William Thien

Archive for September 2011

I’m sifting this through the anti-politics filter and examining what remains. There are a few shiny pieces that appear to be something of value.

For example, the Republicans and Democrats are at odds over the administration’s desire to raise taxes on the very wealthy so that the “very wealthy” (I’m not sure how this is defined, by the way) pay “their fair share,” a phrase used by the administration, in correlation with something called “The Buffet Rule,” which has been bandied about as well and involves a discrepancy in tax rates for those who pay on a scale related to their income and those who earn their income from investments, which is taxed at a lower rate, generally fifteen percent of their income, much less than a person earning a paycheck pays in taxes.

The interesting facet of the administration’s desire to raise taxes on the very wealthy in order to achieve “tax fairness” is that there is currently no motivation on the part of “the very wealthy” to seek “tax fairness.”

In other words, as long as the very wealthy pay at a lower rate, there is no desire on their part to see that taxes go down for those who pay at a higher rate but who make substantially less. There is no motivation for the very wealthy to work to achieve “tax fairness” for those who make less but pay higher taxes. Yet, many who make less but pay higher taxes fend for the very wealthy merely by default when they chant the mantra “no new taxes.” That, ladies and gentlemen, could be called “dirty work” if it were not for the mere fact that the mantra “no new taxes” has universal appeal.

And if the very poor don’t pay any taxes, and the very wealthy pay fewer taxes, that leaves only the middle class to pay almost all of the taxes. So, without raising taxes on the very wealthy, the mentality in Washington that the middle class is an endless font for taxation will persist.

If the very wealthy are taxed at the same rate, then they will be motivated to see that their taxes are brought down, which if they pay at the same rate as the middle class, will then benefit the middle class since as a result if the very wealthy lobby to see lower taxes and it is directly related to the taxation of the middle class, then the middle classes will benefit from the efforts of the very wealthy to see their taxes lowered as well.

Warren Buffet may think it is unfair that he pays at a lower rate than his secretary, but I’d be willing to wager he is not in the majority when it comes to the generalized sentiments of the very wealthy. Maybe, maybe not. And perhaps rightfully so. Even though the very wealthy pay at a much lower rate, they often pay much more than anyone else per person. They pay, indeed.

So as a tool that may in the future leverage the interest of the “very wealthy” in seeing their taxes lowered, “tax fairness” is one of the more interesting aspects to come from the current administration’s proposal to tax the very wealthy at an equivalent rate to everyone else.

But, such ideas still involve the act of raising taxes. And I suspect any such move, and any such move should be considered with extreme caution.

Furthermore, even though as it has been said that the new proposal is “math” and “not class warfare,” history reveals that all class warfare is essentially that, math. Often, it is evil math. Genocidal math. Diabolical subtraction. Economic servitude. Role reversal. Death math.

Is that what this taxation program is, though, evil, death math? No, but it could perhaps be defined as “socialist math,” perhaps “marxist calculus,” and in the first few permutations of that equation, Stalin, for example, dealt with things rather harshly, most would say if they knew, in a rather diabolical fashion with the starvation of the Ukrainians and the systematic purges.

Nevertheless, I do not believe that is the current administration’s intent at all. And I see something favorable in some of what remains after being sifted through the politics filter, such as the fact that the administration has a solid understanding that education is also very important to this country and that teachers and educators, for example, have been amongst those to suffer the most in the current economic downturn. Funding education is clearly an indication that the administration does not have nefarious intent.

Yet, the mere fact that you can’t just take what’s good from the proposal and toss out everything else is to me an indication that our system is almost entirely broken, all rigged, tied up perhaps. And we must be careful, ever so careful.

Nothwithstanding…that the middle class suffers at both ends as a result of the current system of taxation with the very wealthy paying fewer taxes and the very poor little at all. And as I’ve said before, the middle class is the economic engine of this country. Neglect, starve through excessive taxation, or kill off the middle class, and you kill the economy…kill the economy, kill the country. The acts go hand in hand. One leads to the other from front to back and back to front. There, ladies and gentlemen, is some math to consider.

Copyright © William Thien 2011

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I was surprised to hear today that the largest bank in America is going to lay off 30,000 employees. That is the same number of people as a small to medium sized city.

But then something occurred to me at the same time, that The President has recently been talking about jobs and certain types of financial stimulus. And the thought did cross my mind, it really did, that perhaps, just maybe, since they have done it twice already that big banks are positioning themselves for another big bailout at the expense of the American public.

What if big banks have developed a new business strategy that involves screaming “it’s the end” and “we are too big to fail,” hiding the money they have somehow, and then threatening massive layoffs while simultaneously crying to the current administration’s economic advisors that if they aren’t bailed out, it will signal a new national economic depression? The banks have done it twice already. They could be saying, why not once more? What a business plan! Or, what a criminal enterprise, rather.

Get the media to spin it enough to scare the American public to get behind it again, and again, and again, and again, and voila, banking executives will be singing again and again, “We’re in the money…we’re in the money. Suckerssssssssssss!”

Nevertheless, after the last two bailouts and seeing the banks hand out million dollar bonuses in six months or less to their executives, our elected leadership would be extremely negligent, perhaps corrupt and criminal, if they simply started handing out public funds to the banks once again, creating more massive national debt, unemployment, a veritable depression.

There is nothing conservative about that. That’s big government, ladies and gentlemen, making suckers of the America public at the behest of the banking sector, make no mistake.

Copyright © William Thien 2011

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I’m pro-nuclear power, yet I live near Lake Michigan and much of the water I use during the day comes from that lake. So does the water one hundred million people use.

The water used to cool two nuclear power plants, The Point Beach and Kewaunee Nuclear Power Plants, comes from that lake as well. Lake Michigan is not the ocean but a closed ecosystem as I’ve described before. It takes close to 100 years for Lake Michigan to cycle pollution out of itself, one hundred years. Just think how long it would take for radiation that lasts thousands of years.

So, what’s more important, electricity derived from nuclear power or fresh water? Perhaps I should rephrase that question to, What’s more precious, nuclear power or fresh water?

For most of us, the answer to that question is fairly obvious and becoming more so as time progresses and clean water becomes more scarce. Fresh water that we can drink is obviously more precious.

The reason I ask the question is the result of the disaster at Tepco Nuclear Power Plant in Fukushima, Japan. Lately, there have been news stories about how much radiation has been leaking into the ocean surrounding the Tepco Plant, both currently in the form of cooling water runoff and from the initial explosions following the earthquake which sent radioactive particles into the air that in turn end up in the ocean within rain and that simply settle into the water.

Huge amounts of radiation have been found in the ocean water and scientists believe it will show up in the water around the world in a matter of time and then in the fish some of us eat.

“Well, what’s it got to do with us,” you might be asking? “It’s not a threat to us if we avoid eating the fish.” Perhaps. But there is a parallel to our situation here in the Midwest.

The two nuclear power plants located on the shore, Point Beach and Kewaunee, represent a significant threat to the drinking water of the cumulation of communities that surround Lake Michigan and use its water for drinking and bathing purposes. Were one of those two nuclear power plants to suffer a meltdown due to any number of circumstances, perhaps a terrorist attack, it is likely that Lake Michigan water would need to be used to directly cool the nuclear pile and as a result, Lake Michigan water would be contaminated with high levels of toxic radiation. And it is likely that the water would no longer be drinkable as a result.

The Great Lakes are the largest fresh water system in the world that is surrounded by a significant population which relies on the water. Were that water no longer available to drink, it would have catastrophic effects on the communities surrounding Lake Michigan. Major cities along the shore of Lake Michigan would be turned into ghost towns. Of course this would have a global economic impact as well as the Midwest is the breadbasket of America and much of the world.

I think that serious consideration should be paid by the NRC (Nuclear Regulatory Commission) to licensure revocation of the two plants unless they can come up with alternative plans during a plant disaster such as a meltdown or worse, an explosion such as at the Tepco Plant in Japan.

There are legal questions which have already probably been argued in court, such as is the water part of “The Commons” and so forth, which is an antiquated way of looking at natural resources. But this is another matter altogether and may fall within the purvey of national security. Nevertheless, it seems to me that a renewal of concern over the danger of having the nuclear power plants within such close proximity to the world’s largest fresh water supply may be necessary. It doesn’t take an act of terrorism to create the problems we are seeing in Japan. An earthquake, perhaps a tornado, a plane crash, any number of disasters could render the waters in Lake Michigan poisonous for hundreds of years. Why chance it?

AS I’ve said, I’m pro-nuclear power. But this is a special circumstance. There simply is too much at stake. This isn’t about a nuclear plant on the shore of the ocean where we do not drink the water in the first place, or on a river where water can be drawn above a nuclear plant if there is an accident, this is about contaminating the water in a closed ecosystem that takes a hundred years to self clean.

Again, why chance it? Why take the risk?

Copyright © William Thien 2011

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In October of 2010 I wrote an essay titled “Why is the Federal Reserve Deliberately Stimulating Inflation?” I discussed the history of such behavior by governments and how it often backfires, causing runaway inflation and consequently, economic and social collapse.

If there is one poignant factor to consider with the current policy coming from the FED is that the wages of US workers are not and have not been keeping up with inflation for the last two decades. So, any attempt to drive up the cost of goods and services will only widen the wealth gap between the working poor and other socio-economic classes in our society, and any attempt to stimulate inflation is the surest way to abolish the middle class through what could be called systematic, economic genocide. And it raises the question, is it just careless policy or is it policy by design? And even more importantly, whose design is it if it is in fact by design?

Finally, such policy is a short-term business policy as it is the middle class that is the driving force of the American economy. Kill the middle class, kill the economy.

Add to that the constant increase in taxes and fees and coupled with inflation by design and, well, you may as well just dig a mass grave for the middle class.

For your convenience here is the link to my previous essay on the matter, Why is the Federal Reserve Deliberately Stimulating Inflation

https://williamthien.wordpress.com/2010/10/19/why-is-the-federal-reserve-deliberately-stimulating-inflation/

Copyright © William Thien 2010, 2011

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Last Sunday while returning from a jaunt to the sporting goods store with a friend we took a little diversion to stop by the local donut shop to pick up some of the best bakery ever made. Upon arriving we discovered the store had closed and was replaced by a dollar store. I was admittedly angry at first. I had my hopes up in anticipation of a couple of the best donuts you could ever eat. All varieties. Fresh. Real. Satisfying. Not that greasy, sticky, icing slathered type of donut you find at the gas station. These were works of art, made by real bakers, guys and gals with rosy cheeks and smiling faces who went to work in the early hours of the morning so we could have fresh bakery.

As we drove away I pondered the reason for the closure of the bakery. How could that donut shop have closed? They made the best donuts. People used to line up in the morning twenty back for their donuts. People used to argue over their number in line when certain types of donuts ran low and they thought it would be too late by the time their number was called to get the donuts they came to buy. At the end of the day, only crumbs remained on the large silver trays where the donuts were displayed behind the glass.

“How,” I asked again, “how could they have gone out of business?” We talked about the reasons. We stopped at a gas station a couple of blocks away to see if someone knew if they had moved? “No,” the clerk said, “they closed shop because they couldn’t afford to do it anymore.”

Then something occurred to me. They were master bakers. Craftsmen at their trade. Specialists. Artists. Dinosaurs. They don’t exist much anymore. You don’t find those types of people making things hardly in this day and age. “But why?” I asked. We bought some greasy gas station donuts and stale coffee and continued the ride home.

It occurred to me as it has before that business isn’t run like it once was.

More emphasis is put on tax strategy and cutting costs today than it is on making quality products that will bring customers back for more.

Inflation has increased the cost of everything while large corporate retailers have kept their prices low, forcing the little guy out of the marketplace. And quality suffers as a result. And as a result, due to these same forces, American products are now being forced out of the marketplace by low quality foreign products because they can be offered for less. All of this is a function of US tax policy and government regulation. Businesses are now run by business school graduates (bean counters) and not craftsmen, specialists, artists, people who know how to make and manufacture quality products. If you know tax law, you are more in shape to run a business than if you know how to make something and make it well. That shouldn’t be. And what’s worse, schools are dropping all of their trade and manufacturing classes in favor of business classes. More bean counters and less makers. That’s not good.

There is not much anyone can do about the devastating trend except patronize the small business. But even then, when the aforementioned bakery had a large customer base and was always busy and always sold all of their product, daily, and it wasn’t exactly cheap, they still couldn’t afford to keep their doors open, well that tells you we are in for trouble as an economy. We need to change tax policy in favor of such businesses, not just the large corporate retailers. And we need to do it for just one reason.

Quality.

Because at the very least, I for one like a quality donut on Sunday morning. And I think that’s as good a place as any for America to regain its reputation as a maker of quality products. Call me a donut eater, but I do like a good donut on Sunday morning.

Copyright © William Thien 2011

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