Category Archives: Economics

Chinese Millennials

Will Chinese Millennials diverge from their elder’s and ancestor’s infatuation with consuming the worlds endangered species?

“Worth thousands of dollars on the Chinese black market.”

That statement alone should make you shudder with regards to what the Chinese economy is set to do to the world’s endangered wildlife. With nearly 1.4 billion people, 70% of which are up and coming middle class — many of whom will be subscribing to the traditions of their ancestors — China will soon be eating, drinking, buying and owning the world’s critically threatened species.

Elephant ivory. Rhino horn. Exotic bear, tiger, simian, marsupial and fish organs. The consumption of all of these and hundreds, if not thousands, of other medicinal and collectible parts of animals, are all on the rise in China.

Yes, the Western world had, as its toy, for centuries, the undeveloped world. The United States extracted one of the greatest tolls on the planet as it sucked at the planet’s resources before, during, and after the country’s golden years. And then the rest of the industrialized world caught on and replicated America’s rapacious exploitation. Colonialism started it, but transnational corporations are finishing it. And yet, through it all, the West seems to have found religion. They’ve realized the detrimental impact they have on the species of the world (or so they would have us think; I do believe the West is trying to be a good curator now).

But China and India (and the other countries of Asia?) they’re just getting started in their consumption cycles. If just a third of China’s middle class all want to own an ivory trinket of some sort (to honor tradition, or establish a wealth designation) that alone will have 300 million Chinese buying carved ivory — extracted mostly through illegal sources — effectively wiping out the entire African elephant population.

And that’s just the elephants. A million apothecaries all trying to get black bear pancreases, or tiger penises, or pangolin fetuses, or totoaba bladders (a fish), will utterly destroy the populations of such species.

So, I ask, will the Chinese Millennials alter the future of their people and reject such ancient superstitious traditions and help save, rather than consume, the world’s endangered species?

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Logical maximum pay

I like creating simple algorithms to solve complex social issues. My 28th, 29th and 30th Amendments, FED tax schedule, college tuition, inequality tax and dividend maximums, among others, are examples.

One of the bizarre social numbers out there is CEO pay (or corporate executive pay). Generally, these numbers are incomprehensible.  Some examples (BI):

Name Company Salary
Steve Wynn Wynn Resorts $28.2 million
Leonard Schleifer Regeneron Pharmaceuticals $28.3 million
Ginni Rometty IBM $32.3 million
Jeff Bewkes Time Warner Inc. $32.6 million
Brian Roberts Comcast Corp. $33 million
Robert Kotick Activision Blizzard Inc. $33.1 million
David Zaslav Discovery Communications $37.2 million
Bob Iger Walt Disney Co. $41 million
Les Moonves CBS Corp $68.6 million
Tom Rutledge Charter Communications $98 million

What is reasonable? Certainly not $100 million a year! Some say that executive pay is necessarily high as it needs to attract the best (the best sociopaths…) who are willing to take the heat and dish out the sometimes oppressive company actions that keep a corporation healthy.

Yeah, right!

But as I asked, what is reasonable? What is a logical maximum salary? What simple algorithm could we create to deduce this? How about this. I’ll admit that someone might be:

  • twice as smart as me
  • twice as skilled as me
  • twice as educated as me
  • twice as experienced as me
  • twice as industrious as me and
  • twice as lucky as me.

(Twice being 100% better. “Me” being the average Joe.)

That’s 2 x 2 x 2 x 2 x 2 x 2 = 64 times “better” than me.

If the median household salary is $59k (US Census Bureau 2016) then:
64 x $59k = $3,776,000

That is the maximum logical pay anyone could possibly be paid based on the reasonable comparison of people’s abilities. $3.7M is a pretty hefty paycheck in my book. Plenty, I’m sure, on which to live a lavish life.

But there are 482 CEO’s of the S&P 500 paid more than this number.
(cite: https://aflcio.org/paywatch/highest-paid-ceos)

The highest, Sundar Pichai of Google fame, gets $100M. That means that he’s effectively 1694 times “better” than me.

Boy, that sure is one-hell-of-a-lot better! I’m sure he’s worth it.


Taxes? Payment for privileges.

Who doesn’t like socialism? Well, if you consider all that society provides for itself already, nobody shouldn’t like socialism. That is, rejoice in Socialism — cuz’ we’re already in it.

Who likes paying taxes? Well, if you consider calling them payment for privileges then maybe they wouldn’t feel like taxes. Let’s say we DON’T tax anybody’s income anymore. But then everyone would be forced to independently purchase things like the following:

Protection from:
• Foreign nation states,
• Criminal activity,
• Medical catastrophe
• Fire,
• you know, all those things a national, state and local government setup of systems does for our protection.

And then there are the perks we would each have to pay for:

• A maintained and well marked road system,
• A system of education,
• A system of justice,
• A system of water delivery and sewage handling,
• An electricity system,
• Systems for managing air traffic, boat traffic, compliance for building, food safety…

If you examine that list you’ll come to the conclusion that, hell!, we already are living in a socialistic society. Without all that money (taxes) to pay for all those common good services, we’d be a helluva lot worse off.

Now how about upping the tax on the wealth? “Booooo,” all the wealthy will say, but wait a minute Mr. & Mrs. Oligarch, do you like having a trustworthy banking and investment system? You like being able to buy and own vast swaths of land, buildings, planes and boats? You like living in a safe, well protected and just system? Well, it’s gonna cost ya… Because, you know, you wouldn’t be wealthy if We The People weren’t here to provide all of that protection.

One would think that a natural algorithm would be that the more wealth you possess the more you owe it to society as the protector and provider of that wealth. The fallacious theory of “I’m a self-made man!” ignores the fact that all of one’s success is based on living in and working with a society that provides all of the protections and benefits previously mentioned. No one stands alone. The wealthy tend to think it’s they who have succeeded when in reality it is society that enable all of that success. No society, no success.

If the wealthy don’t like this theory well maybe they should consider that in the coming apocalypse, when society has collapsed, dissolved even, and they’re standing there, alone, having to protect themselves, feed themselves, clothe themselves, shelter themselves and they wonder, “how can we rebuild our wealth?”, and the answer comes that you, they, can’t because they’re spending all their time surviving. Then they might realize that only a society can support wealth. And that the more wealth one owns the more one owes society for the opportunity to have acquired it.

Is this wealth hatred? Bah! A certain dynamic of wealth in a society is necessary. Achievable betterment, the lifting of station through education, ideation, creation and hard work should always be possible and acknowledged. But even then, such betterment is a function of society and must be recognized. Taxation is one of the tools for that recognition.

Without a taxation system, throughout its history, to build all of the protection and privilege systems I mentioned above, no society would exist. Without taxes (historic and present) I couldn’t ever have written this blog — nor could you been able to read it. Which, by the way, thanks.


Forced to lie

I went looking for a job.

I found this one, it looked like a fit for my skills — on the surface — not enough information was available though. So I applied on Dice.com.

The recruiter called me. “Here’s the job specs, go have a look-see.”

A few of the “Requirements” stuck out at me:

  • Excellent attention to detail
  • Excellent written and verbal communication skills
  • Excellent interpersonal skills
  • Excellent time management skills
  • Excellent problem-solving and analytical skills

I thought to myself, “I might be excellent in one or two of those, and probably above average in others (and maybe just average in time management…), but I sure as hell am not EXCELLENT in all of those!”

In fact, I’m not sure who is. I’ve never met someone like that. By stating that these are requirements, anyone stepping up with interest would effectively be lying:

“Yes, I’m excellent in all of those things.”

“No you’re not, nobody is. Therefore you’re already lying to us.”

“Well, you got me there. But if everyone who approaches you has to lie about possessing Excellent Everything skills, why make such stipulations? Do you WANT to force every one of your candidates into a LIE — right from the get-go?”

Apparently this is common practice. Job requirements call out completely unrealistic levels and numbers of skills and expect you to lie about them.

Needless to say I brought up this discrepancy and the blatant need to lie to get a job interview. The recruiter didn’t care. “Everyone does it,” he said.

Nice – an entire industry predicated on lies.


Self-regulating Systems

Nature knows how to self-regulate. The cycles of feast or famine are simple examples of such systems. Too much browse for caribou produces too many caribou calves, which then feeds too many wolves which then produce too many pups which then grow up and eat too many caribou… Leading to too few caribou, starving too many wolves, which end up producing too few new pups, which then let too many new caribou to prosper. Yeah, The Lion King was right, it’s a circle, sometimes it’s a big circle and sometimes it’s a little one. But around and around it goes.

Other self regulating system examples are the human body: when we get hot, we sweat, which cools us down. If we get too cool then we shiver which produces excess heat which warms us up.

The climate is generally a homeostatic system – a system that reaches an equilibrium (or oscillates between extremes, the average of which is steady over time). Ignoring humans impact for now, too much CO2, produces too much plant growth, which then extracts much more CO2 (a greenhouse gas) which then allows the planet to cool, which kills or retards plant growth allowing the decay of plant material to return the CO2 to the atmosphere which then heats up and allows plants to thrive again.

Over the years I’ve tried to figure out how to apply such self-regulating behaviors to social systems. For instance, I dreamed up a number of Constitutional Amendments, one of which addressed campaign contribution limits. I figured that if we used median wage as the basis for contributions — this would self regulate: every citizen could contribute one days gross wage, per candidate, per year. If politicians wanted greater contributions — they should work to elevate wages.

Another one is: what should be the minimum wage for any one location? I figured that the cost of living should determine the minimum wage; it would cost more to live in New York, NY than in Lincoln, NB. To create an algorithm for this: if we use the median monthly cost of an apartment as the basis for minimum wage: $1000 / mo. rent multiplied by 2 and divided by 100 would give us $20/hr. At 20 dollars an hour, a $1000 a month rent seems reasonable. If you want to raise rent, you have to raise wages too. If you want to lower wages, you have to lower the cost of rent.

All sort of systems can be redesigned with self-regulation in mind. Taxes for instance. Or how to handle income inequality. I’ve posted on these topics here if you’re curious. But what about other applications? Healthcare? Are there self-regulatory aspects we could apply there? I’ve posted my thoughts on the “win/win” vs the “win/lose” aspect of capitalism. That seems like a candidate for determine when free-markets should be used. In fact when the “win/win” impact of capitalism is applied, supply and demand also finds its own equilibrium.

Tragedy of the commons algorithms? Water rights algorithms? Gun laws? Energy production and consumption? Land use? The elimination of biases in the hiring process for employers? I’m sure there are many facets of life that would benefit from an intelligent analysis and design of algorithms which would produce a self-regulating system.


New FED Mandate – Equality

The Federal Reserve is “governed” by a Congressional mandate:

  • Maximize employment.
  • Keep prices stable.
  • Retain moderate long-term interest rates.

I propose another:

  • Minimize income inequality.

Now, there’s a problem with all of these mandates. The FED has but three primitive tools with which to accomplish their goals.

  • The Discount Rate, that is, the oft stated “interest rate”.
  • Banking reserve requirements, what percentage of deposits banks are required to retain to substantiate their loans.
  • Open market activity, buying and selling of treasuries like the Quantitative Easing they did during the 2008 Financial Crisis.

So, what new (or existing) tool can Congress give the FED to help it with this new “Min- Inequality” mandate? How can the FED do its work with only a throttle/brake (interest rate), a bottle of NOX (QE),  and seat belts (banking reserve)?

If we postulate that the three main drivers of income inequality are corporations that:

  • Pay their executives and officers far more than they are worth, and pay their employees far less than they are worth.
  • That they distribute the income of the company’s business to shareholders rather than a larger portion going to employees (as wage, salary or shares).
  • And that they use net income to buy-back shares of the company from the stock market (which boosts stock prices).

Then those are the behaviors we want to change.

These are therefore the leverage points we can use:
1) Corporations borrow money from banks to fund growth.
2) They borrow money from investors as bonds to fund growth.
3) And corporations issue additional common or preferred stock to fund growth.

We would need to give the FED the power to throttle each of these corporate growth behaviors. With me so far? For each of these corporate expansion tactics we’ll add an inequality tax. This tax will be a calculation of the highest paid employee divided by the lowest paid employee — and that then divided by 100.

   CEO    ÷ low wage ÷ (adj)
5,000,000 ÷  50,000  ÷  100  = 1.00

The FED will now be given additional power, a number the “Inequality Quotient” IEQQ, by which they can lower the inequality penalty or raise it.

With the FED IEQQ number set to 1.00, a corporation with the above inequality metric would have to pay 1% higher interest rate to borrow money from any bank. Would have to pay 1% more in bond interest for any bonds they issue. And they would have to pay 1% gratuity tax on any new shares they offered.

   CEO    ÷ low wage ÷ (adj)
5,000,000 ÷ 50,000   ÷ 100 * (1.00 FED IEQQ) = 1.00%

All funds collected would go into — Social Security!

Simple right? Now, how do we convince Congress that this is important and that this (or a version of it) will work?


Aristocracy stymied corptocracy

European countries do not kowtow to corporations the way the United States does. In the US, the corporations own the politicians and they do the bidding of the plutocrats and the oligarchs — you know, the share holders and board members.

But European countries don’t let corporations run the show. And I wondered why this is.

Could it be that because Europe has had the bad taste in its collective mouth regarding kings and queens through the ages, that when it came time to form democratic governments they KNEW how to construct rules of government that limited the power of the powerful?

In the US, the new aristocracy are the corporate plutocrats that run and pay for government. The Koch asshats, and their ilk. When the corporations were just beginning to become “a thing” in the US, the likes of the robber barons, the train tycoons, the oil and steel magnates (Rockefeller and Morgan) we tried to handle them and the monopolies they formed (as all true capitalistic enterprises will eventually try to do). But when dozens, then hundreds and then tens of thousands of corporations and the power they wielded rose and demanded control of the country, its resources and its wealth — US Citizens had NO IDEA what to do? Why? Because we’d never had tyrants trying to run our lives for century after century.

So, is the United States just an aristocratic victim in the making because there’s no way that the plutocrats in power are going to relinquish that power? Or, like Europeans, can we learn to control the corptocracy?