TV: How times have changed!

About 25 years ago, when I was teaching introductory Russian classes as a sideline at Adrian College, I looked into what we would need to do to allow our students to watch Soviet TV. I thought it would improve student ability to understand spoken Russian and make the subject more interesting.

The answer was that the special equipment needed to tune in on satellites carrying Soviet TV would cost about $50,000, which was completely unthinkable for a small college with only a dozen or so students of Russian.

After the Soviet Union cracked up in December of 1991, so that it was no longer public nuisance number one, our students lost interest in studying Russian, so I discontinued the classes and went back to teaching only political science classes plus, each semester, one course in the computer science department.

This evening, I have just spent the better part of an hour watching a very interesting program from Russian TV, a documentary on energy use and its impact on the environment and the long-term problems our expanding population and depleting oil and gas will probably bring. I am doing it on a computer that cost less than $600 four or five years ago with a DSL connection to the internet. It probably would come in just as well on my 3 year old netbook, which can currently be bought for as little as $150 in occasional sales.

The same website, http://beelinetv.com, lists hundreds of other TV stations around the world, all of which can be watched by anybody with a computer and a fast enough (DSL or cable) internet connection. For free!

I hope language teachers are making full use of these wonderful new opportunities to have their students tune in on the world!

A Goal For Occupiers: Down with regressive taxes!

Although the occupy movements have elicited widespread sympathy, they have been better at expressing general unhappiness than at suggesting specific reforms. One trouble with specific goals is that it is hard to find any that broad masses of people can agree on.

It would be wonderful if the energy, sincerity, and enthusiasm of the occupiers were focused on some concrete action that they could demand Congress take. I would like to suggest a goal which could unify the occupiers: getting rid of regressive taxes.

Republican presidential contenders have renewed old disputes about the merits of “progressive” taxes ( higher incomes pay a higher tax rate) and “flat” taxes (everyone pays the same percentage). There is something to be said for both sides of this issue. But nothing whatever can be said in favor of regressive taxes ( higher incomes pay a lower percentage in taxes).

Several federal taxes are highly regressive. The most obvious one is the FICA tax supporting Social Security and Medicare. This 15.3% tax applies to the first dollar earned, only applies to wages and salaries, and only applies to the first $106,800 this year. A person earning $106,680 this year pays $16,340.40 in FICA taxes, half directly and half indirectly as the so-called “employer’s share.” A person earning twice as much still pays the same $16,340.40, as does someone who makes $1,000,000, or about 1.6%.

Some but not all of the injustices in the FICA tax will be reduced beginning in 2013 unless Obamacare is repealed or declared unconstitutional.

The federal income tax also has regressive elements, with much lower tax rates on income from dividends and capital gains than on wages and salaries.

Supporters of these major loopholes claim that it is unfair “double taxation” to tax dividends, since the corporations paying them have already paid corporate income tax on their income. And they proclaim it unfair to tax capital gains, part of which is not really income because of inflation, at the same rate as wages.

The argument about double taxation is sheer sophistry, since money is always subject to taxation whenever it changes hands and no tax system can avoid this. The argument about inflation has merit but wouldn’t if capital gains were indexed to exempt the portion caused by inflation.

It is obviously unfair to tax hedge fund managers with billion dollar incomes at a much lower rate than that paid by the people who clean their offices. It is apparently impossible to eliminate this injustice without major and harmful side effects as long as capital gains are taxed at lower rates than earned income. The solution to this problem is therefore to eliminate the preferential rate for capital gains.

I therefore urge the Occupy movement to focus on one unifying and clearly meritorious reform: getting rid of all regressive taxes. The movement’s energy, enthusiasm and public attention could make this reform politically possible. A mobilized public opinion could force Congress to ignore the well-financed lobbyists, spin-doctors, and special pleaders who would rush to oppose such a reform.

Down with regressive taxes!

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This piece has appeared in the Daily Telegram, Adrian, Michigan.

Unemployment not just a problem for returning veterans

It is hard to disagree with President Obama when he tells us it is wrong for returning veterans to be unable to find work. Even Senate Republicans went along with his proposal to give tax credits to companies that hire unemployed veterans.

Still, this kind of rhetoric and legislation should make us all very uneasy. Although it sounds good in Veteran’s Day oratory, it smacks too much of telling us that the wrong people are unemployed.

Government should not be in the business of deciding who should be employed and who should not be employed. Nor should anybody else be in that business. In a full-employment economy, veterans, like everyone else, would be able to find jobs.

We often hear laments that older people, young people, and members of racial minorities suffer from higher unemployment than do middle-aged non-minority people, which again takes the existence of unemployment as a given and suggests it should be distributed more equitably.

There is nothing in the structure of the physical or social universes that requires the existence of unemployment. During World War II the United States not only had no unemployment but it actually had a labor shortage. And the amazing results? Women (“Rosie the riveter”) and black people suddenly found themselves hired to do work that had previously been denied them. (The shortage of workers, aggravated because employers were not allowed to raise wages to attracted needed labor, led employers to offer fringe benefits like medical insurance, which the government did not count as wage increases.)

During the heyday of the Soviet Union, likewise, there was also a shortage of labor instead of unemployment, because state-run factories and farms (and that was all there was) were not allowed to raise wages to the point where the demand for labor would have fallen to be equal to the supply. The notorious Gulag Archipelago, or system of concentration camps, functioned as a kind of civilian draft to get needed labor for difficult projects in unpleasant parts of the U.S.S.R.

There are several ways the U.S. could assure full employment without the unpleasantness of a war or Soviet-style economy. Small decreases in average wages could bring the demand for labor into equilibrium with the number of people seeking work, as was the case in World War II America and in the Soviet Union. If measures need to accomplish this are politically unpalatable, the government could become the employer of last resort, guaranteeing everyone a job at the legal minimum wage, modified versions of the WPA/CCC programs of Franklin D. Roosevelt, but on a larger scale. The costs of doing this would not be out of line with what we have lately been spending on ineffective “stimulus” programs.

Whether we supported or opposed the wars they have been fighting, we can only wish returning veterans the best. But we can wish no less for all other Americans. It is time to stop talking about reducing unemployment and to start talking about eliminating it.

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This piece has run on CommonDreams.org.

Don't lay off government employees

The Wall Street Journal ran my following letter to the editor October 24, 2011:

Harry Reid's jobs math may be more politics than economics, but so is the Journal's retort that "State and local governments now have no choice but to cut workers."

Laying off people when there is work for them to do makes no sense, especially when unemployment is high. Government does have another choice; it can reduce pay and fringe benefits for its workers to save the needed money.

Government has a duty to drive the best possible bargain when it spends money extracted from taxpayers. Paying government workers more than is necessary to attract and retain enough qualified applicants—generosity with other people's money—may be politically safe in an age of public-employee unions, but it is a breach of that duty.

Paul deLespinasse

Corvallis, Ore.

TO END UNEMPLOYMENT, LOOK TO SOVIET EXAMPLE

The Soviet Union suffered from totalitarianism, low living standards, and economic inefficiency. But it had one redeeming feature: there was no unemployment. As we flail around trying to reduce unemployment, we should study how the Soviets eliminated it. But we need to look at what they did, not what they said.

Communist explanations of unemployment were nonsense. They claimed unemployment was due to selfish capitalists, who wanted an “army” of surplus workers they could threaten to substitute for current employees demanding raises. The Party line was that the U.S.S.R., having destroyed capitalism, therefore had no unemployment.

But when the price of something is less than the “market-clearing” price, the price at which demand for it equals supply, a shortage occurs. If capitalists really underpaid workers—as Communists claimed--- there would be a labor shortage, not an army of surplus workers.

The actual reason for Soviet full employment was that the state monopolized the right to employ labor and to set wage levels. Although claiming to represent workers, the Soviet state lacked free elections where its claims could be tested, and it set wages far below the market-clearing level. People joked “We pretend to work, and they pretend to pay us.” But the upside was that a fired worker could always find another job, since –thanks to the low wages---there was a labor shortage.

Meanwhile American and European economies have multiple obstacles, legal and social, to reducing wages, and pressures, legal and social, to raise wages: minimum wage laws, labor unions, a climate of opinion where low wages are considered a sign of inferiority and paying them a sign of unscrupulousness. No wonder we had 5% unemployment even in the good old days!

Unemployment would disappear if all wages fell to the level at which the supply of labor is equal to the demand for it. There is no need to go below this point like the Soviets did. But wages in general will have to be somewhat lower than they are now.

Reduced wages would be resented by workers. But since one person’s wage is another’s cost of getting something done, as average wages fall so will the cost of living. And the security each worker feels, knowing that if a current job disappears another will not be hard to find, will be invaluable. Today even people with jobs hesitate to spend money, let alone borrow, since they don’t know whether they will be employed tomorrow. This would not be a problem in a full-employment economy.

Best of all, with market-clearing wages unemployment will go away without any need for expensive “stimulus” programs or for “growth.”

Economically, then, ending unemployment would be easy. The Soviet Union proved that it can be done. Politically, however, it may be impossible in democracies whose electorates have limited understanding of economics and whose leaders must cater to public opinion or lose their offices. If it is necessary to eliminate minimum wage laws, critics will correctly argue that lower paying jobs will not support a decent standard of living while ignoring the fact that being unemployed won’t support any standard of living at all. We need to remember that it is better to be employed, even for low wages, than to be unemployed.

If funds currently spent to “stimulate” the economy could be redirected to subsidizing people working for low wages, eliminating minimum wage laws might become politically possible.

Full employment requires wage flexibility, wages that can fall when necessary as well as rise. It remains to be seen if this is possible in a democratic society.

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This article has run in the Daily Telegram, Adrian, Michigan, and in the Democrat-Herald (Albany-Corvallis, Oregon).

A good idea in the New York Times?! Amazing!

Once in a while the New York Times prints a letter to the editor that actually makes sense. Today is one of those unfortunately rare days! Consider well the following suggestion:

To the Editor:

The single most effective remedy for our deficit problem would be a tax that tracks the national debt. It would be levied as a surtax on all income. The revenue from this “debt tax” would be dedicated solely to paying interest and principal on the national debt. Those interest payments are fast approaching a whopping $500 billion per year.

This surtax would gradually reduce itself to zero as the debt was paid off, or increase as the debt rose. Such a tax — especially if itemized on pay stubs — would be a constant irritant to taxpayers and politicians alike, providing an effective means of inhibiting future deficits.

RON SHEPPE
Rochester, N.H., Aug. 7, 2011

Supreme Court Should Overturn State Establishment Clause Cases

Cross City Florida has the honor of being the latest victim of perverse judicial interpretations of the First Amendment’s establishment clause. A federal district court judge, responding to a lawsuit filed by the American Civil Liberties Union, ordered the city to remove a monument in front of the Dixie County courthouse. The monument’s offense? It recites the Ten Commandments.

Thomas Jefferson, in a letter, famously called for a “wall of separation between church and state.” But Jefferson’s colorful words are a grossly inadequate generalization about the establishment clause, which contains no such language.

The clause reads: “Congress shall make no law respecting an establishment of religion . . . .” The key words here are “Congress” and “respecting.” The establishment clause placed restriction only on what Congress (a federal body) could do, not on what state governments could do. And Congress could make no law “respecting,” which means “having to do with,” an establishment of religion. This awkward expression was used because the amendment’s drafters understood that it would do two things, not just one: 1) prevent Congress from establishing a religion, and 2) prevent Congress from interfering if state governments establish a religion. (Several states had established churches when the First Amendment was written; others had religious tests for public officials.)

Most establishment clause cases challenge actions by state governments (including school districts) rather than by the federal government. If the clause were interpreted as written all these cases, including the current one from Florida, would be thrown out of court. Most of them, including the Cross City case, involve actions which it is a stretch to consider “establishments” of religion. But, assuming that they are indeed establishments, the right of the states and school districts to engage in them would be protected by the establishment clause, not prohibited!

But the Supreme Court has been striking down state government actions under the establishment clause for more than half a century. It has held that although the original Bill of Rights (amendments 1-10) placed limits only on the federal government, the Fourteenth Amendment, added after the Civil War, was intended to place many of these same limits on the state governments.

There is convincing evidence that this was indeed intended when Congress wrote the Fourteenth Amendment. And for the most part this “incorporation” of the Bill of Rights made sense. It did not undermine our protection against federal censorship, for example, to hold that the First Amendment also protects us from state government censorship.

But “incorporating” the first dimension of the establishment clause to prevent state establishments as well as federal establishments totally contradicts the clause’s second dimension, protecting the right of states to establish a religion. The Fourteenth Amendment’s drafters intended no such result. Their report when the Amendment was submitted to Congress conspicuously omitted the establishment clause as one of the long list of provisions that would be “incorporated” against the states.

No doubt it would be a bad idea for a state to establish a religion today. But letting nine unelected justices twist a key clause of the Constitution so that it means the opposite of what it originally meant is an even worse idea.

There can be no doubt that the Supreme Court has pulled a fast one here, quite possibly without realizing what they were doing. The proper thing for them to do now would be to recognize their error, overturn all of the cases based on that error, and leave issues of church-state relations to the political and legal process at the state level as our Founders intended.

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This article has run in the Gainesville (Florida) Sun.