The Need for Unions In America

Hello and welcome to the Think Tank.

This week I have been inspired by those protesting the Anti-union legislation in Wisconsin. It seems clear that the debate has quickly transcended the idea of budgeting and has become an outright attack on unions and the bargaining laws that protect them. So in a show of support I would like to do a quick rundown of basic economics and why it is important for Unions to have the right to bargain for wage increases.

Let's cut to the chase. The economy does not function on "trickle down effect economics." Giving the rich more money does not mean our economy will magically prosper, and the average non-luxury business does not rely on the rich to buy all of their products because we live in a consumer-driven economy. Think about it this way: I go to the hammer store because I just broke my hammer. I have $20 and the price of my new hammer is $15. I buy my hammer and walk out.

NOW

If I had $120 would I have bought 8 hammers? Of course not. I only need one hammer for the job I am doing and buying any more would be a waste of money. I would buy one hammer and save the other $105. This same idea applies to the "trickle down effect" economic theory. The rich in our country have the same basic needs as everyone else. Sure they consume many high quality products but they can still only eat so much, buy so many couches, computers etc. They do not purchase enough goods for our entire economy to live on. The real spending power in our economy comes from the middle and lower classes. Without the main populace's consumption, overproduction would be rampant and our economic system would collapse. The more money the middle and working classes have, the more the working class will spend on disposable goods and as a result the more goods businesses will see fly off their shelves.

But hang on there what about businesses? Surely putting more money in the pocket of businesses would create a prosperous economy!

Not so fast, we have to understand that without anyone to buy those goods or services that businesses offer it doesn't matter how many tax breaks you give them, businesses will not make a profit.

The way that we make sure that people are able to buy the goods that businesses sell is through the creation of wages. We give the people who are working in businesses a living wage so that they can then go out and buy groceries, housing, and a hammer of their very own. But wages can't be too high because businesses have to make a profit and wages are a huge expense that any smart business model would minimize.

Because companies and businesses want to minimize the amount of money they spend on wages the workers often have to make sure that the other end of the spectrum isn't forgotten and they do this by forming Unions. In a Union, workers can make sure they are getting enough money to keep their lives afloat and ultimately the rest of the economy. Taking away the Union's right to bargain for wages means the delicate balance of wages and profit gets tipped in the favor of profit. Not only does this cause problems for individuals trying to pay their bills but it limits the amount of money that goes into the market economy and decreases the likelihood of spending by those who are experiencing wage stagnation. The longterm effects of which can be devastating.

So to those who are fighting for Union rights I salute you!

Post comments, arguments below

Corporations: Businesses or People?

Hello and welcome to the Think Tank.

A recent subject of hot political debate has been the January 21, 2010 Supreme court rejection of the corporate spending limit. This means that Corporations have all the first amendment rights that we enjoy.

In one corner you have Libertarians who believe in a "free monetary" democracy. They believe that the dollar is just as vital to the voting process as the actual voting is. The candidate who gets more financing should have an advantage because he is favored by the business sector and the engines of our modern society.

In the other corner you have Reformers who believe in "one person, one vote" democracy. The reformers have been pushing for publicly funded elections in order to level the playing field, without smear campaigns fogging the voter's head. They argue that Labor unions and Corporations can now dominate the media with fast, deadly attack ads that candidates couldn't respond to.

The third corner are conservatives that believe that the limitation of money a corporation or special interest group can spend to make their political point is censorship and violates their right to free speech. "Corporate power and influence aren't inherently corrupting... as long as they're part of a vibrant debate within an open marketplace of ideas." (Christian science monitor)

Recent court rulings have been favoring the more reformist point of view however when Citizens United, a corporation, wanted to air a controversial political documentary on Hillary Clinton and was shot down by the Federal Election Commission they appealed to the supreme court which now leans conservatively 5-4. The ruling was a 5-4 decision in favor of Citizens United which overturned a hundred year old ruling against a corporation's right to free speech.

But while partisan lines are drawn and the attention of the media goes toward the health care decision a few unexpected consequences of the ruling are brewing in Maryland. A Corporation is actually running for office. Murray Hill Inc. is running in the 8th district of Maryland for congress. While it is a satirical election campaign and mixes an add campaign with its candidacy the corporation has made a big splash because, frankly, it is now legal.



Their website is even more hilarious but people are realizing that they can legally run for office. This Supreme Court ruling has potential to completely change what we hear about our candidates and who we hear it from. Needless to say our republic is walking a fine line.

So I ask you, The Corporation: a Place or a Person? Post thoughts below.

Haiti: The Poorest Nation in the Western Hemisphere

Hello and welcome to the Think Tank.

This post is about Haiti. No it is not an article about the horrible earthquake that flattened their capital. It is not about the predicted thousands of people who died. And it is not about the heroic struggle of individuals trying to survive. This article is about Haiti's future, why they are so incredibly poor, and how this event could completely destroy the country.

First I must point out that the basis of Haiti's economy is agriculture. Two thirds of their population depends on the agricultural sector. They have a massive trade deficit and little to no outlook economically. Because of a shrinking economy, the government has little money to invest in infrastructure and is in massive debt. The result is horrible poverty. Haiti's poverty is so incredibly bad, their poor have begun eating dirt.

But wait a minute. Why is the economy stagnant?

The answer is not pretty.
It's kind of our fault.

See, the US has lots of these things called subsidies. A subsidy is when a government supplements the income of corporations or workers in an industry in exchange for a lowering of the price of the good that the industry produces. Subsidies are good for the country because they make their product more competitive on the global market. The consequence of these subsidies unfortunately is that countries will import the subsidized good over the non subsidized good because it is cheaper. This ends up being devastating for the poorer countries that cannot afford large government subsidies of their own.

Below is a chart showing the different agricultural products that the U.S subsidizes.


Now let me list the agricultural exports from Haiti in 1990:coffee and sugarcane; rice, corn, sorghum, mangoes
The US makes some of the top money making crops virtually useless because we spend more on subsidies than they can ever dream of. Add to that the Brazilian and Venezuelan subsidies on sugarcane, a tightening of outside investment following an economic crash, and a little political turmoil, and you get a severely disadvantaged country.

What this earthquake has just done is demolished most of the infrastructure built over the last twenty years. Haiti is already strapped for cash and doesn't have enough money to even come close to fixing this mess. Hospitals crumbled, schools crumbled, lives crumbled and at best the stability and future of this country look bleak.

The Dilemma Of Afghanistan

Hello and welcome to the Think Tank.

I am writing to express my concern with our occupation of Afghanistan. President Obama has decided to add 30,000 troops to our current force. In an attempt to appeal to the 51% of Americans that now say they are against the war (CNN/ORC poll) he also came up with an exit strategy. In July 2011 President Obama plans to begin withdrawing troops. Robert Gibbs then claimed that the exit strategy set in stone and that troops will start coming home in July 2011 period. Gibbs said the plan has "no flexibility." Or does it?

Hillary Clinton seems to think otherwise.

"We're not talking about an exit strategy or a drop dead deadline. What we're talking about is an assessment that in 2011, we can begin a transition." ~Hillary Clinton on Meet The Press

Apparently neither does Robert Gates

"We're not talking about an abrupt withdrawal. We're talking about something that will take place over a period of time... Because we will have 100,000 troops there. And they are not leaving in July of 2011."~Robert Gates on Meet The Press

So what is actually going on? It seems that the so called exit strategy was just an attempt to quell the public's anger and we don't really know what, if anything, is going to happen in July 2011.

We know that if the U.S pulls out of Afghanistan the Taliban will quickly overthrow the weak democratic government. As Tom Friedman wrote in the New York Times:
"This only has a chance to work if Karzai becomes a new man, if Pakistan becomes a new country and if we actually succeed at something the president says we won't be doing at all: nation-building in Afghanistan. Yikes!"

So the question is: Should we try and pull out and leave Afghanistan and now Pakistan to the Taliban? or should we stay the course and try to pull off in Afghanistan what we did in Iraq? Post Below

Don't get too excited

Hello and welcome to the Think Tank.

I am writing now because I wish to make a prediction. This prediction will contradict every economist you hear on the news, and everything you hear on CNBC. I was getting home from this weeks thanks giving trip and thought I would catch up on the financial news. I was immediately bombarded with a singular message: the recession is over. I heard the beating of drums, the excited reporters talking about how sales have gone up, housing prices returning to normalcy. A quick glance at the bottom of the screen reveals the title of the story they are reporting on. It reads "Recession over?" I roll my eyes.

The economic growth that we are seeing today is due to the same unstable, dangerous practices that led us into the recession. When Obama took office he promised regulation of the dangerous derivative market (something to be explained another day), increased regulation on the dangerous amount of leveraging banks were doing, and promised to make this country about Main street instead of Wall street. This has not happened and as a result the corporate business practices have returned.
The thing about these practices is that they are incredibly profitable. That is until somebody goofs up. When somebody does mess up the whole thing collapses. We are likely seeing the result of one or more of these derivative bets going sour, and the resulting collapse of all companies that were involved in the bet.When these derivatives do work however they skyrocket profits and we see the same result we saw before the recession: rapid economic growth.

My prediction is that in a matter of time we will see another collapse of the market. This is because nothing has changed, the same practices that got us into this mess are happening all over again and no one seems to care. In the meantime however the stock market will soar and it will appear that the recession is over, but as long as regulation is not introduced we will see the exact same results.

Healthcare vote opposition

As many of us here in America are aware tonight the health care bill is being voted on to officially enter debate in the senate. If there is anything that our country needs right now it is public option health care. We have 40 million uninsured people in this country and there are very few incentives for corporations and businesses to remain in the United States.

Not surprisingly every Republican is united against tonight's vote. I am listening to the GOP's weekly address and will explain why several of the things they list in the beginning are wrong.

1. They say that this health care bill would "increase taxes by hundreds of billions of dollars." This is true taxes will be increased. However the problem with that is the main way the health care bill is going to be paid for (besides cutting Medicare) is through taxing couples making above $250,000 a year and taxing individuals making over $200,000 a year. That means an increase in taxes for right around 2% of us. They make is sound as though everyone is going to have massive tax increases but that is just not the case.
2. The health care bill will "cut medicare for hundreds of senior citizens by hundreds of billions of dollars." Again this is true however they conveniently leave out the fact that there is a whole new system being proposed that the senior citizens would be eligible for.
   
3. The health care will will "grow the Federal Government by over 2.4 trillion dollars." Once again the GOP is "right". The plan will increase the debt of our country no doubt. They somehow came up with the number 2.4 trillion dollars over ten years however the official bill and the one being debated only costs $849 billion over ten years. That is $84.9 billion dollars a year. However CBO has recently stated that the Senate health care bill would:"Cut the federal deficit by $130 billion in its first decade, more than any other bill. It would cut the budget deficit by as much as $650 billion in the second decade."(ABC news) So the deficit is going to go down in the long run.
   
4. The health care bill will "push the needy uninsured into a failing Medicaid system." That was a big one.Without arguing about the assumption that Medicaid is a failing system (my grandparents would say it isn't) I will simply say that the poor probably prefer something instead of nothing.
5. The health care bill will "leave millions of Americans uninsured." That one is funny. The GOP was trying to block the bill from entering the debate phase of passing. They don't even want to change it. And now they are unhappy because the health care bill is not the universal health care bill that they called socialist?
6. Finally the health care bill will "establish a massive governmental intrusion into management of our health care economy." I don't know about you but I would much rather have the government (whom I elected) have control over health care than a group of CEO's who see me as a bag of money. I also do not like the fact that here health care is labeled an economy. It is upsetting that we label people's lives as simply part of an economy.

Thoughts? Comments? post them below.

Earth Day and Oil

An impressive interview

The Bailout of America's banking system is dominating the headlines these days. The first bank that failed in 2007 was the Metropolitan savings bank in Pittsburgh. This bank would soon be followed by 48 other banks by the year to date.
In my other article "All about Capitalism" I described what corporations do when they are unsatisfied with their bottom line. One of their options is to create a "bubble" and that is exactly what our banks did.
With most banks begging for cash we must ask ourselves "do they deserve it?" The answer varies but right now apparently we do believe they deserve it. I was watching an interview on Bill Moyers Journal in which he was interviewing a man named William K. Black. I highly encourage the serious Thinker to watch it here. Black explains it all. He talks about his disbelief in why we are letting them get away with our money, and touches on a number of things that our government simply did not tell us during the bailout of the banking system.
This is a thought provoking interview that hits home and leaves you restless, unsatisfied with what is going on, and above all else, thinking.

Why They Won't Help us

Recently, the prime minister of (insert European country here) has told the United states that they will not help out the bailout of the corporations that are failing. Many people in the U.S are asking, "Why? Don't they care about the corporations and banks that run the world's economy?" the answer is a flat "No." and here's why.
When you look at all of the corporations and banks that are being bailed out in this mess one can not help but notice that they are nearly all American corporations. During Bush's years Europe learned to detach itself from America's senseless spending and starting of war. Many of the policies that drove the world economy into our current recession are viewed as American and are unpopular. This was coupled by a falling American worldview.

"The annual survey, taken by the highly regarded German Marshall Fund of the United States, shows that 77 percent of Europeans disapprove of the way Bush has handled international affairs, as compared with 56 percent who felt that way in GMF's "Transatlantic Trends" survey in 2002."
~Washington Post

The truth of the matter is that Europe sees this financial explosion to be the U.S's doing, and they are right. Very few companies in Europe became involved in dealing mortgage-backed securities and largely avoided this mess. It is this combination of disapproval of America's image and the view that this crisis is largely a product of American corporate greed that many European countries do not feel compelled to help us bail them out.

An impressive interview

The Bailout of America's banking system is dominating the headlines these days. The first bank that failed in 2007 was the Metropolitan savings bank in Pittsburgh. This bank would soon be followed by 48 other banks by the year to date.
In my other article "All about Capitalism" I described what corporations do when they are unsatisfied with their bottom line. One of their options is to create a "bubble" and that is exactly what our banks did.
With most banks begging for cash we must ask ourselves "do they deserve it?" The answer varies but right now apparently we do believe they deserve it. I was watching an interview on Bill Moyers Journal in which he was interviewing a man named William K. Black. I highly encourage the serious Thinker to watch it here. Black explains it all. He talks about his disbelief in why we are letting them get away with our money, and touches on a number of things that our government simply did not tell us during the bailout of the banking system.
This is a thought provoking interview that hits home and leaves you restless, unsatisfied with what is going on, and above all else, thinking.

Our Nature?

From afterdowningstreet.org:

"Through yellow smoke whirling into light

Buildings split, bridges collapsed

Crowded trams burnt as they rolled about

Hiroshima, all full of boundless heaps of embers

Soon after, skin dangling like rags

With hands on breasts

Treading upon the spilt brains

Wearing shreds of burnt cloth round their loins

There came numberless lines of the naked

all crying" -Poem by Sankichi Toge: Hibakusha (A-bomb survivor)

The Atomic bomb is the most recent way to cause death on an impossible scale. From the moment the first Homo Erectus threw a rock at another tribe looking to encroach on his territory to the dropping of the atomic bombs human history is the definition war.
When you give humans absolute power they almost immediately turn to violence (Stanford Prison experiment). When we look at our history books, often the most violent countries are the most praised. Think about it, The Spartans, The Athenians, the Japanese, The Persian empire (although they were fairly peaceful they are still portrayed as violent), The U.S, Great Britain, the list just keeps going on and on. Maybe peace is just overlooked but why is it overlooked?

What does this mean? Is conflict in our nature? What do you think?

Thoughts on War (thought assignment #4)

Thought assignment opinions:

1.Because I have been raised under typical ideals I personally think that just war is possible and does happen. I also think that our leaders love to make us think that the war is a just one in order to get their way.

2.I do not personally think that anyone understands war, because it is such an awkward mess. The people who even have a chance at understanding war are those fighting it. While the rest of us think of it as more of a gung ho kind of thing almost like sports teams.

War is a powerful thing. We are taught right from the start that war is also a bad thing. I can say with probably 99% accuracy that is IS a bad thing. But we are also taught not to try and judge war because we have not ever fought ourselves. My brain starts out thinking that war is bad, but I am also taught not to have pre-assumptions about war. It is on this subject that my brain nearly tears itself in half.
Everyone knows about how terrible and horrible war is, so I won't talk about it very much, however part of me (I am convinced the crazy part) thinks that somehow, war can be a good force. (Yes I realize that this is my testosterone speaking)
Here is one half of my brain's argument:
Looking at history and looking at advances from military conflict, it is fairly obvious that nearly all of our medical inventions have come from war. Many things such as: Radar, The Microwave, Superglue, Penicillin, Satellites, The Jeep, Orange juice from concentrate, Plastics, Computers (as we know them, cold war), The Internet, Cellphones, to name a few.
Some people will argue that "Most" of our inventions come from wars, But it is evident that some of the most important and taken for granted of inventions came out of war.
Every time I start thinking about how "good" war can be, I have to backtrack and look at how bad war can be. I try and read about what people who have actually been in war went through, but I acknowledge that I will never understand what combat is like unless I actually experience it, but that won't keep me from Trying to understand.
The third half of my brain wonders whether it really matters if war is good or bad. It tells me that politicians will fool us or will drag us into wars whether we like it or not. That half argues that war no matter how bad it may be, will forever be fought.
"I don't know whether war is an interlude during peace, or peace an interlude during war." ~Georges Clemenceau

What goes up comes down?

Even though everybody has heard the saying “what goes up must come down.” no one is interpreting it very well. We think too much about the glue that we use to make “it” stay up there so we never have to see it again, rather than throwing it high and preparing ourselves for the landing it will unavoidably make. We tend to forget about it once we have smothered it in glue and thrown it to the ceiling. We assume that it won’t ever come back down to land on our heads. This is especially apparent with the U.S debt. Every once in a while it seems a generation is faced with our "little debt problem" and we all handle it the same way: go into more debt and push it onto the backs of our children. I like to think about problems as things that need to be prepared for, not things that need more glue.

War in America- A Documentary

This is a documentary That I think needs to be watched. Indeed, war propaganda is alive and well here in America. There is a process to getting Americans to go to war, and this documentary describes it. This movie is creepy and thought provoking, perfect food for the Thinker.
In war, truth is the first casualty. ~Aeschylus

The Problem With Green Energy

On the news there has been much hype on supposed "green" jobs and other advancements in energy-producing technology. The U.S only gets about 6% of our total energy from renewable fuels (manhattan-institute.org 2005) and our president is calling on corporate America to switch to green energy. Like everything in the world, there is a huge problem.

The problem is with our current "grid system". But let's slow down. What IS "the Grid"? In the U.S the "grid" supplies you with all of your energy needs. The grid is a shortened word for the National Power Grid. This is where the electricity goes when its on its way to your house. The National Power Grid is a system of transporting energy from the production sites to our homes, businesses, schools, etc.
There is no storing of energy, it is all (relatively) immediately converted into high voltages and sent off to run our lives. This creates a huge balancing act in the grid. There can't be too much electricity in the wires at one time and there can't be too little.

Do you see the problem?

Coal provides constant consistent production of power on an hourly basis. All you need to supply power with coal (in a sense) is a constant fire. But with solar power, problems erupt. If hundreds of new solar power plants went online today, or even over a period of five years, other coal power plants would have to be shut down the same second a solar plant came online (in order to supply residents with consistent power supply). With our current energy economy privatized, it would be illegal for the government to force coal power plants to shut down and give in to the solar competition. That goes for wind power too. But there indeed is an even larger problem with solar and wind farms in relation to the grid. They don't produce a constant consistent amount of power on an hourly basis. Electricity would be fairly aggravating and pointless if it could only be used when the sun was shining, or when the wind was blowing. Our current lifestyles could not allow for electricity during the day and blackouts at night. There are also different amounts of light during different times across America, and wind power would only work for certain areas of the country.

Solar and wind aren't impossible, but it would require cooperation that America has never seen. In the meantime Nuclear and renewable fuels do provide a constant consistent amount of power at an hourly rate. We just need a place to put the waste and a cheap crop to farm that isn't essential to our food supply. But as far as the "Solar" or "wind" solutions, we have a long way to go.

All about Capitalism

So you already know about the bailout of the banking and auto industries. They are receiving billions of dollars practically every day. Our stock market has nearly been cut in half in terms of points. What does this mean, and why are we going through a recession? The answer is what our world runs on today: Capitalism. Capitalism is "an economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations, esp. as contrasted to cooperatively or state-owned means of wealth." In other words, Capitalism is when the primary means of producing money and goods in an economy is through individuals who own the means to produce the good. The system works in a sort of "circle". The factory hires people to make a product, the people receive money from the factory in the form of pay, and in turn they buy the product, or a population buys the product. Last the Government taxes the sale of the product from the factory to the people, and taxes the factory as a business. In the end, The person who owns the factory makes more money than the people, and benefits the most from everyone's labor. The workers in the factory are being paid less than the factory owner, but do not have the funds to start their own factory, and have families that they need to take care of. The government makes less money on the factory's existence than the factory owner, but also taxes the people to get revenue thus making schooling and the like possible.

When a business owner who has three factories wants to continue expansion (at a fast rate) He often needs a loan. He figures that a bank loan would be a nice as a one time investment into his factory business, but he is really looking to grow fast. He wants a stream of income that will allow him to grow even faster. He decides that the people he sells to could give him those loans. And the stock market is born. The people don't have a large sum of money to give at one time, so they buy pieces of the business from the owner a little bit at a time, but with enough people buying parts, the business man receives large amounts of cash to immediately grow his business and in the future, the people can sell their piece of the company for more money than they bought it because the growth of the business made the business as a whole worth more and thus, pieces of it worth more.

Now, all of this sounds like a great idea where everyone in the society is served and everyone in the society benefits from the economic growth of their companies. But there is a huge problem. Right now in order for this to go on, the business needs to get exponentially bigger. It needs to continue growth to continue benefiting the people. But in the real world no business can do that. And when corporations reach their maximum limit of growth, they either need to keep introducing new products, expand the number of people they are selling to, or they need to artificially create more growth and get out with as much money as they can. The problem with Capitalism is that markets like the housing market or the technology market are already at maximum growth, and don't cave much to work with in terms of making money besides the turnover rate (the destruction or inferiority destruction of a product). When the businessmen want even MORE revenue than their market naturally makes, they create something called a "bubble"
A "bubble" is artificial growth by means of hype. Growth through excitement of the product or tricking of the buyer (often both). Every "bubble" leads to a crash. It is inevitable. During a crash, The people who trusted the company(s) doing the manipulation are the ones who are hurt the most. Leading up to our current crash and now recession, there was massive trickery, and manipulation of the people in terms of housing. The banks led everyone to believe that they could have and afford a house that was above their means of paying for. People, trusting the bank, took out a loan and went to buy a house. They could not afford the house, and the bank knew they couldn't afford it, but they gave it to them anyway.
You may now be thinking, "how could our government let the banks do that to us?" and the answer is because they didn't have our best interest in mind. There used to be laws in which the banks were regulated by the government and none of this could happen. However, about a decade ago there was lobbying for deregulation of the market. Our government, being very willing to listen to lobbyists with deep pockets, decided to vote on whether or not to get rid of much of the regulation. Not surprisingly, they voted to deregulate the market, and corporations being greedy and desiring more money went to work manipulating us and building a bubble. Today we are seeing the fallout of or governments failure to protect us from greed and the corporations in America manipulation the populace and getting rich. Now because one collapse of one market infects the whole system, our economy is on the rocks. On top of that, for some reason, our Government thinks it is a good idea to give massive amounts of money to the corporations that manipulated us and came up with this failing business plan. Think. Will the corporations do that to us again? Is our government going to re-assert regulation? or is this all just part of the circle of capitalism?