you’re hit up to donate to the Humane Society.

I can’t honestly believe that this was the most cost effective solution to the situation.  Surely there were shelters closer that could have accommodated these animals at a fraction of the cost?  But to fly them across the country?!  Are they going to be flown back at some point once the influx of storm-related loose animals abates?

I speak as a dog owner and dog lover.  This just sounds like a ridiculous waste of money, and yet is being promoted as somehow wonderful.  I’m glad these dogs are safe and that other animals can be safe because of relocating existing shelter animals.  It’s one of those logistics that I wouldn’t naturally think of.  But I also wouldn’t naturally think of relocating them to the entire other side of the continent.

More Doomsday

October 17, 2018

If death from nuclear war or a massive decline in bug population wasn’t enough to make you jittery, perhaps this little article will.  One in ten people is more than 90 days in default on their student loans.  Student loan debt has grown by 157% in just over a decade.   What does that mean?  Over $1.5 trillion dollars in existing student loan debt.  Interest rates on student loans have topped 5% for undergraduate loans and are nearly 7% for advanced degrees.

Yet one cited expert in the article posits the student loan debt rise isn’t nearly a crisis on the scale of the housing collapse a decade ago.  He claims the difference is that student loan debt isn’t systemic.  I’m not sure what he means by that, considering earlier in the article another expert described the situation as systemic.  Elsewhere the article reported a further increase in the number of people living at home with their parents still by age 35.  Generations of people are unable to do the things their parents did by their late 20’s and 30’s because they’re saddled with massive student loan debt and, surprise surprise, aren’t able to find jobs that enable them to continue paying it off.

Meanwhile, tuition rates are basically at all-time highs and continue  to climb.  Why not?  If people are being groomed to see college education as an absolute necessity for future financial security, of course people are going to keep taking out loans to pursue that education.

Those most likely to default on their loans?  People who attended for-profit schools, minorities, and those who started on their education but didn’t finish.  Also, as a whole it’s the smaller loans that are defaulted on, rather than the big, six-figure loans.  Those who spend a lot of money to get advanced schooling for careers in law and medicine tend to be better able to repay their loans.

Meanwhile, the government just keeps handing out loans.  After all, it’s not  the government’s money.  It’s yours.  And mine.

I don’t know how any financially sensible person could see this situation as anything but a massive bubble waiting to burst, and burst it eventually will.  At which point I’m sure the effects will be very systemic.  And pervasive.  Destruction by nukes, bugs, or financial meltdown.  At least we have options to place our bets on.

 

Charity & Taxes

December 17, 2017

As we move closer to a major (or allegedly major) overhaul of our tax code, some are raising red flags that this might have a significant impact on the Church, namely in the realm of charitable giving.

Currently donations given to churches and other non-profit entities are tax-deductible if you itemize deductions.  But the new tax code may reduce the overall benefit of itemizing by increasing the standard deduction.  The net result could be lower incentive to give to charities for a tax benefit, and overall lower donation levels.

So would you give even if you weren’t getting a tax write-off for it?

 

More Tax Fun

December 11, 2017

Just in case the Congressional tax plan hasn’t been interesting enough for you, you might be interested to learn that in October a judge (for a second time) ruled that the clergy tax exemption on income designated for housing is unConstitutional.  This has enormous repercussions for religious organizations of every kind, as all are blessed to have the income their religious leaders spend directly on housing-related expenses excluded from taxes, saving religious groups a considerable (though probably not outrageous) amount of money.

The judge ruled that the clergy housing allowance is unfair in that it essentially is an endorsement of religious organizations (while not an endorsement of a particular religion), and as such is unfair as secular organizations and individuals do not receive a similar or equal benefit.  The ruling has been appealed, and defendants will argue that this is more an issue of preventing complicated and unnecessary entanglement of the State with religious organizations, which could lead to a breach of the separation of Church and State.

Certainly there are plenty of folks who think the status quo is Constitutional and should withstand this legal challenge.  Recommendations are that congregations continue to designate housing allowance for 2018 onwards until the case is finally resolved by an appeals court or the Supreme Court, recognizing that if the appeal is unsuccessful, it is possible (if not likely) that housing income will become taxable retroactively to the October ruling, as opposed to being implemented effective of the final court outcome.  This would place ministers of religion in a painful financial situation in having to pay back taxes on perhaps multiple years of housing allowance.

This ruling – at least thus far – applies only to housing allowances, cash given to ministers of religion to secure and maintain housing arrangements.  It does not affect a church that owns a home which it allows the minister to use (a parsonage).  Should the revocation of ministerial housing allowances stand, I’m sure there will be a massive upswing in the number of congregations that provide parsonages rather than housing allowances to their ministers.

All of which would spell the end of many small religious groups unable to cope with the additional burden of needing to pay their ministers enough additional income to offset the negative tax impact.  None of this is surprising given our cultural climate and the sudden reduction in the perceived benefit of religious organizations to society and culture as a whole.

Yay, Insurance!

November 3, 2017

So, if you’re wondering some of the upshots of mandatory health insurance coverage, consider all of the possibilities waiting to be added to the list of covered procedures.  Your still-rapidly-increasing-premiums could one day – soon apparently – be funding things such as uterus implants and pregnancy care for people born male but who have decided they want to be female instead.

It’s really great that as increasingly controversial treatments and procedures are innovated, we are being given less and less freedom to reject these things personally in terms of our finances.  I strongly suspect that if we had the freedom to pick and choose, these sorts of procedures wouldn’t find a whole lot of support in the free market system.

Waste Not Want

October 20, 2017

I didn’t see much report about this in the news over the summer, but it seems like a pretty big deal.  China has been a major importer of the world’s recyclable materials, but is making changes that will place major restrictions on the type and amount of material it accepts in the future.  I haven’t been able to confirm it, but I’ve heard anecdotally that China – until these changes take effect – has imported up to 40% of America’s recyclable material.

That should have a major impact on our country, seeing the massive amount of plastics we use.  It’s going to get more expensive, at least in the short term, to find alternate ways of dealing with losing a major market for our recyclables.  It hopefully will drive us to find better ways of handling them in the first place.  Oversees, it was routine to see multiple bins in the places we stayed.  The expectation was that the household would clean and divide up the types of waste.  Organic waste/table scraps in one bin, paper waste in another, plastics in another, aluminum in another, etc.  It was a little excessive compared to our policy where we live that we just throw all the recyclables into a single bin for weekly pick up.

Much of what we do and how we do it is driven by convenience.  But convenience has a price, a price we’ve been able to deflect somewhat, but which may get harder and therefore more expensive to mitigate.  Hopefully that will spur our American creativity and ingenuity to find better solutions than we have so far.  It would be nice to see us dealing with our own issues and consequences rather than just off-loading them to other countries.

Aquaponics 2

October 19, 2017

We’ve taken one step forward and two steps back this week in our aquaponics venture.  I procured three large 55-gallon drums for starter tanks.  But I also discovered this week that the most popular and common form of fish for aquaponics – tilapia – is not permitted in the county we live in (gotta loooooovvvveeee California!).

I had suspected this to be the case for a few weeks now after scouring the Internet.  But I held out hope that exceptions might be made if the system was completely self-contained (as opposed to privately stocking tilapia in a pond on your property or something).  I referred to the California game and fish web site to begin with.  I called the contact number listed there.  But the number was actually some sort of nation-wide contact, so they had to transfer me to a California person.  That person had to transfer me to someone else, and that person transferred me to someone else, who gave me the name and number of the person she was transferring me to, and I left a voice mail with this person.  She responded within an hour or so to give me another name and  number where I left a voice mail.  This woman called back in a couple of hours and was extremely pleasant but confirmed there were no exceptions to the tilapia ban.  She e-mailed me a variety of resources that will be very helpful as we progress, and gave me the name of  a guy down in San Diego that I have e-mailed, asking for his next best recommendation for an aquaponics fish.

In the meantime I’ve started researching other options for fish.  Catfish seems to be the next-best option in terms of growing quickly.  But it’s a less popular fish to eat.  We’ll see what the San Diego guy recommends.