OurFuture.org Blogs: Gordon Johnson

Myopic Selfishness of the Wealthy Leads to Constricting Economy

Gordon Johnson — Wed, 03 Sep 2008 13:06:21 -0700

The economic stance in favor today is to give breaks to the wealthy under the expectation that if they have more money, they are more likely to be in a position to invest to make our means of production bigger and better. What the stance is missing is that corporations do lots of marketing studies to figure out how much of what to produce. Guess what the marketing studies look at? *How much the rest of us have to spend!!*

Well if the wealthy have all the money, what is the level of production the corporations will gear up for? Instead of a cornucopia of great goods and services for many, it leads to production of extravagances and luxury goods no regular person would or could waste their money on. In essence, it is economic slavery as the rest of us scurry to try and cover our life costs with ever-shrinking wages.

How much profit does that leave the corporations? They myopically think they make as much profit on the big ticket items for the few as they would have on medium ticket items for us all.

Put (or leave) the money in the average person's pocket and something quite different unfolds. We, having more money, can afford more and better things so we all in fact have a better standard of living. Our spending would confirm (realigned) corporate choices to invest in improved production and to hire more people for more medium ticket items, and as more people are hired there is even more money flowing through the system, leading to even more and better goods and services.

The ironic thing is that an increasingly larger flow of medium ticket goods and services will actually end up producing much larger profits for the corporations, and a more stable economy and society to boot: we would have lower unemployment and poverty, higher tax revenue so lower deficit or even a return to surplus (given away by our short-sighted, selfish Republican "friends"), fewer foreclosed houses, maybe even longer lasting marriages. And if our economy is blossoming instead of shriveling, what does that do to the stature of the US in the eyes of the rest of the world? Perhaps even the terrorists would have to acquiesce that the US is good to its people in ways they claim we have not been.

The last 16 years confirm this. What happened to the economy under Clinton? Under Bush?

QED

Low wages = bad economics

Gordon Johnson — Thu, 20 Mar 2008 22:22:30 -0700

Gargantuan compensation for executives and insultingly low wages for common workers skews production. If rich people insist on keeping money in the upper echelons of society, they are doing themselves and society injustice because spending money is how we vote for what we want.

If most of us don't have money, that means we are not able to vote for what should be produced. Instead, the rich spend on items that are outside the scope of reality to most of us -- yachts, mansions, $100,000+ cars, profligate private parties, lavish extended travel vacations, mountains of new designer clothes because they're bored with what they already have. It's like the difference between spending hundreds of millions on fighter jets when a fraction of that amount spend on education would yield huge future results in our general standard of living.

The rich may think it's a good thing to keep a larger amount of their money. What they are missing is that to spend that money on higher wages would put more voting dollars in more people's hands. As those people vote with their larger spending, everything they pick will be of higher quality so we end up producing higher value goods. And if the rich have invested in the means of producing those higher value of goods, guess what. The rich can actually reap higher profits, especially the rich who are savvy enough to divine what people are going to buy at the higher income levels.

Instead, the game is to pay people as little as possible and let us scrabble for a few pennies more an hour in this job or that and keep the majority of the money at the top. We're back to trickle down economics and the law makers are quite happy to help keep the rules set so the money stays at the top.

The US economy is trillions of dollars a year. Yet the finitely small number of people who write and effect our laws are sitting ducks for a paltry micro-percentage of that flow. It is far too easy for a company to do wrong and pay the relatively gentle slap on the wrist fines if they happen to be caught. A several million dollar fine sounds big, until you compare it to billion dollar revenues. And a contribution to a few candidates may be large to the candidates and yet is itty bitty to the rich.

So are there solutions? Perhaps. The solution to the bad economics of the rich keeping their riches and squeezing the rest of us could be rectified by
1) raising the minimum wage significantly to the range of at least $15 per hour;
2) instituting paid training so people can afford to learn what's needed for our increasingly technical production; and
3) leaving more money in the pockets of the lower end of the income scale by returning to the more progressively graduated scale of taxes thrown out by the rich

A question still remains, though. How do we hold high level elected officials accountable to everyone, not just the few ultra rich who find ways to ensure the lawmakers do their bidding? This is just a thought, not a solution, but perhaps there might be a way to ensure we know what our lawmakers' influences are? Suppose every law maker's life was completely, transparently available to everyone by recording every moment of every day from when they begin campaigning for their first office until the last day of service when they retire.

Private citizens may claim the right to privacy, but when there is so much at stake involving so many people and so much money, this country can no longer afford to grant privacy for high level elected officials. The light of day would surely dry up a lot of bad conduct.

Mars=millions; clean, limitless energy=~25

Gordon Johnson — Sat, 23 Feb 2008 00:39:20 -0800

Mission to Mars? That could be considered a rallying effort but it is not what our country needs right now. Absolutely, we need to work out life in space because humans are surpassing earth's ability to support us. However, instead of devoting our hopes and dreams and huge federal money to send a few people millions of miles to Mars, we need to start making a trip of just 25 or so miles the other direction for the rest of us earth-bound bodies. Geothermal is nearly limitless, doesn't saddle us with tons of radioactive waste to be monitored for tens to thousands of years, doesn't chop migrating birds, doesn't take acres of collection panels or mirrors with intricate control mechanisms, doesn't choke the last remaining rivers (most viable hydroelectric has already been exploited, anyway).

Global warming is only one horrible symptom waiting to make our lives miserable. But at least it is a problem we can thwart if we choose to. The mantra about geothermal energy is that you have to do it where the crust is thinner and the hot magma is closer to the surface. I have suggested we develop ways to drill wells deep enough to tap realistically usable heat and have been told in most places it cannot be done.

In fact there is technology, called jet spallation drilling (Jeffrey Tester, MIT), which is faster and more effective than standard drilling methods and is capable of reaching the depths we need. We just need to commit to it instead of funding multi-million mile space trips or ill-conceived wars.

As we demonstrate the technology to tap geothermal anywhere energy is needed, we start providing the means to wean ourselves off of oil. This is a near term solution, folks, and it will lead not only to decreasing greenhouse gas emissions. It will also engender peace and higher standards of living throughout the world.

Once we are off oil and show any country can do it (and help them to do it), the market for oil deflates, decimating the flow of money into the Middle East, removing a major source for both terrorists and hostile governments that have so far easily been affording arms, nuclear and intercontinental missile technology, nuclear fuel, etc. Thus we move the whole world toward peace as well as less global warming gas emissions.

As countries adopt this and other cheap, renewable, green sources of energy, mechanizing of repetitive jobs, powering computers and robots, desalinizing sea water, and using many other energy intensive life enhancements will help to raise the world's standard of living.

Geothermal will be a disruptive technology -- the oil industry is heavily entrenched, very powerful, and highly capitalized. It will take a lot of new investment to convert our transportation and other high energy uses to electricity, and it will decimate the value of current technology and infrastructure. The benefits far outweigh the costs and it is time we committed to this incredibly ignored source of energy.

Approximating Utopia

Gordon Johnson — Wed, 20 Feb 2008 20:05:52 -0800

We have the technology to lift all boats. We (at least the folks visiting this site) know what we have is better than a lot of the world but is far from the best there can be. There is a solution available that can eliminate poverty and hunger, the national debt (not just the deficit), pollution, and lots more problems. The solution will take a great deal of refocusing of effort.

There are lots of waves out there with conflicting opinions and directions. Business folk say unleash business and prosperity will blossom. What they forget is that with freedom comes responsibility, and the actions of a few bad apples of catastrophically large proportion require we keep business on a short, tight leash. They also forget that their impetus is to make money, and that doesn't always coincide with what is actually best for the economy and society, especially over time as power pools among the successful wealthy.

On the other side, there are people who suggest simply redistributing wealth will fix things. If donations and charity are easily available, it becomes much easier for people to rationalize their poverty and need for handouts.

There are others who rail against outsourcing of jobs. This is a painful, two-edged sword -- the more work is done by impoverished people producing things everyone wants, the more those people become economic voters by the wages they begin to earn. Eventually they will catch up, and until they do, it will draw down the pay for work done in countries where wages orders of magnitude higher.

So the question is how to unleash economic potential outside the fetters of governmental bureaucracy and yet have business making choices that are for the good of society and future generations, how to enrich the poor globally so all share well in the bounty we can create, and at the same time how to cease fouling our environment before we tip the scales irreversibly toward our extinction.

The solution involves enhanced socio-economic evolution by experimentation, but not just by "cult of personality" communes. For us to have more we need to produce more. And more importantly, to have more of what we want, we need to know what we want.

The US and much of the world economy is based on supply side economics. A person starts a company to make something thought to be wanted. Maybe the company succeeds, maybe not. But material, time and effort go into it, no matter what. As successful companies supply more of the good/service they produce, they supply jobs as they ask people to come work for them. The companies that don't succeed go bust, along with the investment. Meanwhile the successful companies are doing their best to hold cost down to keep profit up. And eventually the business cycle overtakes most products and the companies that have not found other front edge products to make (either of their own design or bought of someone else's) go out of business.

But there are lots of currents here driving decisions and methods. If a company makes things people don't think they want, the company can advertise to persuade people to buy. If a company could know that people wouldn't want a potential new product, they would know better than to invest in it. If a company were able to increase the productivity of their workers, there would be more product for money spent on wages. If a company knew what to make next and was supported in doing so it would be less inclined to staunchly cling to current investment.

Here's the kicker. Companies do their market analysis based on what the level of the economy is at the time. What isn't happening is the companies don't think in terms of supposing all companies were to produce at a higher level of quality and volume and pay the workers more accordingly. The workers would be able to turn around with their higher salaries and actually be able to buy the higher economic product.

And to add icing on the cake, we can decide that we want companies to be responsible for pollution anywhere in the world because it does eventually get everywhere. Afghanistan could sue the US for the brown cloud that encircles the earth. Madagascar could sue China for all the polluting they do because the currents eventually carry from China to Africa. We can decide it's time to eradicate cancer or Alzheimer's and include that as part of what we say we want.

The bottom line is to get the horse in front of the cart and have a true demand-side economic system. Let's know where we want to go instead of hoping upon the sum of all guessed actions.

So how do we get there? How do we "know what we want"? We ask ourselves. It is time we develop a system into which we can enter how we would spend, say, $150,000 salary (note, this is not just a one time pot, but an on-going amount). We use data mining and system analysis to distill the overlapping wants, and then CAD-CAM to design the mechanized means of production. And perhaps we decide we can do just fine on $50,000 of value instead. But I don't think there's anything wrong to dream big if we do it well.

Meanwhile, we decide providing energy is not a cow to be milked and its product parsimoniously dispensed. Instead we commit to CLEAN, RENEWABLE, global, bountiful, cheap energy to run all the machinery and free ourselves of the menial tasks. Where do we look? Well if we can get 225,000 miles to the moon and are sure we can cover the multiple millions of miles to Mars, what is stopping us from tapping a nearly limitless source of geothermal energy starting about 20 miles into the crust anywhere on earth? [search on Jeffrey Tester, MIT, jet spallation drilling] Or once we know we can trust that our global economic system on steroids has solved poverty and so, obviated the military and quelled terrorism and the many petty wars in the various backwater pockets of the world, space is a great place to harvest huge quantities of solar energy to beam back to earth with the trust that the energy will not be used as the ray gun to beat all ray guns.

And the Internet is the ideal place to disseminate classes taught by the best teachers we can find to teach us robotics, computer science, medicine, bioengineering, and all the other skills we will need to be able to fill the new level of work that will need to be done.

The time is now to launch an honest-to-goodness new world order that will give our world the peace and prosperity we, as thinking, rational, sentient beings, ought to have achieved.

____________ received personal reply outside OurFuture.org (my reply follows):

Hi Gordon,
I read your article
http://www.ourfuture.org/blog-entry/approximating-utopia (2/20/08)
and you seem to be saying:

1) Much inefficiency in developing new products.

2) A planning system that reflects what people would do with $150K would be illustrative (more efficient).

3) Countries should be able to bill other countries for the mess (pollution) that slips in.

4) Geothermal energy is the answer to global warming and our energy needs.

5) Harness the Internet to spread education globally.

I'd say:
1) Scientific method at work. It's not that expensive, vs the advantage of possible unique/accidental discovery, to have multiple firms experimenting similarly with new products.

2) The reality of markets and demographics drives actual market research into possible niches and needs. The granularity of the decisions involved in forecasting the spending of $150K (how many Lotto tickets to buy this weekend when the jackpot is $32M?) would not reflect each market's actual potential.

3) Hard to stop the "You polluted/despoiled to develop and gain your edge so we will too" line of argument. Power/money is resistant to being told what to do.

4) Makes sense. Aren't we seeing commercials from the energy companies about this? If it was easy/cheap, wouldn't it have happened already? i.e. what's the true (not hypothetical) cost/benefit of geothermal?

5) This is happening. Courses are coming online for free from major universities. It's up to people to start taking advantage.

_________________my reply:
my post is an invitation to think outside the box. Sure the way things are right now addresses to some extent what I'm suggesting, but it's pretty myopic to think that the US way of doing things is the best we can hope for. I'm trying to find more hope and joy and lower the fear and greed.

1) I don't rule out experimentation. Indeed the very title, Approximating Utopia, stipulates experimentation.

If developers are behind closed doors working on the same thing and just trying to race each other to be first for a given potential new product, it might be delivered sooner, but at lower quality just to claim the patent and the first production. That kind of development doesn't guarantee the best, most applicable product. (I'm tired of American Cheese level solutions.)

If someone is lucky enough to have demonstrated creative capability extraordinary enough to be on a design/experimentation team, that person is probably already infused with enthusiasm and would most likely benefit from some degree of shared knowledge among developers. Also, the person is probably quite happy just seeing his/her idea(s) adopted. Yes they deserve high compensation, but such people are mostly standing on the shoulders of giants and their contributions are marginal.

The Wright brothers may have been the first to fly, but they didn't invent the steel their engines were made of or fuel they used or the method to make fabric. And they certainly didn't invent the social structure and prior civilization that afforded them all the information they started with. What would you think if you were given the opportunity to gin up the first functional flying machine? That would be pretty exciting in and of itself.

How about a cure for cancer? I would be honored to be helping and not so caught up in expecting billions as a reward.

2) Granularity can be achieved by individuals starting with templates and customizing and individualizing over time, which is to say the ultimate goal would be a moving target, which is OK if production is also dynamic. Part of the way things are is that production is less dynamic than it could be. The point of the $150K figure is a starting point for what level of production to aim for. Current market is based on trying to push noodles and falling far short of potential. Put the horse in front of the cart and we get much further for the same (or less!!) effort.

3) I'm somewhat regretful of including the bit about suing other countries for their pollution, but it is up to developed countries to lead by example how to do huge production without pollution. Instead the US ignores any global efforts to curb greenhouse gases. Maybe the proposed solutions in Kyoto are inadequate, but it's easier to achieve a goal by persuading a friend than chiding an enemy/competitor. When the US finally owns up to its childish behavior and decides to act like a rational adult and take care of our own better, we will find more respect in the world for our ideas. It's not good enough that we have a lot of stuff and poor countries don't so they think it's OK to achieve parity by any means, extraordinary pollution included.

4) The sunk cost of drilling is the big expense. Once invested the resource will produce for centuries. That's why it's worth federal spending to get it done in the first place on a large scale, and then turn maintaining production over to municipalities. The oil companies are no paragon of virtue and I'm not sure they deserve any handouts. What have they done with their obscene windfalls the last couple of years under the wing of Shrub? Trying to do more oil because they already do oil is not the answer.

5) Then pace needs accelerating and publicity to ferret out the best teachers and best providing methods, graphics, testing, teacher aids, etc.

Peace